Commons Sitting of 6 June 1951

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]

MR. SPEAKER'S ABSENCE
Mr. Speaker: I desire to ask the leave of the House that I may be absent from tomorrow's Sitting in order that, as High Steward of Cambridge University, I may attend the installation of the new Chancellor, Lord Tedder, and later the presentation of honorary degrees to distinguished persons, one of whom will be General Bradley.
The House signified its assent.

PRIVATE BUSINESS
  PIER AND HARBOUR PROVISIONAL ORDER (LYMINGTON) BILL
    WALSALL CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL
    Read a Second time, and committed.
  PETITIONS

    FUEL, MEAT AND HOUSING
    Mr. John Morrison: I beg to ask leave to present a petition from the women of Wiltshire. This Petition contains 1,485 signatures and is indicative of the feeling aroused there by the policy for fuel, meat and housing and its administration. The Petitioners pray that this policy be changed forthwith and concludes:
    "Your Petitioners, as in duty bound, will ever pray."
    To lie upon the Table.
    Mr. Studholme: I beg to ask leave to present a petition in identical terms with that presented by my hon. Friend the Member for Salisbury (Mr. J. Morrison). It is signed by 694 women resident in the neighbourhood of Plymouth in the county of Devon and also concludes:
    "Your Petitioners, as in duty bound, will ever pray."
    To lie upon the Table.

ORAL ANSWERS TO QUESTIONS
  CHINA

    H.M. Consuls, Tihwa and Nanking
    Mr. Fitzroy Macleanasked the Secretary of State for Foreign Affairs what reply has been received from the Chinese Government to the protests addressed to them by His Majesty's Government concerning the treatment of His Majesty's Consuls at Tihwa and Nanking.
    The Secretary of State for Foreign Affairs (Mr. Herbert Morrison): No reply has been received to the protest about the treatment of His Majesty's Consul at Nanking. As regards the treatment of His Majesty's Consul-General at Tihwa, no communication has been received from the Chinese Government other than that mentioned in the reply given to the hon. Member on 12th March.
    Mr. Maclean: Does the right hon. Gentleman consider that at this time when British Consular officers are being physically ill treated and publicly humiliated by the Chinese Government, this is the moment to plead with that Government to be allowed to establish full diplomatic relations?
    Mr. Morrison: I did not know that we were in the position of pleading. It is well known that we are willing to establish full diplomatic relations, but there have been difficulties at the other end. I should like to take this opportunity to pay tribute to the British Consular Service in China, which has been working very bravely in most difficult conditions. I am sure the House will join with me in this expression.

    Diplomatic Relations
    Mr. F. Macleanasked the Secretary of State for Foreign Affairs how long negotiations have now been in progress between His Majesty's Government and the Chinese Government for the establishment of full diplomatic relations; and what progress has been made.
    Mr. H. Morrison: The position remains as stated in the answer given to the hon. Member on 7th February. Full diplomatic relations have not yet been established.
    Mr. Maclean: Is it still the policy of His Majesty's Government to endeavour to secure the admission of the Chinese Communist Government to the Security Council and also to secure the transfer to them of Formosa?
    Mr. Morrison: We still take the view that the Chinese People's Government should be admitted to the United Nations but, as the hon. Member will have observed, we have taken the view that in existing conditions there is not much point in voting on it at the present time. Therefore, the Trusteeship Council, yesterday I think, postponed the issue.

    Passports
    Mr. J. R. Bevinsasked the Secretary of State for Foreign Affiairs how many persons have been issued with passports for China since 1st April, 1951.
    Mr. H. Morrison: No record is kept of the number of persons travelling to different countries, or of the countries for which individual passports are made available. I am therefore unable to say how many persons have obtained passports for China during any specified period.
    Mr. Bevins: Is the right hon. Gentleman aware that, during the period referred to, at least four prominent members of the British Communist Party have visited the Communist leaders in China? [HON. MEMBERS: "Why not?"] Does the right hon. Gentleman not think it is a shameful thing that, when British lives are being lost in Korea, these men should be allowed to confer with their opposite numbers there?
    Mr. Morrison: I think that is running the argument a bit far. We have never laid it down that members of the Communist Party cannot go anywhere. In fact, I am in favour of quite a lot of them going somewhere. As a matter of fact, the Chinese authorities could have admitted them without passports. I understand that the number of the party is probably less than 10, so there is no danger of an extension of the social revolution breaking out.
    Colonel Gomme-Duncan: As these people who go off are heartily in sympathy with the Chinese Government and with the Russian Government as well, does not the right hon. Gentleman agree that we should let them stay there?
    Mr. Morrison: I am glad to note that the hon. and gallant Member disagrees with his hon. Friend who put the Question.

  TIBET (SITUATION)
  Mr. F. Macleanasked the Secretary of State for Foreign Affairs if he will now make a further statement regarding the situation in Tibet.
  Mr. H. Morrison: I would refer the hon. Member to the reply given on 4th June to the hon. Member for Hornsey (Mr. Gammans).
  Mr. Maclean: Is it not the declared policy of His Majesty's Government to maintain Tibetan autonomy, and will not the Foreign Secretary agree that at the present time it seems most unlikely, to say the least, that Tibet will remain autonomous or, indeed, be anything except another Soviet satellite? Can he say what action His Majesty's Government propose to take?
  Mr. Morrison: It is, of course, of some importance what the attitude of the Tibetan Government is, but for external relations it is surely a matter in the first instance for India.
  Mr. M. Philips Price: Is it not a fact that we now have no power in this matter, seeing that India is a neighbour of Tibet and not ourselves?
  Mr. Morrison: I think there is a great deal of truth in what my hon. Friend says.
  Mr. Pickthorn: Do the last two replies mean that His Majesty's Government regard themselves as incapable of having a policy on Tibet because India is nearer?
  Mr. Morrison: No, Sir, it does not mean that; but the fact has to be faced that we have no diplomatic representation in Tibet.
  Mr. Henry Hopkinson: Can the right hon. Gentleman say whether His Majesty's Government are in consultation with the Governments of India, Pakistan and Nepal on this question?
  Mr. Morrison: We are being kept informed as to the position in India.
  Mr. Maclean: Is it not possible to bring the matter before the Security Council?
  Mr. Morrison: I do not think it is for us to bring it up there. Tibet did bring it before the Security Council, but I do not know whether they are going to pursue the matter.
  Mr. Maclean—
  Mr. Speaker: We cannot take all our time on this Question.

  ALBANIA (BRITISH CLAIM)
  Brigadier Raynerasked the Secretary of State for Foreign Affairs how the matter now stands as regards the payment of damages awarded by The Hague International Court against Albania in 1949 in respect to the Corfu Channel incident.
  Mr. H. Morrison: I would refer the hon. and gallant Member to the agreement between the British, American and French Governments published in the White Paper. Command No. 8242.
  Brigadier Rayner: I have read it. Will the Government on every possible occasion instruct the British people on the very small advantages of these references to The Hague Court? Is it not much better in these days to face facts honestly and not live in a world of make believe?
  Mr. Morrison: I do not think it would be useful if I were to make an attack upon The Hague Court, as invited by the hon. and gallant Member.
  Mr. E. L. Mallalieu: In spite of the somewhat nugatory character of the judgment in the Corfu case, is my right hon. Friend aware of the great satisfaction he has given in submitting the Persian oil case to The Hague Court, as an alternative to the Tory policy of sending warships?
  Mr. Mott-Radclyffe: Before the discussion took place with Albanian representatives on the method of paying The Hague Court award, were His Majesty's Government aware that there were no Albanian assets in this country which could be seized as compensation?
  Mr. Morrison: I think we have always known that.

  JAPAN

    Peace Treaty
    Colonel J. R. H. Hutchisonasked the Secretary of State for Foreign Affairs whether, in his talks with Mr. John Foster Dulles on the question of a Japanese treaty, he will review the question of the Congo Basin Treaties.
    Mr. H. Morrison: Yes, Sir.
    Colonel Hutchison: While thanking the right hon. Gentleman for that reply, may I ask whether he will be prepared to receive deputations from trades and industries that are very concerned about the effect of these treaties and agreements?
    Mr. Morrison: I am not sure who would be the appropriate Minister, but if they will put their views in writing I shall be very glad to consider them.
    Colonel J. R. H. Hutchisonasked the Secretary of State for Foreign Affairs whether, in his discussions with Mr. John Foster Dulles of the United States of America on the Japanese peace treaty, he will include the question of compensation to British ex-prisoners of war of the Japanese.
    Mr. H. Morrison: The subjects under discussion with Mr. Dulles include all aspects of the proposed peace treaty with Japan.
    Colonel Hutchison: I should like the right hon. Gentleman to be a bit more categoric and say whether these subjects include the subject of prisoners of war?
    Mr. Morrison: I do not think that I can be more categorical at this stage.
    General Sir George Jeffreysasked the Secretary of State for Foreign Affairs whether he will include in the peace treaty with Japan a clause providing for payment by the Japanese of substantial sums, both for the purpose of compensation to their former prisoners of war for the barbarities to which they were subjected, and also in order to make it clear to them that international law cannot be defied with impunity.
    Brigadier Smythasked the Secretary of State for Foreign Affairs if he will give an assurance that when drawing up the Japanese peace treaty he will keep

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    separate the claims of the Far Eastern prisoners of war for compensation from the Japanese for brutalities inflicted on them in violation of the terms of The Hague and Geneva Conventions and the claims of British civilians for loss of property.
    Mr. H. Morrison: As the hon. and gallant Member for Norwood (Brigadier Smyth) was informed on 30th May, I am not yet in a position to give any further information with regard to the Japanese peace treaty.
    Sir G. Jeffreys: Is the right hon. Gentleman aware that, apart altogether from the question of compensation for brutalities inflicted, if public retribution is not exacted from the Japanese for their deliberate and calculated breaches of The Hague and Geneva Conventions and for their affronts to this country, they will be thought in the East to have got away with it and we shall lose even more face than we have lost already and they will gain face over it?
    Mr. Morrison: Of course, it must be remembered that the Japanese have undergone the experience of five years' occupation. I shall not forget the considerations which the hon. and gallant Gentleman has put to me but, on the other hand, I am inclined to think that a perpetuation of hatreds is not too good for the peace of the world.
    Brigadier Smyth: Does not the right hon. Gentleman realise that Questions Nos. 16 and 19 are very different? In Question No. 19 I am asking the Foreign Secretary if he will separate the two claims. One of them, which was accepted by the House on 10th May, relates to the violation of certain principles of war. The other claim is for restitution to British civilians in respect of property which they lost in the Far East. That is a claim which demands individual attention. I was suggesting to the right hon. Gentleman that the two claims are quite different and asking him to keep them separate. Will he please do so?
    Captain Crookshank: In his reply just now the right hon. Gentleman made use of the words that since these occurrences the Japanese had "undergone" five years' occupation. Could he explain what he
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    meant by that? He does not really mean that is a set-off against the cruelties, but it is a phrase which might well be misunderstood if he does not hastily put it right.
    Mr. Morrison: I was answering the hon. and gallant Gentleman who put the Question as to whether anything had been done to bring home to the Japanese the considerations to which he drew attention. I do not say that that is a full discharge of bringing them home to them, but at any rate it was a consideration. That was all I meant.
    Brigadier Smythasked the Secretary of State for Foreign Affairs when he expects to be in a position to inform the House with regard to the Japanese peace treaty.
    Mr. H. Morrison: I will consider doing so in the near future.
    Brigadier Smyth: Will the House have an opportunity of discussing the treaty proposals before they are drafted in final form?
    Mr. Morrison: I will take that into account and see what I can do.
    Mr. Walter Fletcher: In view of the information given by the Foreign Secretary in 1947 regarding claims for property seized by the Japanese in Malaya and elsewhere, will no settlement be arrived at before those concerned have an opportunity of making representations?
    Mr. Morrison: Those concerned are perfectly free to make any representations at any moment they wish. It is quite possible they have done so.
    Mr. Sydney Silverman: Can my right hon. Friend say what representations in these negotiations now proceeding His Majesty's Government are making to the other Powers concerned to make sure that China, who after all fought the Japanese longer than any other Power, has some share in those negotiations?
    Major Legge-Bourke: May I ask the right hon. Gentleman if, when he is in a position to tell the House more about this matter, he will bear in mind the decision of the House on 10th May? He usually expresses a desire to abide by the wishes of the House, so will he do it in this case?
    Mr. Morrison: The debate took place and must be taken into account as well as the Motion, but the hon. and gallant Gentleman may be quite sure that I shall keep in mind the decision the House reached.
    Mr. Silverman: Would my right hon. Friend give me the courtesy of a reply to my question, which surely was a reasonable question to ask?
    Mr. Morrison: If I may say so, I think it opens up implications that I am not disposed to pursue at this stage.

  U.S. MINISTER'S SPEECH
  Mr. Dribergasked the Secretary of State for Foreign Affairs what representations have been made on behalf of His Majesty's Government to the United States State Department concerning the recent speech by Mr. Dean Rusk, United States Assistant Secretary of State for Far Eastern Affairs.
  Mr. H. Morrison: His Majesty's Ambassador in Washington conveyed to Mr. Acheson the misgivings of His Majesty's Government at Press reports of the speech tending to show that there had been a new development in United States policy towards China and Formosa. Mr. Acheson assured him that there had been no such development and that the speech indicated no modification of established American policy.
  Mr. Driberg: Did Mr. Acheson explain to our Ambassador the apparent discrepancies between that speech and the policy which has always been understood to have been followed hitherto? Will my right hon. Friend give an assurance that there will be no modification of British policy on the lines suggested in the speech?
  Mr. Morrison: If my hon. Friend wants to put a Question down about British policy it would be better if he did so, rather than to put down a Question about American policy.
  Mr. Driberg: In view of the constantly reiterated necessity of close harmony in major policy between the British and American Governments, surely we are entitled to ask for that assurance?
  Mr. Osborne: Is it not true that the discrepancies referred to are much less
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  than the discrepancies shown among speeches made by members of His Majesty's Government?
  Mr. Sydney Silverman: Does my right hon. Friend understand from what Mr. Acheson told him that Mr. Rusk's speech not merely represents the present American policy but represents what American policy has always been? Can my right hon. Friend say whether in that respect his misgivings were increased or diminished by the statement?
  Mr. Morrison: In the light of Mr. Acheson's statement to our Ambassador I really have no misgivings and, if I may say so, I do not think it is good for the House of Commons to take a line which is calculated to complicate Anglo-American relations.
  Mr. Osborne: That is what some hon. Members opposite are doing all the while.

  FOREIGN MINISTERS' CONFERENCE, PARIS
  Brigadier Raynerasked the Secretary of State for Foreign Affairs whether he will consider withdrawing the United Kingdom's representative from the Paris Conference of Deputies in view of the time wasted and the meagre results achieved.
  Mr. Emrys Hughesasked the Secretary of State for Foreign Affairs to what extent our representative at the recent Paris Conference objected to the question of American bases for possible bombing operations against the Union of Soviet Socialist Republics being included in the agenda for the proposed conference of Foreign Ministers; and on what grounds his objections were based.
  Mr. H. Morrison: The situation created by the Soviet Government's unfavourable response to the Western Powers' invitation to a meeting of the four Foreign Ministers in Washington on 23rd July is at present under consideration by the United Kingdom, United States and French Governments. In the circumstances, I do not think it would be wise for me to make any statement at this juncture.
  Brigadier Rayner: Although we all recognise that we are dealing with an Eastern Power and that negotiation over

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  coffee and vodka must necessarily be rather long, has not this "schimozzle" gone on altogether too long? In view of the fact that the moment they desire to have a high level conference the Soviet Government can arrange one in double quick time, will the right hon. Gentleman say what possible profit we can have from continuing to subscribe to this Paris bottle party?
  Mr. Hughes: Will not the Foreign Secretary agree that it is a very reasonable request by the Government of the U.S.S.R. that bombing bases from which atom bombers might go to bomb Moscow and other towns of the U.S.S.R. should be put on any agenda; otherwise a conference will be no use?
  Mr. Morrison: I really wish my hon. Friend could stretch his imagination so far as to realise that there may be bombing bases the other way round.
  Mr. Hughes: I do.
  Mr. Morrison: If my hon. Friend could take account of British as well as Russian interests it would be a welcome development.
  Viscount Hinchingbrooke: Would it not be right and appropriate, and also go a long way to eliminate the so-called Russian propaganda advantage at the present moment, if the three Western Powers were to accept the Soviet demand for the inclusion of the American bases as a specific item of the conference agenda, but at the same time insist that as another item there should be included the present level of Soviet armaments and the armaments of the satellite powers?
  Mr. Morrison: That is a possible line of exploration. I notice the combination here. On the other hand, one really must make up one's mind whether one wants a conference to do effective work for the development of the peace of the world, or whether one merely wants a debating assembly.
  Mr. Hughes: Is the Foreign Secretary aware that I am not concerned with Russian interests? [HON. MEMBERS: "Oh!"] My interests are the interests of this country and of humanity. I am taking the same attitude now as the right hon. Gentleman took in the 1914–18 war.
  Mr. Morrison: I follow my hon. Friend's counter-offensive perfectly. I only say that when he talks about bombing bases he might bear in mind that there are more bombing bases than are to be found in the United Kingdom.
  Mr. Hughes: I have done so.
  Mr. Morrison: My hon. Friend did not say so.

  HAIFA
  Mr. Dodds-Parkerasked the Secretary of State for Foreign Affairs whether, in view of the strategic importance of the area, he will approach the Israeli Government with a view to calling a meeting of those concerned to consider the establishment at Haifa of a free, international port, including the oil refineries.
  Mr. H. Morrison: The future of the port of Haifa is for the Government of Israel to determine. In any case the benefits to be derived from the establishment of a free port at Haifa would seem to depend on conditions of trade which do not at present exist. His Majesty's Government do not therefore consider that an approach of the nature suggested would be expedient at the present time.
  Mr. Dodds-Parker: Has the Foreign Secretary any alternative suggestion for getting this badly needed oil production back into operation, and, if so, will he disclose it to the House?
  An Hon. Member: What would you do, chum?
  Mr. Boothby: Before approaching the Government of Israel, will the right hon. Gentleman approach the Government of Egypt in order to secure the passage through the Suez Canal of our tankers carrying oil for the refineries on their lawful occasions and in accordance with Treaty rights?
  Mr. Morrison: That has been done, and our efforts in that direction will be continued.

  GERMANY

    Refugees
    Mr. Sorensenasked the Secretary of State for Foreign Affairs, in view of increasing distress arising from the continuous influx of refugees into Western

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    Germany and the difficulty of the Western German Government adequately dealing with the situation, whether His Majesty's Government or the United Nations have considered or will consider afresh conferring with the West German Government with a view to assisting that Government in this problem.
    Mr. H. Morrison: His Majesty's Government have considerable sympathy with the German Federal Government in their difficulties, and are participating in the discussions covering this subject recently initiated by the Committee of Ministers of the Council of Europe.
    Mr. Sorensen: Can the Secretary of State say to what extent the Government are prepared to take some active interest in and to render some active service to the solution of this very grave problem, because precisely these conditions, which are being added to by thousands of refugees daily, form the material from which very sinister political parties can arise in the future?
    Mr. Morrison: This is a serious problem, as I found when I was in Germany; I quite accept that. On the other hand, we really cannot take the whole burden on the shoulders of His Majesty's Government.
    Mr. Sorensen: I am not suggesting that.
    Mr. Ian Winterbottom: Will my right hon. Friend sympathetically consider any initiative coming from the Commonwealth or some organ of the United Nations, such as the I.R.O., the purpose of which is to arrange for the re-settlement of these people in the less densely populated areas of the world?
    Mr. Morrison: We should regard such suggestions sympathetically.
    Captain Ryder: Will not the sending of additional divisions to Germany make the problem even worse, and is it not likely to create bad feeling between us and the Germans? Would it not be better to have some constructive plan now?

    Reichsfront Army
    Mr. Toucheasked the Secretary of State for Foreign Affairs how many of the
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    illegal Reichsfront Army of Major General Remer are members of the British trained German Service Organisation.
    Mr. H. Morrison: I cannot provide the hon. Member with any figures on this subject. I can assure him, however, that if any members of the German Service Organisation should be found to be members of the illegal Reichsfront Army they will be instantly dismissed. I may add that a security watch is normally kept for manifestations of political extremism in any direction among members of this body and that, in view of recent evidence of renewed extremism of the right in Lower Saxony. I am asking my right hon. Friend the Secretary of State for War to ensure that measures of precaution are intensified.

    Occupation Statute
    Professor Savoryasked the Secretary of State for Foreign Affairs whether, during the recent negotiations for the revision of the Occupation Statute of Western Germany, any assurance was obtained from the Federal Chancellor of a guarantee of the Kiel Convention securing the rights of the Danish population of South Slesvig.
    Mr. H. Morrison: No assurance of this nature was obtained or requested during the negotiations for the revision of the Occupation Statute. The Federal Chancellor, however, gave a spontaneous assurance some six months ago, in a memorandum to the Allied High Commission, that the Federal Government endorsed the policy embodied in the Kiel Declaration.
    Professor Savoryasked the Secretary of State for Foreign Affairs (1) whether the terms of the revision of the Occupation Statute of Western Germany will be submitted to Parliament for its approval before it is Anally ratified;
    (2) whether the Instrument of Revision of the Charter of the Allied High Commission for Germany will be submitted to the approval of Parliament before being finally ratified.
    Mr. H. Morrison: Neither of these Instruments is subject to ratification. Both entered into force on 7th March, 1951.
    Professor Savory: As the right hon. Gentleman has combined my two Questions, I should like to ask for information on two separate points. First, with regard to the revision of the Occupation Statute, has the attention of the right hon. Gentleman been called to the serious clause which states that federal legislation and legislation of the Lander will no longer be submitted to the British High Commission as a preliminary and, therefore, that the unfortunate Danish people of South Slesvig are extremely apprehensive that some law may be passed by the Diet of Slesvig-Holstein, as a result affecting their rights?
    With regard to the second point, which is the revision of the Charter of the Allied High Commission, has the attention of the right hon. Gentleman been drawn to the clause allowing for direct diplomatic relations with Germany? I should like to know whether that permits the Soviet Government also to have direct diplomatic relations with Germany?
    Mr. Morrison: If the hon. Gentleman wants a reply, he had better put all that down.

  YUGOSLAVIA (WESTERN AID)
  Mr. Osborneasked the Secretary of State for Foreign Affairs if he will make a statement on the talks that are taking place in London between Britain, the United States of America and France on Western aid to Yugoslavia; and what steps he is taking to expedite that aid.
  Mr. H. Morrison: The talks between American, French and British officials are now almost concluded, and the recommendations of the three delegations about future short-term economic aid to Yugoslavia will shortly be submitted to the three governments concerned. When these recommendations have been approved by Governments the House will be informed of the scope of the proposed aid programme.
  Mr. Osborne: Can the right hon. Gentleman say approximately when he expects to make that announcement to the House, and will he bear in mind that this is a case where one gives twice if one gives quickly?
  Mr. Morrison: I am hoping that there will not be material delay.
  Mr. Philips Price: Will my right hon. Friend bear in mind that help to Yugoslavia is vitally important just now because she is one of the best bastions against Soviet encroachment in South-East Europe?
  Mr. Morrison: I can assure my hon. Friend that this consideration will most certainly be borne in mind.
  Mr. Duncan Sandys: Can the right hon. Gentleman say whether these talks include the question of military aid to Yugoslavia in the event of an aggression upon that country? Does he not consider that it is urgently necessary that the Western Powers should make their position in regard to this important question quite clear without delay?
  Mr. Morrison: That is not the Question on the Order Paper.
  Mr. Sandys: My question concerns the scope of the talks.

  KOREA (CIVILIAN POPULATION)
  Mr. Emrys Hughesasked the Secretary of State for Foreign Affairs what recent reports he has received from the Agent General for Reconstruction in Korea, appointed by the United Nations, describing the suffering of the civilian population in Korea; and if he will publish a summary of these reports.
  Mr. H. Morrison: The United Nations Rehabilitation Agency has not yet started operations, and the Agent General has not therefore issued any reports.
  Mr. Hughes: Does not the Foreign Secretary think that it is time that this country and the world generally had some picture of the terrible destruction which has been wrought in Korea by both sides, and that the time has come for some reasoned action to stop this terrible destruction of a country we are supposed to be liberating?
  Mr. Morrison: We shall get a report as soon as we can. My hon. Friend will appreciate that active military operations are proceeding and that the circumstances are not too easy at the moment for this purpose.

  MIDDLE AND S.E. ASIA (RUSSIAN PROPAGANDA)
  Mr. Gammansasked the Secretary of State for Foreign Affairs if he is aware of the increase in Russian propaganda films being shown in countries in the Middle East and South-East Asia with sound tracks in the language of the country in which they are being shown; and what steps he has taken in collaboration with the United States of America and also countries of the democratic world to counteract this propaganda by financing films of our own.
  Mr. H. Morrison: His Majesty's Government are aware of the need to which the hon. Member refers. They strive to meet it by supplying these areas with documentary films and newsreels dubbed in local languages. Close liaison is maintained between United Kingdom information officers and their United States colleagues in these areas with a view to making the best use of the films and equipment at their disposal.
  Mr. Gammans: Will the right hon. Gentleman say if the money voted for this purpose has been increased or decreased in the present year, in view of the fact that there has been a spectacular increase in the number of Russian films being shown in these areas?
  Mr. Morrison: If the hon. Gentleman wishes to have figures, he had better put down a Question; but a fairly substantial sum is being spent.
  Mr. Peter Smithers: Is the right hon. Gentleman aware that some of the best film propaganda was that done by the British Council? Can he say whether that has had to be substantially reduced as a result of the recent cuts in the grant to the Council, and will he increase it?
  Mr. Morrison: My impression is that there have not been drastic cuts in South-East Asia. It is an area to which, I agree, we should attach importance.
  Mr. Erroll: What use is dubbing for a largely illiterate audience?

  HUNGARY (INTERNMENTS)
  Mr. Eric Fletcherasked the Secretary of State for Foreign Affairs what reports he has received on the recent
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  mass internments of Hungarian families by the Hungarian Government; and what action he is taking in view of this further violation by the Hungarian Government of Article 2 of the Peace Treaty.
  Mr. H. Morrison: I have received no reports of mass internments. As far as I know at present, some high officials of the Hungarian Communist Party have been disgraced. I have also received reports that some Hungarians have been ordered to leave Budapest and to live in the country.
  As to the second part of the Question, on 3rd November, 1950, the United Kingdom Delegation supported a resolution adopted by the United Nations General Assembly on the Observance of Human Rights and Fundamental Freedoms in Hungary, Bulgaria and Roumania. His Majesty's Government will, of course, implement this Resolution.

  COLONIAL EMPIRE

    Gold Sales
    Mr. Errollasked the Secretary of State for the Colonies when premium gold sales will be permitted in and from colonial territories.
    The Secretary of State for the Colonies (Mr. James Griffiths): The question of sales of gold at premium prices is at present under discussion in the International Monetary Fund. In the meantime, any such sales in or from colonial territories would be undesirable since they could conflict with the Fund's gold policy, to which His Majesty's Government have subscribed.
    Mr. Erroll: Can the Minister take steps to speed up those discussions so that we can get the advantage of selling gold, or at least some of it, at higher prices?
    Mr. Griffiths: I will inquire how discussions are proceeding.

    Students (Assistance)
    Mr. Alportasked the Secretary of State for the Colonies whether any fund is available to assist colonial students in the United Kingdom who, from illness or other causes, find themselves in financial difficulties.
    Mr. J. Griffiths: Yes, Sir. A fund is provided by Colonial Governments from

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    which grants can be made to help colonial students with the expenses of convalescence or special medical comforts not provided for under the National Health Scheme, and also by way of ex gratia payment in special emergencies.
    Mr. Alport: Can the right hon. Gentleman say how many students have availed themselves of this fund, and whether those at present resident in this country are informed of its existence should they need to avail themselves of it?
    Mr. Griffiths: I think they are kept informed. There are liaison officers between my office and the students, and it is their duty—I am sure it is carried out—to keep them informed of funds of this kind. I could not, without notice, give the number of students who have been helped. Perhaps the hon. Member will put that question down.

    Colonial Development Corporation (Schemes)
    Mr. Henderson Stewartasked the Secretary of State for the Colonies what further schemes, in addition to the 50 schemes now being operated, are being examined for early development by the Colonial Development Corporation; and what projects in connection with the Colombo Scheme are the Corporation being asked to consider.
    Mr. J. Griffiths: The Corporation has sixteen schemes under investigation at the present time, but it is not the policy of the Corporation to publish details of their schemes while they are under investigation.
    The Corporation is already participating in several projects in South-East Asian territories which, although not formally a part of the Colombo Plan, will contribute to the economic expansion which the Colombo Plan is designed to promote, and it has a number of similar schemes under investigation.
    Mr. Stewart: In view of the Colonial Secretary's own statement in the recent debate that the present ought to be a time of consolidation for the Corporation, is it wise that they should be either required or encouraged now to undertake any new schemes?
    Mr. Griffiths: These schemes are under investigation. No decision has been made about them yet.

  HONG KONG

    Chinese Residents
    Sir Ralph Glynasked the Secretary of State for the Colonies how many Chinese have registered as residents in the Colony of Hong Kong since 1949; what is the total estimated population of the Colony today; and how does this compare with 1948.
    Mr. J. Griffiths: Approximately 1,366,500 persons of Chinese race have registered to date under the Hong Kong Registration of Persons Ordinance, 1949; the total estimated population of the Colony today is about 2,030,000; in 1948 it was about 1,800,000.
    Sir R. Glyn: May I ask the right hon. Gentleman, in view of this enormous increase of population in the Colony, what proportion of foodstuffs which the people must have must come from United Kingdom sources or by arrangement through the Colonial Office?
    Mr. Griffiths: A good deal of food comes from the mainland of China. I could not give particulars about the United Kingdom unless I had previous notice.

    Industrial Development
    Sir R. Glynasked the Secretary of State for the Colonies how many factories and other assembly establishments have been set up in the Colony of Hong Kong to give employment to the greatly increased population since 1949; and what quantity of raw materials must be imported to supply these undertakings apart from the entrepôt trade with China from that Colony.
    Mr. J. Griffiths: Five hundred and twenty-two new factories and workshops were registered in the Colony between 1st January, 1949, and 21st March of this year, giving employment to a further 30,000 workers, but there has also been a steady increase in the number of factories and workshops not officially registered, and also in the trades and services which cater for the general needs of the population.
    With reference to the second part of the Question, I cannot give figures relating specifically to these new undertakings, but statistics are available showing the

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    total monthly requirements of important materials for all the Colony's industries and, with permission I will circulate these figures with the OFFICIAL REPORT.
    Sir R. Glyn: Does not the right hon. Gentleman agree that the work which has been done by the Governor of Hong Kong and his officers to give employment to this vast increase in the population has been extremely successful, but that if there is any diminution in employment it may cause industrial difficulties? Will he see that the raw material needed for those factories is forthcoming?
    Mr. Griffiths: We are very conscious of the need for seeking to provide as large a measure of employment as possible, and of the dangers of increasing unemployment.
    Mr. Harrison: What steps is my right hon. Friend taking to control this terrific increase of population in Hong Kong, and also what steps is he taking to stop the large increase in economic activity which is beyond the capacity of that particularly small island?
    Mr. Griffiths: I think I have answered Questions already in the House about the arrangements that are made to control the movement of population in Hong Kong.
    Following are the figures:

    ESTIMATED QUANTITIES OF THE MORE IMPORTANT MATERIALS REQUIRED MONTHLY FOR HONG KONG INDUSTRIES

    Commodity

    Long tons

    Tinplate

    …

    1,532

    Black Sheets

    …

    2,260

    Steel Plates, Mild

    …

    464

    Aluminium

    …

    256

    Copper

    …

    58

    Brass and Bronze

    …

    717*

    Iron and steel (including wire)

    …

    2,000

    Galvanised Iron

    …

    230

    Lead

    …

    53

    Nickel

    …

    7

    Zinc

    …

    137

    Welding Rods and Wire

    …

    100

    Sulphur

    …

    157

    Rubber

    …

    575

    Chemicals, dyestuffs and pigments

    …

    3,000†

    Metres

    Tungsten Wire

    …

    616,000

    Molybdenum Wire

    …

    31,500

    * Of which local rolling mills can produce 270 tons of brass sheets provided scrap is available.

    † Mainly for enamel, dyeing, paint and plastic industries.

  MALAYA AND SINGAPORE

    Rubber Estates (Protection)
    Mr. Vaughan-Morganasked the Secretary of State for the Colonies what steps have been taken to draw the attention of rubber estates in Malaya to the fact that arms and armoured vehicles are available in this country for purchase by them.
    Mr. J. Griffiths: The Rubber Growers Association in this country, and through them the United Planting Association in Malaya, are fully aware of the means of purchasing arms and armoured vehicles.
    Mr. Vaughan-Morgan: Is the right hon. Gentleman aware that there is at least one rubber estate in Malaya, with a head office in London, which is completely unaware that these arms and vehicles could be bought for their protection?
    Mr. Griffiths: It is well known to the Association to which most of the estates belong. If there is an estate that does not know, I hope that this Question and answer will give them the information they require.
    Colonel Gomme-Duncan: In view of the fact that these estates and personnel are serving in this war, is it not undesirable that these people should have to pay for arms and vehicles with which they are taking part in what is, after all, our war?
    Mr. Griffiths: That is another question.

    Situation
    Mr. Gammansasked the Secretary of State for the Colonies to what extent the number of bandit outrages in Malaya has increased or decreased during the past three months as compared with the previous quarter; how the figures of casualties compare; and if he will make a statement on the situation generally.
    Mr. J. Griffiths: There has been no significant change in the number of incidents during the last three months compared with the previous three months. Fatal casualties of civilians and the security forces have decreased very slightly, but bandit casualties, including killed, captured and surrendered, have increased by 37 per cent. The general

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    situation remains much as described in my reply to the hon. Member for Gillingham (Mr. Burden) on 2nd May.
    Mr. Gammans: Does the Minister, generally speaking, regard the situation as being better than it was, say, six months ago?
    Mr. Griffiths: The most encouraging sign of the last few months has been the fact that information is now coming to the security officers much more freely and much more often. That is the most encouraging sign, because it gives hope for the future.
    Mr. Lennox-Boyd: The Secretary of State has said that there has been a 37 per cent. increase in casualties among the bandits. What does this percentage mean in actual numbers?
    Mr. Griffiths: I could not give the number without notice.

    China (Rubber Contracts)
    Mr. Awberyasked the Secretary of State for the Colonies what was the quantity purchased, and the price paid per pound, for the rubber which was taken over by the Government in respect to contracts made in Singapore and Malaya with China before the destinational controls were imposed.
    Mr. J. Griffiths: The only quantity so far purchased is a cargo of 740 tons originally consigned to China in the s.s. "Nor Bay" which was refused clearance. This cargo was taken over at a cost of 5s. per pound landed at Singapore subject to a fractional adjustment now under consideration.
    Mr. Awbery: Can my right hon. Friend say whether this is the inflated price which is offered by the purchasers in China, and whether the vendors of the rubber in Malaya were aware that it may be used against the United Nations in Korea?
    Mr. Griffiths: I think that this price was about right at that time.

    Kuala Lumpur (Curfew)
    Mr. Awberyasked the Secretary of State for the Colonies what notice was given, and what methods adopted, to notify the residents in the Ampang suburb of Kuala Lumpur that a curfew
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    was being imposed; and whether steps were taken to ensure that all the inhabitants had been made aware that such a restriction had been imposed before prosecutions were initiated.
    Mr. J. Griffiths: The Curfew Order to which my hon. Friend is referring was proclaimed throughout the area, on the day before it was due to become effective, by police patrols with the assistance of loudspeaker vans. A night curfew had been in force since 4th December, 1950.
    Mr. Awbery: Is my right hon. Friend aware that I have a letter from a man living in the area, who informs me that the police notified the people of the area only by going along the main road with an amplifier and that people living off the main road knew nothing at all about it for some days afterwards? Will my right hon. Friend take steps to ensure that in future everyone concerned is aware of the curfew?
    Mr. Griffiths: It is desirable that everyone should be made aware of the curfew, and this is, of course, essential for its success. My information is that that was done in this particular case.

    Riots (Report)
    Mr. Niall Macphersonasked the Secretary of State for the Colonies whether he will now publish the Report on the Singapore riots which took place in December last.
    Mr. J. Griffiths: The Report has now been presented to the Governor, who is fully aware of the need for its early publication.
    Mr. Macpherson: Does that mean that the Report will be published immediately after the Governor has examined it and not first submitted to the right hon. Gentleman for consideration?
    Mr. Griffiths: No, the Commission was set up by the Governor and the Report will be presented to him. It is for him to publish it, and he is fully aware of the necessity to publish it as soon as possible.

  WEST AFRICA

    Diseased Cocoa Trees
    Mr. Sorensenasked the Secretary of State for the Colonies what is the present position in respect of the cutting-

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    out of diseased cocoa trees in the Gold Coast and Nigeria; and what proposals have been made regarding the reconstruction of the Cocoa Marketing Board.
    Mr. J. Griffiths: The Gold Coast Government, after consideration of the report of the Committee appointed to inquire into the organisation and methods for the control of swollen shoot disease by compulsory cutting out, has decided that compulsory cutting out should cease and that the farmers' consent and co-operation should be sought in the Government's efforts to control the swollen shoot disease. The policy which is being followed in Nigeria is as described in the statement circulated in the OFFICIAL REPORT of 11th April.
    With regard to the second part of the Question, I am arranging to place in the Library of the House a copy of the amending Gold Coast legislation under which the Cocoa Marketing Board is to be reconstructed.
    Mr. Sorensen: Is the recommendation or conclusion of the Gold Coast Government for the cutting out of the disease permanent, or is it only a temporary expedient? There is obscurity about this.
    Mr. Griffiths: No, Sir. The conclusion is that the compulsory cutting out should cease and that efforts should be made to do this by co-operation with the farmers.
    Mr. Gammans: Is the policy of abandoning the compulsory cutting out supported by the Minister's technical advisers?
    Mr. Griffiths: The decision was the result of a report by a committee. The report was unanimous and the Gold Coast Government acted upon it.

    Prices and Wages
    Mr. Sorensenasked the Secretary of State for the Colonies to what extent food and cloth prices have risen in West Africa during each of the past three years; to what extent wages have also risen; and what proposals have been considered to deal with the problem.
    Mr. J. Griffiths: Up-to-date information on these points is being obtained from West Africa, and I will write to my hon. Friend when inquiries are complete.
    Mr. Sorensen: Meanwhile, can my right hon. Friend say whether there is parity between the rise in prices and the rise in wages? Is it not rather the case that there is a considerable disparity, leading to a good deal of discontent?
    Mr. Griffiths: I am seeking this information for my hon. Friend, and I think he had better wait until I receive it from West Africa.

    Shark and Tunny Fish
    Mr. Osborneasked the Secretary of State for the Colonies to whom he proposes to sell, and at what prices, the processed shark and tunny fish now being caught in West African waters by the ship "African Queen"; when these foods will be made available; and in what quantities.
    Mr. J. Griffiths: These are all matters for the Colonial Development Corporation, to whom I suggest that the hon. Member should address his inquiries.
    Mr. Osborne: Does the Minister know whether the Colonial Development Corporation had conversations with his right hon. Friend the Minister of Food to see whether the British public were prepared to buy and to eat processed shark?
    Mr. Griffiths: I am sure that if the hon. Member puts that question to the Corporation he will get a reply.
    Mr. Osborne: I have done so, but did not get a reply.
    Mr. Griffiths: The hon. Member should try again.

  COLONIAL SERVICE

    Overseas Food Corporation (Transferred Personnel)
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies what conditions of service are being offered to former personnel of the Overseas Food Corporation who are taken into the Colonial Service; and to what extent length of previous service in East Africa is taken into account.
    Mr. J. Griffiths: Staff secured from the Overseas Food Corporation would be engaged on the terms applicable to other overseas officers, which take into account

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    experience relevant to the duties of the posts for which they are selected. Some education staff have been taken on by the Tanganyika Government for the remainder of their tours of duty at existing salaries.
    Mr. Dodds-Parker: Can knowledge of a local language, for instance, also be taken into account?
    Mr. Griffiths: I am sure that it would be by the Government.

    Personal Cases
    Mr. Gammansasked the Secretary of State for the Colonies what was the total service in Sarawak for which Mr. MacBryan was paid a pension of £1,400 a year; what were the claims for which the annuity of £900 a year was in settlement; and what is the highest pension hitherto paid to any member of the Sarawak Government.
    Mr. J. Griffiths: According to my information, Mr. MacBryan served the Rajah and his government between 1920 and 1946 for various periods amounting to about 12 years; the annuity of £900 is in settlement of a claim by Mr. MacBryan under an agreement executed by the Rajah before the cession to pay him £1,400 a year for life out of Government funds; the highest pension hitherto paid to a Sarawak official is £1,186 4s. 4d.
    Mr. Gammans: What is behind this extraordinary business? Is not Mr. MacBryan, for his 12 years' service, getting at least three times as much pension as an ordinary member of the Sarawak Service? Was not the obligation to pay this pension by the Rajah taken into account when a financial settlement was made by Rajah Brooke?
    Mr. Griffiths: The pension now being paid to Mr. MacBryan was settled with him after negotiation.
    Mr. Fortasked the Secretary of State for the Colonies if he will explain the refusal of the Kenya Government to grant Mr. F. Hewitt, 53, Victoria Road, Padiham, a pension of £374 a year, based upon the salary of £660, which he actually earned as a senior health inspector; and if he will take steps to have this decision reversed.
    Mr. J. Griffiths: Up to 1948, Mr. Hewitt's pensionable emoluments were £660 plus £81 house allowance. His pension has, in fact, been awarded on the basis of increased pensionable emoluments of £840 in consequence of the post-war revision of salaries. I am aware that he considers that his salary should have been converted to a higher figure, but neither I nor the Government of Kenya have been able to accept his contention.
    Mr. Fort: Is the right hon. Gentleman aware that Mr. Hewitt served the Kenya Government for 23 years, ending up as a senior health inspector, and that the result of the Kenya Government's decision after his many years' service has been to reduce his pension by a mere £20 or so a year, and could the Minister see his way to rewarding this man fully for his many years' service in Kenya?
    Mr. Griffiths: I have gone into this matter very fully. I am satisfied that this man has been awarded the right pension. The matter has a long history—far too long to be dealt with adequately by question and answer. If the hon. Member would care to write to me, I will let him have very much fuller information.

  EAST AFRICA

    Coffee (Price)
    Mr. James Johnsonasked the Secretary of State for the Colonies what relation the controlled price paid to African coffee growers of Uganda bears to the world price of coffee sold at Nairobi by non-African coffee growers in Uganda.
    Mr. J. Griffiths: As the reply is unavoidably long and contains figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    Two kinds of coffee, Robusta and Arabica, are grown in Uganda. The Robusta crop is much the more important.
    With regard to Robusta coffee, the African crop is marketed as sun-dried cherry and the non-African crop as pulped, washed and cleaned coffee. No direct comparison is therefore possible. Prices paid to African growers by the Uganda Coffee Control are equivalent to the minimum price in their contract with the Ministry of Food, for 4,000 tons a year, namely, £132 3s. a ton f.o.b. Mombasa less export tax, freight charges, and expenses incurred in processing.

    1005
    The remainder of the African crop amounting to something over 20,000 tons a year, is sold at the Mombasa auctions, where prices are at present approximately £350 a ton. The difference between the auction price and the Ministry of Food's price is credited to the Coffee Price Assistance Fund. About 2,000 tons of non-African Robusta coffee are sold under a long-term contract between the Non-Native Coffee Marketing Board and the Ministry of Food at prices, f.o.b. Mombasa, of £164 13s. and £154 10s. a ton according to quality. The remainder of this crop, about 1,000 tons a year, is sold at the Mombasa auctions at prices comparable to those for African Robusta.
    With regard to Arabica Coffee, the greater part of the African crop is marketed by the Bugishu Coffee Scheme. About 1,000 tons, rather less than half the total crop, are sold to the Ministry of Food under long-term contract at a price of £262 5s. a ton f.o.b. The remainder is sold at the Nairobi Coffee Auctions where prices at present average rather more than £400 a ton. Only a negligible quantity of non-African Arabica is marketed in Nairobi in small individual parcels; details are not available.
    Mr. J. Johnsonasked the Secretary of State for the Colonies what are the reserves of the Coffee Stabilisation and Betterment Fund in Uganda; and how is the Fund used.
    Mr. J. Griffiths: I assume that my hon. Friend has in mind the Coffee Price Assistance Fund, which stands at approximately £6,735,000. The purpose of this Fund is to cushion prices to growers should they fall.

  GRENADA (COMMUNISTS)
  Major Legge-Bourkeasked the Secretary of State for the Colonies if he is now in a position to make a further statement regarding the influence of Communists in Grenada.
  Mr. J. Griffiths: While the position has been carefully watched, the Governor has no evidence that the recent strikes in Grenada were occasioned by Communist activity. One case of Communist literature being sent to Grenada has been reported.
  Major Legge-Bourke: Will the right hon. Gentleman, without prejudicing the present inquiries, call for answers to the following questions: First, what is the relationship between Mr. Gairy and Mr. John La Rose of Trinidad, who recently visited the island? Secondly, will he have the allegations followed up which were
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  made at the meeting before the Governor on 7th March, attended by representatives of the Chamber of Commerce, the Tourist Board, the Employers' Association and the Planting Fraternity. Thirdly, will he call for a definite answer from the Governor as to whether or not this was a strike or a revolt—
  Mr. S. Silverman: On a point of order. May I ask you, Mr. Speaker, whether it is in order, under the guise of a supplementary question, to read out a long series of questions—factual questions—which were obviously prepared long in advance of the anticipated reply?
  Major Legge-Bourke: Further to that point of order. May I assure you, Mr. Speaker, that I was not reading the questions. I think it is customary to have some reference notes, but I assure you that I was not reading them.
  Mr. Speaker: I think we have had a very long supplementary question and we might have those questions answered. I agree with the hon. Member that very often a Question is put down which is innocent in itself but leads to supplementary questions which are sometimes irrelevant.
  Mr. Griffiths: I could not possibly answer those questions without seeing them on the Order Paper.
  Major Legge-Bourke: I was not suggesting that the right hon. Gentleman should answer them, but I was asking him to call for answers to them from those who could give the correct answers.

  POST OFFICE (TREASURY CONTROL)
  Mr. Russellasked the Prime Minister whether the speech made by the Postmaster-General on 22nd May advocating complete freedom from Treasury control for the Post Office represents the policy of the Government.
  The Prime Minister (Mr. Attlee): I presume the hon. Member is referring to an informal speech which my right hon. Friend made at the Conference of Post Office Controlling Officers. The suggestions which he made were put forward for consideration and discussion and did not purport to represent Government policy.
  Mr. Russell: Would the right hon. Gentleman agree that, whether the speech was formal or informal, it contained some very practicable and sensible suggestions, and will he reconsider the matter and stop using the Post Office as a source for raising taxation?
  The Prime Minister: I have been at the Post Office myself, and I am well aware of the difficulty of these questions.

  ARMED FORCES

    Equipment (Standardisation)
    Major Guy Lloydasked the Minister of Defence how far, and to what effect, agreement has been reached between the signatories to the Atlantic Pact for the standardisation of nuts, bolts and screws.
    The Minister of Defence (Mr. Shinwell): This aspect of standardisation has not been discussed by the North Atlantic Treaty Organisation because, in order to be effective, any such standardisation must cover a wider field than military equipment; it is, therefore, the responsibility of the national standardising institutions of the various countries.
    Discussions with the United States and Canada have, however, resulted in an agreement to adopt common standards for nuts, bolts and screws which will ensure interchangeability. National standards for these items will shortly be published in the three countries and production in this country has already commenced.
    Mr. Sandys: Can the right hon. Gentleman say whether agreement has been reached on any one item among all the members of the Atlantic Pact?
    Mr. Shinwell: If the right hon. Member will put that down, I will endeavour to answer it.

    Burial Arrangements
    Mr. Boyd-Carpenterasked the Minister of Defence whether, in view of the small cost to public funds involved, he will reconsider his decision not to give free transport to widows and parents of members of the three Services killed or dying in Europe in time of peace in order to enable these relatives to attend the funeral.
    Mr. Shinwell: I sympathise with the hon. Member's purpose in putting this Question. The cost to public funds is, however, not the only, or even the primary, consideration in this matter. The real problem is the practical difficulty—or even impossibility—of making suitable arrangements for travel to the overseas station concerned at short notice. We have given further thought to the hon. Member's suggestion, but we have concluded with regret that it would not be practicable to operate the scheme outside the United Kingdom.
    Mr. Boyd-Carpenter: In considering the matter, has the right hon. Gentleman given consideration to the possibility of using Air Transport Command, and is he also aware that the majority of His Majesty's Forces on the Continent of Europe are in accessible places to which it is perfectly possible to arrange air transport if people could afford it?
    Mr. Shinwell: Air Transport Command is not always available at such short notice.

    Reservists (Call-up)
    Miss Irene Wardasked the Minister of Defence the number of reservists called up to 31st May for the Royal Navy, Army and Royal Air Force, respectively.
    Mr. Shinwell: As I have indicated in my letter to the hon. Member, this is a matter falling within the responsibility of my right hon. Friends the Service Ministers, and I am therefore asking them to communicate the figures to her.
    Miss Ward: Could the right hon. Gentleman say why in discussing the period for the call-up of reservists he repudiated the principle of Cabinet responsibility?
    Mr. Shinwell: There is no repudiation at all, but the position of reservists changes from day to day. It is a matter of administration within the knowledge of my right hon. Friends, and I prefer them to deal with it.
    Mr. Churchill: How are these figures to be given? Is each of the Service Ministers to render the figure separately for his Department, and are they to be circulated in the ordinary way of Questions not answered orally?
    Mr. Shinwell: Yes, if the hon. Members ask the Questions, my right hon. Friends will no doubt give the answers.
    Sir Herbert Williams: Will the right hon. Gentleman arrange for someone in his Department who produces these figures to be able to add up?
    Mr. Churchill: My hon. Friend the Member for Tynemouth (Miss Ward) has asked a Question. She asked the right hon. Gentleman to give the figures collectively. He does not give them collectively, but says they should be given separately. Surely that operation should be conducted by the right hon. Gentleman?
    Mr. Shinwell: The right hon. Gentle man is quite wrong. As usual he both misunderstands and misrepresents the position.
    Mr. Churchill: Will the right hon. Gentleman mind answering the question, whether the answers are to be given separately by the different Ministers, or whether new Questions have to be put on the Order Paper for each of the three Ministers?
    Mr. Shinwell: It obviously depends on the nature of the Question.
    Mr. Churchill: The nature of the Question is set out in the very simple terms of whether:
    "he will state the number of reservists called up to 31st May for the Royal Navy, Army and Royal Air Force, respectively."
    Nothing could be simpler than that. How are those figures to be given? When are they to be given, and ought we to put down more Questions on the subject?
    Mr. Shinwell: I am afraid the right hon. Gentleman will require to put down more Questions, because obviously there are different categories of the reservists and obviously different dates, and these are matters in the competence of my right hon. Friends.
    Miss Ward: On a point of order. I think it would be fair if you would allow me to say, Mr. Speaker, that I had agreed with the right hon. Gentleman, because he asked me to withdraw the Question and put it down to the Service Ministers, to accept the answer in that form. I think it is only fair to say that, but why did the right hon. Gentleman say that he had persuaded the Cabinet not to have the
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    period more than 15 days? That is what I meant by repudiating Cabinet responsibility.
    Mr. Shinwell: That is not contained in the Question.
    Miss Ward: No, I know.
    Brigadier Head: May I ask the Minister of Defence, having regard to his unwillingness to answer this particular Question, whether it is not a fact that returns of the very nature required for the giving of these figures are made periodically to the Minister of Defence?
    Mr. Shinwell: The global figures are of course given to us, but it is not really a case of the global figures. As I say, there are different categories of Reserves.
    Mr. Churchill: If the right hon. Gentleman finds it so difficult to avoid getting into a muddle about such trivial details, how does he hope to solve our great problems?
    Mr. Shinwell: If the Government required any assistance to get into a muddle, the right hon. Gentleman would render every possible assistance.

FESTIVAL GARDENS, LTD. (REPORT)
The Lord Privy Seal (Mr. Stokes): Sir, with your permission and the leave of the House, I wish to make a statement about publishing the reports of the investigations into the finances of Festival Gardens, Ltd.
I have now received from the Board a report on the second investigation instituted by it at my request, which covers operations on the site. I have carefully weighed the advice I have received on the possible effect of publication on the Company's position in negotiating settlements with the various interests concerned, and I propose, before the Second Reading of the Festival of Britain (Additional Loans) Bill, to lay on the Table a White Paper conveying the results of the two investigations carried out for the Company, together with any comments the Board of the Company may wish to make on them.
Mr. Harold Macmillan: Does what the Minister has just said mean that he

1011
hopes to have completed negotiations for the settling of outstanding matters before the Bill is brought before the House?
Mr. Stokes: The settlement of outstanding matters is not my concern. Any question of settlement between the Company and the contractors is the affair of the Company. I am desirous only that the House should be as fully informed as possible about what has happened by publishing the report before the Second Reading of the Bill.
Mr. Macmillan: I am obliged to the right hon. Gentleman. I assume that that means the White Paper, when published, will contain the full reports as received by the Minister?
Mr. Stokes: That is my intention.
Sir R. Glyn: When the White Paper is published, will the right hon. Gentle-man draw a distinction between the Festival Gardens and the South Bank position?
Mr. Stokes: I do not think there is any confusion at all in the reports. The South Bank does not come into it at all. They are reports made by two sets of independent accountants into the affairs which produced this rather unexpected extra cost, and were made at the request of the Company at my instigation. It has nothing to do with the South Bank.
Sir R. Glyn: Is the South Bank overspending not to be inquired into at all?
Mr. Stokes: That is not the question. I am really not aware that the South Bank has overspent. So far as my information goes, while some items on the South Bank cost rather more than expected, the overall expenditure is within the total limit.
Mr. Macmillan: Having regard to the desirability of the Company settling these matters before the reports are published, can the right hon. Gentleman say what effect that will have on the date when we may expect the introduction of the Bill?
Mr. Stokes: The Bill is coming on almost immediately. The Second Reading will perhaps be taken the week after next.
Mr. Sandys: In view of the slight confusion there was the other day, when the
1012
Leader of the House answered a Question in the absence of the right hon. Gentleman, may we have it quite clear this time that the intention is to publish both reports in full in the White Paper?
Mr. Stokes: That is what I said. The reports, as put in by Messrs. Moores, Carson and Watson, and Messrs. Peat, Marwick, Mitchell, will be in the White Paper, together with any comments which the Board of Festival Gardens, Ltd., ask to be published at the same time.
Mr. H. A. Price: Will the Minister consider having the White Paper printed in red?
Sir H. Williams: Will the White Paper be accompanied by any white sheets of repentance?

KOREA (OPERATIONS)
The Minister of Defence (Mr. Shinwell): With your permission, Mr. Speaker, and that of the House, I should like to make a further statement on the course of operations in Korea.
The position on 2nd May, when I made my last statement, was that the first phase of the Chinese spring counter-offensive had been halted north of Seoul. The skill and courage displayed by the British 29th Brigade and the British Commonwealth 27th Brigade played a major part in breaking up the massive Chinese attacks against the United Nations western and central corps, and in enabling these two corps to withdraw in safety. The magnificent action fought by the 1st battalion the Gloucestershire Regiment at this critical period was decisive in preventing a major enemy break-through and ensured the safety of our whole force in the west.
It may be appropriate at this stage of my statement to give the House further information about this action, and also some details of the fortunes of the other units in the British 29th Brigade of which the Gloucesters form a part. The 29th Brigade, with the Belgian Battalion under command, was disposed on a wide front just south of the Imjin river guarding the approaches to Seoul. The Belgian Battalion was on the right, the 1st Battalion Royal Northumberland Fusiliers in the

1013
centre and the 1st Battalion the Gloucestershire Regiment on the left. The 1st Battalion Royal Ulster Rifles was in reserve.
The battle opened on the night of Sunday, 22nd April, when the Chinese began a series of attacks across the shallow Imjin river in brilliant moonlight. The heaviest attacks fell on the Gloucesters and the Royal Northumberland Fusiliers. The Belgians were cut off, but were able to withdraw around the right flank into Brigade reserve. One company of the Royal Ulster Rifles was brought up to stabilise the position. Throughout Monday night all battalions were subjected to heavy and prolonged attacks in which both sides suffered severe casualties.
By daylight on the morning of Tuesday, 24th April, the Gloucesters, to whom were attached C Troop of 170th Independent Mortar Battery of the Royal Artillery, had become cut off from the rest of the Brigade. Later that morning a Battalion of the Philippines Combat Team supported by a troop of Centurion tanks of the 8th Hussars, attempted to reach the Gloucesters. When within about 1½ miles of the Gloucesters' position the leading tank of the relief column caught fire and blocked the road and the remainder of the force was compelled to withdraw.
Early on Wednesday, 25th April, a tank force from the American reserve brigade attempted to relieve the isolated battalion but failed to get through. On the same morning the 29th Brigade were ordered to withdraw. The withdrawal of the Royal Northumberland Fusiliers and the Belgians was largely successful. The Royal Ulster Rifles, however, got into difficulties and retired to the east.
Meanwhile Lieut.-Colonel Carne, commanding the Gloucesters, split his battalion into three groups with instructions that each group should attempt to infiltrate back to our own lines. Hon. Members will by now have heard that Peking Radio has announced that Colonel Carne and about 100 officers and men are prisoners in Chinese hands.
For their action, 1st Battalion the Gloucestershire Regiment, and C Troop of 170th Independent Mortar Battery, Royal Artillery, received a Presidential Citation. I would like to read to the
1014
House the concluding sentences of the Citation which shows how this fine exploit appeared in American eyes:
"The 1st Battalion, Gloucestershire Regiment and Troop C 170th Independent Mortar Battery displayed such gallantry, determination, and esprit de corps in accomplishing their mission under extremely difficult and hazardous conditions as to set them apart and above other units participating in the same battle. Their sustained brilliance in battle, their resoluteness, and extraordinary heroism are in keeping with the finest traditions of the renowned military forces of the British Commonwealth, and reflect unsurpassed credit on these courageous soldiers and their homeland."
During the first week in May the enemy pulled back their forces to a distance of some 10 to 15 miles along the entire front in order to regroup and re-equip for the second phase of their counter-offensive. The 8th Army reacted vigorously by patrolling forward in order to maintain contact with the enemy and by the middle of May had reached a line running a few miles south of the 38th Parallel in the west and a few miles north of it in the east. Thus a "buffer" had been constituted in front of the main defensive positions.
The Chinese attacked again on the morning of 17th May, and two main thrusts developed—one against an American Division in the west, and the other against an American Division and a South Korean Corps in the east. The attack in the west faded out on 18th May and on the morning of 20th May the two more westerly American Corps seized the initiative and advanced northwards toward the Imjin River.
In the eastern sector, the Chinese attempt at a major break through met with greater success as a result of the partial collapse of three South Korean divisions, whose positions were over-run. The serious situation which thus developed was only saved from further deterioration by a determined stand by American, French, and Dutch units. Eventually, an American reserve division arrived and the situation was restored.
On 23rd May, 8th Army resumed the offensive along the entire front. Our rapidly moving forces were able to create road blocks behind the retreating Chinese, and in this way large numbers of prisoners fell into our hands. United Nations air forces were also able to take heavy toll of the enemy who, in his haste to

1015
retreat moved in daylight as well as by night.
By about 28th May, it became clear that the enemy had suffered a major defeat. Enemy casualties for May were officially estimated at about 200,000. By 1st June, however, enemy resistance had increased everywhere, particularly in the centre on the approaches to Chorwon and Kumhwa, which are important supply bases about which the enemy is very sensitive. The House will recall that it was from these bases that the enemy launched his previous offensives.
The 29th British Brigade and the 28th Commonwealth Brigade—which relieved 27th Brigade—are again in the line in the western sector, while the 25th Canadian Brigade is well to the fore in the centre. Each Brigade is playing its full part in current operations. During these operations, the Army have suffered only relatively light casualties; and while I naturally deplore them, I think that in view of the scale of the operations we must feel relief that they have not been heavier.
Throughout the month, His Majesty's Naval Forces and the Sunderland squadron of the Royal Air Force have continued their successful operations on an intensive scale. There have been no casualties in the Royal Navy or the Royal Air Force.
The situation at present is that the Chinese and North Korean armies have been considerably disorganised. General Van Fleet's timely counter-offensive, brilliantly executed by troops of fine fighting quality undoubtedly took the enemy by surprise and threw him off balance. He has suffered heavily, and the fact that his troops are surrendering more willingly than heretofore and are abandoning large quantities of equipment, may be an indication that the morale and will to resist of at least the forward troops is wavering. Nevertheless, I would remind the House that there is no evidence that the huge Chinese manpower potential has been to any great extent affected, and it would be most unwise to assume that the enemy is permanently crippled. We should be thankful for the success which has attended our arms so far, and we should look forward with hope and cautious optimism.
Mr. Bellenger: As it would now appear that the enemy have been driven out of South Korea, is there any likelihood, in order to avoid what I might call a seesaw campaign, of formulating more static defences, particularly in the nature of large-scale minefields, to contain the enemy, so that we do not have what appears to be a constant succession of attempted breaks through which apparently are nearly successful?
Mr. Shinwell: We must have confidence in the commanders on the spot, who no doubt are taking all necessary precautions.
Lieut.-Commander Gurney Braithwaite: Can the right hon. Gentleman tell the House whether His Majesty's representative in Peking is being granted proper facilities for access to our men who are prisoners in Chinese hands, and whether we are likely to receive a list of names at an early date?
Mr. Shinwell: I have no information on the first part of the question. As regards the second part, I made inquiries only the other day when this statement was being prepared. So far we have no names in our possession other than the name of Colonel Carne.
Mr. Rankin: Is it not true that the United Nations Commander in the Far East has stated that a position of military stalemate has been achieved in Central Korea and that that opinion has been substantiated by the Chiefs of Staff in America? Can my right hon. Friend say whether or not any steps are contemplated which might break that military stalemate other than by military means?
Mr. Shinwell: Naturally we are anxious to ensure that our desire for negotiations—I speak for the United Nations—in order to bring this affair to an end should meet with a ready response from the Peking Government; but in the absence of any desire on the part of the Peking Government to respond to our suggestion that there should be a negotiation, there can be no question of stalemate. We must defeat the forces of aggression.
Brigadier Peto: The Minister said that the Peking authorities had stated that 100 officers and men were prisoners of war.

1017
Is not this an opportunity to ask them to receive a delegate from the Red Cross, or to accept some other method of identification?
Mr. Shinwell: I shall certainly make inquiries.
Brigadier Thorp: Can the right hon. Gentleman give the number of casualties suffered by the Royal Northumberland Fusiliers, and can he assure the House that there are sufficient reserves to keep that battalion and other battalions up to establishment?
Mr. Shinwell: The House will understand that I was furnishing all the information that I have in my possession about the battle in the month of May. I have given some figures of casualties in earlier statements. I have not got the actual figures showing the casualties in the Royal Northumberland Fusiliers, but I have reason to believe that they are not very heavy.
Mr. Emrys Hughes: Can the Minister give any information on the statement made by the Reconstruction Officer of the United Nations in Korea that there have been one million civilian casualties and that there are three million refugees on the roads? When will he say something about that? [HON. MEMBERS: "Who caused it all?"] The bombers.
Mr. Shinwell: When an act of aggression is committed, those who are responsible for perpetrating that act of aggression should think of the consequences.
Mr. Hughes: The one million civilians did not cause it.
Mr. Duncan Sandys: I wish to ask a question which might be of legal importance. Can the Minister say whether the Chinese Government have stated that they officially hold our men as prisoners of war of China or whether the men are held by the North Korean authorities?
Mr. Shinwell: The trouble is that we have no official information other than reports that emanate from Peking Radio. Naturally we are anxious to get official information, and every attempt is being made to obtain it.
Mr. Sandys: Did Peking Radio say that they were being held by China or by North Korea?
Mr. Shinwell: I should not care to say. This is a somewhat complicated matter.
Mr. Gammans: The Minister said that at the moment he could not give the casualties of the Royal Northumberland Fusiliers. Can he give the total casualties of the British Commonwealth Forces and, if possible, of the United Nations Forces as a whole?
Mr. Shinwell: I have not got the information beside me, but if the hon. Gentleman will put down a Question, I will endeavour to give him a full answer.
Lieut.-Colonel Bromley-Davenport: The right hon. Gentleman ought to have it.
Mr. Driberg: Has not the Secretary of State for War already answered a number of Questions in this House on the subject of prisoners and the Red Cross, and did he not say recently that the Chinese Red Cross Society were possibly going to act on behalf of the International Red Cross as forwarding agents, and so on? Can he say whether there has been any development on those lines?
Mr. Shinwell: I understand that no such official information has been furnished to the House, but we shall certainly endeavour to get it.
Mr. Alport: Is the right hon. Gentleman aware of the inevitable difficulties facing the commander of the Independent Brigade in Korea owing to the continued absence of divisional headquarters, and can he say when divisional headquarters will be in being in Korea, and whether they will be accompanied by full-scale supporting units?
Mr. Shinwell: The divisional headquarters are being assembled now, and we hope will be ready by next month.
Mr. Churchill: If the British representative in Peking cannot even get the names of the 100 British prisoners of war in the control of the Government to which he is accredited, what actually are the duties which he is able to discharge and what is the continued value which should be attached to his presence there?
Mr. Shinwell: As to the responsibility of our representative in Peking, that is a matter for my right hon. Friend the Foreign Secretary. I would not know what the actual position is, but on the

1019
general question which I expect is in the mind of the right hon. Gentleman, namely, what information we can get about our men who are in the hands of the Chinese and the North Koreans, I shall certainly do everything I can to get the information.
Major Guy Lloyd: Is it the Government's view that the Chinese Government are our enemies or not?
Mr. Shinwell: I think we must each draw our own conclusions.
Mr. Spence: Can the right hon. Gentleman say through what channels details of Chinese prisoners in our hands are sent to China, and whether that channel could be used in reverse?
Mr. Shinwell: I will certainly look at that.

JAPAN (PEACE TREATY)
Mr. Ellis Smith: I desire to ask your permission, Mr. Speaker, to move the Adjournment of the House in order to call attention to a definite matter of urgent public importance, namely, the proposed Japanese Peace Treaty to be concluded this week, in view of the Foreign Office statement that no economic clauses will be included, and the urgent need for an assurance that the position of the cotton, pottery and other industries will be safeguarded under any agreement that is made.
I know that I am not allowed to debate this matter, but I just want to explain the position briefly and to place before you points for your consideration in deciding whether or not this is a definite matter of urgent public importance. Press statements have been made to the following effect: first, that working parties have been set up; secondly, that it is expected that the basis of an agreement will be reached this week; and thirdly, that no economic clauses will be included in the proposed draft. If that is so, after 20 years in which Britain, concerned at
1020
the menace of Japanese standards to British standards—
Mr. Speaker: The hon. Gentleman cannot make a speech when asking for leave to move the Adjournment of the House. He has asked leave to move the Adjournment, and he really cannot say any more, having asked for that leave. I am afraid I must tell him also that the Japanese Treaty is not a single definite act, but is a continuing matter and it does not come within Standing Order 9 at all. In addition, I may add that we do not discuss peace treaties before they are made. When they are made, then often we are entitled to discuss them, sometimes before they receive signature; but we are not in a position now to discuss the treaty, which is not before us, and I must therefore rule the Motion out of order.
Mr. Ellis Smith: With due respect to your Ruling, Mr. Speaker, I was just concluding by saying that, surely, an undertaking should be given to this House that some safeguards will be made before this treaty is agreed to.
Mr. Speaker: I do not think the hon. Member appreciated what happened during Question Time today, when there were several Questions about the Japanese Treaty, and my impression was that the Foreign Secretary indicated that it was likely that a statement would be made which, no doubt, we would be able to discuss. I think the hon. Gentleman must leave it at that. He can read HANSARD and find out whether I am correct or not, but he is not entitled to ask for a definite statement from the Government now.

BILL PRESENTED
  NATIONAL ASSISTANCE (AMENDMENT) BILL
  "to amend section forty-seven of the National Assistance Act, 1948," presented by Dr. Broughton; supported by Dr. Stross, Dr. Hill, Mr. Messer, Surgeon Lieut.-Commander Bennett, Mr. Linstead, Mr. Mitchison and Mr. Dryden Brook; read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 116.]
ORDERS OF THE DAY

  FINANCE BILL
  Considered in Commitee. [Progress, 5th June.]
  [Colonel Sir CHARLES MACANDREW in the Chair]

  FINANCE BILL

    Clause 3.—(THREE-YEAR EXTENSION OF KEY INDUSTRY DUTY.)
    The Deputy-Chairman: The Amendment in the name of the hon. Member for Croydon, East (Sir H. Williams), in page 2, line 38, to leave out "fifty-four" and to add "fifty-seven"—is out of order.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    3.57 p.m.
    Sir Herbert Williams: I realised that my Amendment would be ruled out of order because it is outside the scope of the Financial Resolution, as this Clause provides that the key industry duty should be extended for another three years. As I thought that period was a little short, I put down my Amendment to suggest that it should be six years, and that has had the effect of drawing the Chancellor's attention to the fact that I think the period is too short.
    I should like to remind the Chancellor and other hon. Members of the history of the key industry duty. It was in 1921, 30 years ago, that this House took an historic decision, because it was a reversal in a formal way of the policy of free trade to which this country had been committed for many years prior to that. When in 1921 this very important decision was taken, it was provided that the duty should operate for a period of five years, and I should like to remind hon. Members what this part of the Safeguarding of Industries Act did, because here we are extending it, quite rightly, for a further period.
    It was discovered in the First World War that we were in great difficulties because the Germans had developed several industries which we had neglected. For the purpose of making sure that we would not be caught out again, we decided to protect in this country the products of what were called key industries, which
    1022
    are small industries whose products are very important to other industries. Originally, the duty was fixed at one-third of the value, and that duty, with modifications in the rates, has been applied to optical glass, scientific glassware, scientific instruments, wireless valves, magnetos, are lamp carbons and certain rare metals and fine chemicals. There is not the slightest doubt that the key industry duty was a great success. It safeguarded our economic position, and in many cases provided us with these articles more cheaply than was the case before the duty was imposed. When we were largely in the hands of the German manufacturers, we often had to pay through the nose, and we obtained the goods much cheaper when we started to produce them ourselves.
    4.0 p.m.
    I know that the Liberals will never learn anything—that is their fundamental trouble—but the fact remains that over a whole range of goods our position became, not only much safer, but economically much more satisfactory. In a great many cases, the consumer benefited enormously as a result of the duty, and if there are any Free Traders left in this country, I challenge them to give me one example of where the consumer has suffered over the years as the result of the duty.
    I want to draw attention to an inconsistency of Parliament with regard to the duty. In 1921 it was rather a great venture, after 60 years of Free Trade, to introduce this duty, because although Mr. McKenna in 1915 introduced, for dollar reasons, certain duties, and Mr. Austen Chamberlain made certain duties preferential in 1919, up to that date we had still got Free Trade. This was the first occasion on which this country for over 60 years introduced definitely protective legislation, and the then Government were rather timorous about it.
    It was a Coalition Government, and the Prime Minister of that Government belonged to the party largely represented behind me at this moment, namely, the Liberals. There are few survivors of that Government left. My right hon. Friend the Leader of the Opposition is one of them. He has made great progress in these matters. But there are now very few people left in this country who object to the idea of protecting

    1023
    the production of our goods. Though some people prefer to do it by methods of which I do not entirely approve, that does not matter, because they accept the general idea.
    That was a bold step to take in 1921, but, instead of proposing permanent legislation, the Government suggested a period of five years only. When that time was up, the first Parliament of which I was a Member was in being. We were bolder by that time, though not so bold as we ought to have been, because there was an unfortunate election in 1923.
    Mr. Messer: The hon. Gentleman got bowled out.
    Sir H. Williams: Yes, but we were bolder afterwards, and bowled out the hon. Gentleman's Government. In 1926, we were a good deal bolder, and continued the duty for 10 years. When in 1936 those 10 years were up, we had a Government not entirely Conservative—a National Government—and again we plumped for 10 years. That 10 years expired in 1946 when the predecessors of the existing Government were in power—there were certain changes of personnel, which is always a good idea; there ought to be more changes in personnel, and we have been rather successful recently in getting rid of some of them—and for some strange reason it was decided to extend the duty for only two years. When we came to 1948, it was extended for a further three years, and, now that that period is up, it is proposed to extend it for another period of the same length.
    From the point of view of the stability of industry, I think it stupid not to make the duty permanent. Of course, nothing is completely permanent under our Constitution. We are not checked in any way like the Congress of the United States of America; nothing is referred to the Supreme Court. We are free to repeal any Act we like, and to make any Act we like. What we do is unchallenged. In the words of His Majesty when he is asking the Commissioners to give the Royal Assent, they are all described as good and perfect Acts of Parliament. That has nothing to do with their merits; it merely means that the courts have to take full notice of them. Therefore, if we make a thing
    1024
    permanent, it does not mean that we deprive ourselves of the power to repeal it later, but it does give greater stability to those engaged in the production of goods if they know that Parliament has decided that, unless it comes to the decision of reversal, these things shall go on indefinitely.
    I do not know why something first enacted 30 years ago should already have had to be re-enacted four times, and will again, under this Clause, be re-enacted for three years. Why this limited period? Does it mean that after 30 years the Government cannot make up their minds about the merits of the proposal? It is rather stupid to make this temporary legislation. We all know, of course, that Income Tax is made temporary for a constitutional reason—in order that each year the House may have a measure of control over the Executive. Of course, if there were no Income Tax, there would be much happiness, but that is a different issue. There would be much happiness, too, if we did not have this Government, but that, again, is a different issue. If we did not have certain annual taxes the Government might get through the year without a Finance Bill at all.
    But there are certain things which ought to be made permanent, and I do not think I am putting forward an unreasonable case in urging His Majesty's present Ministers, or their successors who will be on the Bench opposite next year, to make the duty permanent and not subject to a periodic re-enactment, sometimes at the end of five years, sometimes at the end of ten, sometimes at the end of two, and, as on this occasion, at the end of three. It is rather stupid that we should waste paper in reprinting something like this every three or four years. I am not against the Clause, but for the reasons I have given, I could wish that it went further.
    Lieut.-Commander Gurney Braithwaite: As you have indicated, Sir Charles, it is not possible for us to discuss the Amendment of my hon. Friend the Member for Croydon, East (Sir H. Williams), but I understand that it will be in order to invert the matter by asking the Chancellor what particular magic there is in this period of three years. My hon. Friend recapitulated very ably the history of this matter, and I think it is not only fortuitous, but rather fortunate that we should have reached this stage

    1025
    of the Bill on the very afternoon that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), endeavoured to raise as a matter of urgency just the kind of thing that brought about the Safeguarding of Industries Act, Part I, in 1921.
    The Committee will recall that what caused Mr. Lloyd George and his friends to grope their way somewhat timorously, as we have been told, towards a protective system, were two cold winds blowing on British industry, the one depreciated currency, notably in Germany, and the other the lower standards of living in the Orient which were beginning to penetrate our markets, particularly Lancashire. Therefore, I think it fortunate that we can spend a few minutes on this matter today.
    Following on that experience, we had the introduction of the Safeguarding of Industries Act, 1925, hedged about as it was with a great many gaps, and it was not until the financial crisis of 1931, which I will pass over rapidly, knowing what painful memories it has for hon. Members opposite, that we reached unity on this matter, not only on these benches, but among Liberal thought at that time, whatever prefix or suffix they carried in that period of their history, in favour of the Abnormal Importations Act, 1931, which was introduced to deal with the currency of that period. I always thought that the Abnormal Importations Act was a far more effective instrument than the Import Duties Act. Be that as it may, I submit to the Government that three years is a very short period of planning or security for those engaged in industry. I should have thought that this system had now successfully passed the test of time and might be placed in a permanent position on the Statute Book.
    I anticipate one possible argument which may be adduced. I do not know whether we are to hear the President of the Board of Trade reply or which Minister is going to speak. If it is the President, I was going to anticipate what he may say, namely, that we are living in times of tremendous economic uncertainty, that there is a shortage of raw materials and that the Government may not be seeking restriction of imports but may wish to throw wide open the gates for some of the products this Measure sought to keep out. If that is the case, the three-year period is just as objectionable as anything else, because the next
    1026
    three years are going to be the critical period.
    I feel that there is very great force in the argument that my hon. Friend the Member for Croydon, East, deployed to the Committee. After a period of 30 years' testing time, we ought to have got beyond these short steps and frequent renewals. It would create a much better feeling of confidence and certainty in the industrial world if the Government would say that there should be at any rate a 10 years' renewal. I hope that the right hon. Gentleman may feel this point to be worthy of examination between now and the Report stage.
    Mr. Tomney: The hon. Member for Croydon, East (Sir H. Williams), mentioned two industries, both of which are vitally important. He spoke of the development and extension of the scientific glassware and gauge industries. There was a time when we were entirely in the hands of German manufacturers and craftsmen for the supply of these components. The hon. Member for Croydon, East, has a knowledge of neon tubes. He will remember that after their introduction into this country, from 1923 onwards there was inaugurated a Government training scheme whereby unemployed men were trained in neon glass blowing.
    4.15 p.m.
    At the outbreak of hostilities, when the German supply was cut off, it was essential to train our technicians. I was responsible in a small degree for the training of glass blowers. Today the production of chemical and scientific glassware is so developed that we are in a position to export these articles and to capture markets that we did not have before, especially in South Africa. It is vitally important, not only for the future but for the present defence programme that we should have a fully developed industry and a continued supply of craftsmen in connection with atomic energy and radio valves, and so forth.
    The hon. Member for Croydon, East, has raised a matter at which we should look most carefully. This is a vital and valuable industry and I am proud to say that the craft formerly exercised by Austrians and Germans, in particular, has now passed in a great degree to craftsmen in this country.
    Mr. Hopkin Morris: The hon. Member for Hammersmith, North (Mr. Tomney), developed a very interesting argument. He said that the glass industry had secured valuable protection from Part I of the Safeguarding of Industries Act dealing with key industries. But assuming, as he says, that the duty in the initial stages was of great help to the glass-blowing industry, the statement now is that the industry is fully developed and in a position to export and compete in world markets. Therefore, surely there is no longer any need for the duty to be maintained. It might disappear for the next three years, let alone the period of 10 years to which the Government are now urged to extend it.
    The hon. Member for Croydon, East (Sir H. Williams), referred to the history of the Safeguarding of Industries Act, 1921. That Act was passed because those specific industries were necessary in time of war. But the argument put forward today is that this duty has been very useful in making this industry prosperous. Therefore, it is a different class of argument altogether, and if this argument were true, it might be asked why we should not increase the duty to make the industry more prosperous.
    The hon. Member for Croydon, East, asked why the duty has not been made permanent during the whole of the 30 years which have intervened since its inception. In the meantime, several Governments have sat on the benches opposite, including a Government of the hon. Member's own party with as overwhelming a majority as the Labour Party had in the last Parliament. They did not make the duty permanent because they did not believe it was necessary to do so. Many hon. Members believe that the duty is not a good duty even for a short period.
    A most outspoken attack on the duty and the Safeguarding of Industries Act came from a Member of the Conservative Party in 1923–24. He was Lord Hugh Cecil, now Lord Quickswood, who is possessed of one of the most distinguished minds of any Member who has sat in this Chamber during my time. He disposed completely of the argument used by the hon. Member for Croydon, East—that a duty is imposed and then has the result of making goods cheaper. If the hon. Member for Croydon, East, will
    1028
    look at the speeches of one of the most distinguished Conservatives, he will see that they disposed completely of his argument. There is no reason why this duty should be continued even for one year.
    Colonel Ropner: The hon. and learned Member for Carmarthen (Mr. Hopkin Morris) might have received some applause for his remarks if he had made that speech 20, 30 or 40 years ago, but I am afraid he must have missed the applause for the Free Trade views he expressed today.
    Mr. Hopkin Morris: It would be out of order for me to pursue that. My answer would be that that is perfectly true of the last 20 or 30 years, but the history of the last 30 years is a very damning record of the results.
    Colonel Ropner: The history of the last 30 years is that of the disappearance of the party the hon. and learned Member for Carmarthen so ably represents in the House of Commons. I imagine I should be ruled out of order if I continued the argument about Free Trade.
    I hope the President of the Board of Trade will tell the Committee at least why these safeguarded industries are, in a sense, afforded exceptional treatment. I have some knowledge of one or two of these industries. I know there is some real doubt why this protective duty cannot be made permanent or disappear altogether and why we go on renewing it for a period of three or four years, or whatever it may be. The right hon. and learned Gentleman would be serving the interest of these industries and would be giving valuable information to the Committee if he could make that point clear.
    Mr. Joynson-Hicks: I feel that this continuously recurring period of extension of the Safeguarding of Industries Act is getting rather like the man who, having served in his firm for 50 years, thanked the directors very much for their generosity in giving him a pension, because he had always been on a temporary basis. Why should we go on renewing this duty instead of taking at least a substantial bite of the cherry?
    It has been seen in times past that at least a 10-year period could well be substantiated, and the general policy of past Governments, of whatever colour, has been to hasten slowly but to continue in a

    1029
    forward direction. This Government is rather retracing its steps, and is getting more and more halting in its attitude to this matter, advancing in brief intervals of three years. I cannot see any reason for it at all, and I shall be interested to know whether the President of the Board of Trade is able to give us some very substantial reasons.
    I should have thought that even for the fundamental reason which has accounted for most forms of legislation at the present time, namely, that it is administratively convenient, it would have been more administratively convenient to have had this matter at least on a semi-permanent basis for 10 years than for the Departments concerned to feel that even the Government could not make up their minds what attitude to take towards this matter for a period in excess of three years.
    If the Government cannot decide on a matter of that sort for a period longer than three years, can industry be expected to plan itself? We have heard a great deal about the Government's intention with regard to planning, and surely if this is a planning Government it can at this stage, on its virtual death bed, at least produce a codicil which will last for more than three years. If it is not prepared to commit itself to that extent, how can it hope for the co-operation of industry in building up these essential key industries on which any Government in this country will have to rely in the event of an emergency arising? I submit that there is an overwhelming case for a much more definite policy on the part of the Government in respect of this matter on grounds both of national interest as well as of current political administrative and business interest.
    The President of the Board of Trade (Sir Hartley Shawcross): I am glad to have the opportunity of intervening at this stage, because there is perhaps, not unnaturally, a certain amount of misunderstanding about the purpose of this Clause. I do not think there is much difference of opinion between the two sides of the Committee on principle, except perhaps on the part of those who take the full Free Trade view, and what is involved in this Clause is much more a question of method and system than one of principle.
    I do not think there would be many people, except the hon. and learned Mem-
    1030
    ber for Carmarthen (Mr. Hopkin Morris), who would think that at the end of the three-year period for which we contemplate renewing the duties under the Safeguarding of Industries Act, they would all come suddenly and automatically to an end. That is not the present intention of the Government at all.
    I am bound to say that I have some sympathy with the view of the hon. Member for Croydon, East (Sir H. Williams), and the hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite), in their view that these duties should be placed on a more permanent and stable basis; but what those hon. Members and perhaps other hon. Members have lost sight of is that at present we are operating in this country what most people would agree is an inconvenient system of having two parallel sets of Import Duties, one under the Safeguarding of Industries Act, 1921, and the other under the Import Duties Act, 1932, Our object and our hope has always been—and here I think we may follow in the steps of our predecessors who are now, and I hope will long remain, on the other side of the Committee—to try to assimilate these two systems into a single understandable and simplified code.
    I have no doubt that when these duties were renewed by hon. Members opposite in 1936, they hoped that circumstances might be such before the end of that period as to enable them to assimilate the two systems into a single whole, and I confess that when we renewed the duties in 1946 and 1948 we thought that comparatively short period for which the duties were then renewed might have been long enough to have enabled things to become more settled and to have enabled us to get back into a more normal pattern of trading so that we could introduce legislation which would cover the whole field in a single Bill.
    Unfortunately, those hopes have not been fulfilled. The international situation, both on the economic and political planes, has been such that it has been quite impossible to reach any final conclusion on the question of whether we should or could maintain indefinitely these two parallel codes, the one for protecting key industries particularly, and the other for giving a general protection to British

    1031
    industry. I can well understand, as the hon. Member for Croydon, East, has said, that these industries would like to be able to see further ahead than three years, although whatever period is chosen is bound to be somewhat arbitrary. I appreciate that they would like to know, quite naturally, where they stand in this matter, but the very nature of things at the moment makes that impossible.
    We have a system of import licensing restrictions still affecting a number of classes of imports. We have the re-armament programme which is planned at the moment to cover a period of three years. There are all sorts of abnormal conditions in international trading relations—controls over exchanges and over materials, and so on.
    Mr. Hopkin Morris: As I understand it, the right hon. and learned Gentleman is defending the present system because it is necessary to extend the period from time to time and give these industries a sense of stability. The hon. Member for Hammersmith, North (Mr. Tomney) said that the industry with which he is concerned is on a completely competitive basis and has that stability. I should like to make this request to the right hon. and learned Gentleman. In seeking to make the duty permanent, would he discriminate between those industries that still require the duty and those industries which have in the meantime got themselves on a stable basis?
    Sir H. Shawcross: What I said was that at the moment, because of the uncertain trading conditions and the fluid state of affairs in this respect, it is extremely difficult to say what industries, whether from a strategic or economic point of view, require this protection, whether at the rate of 33⅓ per cent. or 10 per cent. What we hope—and this is why we have chosen the period of three years—is that at the end of that period it may be possible for us to make a serious attempt to assimilate these two systems into one—I am not saying at what rate of tariff at all, but to have a single code which provides, where necessary, in respect of those industries which seem to us to require protection either from the strategic or from the general economic point of view, a tariff system to protect them against foreign imports, and to deal with the
    1032
    whole thing on a comprehensive basis in a single Measure.
    What we want to get eventually, I think hon. Members will agree, assuming we have to have a tariff at all—and I appreciate that the hon. and learned Member for Carmarthen would take the view that we ought not to have a tariff—but assuming we have to have a tariff at all, I think it will be agreed that we ought to be able to have it in a single Measure and in as comprehensive and simple a way as these things can be done. No one would pretend that that is the position at present. We have these two systems running side by side, and eventually we want to get away from that state of affairs. That is why we would rather not continue this particular branch of the two systems for a long or indefinite period.
    We hope that within the next two or three years, if we manage to avoid the calamity of war, trading conditions may perhaps become nearer to normal and the Government of the day will be able to take decisions about the continuance both of the key industry duty on the one hand on a long-term view, and also of the other duties that it may be necessary to maintain, and will be able to embody them in a single Measure.
    4.30 p.m.
    I must say that it is certainly our intention—and speaking as one who believes very much in simplicity in these matters I say it is our desire—to go ahead with this objective of arriving at a single tariff code and of assimilating the key industry duty system with the Import Duties system, while providing in the meantime, during this period of three years, the appropriate protection to those industries which in the light of modern developments appear to us to require it.
    I Would add only that there is, as hon. Members know, machinery whereby, on the application of some consumer in this country who complains that he cannot obtain the product of some industry which is protected under the Act of 1921, the duties can be removed or lowered under the provisions of the Act of 1921. The hon. Member for Skipton (Mr. Drayson) was kind enough to call my attention to a case of that kind, and we were able to deal with it. If there are

    1033
    cases of that sort, it is within our power to reduce or remove particular duties. I was grateful to the hon. Member for bringing that case to our attention.
    Subject to that, we think that it is in the interests of the trading community that we should proceed on this basis, following a good precedent, but proceed on it with a view to assimilating the two parallel systems in one code when we reach a position which is less fluid than is the case at present.
    Captain Crookshank: We welcome the first intervention in our Finance Bill debates of the new President of the Board of Trade, and we hope that he will always be as kindly as he seems to be this afternoon. Let us make no mistake, this is an important point, as has been revealed by what has already been said.
    The right hon. and learned Gentleman told us that he hoped to bring these two parallel sets of tariff arrangements—if I may use the phrase—into one document or enactment, or whatever it may be. It was not clear to me from what he said whether he was wanting the three years provided in this Clause in order to enable him to do that within a three-year period or whether he wanted a three-year cover before starting the amalgamating. What he has in mind makes a difference to the argument. According to what I jotted down, he said both things. At one moment he said that at the end of the period the Government intended to make a code. Then he said that they hoped during the three years to get on with it if trade circumstances allowed that to be done. We should like to know which of these intentions the right hon. and learned Gentleman has in mind.
    Sir H. Shawcross: I am much obliged to the right hon. and gallant Member. I hope that I have not said two things which were inconsistent, and in the form in which the right hon. and gallant Gentleman repeated them I do not think that they were. We certainly intend to do what we are already doing, to continue within the next three years the process of study to see how we can blend the two together in a single code.
    Neither the right hon. and gallant Gentleman nor I know what the situation will be at the end of three years. It may
    1034
    be that we shall then still require to have a special code for safeguarding key industries which are vital for strategic purposes. We hope not. We hope that things may be more normal then, and that we may then be able to introduce a Measure which will assimilate the two duties. In the three years we shall be working to that end.
    I cannot guarantee what the position will be at the end of the three years. If our hopes are realised, we shall try to assimilate the two within that period—it may be sooner—though I think that is most improbable. We are working on this now and shall certainly continue to do so, using the three-year period as a target which we should hope to reach if all goes well in the international and economic fields.
    Captain Crookshank: I am obliged to the right hon. and learned Gentleman. What he has said clears up the point. We all know that the Front Bench opposite cannot guarantee anything for three years ahead, but I think that the right hon. and learned Gentleman was talking merely in the economic sense, irrespective of what Government was in office, when he was speaking about that aspect.
    What the Government's intention really amounts to is that for three years a prolonged engagement is being fostered with a view to marriage in three years' time. That may suit the argument which my hon. Friends have put forward because, and only because, the argument pre-supposes there is to be a marriage and that there is to be a continuance of the key industry duty, because that is the basis of the argument about the necessity for various industries to know where they stand.
    I was delighted to hear the right hon. and learned Gentleman say quite as definitely as he did—I hope that he will not go back on this—that it is the Government's intention to go ahead with a single tariff code. I do not remember the Labour Party ever having previously announced the intention of going ahead with any tariff code. Certainly, if they intend to marry—[Interruption]—it is a very important decision, if it is a decision. I do not know that everybody in the Committee had appreciated that the Labour Party had now become a tariff party.

    1035
    The President of the Board of Trade said that it is the Government's intention to go ahead with a single tariff code. Therefore, those who have believed in the past in that method of protecting industry against the adverse blasts of unfair foreign competition will have been encouraged by the fact that the Opposition have today raised this useful debate, leading up to an assurance that so far as the Government are concerned they hope, if still in office in three years' time, to have a permanent code embodying this and the other tariff arrangements.
    Mr. Charles Williams: I am possibly almost the only person in the Committee at the moment who was present in the House when the 1921 Act was brought in. I welcome the terrific change which has come over the whole commonsense view of the country since that time. The President of the Board of Trade, whom we welcome in his new position—he cannot be any worse than his predecessor—has made an announcement this afternoon which those of us who have been fighting for tariffs during the whole of our lives welcome vigorously and with great relief.
    We have known for a considerable time that some form of tariff was perfectly safe under a Socialist Government, but I welcome the fact that, although during many elections I have been abused by both Liberal and Socialist candidates because I wished to protect industry and because I was in favour of safeguarding industry, I can now say, at all events so far as Socialist candidates are concerned, that the President of the Board of Trade here admits that these tariffs are very good and that the only thing to do is to get a more unified and more perfect form of them. It is an occasion for considerable pleasure when one sees one's political opponents advancing on those roads to wisdom along which one has trodden for generations.
    I do not for a moment wish to enter into controversy with my hon. Friend below the Gangway who represents the Liberal Party, except to say that if ever there was a person who believed in the freedom of imports it was Lord Hugh Cecil, and we can leave it at that. He never deviated from it, he fought our party on that question through the whole of his time, and it is only fair that I,
    1036
    as someone who knew him quite well, should pay that tribute to him.
    I wish to say, in regard to this Clause, that if we have now come to a position where the two leading parties have agreed officially and openly in the House of Commons, I hope that it will be in the Socialist Party's programme at the next Election. I am sorry to see the right hon. and learned Gentleman being a little coy. I do hope that we shall not be told by the Prime Minister that this is one of the right hon. and learned Gentleman's informal speeches. It would be a shocking thing if that happened, because, after all, the right hon. and learned Gentleman has had the great advantage of a legal training, if there is any advantage in a legal training, and so he ought not from the Government Front Bench to make an informal speech. I am sure the Committee wishes him well, and I should not like to be told that the right hon. and learned Gentleman had had to resign his newly-won office so quickly. That would be a very sad thing.
    However, so far as the three years are concerned, those three years do, of course, give time for a good many things to happen. We have the assurance that whichever party comes in this duty, which has been so very valuable, will remain. It has been very valuable. An hon. Gentleman opposite pointed out just now that it had brought his particular industry and a good many others into prosperity. I do hope we may go this step further, and that, when an industry has been brought into prosperity by such a duty, we shall not immediately turn round and take off the duty and let the industry go derelict once more. That, quite obviously, would be foolish.
    I am very glad that we have this position, that the Socialists—a great section of the Labour Party; the great bulk of the Labour Party in this Chamber—are fully concerned to support this Clause because they are quite determined not to have limitless dumpings, and because they agree with Conservative wisdom, and also because we all realise as a nation that there was work of very great value done in those years between the wars when the Socialists were always saying that nothing good was done. Now in this matter, as in other matters, the Socialists see the value of Conservative legislation and Conservative policy.

    1037
    I congratulate the right hon. and learned Gentleman on having got some common sense into some of the professors one sees at the back of him. Lawyers are bad enough; professors are worse. [Interruption.] Oh, I will not mention doctors. We are very glad to see that he has got some common sense into them and into his party, and we hope that they will not waver just because an odd Liberal thought they might not improve.
    Mr. Hollis: I had waited with very great interest and curiosity for the speech of the President of the Board of Trade, because I was very anxious to know why this period of three years had been selected. I could understand the point of view of the hon. and learned Gentleman the Member for Carmarthen (Mr. Hopkin Morris), who is a Free Trader and wanted no tariff at all, and I could understand the point of view of my hon. Friends who said that these things were good things and, therefore, that they should be protected for a considerable period, but it seemed to me that three years was about as bad a period as one could choose. Therefore, like my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) I was listening with very great curiosity to the right hon. and learned Gentleman's speech and to his explanation.
    I was interested in his arguments, and I was interested in his conclusions—at any rate, the tangible conclusion—but I see no connection between the arguments and the conclusion. The right hon. and learned Gentleman laughs. I am wondering if he is agreeing with me, because I am still in confusion; and I hope that the right hon. and learned Gentleman either will be so kind as to admit that there is confusion which is not mine and to make a concession to improve matters, or clear up the point.
    I cannot guess the reason he would give for this period. He gave this very interesting reason that there were those two codes, and that for tidiness' sake he was hoping that the day would come when it would be possible to abolish those two codes and have the whole of our tariff regulations included in a single code. Everyone can see the common sense of that, but whether it will be possible to do it in as short a time as three
    1038
    years is another question. I should have thought it extremely doubtful.
    Still, one can see that we could have everything included in one code instead of two codes, that, in itself, would be a convenience; but I do not see how that hope is an argument for the Clause we are now discussing—for this period of three years: this hope that when what my right hon. and gallant Friend called a marriage ceremony comes there will be a marriage ceremony and flowers and an organ; that is to say, there will have to be substantial new legislation, obviously, in which this legislation—a good deal of this legislation—will, of course, be abolished, being immediately supplemented by some alternative to it.
    4.45 p.m.
    The fact, as my right hon. and gallant Friend pointed out, that we make legislation permanent does not mean that future Parliaments are inhibited from repealing the legislation or substituting new legislation for it. But how does that help out the figure of three years in this Bill? That is what I just cannot understand at all. The right hon. and learned Gentleman makes a guess—and it cannot be more than a guess—that in about three years' time it will be possible to enact this new code. It may be possible; it may not be possible. The Government do not pretend themselves to know. Nobody else pretends to know.
    What these key industries, therefore, want, surely, is a guarantee that if it is not possible to enact this code at the end of three years they will not be let down. If the legislation were on a permanent basis they would have that guarantee. At present, so far as I can see, they are having the guarantee taken away from them. What the key industries want is not a shady promise that there will be a marriage ceremony one day. They must have some guarantee against a breach of promise of marriage if, at the end of the three years, the bridegroom does not come up to scratch. No doubt, the right hon. and learned Gentleman will not be the bridegroom then, but a guarantee is required that the bridegroom then will come up to scratch. What purpose is served by putting in this period of three years? No one can say that whatever Government may be in power then will be in a position to enact

    1039
    that unifying code. I cannot see for what purpose this period of three years is in this Clause.
    Mr. Donald Wade: I shall resist the temptation to enter into a debate upon the fundamental errors of the Protectionist philosophy, despite the new display of unity between the Conservative and Socialist parties, but I think it would be unfortunate if we left the discussion of this subject without some reference to the harmful effects which these import duties may have, particularly upon our defence programme. I think it was an hon. Member opposite who mentioned the subject of defence.
    The President has said very little about the need for all these duties. It is true he referred to the procedure whereby the consumer may object, but I would respectfully suggest that that has not proved a very satisfactory procedure. What I wish to ask is whether he is satisfied that these duties are justified? Are not many articles covered by these duties, articles which must be imported anyway or for which the demand cannot be wholly satisfied by home manufacture? The Safeguarding of Industries Act affects 6,368 articles, and then there is that very great list of articles covered by other import duties. I suspect that there are many goods subject to duty, which this country has to import, which are necessary for defence, or for agriculture, or for the general well-being of the country, and that, in effect, we are simply imposing a discriminatory tax on goods which the country must import.
    This may be a way of raising revenue, but if it is so I suggest that it is not the best way to do it. Where industry is engaged on a defence programme, then these duties must inevitably add to the costs of production and to the cost of the article and, therefore, to the cost of defence. In some cases it may add to the price which the Government itself pays for an article. The Government are, therefore, imposing a tax and paying it back again in the form of the additional cost of the article, which they have, of necessity, to buy for the purposes of defence.
    May I give another illustration? The hon. Member for Wallasey (Mr. Marples) asked the President of the Board of Trade on 10th May:
    1040
    "…whether he will remove temporarily the import duty on those steel reinforcing bars which are specially imported for use on the building work of the defence programme."
    The right hon. and learned Gentleman replied:
    "I am always prepared to consider applications for adjustment or removal of import duties with a view to making appropriate recommendations to my right hon. Friend the Chancellor of the Exchequer. In general, however, there are no powers under existing legislation to make variations in duties on iron and steel goods imported by particular firms or for particular purposes."—[OFFICIAL REPORT, 10th May, 1951; Vol. 487, c. 236.]
    I would urge that there should be a review of all these import duties. I believe, even accepting the Protectionists' argument, that many of these duties are unjustified and merely impose an additional burden upon industry. It is true that by means of conferences with other countries, such as those at Geneva and Torquay, some reduction in tariffs may be brought about by mutual agreement, but I do not believe that that is adequate. The Board of Trade Journal for 28th April, 1951, said:
    "Generally speaking, the consequence of tariffs as an instrument of national economic policy is increasing and the difficulties encountered in lowing the rates of duty are probably greater today than at any time since the end of the war."
    I believe that that is true.
    The point that I have raised cannot be dealt with adequately by any mutual agreement for a general lowering of tariffs. It must be dealt with unilaterally and, therefore, I urge the Government to review the whole of these impositions. Whatever view may be held about national sovereignty, in economic affairs national boundaries and national barriers are becoming increasingly antiquated and illogical. Even if that view is not accepted, I suggest that the Government should consider the effect of these import duties upon the costs of production in industry and indirectly upon the cost of living. I do not think it is logical to object to other taxes, which have the effect of raising the cost of living, and, at the same time, advocate a continuation of taxes of this discriminatory nature.
    Mr. Arthur Colegate: The speech of the President of the Board of Trade was, I thought, very satisfactory for he showed he had a realisation of the position of British industry today which

    1041
    we do not always find on his side of the Committee and the possibility that there may be changes during the next three years, which may call for Government action, and which will materially affect conditions here. It is quite clear that the hon. and learned Gentleman the Member for Carmarthen (Mr. Hopkin Morris) has not apparently the faintest idea of the position in which British industry is at present. He alleged that an hon. Member on the other side of the Committee stated that industry was prosperous and was, therefore, on a competitive basis.
    Mr. Hopkin Morris Mr. Hopkin Morris rose—
    Mr. Colegate: I hope I am not interpreting the hon. and learned Gentleman incorrectly.
    Mr. Hopkin Morris: I did not "allege" what an hon. Member had said. He was here when I said it and he did not deny it. He said that we were now capable of exporting all we manufactured and that meant that we were economically sound.
    Mr. Colegate: That is just the very heresy which I wish to eradicate from the mind of the hon. and learned Gentleman. If we imagine that we are on a competitive basis when, in a year or two, we shall be faced with Japanese, German and other competition, we shall find out how mistaken we are.
    The truth is that there is a shortage of goods because of failure to produce them during the six years of war. Though we can still sell in any quantity at a high price, it would be misleading the public and deceiving ourselves to think, therefore, that when competition comes we shall be able to meet it. The Government are right to extend this prohibition for three years, when we or perhaps their successors will have an opportunity of considering what need there is for some kind of action to protect our standards of life, which we hope we shall continue to build up to a high level.
    Squadron Leader A. E. Cooper: The hon. Member for Huddersfield, West (Mr. Wade), did not speak to the Bill, but he related his entire remarks to the Import Duties Act, 1932. That particular Act, which we are now seeking to extend, was for the specific purpose of the safeguarding of British industries and preventing goods from coming into this
    1042
    country in order that the industries of this country could develop.
    The hon. Member has made the suggestion that consumers could not get a reduction of duty at the present time. From my own personal knowledge, I can assure him that it is quite possible; indeed is done regularly when we make our views known to the Board of Trade, particularly when we are concerned with certain articles which are subject to duty and are not now available in this country. In such conditions, the Board of Trade make the necessary adjustments with very little delay. If the hon. Member studied some of the Statutory Instruments published during this week he will see a number of examples of such concessions having been made.
    I would ask the President of the Board of Trade to reconsider this question of three years. He made it the burden of his case that industry of that time would be back to normal. I do not think that any man in business today imagines that business will be normal in three years' time. As one of my hon. Friends has said, industry and conditions are never normal. I must confess that when I saw this period of three years I was rather suspicious of the motives of the Government.
    I could not help remembering that it was Mr. Philip Snowden who announced in 1929 that it was the intention of the Socialist Party to allow this Act to run out and not to renew it. We also know that in 1924 as well as in 1929 it was the intention of the Socialist Chancellor to repeal the McKenna Duties. We therefore had a suspicion in our minds that here was another attempt by the Socialist Party to expose British industry to the four winds of sweated labour from many countries overseas, thereby driving our own men out of employment as they succeeded in doing from 1929 to 1931.
    We are very glad that the Government are seeking to codify or co-ordinate the various systems under which we are working today, and I ask the President of the Board of Trade to bear in mind that one of the industries which is having considerable difficulty is the chemical industry, which requires much more than three years to develop the new processes which they contemplate. The provision of plant today in the chemical industry, including stainless steel, creates considerable

    1043
    difficulties, because in many cases three or four years elapse before they get it.
    It is not a practical proposition to say to industry, "Please do some research work on this particular problem, but when you have done it we do not guarantee to give you a good market in which to sell your product." I hope that by the Report stage the right hon. and learned Gentleman will have had second thoughts on this matter.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 4.—(AMENDMENT OF EXCISE DUTY ON MECHANICAL LIGHTERS.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    5.0 p.m.
    Mr. Nigel Birch: I think we should like to have a little explanation about this Clause. As I understand it, the object of the Clause is to prevent some form of tax evasion in the assembling or manufacture of mechanical lighters, but what the Clause does seems, on the face of it, to be rather sweeping. Subsection (1, a) says:
    "any prescribed component of a mechanical lighter…shall be deemed to be a mechanical lighter, but incomplete."
    The Clause first says that anything may be deemed to be a mechanical lighter, but then goes on, in subsection (2), to say that probably the Treasury will say that the prescribed component which is a lighter is
    "the component part or one of the component parts least likely to require replacement."
    Anyone looking at his lighter might well be in some doubt as to which was the component part least likely to require replacement.
    The mischief arises here because subsection (1, b) has a retrospective effect and says that
    "a manufacturer of mechanical lighters shall include a person by whom any such component…has been manufactured…not withstanding that he has not carried on the manufacture at a time when such a component or assembly is deemed to be a mechanical lighter."
    The net effect of the whole Clause is that any bit of old iron is a mechanical lighter. Not only is it a mechanical lighter, but it always has been a mechanical
    1044
    lighter. That seems, on the face of it, a very ponderous, and indeed undesirable, weapon to use to try to stop something which may require no such great force to prevent. It is using a sledgehammer to crack a nut. If hon. Members consult the governing Act, the Finance Act, 1928, they will see that in it there are a great many provisions for preventing the fraud of evasion. It says that when
    "a manufacturer of mechanical lighters, sends out from his premises without payment of duty any mechanical lighters, whether complete or incomplete"
    he can be sent to jail, and there are regulations of the utmost detail about who is an authorised manufacturer, and so on. The question of the parts of lighters being sent out is also dealt with.
    Before the Committee passes this Clause it is entitled to some account of the fraud it is intended to prevent, and also some justification—for it will need justification—for the retrospective provision which declares that any bit of old iron not only is a lighter but always has been a lighter.
    Mr. Hopkin Morris: I wish to support the comments of the hon. Member for Flint, West (Mr. Birch), and his plea for further information. I make this addition. This Clause is a very good illustration of what happens when it is sought to put a tariff duty upon things. What is a lighter, what is a component part of a lighter, or what is the prescribed component part of a mechanical lighter cannot be defined.
    I well recall the present Leader of the Opposition, when he was Chancellor of the Exchequer, introducing the duty upon match lighters, because a very interesting thing happened. One night the only occupant of the Government Front Bench was the Financial Secretary, and the then hon. Member for Bradford, North, now Lord Ramsden, moved to delete the countervailing duty provided in the Bill, and the Financial Secretary accepted the Amendment. The result was that the Committee had to be adjourned so that the Chancellor could come to the House next day to restore his own Budget. That was the first difficulty we got into over match lighters. Now we are in another difficulty over match lighters. What is a component part? What is a prescribed component part? Is it any old iron? Who is to define it?

    1045
    We have often talked about the evils of delegated legislation, when the power to define a thing has been handed to a Minister. In this Clause that power is not merely handed to a Minister. It is not merely handed to the Treasury, who have certain functions to discharge. It is handed still further, to the Commissioners, who under subsection (3) are to determine whether a component part of a lighter appears to them
    "to be constructed solely for the purpose of igniting gas."
    How do they determine that? What are the conditions upon which they make their judgment? There is nothing here to indicate that. Will the Commissioners go from one part of the country to another? There is nothing to indicate it. This is a typical tariff Clause, muddle-headed from start to finish, which ought to be deleted.
    The Economic Secretary to the Treasury (Mr. John Edwards): I think that the purpose of this Clause is quite straightforward, and although it may take up some 50 lines or so of the Bill I doubt very much whether even the ingenuity of hon. and learned Members opposite could produce something that was any shorter or clearer for the purpose in mind.
    Mr. Hopkin Morris: Delete it.
    Mr. Edwards: Let me explain the point of the Clause. It is, of course, not to raise revenue but to safeguard revenue. Some manufacturers found a legal way of avoiding the payment of duty on gas lighters of certain types. The method that has been adopted is to offer for sale, free of duty, complete sets of parts, ostensibly for replacing worn out parts of lighters in use, but in reality for assembly into complete lighters by the purchaser at home. I think the Committee will agree that this evasion of tax constitutes a form of unfair competition to the legitimate trader, and that it was reasonable that we should try to stop it, for if we were not to stop it this kind of device could spread.
    What this Clause does is to establish the principle that no set of mechanical lighter parts can be sold unless one of the parts has borne the appropriate amount of duty, and it leaves the Treasury to apply this principle according to the special circumstances for each type of lighter. Clearly, it was necessary to apply this from the time it was first announced
    1046
    in the Budget Speech, and we therefore had a Budget Resolution imposing the charge as from 11th April. If we did not make this retrospective there would be nothing to prevent the stocks of these prescribed components held by manufacturers being disposed of without payment, and it is therefore essential that that part should be in the Clause.
    Mr. Birch: Why could not a date be put in subsection (1, b)? The thing is completely unlimited at the moment.
    Mr. Edwards: Clearly, it only has effect from the Budget Resolution of 11th April. The Budget Resolution of 11th April actually imposed this charge, and all we wanted to be sure about was that the people who had been doing this would not be able to dispose of their stocks. That is the only point. I should have thought the Committee was completely protected by the procedure laid down here, that we have to have an Affirmative resolution if the incidence of the tax is extended and a Negative resolution in other cases.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.
    Clauses 5 and 6 ordered to stand part of the Bill.

    Clause 7.—(PAKISTAN TRADE AGREEMENT.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Lennox-Boyd: This Clause deals with the new trade agreement with Pakistan, and in the Fourth Schedule of the Bill the terms of that trade agreement are set out. As this Clause deals with a matter of the greatest importance to a Dominion in the British Commonwealth, we feel that some observation should be made upon it this evening.
    It deals with Pakistan, whose loyal association within the British Commonwealth is deeply valued in this House and country, and whose brave people are held in the highest regard and affection throughout the British Empire. We cannot pretend that the Clause does not make startling changes in the Imperial Preference system. I recognise that the Secretary for Overseas Trade deserves the congratulations of the Committee for the zeal with which he has addressed himself to the preservation of Imperial

    1047
    trade between the United Kingdom and Pakistan, and he will, I know, agree that the Clause does represent very significant changes in the pattern of Anglo-Pakistan trade.
    We appreciate that some alteration was inevitable and very desirable in the tariff arrangements between the two parts of the British Empire, because the Anglo-Indian Agreement of 1939 had, obviously, to be amended. The Committee will realise that with the separation of the Indian Continent into the two Dominions of India and Pakistan, the trade agreement arrived at with India when India was a single country needs wide modifications. One consequence of the division of the Indian Continent into two Dominions has been that in the last few years Pakistan has given the United Kingdom a preference of some £16 million on our exports to Pakistan and has, I believe, in return received only some £4 million on her exports to us. Such a disparity of trade cannot indefinitely continue.
    The agreement which, no doubt, the Secretary of Overseas Trade will commend to the Committee—I must apologise if I appear to be doing it for him—results in certain very considerable changes. I think that I am right in saying—perhaps he will confirm this—that on some 30 articles the preference hitherto held by the United Kingdom in the Pakistan market will disappear altogether and, in a considerable number of other cases, the margin of preference, by the raising of the general level of duty, will be reduced. Perhaps he will confirm that I am right in believing that in future, after this agreement, grey cloth for example, from the United Kingdom, which has hitherto enjoyed in Pakistan a preference margin of 45 per cent., will now have only a margin of 5 per cent. On rayon fabrics the preference margin will drop from 30 to 10 per cent. and on printed cloth the margin will drop from 42 to 6 per cent. These are very significant changes.
    A new agreement was necessary. It seems to us that it would have been better if, when we saw this growing disequilibrium between Britain's trade with Pakistan and the advantages that we were getting compared with the advantages that Pakistan were getting in return, the United Kingdom-Pakistan had been
    1048
    allowed to get together and work out their own solution for improving trade, either by creating new preferences or raising existing preferences and giving Pakistan greater concessions in the United Kingdom market.
    I hope that the Committee will realise this fact: we were not able to do that, not, I believe, through any lack of good will on the part of the Government, but because of our international obligations under the general agreement on tariffs and trade. I can understand the attitude of many people in Pakistan. They are able to sell wherever they like all their products—cotton, jute and tea. There is a great demand for all they produce. The time may come when competitive sources may be found for these commodities. Then the preferences which Pakistan has hitherto enjoyed and still, in a measure, continues to enjoy will once more become very important. We shall not be able to restore the preferences which are being altered today without very difficult international negotiations with some 30 other countries who will feel that their interests are also affected and prevent us from restoring these preferences which we are now abandoning.
    5.15 p.m.
    We, in the United Kingdom, I think it says in the agreement, will consult together with our friends and fellow citizens in Pakistan if there is a mutual change, in future, in the pattern of our preferential trade. Once more we may consult together, but we cannot do anything about it, because preferences abandoned or reduced cannot be restored or raised without international agreement, and agreement from those other countries whose competitive position would be jeopardised if they granted that agreement to us.
    We do not believe that this is the way in which Empire trade may be developed. The Clause deals with an agreement made with a Dominion and made, I recognise, largely at the request of that Dominion, and it would be inconceivable for the Opposition to vote against the Clause. All the arguments that I have advanced are arguments not against the Clause but against those provisions in international agreements which will prevent us, if we want to in future, from restoring the preferences that we are altering tonight. There is a very strong case indeed for the earliest possible

    1049
    opportunity being taken to recover for the British people in this country and our associated Dominions throughout the Empire that freedom of decision in this field of preferential trade which, we believe, we are entitled to claim and which we feel should never have been given up.
    Mr. Harold Wilson: I apologise for detaining the Committee, but I cannot allow this Clause to go through without adding my support to what has been said by the hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd) in the tribute which he paid to the Secretary for Overseas Trade in the negotiation of this agreement with Pakistan.
    The hon. Gentleman himself, I think, would be the first to agree that in the past year or two we have been experiencing great difficulty with regard to the Imperial Preference system. A special difficulty arises in the case of Pakistan following the partition. It is, I am sure, no secret to the Committee that following partition the Pakistan Government felt that some of the advantages granted to undivided India did not apply equally to post-partition Pakistan. They did not feel the same about continuing with the pre-war trade agreement. In those circumstances, the desire of the Pakistan Government to revise or even completely to remove the pre-war agreement presented the Government with a very great problem indeed.
    I should want to be the first to say that had it not been for the way in which my hon. Friend handled these negotiations the whole future of Anglo-Pakistan trade might have been very different indeed. As I think the Committee know, my hon. Friend has undertaken in the last three or four years a very large number of missions and tasks of this kind which have redounded to the benefit not only of British trade but also of Commonwealth trade as a whole—missions and tasks which seldom hit the headlines but which are of very great value.
    As a result of his conducting these tremendously difficult negotiations, we have this Clause in front of us today. It is not ideal and not all that we should have liked. We have lost preferences in Pakistan which are of great value to a number of British industries. But on balance, I think British industry and those with whom my hon. Friend were in close consultation would feel that, out of a
    1050
    very difficult situation, his negotiations and his knowledge of the subject have obtained a very reasonable settlement which makes it possible for us to look forward to a long term and permanent development of trade between our two countries.
    Sir Patrick Spens: I should not like this Clause to be passed without a few words on two subjects. First, I want most heartily to congratulate the Secretary for Overseas Trade on his success in obtaining the agreement for us at the present time. Some time ago I had the pleasure of entertaining him when he was on another mission in India. I realised full well how Pakistan felt shortly after she became a Dominion and how difficult it would be to get the resumption of a trading connection with Pakistan which would be satisfactory to them and reasonably fair to our own people.
    This agreement is not perfect and there is no doubt that some of our traders will suffer to some extent as a result of it. I am extremely pleased that the right hon. Member for Huyton (Mr. H. Wilson) has made the speech which we have just heard, because I think it will explain to many people in Pakistan some of the difficulties which are inherent in what was attempted and in what we should like to do. On the other hand, this means that there is a resumption of trade between the Dominion and ourselves with a hope that in time to come it will develop for the mutual benefit of both the Dominion and ourselves.
    I regret that the term of the agreement is so short but, on the other hand, if it is a success, there is no reason why it should not continue indefinitely beyond the autumn of next year. I hope very much that the agreement will be continued in this or some altered form because I think it is essential for the prosperity of that part of the world that there should be the closest trading connection between Pakistan and ourselves, as well as between India and ourselves.
    As a lawyer, I am bound to say that there is one point I wish to put to the Secretary for Overseas Trade. I realise that it was not possible to put into the agreement, as such, everything which Pakistan desired to have put into it. In the Schedule we find two letters of great importance; they are simply put into the

    1051
    Schedule and no reference is made to them either in the Clause or in the agreement. Both letters contain important assurances, and I apprehend that Pakistan was desirous that the contents of those letters should be put on record in one form or another.
    But I am not at all sure what this Committee will be doing, or what the House will be doing, if we merely put into a Schedule two letters which are left apparently completely in the air. They can have no legislative validity at all; I should have thought they could have no additional legal validity. I raise this matter because I think the assurances given in these letters are of the greatest importance and I wonder whether, between now and the Report stage, it may not be possible to put those assurances into some other form which would give them some ordinary legal validity of one sort or another.
    Subject to that one main criticism, I should like to end by congratulating the Secretary for Overseas Trade again and also by congratulating His Majesty's Government in Pakistan that they came to this agreement with His Majesty's Government in the United Kingdom.
    Mr. C. Williams: I do not wish to raise any further controversial matter on this subject. I welcome the Clause and I welcome the fact that we have reached this agreement, but I must say—and probably there are others who agree with me—that there are many factors connected with British trade which have not advanced as much as we might have hoped under agreement with Pakistan.
    I will not pursue that point, for I want to ask whoever is to reply on behalf of the Government whether this is not a rather unusual Clause to find in a Finance Bill. Perhaps I may have the attention of the Law Officers here. The Clause itself seems normal, but when we come to this amazing Schedule, which is of great length with the letters at the end, I am bound to ask whether there are any precedents for putting that kind of letter and this kind of agreement between ourselves and the Dominion in a Finance Bill. Or are the precedents that this should come under a separate Act?
    This is a subject which should be investigated, because a Finance Bill is
    1052
    liable to become congested if we begin slipping into it other material. The duty is an obvious subject which must go into the Bill, but when we have an agreement it is an entirely different matter. If we are to have many of these agreements, and if they are all to go into the Finance Bill, we shall undoubtedly lengthen our Finance Bill and, as I see it, we may create a very difficult position. It may be that such a matter as this could be tabled at the same time as the Finance Bill, but I suggest that it might be better to have the agreement as a separate matter rather than have it in the Finance Bill. If a considerable number of these agreements are made we might clog up the Finance Bill.
    Mr. Gammans: I agree with what the right hon. Gentleman the former President of the Board of Trade had to say about the difficulties under which the Minister carried out these negotiations, but I think he should have gone a little deeper into this and explained to some of his hon. Friends behind him exactly what is implied in the provisions of this Clause. I wonder how many Government Members would care to go to their constituencies this week-end and explain to their supporters exactly what this agreement may mean to the standards of living of the British people.
    I am sorry that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), is not here, because earlier today he raised the question of Japanese competition and the effect it might have upon our standard of living. As my hon. Friend the Member for Mid-Bedfordshire (Mr. Lennox-Boyd) pointed out, the main reason for this agreement is that India is no longer one entity and that since Pakistan has come into being some sort of separate agreement is necessary. We do not quarrel with that at all.
    But I wonder how many hon. Members realise how much we have lost in preferences. My hon. Friend pointed out the reductions we have suffered on British piece goods and rayon, but we have lost some preferences altogether. For instance, we have lost all preference on cement, motor tyres, motor cycles, bicycles and many types of iron and steel goods. That may not matter very much now in a sellers' market, when we can sell almost anything anywhere at any price; but before long we will be in a buyers'

    1053
    market and we must expect in Pakistan, which is a great and growing market, to meet some fierce competition from Germany and Japan.
    5.30 p.m.
    What the hon. Member for Stoke-on-Trent, South, feared when he raised this subject earlier today is almost certain to occur in Pakistan, especially over textiles and bicycles. As my hon. Friend pointed out, the other reason for this new agreement is that we have been selling to Pakistan about four times as much of goods which are subject to preference as they have been selling to us. It is no good our blaming or thinking of blaming Pakistan. They are quite right to want to redress the balance. The normal way would be to try to make up the difference by giving them increased preferences, or perhaps by starting to give them new ones.
    Here we see one of the evils of the agreement we entered into on tariffs and trade. We cannot give a preference to Pakistan unless we give it to the whole world. We are forbidden to help our friends in Pakistan unless we help our not-so-good friends in Argentina and our enemies in China and those countries behind the Iron Curtain who are out to destroy us. Here we have the chickens coming home to roost for having accepted the American Loan. It was a fell day's work when, for a mess of American pottage, we sold the birthright of the British Empire.
    It was the right hon. Gentleman who is now the Minister of Local Government and Planning who did it. He is the Esau of the Labour Party. I hope that the British people will realise that this was done by the present Government when we once more have to face the fiercest competition in markets where we hitherto enjoyed preference. No attempt was made to explain to our American friends that Imperial Preference, far from hindering world trade, had increased it and had led to a stable area in the world such as we and they so much desire. I do not know whether any Member of the Government finds time to go to the movies. If they do so, they will see from time to time a gangster film. I believe that the gangster refers to his gun as "Gat." This particular G.A.T.T., the General Agreement on Tariffs and Trade, is certainly a gun, directed not only at the British
    1054
    Empire but at the standard of living of the British worker.
    We do not blame Pakistan for this agreement, but I wonder whether hon. Gentlemen on the other side of the Committee realise how deep may be the repercussions of what their Government have done in the past. Now we see an example of it. We are not going through any evil effects immediately, because of the sellers' market which now exists. The fundamental fault is that we have surrendered a vital principle for cold cash. In other words we have committed the unpardonable error of eating the seed corn. I hope what we have done in that direction will not result in what normally happens to people who eat the seed corn, which is that before long they wonder where their next meal is coming from.
    Mr. David Eccles: All hon. Gentlemen who have taken part in the debate on this Clause have referred to the difficulty of making a commercial agreement. Considering the handicap under which the Secretary for Overseas Trade was working, in that he could not bargain with Imperial Preferences, I would add my congratulations to those of other hon. Members. What has made this agreement hard to conclude is that many of our friends in Pakistan have felt for some time that they had not been getting a fair share of goods which were in short supply. I refer especially to capital goods. That feeling, if it exists widely, which I am told it does, may have added to the difficulties of making the agreement.
    The problem of Pakistan's imports has become very much more acute because they are getting higher prices for the raw materials which they export and which we need very badly. That additional income is not being balanced by an increased volume of imports. The Pakistan Government have done their best to stop inflation, but inflation is now growing in Pakistan. One realises that our re-armament programme will make this difficulty more acute. The demands of defence are for the products of the heavy engineering industries which Pakistan hopes to get as a result of this agreement in order to develop her resources and raise her low standard of life. In the consideration of our defence programme the requirements of Pakistan may easily be overlooked.

    1055
    I rose to say that I think that would be a very great mistake. Pakistan people are very tough. They live upon the confines of the Communist bloc. I do not know whether it would be right to describe Pakistan as "the Canada of South Asia," but it is of the highest importance politically and economically to Pakistan and to this country, and indeed to the whole free world, that that part of the Colombo Plan which relates to Pakistan should be swiftly and efficiently carried out. That will take a great deal of encouragement, good will and deliberate prodding on the part of His Majesty's Government, so far as our capital goods are required for that great purpose.
    I do not think that we should part with this Clause, especially when we know how difficult the agreement has been and how difficult the situation is in Pakistan today, without a very clear assurance from the Ministers concerned that they intend to do everything possible to make the agreement a success and that they are not going to lie back and say: "We have got out of this very awkward tangle of preferences. We have come pretty well out of it." That is not good enough. We must try to help this strategic area of the free world, and these people who have been such stalwart friends of ours for so long. I ask the Secretary for Overseas Trade for that assurance in the very clearest terms.
    The Secretary for Overseas Trade (Mr. Bottomley): My first duty is to acknowledge all the kind comments, which have come from both sides of the Committee, upon the securing of this Anglo-Pakistan Agreement. I have been asked to say a word or two on how it came about.
    Circumstances developed in such a way that it became necessary for me to fly to Pakistan in order to get this matter settled. My right hon. Friend the ex-President of the Board of Trade and I met the Pakistan Minister of Commerce in June, 1949. The Minister explained to us the difficulties in carrying on trade under the Anglo-Indian Trade Agreement of 1939. We discussed this with him and suggested that it might be good if departmental officials from Pakistan and from the United Kingdom got together to see what could be done. After long deliberation nothing was settled, and it was only when we began to see the Pakistan
    1056
    Press that we understood some of the influences which were at work.
    I will quote one comment as an illustration of the atmosphere which was built up. One of the Pakistan newspapers said:
    "Three years have passed since Pakistan came into being but we continue to give preferential treatment to British goods to the great detriment of our trading relations with the world outside the British Commonwealth. The sentiments of the people in this country on the question of Imperial preferences are well known. As a matter of fact, the struggle to abolish preferential treatment to British goods has been one of the most important aspects of the struggle for freedom waged for years in this sub-continent."
    It went on to say:
    "The operation of the Imperial preferences has been inflicting great injury to our economy. It has turned our country into a preserved market for British manufacturers to the great detriment of our own industries."
    We all know that that was not true, but that this atmosphere existed has now been confirmed by the hon. Member for Chippenham (Mr. Eccles) today. He said that Pakistan was not getting its fair share of industrial goods. I assure the hon. Gentleman that if we look at the Commonwealth as a whole we see that Pakistan has been getting a very liberal share of the capital and other goods that we have been able to export in recent years. That atmosphere had to be changed.
    I am glad to say that from the very moment that I got to Pakistan I found the Minister of Commerce most friendly and co-operative. The whole Government said that they wanted Anglo-Pakistan trade relations to proceed smoothly and sweetly. After such an introduction it was not at all difficult finally to reach some settlement. It is true that in reaching this settlement we had to give away a good deal. We have enjoyed great advantages for a considerable time. The figures of £16 million worth of preference trade on our side against £4 million on the Pakistan side are correct.
    I have one or two minor disagreements on the rates to which the hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd) referred, but I will not go into them now. We must recognise that, when it comes to preferences, the British Commonwealth in itself is not self-sufficient and therefore we must trade with the rest of the world. It would be wrong to get rid of preferences; it would be equally wrong to insulate ourselves against the rest of the

    1057
    world. The Pakistanis take that view very strongly, too. We must remember that they are parties to the General Agreement on Tariffs and Trade. Whatever our initial position may have been, we have to meet the Pakistan Government on these terms which we have also rightly imposed on ourselves in our general trade relationships.
    The hon. and learned Member for Kensington, South (Sir P. Spens), asked me a question about the letters. As far as the agreement itself is concerned, there is nothing new in the present procedure. Agreements have been presented in the past in this way in the Finance Bill. There are precedents for it, although I cannot at the moment recollect them. If the letters are read carefully, it will be seen that they contain no legal obligation. His Majesty's Government have given assurances of helping the Pakistan Government, through the aid of our commercial agents, in supplying and buying goods which are required. It is not a legal document. It was at the wish of my colleagues in Pakistan that they were incorporated in this way.
    The real reason for the Clause is that there is a need for legislation arising out of the provisions of the Ottawa Agreement of 1932. That Agreement provides for the free entry of some Commonwealth goods and gives guaranteed margins of preference to certain others. The Ottawa (Agreements) Act, 1932, gives effect to the individual agreements then reached with Canada, Australia, New Zealand, South Africa, Newfoundland, India and Southern Rhodesia. If any one of those agreements is revised in any way or a new one is desired, fresh legislation is required so that they can be attached as scheduled agreements to the Ottawa (Agreements) Act, 1932. It is because of this that we present this Clause to the Committee. We hope it will be accepted.
    Mr. C. Williams: I asked the Government to give any precedent for incorporating these letters in this way—the hon. Gentleman said that he thought there was some precedent—and for the way the Clause is framed.
    Mr. Bottomley: I think there is a precedent in the Ottawa (Agreements) Act and also in the India Act, 1939.
    Mr. Williams: For the Clause, but not for the letters. I do not believe there is
    1058
    any precedent for having letters of this kind in a Finance Bill, letters such as the one which talks about tea rationing and all sorts of things like that. I have no point of hostility to press, but I think it will be very inconvenient to the House of Commons if we are to have attached to ordinary agreements of this kind—they may be quite ordinary in the future—very long Schedules of this kind which could form a separate Bill, especially if we are to have correspondence of this kind added as well. It is not a good precedent.
    Mr. Godfrey Nicholson: Does not the hon. Gentleman think that it would be wise to be a little more categorical in his assurance to Pakistan that we shall pay particular attention to that amount of capital goods? He knows that that has been a stumbling block in Anglo-Pakistan relations. I wish he would strengthen his assurance.
    Mr. Bottomley: Not only have we given an assurance but we have specially sent out an industrial mission to see what is wanted and what can be done by British industry to provide the capital goods that Pakistan requires.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 8.—(EXTENSION OF POWER TO ALLOW DRAWBACK UNDER IMPORT DUTIES ACT, 1932, SCH. 2.)
    5.45 p.m.
    The Attorney-General (Sir Frank Soskice): I beg to move, in page 6, line 38, at the end, to add:
    (4) Drawback allowed before the commencement of this Act shall not be deemed to have been wrongly allowed if it would have been allowable by virtue of paragraph (a) of subsection (1) of this section had the foregoing provisions of this section then been in force.
    Hon. Members will have noticed that the new Clause 8 has two purposes. My Amendment relates to the former of those purposes. Under the Second Schedule of the Import Duties Act, 1932, drawback orders can be made by the Treasury in respect of classes of goods. It was a requirement that the classes of goods exported should be exported in exactly the same state as that in which they were imported, and it had been thought for a long time past that a machine which was incorporated in a larger article of machin-

    1059
    ery could be said still to remain in the same state and that a drawback order could be made in regard to it.
    Doubts have been raised recently whether a drawback order could be made in respect of a particular piece of machinery incorporated in a larger unit, and subsection (1, a) now makes it possible to have a drawback order in respect of articles of machinery in those circumstances. In other words, provided that the other requirements in the Second Schedule of the Import Duties Act, 1932, are complied with, a drawback order can be made in respect of parts of machines which are incorporated in larger units.
    The Amendment retrospectively validates any drawback relief which has been given in respect of parts of machines incorporated in larger units in the past under the terms of drawback orders thought to have been lawfully made under the Second Schedule to the 1932 Act. If the Committee agree with the Clause as a whole or that part of the Clause, I hope that they will agree that it is reasonable retrospectively to validate drawback orders which have been made upon this doubtful view of the law. That is the sole purpose of the Amendment.
    Mr. Oliver Lyttelton: We welcome the Amendment. I believe that the point which the right hon. and learned Gentleman has in mind is the drawback on things like fraction horsepower motors which are now increasingly incorporated in large machine tools. I believe that something of this kind will be helpful.
    Mr. Pickthorn: I have only one short question to put. I have followed the Attorney-General as closely as I could, but there was one thing which I did not quite follow. Everything he said was with regard to machinery. The word in the Clause is "goods." Might not the effect of the Clause therefore be to apply to something which he did not mean, or, if not, why should not the Clause say "machinery" if it is meant to apply to nothing but machinery?
    The Attorney-General: It is because the Clause, or this part of the Clause, can only apply to something which can be incorporated in a larger unit and, ordinarily speaking, the only things that one can incorporate, without changing their
    1060
    nature, in larger units are parts of machines. That is why, generally speaking, this applies only to machine parts.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.
    Clause 9 ordered to stand part of the Bill.

    Clause 10.—(BOTTLING OF WINE IN BOND FOR HOME CONSUMPTION.)
    Motion made and Question proposed, "That the Clause stand part of the Bill."
    Mr. Colegate: I want to ask a question about the effect of Clause 10, which refers to British spirits which may be bottled in warehouse. I am not certain of the meaning of the expression "wine or British spirits into bottles" in line 25. Does that mean foreign imported wines, or British wines, or both? The question is of some importance. Port is protected already and it is mentioned in this Clause. Only wine which has crossed the bar of the Douro River can legally be called port. In international conferences we are constantly defending our trade marks. Are we going to allow wine to be sold in this country to include hocks and burgundies when they are not really hocks and burgundies as understood? Would the Attorney-General say a word on that?
    Mr. Nicholson: As one interested in this trade, I should be grateful for an explanation of this Clause from the Attorney-General.
    The Financial Secretary to the Treasury (Mr. Douglas Jay): I am glad to see we are making such rapid progress, Sir Charles. This Clause is intended simply to allow the bottling of wine in warehouses for home consumption as well as for export. It has hitherto been the law that it is lawful in a warehouse to sort, separate, pack and repack any goods, and to make such alteration therein as may be necessary for the preservation, sale, shipment or disposal thereof.
    There has been an exception, however, in the case of wine, which may be bottled in bond for exportation but not for home consumption. It has been a longstanding complaint of the trade that that should be so because it has, of course, involved the trade in locking up a certain amount of capital for a long period, while the wine was in bond. The reason we

    1061
    have hesitated to grant this concession before was simply that permission for wine to be bottled in bond for home consumption involves an extra use of administrative manpower by the Customs, and we have not hitherto thought we would be justified in providing for that. However, by this year, the manpower resources of the Customs being a little greater than they were in the post-war period, it seemed to us that it was justified.
    Mr. Nicholson: Do I understand from what the hon. Gentleman has said that this extends the concession in regard to British port to all table and other wines?
    Mr. Jay: Yes, precisely.
    Mr. Nicholson: Then I should like to thank the Government, on behalf of the trade. It will be a help to the wine trade, which has suffered rather severely from the rise in duty and prices. Many wine merchants are comparatively small firms and old family firms and they have felt heavily the burden involved in locking up a great deal of capital in wine.
    Mr. Colegate: The Financial Secretary was not here when I made my point and his reply did not quite answer it. Has the hon. Gentleman had any conversations with the French Government, who are extremely sensitive about the naming of wines? Under what label should an importer of claret who bottles it here now sell the wine? Under the Madrid and other conventions we are restricted, and I am wondering whether the Financial Secretary had that in mind.
    Mr. Jay: British wine.
    Mr. Julian Amery: It has occurred to me that what is suggested in the Finance Bill at this point will be welcomed as evidence of a great change of heart on the part of the party opposite. Here is this commodity—port—obviously associated with privilege, which the Government are now undertaking to make available to the public in a more privileged way than before. There are few people left in the country who can afford to be two-bottle men, of which there were so many in the past. There are very few on this side of the Committee and, I suspect, not very many even on the side of the party in power. Never-
    1062
    theless, we should not let this Clause pass without extending a word of congratulation to the Government on the steps they are taking to encourage the drinking of a beverage which has contributed to making the British people what they are.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 11.—(TOBACCO LICENCES FOR VEHICLES IN SPECIAL CASES.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Lieut.-Commander Braithwaite: I wonder if we might have some elucidation of this Clause, which is drafted in the language so dear to the hearts of the Parliamentary draftsmen. Its intention would appear to be benevolent and to give facilities for mobile vans to sell tobacco.
    Mr. Poole: And snuff.
    Lieut.-Commander Braithwaite: I am grateful to the hon. Member, but I was coming to snuff in 10 minutes' time when I had deployed the case regarding tobacco. He has anticipated some observations which I hope to make shortly. If the hon. Member has to leave the Committee, may I assure him that HANSARD tomorrow will be well worth study in regard to my remarks on that topic. In the meantime, he is in a position to obtain a necessary pinch thereof at the door of the Chamber.
    Before that untimely interruption took place, I was about to say that, so far as I read the Clause, it is an attempt to provide facilities for the sale of tobacco, in the first instance, in outlying areas where, one imagines, tobacconists' shops are difficult of access during working hours, or may perhaps not even be open at the time when workers in those areas are proceeding to their daily task. If I am right in that interpretation of the intention behind this Clause, there are certain questions which I want to address to the Front Bench opposite.
    Are they satisfied that there is a genuine need for this new machinery? I do not recall anything of the kind before. Although it is described in the Clause as temporary—the Commissioners can grant

    1063
    or withhold or cancel licences as the situation may change—we should like elucidation of the circumstances which have caused this to be a matter of importance and urgency this year.
    I am open to correction by the Financial Secretary, but I understand there were certain consultations with the trade association concerned in which the Commissioners of Customs and Excise took part, only to encounter considerable resistance to this change in the law. It was based, I gather, not so much upon the danger of competition—although I have no doubt that was present in their minds—as on the difficulty of providing effective safeguards against certain abuses which will be obvious to hon. Members on both sides of the Committee.
    6.0 p.m.
    This honourable House exists, after all, to take precautions against the evil-doer. We may be told that there are no evildoers in these areas, but a Government which is taking such wide powers to deal with tax evasion should listen to one or two of the objections which might arise in this particular connection. Is it the case that these areas have no other facilities whatever for the purchase of tobacco? If so, perhaps we shall hear later on what those areas are. Is it not the case that there are hardly any areas which are not served at one time or another during the day by grocery delivery vans from some adjacent town or village?
    That brings me to the second article to which the Clause refers, and perhaps the Financial Secretary or the Attorney-General can enlighten us on this point. I think I have made a valid argument as regards tobacco. Is there difficulty in obtaining snuff in these outlying areas? What is the snuff potential in those parts? Are the hardy toilers in the Highlands and Islands of Scotland, for instance, experiencing grievous hardship through a shortage of snuff in those areas? Perhaps the right hon. Member for Dunbartonshire, East (Mr. Kirkwood), if he would like to intervene, will tell us, because I am sure that he is well informed on this particular point. One cannot imagine that shortage of machinery for the purchase of snuff in these outlying areas is the main problem. I imagine that if we concentrate upon tobacco, we are dealing with the chief point.
    1064
    Are there not certain abuses which might arise from the point of view of Excise officers? Would not the existence of a large number of mobile vans, for instance, somewhat facilitate the machinations of receivers of stolen goods? Would it not be easier for them to dispose of illicit tobacco? I have certain experience, not as a receiver of illicit tobacco, but as one who had to deal with the problem of evasion when, during the war, there were a large number of naval shore establishments, each of which had the facility—which I am glad is continued and which will never, I hope, be cancelled—of duty-free tobacco. The fact that they were shore establishments increased the problem of the Excise officers in the possible evasion of duty by the illicit selling of that duty-free tobacco to civilians outside. Does not the existence of a Clause of this nature somewhat open the door to that kind of abuse, or at any rate to such a possibility?
    Furthermore, it is the duty of local authorities in all parts of our island to administer and enforce the Shops Act. Do not these mobile vans become retail shops within the meaning of that expression at the moment the Clause is upon the Statute Book? As hon. Members on both sides of the Committee well know, there is a Shops Act which limits, I think quite properly, the hours worked by shop assistants. I am glad to see that I have uprooted for the moment the Parliamentary Private Secretary, which makes me think that a new point is perhaps being uncovered. He is on his way now to seek inspiration, very properly, from under the Gallery for his hon. Friend the Financial Secretary.
    Mr. Holmes Mr. Holmes (Hemsworth) indicated dissent.
    Lieut.-Commander Braithwaite: The hon. Member behind the Financial Secretary shakes his head, but I still believe myself to be right.
    Is it not a valid point that, as everybody knows, the hours worked by shop assistants are now controlled by Statute, and that if they are going far afield to serve these various areas, unless there is some complicated system by which one driver or salesman relieves another halfway through the day, is it not likely that they will have to spend very long hours on their journeys and only return to the

    1065
    point from which they began long after the hours of work so laid down by the House have expired? I see that Mercury has now returned, and perhaps, therefore, we may expect a pronouncement.
    Mr. Jay: The hon. and gallant Member is quite correct about the Shops Act in supposing that it applies to mobile shops.
    Lieut.-Commander Braithwaite: I am grateful to the Financial Secretary, because that rather strengthens, not so much the argument, but the submission which I am making. As the Shops Act applies, now we know, to mobile vans, does not the point about the hours of work apply? The Financial Secretary, apparently, is still engaging in consultation, and I do not want to interrupt any addendum there may be to the information which might be coming through, but would it not be a little difficult to enforce the Shops Act in these conditions?
    Mr. Glenvil Hall: The union will probably see to that.
    Lieut.-Commander Braithwaite: How pleased we are to have an intervention during this Committee stage from one whom we used to hear so frequently. It is the second time that the right hon. Member has intervened in our proceedings since we began yesterday, and in each case his interruptions have been to some humble remarks of mine. But the right hon. Member's remarks are unnecessarily concise. We would like him to rise and to expound a little further on this matter, because on this particular question he appears to lack confidence in his successors. We feel very much the same way on this side of the Committee. The right hon. Gentleman has made a most profound intervention, for which the Committee are grateful. When he occupied the Treasury Bench he always had a grasp of the obvious, which we on this side used to admire, and he now makes the resounding contribution that these men, after all, have a union who will look after their interests.
    But even a union will have difficulty in getting round this particular problem. The men on the mobile vans will be miles away from home, benighted possibly in the constituency of the right hon. Mem-
    1066
    ber for Dunbartonshire, East, at a time when the right hon. Member is at Westminster and unable to come to their assistance. It might be that they are dispensing tobacco or snuff in the Orkneys and Shetlands, the Member for which important constituency is lamentably absent at the moment when the affairs of his constituents are being discussed, a dereliction of duty for which he, being the Chief Whip of the Liberal Party, should administer the sternest rebuke to himself.
    We think also of those in even more far-flung areas of our country, in many of which the roads are impassable during the winter months. A severe winter brings great problems, as you, Major Milner, will be aware, in certain Yorkshire areas, a county which you have represented with so much distinction for so long. A number of hon. Members opposite also represent that same county. They know full well how a hard winter can cause an almost entire hold-up of this essential transport in certain parts of Yorkshire. I say this despite all the assurance of the right hon. Member for Colne Valley—an area which, incidentally, is perhaps affected in such severe weather as that which I have described. Even his distinguished lady opponent may have difficulty in reaching Colne Valley to deliver her election speeches with which she hopes shortly to uproot him.
    Be that as it may, will it not be very difficult for the union, or anyone, to see that undue hours are not worked for this purpose?
    Mrs. Glenvil Hall Mrs. Glenvil Hall indicated dissent.
    Lieut.-Commander Braithwaite: The right hon. Gentleman shakes his head in the luxurious comfort of the third bench behind the Government, but he is in a position of greater freedom and lesser responsibility and I am sure he would not look at this in quite so lighthearted a manner were he in charge of the Finance Bill. I do not wish to take up more than a few minutes, because we wish to hear the right hon. Member for Colne Valley on this matter.
    This Clause is drafted in obscure language—one can call it nothing else. I have a feeling that the Attorney-General, whom we congratulate on his elevation, would find it difficult to explain the

    1067
    Clause, lucid as he always is, and I plead with him to rise shortly. In the meantime, a poor layman has endeavoured to dissect the meaning, which I think now emerges, that the Clause is entirely for the benefit of mobile vans in the remotest rural areas and that they shall be permitted to sell tobacco and also snuff to the distressed inhabitants thereof. Are we not going to be confronted by difficulties from the point of view of the administration by Excise officers which will cause the Chancellor a year from now a very serious leakage in that revenue which he tells us is sacrosanct by giving competing concessions to other sections of the community?
    Mr. A. Edward Davies: Before my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) replies to the hon. and gallant Member's remarks, may I recall that, whatever may be the urges of my right hon. Friend in this matter, it was said that he was too concise. That cannot be said of the hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite), who took us on a Cook's tour, or some other tour, round the world, which I dare say we enjoyed.
    The hon. and gallant Gentleman did not bring out one point. He expressed apprehension about exceeding the hours of work set out in the Shops Act, and thought that the unions would not be able to deal with the matter and suggested there were great dangers of evasion. But I have received representations from another aspect. Is there sufficient tobacco for the people who at present sell tobacco? They have to pay for their licences, it is argued, and they come to me and ask why we should talk about providing new facilities, not only in remote places, but anywhere, apparently—according to the Clause—when in fact there is already more than sufficient competition for the supplies which are made available?
    I have to be careful in this matter and not go outside the Clause, but I ask the Minister whether he has inquired into the distribution aspect of the matter. Is he satisfied that in the various areas with the background which has led to the present allocations, they are in fact getting a proper service? I have received representations on this aspect of the matter from an industrial area where a great deal of tobacco is smoked. One
    1068
    man with a considerable business found difficulty in supplying his customers. It would be interesting to know how the position has arisen and whether something will be done, in the event of this Clause being agreed to, to make supplies available both to existing licence holders and others whom the Clause will create.
    6.15 p.m.
    Mr. Pickthorn: May I ask the hon. Gentleman three questions? First, I am not quite sure from where those who have spoken earlier got the word "remote," and why they assume the remoteness of the district to be concerned. Secondly, the words "exceptional but temporary," occur in line 35, and I find that a little puzzling. I feel sure that in this connection although "exceptional" and "temporary," are not precisely identical, they are very close to each other in meaning; and I do not understand the word "but." What is meant by "exceptional but temporary"? If the need is exceptional, it is almost bound to be temporary, and vice versa, and I do not understand the connotation of "but."
    I do not think my first two questions need any apology, but my third question perhaps ought to be apologised for, because perhaps those who are familiar with the law should know the answer already. Subsection (2) authorises the Commissioners to make any conditions they think fit, and I have no doubt that will be exercised with the greatest wisdom and discretion; but I do not think the Committee ought to pass that without more of us than merely the lawyers knowing what are the limitations on that, because as the words stand, on the face of it they give powers to the Commissioners entirely at large. I think we ought to have the subsection explained to us.
    Brigadier Thorp: One point I should like to hear explained is what is actually meant by the Clause when it says:
    "a registered goods vehicle when stationed at a place specified in the licence."
    I imagine this Clause is for the benefit of the outlying areas, although nothing is said in the Clause about it. In my constituency there are many villages in the hills from which people cannot always get to the shops to get tobacco, if it is available. Does that mean that in a winter like last winter, when there was

    1069
    a lot of snow, one of these vehicles will be stationed in the hills
    "at a place specified in the licence"
    so that it can go into operation when the "exceptional but temporary" need occurs? Is that what is meant, or is it a special place in a town where the vehicle will be kept in readiness to go into the hills, in which case it will not get there because the roads will be snowed up?
    Mr. Frederic Harris: This is an important point. Possibly we are approving a step by which the Government could break into the goodwill of established retail tobacco distributors throughout the country. There is a danger of that being permitted to happen without a really justified need being explained by the Government. I believe it is right to say that for approximately all the people in this country there is the ability to buy tobacco quite freely, and one rather doubts whether there is any real need for the Government to satisfy the demands in remote areas.
    If this Clause is agreed to, we shall definitely take away some of the goodwill from established distributors throughout the country and take away a considerable amount of their trade. It seems a rather serious infringement on the distributors of tobacco. I hope the Government will try to establish a very real need for such permission to be granted because, otherwise, possibly in due course we shall make it very difficult for many tobacconists to keep going. They are very dependent upon present trade, and in other respects trade in their business is diminishing all the time.
    Mr. Jay: The hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite), made a lucid and informed speech on this important topic, although he did not extend his researches as far as my speech on Second Reading, when I did actually explain what this Clause meant, although naturally my explanation was brief. What the Clause does is to give power to the Customs and Excise to license for the sale of tobacco or snuff a mobile shop as well as what under the present law are, I think, described as premises. As I said en Second Reading, it is a pleasure in at least one Clause of the Finance Bill to be liberating somebody as well as restricting other people in other Clauses.
    1070
    I do not agree with the hon. Member for Croydon, North (Mr. Frederic Harris), that we should detract competition in the retail trade. Generally speaking, I am in favour of competition in retail distribution. The hon. and gallant Member for Bristol, North-West, asked whether we were satisfied that there was a need for this innovation this year. We are satisfield, largely as a result of the number of applications we have received for these facilities from potential consumers of tobacco and snuff. As a matter of fact, we have had applications affecting travelling fish and chip vans, mobile canteens serving troops and civilians working on a military railway line where there are no facilities for buying tobacco, a mobile confectionery shop and so forth.
    The hon. and gallant Gentleman asked what event it was in this particular year that had moved us to introduce the Clause. The main purpose we have in mind is the development of new housing estates and new towns, where a number of houses have been built, but owing to the necessary priorities, in which we put houses in front of shops, the building of houses has exceeded the provision of new shops. Therefore, strictly the answer is that it is the progress of the new towns' programme and the progress of our housing programme generally which has made this necessary this year.
    The hon. and gallant Gentleman also asked whether there were no other facilities for the purchase of tobacco by these consumers. Strictly there are other facilities available if the consumer goes far enough to find them; but in our opinion those facilities were not adequate and the consumer could justifiably ask for greater convenience to obtain his tobacco. The hon. Member for Stoke-on-Trent, North (Mr. Edward Davies), asked whether there would be sufficient tobacco available. I do not think it necessarily follows that a very large increase in the consumption of tobacco will result from this change. To some extent those consumers in an area where there is no shop nearby who would have to travel a long way to fetch their tobacco will be able now to get tobacco from the mobile vehicle.
    Lieut.-Commander Braithwaite: I am grateful to the Financial Secretary for his explanation, but he is misrepresenting me. I did not say that these people will have to go far afield to get their tobacco. I

    1071
    said I thought there were facilities which would come from far afield to them. Surely on these growing housing estates, and in the new towns and so on, the inhabitants are served by grocery vans which could supply tobacco.
    Mr. Jay: To some extent, no doubt, that is true, but the applications we have received convince us that they are inadequate.
    The hon. and gallant Gentleman also asked why snuff as well as tobacco was included in this Clause. The answer is that it is due, not to a very great present or growing demand for snuff, but to the fact that these licences apply to tobacco and snuff together, and therefore under the law the two go together.
    I was also asked whether we were sure that abuses of various kinds, whether under the Shops Act or abuses of other kinds, can be avoided when this change is made. We are perfectly satisfied that can be done. The hon. Member for Edgbaston (Sir P. Bennett) rebuked us yesterday for saying to the administration, "You cannot do this, can you?" This is a case—I think I reveal no secret when I say it—where there were some outside interests who were keen to say that the Customs would never be able to do this, but the Customs told us that they were perfectly satisfied that they could—
    Sir Peter Bennett: I told the hon. Gentleman they could.
    Mr. Jay: —and I unhesitatingly accept their word in that respect. The hon. Member for Carlton (Mr. Pickthorn) asked three questions. First, he asked whether the word "remote" was really embodied in this arrangement. He is perfectly right. This is not to be confined to remote areas. We are mainly thinking of new housing estates and new towns, but in some cases it would apply to remote areas. He asked why the words, "exceptional but temporary" are included in the Clause, and I think he implied that if the circumstances were temporary there was no need to add the word "exceptional." I should have thought that the two were not necessarily the same.
    Surely the circumstances might be exceptional in place as well as in time, and
    1072
    that is one of the senses which I would have taken the Clause to imply. He inquired about subsection (2), which says the licences may be granted subject to such conditions as the Commissioners think fit to impose. What we had in mind there was, first of all, conditions of time or place and, in addition to such conditions, a particular type of consumer, such as a building worker on some out-of-the-way site.
    Mr. Pickthorn: That is not exactly my point. The Financial Secretary is kindly telling the Committee what he has in mind that the Commissioners should do. My question was, what is it that the Commissioners cannot do under this? What limitation is there in the Commissioners' discretion in the existing law so far as this Bill is concerned, because there seems to be none?
    Mr. Jay: Presumably they can act in any way in which they have the power under the existing law, and this Clause does not further limit their powers in that respect. I think I have answered most of the questions. The purpose of the Clause is simply to provide greater facilities for the consumers of tobacco, and we hope that the Committee will approve of it.
    Mr. Hopkin Morris: Arising out of the question by the hon. Member for Carlton (Mr. Pickthorn) about these words "exceptional but temporary," supposing the words were omitted from the Clause, would the Commissioners then have to be satisfied that a licence should be granted? Now the Commissioners have to be satisfied in the exceptional and temporary circumstances, and someone who had an objection to the granting of a licence would have the right of action in a court, which is probably not intended to happen.
    Major Legge-Bourke: I should like to ask the hon. Gentleman two other questions which arise out of his statement that this Clause will apply in certain cases to mobile fried fish shops. I do not know whether it is so in other parts of the country, but certainly in my own area these fried fish shops, so far from being temporary or exceptional, are very regular visitors, and are indeed an institution in a great many villages. Unless we have some clarification on this point, there will be an application from almost every travelling fish shop for facilities to

    1073
    be given under this Clause. Is it intended that that should be encouraged, or is it not?
    6.30 p.m.
    Secondly, in line 37, of page 7, there is the phrase:
    "when stationed at a place specified"—
    As a rule, fried fish shops have many places where they are regularly stationed. They go the rounds of the areas they cover. Will they have to put in a special application for each place at which they stop, or will a licence be given to cover any place at which they are known to stop regularly?
    Mr. Sidney Marshall: I should like to know how long the temporary period will be. Will it be six months or a year? Can the hon. Gentleman give any indication?
    Captain Crookshank: I do not think that it will be necessary to divide on this Clause, unless any of my hon. Friends have very strong feelings about it, but it is a remarkable provision. The natural implication was that which my hon. Friend took, that this was really dealing with exceptional cases in remote rural areas. What has not been made at all clear is who are the promoters of this suggestion. Obviously it was not the Government, because it is completely contrary to the general Government thesis about shops. Time and again they have told us that there are too many shops. They have been trying to restrict the sources of distribution. In fact, they have gone some way towards that by increasing the tax on petrol which we discussed yesterday. That, by adding to the costs of transport, makes the businesses which require transport less attractive.
    Who has asked for this concession? It was never asked for during the war when people were working in the most remote parts of the country, some on aerodrome construction and others in various jobs in the North of Scotland and other parts of the island. There were other areas where enemy destruction was such that a great range of shops were destroyed, but nobody suggested selling tobacco either in caravans or buses, or in whatever way the procedure is to be in future.
    One wonders what has prompted this suggestion. The Financial Secretary to the Treasury said that it was because of
    1074
    the development of the housing estates. I must say that if we have had to wait until this year for that need to emerge, it is a serious reflection on the housing policy of the Government. If there had been a lot of housing done, and this was at the back of it, this step would have been asked for three years ago. But it is only now emerging. We can reach our own conclusions about that.
    But when the Financial Secretary says that we ought to praise this action, because for once in a way the Government are liberating someone—they are making it easier for someone to sell tobacco—he overlooks the fact that unless more tobacco is provided they are simultaneously reducing the sales of somebody else. That man will not look upon his as a liberating measure; but pro tanto if sufficient tobacco were put on the market wherever there were shortages, that would meet the point of the hon. Member for Stoke-on-Trent, North (Mr. Edward Davies) and of a great number of would-be consumers who, even today, find difficulty in getting the brands which they want.
    On the question of liberation, that is something we welcome, provided the other action is taken as well. But the hon. Gentleman had better carry the matter a little further. It has been most difficult for people who want to open shops to get the necessary facilities. It has been difficult to get permission to sell sweets, and that is a business which very often goes with that of a small retail tobacconist. The Minister of Food is very slow about giving any of the necessary permissions for that purpose. Even the greengrocery trade for ex-Service men has been more or less a closed one owing to the action of the Government.
    If we are to liberate shops, let us liberate on a great deal larger scale and make sure that the supplies are there to be sold. But, as the Government's real policy is a restrictive one all the time, that makes it all the more strange that, on the question of one of the commodities in which there is a general shortage, they go out of their way to create more channels of distribution. Housing estates or no—and I do not really accept that as a good argument—I should like to know whether it was not the Co-ops who were at the back of all this. I am pretty sure that it is some arrangement which

    1075
    has been concluded between these two parties which are very intimate political friends.
    Even on the housing estates, where, according to the Financial Secretary, the need has just arisen, have the people who live on these estates no opportunity at all of buying any tobacco? I should like to see one of these extraordinary housing estates which is so large that it requires a mobile shop all to itself to sell tobacco, and which is so remote that nobody who lives on the estate has any means of buying any tobacco anywhere else. It is just ridiculous, but it is completely in line with everything else which comes from the hon. Gentleman.
    Mr. J. C. Maude: I wish to ask the Committee to consider seriously an aspect which was not mentioned by my hon. and gallant Friend the Member for Bristol, North-West (Lieut.-Commander Braithwaite). It is one which concerns me deeply. It is the question of dishonesty being promoted by this Clause. Stocks which move, quite properly, by a van from the place where the stock is ordinarily held to the place of distribution are, in a sense, under proper control. I am sure, however, that the Committee will not mind if I remind them that one of the greatest possible nuisances in the last few years so far as crime has been concerned has been the wholesale stealing of cigarettes and tobacco. I think that we all know that: it has been a perfect curse.
    Is not this provision likely to promote thieving? The fellows who steal tobacco and cigarettes at present only do it when they know that they can find some method of disposing of those goods. It is a well-known saying that if there were no receivers there would be no thieves. Apparently, it is not too difficult to find receivers. Nevertheless, facilities by way of receivers would be welcomed by some of the community who are quite prepared to rob the public.
    What will happen under this Clause? A van will be sent out, not in the control of the owner of the shop who, presumably, stays at his base. The van will be sent out in the charge of a fellow who probably is not very well paid. He will be entrusted with most valuable goods. No doubt he will be subject to control on
    1076
    the goods which he takes into stock for sale. But the fraternity of whom I am thinking are most anxious to meet the van on the way and put into it stolen stuff. It can never be checked. The van driver, having been suborned by the possibility of making a great deal of money by selling the tobacco and cigarettes, disposes of them at his destination.
    The only possible way of controlling activities like that is a perfectly odious one from the point of view of the employee. It is by arranging for surprise searches of his van to see whether it has on board more stock than it had when it started the journey. The temptation is a very great one, if, in fact, two or three cartons of cigarettes are loaded into a van on the road. Does it not seem likely that, other things being equal, persons who are not crooks at all, but lorry drivers who may be in difficult circumstances, due to ill-health in the family, and so on, will be gravely tempted to dispose of cigarettes most rapidly, because the fact is that these sales take place in busy industrial areas where very quick sales are possible? The money will go into the pocket of the man who has been tempted by this most undesirable Clause.
    When I heard my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) asking, a few moment ago, who had asked for this proposal, although I know it is possible for people to laugh at it, I thought it was a serious and important question. How does it come about? As far as I know, we have done quite well all through my lifetime with the present arrangments for the distribution of tobacco and cigarettes. I have no personal interest in any tobacconist at all, but I should have thought that, if we are now going to do this, every small shopkeeper would start quaking, knowing that no longer will tobacco and cigarettes be bought at his shop, but that people will buy them in remote districts and take their trade away from the shops where they used to buy.
    I am willing to offer every facility for people to enjoy themselves if they want to, but I am not prepared to support this proposal, unless we have an assurance that the police have been consulted, and that they have advised that, in their view, it is not likely to increase the stealing and disposal of an extremely valuable and

    1077
    compact commodity—tobacco. Are we not shutting our eyes to what goes on, if we do not realise that a great number of our fellow-citizens are not angels? Thefts of tobacco and cigarettes have been enormous. It is humbug to pretend that it is not so, and yet we have had no explanation as to how this aspect of the matter, which must have been in the mind of the Government, was regarded, because we know that we have had information from the tobacco interests that they are disturbed about this particular Clause.
    The Committee must know that, in general, there has been anxiety about the dishonesty aspect of this matter, not merely because people want to have some security about their sales, which is very reasonable, but because of the reason in which I am particularly interested, which is that it is high time that this Committee took very great care indeed that it does absolutely nothing which would lead to an increase in crime of this kind, in which the goods are quite impossible to trace. We can trace watches, and, possibly, jewellery, even when it has been broken up, but cigarettes which have been taken out of their cartons and packets are quite impossible to trace, and I should have thought that it is only reasonable to ask the Minister, as I ask him now, for an assurance that the police authorities have pronounced this proposal all right and have said that they are not worried about it. If they have said so, so be it, but, if not, or if they have not been consulted, we should vote against the Clause.
    6.45 p.m.
    Sir Ian Fraser: In a free economy where there are ample supplies, I would welcome any attempt to make distribution more widespread, but this is not a free economy, and I cannot see myself how we can expect, within a measureable time, ample and unrestricted supplies of tobacco.
    That being so, I want to put in a plea for the village shop. In my constituency, there are hundreds of village shops, and they render most valuable services to the community, which depends upon them for the sale of a great many commodities, one of the most important among which is tobacco and cigarettes. It is not a very big turnover which is involved, but it is very important. Apparently, from what I
    1078
    can gather, we are going to undermine this very important trade in selling tobacco and cigarettes by permitting moving vehicles, notably fried fish shops, to proceed to the village—[HON. MEMBERS: "No."]
    If that is not the case, I hope the Minister will set my anxieties at rest, but I understood that to be the case. I cannot think of anything less compatible than fried fish and cigarettes. The two things ought not to be put together, in any event; it is unethical and unaesthetic. In a world where there is a limited amount of any commodity, we ought to think twice before we deliberately set travelling competition against the village shop, which is an English institution greatly valued by the people who live in the countryside, and one of the sources of our strength and comfort.
    Mr. Reeves: Listening to the arguments put forward by hon. Members opposite, one would have imagined that there were no such things as travelling shops in this country, and that the proposal now put forward is an innovation. May I assure them that, only within the last few weeks, it has been my privilege to inspect a whole exhibition of travelling shops which are used in this country for multiple purposes. It is a legitimate trading business which is carried on all the time, and there are literally hundreds of travelling shops in this country carrying on legitimate trading in districts where it is absolutely essential that those goods should go to those people in that way, because, otherwise, they would be denied supplies.
    The proposal which is now being made is a very simple one. It is that these shops should have the opportunity of selling tobacco like the ordinary static shop, which has a licence for the purpose. Surely no one will deny that that is a legitimate form of business, and it is a pity that there has been this opposition to the proposal. It may well be that hon. Members opposite object to this kind of competition, but I was under the impression that they were in favour of competition. Apparently, however, they resent it, and, when anything of an enterprising nature comes along, they go out to kill it.
    Brigadier Prior-Palmer: I think the hon. Member for Greenwich (Mr. Reeves), who has just spoken, very

    1079
    nearly let the cat out of the bag. Now we know what is behind this Clause. I want to add a few words to those which have already been said on behalf of the small man. I do not think I know of a single village or hamlet in England, however small, which has not got its own sweets and tobacco shop. I know of no area in which one cannot obtain tobacco or cigarettes by walking a few hundred yards down the street. In my view, it is not a question of our dislike of competition. Our dislike is directed against unfair competition, which is a very different thing indeed.
    The Assistant Postmaster-General (Mr. Hobson): Define it.
    Brigadier Prior-Palmer: I will define it very quickly. We may have a little village in which there is a postmistress, possibly a widow, running the post office, which is also a tobacco shop, in which she is capable of earning a living, although not so easily in these days of short allocations of tobacco and cigarettes. Along comes the Co-op—and if the hon. Gentleman opposite will read the Clause, he will see that it refers to "registered goods vehicles." Who but a big store is capable of having a registered goods vehicle? Am I going to see the Co-op milk van going round selling tobacco as well as milk? If it does, will it not knock the whole of the small tobacco shop industry out of action altogether? That is why I would very much like to see this side of the Committee vote against the Clause.
    Mr. Glenvil Hall: I would not have intervened in this debate, in spite of what we have heard from hon. Members opposite, but for the speech of the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) and that of the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) who preceded him. I think the Opposition have completely misread this Clause. It is all very well to say that this provision will hit the village shop, which the hon. Member for Morecambe and Lonsdale said is one of the great bulwarks of this country. That, however, is not what will happen. The Clause says that a licence will only be granted for an exceptional and temporary need. If there is a shop selling tobacco in a village, then, quite obviously, such a licence would not be issued to a registered goods van plying
    1080
    in that area. [An HON. MEMBER: "Who says that?"] The Clause says that the need must be exceptional and temporary, and, quite obviously, if there is a village shop selling tobacco, there would be no reason for issuing such a licence.
    Sir I. Fraser: Does it follow, then, that if a licence to go temporarily to an exceptional place is granted the person receiving the licence would not be allowed to sell cigarettes to anyone, even if that person bought fried fish from him?
    Mr. Glenvil Hall: I honestly cannot answer that, but I do know that the gloss which has been placed on the Clause by the hon. Gentleman cannot truthfully be read into it. The need must be exceptional, and it must be temporary.
    I want to take up the point made more than once by hon. Members opposite that, in some way, this Clause is designed to help the Co-operative Society. No doubt the Co-operative as a multiple store may occasionally apply for a licence of this sort, and why should it not? But it is not, as one hon. Member asserted, the only multiple store which has registered goods vehicles. Almost every grocer and the suppliers of all sorts of goods and services in the country have to register their vehicles. To assert, therefore, that because a vehicle is a registered vehicle it must be a Co-operative vehicle is not only completely untrue, but, if I may say so, completely unworthy of right hon. and hon. Members opposite. Quite frankly, all that the Treasury are doing here is to provide for a need which has existed for some years, and which, in my view, should have been met in a Finance Bill long before this.
    Commander Maitland: May I ask the right hon. Gentleman a simple question and one easier to answer than that put to him by my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser)? Has he ever received from any of his constituents a request that such a service should be granted?
    Mr. Glenvil Hall: I happen to represent a constituency which, in winter, is often snowbound. It is a serious complaint among people who live in remote villages on the main spur of the Pennines, an area which I represent, that in winter they are unable to reach the

    1081
    nearest town because the bus service is inadequate. [Laughter.] It is inadequate because the vehicles cannot negotiate the bends and the hills in that particular area. It is not a nationalised service, but a private enterprise company. It says that it cannot make a route of that kind pay. Therefore, the villagers would prefer to have vans coming to them with the goods they need in order to obviate the trouble, difficulty, and discomfort of their having to walk to the nearest town.
    Commander Maitland: Have they specifically asked for tobacco to be supplied to them in this way?
    Mr. Glenvil Hall: Even if they did, it would not come within the four corners of this Clause because the need would be permanent and would not be temporary or exceptional. We must remember that we are here dealing with peculiar and particular cases which do not occur all over the country and in every area.
    Captain Crookshank: As the right hon. Gentleman is opening up such an interesting theme, may I ask him what guarantee he has, if village people cannot come to more populated areas to buy tobacco because of the weather, that vans would be able to go to the villages in that weather, which would be the same whichever way one went?
    Mr. Glenvil Hall: None whatever. I am not raising objection to this Clause. The objection to it is coming from hon. Members opposite, who pose to the general public as people who desire greater liberty and who do not like to see industry fettered. I only rose to say that the suggestion put forward by hon. Members opposite that this is an attempt to help the Co-operative Societies and that there has been some sort of sinister bargain struck between my right hon. and hon. Friends on the Treasury Bench with the great multiple stores known as the Co-operative Wholesale Society, is unworthy of them. Finally, if hon. Members opposite believe, too, as has been suggested by one hon. Member, that this provision will increase crime in this country, then it is their bounden duty to vote against it.
    Mr. I. J. Pitman: It is always a great pleasure to listen to the right hon.
    1082
    Member for Colne Valley (Mr. Glenvil Hall), who was the Minister in charge of the Bill on which I made my maiden speech, and I know that all hon. Members on this side of the Committee like to hear him. He has, however, impugned the truth and propriety of our objections to this Clause. It is not that they are in any way untruthful or unworthy, but that the hon. Member for Greenwich (Mr. Reeves), who spoke before him, imported into this issue a matter both of confusion and of very great sinister importance. In regard to the confusion, I think he brought in the question of whether or not the van is a mobile van. As I understand the Clause, the van has to be stationary.
    That leads me to ask the Financial Secretary why it must be a registered vehicle. If it is to meet a temporary and a very exceptional need, what is wrong with the good old horse? Why should it not be a horse-drawn cart or caravan? Anybody who goes to Hyde Park Corner can see that sort of vehicle. Although I do not think it is a registered vehicle, it is an excellent temporary expedient for meeting a need of this kind.
    Again, why should not the needs of the people be met by the small man with a little hand-trundled thing, like they have at Hyde Park Corner which he will bring out to the temporary station from which vending is taking place? I see that the hon. Member for Greenwich (Mr. Reeves) is shaking his head.
    7.0 p.m.
    Mr. Reeves: The hon. Member is going back to the 19th century.
    Mr. Pitman: This is a temporary exceptional need which has to be met. Why have a high-powered motor vehicle to carry it out? But the hon. Member for Greenwich referred to a fleet of such vehicles which he inspected.
    Mr. Reeves: I thank the hon. Member for giving way and affording me an opportunity to correct him. I said that I had seen an exhibition of vehicles, all manner of vehicles made by different manufacturers who provide the type of mobile van used for trading purposes.
    Mr. Pitman: I am sorry if I misheard or misinterpreted the hon. Member, but I understood him to say that that was for a multiple store and was such a fleet of vehicles.
    Mr. Reeves: I must have been entirely misunderstood. I said that there were many traders in this country who used this type of van and that I had seen an exhibition of them, a great variety of vans which were used for all manner of trading purposes.
    Mr. Pitman: I distinctly heard the hon. Member use the word "multiple" and it was that which raised in our minds this question of a multiple store. It is that which has introduced the sinister aspect of the problem to which my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) is drawing attention. We would ask the Financial Secretary to the Treasury, if he really is trying to get the small van to trade in the exceptional district in this way, he will make it instead of a registered vehicle any vehicle which can be stationed within the terms of this Clause.
    It seems to me undue preference has been given to the multiple store and I do not mind whether it is Lipton's or the Co-op. We wish any temporary vehicle of this kind to be such a temporary vehicle that if there is really the need for it the small man can do the job as well as the big man.
    Sir William Darling: I would not have intervened in this discussion but for the intervention of my distinguished friend the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall). I think he and his hon. Friend the Member for Greenwich (Mr. Reeves) are a little more disingenuous than the Committee would be inclined to believe. There is no question that this provision is designed entirely to benefit the Co-operative societies and I am not one to cavil at their enterprise.
    Since the war it has been impossible for the small trader to get new shop premises anywhere in this country, by and large, but it has not been impossible for the Co-operative Societies to get them not only in new areas but in reconstructed areas, and they are very enterprising wherever they go. They can do what the small shopkeeper cannot do. I am subject to challenge and contradiction, but I think they have been the largest buyers of travelling vehicles in this country for the last five years. They have put more vehicles of that kind on the road than any other business concern. It may be
    1084
    that they have shown great enterprise, but, of course, they have been able to command large sources of capital.
    In Walkerburn, the village where I live, it is beyond the capacity of the small shopkeeper to put on the road a vehicle costing £5,000, but even Co-operative Societies with weak finances can do so, because they are backed by the Central Scottish Co-operative Society or the Co-operative Wholesale Society in England.
    It is a notable fact that in whatever field the Co-operative Wholesale Society has been successful, it has never produced a tobacco which was smokable. If hon. Members want support for that view, they should go to the Tea Room here, where they will hear Co-operative Members, sent here by the Co-operative Party, say, "No thank you, give me Player's or Churchman's, not Co-operative." Faced with that disinclination of the public taste, the Co-operative Societies are meeting it courageously, enterprisingly and commandingly. I do not blame those who represent them for speaking as they do, and they must not blame me if I speak as I do.
    This is entirely a Co-operative matter. I defy hon. Members opposite to tell me of any sort of multiple trader able to find the permission and the capital to put on the road these elaborate and costly vehicles. It is only the Co-operative Societies which can do so.
    Mr. Mitchison Mr. Mitchison (Kettering) rose—
    Sir W. Darling: Please let me finish my sentence. It is only the Co-operative Societies who have the capital and the influence with those who give permits to get these vehicles.
    Mr. Mitchison: I do not know about the hon. Member's large multiple stores, but, unlike the Tory Party, I have some interest in the prosperity of the small man. I have several small traders who run vans round outlying parts of my constituency. They will be very glad indeed to avail themselves of the very reasonable provisions of this Clause. I do not think they will thank the Tory Party, no more than will the co-operators, for showing so lavishly their hostility to small trading and co-operative enterprise.
    Sir W. Darling: I hope the hon. Member's constituents will duly mark the hon. Member's equal and impartial support of the Co-operative movement and of

    1085
    private enterprise. It will not commend him to the Kettering Co-operative Society which is a very powerful organisation and helps him a good deal in elections. When that Society learns of the hon. Member's balanced, dispassionate statement, it might also apply that judgment to the support, financial and personal, it renders to him.
    Let us tear away this veil of specious pretence displayed by the right hon. Gentleman the Member for Colne Valley. If those who want this Clause said, "This Co-operative movement is growing, it is adding millions to its membership every year, it is destined to control the whole community, it has money, it has enterprise and we intend to crush every small trader," if the Government said that, I should accept it and take up the challenge to free enterprise. But that is not what they say. We have special pleadings for the small traders and the convenience of the constituents of the right hon. Member for Colne Valley; but the real reasons are that this great Co-operative monopoly seeks to crush the village store. If the hon. Members opposite definitely said so, no one on this side of the Committee would object; but this mask, screen and pretence is nauseous humbug and detestable, and we have a right to oppose it.
    Mr. Mitchison: I really welcome in a debate in Committee on the Finance Bill the appearance of a little cheerfulness on the benches opposite. We have been told so very often that for lack of representation by hon. Members opposite the country was going to the dogs. It has never got there yet and is never likely to until they get in. But it is quite a change to see them cheerful. I am glad of it and I hope that they will try to keep it up through the whole of our discussion.
    Never have I heard anything more ridiculous in my life than the sort of point that is being put forward now. Here is a concession being made to provide for the sale of tobacco and snuff from registered goods vehicles in exceptional and temporary circumstances. I am not so concerned as the hon. Member for Edinburgh, South (Sir W. Darling), with the competing qualities of different kinds of cigarettes. I prefer pipe tobacco, and I may tell the hon. Member that both in the choice of the name and in the choice of the substance the Co-operative move-
    1086
    ment, in selling "Equity," does exceedingly well. That is the name of the brand. How terrible that a man who has never tried any of these tobaccos should immediately, and out of sheer prejudice, declare that the Co-operative movement is unable to make a decent and smokable tobacco.
    Sir W. Darling: The view I have formed of Co-operative tobacco is not from experience, it is true, but it is on the advice of the hon. and learned Member's hon. Friends on the benches opposite who prefer non-Co-op brands in this House of Commons.
    Mr. Mitchison: Unlike the hon. Gentleman, I prefer to form my conclusions and judgments at first and not at second hand.
    Mrs. Jean Mann: Might I add this for the benefit of the hon. Member for Edinburgh, South (Sir W. Darling)? One of the most famous knights in Scotland and one of the greatest employers of labour, if not the greatest employer of labour, in all Scotland, smokes nothing but "Cogent" and does not even know that it is a Co-operative tobacco.
    Mr. Mitchison: There is little I can add to that. What we are considering is a licence to provide for an exceptional and temporary need by selling tobacco and snuff from registered goods vehicles. I have already pointed out, and I repeat it, that my experience is not that of the hon. Member for Edinburgh, South. I find that registered goods vehicles are used for the purpose of trading in the villages in my constituency, not only by the excellent Co-operative enterprise that functions in those parts but also by small traders and, for that matter, by somewhat larger traders, too. I am not really so jealous or concerned about the particular enterprise which sells the tobacco or snuff as I am concerned with providing tobacco and snuff from these goods vehicles when there is an exceptional or temporary need, which means, in effect, when the people who want to smoke or take snuff cannot get it in any other way.
    I should have thought it was carrying party politics to a ludicrous degree of prejudice to find in a Clause like this some subtle manoeuvre to favour the Co-operative movement or some subtle

    1087
    attempt to score some advantage out of this particular form of licence, which would not be obtainable in any other way. I think that the Tory Party might do a little better than this. If that is all they can find in a perfectly reasonable, sensible and useful provision of this sort, I can only say that I have never met a more glaring instance of a number of apparently sensible people being blinded by prejudice into producing absurdity after absurdity.
    7.15 p.m.
    Mr. Pickthorn: I want to ask one very short question of the Minister. He told us that this Clause was in response to many requests from consumers. Can we have that documented? Does he really mean consumers or does he mean persons wishing to sell? I think that the Committee is unable to come to a conclusion without proper information of what this is all about. It was not I who introduced the Co-operative point—nor do I attach great importance to the Co-operative point—but since the matter has been introduced and pressed strongly, both openly and disguisedly, we ought now to know the numerous requests which the Treasury has received, and from whom those requests came.
    Lieut.-Colonel Sir Thomas Moore: I only intervene in this debate because I am personally associated with a firm which sells merchandise from mobile vans, but in this case it is for one definite purpose and that is to reach the really isolated people who want to read books but who cannot get books at the local village pub or store. That is the one justification in my opinion for using these mobile shops, for that is what they are.
    I challenge most of the country Members to find a village where they will be able to get a decent book or, in fact, any book to read; but, as my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) and others, have said, they will find shops in every village where one can procure some form of tobacco and cigarettes; I am not saying whether it is Co-op tobacco or any other, but there will certainly be some form of smokable tobacco and cigarettes. There may not be snuff, but I do not think that habit is wide enough to constitute an urgent demand.
    1088
    Why is there this discrimination in favour of tobacco and cigarettes? Why not whisky? Is it because there is no whisky to put into the mobile vans, and, if so, surely tobacco and cigarettes run the whisky pretty close? There is no back-door effort to destroy one of the most progressive trades in Scotland; the Government do not seek to license mobile vans to sell whisky as well. No, the whole thing comes down to one issue, and it is this.
    There is no hon. Member opposite who has even sought to justify this Clause, and when the right hon. Member for Colne Valley (Mr. Glenvil Hall) tried to assist the Government Front Bench, I cannot congratulate him upon his success. I like him personally so much that I hate to launch this good-humoured attack on him, but for the sake of any Clause which the Government Front Bench hope to get in this Committee, I would suggest that he relieves them of his support next time, or else goes to his old friends, the Treasury, beforehand and gets a suitable brief.
    In passing, I hope he will not take these remarks in any personal sense whatsoever. Everyone on this side of the Committee has a great respect for him and used to marvel at his ingenuity and patience when he tried to do the job which his hon. Friend has not done with anything like the same ability.
    Many arguments have been made against this Clause by my hon. Friends. Personally, when I first read the Clause I was not greatly prejudiced one way or the other against it, but as I listened to the arguments against it from my hon. Friends on this side of the Committee and as I listened to the feeble support from hon. Members opposite, I became more and more convinced that the Clause was completely unnecessary and should be opposed.
    Captain Crookshank: We have much more business to do on this Finance Bill, but I should like to say that we are much indebted to my hon. and gallant Friend the Member for Bristol, North-West (Lieut.-Commander Braithwaite) for having instituted the debate on this Clause, because it has been quite clear that it has interested hon. Members very much, particularly from the point of view of trying to find out why it ever got into the Finance Bill at all I hazarded a

    1089
    guess, and no one from among those on the benches opposite who should know best has denied its possibility. No Co-operative Member has got up with his hand on his heart and said that he never suggested such a thing in his life and would never dream of doing so. The Minister has never got up and said that there has never been any contact between the two groups on this issue. No one has told us who was responsible.
    The right hon. Member for Colne Valley (Mr. Glenvil Hall) was good enough to say that this had been necessary for years past. It is very strange that no one ever heard of it until April this year, and that the necessity was somehow overlaid by more urgent business during the time that the right hon. Gentleman was at the Treasury. I must admit that in the many years I was there I never heard this suggestion, although war-time might have been the time when
    it was necessary to have exceptional and temporary arrangements, certainly exceptional and, thank goodness, temporary. The war did come to an end just as in good time the Socialist Government will come to an end so perhaps to that extent this is a temporary measure.
    As we have other things to do, I do not suppose that many of my hon. Friends wish to prolong this debate, but in view of the great amount of hostility shown against this Clause and the lack of any further explanation from the Government as to what they are up to and why they are doing this, I can only say that if a Division is challenged I shall certainly go into the Lobby against the Clause.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 295; Noes, 279.

    Division No. 84.]

    AYES

    [7.22 p.m.

    Acland, Sir Richard

    Craddock, George (Bradford, S.)

    Grey, C. F.

    Adams, Richard

    Crawley, A.

    Griffiths, David (Rother Valley)

    Albu, A. H.

    Crosland, C. A. R.

    Griffiths, Rt. Hon. James (Llanelly)

    Allen, Arthur (Bosworth)

    Crossman, R. H. S.

    Griffiths, William (Exchange)

    Allan, Scholefield (Crewe)

    Cullen, Mrs. A.

    Gunter, R. J.

    Anderson, Alexander (Motherwell)

    Daines, P.

    Hale, Joseph (Rochdale)

    Anderson, Frank (Whitehaven)

    Dalton, Rt. Hon. H.

    Hale, Leslie (Oldham, W.)

    Awbery, S. S.

    Darting, George (Hillsborough)

    Hall, John (Gateshead, W.)

    Ayles, W. H.

    Davies, A. Edward (Stoke, N.)

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Bacon, Miss Alice

    Davies, Harold (Leek)

    Hamilton, W. W.

    Baird, J.

    Davies, Stephen (Merthyr)

    Hannan, W.

    Balfour, A.

    de Freitas, Geoffrey

    Hardman, D. R.

    Barnes, Rt. Hon. A. J.

    Deer, G.

    Hardy, E. A.

    Bartley, P.

    Delargy, H. J.

    Hargreaves, A.

    Bellenger, Rt. Hon. F. J.

    Dodds, N. N.

    Harrison, J.

    Benn, Wedgwood

    Donnelly, D.

    Hastings, S.

    Benson, G.

    Driberg, T. E. N.

    Hayman, F. H.

    Beswick, F.

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

    Henderson, Rt. Hon. Arthur (Tipton)

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

    Dye, S.

    Herbison, Miss M.

    Bing, G. H. C.

    Ede, Rt. Hon. J. C.

    Hewitson, Capt. M.

    Blenkinsop, A.

    Edelman, M.

    Hobson, C. R.

    Blyton, W. R.

    Edwards, John (Brighouse)

    Holman, P.

    Boardman, H.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Holmes, Horace (Hemsworth)

    Booth, A.

    Edwards, W. J. (Stepney)

    Houghton, D.

    Bottomley, A. G.

    Evans, Albert (Islington, S. W.)

    Hoy, J.

    Bowles, F. G. (Nuneaton)

    Evans, Edward (Lowestoft)

    Hubbard, T.

    Braddock, Mrs. Elizabeth

    Evans, Stanley (Wednesbury)

    Hudson, James (Ealing, N.)

    Brook, Dryden (Halifax)

    Ewart, R.

    Hughes, Emrys (S. Ayrshire)

    Brooks, T. J. (Normanton)

    Fernyhough, E.

    Hughes, Hector (Aberdeen, N.)

    Broughton, Dr. A. D. D.

    Field, Capt. W. J.

    Hughes, Moelwyn (Islington, N.)

    Brown, Rt. Hon. George (Belper)

    Finch, H. J.

    Hynd, H. (Accrington)

    Brown, Thomas (Ince)

    Fletcher, Eric (Islington, E.)

    Hynd, J. B. (Attercliffe)

    Burke, W. A.

    Follick, M.

    Irvine, A. J. (Edge Hill)

    Burton, Miss E.

    Foot, M. M.

    Irving, W. J. (Wood Green)

    Butler, Herbert (Hackney, S.)

    Forman, J. C.

    Isaacs, Rt. Hon. G. A.

    Callaghan, L. J.

    Fraser, Thomas (Hamilton)

    Janner, B.

    Carmichael, J.

    Freeman, John (Watford)

    Jay, D. P. T.

    Castle, Mrs. B. A.

    Freeman, Peter (Newport)

    Jeger, George (Goole)

    Champion, A. J.

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

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

    Chetwynd, G. R.

    Ganley, Mrs. C. S.

    Jenkins, R. H.

    Clunie, J.

    Gibson, C. W.

    Johnson, James (Rugby)

    Cocks, F. S.

    Gilzean, A.

    Johnston, Douglas (Paisley)

    Coldrick, W.

    Glanville, James (Consett)

    Jones, David (Hartlepool)

    Collindridge, F.

    Gooch, E. G.

    Jones, Frederick Elwyn (W. Ham, S.)

    Cook, T. F.

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

    Jones, Jack (Rotherham)

    Cooper, John (Deptford)

    Greenwood, Anthony (Rossendale)

    Jones, William Elwyn (Conway)

    Corbet, Mrs. Freda (Peckham)

    Greenwood, Rt. Hn. Arthur (Wakefield)

    Keenan, W.

    Cove, W. G.

    Grenfell, D. R.

    Kenyon, C.

    Key, Rt. Hon. C. W.

    O'Brien, T.

    Summerskill, Rt. Hon. Edith

    King, Dr. H. M.

    Oldfield, W. H.

    Sylvester, G. O.

    Kinghorn, Sqn. Ldr. E.

    Oliver, G. H.

    Taylor, Bernard (Mansfield)

    Kinley, J.

    Orbach, M.

    Taylor, Robert (Morpeth)

    Kirkwood, Rt. Hon. D.

    Padley, W. E.

    Thomas, David (Aberdare)

    Lang, Gordon

    Paget, R. T.

    Thomas, George (Cardiff)

    Lee, Frederick (Newton)

    Paling, Rt. Hon. W. (Dearne Valley)

    Thomas, Iorwerth (Rhondda, W.)

    Lee, Miss Jennie (Cannock)

    Paling, Will T. (Dewsbury)

    Thomas, Ivor Owen (Wrekin)

    Lever, Harold (Cheetham)

    Pannell, T. C.

    Thorneycroft, Harry (Clayton)

    Lever, Leslie (Ardwick)

    Pargiter, G. A.

    Thurtle, Ernest

    Lewis, Arthur (West Ham, N.)

    Parker, J.

    Timmons, J.

    Lewis, John (Bolton, W.)

    Paton, J.

    Tomney, F.

    Lindgren, G. S.

    Pearson, A.

    Turner-Samuels, M.

    Lipton, Lt.-Col. M.

    Peart, T. F.

    Ungoed-Thomas, Sir Lynn

    Logan, D. G.

    Poole, C.

    Usborne, H.

    Longden, Fred (Small Heath)

    Popplewell, E.

    Vernon, W. F.

    McAllister, G.

    Porter, G.

    Viant, S. P.

    MacColl, J. E.

    Price, Philips (Gloucestershire, W.)

    Watkins, T. E.

    McGhee, H. G.

    Proctor, W. T.

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

    McGovern, J.

    Pryde, D. J.

    Weitzman, D.

    McInnes, J.

    Pursey, Cmdr. H.

    Wells, Percy (Faversham)

    Mack, J. D.

    Rankin, J.

    Wells, William (Walsall)

    McKay, John (Wallsend)

    Rees, Mrs. D.

    West, D. G.

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

    Reeves, J.

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

    McLeavy, F.

    Reid, Thomas (Swindon)

    White, Mrs. Eirene (E. Flint)

    MacMillan, Malcolm (Western Isles)

    Reid, William (Camlachie)

    White, Henry (Derbyshire, N. E.)

    McNeil, Rt. Hon. H.

    Rhodes, H.

    Whiteley, Rt. Hon. W.

    MacPherson, Malcolm (Stirling)

    Richards, R.

    Wigg, G.

    Mainwaring, W. H.

    Robens, Rt. Hon. A.

    Wilcock, Group Capt. C. A. B.

    Mallalieu, E. L. (Brigg)

    Roberts, Goronwy (Caernarvonshire)

    Wilkes, L.

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

    Robertson, J. J. (Berwick)

    Wilkins, W. A.

    Mann, Mrs. Jean

    Rogers, George (Kensington, N.)

    Willey, Frederick (Sunderland)

    Manuel, A. C.

    Ross, William

    Willey, Octavius (Cleveland)

    Marquand, Rt. Hon. H. A.

    Royle, C.

    Williams, David (Neath)

    Mathers, Rt. Hon. G.

    Shinwell, Rt. Hon. E.

    Messer, F.

    Shurmer, P. L. E.

    Williams, Rev. Llywelyn (Abertillery)

    Middleton, Mrs. L.

    Silverman, Julius (Erdington)

    Williams, Ronald (Wigan)

    Mikardo, Ian.

    Silverman, Sydney (Nelson)

    Williams, Rt. Hon. Thomas (Don V'lly)

    Mitchison, G. R.

    Simmons, C. J.

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

    Moeran, E. W.

    Slater, J.

    Wilson, Rt. Hon. Harold (Huyton)

    Monslow, W.

    Smith, Ellis (Stoke, S.)

    Winterbottom, Ian (Nottingham, C.)

    Moody, A. S.

    Smith, Norman (Nottingham, S.)

    Winterbottom, Richard (Brightside)

    Morgan, Dr. H. B.

    Snow, J. W.

    Wise, F. J.

    Morley, R.

    Sorensen, R. W.

    Woodburn, Rt. Hon. A.

    Morris, Percy (Swansea, W.)

    Soskice, Rt. Hon. Sir Frank

    Woods, Rev. G. S.

    Mort, D. L.

    Sparks, J. A.

    Wyatt, W. L.

    Moyle, A.

    Steele, T.

    Yates, V. F.

    Mulley, F. W.

    Stewart, Michael (Fulham, E.)

    Younger, Hon. K.

    Murray, J. D.

    Stokes, Rt. Hon. R. R.

    Nally, W.

    Strachey, Rt. Hon. J.

    TELLERS FOR THE AYES:

    Neal, Harold (Bolsover)

    Strauss, Rt. Hon. George (Vauxhall)

    Mr. Bowden and

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

    Stross, Dr. Barnett

    Mr. Kenneth Robinson.

    NOES

    Aitken, W. T.

    Braithwaite, Sir Albert (Harrow, W.)

    Cuthbert, W. N.

    Alport, C. J. M.

    Bromley-Davenport, Lt.-Col. W.

    Darling, Sir William (Edinburgh, S.)

    Amery, Julian (Preston, N.)

    Brooke, Henry (Hampstead)

    Davidson, Viscountess

    Amory, Heathcoat (Tiverton)

    Browne, Jack (Govan)

    Davies, Nigel (Epping)

    Arbuthnot, John

    Buchan-Hepburn, P. G. T.

    de Chair, Somerset

    Ashton, H. (Chelmsford)

    Bullock, Capt. M.

    De la Bère, R.

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

    Bullus, Wing Commander E. E.

    Deedes, W. F.

    Astor, Hon. M. L.

    Burden, F. A.

    Digby, S. Wingfield

    Baker, P. A. D.

    Butcher, H. W.

    Dodds-Parker, A. D.

    Baldock, Lt.-Cmdr. J. M.

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Donner, P. W.

    Baldwin, A. E.

    Carr, Robert (Mitcham)

    Douglas-Hamilton, Lord Malcolm

    Banks, Col. C.

    Carson, Hon. E.

    Drayson, G. B.

    Baxter, A. B.

    Channon, H.

    Dugdale, Maj. Sir Thomas (Richmond)

    Beamish, Maj. Tufton

    Clarke, Col. Ralph (East Grinstead)

    Duncan, Capt. J. A. L.

    Bell, R. M.

    Clarke, Brig. Terence (Portsmouth, W.)

    Dunglass, Lord

    Bennett, Sir Peter (Edgbaston)

    Clyde, J. L.

    Duthie, W. S.

    Bennett, Dr. Reginald (Gosport)

    Colegate, A.

    Eccles, D. M.

    Bennett, William (Woodside)

    Conant, Maj. R. J. E.

    Elliot, Rt. Hon. W. E.

    Bevins, J. R. (Liverpool, Toxteth)

    Cooper, Sqn. Ldr. Albert (Ilford, S.)

    Fisher, Nigel

    Birch, Nigel

    Cooper-Key, E. M.

    Fort, R.

    Bishop, F. P.

    Corbett, Lt.-Col. Uvedale (Ludlow)

    Foster, John

    Black, C. W.

    Craddock, Beresford (Spelthorne)

    Fraser, Hon. Hugh (Stone)

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

    Cranborne, Viscount

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Boothby, R.

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

    Fyfe, Rt. Hon. Sir David Maxwell

    Bossom, A. C.

    Crosthwaite-Eyre, Col. O. E.

    Gage, C. H.

    Boyle, Sir Edward

    Crouch, R. F.

    Galbraith, Cmdr. T. D. (Pollok)

    Bracken, Rt. Hon. B.

    Crowder, Capt. John (Finchley)

    Galbraith, T. G. D. (Hillhead)

    Braine, B. R.

    Crowder, Petre (Ruislip—Northwood)

    Gammans, L. D.

    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)

    Cundiff, F. W.

    Garner-Evans, E. H. (Denbigh)

    1092

    1093

    Gates, Maj. E. E.

    Lucas-Tooth, Sir Hugh

    Roper, Sir Harold

    Glyn, Sir Ralph

    Lyttelton, Rt. Hon. O.

    Russell, R. S.

    Gomme-Duncan, Col. A.

    McAdden, S. J.

    Ryder, Capt. R. E. D.

    Gridley, Sir Arnold

    McCallum, Major D.

    Salter, Rt. Hon. Sir Arthur

    Grimston, Hon. John (St. Albans)

    McCorquodale, Rt. Hon. M. S.

    Sandys, Rt. Hon. D.

    Grimston, Robert (Westbury)

    Macdonald, Sir Peter (I. of Wight)

    Savory, Prof. D. L.

    Harden, J. R. E.

    Mackeson, Brig. H. R.

    Scott, Donald

    Hare, Hon. J. H. (Woodbridge)

    McKibbin, A.

    Smiles, Lt.-Col. Sir Walter

    Harris, Frederic (Croydon, N.)

    McKie, J. H. (Galloway)

    Smithers, Peter (Winchester)

    Harris, Reader (Heston)

    Maclay, Hon. John

    Smithers, Sir Waldron (Orpington)

    Harvey, Air Cdre. A. V. (Macclesfield)

    Maclean, Fitzroy

    Smyth, Brig. J. G. (Norwood)

    Harvey, Ian (Harrow, E.)

    MacLeod, Iain (Enfield, W.)

    Snadden, W. McN.

    Harvie-Watt, Sir George

    MacLeod, John (Ross and Cromarty)

    Soames, Capt. C.

    Hay, John

    Macmillan, Rt. Hon. Harold (Bromley)

    Spearman, A. C. M.

    Head, Brig. A. H.

    Macpherson, Major Niall (Dumfries)

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

    Headlam, Lt.-Col. Rt. Hon Sir Cuthbert

    Maitland, Cmdr. J. W.

    Spens, Sir Patrick (Kensington, S.)

    Heard, Lionel

    Manningham-Buller, R. E.

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

    Heath, Edward

    Marlowe, A. A. H.

    Stevens, G. P.

    Henderson, John (Cathcart)

    Marples, A. E.

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

    Hicks-Beach, Maj. W. W.

    Marshall, Douglas (Bodmin)

    Stewart, Henderson (Fife, E.)

    Higgs, J. M. C.

    Marshall, Sidney (Sutton)

    Stoddart-Scott, Col. M.

    Hill, Dr. Charles (Luton)

    Maude, Angus (Ealing S.)

    Storey, S.

    Hill, Mrs. E. (Wythenshawe)

    Maude, John (Exeter)

    Strauss, Henry (Norwich, S.)

    Hinchingbrooke, Viscount

    Maudling, R.

    Stuart, Rt. Hon. James (Moray)

    Hirst, Geoffrey

    Medlicott, Brig. F.

    Summers, G. S.

    Holmes, Sir Stanley (Harwich)

    Mellor, Sir John

    Sutcliffe, H.

    Hope, Lord John

    Molson, A. H. E.

    Taylor, Charles (Eastbourne)

    Hopkinson, Henry

    Monckton, Sir Walter

    Taylor, William (Bradford, N)

    Hornsby-Smith, Miss P.

    Moore, Lt.-Col. Sir Thomas

    Teeling, W.

    Horsbrugh, Rt. Hon. Florence

    Morrison, John (Salisbury)

    Teevan, T. L.

    Howard, Gerald (Cambridgeshire)

    Mott-Radclyffe, C. E.

    Thomas, J. P. L. (Hereford)

    Howard, Greville (St. Ives)

    Nabarro, G.

    Thompson, Kenneth Pugh (Walton)

    Hudson, Sir Austin (Lewisham, N.)

    Nicholson, G.

    Thompson, Lt.-Cmdr. R. (Croydon, W.)

    Hudson, Rt. Hon. Robert (Southport)

    Nield, Basil (Chester)

    Thorneycroft, Peter (Monmouth)

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

    Noble, Cmdr. A. H. P.

    Thornton-Kemsley, Col. C. N.

    Hutchinson, Geoffrey (Ilford, N.)

    Nugent, G. R. H.

    Thorp, Brig. R. A. F.

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

    Nutting, Anthony

    Tilney, John

    Hutchison, Col. James (Glasgow)

    Oakshott, H. D.

    Touche, G. C.

    Hyde, Lt.-Col. H. M.

    Odey, G. W.

    Turner, H. F. L.

    Hylton-Foster, H. B.

    O'Neill, Rt. Hon. Sir Hugh

    Turton, R. H.

    Jeffreys, General Sir George

    Ormsby-Gore, Hon. W. D.

    Tweedsmuir, Lady

    Jennings, R.

    Orr, Capt. L. P. S.

    Vane, W. M. F.

    Johnson, Howard (Kemptown)

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

    Vaughan-Morgan, J. K.

    Jones, A. (Hall Green)

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

    Vosper, D. F.

    Kaberry, D.

    Osborne, C.

    Wade, D. W.

    Kerr, H. W. (Cambridge)

    Peake, Rt. Hon. O.

    Wakefied, Edward (Derbyshire, W.)

    Kingsmill, Lt.-Col. W. H.

    Perkins, W. R. D.

    Wakefield, Sir Wavell (Marylebone)

    Lambert, Hon. G.

    Peto, Brig. C. H. M.

    Walker-Smith, D. C.

    Lancaster, Col. C. G.

    Pickthorn, K.

    Ward, Hon. George (Worcester)

    Langford-Holt, J.

    Pitman, I. J.

    Ward, Miss I. (Tynemouth)

    Law, Rt. Hon. R. K.

    Powell, J. Enoch

    Waterhouse, Capt. Rt. Hon. C.

    Leather, E. H. C.

    Prescott, S.

    Watkinson, H.

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

    Price, Henry (Lewisham, W.)

    Webbe, Sir H. (London & Westminster)

    Lennox-Boyd, A. T.

    Prior-Palmer, Brig. O.

    White, Baker (Canterbury)

    Lindsay, Martin

    Profumo, J. D.

    Williams, Charles (Torquay)

    Linstead, H. N.

    Raikes, H. V.

    Williams, Gerald (Tonbridge)

    Llewellyn, D.

    Rayner, Brig. R.

    Williams, Sir Herbert (Croydon, E.)

    Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)

    Redmayne, M.

    Wills, G.

    Lloyd, Maj. Guy (Renfrew, E.)

    Remnant, Hon. P.

    Wilson, Geoffrey (Truro)

    Lloyd, Selwyn (Wirral)

    Renton, D. L. M.

    Winterton, Rt. Hon. Earl

    Lockwood, Lt.-Col. J. C.

    Roberts, Maj. Peter (Heeley)

    Wood, Hon. R.

    Longden, Gilbert (Herts, S. W.)

    Robertson, Sir David (Caithness)

    York, C.

    Low, A. R. W.

    Robinson, Roland (Blackpool, S.)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Robson-Brown, W.

    TELLERS FOR THE NOES:

    Lucas, P. B. (Brentford)

    Rodgers, John (Sevenoaks)

    Mr. Studholme and Major Wheatley.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.

    Clause 12.—(PURCHASE TAX (CHANGES IN RATES ETC.))
    7.30 p.m.
    Mr. Jay: I beg to move, in page 8, line 10, to leave out from "fifty-one," to the end of line 11.
    The Committee will recall that on Second Reading I explained that owing to certain difficulties of definition we found it was not practicable to carry out
    1094
    the proposal contained in the Budget speech to place a 66⅔ per cent. Purchase Tax on portrait photographs made from materials which had not borne tax. I stated that we should, therefore, introduce an Amendment on the Committee stage to strike out that proposal. We have carried out that undertaking in this Amendment.
    Mr. Osbert Peake: This Amendment is consequential upon a subsequent Amendment to the Fifth Schedule,

    1095
    and I think it would be more convenient to deal with the matter when we reach the Schedule.
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. Peake: It will not have escaped your notice, Colonel Ropner, or that of the Committee that in relation to this Clause, which deals with Purchase Tax, we have not tabled any Amendments. That is not because we do not take a great interest in the subject of Purchase Tax. Indeed, at a later stage we shall have a good deal to say about it. Clause 12, however, merely gives legislative effect to the Fifth Schedule, which embodies the Chancellor's detailed proposals for Amendments to the Purchase Tax this year.
    In considering what Amendments we could move to the Clause or to the Schedule, we have had to pay careful attention to the 24th Budget Resolution. Two years ago the Chancellor prohibited us altogether from having a discussion on the Purchase Tax by the wording of the general Resolution upon which the whole Budget debate hinges. Last year we were permitted to debate only the three main rates of Purchase Tax, without reference to any specific item at all, and on this occasion the Chancellor's general Resolution, the 24th Budget Resolution, enables us to discuss only two matters—first of all, articles in certain groups to which the Fifth Schedule itself relates and, second, we may discuss under the Resolution
    "amendments to make provision for the giving to the Treasury of advice and assistance in the exercise of"
    its powers under the Finance Act of 1948
    "by a body to be constituted for the purpose."
    It appears to us that, limited, as we are, by the terms of this Budget Resolution, that it would be much more convenient to discuss the Chancellor's detailed proposals regarding Purchase Tax and any Amendments which we may table to them when we come to the Fifth Schedule to the Bill. So far as general considerations relating to Purchase Tax are concerned, we can, I think, have a very wide debate on the new Clause which stands in the name of my right
    1096
    hon. Friend the Member for Aldershot (Mr. Lyttelton) and that of other right hon. and hon. Members on this side of the Committee, which is to be found on page 1171 of today's Order Paper—that being the new Clause, permitted to be moved by the Budget Resolution, which is to establish an advisory body in relation to Purchase Tax matters on the same lines as the Import Duties Advisory Committee.
    When we reach that Clause I think we shall be able to discuss very widely many of the main principles relating to the Purchase Tax. In these circumstances, I think it would be wise for me to advise my hon. Friends that we cannot have any very wide debate on Clause 12 and that it will be more convenient to discuss the Chancellor's detailed proposals when we come to the new Schedule and to discuss general principles when we come to the new Clause standing in the name of my right hon. Friend.
    The Temporary Chairman (Colonel Ropner): Perhaps I can help the Committee. The Chairman of Ways and Means has told me that at a later stage of the Bill he will allow a full discussion on Purchase Tax provided, of course, that new Clauses or Amendments to Schedules are within the term of the Ways and Means Resolution.
    Mr. Gaitskell: I am much obliged to you, Colonel Ropner, and to the right hon. Gentleman. I quite agree with the procedure suggested. I think we can discuss the various problems connected with Purchase Tax more appropriately on the Schedule and on the new Clause.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 13.—(CHARGE OF INCOME TAX FOR 1951–52.)
    Motion made, and Question proposed. "That the Clause stand part of the Bill."
    Sir Arthur Salter: The taxation provided in this Clause amounts to something between one-third and a half of the total revenue, and the extra taxation described in the Clause amounts to very nearly half of the additional taxation proposed in the Budget. I suggest that the Clause is, therefore, one of particular importance and, whatever may be

    1097
    the conclusion of the Committee on the Question now before it, I very much hope that there will be adequate discussion and consideration of both the significance of the Clause and of the taxation provided in it and of the consequences, both to the economy of the country and to its citizens. I think it is fair to say that this Clause and the tax provided in this Clause give a better reflection than any others of the Government's general tax pattern, of the financial situation of the country, and, indeed, of the general policy of the country, of which that situation is the net result.
    I propose a little later to make some contributions to the kind of discussion I hope will take place on four aspects of this Clause: first, the hardships involved to certain classes of individuals by Income Tax at the rate prescribed; second, the effect an Income Tax of this height has in diminishing incentives to work and to produce more; third, the discouragement which it involves to risk—enterprise; and, fourth, I propose to say something about the relation of the proposed increase of tax in this Clause to the general problem of inflation.
    There is, however, one preliminary observation I should like to make. I think it is very important in the discussion of Income Tax to consider the effect of the great rise in prices not only upon the taxable capacity of different citizens but upon the very structure of Income Tax itself. It is very easy, I think, to fall into what I may call the fallacy of fixed money reliefs with falling money values. I think the Chancellor and the Financial Secretary have fallen very heavily into that fallacy; and I will justify that statement by quotations in a few minutes' time.
    The fact is that in the very first four lines of this Clause pounds and shillings are used in two quite different ways and in two quite different senses. In the first place we are told that the standard rate of tax is to be 9s. 6d. in the £. That is a definition of a fraction, and that definition remains exactly the same whatever changes there may be in the value of the £. It is perfectly fair to say, without any qualification at all, when we are comparing the Income Tax rate of 4s. 9d. in the £ of 1937 with the 9s. 6d. rate of this present year, that the rate has doubled. That still remains equally true whatever changes have taken place,
    1098
    whatever changes may take place in future, in the purchasing value of the £.
    But in the very next line the £ is used for a quite different purpose, in a quite different way. It is there stated that one begins to become a Surtax payer when one's income exceeds £2,000 a year. In that case the £ is used as what economists call, I believe, a measure of value. That is quite a different thing, because that measure becomes defective in precise proportion to any changes in the purchasing value of the £. Unless we are very careful to remember the effect of this on the whole structure of Income Tax we shall, I think, get completely distorted views. I think that the Chancellor himself, whose statement otherwise was, in general, so lucid and so fair, gave a very wrong impression of the situation in regard to the reliefs now given, and, therefore, of the Income Tax positions after those reliefs have been given.
    Let me justify that by a quotation. What did the right hon. Gentleman say on 10th April?
    "Since 1945, Income Tax reliefs have been given by my predecessors which amount in all to more than £650 million. This figure represents the cost at the time the reliefs were given, but with the steady rise in national income which has occurred since then, they are today, on current income levels, worth about £1,000 million a year. With great regret I now feel bound to take back some part of this relief…I propose to increase the three rates of Income Tax…The married allowance will thus be higher than immediately before the war…"—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 864.]
    Purely in terms of the £, of course, all that is true, but how utterly misleading, how utterly inaccurate, it is in reality.
    7.45 p.m.
    After all, why has the national income gone up so much as to turn £650 million into £1,000 million? Mainly because prices and incomes have gone up together. It is fantastic, I suggest, to describe the extent of the reliefs in the Income Tax, with the reliefs increased by the increase of prices, without any allowance whatever on the other side for the extent those reliefs have been reduced in the same period by the same process through rising prices. The description becomes even more absurd—it is reduced to the extreme of absurdity—when he says:
    "The married allowance will thus be higher than immediately before the war."

    1099
    Married allowance before the war was £180. The Chancellor has now raised it to £190 in terms of the £, but inasmuch as the £ of 1939 has become worth about 10s., inasmuch as since that period, by and large, prices and incomes have about doubled, the real fact is that the £180 person before the war, both in real economic status—in what he can buy—and also, indeed, in relative economic status—that is to say, in proportion to the total national income that he enjoys personally—has become the £360 person of today. If the Chancellor were in any real sense going to give a relief equal to—to say nothing of greater than—the married allowance of 1938–39 he would have to give an exemption of £360. I am not suggesting that in the circumstances he should do so, but I do say that to speak of the married allowance in the context of the passage I have quoted as meaning that it is higher than it was before the war is really a deception—unintentional, of course, but a deception—and a rather cruel deception when we consider the classes of persons who are involved.
    I think, therefore, that the whole of this passage in the Chancellor's Budget speech is very misleading, and in view of the fact that the same fallacy was not only repeated but exaggerated and increased by the Financial Secretary in his speech two days later, on 12th April, and in view of the fact that the same criticism which I am making now was made then and has not received an answer—I must say that the Government have not only given a very misleading description of the reliefs from Income Tax but a persistently misleading description.
    So important is this point, I believe, to the whole consideration of this subject that I venture to quote a little further from the same Budget debate. The Financial Secretary said:
    "We have, of course, since 1945 given reliefs in Income Tax which—I think this is a remarkable figure—if they were wholly reversed today would yield £1,000 million a year of revenue. That is not only the measure of relief we have given, but also shows the large reserves of taxable capacity which still exist against a real emergency."—[OFFICIAL REPORT, 12th April, 1951; Vol. 486, c. 1214.]
    That is complete nonsense. It does not show the measure of taxable reserves. It does not, in itself, show any reserves of
    1100
    taxable capacity. It is merely playing with figures, playing with nomenclature.
    On the same day, following shortly after the hon. Gentleman, I said:
    "the Chancellor and the Financial Secretary totally ignored the basic fact, which is behind their calculations, that prices, monetary incomes and the total national income, as expressed in terms of the pound, have all been rising together. The result is that all those whose wages and incomes have increased in correspondence with the rise in prices have, without any increase at all in their real or relative income status, been swept automatically into higher taxation categories and outside the exemption limits."
    That, surely, is undeniable. I went on to say:
    "How absurd a calculation of that kind can be unless that qualification is made, can easily be shown if we imagine a great inflation which might have the result, let us say, of quadrupling all our prices, wages and incomes. Then, if we retained the same monetary limits for the exemptions and for entry into the Surtax range, we might at once double the real burden of taxation in spite of doubling the extent of nominal reliefs as calculated by the Chancellor. It is a fantastic calculation, unless those qualifications are made."—[OFFICIAL REPORT, 12th April, 1951; Vol. 486, c. 1241–2.]
    That point was made in the Budget debate. It was never answered, and I ask the Chancellor to answer it today. I ask him to repudiate the statement of the Financial Secretary that the £1,000 million a year is any kind of measure of unused taxable capacity, and also to correct his own statement in which he suggested that the relief position with regard to smaller income groups of married persons had improved.
    A remark of that kind on the relation between rising prices and the whole structure of Income Tax was, I think, an essential preliminary to any useful discussion, or indeed any discussion that makes sense, of this Clause. With that in mind I propose to come to the four aspects of the problem to which I have referred earlier. In doing so, I do not propose to deal at length with the arguments I may put before the Committee. Indeed, they will hardly be arguments.
    My object is neither to inform hon. Members of important facts which are not already in their minds, nor to attempt to convince them of the error of opinions that may already be in their minds. My only object is to try to induce hon. Members to bring the knowledge and opinions that are in any case at the back of their minds into the forefront of their minds

    1101
    for the consideration of this Clause. For that purpose it will be sufficient, I think, if I merely give illustrations, and only mention points that might obviously be elaborated at much greater length, and may perhaps be by some of my hon. Friends.
    The first point to which I wish to refer is the hardship involved on citizens of our country by Income Tax rates at the height at which they are proposed in this Clause. I am concerned, not only with the increase of 6d. but with the total Income Tax as now increased, subject to the reliefs mentioned by the Chancellor, and subject also to the qualifications on those reliefs which I have already made. The Chancellor may have given the impression, by referring, for example, to those married couples who only get some increase under the proposals when they reach something over £1,000 a year, that for the great bulk of the people, for all but a relatively small minority of the working class, his proposals involved no increase. That is very far from the case.
    Let me give a few illustrations of the kind of hardships which are involved in taxation of this kind. A bachelor or spinster earning, say, £6 a week—which in terms of 1945, when the Labour Party took office, is equivalent to about £4 10s. a week—paid about £26 and will now pay about £30. The increase rises rapidly with every further rise in income. Indeed, for the bachelor or the spinster there is no new relief, and the Chancellor's increases operate right the way through.
    Similarly, an elderly spinster living on an investment income of £300 a year has been paying £41 and will now pay £46. Again, there will be increases all the way through if her income is higher than that. Take, again, a married couple of 60 years of age living on an investment income of £300 a year, which, at present prices, is a very low income indeed. They will have to pay £24—a small increase on what they paid in the past, but an increase that will rise with any increase in income that such a couple may have. The increase rises all the way through from that point.
    It is perfectly evident that, whatever be the cause and wherever the responsibility, these are very grave hardships, to which hon. Members on both sides can easily add instances of very many others that will be in their minds. Then, in order to show the scale in human terms, they
    1102
    can multiply them by the number of people involved in the different illustrations. The result will be to show that a very considerable number of people are suffering very grave hardship indeed, which is somewhat increased by the Chancellor's new proposals. Undoubtedly, if we think who are the people involved in these categories we must all realise that, wherever the responsibility may be, we are witnessing, if not the liquidation, at least the gradual but inexorable economic degredation—and degredation to a point at which the body is enfeebled and the spirit broken—of some of the classes upon which much of the prosperity and civilisation of this country has depended in the past.
    Mr. Ellis Smith: What would the right hon. Gentleman do to solve the problem?
    Sir A. Salter: I am coming to that, if I may, a little later.
    In this argument I am not suggesting that the responsibility rests upon the selection of this tax as one of the taxes to increase in this Budget. It may be that the main villain of the piece is not the actual Income Tax itself but the height of the Budget, or, rather, I would say the ratio of the total expenditure of the State to the total national income of the country. That is the real villain of the piece. While the Income Tax is the point at which a large part of the consequent hardship becomes felt by the individual, it would be equally true, possibly more true, if other forms of taxation were chosen instead. The real, root cause, is, as I say, the total Budget figure in relation to the total national income is as high as it now is.
    We have, of course, all the way through to remember that with rising prices the people of the categories to whom I have referred not only suffer through the reduced purchasing power of the pounds that are left to them after taxation, but they find that the small amount of real income which is exempted from taxation is also being constantly and inexorably restricted and reduced.
    8.0 p.m.
    I come next to the effect of Income Tax at this height as a result of a Budget of this size upon the incentives to work and production. Here the effect of the Chancellor's changes in Income Tax is

    1103
    comparatively small. The real trouble, as we all know, is the total effect of the Income Tax with its consequence that at a very modest point of income the rate payable on any marginal increases of income is a very powerful disincentive to a man working more and earning more. I will not develop that point because we all know it, and we all know, too, that there is no easy remedy to that situation.
    There is no easy remedy in extending reliefs in such a way that this impediment would disappear, because with a Budget of this size it is quite impossible to dispense with revenue to the extent required. Nor is there any easy remedy in exempting, say, overtime from taxation. We all know that the effect of trying to do that would be, in very large measure indeed, to transfer work from one day to another, so that overtime would be earned without any greater total of work or production.
    I want to develop a little further the effect of taxation of this size on risk and enterprise. I ask the Committee to think back to the time before the war and to recall how large a part of the progress and prosperity of this country was due to the category of people who were then £1,000 to £2,000 a year men—the leading officials in great industries and organisations or the people who started new enterprises at their own risk and with their own money, or the people who ventured their money in the form of equity and share capital in business and made to so large an extent the capital structure of industry an equity structure rather than a fixed obligation structure. In very large measure, the people from whom these enormous benefits to the economy of the country came were the people who were £1,000 to £2,000 a year men.
    What have we now with the doubling of prices and income? The man who was then a £1,000 a year man is now just beginning to enter on Surtax, and the man who was then the £2,000 a year man is now reaching the point at which any further income will attract a 15s. in the £ rate of taxation. I would ask the Committee to consider what this is going to mean, first of all, in discouraging the ambition of the most crucial people in the great organisations of this country upon whom enterprise and expansion depend. What does it mean to a company which is trying to reward, recognise
    1104
    and use the exceptional ability of one of its branch people living in the country? If they are to give so much extra salary as will give enough net income after taxation as to compensate him for coming from a part of the country where he has lived with greater amenities and less expense to, say, the head office in London, the cost to the company is very great and perhaps prohibitive, as any one employed in the organisations of great industries will recognise.
    I want also to ask the Committee to consider what will be the effect of taxation of this kind upon people who would have been inclined to take a risk in developing a new enterprise, or, if they did not want to run one of their own, to take a bit of a risk in providing equity capital for industry rather than fixed obligation capital. If we are at a rate at which they are paying something like three-quarters of any additional income in taxation, what does it mean if they are considering whether they will take a risk? The country's interest really requires that if there is an opportunity for progress where the chances of profit are, let us say, double the risk of loss, that opportunity clearly ought to be seized, but in these circumstances it will not be seized if the prospects of profits are doubled or even trebled: they require to be fourfold. In those circumstances, we cannot expect that this country will hold its way in a changing world and in competition with other countries.
    In the same way, when it comes to a question of investment money, one of the most regrettable developments in the last 25 years or more is the constant tendency for equity capital in industry to be replaced by fixed obligation capital. The industrial system that depends wholly or almost wholly upon fixed obligation capital is a constipated system. When we look at the changing circumstances in the world and the changing fortunes of companies from one year to another, we cannot expect that we can have in our economy the flexibility that is absolutely essential if this progress is continued further.
    Indeed, a Budget of this kind and taxation at this height not only tends to replace equity capital by fixed obligation capital. It reduces the total savings of the country to a point at which the only resource open to the Government is, first of all, to counter the inflation which

    1105
    results when savings are less than the capital expenditure of the country by budgeting for a surplus. Secondly, as time goes on, the result must be a State capital system. If it is true that an economy depending on fixed obligation capital without equity shares is a constipated system, I think that a State capital system is a dying system—unless indeed it can be stimulated into some kind of activity by harsh penalties which are quite incompatible with a free society.
    I want, lastly, to discuss for a few moments the relation between the taxation proposed in the Clause and the general problem of inflation. I am not going to be dogmatic as to what form of taxation is inflationary in its effect and what is not inflationary. The real fact is that it is quite impossible to attempt any scientific distinction that remains true and the same in all circumstances. What is undoubtedly true, however, is that the higher the rate of Income Tax the greater is the proportion of the inflationary as compared with the counter-inflationary results of that taxation.
    If we were discussing an increase in Income Tax of, say, from 5s. to 5s. 6d., the Chancellor could be confident that the yield of the extra 6d. would be counter-inflationary to the full extent of the revenue so yielded. But with every increase in the rate that proportion will certainly change. I do not know—the Chancellor does not know—how much of the £73 million or so that he expects from this additional 6d., after allowing for the reliefs, will really operate as a net advantage in bridging the inflationary gap.
    What I do know, and what he must know, is that it cannot do so to anything like the extent of £73 million. There must be repercussions. How far they go depends upon the psychological reaction to increased taxation, but there must be many reactions of one kind or another which will greatly reduce the extent to which the £73 million yielded by this 6d. is counter-inflationary. I do not for a moment say that there will not be any net result to help him in bridging the gap, but it will certainly be immensely less than the yield of the tax itself.
    I now come to the point as to what we should do about it in these circum-
    1106
    stances. I am tempted to go through an argument with myself such as Robinson Crusoe did on his desert island with a table of pros and a table of cons. But I would rather imagine two of my hon. Friends and myself having an argument with each other. It might go like this. One of them would say, "Well, we are impressed by the enormous disadvantages and the enormous evils which result from Income Tax as high as 9s. 6d. in the £ and Surtax running up to 19s. 6d. in the £. Therefore, it is surely advisable for us to vote against the Clause."
    The other one, however, might at once chip in and say, "Just a moment! You must take into account some other considerations before you definitely come to that conclusion. You say you must vote against the Clause, but do you really mean that the Chancellor has made excessive provision against what he described as 'the great dangers of increased inflation'? Surely not. If anything, perhaps we should think that his safeguards against inflation are inadequate rather than excessive. Do you then say that in these circumstances we can properly and responsibly advise such a change in the ratio between revenue and expenditure as would result from the sacrifice of the additional increase proposed in the Clause?"
    The "con" might, in turn, say to me, "Yes, but remember that you have been arguing that the counter-inflationary effect of this increased Income Tax is doubtful and possibly small." "Yes," the other one might say, "But that is not to say that it does not exist. Is it really a responsible thing that we should be in favour of, and, indeed, demand, real re-armament and still refuse the money which, in the Chancellor's opinion, is required—in order to make that re-armament effective?"
    Backwards and forwards the argument could go, but perhaps we have a clue to what may be the decisive factor in the remark as to the place of the defensive preparations in the Government programme. I ask the Chancellor to give us what information he can upon a matter which is causing anxiety in all our minds. What does he intend to do? What does he think he can do? How rapidly does he think that he will spend the money for which he is asking in the Budget, having

    1107
    regard to some factors which have now emerged or become clearer since his Budget speech, such as the raw material position and the manpower position? It is certainly the case that, if for example, he was unable to proceed with rearmament as rapidly as the Government had intended and if there was left an un-disposed of surplus, it would frustrate his efforts, as head of the Treasury, to reduce the extravagances of Departmental expenditure and to prevent those extravagances from being increased.
    Can he tell us now whether he expects that, with the Budget he has now put before us, the Government will proceed with re-armament on the scale contemplated when the Budget was first prepared? Is he confident that we shall have the contemplated measure of increased defensive preparation not only in terms of money but in real terms of men and munitions? What can he tell us about that? I suggest to my hon. Friends we should take careful account of what the Chancellor says and consider the extent to which he has felt able to give an answer to this question before we come to a conclusion on this debate.
    8.15 p.m.
    Mr. Osborne: I want to put to the Chancellor and to his hon. Friends one or two considerations rather different from those that have been adduced by my right hon. Friend. I believe that a permanent Income Tax of 9s. 6d. in the £ is far too high, and we must remember that it cannot be judged merely on its own but must be taken in conjunction with the Surtax, which takes up another 10s. and, with the accompanying Profits Tax, which goes up another 30 per cent. We also have to remember that these taxes must ultimately come out of industrial profits. It is the aspect of taxation at such a high rate on industrial productivity that I want to put to hon. Members opposite.
    I believe that ultimately both sides of the Committee ought to aim, when times permit, at getting back to something like 6s. in the £, for anything above that tends to reduce the eagerness with which men are prepared to work, either by hand or brain, in order to earn the income we are taxing. I want to put to hon. Members opposite two points on which I hope one day they and their party will change their attitude.
    1108
    We have to remember that the incomes which are taxed at these high rates come mostly from profits earned in industry, and that the Socialist attitude to profits is largely one of emotion and not of thought. Mention profits and the pulses of hon. Members opposite tend to beat faster. Few things make them more angry than the idea of large profits. It is fair to say that, because of the early development of the industrial age, hon. Members opposite tend to think of profits as being wicked and immoral and anti-social, as something we ought to abolish, if possible. They regard profits not as a reward for efficiency, but as the result of exploiting the workers or, in the phrase we used to hear so often, of grinding the faces of the poor.
    Mr. Edward Evans: How does the hon. Gentleman know what we think?
    Mr. Osborne: I was giving hon. Gentlemen opposite the benefit of the doubt in assuming that they could think at all. The history of the early industrial age, and especially the conditions over 100 years ago, when Lord Shaftesbury was doing his work in connection with the factories, lend colour to the emotional view that hon. Members opposite take of the wickedness and wrongness of profits, and of their anti-social effect.
    Therefore hon. Members opposite tend to regard a high rate of Income Tax as something that is socially desirable of itself; that it is, as it were, a social retribution to those who have been successful in industry, and that they are doing good socially, quite apart from the economic merits of the high rate of tax. I put it to hon. Members opposite that that attitude will sooner or later have to be altered.
    The second emotional outlook which the Socialists have towards profits is that, things being equally distributed—there is no denying that in the old days they were shockingly, badly and unequally distributed—a high rate of Income Tax does the work that we as boys were taught was done by Robin Hood in Sherwood Forest in taking from the rich and giving to the poor. Many hon. Members opposite—it is useless for them to deny it—think that this high rate of taxation up to 19s. 6d. is the right social policy to pursue.
    Speaking only for myself, I think there is a great deal to be said for the way these things were looked at in Victorian days, when the great houses in the West

    1109
    End were being built and the slums of the East End were also being allowed to grow. There was no social justification for the one or for the other. Therefore, in the minds of hon. Members opposite, the evils of 100 years ago are being, as it were, adjusted to some extent by these high rates of taxation. I can understand their point of view.
    I should like to give to Members opposite what I consider to be the answers to those two emotional approaches. First, I think it is entirely wrong for them to regard profits and profit-making as something that accrues to the man who is more cunning, more wicked and less socially responsible than his fellows. In a free competitive world, profits are really a payment for efficiency.
    Mr. H. Hynd: Did not the hon. Member, at Question time the other day, complain about excessive profits now being paid out and ask that they be restricted?
    Mr. Osborne: I did not. I did what I thought it was my duty to do, and I asked whether the Chancellor would meet the members of the great industrial groups and appeal that the dividend freeze should be continued, in order to help the responsible trade union leaders to get back to the wage freeze which they and the supporters of the Chancellor have been utterly unable to retain. As regards the social good that hon. Members opposite have been unable to effect, I felt that we on this side should set an example to them. I am not ashamed of having put my Question.
    In a free competitive world, profits accrue to the man who is most efficient. After all, it is the consumer who decides who shall have the big income, the big profits and the dividends to tax. In a competitive world, when the customer had some rights, which today he lacks, he could decide whether he purchased this, that, or the other article, and according to how the manufacturer or the industrialist was able to meet the public wishes he either made profits or made losses.
    I ask hon. Members to believe this and to disabuse their minds of bogeys which arose 100 years ago and to believe that today the vast majority of industrialists recognise they have three responsibilities. The first responsibility they recognise is to the consumer. The second is to their workpeople, to provide regular
    1110
    employment, decent wages and adequate conditions. The third, if there is anything left in the kitty when those two responsibilities have been discharged—[Interruption.] Well, in the monkeynuts project there is no kitty to be distributed. We do not offer our workpeople a profit-sharing scheme of losses, but a profit-sharing scheme of profits, and what is left out of the efficiency of industry by way of profits comes to the shareholder or to the owner, and is then taxed.
    I want to put this point to hon. Members who represent the trade unions. It is to the benefit of the ordinary worker to be employed by a firm that is efficient, that provides regular work and is not in and out like so many firms which are not so efficient. When I was a boy, a poor man's son in Nottingham, we thought that if we could get into either Player's or Boot's we were made. "Made for life" was the term 40 years ago in Nottingham because once one got inside those companies one had a job for life, a regular job, a good job. Why was that? It was because both firms were efficiently run; they produced good profits and good conditions for their workers. I put it to hon. Members opposite that a firm which is unsuccessful is no good to the workpeople. I appeal to them completely to change their attitude to the making of profits and to the success of business.
    Another point I wish to make is that the question of re-distribution of incomes through heavy taxation also merits their consideration. I am sorry that the Chancellor is not here now. He spoke in the De Montfort Hall in Leicester some time in February, and from his speech an important fact emerged. I should like hon. Members who have been jeering to listen to the fact he put forward. He said that if all income exceeding £2,000 a year were taken from the holders of those incomes and distributed to the workers of the country, the workers would get about 6d. per week extra from that surplus over £2,000 a year.
    I put it to hon. Members opposite that it is not possible—and I beg them to believe that we on this side of the Committee would dearly like to do it—to give our people a higher standard of comfort. But it cannot be done by taxation. The limits have been reached and if we are to give our people a higher standard of life—
    Mr. Tomney: Will the hon. Member take his mind back to the statement he made regarding Jesse Boot's? I believe he is a native of Nottingham and knows the firm of Jesse Boot quite well. He will correct me if I am wrong, but I am of opinion that round about 1927 Jesse Boot's was on the point of going bankrupt and was reorganised by American capital at that time and is still run by American capital.
    Mr. Osborne: The hon. Member is quite wrong. It is not Jesse Boot, but Boot's Pure Drug Company, Ltd., and I am well aware of their finances and of their employees. The control was sold in 1923 to an American firm at a figure—I am speaking from memory, because I had a little to do on the side with the deal—of something like £2½ million. They were not going bankrupt. I had a brother working as a bookbinder in Boot's Pure Drug Company, Ltd. He, with all the operatives in Boot's, had a chance to share in the re-distribution of the capital, and it was a very fine thing for him and for everybody employed by Boot's who took the opportunity of having a share in that capital. The hon. Member's facts are completely and utterly wrong.
    8.30 p.m.
    May I go back to my point? The possibility of improving the standard of life of our people through taxation has been limited. I would point out to hon. Members that the higher rate of taxation plus inflation has made it even harder to give workers any more from the rich. I would remind them that in 1935 a man with an income of, say, £10,000 a year in round figures paid about £3,000 in Income Tax, and had about £7,000 to spend for himself, or save or give away. Today an income of £10,000 a year, again roughly, means, instead of paying £3,000 in Income Tax and Surtax, paying £7,000 and getting about £3,000 for himself. But that £3,000 in real purchasing power is worth only £1,500. It buys considerably less, since the purchasing power of the pound today is about 10s. compared with 1935.
    I put it to hon. Members opposite that the men who previously carried responsibilities in industry and trade and in party politics, and in the nationalised industries, will not do it for £1,500 a year. If taxation coupled with inflation continues as it
    1112
    has been doing since the Socialists came into power in 1945, we shall have difficulty in finding men to carry the heavy responsibility that industry requires. In the nationalised industries and in politics there are all sorts of extra perquisites which come to the holders of high office, and which are not to be obtained in ordinary industries. I say again that Income Tax at 9s. 6d., plus Surtax, is a great deterrent to men of more than usual capacity to carry the responsibilities and the burdens which industry must impose upon some.
    Hon. Members opposite are faced with this dilemma. The capitalist system was run with a driving force which was hope of reward, large salaries, large dividends, large incomes—
    Mr. Douglas Houghton: And small wages.
    Mr. Osborne: That interjection comes from a very small mind.
    Mr. Houghton Mr. Houghton rose—
    Mr. Osborne: No, I cannot give way. I am trying to put forward a serious and reasoned statement of the case for profits.
    Mr. Tomney: And for Surtax.
    Mr. Osborne: Yes, and for Surtax.
    Mr. Tomney: I wish Surtax worried me.
    Mr. Osborne: The hon. Gentleman says he wished that Surtax worried him. At least he had as good a start in life as I did. He had the same chances—[Interruption.]—that is quite fair—he had the same chance, and if he has failed, he has failed because he is a failure—[Interruption.]—and if hon. Members like to take it, that applies to more than one hon. Member sitting opposite.
    I was saying that the capitalist system which produced high incomes, and could carry the heavy rates on it, had as its driving force the hope of reward. I would remind hon. Members, although I know today it is very unpopular even with certain hon. Members on my own side of the House, of what Lord Birkenhead said to the Glasgow students in 1922. He talked about the glittering prizes that life had to offer—and the need for sharp swords and stout hearts, too. Hon. Members think it is wicked that these glittering prizes should go to men in industry, but they grab hard enough to get them in politics. See a Minister fall or about to

    1113
    fall, and see his friends run from him. See a Minister rise and see the people running round him.
    Mr. Turner-Samuels: On a point of order. Is this tergiversation in order?
    The Deputy-Chairman (Colonel Sir Charles MacAndrew): I hope that the hon. Member for Louth (Mr. Osborne) will not develop his argument too far.
    Mr. Osborne: I am sorry that my medicine is so unpalatable to hon. Members opposite.
    Finally, I would point out that the dilemma they face is that if these high taxes are to be forthcoming they can only come out of an efficient industry. At least, I carry them so far. If the whole industry of the country fails, then the Chancellor will not be able to get the money he requires either for re-armament or for the social services. At least, hon. Members opposite will admit that much. I maintain that in industry the men who carry the responsibilities are worth paying for carrying those responsibilities, to the same degree that politicians who carry the top responsibility are worth Chequers and other perquisites that go with high office.
    Therefore, I say that if the economic machine is to function to 100 per cent. capacity, we must sooner or later get down these high rates of Income Tax and Surtax. I realise, as we all do, that whilst the cold war is on—a cold war that may one day become a very hot war—whatever it costs we have to pay for re-armament.
    Mr. Edward Evans: Who is to pay—the rich or the poor?
    Mr. Osborne: We are all paying for it. Therefore, for the time being, high taxation is inevitable. But I ask the Government and hon. Members opposite to look at this problem from a less prejudiced point of view. I ask them to realise that if, when times become normal, we are to get the high state of efficiency in industry which will be needed to maintain a high standard of comfort for the people, then sooner or later we must bring down our rates of Income Tax and Surtax.
    Mr. Edward Davies: We have just listened to two speeches from the Opposition and we have been treated, in the latter instance, to some most offensive remarks based on false premises. The
    1114
    burden of the speech of the hon. Member for Louth (Mr. Osborne) was that the efficiency of industry could not be maintained, nor would men be forth-coming to serve their country, unless those at the top were rewarded in a highly disproportionate manner compared with the lower order of workers who had, as he would view it, less responsibility.
    We heard the same argument during a Budget debate some years ago when Sir John Anderson, who then represented the Scottish Universities, made out a similar case. The hon. Member for Louth said that the justification for high rewards and high salaries was that men in managerial and other positions of responsibility would not accept those obligations unless they were amply rewarded. He said that, to that extent, we should all suffer and our economy would be the worse. To begin with, that is a false premise.
    I submit that the gentleman recently cited, whose income, we are told, was reduced from £10,000 to £3,000 a year, had a sufficient income on which to live a full life and render useful service to the community. I put it to the hon. Gentleman and the Committee that there are many professional men who do not derive their income from a capricious economic system but who give first-class services. What of the missionaries and doctors in the Colonies, who after a first-class education, have gone out there, sacrificed their family life and worked for notional or nominal sums of money in the service of their country?
    The hon. Gentleman also said that the mark of efficiency was the amount of reward which men in industry received. I submit that the conditions which we have seen in the world recently give the lie to that statement. The fluctuations of raw materials and commodity prices has been a great gamble and speculation, and I think the hon. Gentleman would admit that, because of some fortuitous circumstances, a man who had rendered no service at all might find himself the heir to a great fortune, or, on the other hand, might lose a great fortune. It certainly gives the lie to his argument that his reward is the mark of his efficiency.
    Third, I submit this for the hon. Gentleman's consideration. As he looks around

    1115
    the country today and examines company reports, would he say that the increased rate of Income Tax over the years since the war is any evidence of decadence in the economic life of the country? Company report after company report, and the evidence of the Chancellor of the Exchequer, shows how profits have risen in the last few months, and supports us in the view that industry is doing very well. We do not complain about that, but I submit that there is no tangible evidence that there is a lack of managerial skill or of men being sufficiently unpatriotic and anti-social as to be unwilling to accept responsibilty at the present rewards.
    Mr. Osborne: I am most grateful to the hon. Gentleman for giving way. All I want to do is to remind him that Lord Citrine, Secretary of the T.U.C. for many years and a very eminent and respected Labour leader, became Chairman of the Central Electricity Authority, not at a salary which the ordinary worker was receiving, but of £8,400 a year and perquisites, and he is by no means an isolated case. Therefore, the hon. Gentleman buttresses my statement that, on the whole—I agree there are exceptions—men carry extra responsibilities if they are paid so to do.
    Mr. Davies: I think the facts as put by the hon. Gentleman are correct. So far as Lord Citrine is concerned, in my view, he is doing a very good job, but, in so far as we compare his salary with some of the payments in positions in some of the big monopolies, corporations and private undertakings, like Woolworths. I.C.I. and Unilevers and corporations of a comparable size, his salary is modest.
    We have never put forward the view, held by some people like Bernard Shaw, that Socialism means absolute equality in terms of money incomes. The view we put forward is that, in a Socialist society, money income has less significance in so far as we increase the social services and assure a man against times of misfortune in terms of industrial accidents, provide for old age, the education of children and the rest of it. In so far as we do that, the significance of actual money incomes is reduced, and, to that extent, I think the proposals made today are very modest ones.
    1116
    I say that they do not discourage incentive amongst properly socially-minded people who wish to see this country emerge from its present difficulties, and who believe that they are living in a world of great opportunities. I think that the view which the hon. Gentleman has put forward does not represent the views of many men in industry today, and certainly does not represent the views of my countrymen whom this party has the honour to represent.
    8.45 p.m.
    Mr. Boothby: I thought that my right hon. Friend the Member for Ormskirk (Sir A. Salter) rut his finger on the crux of the problem we are discussing when he drew attention to the relationship between the total volume of taxation, amounting to well over £4,000 million, and the total size of the national income. The proportion is about 40 per cent. We maintain that it is a perfectly valid proposition to put forward that that is what is now having an inflationary effect, that too much of the total national income is, in fact, being taken in the form of taxation and that the effect of that going on, as it has now been going on, year after year is bound to be in itself inflationary, and will therefore aggravate the fundamental problem with which we and most other countries are confronted.
    The remedies for inflation are not in dispute. I do not think that the Chancellor of the Exchequer would disagree for a moment that they are increased productivity, the deliberate restriction of credit and the encouragement of saving and of investment. Those are the obvious classic remedies for inflation. I cannot deal, on this Clause, with the question of restricting credits, although I must say I am surprised that the Chancellor has not done a little more in that direction. However, I do say that the proposed rate of Income Tax is certainly not designed to increase productivity, that is, greater output at lower costs. I cannot see that a 9s. 6d. standard rate of Income Tax can possibly be expected to do that.
    Another point which seemed to me to be of immense importance was raised by my right hon. Friend. It was the question of risk capital. There is a shortage of risk capital in the country at present, and that shortage is bound to increase until it reaches dangerous proportions if the

    1117
    present rate of direct taxation is maintained. We shall increasingly become a country of debenture and preference shares. No one on either side of the Committee would argue that the British Empire was built up by holders of debentures—by the safety first policy. It was built up by risk capital, by people who really were prepared to take a risk in the hope of making a little money.
    Who is going to risk their capital today—and we must remember that the risks in the world at present are perhaps greater in some respects than they have ever been—especially if it is put overseas, if he is not allowed to take a profit should the risk come off—after all he takes the loss if it fails—and if, at the same time, he knows that money is depreciating and that costs and wages are steadily rising? No one is going to risk what savings he has left—and they are rapidly disappearing under the present régime—if he is not going to benefit if the risk comes off. That is where we have got to at the present time.
    I now turn to the question of personal saving and investment, because I believe it to be one of absolutely vital importance. There is now a net deficit in savings of £90 million, and if we add to that sum the interest paid by the Government on saving certificates, it comes to about £120 million. No one can say that that is good, and I defy the Chancellor to state that an increase in the standard rate of Income Tax will stimulate saving or investment by anyone in this country.
    The fact is that before this extra 6d. goes on it is today impossible for anybody to save money out of earnings. This is a question which, sooner or later, the House of Commons will have to face seriously because it has enormous social implications, which were touched upon by the hon. Member for Stoke-on-Trent, North (Mr. Edward Davies). He suggested, with some truth, that with the extension of the social services and the creation of what we call the Welfare State it was becoming less necessary for anybody to build up personal savings because they would be looked after by the State from birth to death. The question has to be faced—and it is raised directly by this Bill—whether we want to bring up a population all of whom are dependent completely from birth to death on the State and the creative members of which
    1118
    are denied the opportunity of building up any kind of nest-egg of their own.
    A good many people who still have capital are spending it. That will not go on for ever. When that is gone there will be practically no capital left in private hands. I mean by creative people not just managers of Unilevers but professional men, artists, scientists, doctors, surgeons, barristers, the creative people in this country who ought to be making, saving money and investing money. They are not allowed to do so.
    Mr. Edward Davies: I think there is some truth in the hon. Member's argument, but does he not know of instances where people have been taken out of poverty and, with the comfort derived from an adequate income, have been able to develop their creative personality to a greater extent than have men and women who have been exercised about making ends meet? What about Florence Nightingale, for instance, who had a private income?
    Mr. Boothby: I should be very glad to examine the character and performance of Florence Nightingale, in whom I have always taken an historical interest, but I think it would be out of order on this Clause to go into that matter too deeply. One could name people and say that the development of their personality did not depend on their cash. It is true that it does not depend on great wealth, but I should be inclined to say that in many cases the development of personality was dependent upon the kind of freedom that one can only have if one has some savings of one's own and is not entirely dependent for one's fortunes and the fortunes of one's wife and children upon the State. In other words it depends upon one's not being in a position where one has no say in the personal conduct of one's own affairs, which is a condition we are gradually approaching.
    My own solution, which, I believe, may come, for this problem is that after we have taken care of the small rentier class, of the spinsters, the widows and pensioners and all the people who have a small amount of independent income—and their allowance should be as great as the State can afford—we shall have to make a far bigger differentiation in the taxation of earned income at every level right through to secure the incentives

    1119
    necessary for maximum production at the present time.
    This does not really raise the issue of Conservatism against Socialism and I wish this Government had faced this problem long ago. It is a serious factor that, at the moment, nobody in this country is able to save money out of earnings. This proposed standard rate of Income Tax is not an incentive but a further disincentive. Goodness knows, the problem facing the Chancellor of the Exchequer in financing the re-armament programme is formidable. The choice facing him really boils down to reducing the total size of the Budget somehow and providing greater incentives to people through remission of taxation on earned income, or continuing to rely on inflation to do the job for him, because whether we like it or not our re-armament programme is being financed at present by means of inflation.
    Rising prices are doing the job. The total volume of direct taxation of this magnitude is definitely increasing the inflationary pressure. I agree that from the political point of view the Chancellor of the Exchequer could perhaps hardly do otherwise than he has done, but from the economic point of view and, in the long run, from the point of view of the social welfare of the mass of the people in this country, the financing of this re-armament programme by inflation is the less desirable of the two alternatives.
    Mr. Grimond: I think it was the late Lord Keynes who drew attention to the myth that artists and poets gladly lived and died in garrets. He pointed out that many of them were either born in comparatively good circumstances or made a fair amount of money. I might also say that he pointed out that a good many of them thrived in periods of inflation, and I think we should bear in mind that the £ has probably been decreasing in value since the days of Queen Elizabeth.
    Mr. Boothby: But not so fast.
    Mr. Grimond: I agree, not so fast. I now come to the point raised by the hon. Member for Aberdeenshire, East (Mr. Boothby), which is that the enormous size of the Budget today is tending to increase the rate of inflation and that it may reach alarming proportions which
    1120
    we have not yet seen in this country. He suggested, I think, two remedies which he said, were generally agreed—the restriction of credit, presumably by higher interest rate, and greater production. I agree with the hon. Gentleman, but also believe that a great problem which faces us today is to make use of the free market and of the very natural desire of man to improve his own lot. There has been a certain amount of discussion about that today. We all know that historically that has lead to great evils, and, for reasons which I do not want to go into, society grew up in a way which was unacceptable.
    As a result, we are rather inclined to treat the free market—the profit motive, as it is called—as a wild beast, and when it begins to take effect we try to chain it up. I do not think that is entirely or by any means due to the party opposite. From all parts of the Committee we have the pressure of producers' interests. There only needs to be a trade or an industry getting into difficulties, and it approaches its Member of Parliament who, in turn, asks the Government to intervene. It is unrealistic to talk about the profit motive unless we are prepared to take the rough with the smooth.
    The problem which faces us if we want to cut down Government expenditure is to use some more automatic means of bringing about changes in society—that is, a return, to some extent at any rate, to a free system of trade and exchange—and to try to eradicate from that system the great socially evil effects which undoubtedly existed when it was originally tried. Unless we can do that we shall be faced with an almost indefinite extension of Government interference for which every party is responsible.
    We are sometimes told that we suffer from too much doctrine, but a lot of what has happened in the last five years is not due to Socialist doctrine. Some of it may have come from party pamphlets and books of philosophers and economists before the war, but a lot is a continuation of what was brought in by the Government before the war and by the Coalition Government during the war to meet war-time circumstances. A great deal more is simply the result of actions taken off the cuff to meet recurring crises in the last four or five years.
    It is not planning that I object to, but Government interference brought about by

    1121
    competing interests of producers and the failure to use the free market in a way which will enable us to cut down expenditure, give the consumers' choice a bigger play in our economy and allow us to meet the circumstances of the economic world without at every point trying to block and contort the natural development of economy. What we are actually discussing is Income Tax. I think Income Tax was introduced by the Tories—though I am not sure that its sponsors were orthodox members of the Tory Party, even in their own day. Personally, I think there is a great deal to be said for it. I think it is one of the Tory gifts to this country; it is a good, honest, direct tax which does what it says it is going to do—take a large slab of one's earnings and transfer them to the State. There is no concealment about it.
    I think many of us are agreed that, where we can have it, direct taxation is the best form of taxation, and many of us feel that where we intend to give out benefits we should follow the same principle. There is a good deal to be said for the use of direct action in the benefits given out by the State. There is too big an element of truck in the Welfare services. A lot of them are given in kind or are designed to condition the ordinary choice of the consumer. Just as we should take money straight out of a man's pocket if we want to take it from him, so we should pay straight into someone's pocket if we want to give him anything.
    9.0 p.m.
    But Income Tax has reached such a figure that it is not merely a method of raising revenue. It is a deliberate weapon used by the Chancellor to stop private expenditure, so that it has changed a great deal in its nature since it was first introduced. The right hon. Member for Ormskirk (Sir A. Salter) also pointed out that it was having fairly serious effects on the social structure of the country. I think those effects can be exaggerated, and that the middle and upper classes must sacrifice a great deal of their comforts for the sake of a better distribution of wealth in this country. I should not like to see that process reversed to any extent.
    Turning to the professional classes, the fact that they have to spend time in washing up and doing housework is really a great waste of brain power. I happen to have some insight into the Chancellor's own household of which he is not aware,
    1122
    and I believe that in the days before he became Chancellor he and his family spent a good deal of their time in manual labour of a kind which, possibly, in such an eminent man was wasteful.
    Mr. Edward Davies: A nice change!
    Mr. Grimond: These are not entirely minor points, for one of the greatest assets of this country is brain power, and we cannot afford to waste it. We have lost a great deal of our position in the world; we have lost a great deal of our wealth and we are using up our natural resources. We have not the command we once had. But we have a greater experience, we have a great deal of initiative and enterprise, and if hon. Members look at the inventions of the last few years they will find that the great bulk of them are due not to the Russians or even to the Americans but are due to the British—penicillin, radar, and so on. They are due to this country, and it is important that we should keep the lead in the use of brains.
    Mr. Boothby: Is the hon. Gentleman suggesting that we should have been denied the advantages of these great inventions if the inventors concerned had been under the necessity of washing up?
    Mr. Grimond: I do not suggest that; I was following the suggestion which the hon. Gentleman himself had made. [An HON. MEMBER: "Who invented the washing machine?"] I understood that the hon. Gentleman said that if these processes were continued we should reach a stage at which the class from which inventors have been drawn in the past would disappear.
    Mr. Walter Fletcher: Might I remind the hon. Gentleman that one of the greatest inventions of all time came from watching the tea kettle?
    Mr. Grimond: Watching a tea kettle is a very different thing from making the tea or from washing up the cups. I am very willing to watch any number of tea kettles for the hon. Gentleman, provided he washes up the teacups.
    This disincentive point is continually brought up in discussions on Income Tax. We are always told that a very high rate of tax is a disincentive to enterprise. How far that is provable I do not know, but it is one of the points which

    1123
    the Royal Commission which is being set up should investigate. I think it is time that investigation was carried out into the other matter that is always mentioned in debates like this—the diminution in risk capital. Is it true today that industry is failing to replace its capital, and is it true that there is a serious lack of risk capital? If it is true it is absolutely disastrous for this country, and unless we are prepared to go very much further towards State control, and in allowing the State to provide capital, then we have got to find some way of bringing back into circulation capital for enterprise.
    I do not quite know as yet what remit this Royal Commission will have, but these three points do seem to me points which should be examined in an impartial and calm manner; the effect which a very high rate of taxation is having on our general social structure—and I agree that that is the least important; second, its effect as a disincentive, which is always talked about but about which the actual data is not very clear; and, third, its effect on production of capital.
    Mr. Booth: I have listened very carefully to this debate, and it has sounded to me rather like a protest meeting of the sort that we always have when there is some financial proposition put to this Committee. I can remember when, under the late Lloyd George, the same things were said and ruin was prophesied, but we have survived all that a long time.
    When I speak of Income Tax I speak of something very near my heart. I am very sincere when I say that I have never been enamoured of so much indirect taxation in this country. I agree with what was said by the hon. Member for Orkney and Shetland (Mr. Grimond) about direct taxation. All my life—at any rate, since I began to think about these things—I have thought that if I had my way I would tax everybody as soon as he started to earn. I would tax the office boy. The tax always can be graded according to capacity to pay. I would do this because so many people have no idea of what they pay in taxes and have no interest in them, because so much of the taxation is indirect.
    In my more affluent days, when I was a sub-postmaster and tobacconist, a man
    1124
    walked into my shop and asked for 20 Players. They were then half a crown, because the Chancellor of that day was not quite so fierce. Then another man came in and took an interest in another part of the counter. He wanted to put some money into the Post Office Savings Bank. He wanted to place 10s. to the credit of the State. He said about the first customer, "I am a better man than he is. He spends. He spends on things that go up in the air that do not do any good. I lend my money to Britain." It was during the war. I said to him, "That man, though he does not know it, has given about 1s. 9d. to the Chancellor of the Exchequer. You have come to me and put 10s. in, but, like the man in the Bible, you want it back with usury."
    I happen to be chairman of a Bolton savings committee, and I know how difficult it is to get savings. It is argued that people are discouraged from saving by this penal taxation. Everybody knows that the main reason for this taxation is the shadow of war, and they are discouraged by this overhanging cloud, which seems to be settling permanently over the people of the world, and the discouragement of taxation is not to be compared with this other discouragement for the London surburban women or those in the built-up areas of Lancashire. We must have some regard to what has brought about this heavy taxation.
    When the Chancellor introduced his Budget proposals, I remember hearing tales from hon. Members opposite about the dire consequences, the complete disruption of credit and the chaos in industry. Since then, and up to this very day, there has never been such a spate of bonus share issues. Hon. Members have only to read the financial columns of the Press. There have been queues outside the Capital Investment Committee office of people applying for sanction, and sanction has been forthcoming. Hardly a day passes when there is not an issue of bonus shares. There is a case today of an issue of two for one, in spite of all these things. Let the people know what it costs to run the country, not through the tobacconist, and so on, but by having to pay as they go. Let them see that what is happening abroad places upon this country a terrific burden. If paying 9s. 6d. in the £ averts war, it will be a bargain. That is the way we ought to look at it.

    1125
    What is the alternative? I have not heard one offered. After all, we do not complain about profits. Profits are earned by good management, and there will be profits in the nationalised industries when there has been time to sort things out. The trouble in the old days was that profits were sacrosanct. I remember, as a Lancastrian, that ours was the only county to produce a bantam battalion, because Lancashire was a fertile field, one reason being that profits had been the first charge on Lancastrian industries. We do not grumble about profits in themselves, if they are used wisely for the good of the industry and for the proper remuneration of the workers in those industries.
    Mr. Osborne: Does the hon. Gentleman, as a Lancastrian, not remember that in Oldham, Bolton and all the cotton towns, between 1921 and 1937 half the mills were either empty or half working? Not only were there no profits, but half the people in Lancashire were ruined.
    Mr. Booth: I remember the 'thirties, and I also remember the golden days of the 'twenties when the financiers descended upon us from this City offering £20 for £1 shares in Lancashire cotton mills, and then coming back here and talking of penal taxation.
    I regard this Income Tax of 9s. 6d. in the pound as a regrettable necessity. It is stringent and penal taxation if you like, but if it is going to bring us back to normal and enable men to be engaged in all the things in which they should be occupied, then let us pay it with a smile.
    9.15 p.m.
    Mr. Nigel Birch: We have had a very interesting speech from the hon. Member for Bolton, East (Mr. Booth). I must say that I agreed with a lot of it. I agree with him that many people who do not pay indirect taxation do not realise exactly what the Government are doing, and there is something to be said for more direct taxation at the lower levels. I agree with him, too, when he implied that he had no sympathy with those who leave a single talent unoccupied, and I have some sympathy with him in the remarks which he made about profits. We must have profits if we are to have industry at all. He introduced the old bogey of the bonus shares. I do not
    1126
    think that we will argue that again. [HON. MEMBERS: "Oh."] I will argue it if hon. Members opposite wish me to do so.
    Mr. Booth: I did not say that there was anything wrong about them. I only mentioned the spate of them since Budget day.
    Mr. Birch: I thought that the hon. Gentleman was implying that they meant something more than they do. The right hon. Member for Bishop Auckland (Mr. Dalton) talked the most unmitigated nonsense ever heard in the House on the subject of bonuses and he put a special tax on them. It was taken off by Sir Stafford Cripps, and in his speech he indicated that he took much the same view of the right hon. Member for Bishop Auckland and his statement as we did. Anyone who wants to know about that had better look up the old debates, and he will find them most interesting.
    I was very grateful and proud to hear the hon. Member for Bolton say that we had to pay for re-armament, and that if we could get peace it was worth almost anything. That is one of the reasons why we have not put down an Amendment to this Clause. I think that we want to be clear about the ultimate consequences of taxation at this level. When my hon. Friend the Member for Aberdeenshire, East (Mr. Boothby) was talking about the danger that everybody would always be dependent upon the State, he was interrupted by an hon. Member opposite, who said, "What about Florence Nightingale?" That was a most interesting intervention.
    If the hon. Member would read the last "Life of Florence Nightingale," I think that he would realise that it was not perhaps a very wise intervention. Florence Nightingale had two very great trials in her life. One was to get the medical administration of the Army right, starting in the Crimea, and the other was to get the medical administration in India right. How did she do it? She did it as a result of a long, violent and bitter controversy with two Government Departments, in which every civil servant of both Departments was violently opposed to her.
    She did it by financing out of her own pocket the research necessary to bowl out all the civil servants. She was, in fact, the daughter of a very comfortably off

    1127
    family and she had many rich friends to help her. She was connected with Cabinet Ministers on both sides of the House, and she was, I think, a classic example of how reforms are hardly ever instituted except by people of some independence. If Florence Nightingale had had no independence she would have written to the Ministry and back would have come a postcard saying "Your letter has been received." Nothing more would ever have been heard of her, these reforms would have been delayed for 25 or 50 years, many lives would have been lost, and one of the great glories of our country would not have come about.
    Mr. Edward Davies: The argument adduced by the hon. Member for Louth (Mr. Osborne) was that, unless there was a good cash award, the "sacrificial service," as he would term it, would, in some instances, not be forthcoming. That was the point with which I was dealing. I adduced in support of my argument that much of the best service given to this country has had no relation to cash, and, by way of intervention in the speech of the hon. Member for Aberdeenshire, East (Mr. Boothby), I stated that here was a lady with an assured income from her parents who might well have lived in idle comfort but who exercised her great creative talent because of her love for her fellow men.
    Mr. Birch: I did not say that Florence Nightingale made any money out of this; indeed, she spent what money she had. The point which was being made by my hon. Friend the Member for Aberdeenshire, East, was that it would be a very dangerous thing if the present development continued as it is doing, because at the end of it we should get to the point where everybody is dependent on the State from the cradle to the grave. He said that if we reached that condition we were losing many of the most valuable things in life.
    As the Chief Whip for the Liberal Party said, the Conservative Party first imposed Income Tax. It was under Pitt during the Napoleonic War. It was re-imposed by Peel in 1841. Gladstone, always a great opponent of Income Tax, said that no tax so much demoralised and degraded the people. I think that the great man occasionally nodded, and he
    1128
    was wrong there. It is a question of the scale. I was glad that my right hon. Friend the Member for Ormskirk (Sir A. Salter) began by pointing out how completely the personal allowances are put out of scale by the rise in prices which has now taken place. When the Chancellor was talking about them, it was rather like pretending that what we have to pay for a taxi is what appears on the meter; but that is not the case, and these allowances are out of scale with the present value of money. It is important to remember that we have to look to the rise in the cost of living in the future and must not consider only the rise in the past. The rise is going on with increasing rapidity now, and I believe that it will go much beyond the Chancellor's expectations.
    There are two effects about which I wish to talk. The first is the direct effect upon the individual. With a certain amount of wisdom—at any rate we can congratulate him on a certain amount of political wisdom—the Chancellor of the Exchequer has seen to it that the majority of voters are not very much affected by the 6d. on the income tax; but a number of people are very badly affected. There are the bachelors; but perhaps they do not matter so much, for I am a bachelor no longer! Then there are old people living alone who, even after the age allowance have been given, are still badly hit. It is worth remembering that someone who is over 65 and lives alone and has an income of £400 a year at present pays £46 5s. tax and will in future pay £51 10s. That is an appreciable increase when we remember what else is happening all the time.
    Various hon. Members have talked about artists, barristers, technicians, business executives, managers, officials and civil servants, all peope on whose brains and talents we depend for the greatness of our country and for its prosperity. They are all knocked about, and it will produce an effect, particularly when in combination with rising prices and with high indirect taxation. We have to remember that Customs and Excise is £520 million higher this year than in 1945 to 1946, and all this comes on top.
    But I do not want to talk about the direct effect. I want to talk about the indirect effect on the individual, and principally the effect it has through what

    1129
    taxation at this level does to industry. My first point has not been discussed this evening, but it is an obvious and important one which has not been explicitly admitted by the Government. It is that during a period of active inflation Income Tax is a tax which is not levelled only on income but also upon capital. That comes about because paper profits are not true profits. That is one of the problems which is now going before the Cohen Committee.
    I want to quote a remark published this morning which came from a memorandum by the Association of Certified and Incorporate Accountants. They were talking about the definition of a true income. They put it in that jabberwock language which accountants generally use, but I think it is a good definition. They said that a true income is
    "that sum which, at the end of a given period, a business unit could dispose of without impairing the same aggregate of physical assets in the same workable condition as they were at the beginning of the period."
    It is rather difficult to follow, but what it really means is that you have not made a true profit unless your real assets are maintained out of income at the same time and in the same state as they were before.
    Taxation is not now levied on the income as defined by the Association of Certified and Incorporate Accountants. Tax is now levied on that sum which would be provided had there been no rise in the cost of replacement of assets of all sorts. But, as we all know, the cost of replacement is two, three, and four times, depending on the article. Therefore, the whole time the taxation of income is really also a taxation of capital where companies are concerned. The result of that is one of two things: either the real capital of the company is not maintained—and that, of course, is true in a great many cases; the real capital is running down all the time which, in the last resort, is disastrous—or sufficient money has to be made in profits, and a sufficient amount retained in the company after taxation at these enormous rates, in order to make up for the amount of money which has been taxed not on true income but on paper income.
    Mr. Scholefield Allen: Is that where the bonus shares come from?
    Mr. Birch: Could I give two main illustrations of this? The first I will deal with shortly. Some hon. Members may have noticed that Imperial Chemical Industries have just done what everybody ought to do, that is to say, they have revalued all their assets on the basis of replacement cost less depreciation. Now if one looks at their balance sheet one will see a colossal increase in the nominal value of the assets there, and also that the depreciation allowed by the Treasury upon assets is wholly inadequate to replace them. Therefore, an enormous extra reserve has had to be put aside out of taxed money simply in order to keep those assets in any sort of condition.
    9.30 p.m.
    The other illustration which I want to give is from a very interesting article by the President of the Society of Incorporated Accountants, which I also read this morning, illustrating the difference between what happens nowadays to a small firm and what used to happen to such a firm. The illustration begins at the price level of the years 1910–13. Supposing that a firm in those days had made a profit of just under £1,000—the exact figure is £997—and had divided it, as was very common in those days, in this way: the family who owned the business spent just under £500 on their living, put back £480 into the business to build it up—all old businesses were built up in that way—and paid the odd £37 in taxation. That was a typical instance in the old days.
    Conceive now what would be required to produce the same result in real terms today—that is to say, the same living for the family who owned that business, and the same amount put in real terms to build up that capital. The calculation is that the profit required, as against £997 in 1910, would be £8,066, which is over eight times as much, of which taxation would take £4,946, or over 130 times as much as it took in the old days.
    Profits are not up in anything like that proportion to what they were before the war, and the consequence is that in a great many industries there is an actual physical run-down in their assets. The only alternative to people who are unlucky, like the cinema proprietors, who are now being squeezed between the upper and the nether millstones, are the people who deal in commodities such as copper or things of that sort, which have gone up to a very high price, and who

    1131
    may be all right at present at the cost of being jeered at and told they are profiteering and everything else—because no one can make enough money at the present rate of taxation to keep his physical assets in proper order without showing very high nominal profits. They are punished in this heavy way by taxation, and hon. Members opposite think that the crime should fit the punishment and therefore a crime is imputed to them.
    Mr. Albu: Is the hon. Member suggesting that taxation should be so designed as to give a special advantage to the ordinary shareholders in companies over all other income receivers?
    Mr. Birch: I think two things: that the State should run its affairs in such a way as to try to maintain money at a stable value and that taxation should be levied on true profits and not on profits which are not true ones at all.
    I ask hon. Members opposite to think for a moment about the ultimate consequences of this. The real evil of this is that it is conservative in the bad sense of the term: that is to say, that it leads to social immobility. The present high taxation means that a firm which was in a big way before the war probably can get on somehow or other—it can borrow the money if it has good credit, assets, and so on; but someone who is starting now can never build up a business such as was built up by the great men of the past, whose names we have known through every generation.
    In the old days hon. Members opposite said, "We do not mind. We intend to nationalise everything. We intend everything to go to the State." I have no doubt that the right hon. Member for Ebbw Vale (Mr. Bevan) would still say that. He has learned nothing and forgotten nothing—he is a sort of utility Louis XVIII. He has quite a lot of supporters and, as I read the situation, many hon. Members opposite represented by the Fabian Society do not now believe in nationalising. In various articles by the hon. Member for Coventry, East (Mr. Crossman), now leading the "Keep Sideways Group," and other publications from the Fabian Society, we have seen that they have an idea that they should have something different.
    1132
    One of the distinguished members of this movement is Professor Lewis, of Manchester University. In reading a book of his the other day, I saw that he said something which is perfectly true:
    "The future of the country depends on bold and free entrepreneurship."
    That is a horrible word, but what he meant was that it depends on somebody having a chance to start something new and getting away with it. I think he is right, but on the present basis it really cannot be done and we have to think what this present immobility means. It means that we cannot get the new building of businesses, it means that many existing businesses are running down and that if any business is to keep going it has to charge high prices for what it produces. That sort of thing cannot go on forever.
    Mr. Woodburn: I gather that the hon. Member is talking on the theory of this question. Is he aware that in the industrial estates there are quite a number of applications for small factories and that quite a number of people who took small factories during the last five or six years are now moving into the larger factories. I am wondering what was the basis of the hon. Member's experience.
    Mr. Birch: If the right hon. Gentleman goes into the matter—and remember that we have to reckon that we had a period of tremendous boom trade—I think that the comparison with any previous period would be found to be extraordinarily small.
    The right hon. Gentleman asks on what basis I am working. It is on the figures. Out of taxed profits the build-up of capital must and can only be extraordinarily small. Many of these businesses, particularly in the development areas, have had special help through loans from the Government finance board and it is in effect an indirect subsidy, but that is quite a different thing and is a much more dangerous and unsatisfactory way of building it up. It means that they are dependent on the good will and judgment of the officials of the corporations, whereas so many businesses in the past have been built up against the good will and good advice of officials, banks and corporations.

    1133
    I do not think this can go on for ever and perhaps this debate is a vote of sympathy for the Chancellor of the Exchequer for the legacy he has been left and for the weight on his tail of so many hon. Members sitting behind him. All we can offer to him is the early prospect of being relieved of the task of his office and the weight on his tail.
    Mr. Albu: I do not think we can allow the arguments which the hon. Member for Flint, West (Mr. Birch), or the hon. Member for Aberdeenshire, East (Mr. Boothby), have been using to pass any longer without a reply from this side of the Committee. The hon. Members live, of course, in the period of the good old speculative days of the beginning of the century and of the last century when it was perfectly true that businesses were built up by this sort of speculative enterprise and we had not reached the degree of concentration of capital, the large bureaucratic management of public companies and particularly the degree of reduction of risk entailed in the running of business enterprises which we have seen during the last 10 years or so during which we have had full employment, which we are likely to have for a good time to come.
    I think many of the arguments which they use about the necessity for the return on capital, the attraction of risk capital and so on cannot be applied to a large part of our industry, especially in this area. It certainly cannot be applied, in my opinion, to the large public companies which I suppose form something like half, or rather more than half, of the economic activity of this country at the present time. There is no doubt that the return to the ordinary shareholders in those companies is worth considerably more than the risk that they take, when we take into account the annual dividends they receive year by year and capital appreciation, whether it is turned into bonus shares or reflected in the increased share value on the Stock Exchange.
    Hon. Members opposite must not be quite so innocent about bonus shares. They are profits made in the past and are an addition to any dividends received in the past. The issue of bonus shares is a reflection of the present economic strength of a company, with the result, of course, that its shares appreciate considerably further
    1134
    in value and considerable capital profit can then be made by their sale without any loss of capital held by the shareholders.
    I wish to deal particularly with the argument used by the hon. Member for Flint, West, about the possibility of building up enterprises now. I believe there is something in the argument about the small risk-taking enterprises. It is in the early stages of a new business when there are what I would call real business risks and those running it are risking a good deal of their own capital in trying to build it up. I believe, though I do not think this is the exact Clause on which to discuss it, that there is some case for taxation relief in the early stages of a new business enterprise.
    Mr. Birch: I intend to try to frame a new Clause on that subject and I hope to have the support of the hon. Member.
    Mr. Albu: We shall see about that when we see the Clause. This is not, incidentally, the first time I have said this during a discussion on a Finance Bill. But when the argument is extended to cover shareholders in public companies, it really makes complete nonsense. There has been absolutely no difficulty on the part of public companies during the last four or five years in raising fresh capital in order to maintain or extend their assets.
    The argument used by the hon. Member for Flint, West and by the hon. Member for Aberdeenshire, East that the real capital of companies should be maintained by remission of taxation will only have the effect at the present time, when prices are rising, of giving to the ordinary shareholders, who are the residual beneficiaries of the profits of these companies, an advantage over all other income receivers or other investors in the community.
    Mr. Brendan Bracken: Is the hon. Gentleman sending an encouraging message to the Prime Minister of Persia?
    Mr. Albu: I am very sorry, but as usual I cannot follow the relevance of the remark of the right hon. Gentleman.
    Mr. W. Fletcher: The hon. Gentleman has used the phrase "raising capital to maintain assets." Could he explain a little more clearly exactly what that means.
    Mr. Albu: I should have thought that almost anybody who had read reports of the speeches of almost any company chairman would have understood what I meant. They have all complained they are unable to maintain their assets out of their profits and have had to raise fresh captial in order to do it. If this is not the case, what is the argument? I thought the argument was that it was not possible to maintain the assets of the company out of profits left after taxation. I agree that that may sometimes be the case. I am merely saying that there does not appear to be any difficulty in raising further capital in order to do so. I think that is perfectly fair.
    9.45 p.m.
    If this is not done, the result is that the ordinary shareholders maintain the real value of their investment in money terms, and they are the only section of the investing community, or the saving community, that does so. There is absolutely no right for the ordinary shareholder in a public company who takes very little risk at present, who plays no part in the management of the concern, to receive any benefit which no other saver, no other pension receiver, no other receiver of any fixed income, gets at present. It is time that right hon. and hon. Gentlemen opposite realised that in fact this is the point of view of this side of the Committee.
    If it could be shown that there has been difficulty in raising fresh capital in order to maintain and expand the industrial activities of the country, then hon. Gentlemen opposite would have a case; but, in fact, there has been no difficulty whatever during the past five or six years. When, for instance, the hon. Member for Aberdeenshire, East, was pleading the case of the professional classes and pointing out that they are unable to save at present, I wondered how he accounted for the very great increase in the savings invested in insurance companies. These insurance companies are themselves expanding their own investment in risk enterprise.
    Mr. Lyttelton: I trust that the hon. Member will pursue this enchanting argument a little further and explain to the Committee why the raising of further capital against the same assets enhances the value of the existing shares.
    Mr. Albu: I am sorry that the right hon. Gentleman misunderstood what I said, If one does not have to raise fresh capital and if one is able to maintain the assets out of profits, the value of the ordinary shares rises. If one has to raise fresh capital, the value of the ordinary shares remains relatively the same. I am in favour of the latter, and in fact that is what is taking place. Ordinary shares are not falling. On the other hand, in this country, the index of share prices has not gone up as much as it has in other countries.
    That may well be because of the taxation we have had and because of the fact that it has been necessary, in order to expand business enterprise, to raise this capital. I see no reason why public companies in this country should not be forced to raise fresh capital in order to expand their activities and to develop new technical and other resources. The yield of ordinary shares has certainly been adequate, and there has been some capital appreciation. I think that that is sufficient.
    If we were to follow the argument of the hon. Member for Flint, West, and apparently of the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), what would have happened is that the, index of ordinary share prices, instead of being around 130 today—I forget the exact figure; it is probably higher—would be something like 200. I see no reason why the wealth of ordinary shareholders in public companies should have doubled since the end of the war when the savings of other members of the community have been rather reduced by the rise in prices. But apparently hon. and right hon. Gentlemen opposite think that the very small number of people who have ordinary shares—not many more than one million—should be the only class in the community to continue to benefit from rising prices and full employment.
    Mr. Mott-Radclyffe: I hope that later in this discussion either the Chancellor or the Financial Secretary to the Treasury will be able to explain a little more clearly than the hon. Member for Edmonton (Mr. Albu) the exact process by which anybody would benefit in the raising of fresh capital to maintain the existing assets of a company. I do not move in the realm of high finance myself, and I found that argument a little difficult to understand.

    1137
    I believe that there are two quite simple tests which should be applied to any fresh taxation proposal by the Chancellor, and that they should be applied particularly in the proposal to increase the standard rate of Income Tax by 6d., as in Clause 13. In the first place, does the increase in the tax reward or penalise skill and thrift? That is the first test. The second is this: Does it stimulate or stifle savings? I claim that the increase in the standard rate of tax falls most heavily upon those who, by now, should be entitled to a little lightening of the burden which they have borne for so long.
    It falls on the single wage earner and salary earner, the retired person living on a pension—and, incidentally, many of these retired people living on their pensions have rendered very distinguished and valuable service to their country—and it falls particularly heavily also upon elderly people living on the income out of their savings. Furthermore, the increase in the standard rate is a direct discouragement to a very wide range of technicians, managers and higher salaried officials, who are just the very people whose skill and imagination we ought to be encouraging in the highly competitive world of today.
    Secondly, in so far as savings are concerned, the figures speak for themselves. My hon. Friend the Member for Aberdeenshire, East (Mr. Boothby) referred earlier in the debate to the fact that, in the year 1950–51, the total net deficit was £90 million. No Chancellor can afford to ignore these figures, and, if I may say so to him with respect, it really is no use exhorting us to save and then inserting a provision in the Finance Bill which will make saving proportionately more difficult.
    The truth is that when taxation reaches a certain point it is almost impossible to save, and beyond that point taxation is met either from money which otherwise would go into savings, or, in some cases, the increased taxation is met by taking money out of savings. The same 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 National Savings certificates or some other form of Savings. It cannot do both at one and the same time. In parenthesis, may I remind hon. Gentlemen opposite, who are so keen at times to decry what they call unearned or invested income, that the
    1138
    interest from savings is treated by the Inland Revenue as unearned income?
    It is precisely the desire to save for one's old age, for one's children or for an unforeseen emergency which might arise later in life, that is one of the fundamental urges spurring a man on to further efforts. If we remove the possibility of saving, or make it more difficult, in a great many cases we shall actually remove the accompanying incentive. How often do we hear today the phrase, "This job is not worth the sweat"? We hear it from the wage earner, whose overtime rates send him up into a higher P.A.Y.E. category. We hear it from the higher salaried man who has been offered a better job with vastly longer hours of work and greatly increased responsibilities, but who, as a result, is very little better off, if at all, because of the increased tax liability.
    I think the Chancellor would agree if I say that the future of our economy depends upon our capacity to save, both as individuals and as a nation as a whole. The trouble is that the Government themselves have not put anything by for a rainy day. They have put nothing into the kitty on which they could draw in times of emergency such as these. Had they done so, had they spent less of the nation's total income then, of course, there would have been some slack to take up which could have been used to pay at any rate for the early stages of the re-armament programme without imposing a fresh burden upon the already grossly overburdened taxpayer.
    The Government themselves have not set a good example of the thrift which they preach to others. It seems to me that we are now moving into a new era of Socialist economics. We are all used to paying for things which we have or enjoy, although we do not always enjoy the things we have. But, today, vast sums are being extracted from the taxpayer while he receives none of the objects for which the money was taken. We have thus paid £36 million not to have groundnuts, just under £1 million not to have eggs from Gambia, and about £2½ million not to enjoy having the Festival Gardens opened on the appointed day.
    I believe that our prosperity depends to a great extent, in a commercial world, on the country's capacity to take risks, but I do not believe we can persuade many to

    1139
    take a risk if, as the result of a successful venture, one is left very little better off after tax has been deducted than if it had been unsuccessful. So long as the ratio of total Government expenditure is so high in relation to the total national income, so long will the Chancellor have to extort from the country so high a proportion of the nation's income in the form of taxation. In my view, a flat rate of Income Tax of 9s. 6d. in the pound with Surtax on top is in itself absolute proof of a wholly inflationary and irresponsible financial policy.
    Mr. Ivor Owen Thomas: The last two speeches delivered by hon. Members opposite indicate that they are still living in the glorious past, or, rather, the supposedly glorious past of Tory prosperity. The hon. Member for Flint, West (Mr. Birch), went as far back as the days of Florence Nightingale and used the illustration of the life of that lady as proof of the utter irresponsibility of Government Departments, and even of Governments, in the face of terrible social tragedies, and of the failure of such Governments and Departments to face up to those responsibilities.
    I was interested to note that he went back for that illustration to days when politics were practically dominated by Toryism of the old school, and, perhaps, of the old school tie. [An HON. MEMBER: "Do not forget the Whigs."] We can bring in the Whigs if desired, for both parties were much of a muchness. There was not much difference between them, and it did not matter very much to the bottom dog at that time which crowd happened to be in power.
    10.0 p.m.
    That illustration of Florence Nightingale and her struggle brought to my mind, and I am sure to the minds of my hon. Friends on this side of the Committee, the struggle that has been taking place between the forces of reaction in this country and the forces of progress. It is not an exaggeration to refer to the forces of reaction as those which have been repeatedly led by Tory Governments in this Chamber and the forces of progress have been those outside clamouring through the years for a fair deal. It was not until the Labour Government, the Labour Party and the trade union move-
    1140
    ment became strong enough to take an effective part in the national life of the country that any fundamental change took place in the relationship between the great underpaid and poverty-stricken and the privileged few who dominated this Chamber.
    Mr. Bracken: Is the hon. Member making a severe attack on the new chairman of the Iron and Steel Corporation, Mr. Hardie?
    Mr. Thomas: I make this admission straight away, that in the purely technical sphere of business management, we have had outstanding successes in the business world whether politically they were Tories, Liberals or what not. As a matter of fact, there were other elements in the business world besides what one might call the honest, trained, skilled business expert who made a good job of the task of which he was given the responsibility of discharging. There were, of course, the other crowd in the background.
    My point is that it was not until the challenge of awakening organised democracy in this country came on the political scene that any responsibility was even accepted by our opponents and their party predecessors. After all, who are the great outstanding figures—
    The Chairman: I am sorry to interrupt the hon. Gentleman, but I must point out that we are dealing with the question of Income Tax.
    Mr. Thomas: I must plead, in extenuation, that I did not bring in Florence Nightingale, and I am really trying to bring out certain features of the arguments which were adduced by the hon. Member for Flint, West, and on which he was absolutely silent. The hon. Member has the rather unhappy knack of stating a premise and then drawing false conclusions. If his premise was correct that everything in the garden was lovely before the Labour Party came on the scene, and that the Tory Party were such outstanding champions of equality, democracy and fair play, why did the electorate of this country throw them overboard at last when a new aspiring party came on the political stage? The greatest damnation of the Tory Party's claim to be the champions of democracy

    1141
    and fair play is their own miserable, deplorable record in the field of social services in this country.
    Air Commodore Harvey: In his most interesting speech the hon. Member has forgotten to mention the Liberals. Will he give them a break?
    Mr. Thomas: I pay this compliment to the Liberals. Although they failed to work their passage into the land of promise, at least I think they had a social conscience, which is more than can be said of the Tory Party.
    What about the comparisons made by the hon. Member for Flint, West, between these times and the happy days of freedom from taxation and the low rate of Income Tax in the 'twenties and 'thirties? While I listened to the hon. Member painting that beautiful picture of the Tory paradise in those years I began to believe that I had not been living and experiencing certain things in that period. He nearly led me to believe that the Tory Party had been responsible for giving a fair deal, for instance, to the miners in the Welsh valleys and that everything in the industrial field was absolutely healthy and prosperous during those years when we had a succession of Tory Governments. It was only when I remembered certain outstanding facts—
    The Chairman: I am sorry, but if the hon. Gentleman will forgive my saying so, his speech is not relevant to this Clause. I must ask him to be relevant.
    Mr. Thomas: I am relating the condition of the people in this country to taxation as provided in the Bill, by comparison with the condition of the people in this country as related to taxation imposed when the party of the gentlemen opposite were in power.
    The Chairman: Order. I fully appreciate the hon. Member's point, but that is not the question before the Committee. That question is the proposed increase in the rates of Income Tax. The subject of social conditions and so forth is quite incidental to the argument. I must really ask the hon. Gentleman either to be relevant to the matter before the Committee or to resume his seat.
    Mr. Thomas: I will conform with your Ruling, Major Milner, and relate my remarks more definitely to the question,
    1142
    but in my opinion the argument I was adducing had a specific relationship to the matter which the Committee is discussing.
    The hon. Member for Flint, West, went as far back as the middle of the last century, and I thought that I was at least equally in order in saying what I have been saying for the last five minutes when we remember that the hon. Member was holding forth about the merits and virtues of previous Tory Governments. In any event, I will leave that question. [HON. MEMBERS: "Hear, hear."] If hon. Members opposite were not quite so conceited and vain they would admit that there may be a possibility of their learning from something said from this side of the Committee as well as from listening to the profound economic analysis of their own purported leaders in the field of economics.
    This scale of Income Tax—[HON. MEMBERS: "Hear, hear."]; this scale of Income Tax—[HON. MEMBERS: "Hear, hear.]; this scale of Income Tax—[Laughter.] I will vary it a little if hon. Members like. The scale of Income Tax arises particularly from a few outstanding facts. The hon. Member for Windsor (Mr. Mott-Radclyffe) seemed to develop the argument that if any other Government were in power they could slash expenditure right and left. [HON. MEMBERS: "Hear, hear."] There would be no need for vast armament expenditure—
    Mr. Manuel: Now cheer that!
    Mr. Thomas: The argument was that there would be no need to take all the precautions the Government are taking in concert with the North Atlantic Treaty Powers and the Dominions. But hon. Members opposite give no indication as to what part of the national expenditure they would slash for the purposes of economy. I shall put some definite questions to the Opposition which I hope will be answered before the debate on the Bill concludes.
    10.15 p.m.
    The first question is this. They plead for economy—the reduction of national expenditure. Would the Opposition, if they were the Government, reduce family allowances? [HON. MEMBERS: "We started them."] Would they reduce—
    The Chairman: This question is not relevant to an increase in Income Tax, and I must warn the hon. Gentleman that unless he is relevant, if he proposes to go on with his speech at all, I shall have to call the attention of the Committee to his continued disregard of my Ruling, which, as he knows, will, unfortunately, have certain consequences. I do ask the hon. Gentleman to make his speech have direct relevance to the Clause before the Committee, irrespective of what he alleges any other Member has or has not said.
    Mr. George Thomas: On a point of order. [HON. MEMBERS: "Oh."] I realise that hon. Gentlemen opposite are in the right mood; I wish they would be quiet. If my hon. Friend is relating his argument to the effect on the social services of the rate of Income Tax, would not that be well within order?
    The Chairman: I cannot discuss the whys and wherefores of the hon. Gentleman's case, but, in my view, the hon. Member who has the ear of the Committee was not so relating his argument. In any event, I must ask him to obey my request.
    Mr. I. O. Thomas: I was approaching the end of the development of my argument, in reply, I claim, to the case consistently put forward from the benches opposite in the debate, and I think that we on this side of the Committee have the right, and should exercise the right, of answering the case. Anyway, one further point—one further question. It is this. Would they reduce the social services in order to be in a position to reduce the taxation provisions as contained in Clause 13? If not, how would they effect those economies which they claim should be effected, and which they claim can be effected, and should be sought and attained by the Government of this country at the present time?
    I say this finally to the Opposition, that in attacking the Government's proposals in regard to Income Tax, without putting forward a tangible alternative to the policy now being pursued by the Government bearing upon national expenditure, they are being entirely unreal; that they are false to the facts of the situation; and that it would be no exaggeration to say that they have been absolutely dishonest to the people of this country.
    Mr. W. Fletcher: I have listened entranced to the voice of the forces of
    1144
    progress, which certainly made up in length—
    Mr. Henry Strauss: And in irrelevance.
    Mr. Fletcher: —for what it lacked in clarity. As I think it is rather important that we should get on with the real discussion of the effects of high taxation, I do not propose to follow further what the hon. Gentleman had to say.
    However, I think it is necessary to refer to the speech of the hon. Member for Edmonton (Mr. Albu). He went to the London School of Economics, and his economic playground seems to have been the maze at Hampton Court, because it was almost impossible to follow—I doubt very much whether he himself was able to follow—his argument. I think he must have struck terror into the heart of the Chancellor of the Exchequer. After all, his plea was that one only had to go in for the purchase of ordinary shares to be ensured of making a rapid fortune. How, then, can the Chancellor expect in future to get anything with 3 per cent. or 3½ per cent. in the way of fixed interest on Government securities?
    Following the lead of the hon. Gentleman, no doubt he and all his followers, and everybody in the country who reads the words of wisdom which the hon. Gentleman let fall will see opening before them the pearly gates of the way to a great fortune—and an untaxable fortune, because it will be in the form of capital profit, and therefore will escape taxation. I think that he has done a great disservice to his financial leader, and he should be very much more careful in future.
    He rather opened up the question, which has been touched on by other hon. and right hon. Members, of the rôle of risk capital and how it is affected by the high level of taxation. There is a considerable misconception on the other side of the Committee about risk capital. Too many hon. and right hon. Members opposite seem to think that it is a sum of money in the hands of individuals which is used for a speculative purpose, and of which they themselves control the destinies. The vast amount of risk capital in this country is not of that nature at all. It is invested in public companies whose policies are directed by the boards of directors, and the great trouble that arises

    1145
    from a very high level of taxation, and from other obstacles that are put in the way, is that a state of mind is being induced which makes it almost impossible for the director with a conscience to take the risks that he should take with that capital.
    It is very important to bear in mind that any company whose construction contains fixed interest-bearing capital in the form of debentures and preference shares has capital which is very often just as much at risk as the ordinary capital. When, through force of circumstances, the whole assets of the company are in jeopardy—and we have an instance before our eyes at the present moment—it is not only the ordinary shares and the ordinary capital that are at risk, but the whole assets of the company.
    If the minds of directors and those who are responsible—who in this country have traditionally been bold and enterprising and balanced risks very successfully—there is induced the idea that to take those risks is a very bad bet, very soon the economy, not only of this country but of all the countries which have depended for their development on capital exported from this country, will gradually be brought to a standstill. No clearer indication could have been given than that given by Lord Reith in his Report on the Colonial Development Corporation.
    It is perfectly clear that at the present moment the path of the directors is very different from that which existed in the era when, because of our development, we had a £2,000 million cushion with which to take the shock at the beginning of the last war. It was a 220 yards race with a nice prize at the end then. Now it is an obstacle race, with new obstacles being interposed at every period, and the prize is probably a lemon or a groundnut.
    The Chancellor of the Exchequer should really think of the dangers that he is running on long-term development by the state of mind which he is inducing and forcing upon those who have to look after these things. If a person goes to the race course and permanently backs outsiders, he may be very lucky over a short period during which he has golden success and is envied for his brilliance by all around him. But as a long-term financial policy, no serious board of
    1146
    directors could possibly continue on that path.
    At the present moment the companies which are developing the overseas markets that allow us to export the manufactured goods of this country, and attempt in some way to balance our trade, are committed in many instances to heavy local taxation, not all of which is set off against taxation here, to heavy taxation in this country and to depreciation which they cannot easily meet out of their normal revenue. Therefore, when the position is put before the directors at a board meeting—and that is the moment when a decision has to be taken on risk capital—they must say to themselves: "I, with a sense of responsibility on behalf of those who are investing their money in this company"—and it is they whose capital is being risked—"cannot take this risk. The political horizon is cloudy. If it were an even risk and taxation were not such a burden and if I were not pointed out, as in a later Clause of the Finance Bill, as being a villain of the deepest dye because I am a director of a company, I would take this risk." The average director, whether he knows it or whether he does not, recoils now from the risk that he would have taken before.
    There is a much worse effect. There is no new class of young people growing up to inherit the very great art of employing risk capital. The City of London is predominant over any other city in the world in doing that. If this lost art of taking a business risk with capital is too much suppressed and those who are responsible for policy in every sort of company are hedged round as they are at present, what will be the result?
    The right hon. Gentleman is trying to freeze capital in this country and stop its export. What he cannot do is stop the export of the brains and knowledge which know how to use that capital. It is the high rate of taxation on individuals and the enormous weight which is put upon them as administrators of public money entrusted to them which is driving them out of this country. [An HON. MEMBER: "Where to?"] To a great many places in the British Empire which will welcome them, and which will give them a much better deal than they get here in many ways; and to many other countries.
    Mr. Manuel: What about Florence Nightingale?
    Mr. Fletcher: Florence Nightingale had a lamp which had a flame in it, and the hon. Gentleman is much too smoky to recognise it. I would commend to the Chancellor, if his only plea is that he is losing capital rapidly—
    The Chancellor of the Exchequer (Mr. Gaitskell)The Chancellor of the Exchequer (Mr. Gaitskell) indicated dissent.
    Mr. Fletcher: The right hon. Gentleman nods his head repudiating it. [Interruption.] Those behind him the other day jeered at him because he gave a concession which meant that the highest grade of taxpayer would not have to pay 21s. in the pound. It is not the individual, and the jealousy of the success that he may be having through his own brain and incentive, that matters; it is that we have largely broken down the desire and the possibility of the proper use of risk capital.
    10.30 p.m.
    We are an entrepot country; our greatest exports have always been our invisible exports. The greatest impact of high taxation and the evil that springs from it is the slowing down and killing of our invisible exports. The Chancellor can argue that it is necessary to get the taxation. That seems to be a panacea today. It seems to be a reproach against hon. Members on this side if they criticise any course without immediately suggesting something to take the place of the taxation which they think is wrong. That is a foolish and childish attitude. The Opposition are fulfilling their function when they put forward these criticisms. It is not their duty to suggest directly the substitutes. I hope they will continue on the same path.
    In my final word I would say to the Chancellor that I believe that in his heart of hearts he knows that he will not be able to finance the expense of the necessary development of markets and the carrying out of the promises to people to whom we are giving political advancement without giving them the same degree of economic advancement—all the development that is necessary if we do not want to deal in the markets of other countries outside. If he is hamstringing the whole of that endeavour, we in this little island, unable to produce more of
    1148
    what we need in the way of foodstuffs and raw materials, will go into a steady decline to a degree which it is difficult to realise at this moment with all the rosy clouds around us, but which, when the mist clears away, will be seen clearly. This obstacle, and all the other obstacles, to freedom that the Chancellor introduces in this Budget are some of the most shameful pieces of legislation this Committee has seen.
    Mr. Lyttelton: We are not making very rapid progress, and I shall try so far as possible to keep my remarks short. Naturally, little discussion is necessary about the methods of raising revenue through Income Tax, which is covered by this Clause. It is a traditional method, which has this one merit: it is levied on profits after they have been made and not, like Entertainments Duty and rates, on profits before they are made. I wish to begin by discussing the effect of Income Tax at its present level on business and industry, and I shall go on later to say something about its effect on the individual.
    First of all, let me take the effect upon the prices at which we are able to offer our goods. Though this is not immediately affected by a rise in Income Tax, it is gravely affected at long term. The indirect effect of Income Tax at this crippling rate must be making it extremely difficult, if not impossible, for our business and industry to keep their plant and equipment in a modern enough condition to meet international competition from whatever source it comes. If that be true, it is all the more true that its chances of expanding become very small.
    As an industrialist, I should like to add that it is completely repugnant to my ideas that we should ask the most highly skilled body of workmen in the world to work with anything but the best tools. At the present rates of tax, industry must lose sight of modern equipment, and the great expansion of industry and production which is the first necessity of our national life today will be impossible.
    I now turn to a matter which is germane to the whole subject—namely, that Income Tax at 9s. 6d. in the £ accelerates the depletion of industrial capital at an unpardonable rate at a time when all concerned in these matters are deeply anxious, and at a time when we should be trying

    1149
    to build up further industrial capital to meet the finance necessitated by the higher prices we see all round.
    I must at this moment refer to the subject of taxable capacity. My right hon. Friend the Member for Ormskirk (Sir A. Salter) demolished the arguments which have so far been produced by the Chancellor and the Financial Secretary, and I want to confine my remarks on the subject of taxable resources to a practical issue. The £1,000 million which is claimed to be the taxable resources out of Income Tax would mean raising the standard to 10s., reducing the main income allowances from one-fifth to one-tenth, reducing the personal allowances for single persons from £110 to £80 and of married couples from £180 to £140, and children's allowances from £60 to £55. The hon. Member for The Wrekin (Mr. I. O. Thomas) will find the answer to many of his questions in those figures.
    I should judge that that kind of thing is manifestly impossible in its entirety. The social consequences would be much too grave. Nor should the increase in Income Tax that we are discussing be judged in isolation. It has been estimated that the total amount to be raised in taxes, direct and indirect and local, amounts to nearly £4,330 million this year, and it is well for the Chancellor to realise that cancellation of concessions to the lower paid earners and savers will provide the only source of any substantial revenue still remaining to the Government. That is not my submission; that is on the Government's own admission.
    I want to say at the outset of my remarks that any hopes that are held out to the public—they frequently are—that we can, first of all, re-arm on the scale proposed; secondly, maintain our exports; thirdly, maintain the social services; and, fourthly, enjoy, or suffer—I offer hon. Gentlemen the choice of either word—our present standard of life, are hopes which are certain to prove false.
    I must examine these four claims for a moment. We are to suppose that we are to spend £1,300 million on armaments in 1951–52. I see that Sir Godfrey Ince, in a speech to the Institute of Personal Management, stated that in October, 1950, there were 450,000 persons employed in the manufacture of equipment and supplies for the Armed Services compared
    1150
    with 1,300,000 in 1939, although he afterwards revised the figure to say that we had about 750,000 fewer persons in the munitions industries than we had in 1939.
    We want to hear from the Government what their estimate of the position is today, because it is very germane to the subject of raising tax to meet the bill. What I am asking is whether the Government are convinced that they can spend this money upon armaments during the year 1951–2. I feel that it is at least open to doubt whether in the present state of raw material supplies and manpower we can spend the money mentioned in this financial year; but we have to acknowledge that that is our aim.
    Now, I turn to exports. It is, of course, certain that our exports must suffer because the engineering industries which have made such a large contribution must largely be turned over to munitions. I am afraid that our exports will be a fair measure of the success or failure of the armaments drive. The social services have already been drastically cut by the present Government, not only by the addition of charges, but by the decrease in the value of money. The stamps which were put on the cards in 1947 are worth far, far less in benefits than when they were first stuck on. The social services are being cut every day by the Government in the easy way, by just letting the sums contributed buy ever less and less. Lastly, the standard of living is falling and will continue to fall, and this fact is openly admitted by the Government, although the Chancellor seeks to say in some public utterances that the immediate effects will be small.
    Faced by the need to re-arm and by the menace of war, a well-managed State would have had a reserve of taxable resources on which to draw. If that well-managed State had been a prudent spender it would have seen that it got £1 worth for every £1 spent, and the natural expectation would be for some increase of taxation out of reserves of taxable resources, and perhaps for some increase in the Income Tax. But our State has not been prudently managed, so that the ability to raise further taxes is small; and the effect of the present rise will also bear very hardly on the individual. I must discuss shortly the effect upon the individual.

    1151
    We, on these benches, welcome very much the increases in the allowances for married couples with children. They are quite substantial allowances, and the increased burden will not fall in the main upon those with family responsibilities. It will fall upon the single wage earner and salary earner, upon the single people living on fixed incomes and pensions; and, of course, it will fall—as it goes without saying under a Socialist regime—upon the managers and technicians upon whose success and initiative our industrial future depends.
    Let me quote some figures showing how the present tax and the proposed new tax bears on people over the age of 65, taking into account the one-fifth age allowance. For those with an income of £4 a week, the increase amounts to 25s. a year—not perhaps very heavy. But at £6 it is £3 5s.; at £8 about £5 a year, and at £10 something over £7 5s. In these times those are serious increases for people trying to live on these very marginal incomes. I also remind the Committee how the increased tax falls on a single person among the lower paid workers. It is true it is only 5s. a year beginning at £3 a week. It then rises to £2 5s. on an income of £5 a week, and about £4 5s. on what we might call the average industrial earnings of £7 a week.
    The significance of these figures becomes all the more striking when they are read against the background of the Government claim that there is a reserve of taxable resources of £1,000 million a year; because we can only get that reserve of taxable resources by the cancellation of these allowances all down the line. There was a time when trades unionists and hon. Members opposite used to favour no increase in taxation being made without an increase in direct taxation, for the human and understandable reason that the contributions made by their members, and by those who, in the main, they represented, would thereby be greatly decreased; other people, in the main, would find the money—shoulders better able to bear the burden would carry it, They subscribed to the doctrine that taxation in the higher scale is bearable only if other people pay it.
    There is no comfort in that doctrine today, because the yield from Income Tax—I am quoting from Table II of the
    1152
    Financial Statement—amounted to £1,404 million in 1950–51, while the yield from Surtax amounted to £121 million. The yield from Income Tax in a single year exceeded the yield from Surtax by £1,283 million, so do not let hon. Members opposite lose sight of the fact that Income Tax, like death, has become classless.
    10.45 p.m.
    Today, we are the most heavily taxed nation in the world. I cannot help referring to something which, when I heard it, I did not regard as trivial, and the more I hear of it the more serious I find it. The Chancellor referred to a certain tax as being overdue, and I heard that with more surprise than bitterness. For our people, no increase in tax is overdue; what is overdue is any attempt by the Government to cut down its own extravagance in any serious way.
    The proposal to raise the standard rate by 6d. in the first year of the re-armament programme is indeed a very grim proposal, and it must be remembered that our expenditure on armaments is going to rise very steeply in the second and third years—1952–53 and 1953–54. If our affairs and finances had been prudently managed by the right hon. Gentleman's predecessors, we could certainly have financed the first year's armament programme without anything like the increase now proposed, and perhaps without any increase. [HON. MEMBERS: "Oh."]
    We cannot, however, re-write the history of the last six years, but must face the realities of the day. What we can and must do is to see that the Government tackles the subject of its expenditure now and starts pruning now. [Interruption.] Hon. Members complained that a speech by my right hon. and gallant Friend the Member for Leicester, South-East (Captain Waterhouse) went on too long, but the whole speech was devoted to detailed economies which the Government could make. Perhaps they would like him to repeat it. I recommend hon. Members to read it. It is not a question of whether they like it or not; they have got to tackle it now, because only in that way can we avoid any further burden, which I think would become intolerable, being added to the weight the people are being asked to bear.

    1153
    I want to discuss at no great length the effect of this savage rate of tax on incentive, reward, the profit motive—to which the Chancellor of the Exchequer made some genuflexion the other day—and upon the national economy. Taxation at its present level is distorting the whole national life. I referred during the Second Reading of the Bill to the need for bonuses for extra efforts and premiums on success. Instead of that we have fines—fines on overtime, fines on high earnings and fines on profits, which are greatly in the national interest. Does anyone deny that? They do not.
    What I want hon. Members opposite to realise is that it is demonstrable that the top layers of taxation are raised, not for revenue purposes at all, but merely for punishment. "If you earn a lot of money," say the Government, "as a lawyer, as a surgeon, a doctor, an actor, an author, a singer, or company director, we will jolly well soon teach you not to."
    I shall try to give simple proof of this. Here it is, and I hope hon. Members will be a little surprised by the figures. If a law were passed to say that no one in the country had to pay any direct taxation, Income Tax and Surtax, at more than 15s. in the £—and I shall be glad to be corrected afterwards if I am £1 million or £2 million out—then, as near as I can calculate, it would cost the Exchequer £16 million a year—about 1½d. on the Income Tax. Compare that £16 million with the £4,333 million which has to be raised in taxation.
    It is upon those figures that I based my statement, which I repeat, that the top levels of taxation are not intended for revenue purposes at all but as punishment. They are intended as punishment on success at a time when what we want is private enterprise and the urge to increase our national wealth. [Interruption.] I quite understand how very distasteful the figures will be to hon. Members opposite, but I hope they will receive them in the proper spirit.
    Mr. I. O. Thomas Mr. I. O. Thomas rose—
    Mr. Lyttelton: No, the hon. Member has had a very good run. I should be very glad to give way to the hon. Member if I could feel any assurance that the interruption would be relevant to the sub-
    1154
    ject, but my experience teaches me that it would not be.
    Mr. Thomas: Will the right hon. Gentleman allow me?
    Mr. Lyttelton: Oh, very well.
    Mr. Thomas: When the right hon. Gentleman says that Income Tax is not relevant to the national income and claims that those paying the higher level of Income Tax are entitled to special consideration, are we to take it that it will be one of the first parts of Tory policy to lighten the burden of these people if they are returned to power?
    Mr. Lyttelton: The hon. Member is entitled to any flights of fancy which the Labour Party or his particular views suggest. But that type of taxation raises only £16 million out of a Budget total of £4,000 million. I strongly recommend the hon. Member to wait for the Budget that will be introduced next year by the Conservative Party. If he has the good fortune to hold his seat, which I think is doubtful, he will have the good luck of being able to criticise the proposals.
    Incentive and hard work are cancelled by this penal taxation. I believe that there could be a higher yield from the "soak-the-rich" policy if some incentive were left. I think the punishment motive, beside being inequitable and unfair, is silly. It is hard nowadays to get lawyers to take briefs, to get doctors to take out appendices, for directors to take on new commitments, managers to take new responsibilities, or anyone else to make any effort at all. It is this deadening doctrine of trying to level out everything that is responsible. It is sapping the vitality of this trading nation that is largely carried on by the momentum of ideas which it has inherited, ideas which are extremely repugnant to the present Government.
    A new generation is growing up, and it cannot be blamed if it looks twice at working overtime when it has to give up a large part of its earnings and is unwilling to take responsibility because it has no chance of adequate reward. It is all very well for the hon. Member to laugh, but those who run large companies now know that it is difficult to get people to take the higher responsibilities when they get no commensurate reward. I would be so bold as to put my industrial

    1155
    experience against that of the hon. Member. These rates of taxation are also poison to the ideas of personal thrift and saving.
    The figures of net small savings for the last five financial years have been: in 1946–47, plus £324 million; in 1947–48, plus £189 million; in 1948–49, plus £37 million, and in 1949–50, minus £68 million; in 1950–51, minus £90 million. That is one of the reasons why my right hon. Friend describes the rise in Income Tax as being not wholly disinflationary, to use the jargon of Sir Stafford Cripps. I accuse the Government of gross mismanagement of our national affairs, and I urge them to economise now, before the value of the £ takes another lurch downwards. I would remind the Committee that this is the highest level at which tax has ever run in peace-time.
    I now conclude with some remarks concerning inflation. Too often the social consequences of inflation are ignored or underrated. But inflation, and the rise in prices which accompany it, work most unfairly between one class and another. Inflation is the deadliest poisoner of course for all those who live on fixed incomes—the civil servants, all the official classes, teachers and professors, all those living on the proceeds of their past thrift, pensions, and so forth. The entrepreneur and the wage earner are least affected because economic facts adjust their earnings to the spiral of inflation. But even then, their wages and earnings are slow to adjust themselves to the spiral, and during the time the adjustment is taking place they suffer very great hardships. All we can say is that inflation is less likely completely to destroy the wage earner or the entrepreneur class. It does inflict the greatest hardship upon them.
    Are we at this moment in an inflation? I shall be very short and give three or four figures. One sentence from the Economic Survey of Europe of the O.E.E.C. reads:
    "There can be small doubt that if our import prices rise any further the rise in the cost-of-living is bound to be very considerably greater than was apparently assumed when the Economic Survey for 1951 was written."
    The cost-of-living price index stood at 111 in April, 1950. In April, 1951, it was 121, but the wholesale prices were 246.2 in April, 1950, and 314.1 in April, 1951.
    1156
    So it is quite clear that we are now in a galloping inflation. I have seen myself the effects of such a galloping inflation in Germany, and no one with the least humanity could fail to be impressed by the horrible tragedies it brings in its train. I think it is undeniable that the gaining of £73 million in a full year is to some extent disinflationary. I do not subscribe to the theory that all increases in taxation are inflation, and I agree with what my right hon. Friend said that the deflationary effect of rises in taxes now are far less than we should like to see, far less than they should be if our economy had been properly managed. These figures prove the point.
    I suppose no one would deny that if we are successful in our re-armament programme there will be a steady decrease, becoming more acute as time goes on, in consumer goods available for civilians, and that by taking £73 million in a full year from the taxpayers some deflationary effect will be produced—some decrease in the amount of money chasing an ever-decreasing supply of goods.
    It is with at one and the same time a deep sense of the way our affairs have been managed in the past, but also with a deep sense of responsibility, that we must not neglect even a partial deflationary measure, that I propose to advise my right hon. and hon. Friends to let this Clause go without a Division. We feel we shall have done our duty in discussing it. [Interruption.] I see nothing funny in it whatever. The hon. Gentleman can gain what pleasure he likes out of it. We have done our duty when we point out that the national economy is distorted by taxes at these rates.
    It is necessary to have an entirely new approach to the whole of our economic problems, and the true weapon against inflation is increased production, not mentioned by the Chancellor in his Budget speech, and increased incentive. But the sombre realities of today, when we are already in the third month of the financial year, which imposed these taxes, have to be faced. We cannot re-write the history of the last six years. It is with great reluctance that I advise my right hon. and hon. Friends to let this Clause go. The plain fact is that no patching can be done now. What is required is not new taxes or new measures, but a new Government.
    11.0 p.m.
    The Chancellor of the Exchequer (Mr. Gaitskell): The right hon. Gentleman the Member for Ormskirk (Sir A. Salter) made what I thought was a very moderate speech in opening this debate. It was rather gloomy in content and was delivered, unfortunately, to a thin House, but it seemed to me to set a fairly high standard. I cannot feel, however, that the standard was always upheld by everyone. It deteriorated quite a lot, and that goes for the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), whose speech I shall come to later on.
    First of all, I want to reply to some of the questions which the right hon. Gentleman the Member for Ormskirk put. He spent some time complaining that what my hon. Friend the Financial Secretary and I have said about the taxable capacity of the nation was inaccurate. I do not think that there is really a great deal of difference between us. The facts are not disputed by the right hon. Gentleman. He said we ought to have explained that there has been a change not only in the total money income but also in the price level as well. He will understand that in the course of a lengthy Budget speech one cannot stop and say: "But remember the price level has risen." No one would dispute that there has been such an increase.
    Where I would disagree with the right hon. Gentleman, and where I think he goes much too far, is when he implied that there has been no increase in the real national income at all. That plainly is not so. There has been an increase in production of something like 40 per cent. since 1946, and that is something which clearly has to be taken into account when making the various computations he was making.
    Sir A. Salter: I did not say there had been no rise in the real national income. I said that quite obviously a large part of the difference between the figure of £650 million and £1,000 million was due to the rise in prices, and therefore the description the Chancellor gave of the effect of his reliefs, and subsequently the suggestion of the Financial Secretary, needs very considerable correction if we are to have a just view on these two points.
    Mr. Gaitskell: If, in fact, the right hon. Gentleman is limiting himself to saying
    1158
    that there has been some change in the value of money and a rise in the real national income to the same extent, I do not think there is any difference between us. Neither the Financial Secretary nor I suggested there has been anything attractive in going back over the paths of reducing taxation. Quite obviously, no one wishes to increase taxation or reduce the personal or other allowances. I would go so far as to say that in peace-time it would be an extremely difficult thing to go the whole way. I think that is absolutely true, but that is not the same thing as saying that you have absolutely no reserves to go back on.
    The right hon. Gentleman also did me less than justice when he suggested that I was indifferent to the hardship aspects of direct taxation. I certainly never gave that impression, and I would draw his attention to what I said in my Budget speech and on many other occasions. It is surely reasonable to say: "Yes, we have to impose this taxation, and recognise there will be hardship, but in the international situation"—as the hon. Member for Bolton, East (Mr. Booth) so aptly said—"we must accept it, and accept the hardship too."
    Sir A. Salter: I did not suggest the right hon. Gentleman was indifferent to the hardship. What I did say was that, while his statement that any such marriage allowance was higher than immediately before the war was accurate in the terms in which it was stated, it gave a cruelly wrong impression as to the changes in the reliefs.
    Mr. Gaitskell: I have already answered that question. One cannot stop every half sentence and say, "Well, of course, there has been a change in the value of money." The right hon. Gentleman and other speakers, including the right hon. Member for Aldershot, emphasized what seemed to them to be the adverse effects of Income Tax. Of course, nobody complains that in a debate on an indivdual Clause of this kind attention should be drawn to what hon. Members feel are disadvantages. But I should like to say a few things in reply to these various aspects of the problem.
    First, let me say a word on the effects of Income Tax on work. Some horn. Members feel it is a very serious thing if clever barristers decide not to accept quite

    1159
    so many briefs as before, because they find themselves paying 19s. 6d. in the £, but I wonder if that really is a terrible loss to the community. As a matter of fact, I have heard it said by younger lawyers that it would give them a chance. I have even heard them complain that in spite of the rate of Income Tax and Surtax the cleverer lawyers with established practices do still go on taking briefs. It seems difficult to reconcile that with some of the things that have been said opposite.
    Really, if we take the position of what are roughly called the professional classes today, can it be seriously maintained, for example, that the English stage is any less flourishing than it was before the war, or that in the arts generally there has been any falling back? I should have said that, on the contrary, there is a distinct renaissance in the sphere. If one passes to other professions, do hon. Members opposite really suppose that nowadays there has been a general slackening by very many lawyers and doctors? I find no signs of it. I hear a lot of complaint from some of them of overwork, which is quite a different thing. But to suppose that people who are paid on a salary basis are likely greatly to be influenced by taxation in the direction of working less, is rather unlikely. On the contrary, they are paid so much and they do their job, and if they do not do their job so well as somebody else they will not get on in their profession.
    I would not deny that there are some cases—that of the very experienced barrister has been mentioned—cases of writers, for example, who do make very large sums writing stories and novels and decide that they will write rather fewer than before. Again, I cannot say that I think that a very serious consequence. If we turn to the manual workers, I would remind the Committee that the T.U.C. itself, which is likely to know more about this than most people, have recently said that they do not believe the effects of P.A.Y.E. on overtime or work are at all serious. Therefore, I cannot see that there is a great deal of effect here.
    The fact is that people's motives for working are a good deal more complicated than hon. Members opposite think They are interested, of course, in earning
    1160
    their living in the ordinary way, but they are interested in all sorts of other things—family responsibility, ambition, power—and all these factors come into the picture as well. I do not believe there are very serious consequences of taxation here.
    A great deal has been made of the consequences on capital investment. At first hearing it sounds extraordinarily convincing. The hon. Member for Bury and Radcliffe (Mr. W. Fletcher) drew a very gloomy picture of the way in which nobody was prepared to invest any money in industry, of how disastrous the consequences were going to be to our export trade, and of how short industry was of capital. All this is in complete conflict with what has been happening these last few years. We have had an extraordinarily high rate of capital investment.
    Our problem in restraining inflation at the moment at home is, not wholly but to a considerable extent, to prevent too many orders going to the investment industries. That is the reason we have found it necessary this year to suspend the initial allowances. Does that look as though there was any shortage of capital for industry, or any disinclination to spend money on modernising plant? There really is no sign of that. The theory is miles from reality.
    The hon. Member for Flint, West (Mr. Birch) considered that the definition of profits by the Inland Revenue was such that it must involve a steady running down of capital. He suggested that there should be a new arrangement by which taxation should be levied on what he called true profits. I would only point out that we have recently had the Tucker Committee reporting on this matter. I do not want to go into details—we shall no doubt have another opportunity for discussing this matter—I need only say now that they came to a completely different conclusion.
    Mr. Birch: The Tucker Committee recommended increased allowances for industry.
    Mr. Gaitskell: That has nothing to do with it. I am talking about the definition of profit, and their conclusion is totally different from that of the hon. Member. They support the definition of the Inland Revenue. [Interruption.] It is not in the

    1161
    least dishonest. It is well known. The right hon. Gentleman probably has not read the Report. If he does he will find that what I have said is true. [An HON. MEMBER: "Another lecture."] Some people deserve a lecture occasionally. Heaven knows, we have had quite a lot of lectures from Members opposite.
    The second point I was going to make is that the hon. Member is, in fact suggesting that the definition should be altered so as to take away less in taxation from companies. At the same time, he seemed to be disavowing any intention that he was going to alter the position of the shareholders. My hon. Friend the Member for Edmonton (Mr. Albu) pointed out fairly [Laughter]—hon. Members tried to laugh him out of it, but they failed completely—that a consequence of leaving ordinary shareholders with a great deal more was bound to be a further boom in equity prices. That apparently is about the only contribution the hon. Member for Flint, West makes to this Debate. He really thinks that the salvation of the country depends on letting ordinary shareholders have more money.
    Mr. Birch: But to raise or maintain their assets the companies must have more capital. Does the right hon. Gentleman agree with that?
    Mr. Gaitskell: If by raising more capital the hon. Member means borrowing more money, I should think he is right, and that is exactly what the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) said later.
    Mr. Lyttelton: Really, raising capital and borrowing money are not synonymous terms. The right hon. Gentleman will learn that later on, no doubt.
    11.15 p.m.
    Mr. Gaitskell: They certainly are synonymous terms sometimes, as the right hon. Gentleman knows perfectly well. It is apparently the view of the Opposition that at this moment, when they are complaining of the dangers of inflation, talking about prices going up, and drawing attention to the position on the Stock Exchange, that the remedy for all this is to let the shareholders keep more in the way of profits. Is that really a serious contribution? I can think of nothing likely to increase inflation more rapidly.
    1162
    The right hon. Gentleman the Member for Ormskirk has spoken about the effects of taxation on saving, and he argued that with an Income Tax rate of 5s. or 5s. 6d. in the £ it would not make very much difference whether we put on 6d. or not. But, he said, when we get up to 9s. and 9s. 6d.—as I understand the argument—that is going to have serious consequences on the rate of saving. I do not agree with that. I think that whether or not taxation has inflationary effects—that is to say, whether it leads to dissaving, and whether it fails to mop up purchasing power—depends really on whether the people taxed are determined to maintain their standard of living and draw on their savings to do so. If they are, and they draw on their savings, of course it follows in those circumstances that they will spend money and that we shall not cut down their consumption.
    Mr. Lyttelton: They have to eat.
    Mr. Gaitskell: Yes, but they should give up a few luxuries. That is the intention. What the right hon. Gentleman is saying is that the rich are so determined to maintain their standard of living that they will not give anything up.
    Mr. Lyttelton: I am sorry the right hon. Gentleman should seek to raise prejudice in such an obvious way. One of the reasons why small savings are less is that people like to eat, and they have to realise their savings in order to keep any standard of living.
    Mr. Gaitskell: The other contribution of the right hon. Gentleman to the solution of our fiscal problems was to reduce the taxation of those with £15,000 a year and over. He recommended that in his speech. He said that after all it would cost only £16 million: we could give them bonuses, and they are worth it.
    Mr. Lyttelton: The right hon. Gentleman is not entitled to misquote and distort what I said. I never said anything of the kind. If he wishes to know what I said I refer him to HANSARD. The whole of his speech is based on misrepresentation.
    Mr. Gaitskell: If the right hon. Gentleman did not in fact mean that we should relieve the taxation of those with £15,000 a year and over, why on earth did he bring it up at all? It just does

    1163
    not make sense. He actually took the trouble to find out what it would cost the Exchequer. Of course, if he wishes to withdraw that proposal I have no objection.
    We come finally to the last proposal—a proposal which always comes up as the sole constructive remedy, and that is that we should reduce expenditure. This is the way in which the right hon. Gentleman proposes to solve the whole of our problem. He has not, of course, told us what he proposes to reduce. He referred to a speech of the right hon. and gallant Gentleman the Member for Leicester, South-East (Captain Waterhouse), but he failed to remind the Committee that the right hon. and gallant Gentleman's suggestions were at once repudiated by his own Front Bench. Unfortunately, the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) does not seem to be here. I refer the right hon. Gentleman the Member for Aldershot to HANSARD, where he will see precisely what was said.
    Mr. Lyttelton: Since the right hon. Gentleman persists in continuing in this
    strain, I must interrupt him. He said all the proposals of my right hon. and gallant Friend were repudiated by the Opposition. There were one or two; not more.
    Mr. Gaitskell: Certainly all the main ones that would bring in all the money were—for example, the abolition of any subsidy for children's meals. Really, the right hon. Gentleman cannot be allowed to get away with these facile explanations of how they would do it. The fact is that it is the Opposition's view that we should not in these last years have developed the social services in the way we have. [HON. MEMBERS: "Nonsense."] Oh, yes. With the result that now we should have lower rates of taxation and it would be very much easier to raise revenue.
    The Parliamentary Secretary to the Treasury (Mr. William Whiteley)The Parliamentary Secretary to the Treasury (Mr. William Whiteley) rose in his place and claimed to move, "That the Question be now put."
    Question put, "That the Question be now put."
    The Committee divided: Ayes, 293; Noes, 287.

    Division No. 85.]

    AYES

    [11.25 p.m.

    Acland, Sir Richard

    Chetwynd, G. R.

    Field, Capt. W. J.

    Adams, Richard

    Clunie, J.

    Finch, H. J.

    Albu, A. H.

    Cocks, F. S.

    Fletcher, Eric (Islington, E.)

    Allen, Arthur (Bosworth)

    Coldrick, W.

    Follick, M.

    Allen, Scholefield (Crewe)

    Collindridge, F.

    Foot, M. M.

    Anderson, Alexander (Motherwell)

    Cook, T. F.

    Forman, J. C.

    Anderson, Frank (Whitehaven)

    Cooper, Geoffrey (Middlesbrough, W.)

    Fraser, Thomas (Hamilton)

    Awbery, S. S.

    Cooper, John (Deptford)

    Freeman, John (Watford)

    Bacon, Miss Alice

    Corbet, Mrs. Freda (Peckham)

    Freeman, Peter (Newport)

    Baird, J.

    Cove, W. G.

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

    Balfour, A.

    Craddock, George (Bradford, S.)

    Ganley, Mrs. C. S.

    Barnes, Rt. Hon. A. J.

    Crawley, A.

    Gibson, C. W.

    Bartley, P.

    Crosland, C. A. R.

    Gilzean, A.

    Bellenger, Rt. Hon. F. J.

    Crossman, R. H. S.

    Glanville, James (Consett)

    Benn, Wedgwood

    Cullen, Mrs. A.

    Gooch, E. G.

    Benson, G.

    Daines, P.

    Gordon-Walker, Rt. Hon P. C.

    Beswick, F.

    Dalton, Rt. Hon. H.

    Greenwood, Anthony (Rossendale)

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

    Darling, George (Hillsborough)

    Greenwood, Rt. Hon. Arthur (Wakefield)

    Bing, G. H. C.

    Davies, A. Edward (Stoke, N.)

    Grenfell, D. R.

    Blenkinsop, A.

    Davies, Harold (Leek)

    Grey, C. F.

    Blyton, W. R.

    Davies, Stephen (Merthyr)

    Griffiths, David (Rother Valley)

    Boardman, H.

    de Freitas, Geoffrey

    Griffiths, Rt. Hon. James (Llanelly)

    Booth, A.

    Deer, G.

    Griffiths, William (Exchange)

    Bottomley, A. G.

    Delargy, H. J.

    Gunter, R. J.

    Bowden, H. W.

    Dodds, N. N.

    Hale, Joseph (Rochdale)

    Bowles, F. G. (Nuneaton)

    Donnelly, D.

    Hale, Leslie (Oldham, W.)

    Braddock, Mrs. Elizabeth

    Driberg, T. E. N.

    Hall, John (Gateshead, W.)

    Brook, Dryden (Halifax)

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

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Brooks, T. J. (Normanton)

    Dye, S.

    Hamilton, W. W.

    Broughton, Dr. A. D. D.

    Ede, Rt. Hon. J. C.

    Hannan, W.

    Brown, Rt. Hon. George (Belper)

    Edelman, M.

    Hardman, D. R.

    Brown, Thomas (Ince)

    Edwards, John (Brighouse)

    Hardy, E. A.

    Burke, W. A.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hargreaves, A.

    Burton, Miss E.

    Edwards, W. J. (Stepney)

    Harrison, J.

    Butler, Herbert (Hackney, S)

    Evans, Albert (Islington, S. W.)

    Hastings, S.

    Callaghan, L. J.

    Evans, Edward (Lowestoft)

    Hayman, F. H.

    Carmichael, J.

    Evans, Stanley (Wednesbury)

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

    Castle, Mrs. B. A.

    Ewart, R.

    Herbison, Miss M.

    Champion, A. J.

    Fernyhough, E.

    Hewitson, Capt. M.

    Hobson, C. R.

    Mathers, Rt. Hon. G.

    Snow, J. W.

    Holman, P.

    Mellish, R. J.

    Sorensen, R. W.

    Holmes, Horace (Hemsworth)

    Messer, F.

    Soskice, Rt. Hon Sir Frank

    Houghton, D.

    Middleton, Mrs. L.

    Sparks, J. A.

    Hoy, J.

    Mikardo, Ian

    Steele, T.

    Hubbard, T.

    Mitchison, G. R.

    Stewart, Michael (Fulham, E.)

    Hudson, James (Ealing, N.)

    Moeran, E. W.

    Stokes, Rt. Hon. R. R.

    Hughes, Emrys (S. Ayrshire)

    Monslow, W.

    Strachey, Rt. Hon. J.

    Hughes, Hector (Aberdeen, N.)

    Moody, A. S.

    Strauss, Rt. Hon. George (Vauxhall)

    Hughes, Moelwyn (Islington, N.)

    Morgan, Dr. H. B.

    Stross, Dr. Barnett

    Hynd, H. (Accrington)

    Morley, R.

    Summerskill, Rt. Hon. Edith

    Hynd, J. B. (Attercliffe)

    Morris, Percy (Swansea, W.)

    Sylvester, G. O.

    Irvine, A. J. (Edge Hill)

    Mort, D. L.

    Taylor, Bernard (Mansfield)

    Irving, W. J. (Wood Green)

    Moyle, A.

    Taylor, Robert (Morpeth)

    Isaacs, Rt. Hon. G. A.

    Mulley, F. W.

    Thomas, David (Aberdare)

    Janner, B.

    Murray, J. T.

    Thomas, George (Cardiff)

    Jay, D. P. T.

    Nally, W.

    Thomas, Iorwerth (Rhondda, W.)

    Jeger, George (Goole)

    Neal, Harold (Bolsover)

    Thomas, Ivor Owen (Wrekin)

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

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

    Thorneycroft, Harry (Clayton)

    Jenkins, R. H.

    O'Brien, T.

    Thurtle, Ernest

    Johnson, James (Rugby)

    Oldfield, W. H.

    Timmons, J.

    Johnston, Douglas (Paisley)

    Oliver, G. H.

    Tomney, F.

    Jones, David (Hartlepool)

    Orbach, M.

    Turner-Samuels, M.

    Jones, Frederick Elwyn (West Ham, S.)

    Padley, W. E.

    Ungoed-Thomas, A. L.

    Jones, Jack (Rotherham)

    Paget, R. T.

    Usborne, H.

    Jones, William Elwyn (Conway)

    Paling, Rt. Hon. Wilfred (Dearne Vally)

    Vernon, W. F.

    Keenan, W.

    Paling, Will T. (Dewsbury)

    Viant, S. P.

    Kenyon, C.

    Pannell, T. C.

    Wallace, H. W.

    Key, Rt. Hon. C. W.

    Pargiter, G. A.

    Watkins, T. E.

    King, Dr. H. M.

    Parker, J.

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

    Kinghorn, Sqn. Ldr. E.

    Paton, J.

    Weitzman, D.

    Kinley, J.

    Pearson, A.

    Wells, Percy (Faversham)

    Lang, Gordon

    Peart, T. F.

    Wells, William (Walsall)

    Lee, Frederick (Newton)

    Poole, C.

    West, D. G.

    Lee, Miss Jennie (Cannock)

    Porter, G.

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

    Lever, Harold (Cheetham)

    Price, Philips (Gloucestershire, W.)

    While, Mrs. Eirene (E. Flint)

    Lever, Leslie (Ardwick)

    Proctor, W. T.

    White, Henry (Derbyshire, N. E.)

    Lewis, Arthur (West Ham, N.)

    Pryde, D. J.

    Whiteley, Rt. Hon. W.

    Lewis, John (Bolton, W.)

    Pursey, Cmdr. H.

    Wilcock, Group Capt. C. A. B.

    Lindgren, G. S.

    Rankin, J.

    Wilkes, L.

    Logan, D. G.

    Rees, Mrs. D.

    Willey, Frederick (Sunderland)

    Longden, Fred (Small Heath)

    Reeves, J.

    Willey, Octavius (Cleveland)

    McAllister, G.

    Reid, Thomas (Swindon)

    Williams, David (Neath)

    MacColl, J. E.

    Reid, William (Camlachie)

    Williams, Rev. Llywelyn (Abertillery)

    McGhee, H. G.

    Rhodes, H.

    Williams, Ronald (Wigan)

    McGovern, J.

    Richards, R.

    Williams, Rt. Hon. Thomas (Don Valley)

    McInnes, J.

    Robens, A.

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

    Mack, J. D.

    Roberts, Goronwy (Caernarvonshire)

    Wilson, Rt. Hon. Harold (Huyton)

    McKay, John (Wallsend)

    Robertson, J. J. (Berwick)

    Winterbottom, Ian (Nottingham, C.)

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

    Robinson, Kenneth (St. Pancras, N.)

    Winterbottom, Richard (Brightside)

    McLeavy, F.

    Rogers, George (Kensington, N.)

    Wise, F. J.

    MacMillan, Malcolm (Western Isles)

    Ross, William (Kilmarnock)

    Woodburn, Rt. Hon. A.

    McNeil, Rt. Hon. H.

    Royle, C.

    Woods, Rev. G. S.

    MacPherson, Malcolm (Stirling)

    Shurmer, P. L. E.

    Wyatt, W. L.

    Mainwaring, W. H.

    Silverman, Julius (Erdington)

    Yates, V. F.

    Mallalieu, E. L. (Brigg)

    Silverman, Sydney (Nelson)

    Younger, Hon. K.

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

    Simmons, C. J.

    Mann, Mrs. Jean

    Slater, J.

    TELLERS FOR THE AYES:

    Manuel, A. C.

    Smith, Ellis (Stoke, S.)

    Mr. Popplewell and Mr. Wilkins.

    Marquand, Rt. Hon. H. A.

    Smith, Norman (Nottingham, S.)

    NOES

    Aitken, W. T.

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

    Clarke, Brig. Terence (Portsmouth, W.)

    Alport, C. J. M.

    Boothby, R.

    Clyde, J. L.

    Amery, Julian (Preston, N.)

    Bossom, A. C.

    Colegate, A.

    Amory, Heathcoat (Tiverton)

    Boyd-Carpenter, J. A.

    Conant, Maj. R. J. E.

    Arbuthnot, John

    Boyle, Sir Edward

    Cooper, Sqn. Ldr. Albert (Ilford S.)

    Ashton, H. (Chelmsford)

    Bracken, Rt. Hon. B.

    Cooper-Key, E. M.

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

    Braine, B. R.

    Corbett, Lt.-Col. Uvedale (Ludlow)

    Astor, Hon. M. L.

    Braithwaite, Sir Albert (Harrow, W.)

    Craddock, Beresford (Spelthorne)

    Baker, P. A. D.

    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)

    Cranborne, Viscount

    Baldock, Lt.-Cmdr. J. M.

    Bromley-Davenport, Lt.-Col. W.

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

    Baldwin, A. E.

    Brooke, Henry (Hampstead)

    Crosthwaite-Eyre, Col. O. E.

    Banks, Col. C.

    Browne, Jack (Govan)

    Crouch, R. F.

    Baxter, A. B.

    Buchan-Hepburn, P. G. T.

    Crowder, Capt. John (Finchley)

    Beamish, Major Tufton

    Bullock, Capt. M.

    Crowder, Petre (Ruislip—Northwood)

    Bell, R. M.

    Bullus, Wing Commander E. E.

    Cundiff, F. W.

    Bennett, Sir Peter (Edgbaston)

    Burden, F. A.

    Cuthbert, W. N.

    Bennett, Dr. Reginald (Gosport)

    Butcher, H. W.

    Darling, Sir William (Edinburgh, S.)

    Bennett, William (Woodside)

    Butler, Rt. Hon. R. A. (Saffron Walden)

    Davidson, Viscountess

    Bevins, J. R. (Liverpool, Toxteth)

    Carr, Robert (Mitcham)

    Davies, Nigel (Epping)

    Birch, Nigel

    Carson, Hon. E.

    de Chair, Somerset

    Bishop, F. P.

    Channon, H.

    De la Bère, R.

    Black, C. W.

    Clarke, Col. Ralph (East Grinstead)

    Deedes, W. F.

    1166

    1167

    Digby, S. W.

    Langford-Holt, J.

    Redmayne, M.

    Dodds-Parker, A. D.

    Law, Rt. Hon. R. K.

    Remnant, Hon. P.

    Donner, P. W.

    Leather, E. H. C.

    Renton, D. L. M.

    Douglas-Hamilton, Lord Malcolm

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

    Roberts, Emrys (Merioneth)

    Drayson, G. B.

    Lennox-Boyd, A. T.

    Roberts, Major Peter (Heeley)

    Dugdale, Maj. Sir Thomas (Richmond)

    Lindsay, Martin

    Robertson, Sir David (Caithness)

    Duncan, Capt. J. A. L.

    Linstead, H. N.

    Robinson, Roland (Blackpool, S.)

    Dunglass, Lord

    Llewellyn, D.

    Robson-Brown, W.

    Duthie, W. S.

    Lloyd, Rt. Hn. Geoffrey (King's Norton)

    Rodgers, John (Sevenoaks)

    Eccles, D. M.

    Lloyd, Maj. Guy (Renfrew, E.)

    Roper, Sir Harold

    Elliot, Rt. Hon. W. E.

    Lloyd, Selwyn (Wirral)

    Russell, R. S.

    Erroll, F. J.

    Lockwood, Lt.-Col. J. C.

    Ryder, Capt. R. E. D.

    Fisher, Nigel

    Longden, Gilbert (Herts, S. W.)

    Salter, Rt. Hon. Sir Arthur

    Fletcher, Walter (Bury)

    Low, A. R. W.

    Sandys, Rt. Hon. D.

    Fort, R.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Savory, Prof. D. L.

    Foster, John

    Lucas, P. B. (Brentford)

    Scott, Donald

    Fraser, Hon. Hugh (Stone)

    Lucas-Tooth, Sir Hugh

    Shepherd, William

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Lyttelton, Rt. Hon. O.

    Smiles, Lt.-Col. Sir Walter

    Fyfe, Rt. Hon. Sir David Maxwell

    McAdden, S. J.

    Smithers, Peter (Winchester)

    Gage, C. H.

    McCallum, Major D.

    Smyth, Brig. J. G. (Norwood)

    Galbraith, Cmdr. T. D. (Pollok)

    McCorquodale, Rt. Hon. M. S.

    Snadden, W. McN.

    Galbraith, T. G. D. (Hillhead)

    Macdonald, A. J. F. (Roxburgh)

    Soames, Capt. C.

    Gammans, L. D.

    Macdonald, Sir Peter (I. of Wight)

    Spearman, A. C. M.

    Garner-Evans, E. H. (Denbigh)

    Mackeson, Brig. H. R.

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

    Gates, Maj. E. E.

    McKibbin, A.

    Spens, Sir Patrick (Kensington, S.)

    George, Lady Megan Lloyd

    McKie, J. H. (Galloway)

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

    Gomme-Duncan, Col. A.

    Maclay, Hon. John

    Stevens, G. P.

    Granville, Edgar (Eye)

    Maclean, Fitzroy

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

    Gridley, Sir Arnold

    MacLeod, Iain (Enfield, W.)

    Stewart, Henderson (Fife, E.)

    Grimond, J.

    MacLeod, John (Ross and Cromarty)

    Stoddart-Scott, Col. M.

    Grimston, Hon. John (St. Albans)

    Macmillan, Rt. Hon. Harold (Bromley)

    Storey, S.

    Grimston, Robert (Westbury)

    MacPherson, Major Niall (Damfries)

    Strauss, Henry (Norwich, S.)

    Harden, J. R. E.

    Maitland, Cmdr. J. W.

    Stuart, Rt. Hon. James (Moray)

    Hare, Hon. J. H. (Woodbridge)

    Manningham-Buller, R. E.

    Summers, G. S.

    Harris, Frederic (Croydon, N.)

    Marlowe, A. A. H.

    Sutcliffe, H.

    Harris, Reader (Heston)

    Marples, A. E.

    Taylor, Charles (Eastbourne)

    Harvey, Air Cdre. A. V. (Macclesfield)

    Marshall, Douglas (Bodmin)

    Taylor, William (Bradford, N.)

    Harvey, Ian (Harrow, E.)

    Marshall, Sidney (Sutton)

    Teeling, W.

    Harvie-Watt, Sir George

    Maude, Angus (Ealing, S.)

    Teevan, T. L.

    Hay, John

    Maude, John (Exeter).

    Thomas, J. P. L. (Hereford)

    Head, Brig. A. H.

    Maudling, R.

    Thompson, Kenneth Pugh (Walton)

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

    Medlicott, Brig. F.

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

    Heald, Lionel

    Mellor, Sir John

    Thorneycroft, Peter (Monmouth)

    Heath, Edward

    Molson, A. H. E.

    Thornton-Kemsley, Col. C. N.

    Henderson, John (Cathcart)

    Monckton, Sir Walter

    Thorp, Brig. R. A. F.

    Hicks-Beach, Maj. W. W.

    Moore, Lt.-Col. Sir Thomas

    Tilney, John

    Higgs, J. M. C.

    Morrison, John (Salisbury)

    Touche, G. C.

    Hill, Mrs. E. (Wythenshawe)

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

    Turner, H. F. L.

    Hill, Dr. Charles (Luton)

    Mott-Radclyffe, C. E.

    Turton, R. H.

    Hinchingbrooke, Viscount

    Nabarro, G.

    Tweedsmuir, Lady

    Hirst, Geoffrey

    Nicholson, G.

    Vane, W. M. F.

    Hollis, M. C.

    Nield, Basil (Chester)

    Vaughan-Morgan, J. K.

    Holmes, Sir Stanley (Harwich)

    Noble, Cmdr. A. H. P.

    Wade, D. W.

    Hope, Lord John

    Nugent, G. R. H.

    Wakefield, Edward (Derbyshire, W.)

    Hopkinson, Henry

    Nutting, Anthony

    Wakefield, Sir Wavell (Marylebone)

    Hornsby-Smith, Miss P.

    Oakshott, H. D.

    Walker-Smith, D. C.

    Horsbrugh, Rt. Hon. Florence

    Odey, G. W.

    Ward, Hon. George (Worcester)

    Howard, Gerald (Cambridgeshire)

    O'Neill, Rt. Hon. Sir Hugh

    Ward, Miss I. (Tynemouth)

    Howard, Greville (St. Ives)

    Ormsby-Gore, Hon. W. D.

    Waterhouse, Capt. Rt. Hon. C.

    Hudson, Sir Austin (Lewisham, N.)

    Orr, Capt. L. P. S.

    Watkinson, H.

    Hudson, Rt. Hon. Robert (Southport)

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

    Webbe, Sir H. (London)

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

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

    Wheatley, Major M. J. (Poole)

    Hutchinson, Geoffrey (Ilford, N.)

    Osborne, C.

    White, Baker (Canterbury)

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

    Peake, Rt. Hon. O.

    Williams, Charles (Torquay)

    Hutchison, Colonel James (Glasgow)

    Perkins, W. R. D.

    Williams, Gerald (Tonbridge)

    Hylton-Foster, H. B.

    Peto, Brig. C. H. M.

    Williams, Sir Herbert (Croydon, E.)

    Jennings, R.

    Pickthorn, K.

    Wills, G.

    Johnson, Howard (Kemptown)

    Pitman, I. J.

    Wilson, Geoffrey (Truro)

    Jones, A. (Hall Green)

    Powell, J. Enoch

    Winterton, Rt. Hon. Earl

    Joynson-Hicks, Hon. L. W.

    Prescott, S.

    Wood, Hon. R.

    Kaberry, D.

    Price, Henry (Lewisham, W.)

    York, C.

    Kerr, H. W. (Cambridge)

    Prior-Palmer, Brig. O.

    Kingsmill, Lt.-Col. W. H.

    Profumo, J. D.

    TELLERS FOR THE NOES:

    Lambert, Hon. G.

    Raikes, H. V.

    Mr. Studholme and Mr. Vosper

    Lancaster, Col. C. G.

    Rayner, Brig. R.

    Question put accordingly, and agreed to.

    Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Bowden.]
    Captain Crookshank: On that Motion, Major Milner, I am bound to ask the Chancellor of the Exchequer what are his plans with regard to the debating of this Bill. Is it that we are reporting Progress because the Government's majority was

    1169
    so very minute just now that they prefer not to carry on the debate tonight; or is it their intention that we should have an early night tonight so that we may have a series of late nights? I think the Committee is entitled to know because, after all, while you accepted the Motion just now, it was moved from the Government Front Bench, "That the Question be now put," and if the intention was to rise immediately after the Clause had been completed, it seems to me there was no reason why the Government should have moved that Motion when there were several of my hon. Friends wishing to carry on the debate. I thought the intention was to take the Bill a little further before we rose, and I think it is only reasonable to ask the Government what they aim to do, and how they propose to handle the business of the Finance Bill.
    The Secretary of State for the Home Department (Mr. Ede): That is quite a reasonable request to make. We are disappointed at the progress we have managed to achieve so far, but I see no reason for asking the Committee to sit late tonight. We shall, however, certainly ask the Committee to sit until early on Friday morning when we start the Sitting tomorrow.
    Mr. Eccles: Surely it would be better to divide the time. The right hon. Gentleman can see his supporters are as fresh as daisies. It would be better for us to go on for two hours now—[Interruption.]—let us go on for two hours now—
    Sir Richard Acland: And the hon. Member can drive home in his car.
    Mr. Eccles: Hon. Gentlemen have been elected Members of this House and they must make their arrangements accordingly. I am not in the least interested in their transport arrangements; I am interested only in getting this Bill through. Let us get it through in an orderly fashion and give enough time to it. Do hon. Members opposite wish it to go out to the public that they want to cut down the discussion on the grievances of the taxpayers? I appeal to the Leader of the House: let us have another couple of hours tonight, and we shall be in a better state to get through the Bill in an orderly fashion tomorrow.
    Mr. Butcher: I should like to reinforce the plea that we sit for a further two hours tonight and
    1170
    make some further progress with the Bill. In the 14 years in which I have been in the House, I do not think I have ever known two Motions follow one another in this way—that the Closure should be put and that hon. Members representing large numbers of taxpayers should be deprived of their right to speak on the Clause.
    I could understand that the Government would move such a Motion if their intention was to make further progress with other Clauses of the Bill, but, when that Motion has been carried by a miserable majority of six, immediately to move that we report Progress and ask leave to sit again makes it perfectly clear that the Government's intention is to stifle debate and that they are studying solely the comfort and convenience of their own supporters. The hon. Baronet the Member for Gravesend (Sir R. Acland) said that we have cars in which to go home. If anyone living on the south side of London is inconvenienced, I, and I am sure many of my hon. Friends, will be happy to see that they reach their homes.—[Laughter.]—It is all very well for Members opposite to laugh, but I have had the pleasure of taking them home and look forward to a similar pleasure.
    I reinforce the appeal made by the hon. Member for Chippenham (Mr. Eccles) that we continue to discuss the Bill for a further period of, say, two hours and make some substantial progress. I hope that if this Motion is taken to a Division, some of us will vote against it.
    Mr. Henry Strauss: I only wish to ask the Leader of the House two simple questions. The first is whether the sole motive in moving the Closure just now was to prevent an immediate reply to the absurd speech of the Chancellor of the Exchequer. My second question is whether the Closure was moved at the request of the Chancellor, or whether—
    The Chairman: I am sorry, but that question does not arise. The Motion before the Committee is that I do report Progress, and the debate must be limited to that question.
    Mr. Strauss: With apologies, Major Milner. In that case I suggest that the

    1171
    Motion to report Progress should not be accepted because of the conduct in moving the Closure on no reasonable grounds whatever. Surely—
    The Chairman: Order. The statement of the hon. and learned Member is in effect a reflection on the Chair. I accepted the Closure and I cannot, of course, accept any reflection on my so doing.
    Mr. Strauss: Let me at once dispose of that. When you accepted the Closure I assume, and I am perfectly certain, that you had no idea that it was to be followed by the Motion to report Progress. You, Major Milner, very naturally assumed, as did we all, that the object of moving the Closure was to enable us to get on to the following Clauses, which I think the whole Committee was eager to debate.
    Captain Crookshank: As the Leader of the House will see, there is some division of opinion whether it is wise or not for the debate to come to an end and consideration to continue tomorrow. I must thank the right hon. Gentleman for having answered me, because I rose on behalf of my hon. Friends to find out what was the plan for the Finance Bill debates. I found out from him that the Government suggest that we adjourn now and have a longer Sitting tomorrow, it being left undetermined at what time the Government will, as usual, move the Closure of the debate. That is, at any rate, an intelligible plan; but it is not the particular business of the Opposition to facilitate the business of the Government. Therefore, there is no particular reason why we should not adjourn, because by sitting on we should be facilitating the Government's business.
    Mr. Osborne: May I ask the Leader of the House to give us this information? When he says that tomorrow we shall sit rather late, or into the early hours of the morning, does he mean that we shall sit until 2 a.m., or until 10 a.m.? Before I came into the Chamber, I heard that we were likely to sit until 10 a.m. If that is so, I submit that it surely would be better for everyone in the Committee to divide that long Sitting and to sit for another two hours tonight. Will the Leader of the House tell us what he means when he says that we shall sit until the early hours?
    Lieut.-Commander Braithwaite: I think that I can help my hon. Friend. We are working now to a formula which. I understand, the Patronage Secretary was good enough to lay down just before Easter when the question of late Sittings was being discussed. He then said that if hon. Members opposite wanted all-night Sittings, let there be sittings until breakfast time. That is his point of view. The Patronage Secretary being a notoriously late riser, I would predict that tomorrow's Sitting may last until 10 a.m. The right hon. Gentleman having laid that down, may I suggest that there is still three quarters of an hour before public transport stops. As we are on Part 11 of the Bill, which deals with Income Tax, might we not make a little progress with that now?
    Sir Peter Macdonald: I cannot understand that there is any great urgency about adjourning at this early hour. Some of us have been in this House for quite a long time, and we remember that in the past we never expected to go home before midnight when the Finance Bill was being discussed. Unfortunately, this Government is a feather-bedded Government. It starts to think about beds, not at 11 o'clock at night, because I see them sleeping in the Library at 4 o'clock in the afternoon.
    Quite seriously, there are a great many Clauses in this Finance Bill to be dealt with. We are told that the number of days for discussion is limited. Therefore, why should we not make the most of today, for instance? We have still a number of hours which could be used. I am told that the question of transport is worrying hon. Members opposite, but honestly I have never seen so many cars packing New Palace Yard as there are tonight. [HON. MEMBERS: "Ministers' cars."] I have not had a car here for years, but I had one tonight and I could not get any room in New Palace Yard at all. I drove into the Speaker's Court. There was no room at all in the Speaker's Court, and I was told by a policeman that it was reserved for Ministers' cars.
    11.45 p.m.
    The Chairman: Order. The hon. Gentleman's remarks are not really relevant to the Motion.
    Sir P. Macdonald: There were 14 Ministers' cars. Have we got 14 Ministers who are entitled to have large motorcars? In my young days in this House, very few Ministers had cars.
    The Chairman: I have indicated to the hon. Gentleman that his remarks are not in order. I must ask him to be relevant to the Motion before the Committee.
    Sir P. Macdonald: I understand that the Motion relates to the Finance Bill.
    The Chairman: No. The Motion before the Committee is that I do report Progress.
    Sir P. Macdonald: Yes, report Progress and ask leave to sit again. Why should we not sit on to-night, because we have still a lot of time? It is not yet 12 o'clock. Why should we not have at least another
    * See Mr. Deputy-Speaker's Ruling, Column 1232.
    hour on this Finance Bill and then perhaps the feather-bedded Government could get home earlier to-morrow night, or they might bring their feather beds with them. Why not? I know what is going to happen to-morrow night. We are going to have a series of discussions for about an hour or two and then the Government are going to put the gag on us, and that will go on all night until they have got the number of Clauses they want. That is a very bad way to deal with the Finance Bill, because there are some very vital things in it affecting the whole nation. I protest most vehemently at reporting Progress at this early hour of the night.
    Question put, "That the Chairman report Progress, and ask leave to sit again."
    The Committee divided: Ayes, 293; Noes, 280.*

    Division No. 86.]

    AYES

    [11.48 p.m.

    Acland, Sir Richard

    Crawley, A.

    Grey, C. F.

    Adams, Richard

    Crosland, C. A. R.

    Griffiths, David (Rother Valley)

    Albu, A. H.

    Crossman, R. H. S.

    Griffiths, Rt. Hon. James (Llanelly)

    Allen, Arthur (Bosworth)

    Cullen, Mrs. A.

    Griffiths, William (Exchange)

    Allen, Scholefield (Crewe)

    Daines, P.

    Grimond, J.

    Anderson, Alexander (Motherwell)

    Dalton, Rt. Hon. H.

    Gunter, R. J.

    Attlee, Rt. Hon. C. R.

    Darling, George (Hillsborough)

    Hale, Joseph (Rochdale)

    Awbery, S. S.

    Davies, A. Edward (Stoke, N.)

    Hale, Leslie (Oldham, W.)

    Bacon, Miss Alice

    Davies, Harold (Leek)

    Hall, John (Gateshead, W.)

    Baird, J.

    Davies, Stephen (Merthyr)

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Balfour, A.

    de Freitas, Geoffrey

    Hamilton, W. W.

    Barnes, Rt. Hon. A. J.

    Deer, G.

    Hannan, W.

    Bartley, P.

    Delargy, H. J.

    Hardman, D. R.

    Bellenger, Rt. Hon F. J.

    Dodds, N. N.

    Hardy, E. A.

    Benn, Wedgwood

    Donnelly, D.

    Hargreaves, A.

    Benson, G.

    Driberg, T. E. N.

    Harrison, J.

    Beswick, F.

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

    Hastings, S.

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

    Dye, S.

    Hayman, F. H.

    Bing, G. H. C.

    Ede, Rt. Hon. J. C.

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

    Blenkinsop, A.

    Edelman, M.

    Herbison, Miss M.

    Blyton, W. R.

    Edwards, John (Brighouse)

    Hewitson, Capt. M.

    Boardman, H.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hobson, C. R.

    Bettomley, A. G.

    Edwards, W. J. (Stepney)

    Holman, P.

    Bowles, F. G. (Nuneaton)

    Evans, Albert (Islington, S. W.)

    Holmes, Horace (Hemsworth)

    Braddock, Mrs. Elizabeth

    Evans, Stanley (Wednesbury)

    Houghton, D.

    Brook, Dryden (Halifax)

    Ewart, R.

    Hoy, J.

    Brooks, T. J. (Normanton)

    Fernyhough, E.

    Hubbard, T.

    Broughton, Dr. A. D. D.

    Field, Capt. W. J.

    Hudson, James (Ealing, N.)

    Brown, Rt. Hon. George (Belper)

    Finch, H. J.

    Hughes, Emrys (S. Ayrshire)

    Brown, Thomas (Ince)

    Fletcher, Eric (Islington, E.)

    Hughes, Hector (Aberdeen, N.)

    Burke, W. A.

    Follick, M.

    Hughes, Moelwyn (Islington, N.)

    Burton, Miss E.

    Foot, M. M.

    Hynd, H. (Accrington)

    Butler, Herbert (Hackney, S.)

    Forman, J. C.

    Hynd, J. B. (Attercliffe)

    Callaghan, L. J.

    Fraser, Thomas (Hamilton)

    Irvine, A. J. (Edge Hill)

    Carmichael, J.

    Freeman, John (Watford)

    Isaacs, Rt. Hon. G. A.

    Castle, Mrs. B. A.

    freeman, Peter (Newport)

    Janner, B.

    Champion, A. J.

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

    Jay, D. P. T.

    Chetwynd, G. R.

    Ganley, Mrs. C. S.

    Jeger, George (Goole)

    Clunie, J.

    George, Lady Megan Lloyd

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

    Cocks, F. S.

    Gibson, C. W.

    Jenkins, R. H.

    Coldrick, W.

    Gilzean, A.

    Johnson, James (Rugby)

    Collindridge, F.

    Glanville, James (Consett)

    Johnston, Douglas (Paisley)

    Cook, T. F.

    Gooch, E. G.

    Jones, David (Hartlepool)

    Cooper, Geoffrey (Middlesbrough, W.)

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

    Jones, Frederick Elwyn (West Ham, S.)

    Cooper, John (Deptford)

    Granville, Edgar (Eye)

    Jones, Jack (Rotherham)

    Corbet, Mrs. Freda (Peckham)

    Greenwood, Anthony (Rossendale)

    Jones, William Elwyn (Conway)

    Cove, W. G.

    Greenwood, Rt. Hon. Arthur (Wakefield)

    Keenan, W.

    Craddock, George (Bradford, S.)

    Grenfell, D. R.

    Kenyon, C.

    Key, Rt. Hon. C. W.

    O'Brien, T.

    Summerskill, Rt. Hon. Edith.

    King, Dr. H. M.

    Oliver, G. H.

    Sylvester, G. O.

    Kinghorn, Sqn. Ldr. E.

    Orbach, M.

    Taylor, Bernard (Mansfield)

    Lang, Gordon

    Padley, W. E.

    Taylor, Robert (Morpeth)

    Lee, Frederick (Newton)

    Paget, R. T.

    Thomas, David (Aberdare)

    Lee, Miss Jennie (Cannock)

    Paling, Rt. Hon. Wilfred (Dearne Vally)

    Thomas, George (Cardiff)

    Lever, Harold (Cheetham)

    Paling, Will T. (Dewsbury)

    Thomas, Iorwerth (Rhondda, W.)

    Lever, Leslie (Ardwick)

    Pannell, T. C.

    Thomas, Ivor Owen (Wrekin)

    Lewis, Arthur (West Ham, N.)

    Pargiter, G. A.

    Thorneycroft, Harry (Clayton)

    Lewis, John (Bolton, W.)

    Parker, J.

    Thurtle, Ernest

    Lindgren, G. S.

    Paton, J.

    Timmons, J.

    Logan, D. G.

    Pearson, A.

    Tomney, F.

    Longden, Fred (Small Heath)

    Peart, T. F.

    Turner-Samuels, M.

    McAllister, G.

    Poole, C.

    Ungoed-Thomas, A. L.

    MacColl, J. E.

    Popplewell, E.

    Usborne, H.

    Macdonald, A. J. F. (Roxburgh)

    Porter, G.

    Vernon, W. F.

    McGhee, H. G.

    Price, Philips (Gloucestershire, W.)

    Viant, S. P.

    McGovern, J.

    Proctor, W. T.

    Wade, D. W.

    McInnes, J.

    Pryde, D. J.

    Wallace, H. W.

    Mack, J. D.

    Pursey, Cmdr. H.

    Watkins, T. E.

    McKay, John (Wallsend)

    Rankin, J.

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

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

    Rees, Mrs. D.

    Weitzman, D.

    McLeavy, F.

    Reeves, J.

    Wells, Percy (Faversham)

    MacMillan, Malcolm (Western Isles)

    Reid, Thomas (Swindon)

    Wells, William (Walsall)

    McNeil, Rt. Hon. H.

    Reid, William (Camlachie)

    West, D. G.

    MacPherson, Malcolm (Stirling)

    Rhodes, H.

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

    Mainwaring, W. H.

    Richards, R.

    White, Mrs. Eirene (E. Flint)

    Mallalieu, E. L. (Brigg)

    Robens, A.

    White, Henry (Derbyshire, N. E.)

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

    Roberts, Emrys (Merioneth)

    Whiteley, Rt. Hon. W.

    Mann, Mrs. Jean

    Roberts, Goronwy (Caernarvonshire)

    Wilcock, Group Capt. C. A. B.

    Manuel, A. C.

    Robertson, J. J. (Berwick)

    Wilkes, L.

    Marquand, Rt. Hon. H. A.

    Rogers, George (Kensington, N.)

    Wilkins, W. A.

    Mathers, Rt. Hon. G.

    Ross, William (Kilmarnock)

    Willey, Frederick (Sunderland)

    Mellish, R. J.

    Royle, C.

    Willey, Octavius (Cleveland)

    Messer, F.

    Shurmer, P. L. E.

    Williams, David (Neath)

    Middleton, Mrs. L.

    Silverman, Julius (Erdington)

    Williams, Rev. Llywelyn (Abertillery)

    Mikardo, Ian

    Silverman, Sydney (Nelson)

    Williams, Ronald (Wigan)

    Mitchison, G. R.

    Simmons, C. J.

    Williams, Rt. Hon. Thomas (Don Valley)

    Moeran, E. W.

    Slater, J.

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

    Monslow, W.

    Smith, Ellis (Stoke, S.)

    Wilson, Rt. Hon. Harold (Huyton)

    Moody, A. S.

    Smith, Norman (Nottingham, S.)

    Winterbottom, Ian (Nottingham, C.)

    Morgan, Dr. H. B.

    Snow, J. W.

    Winterbottom, Richard (Brightside)

    Morley, R.

    Sorensen, R. W.

    Wise, F. J.

    Morris, Percy (Swansea, W.)

    Soskice, Rt. Hon. Sir Frank

    Woodburn, Rt. Hon. A.

    Mort, D. L.

    Sparks, J. A.

    Wyatt, W. L.

    Moyle, A.

    Steele, T.

    Yates, V. F.

    Mulley, F. W.

    Stewart, Michael (Fulham, E.)

    Younger, Hon. K.

    Murray, J. D.

    Stokes, Rt. Hon. R. R.

    Nally, W.

    Strachey, Rt. Hon. J.

    TELLERS FOR THE AYES:

    Neal, Harold (Bolsover)

    Strauss, Rt. Hon. George (Vauxhall)

    Mr. Bowden and

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

    Stross, Dr. Barnett

    Mr. Kenneth Robinson.

    NOES

    Aitken, W. T.

    Brooke, Henry (Hampstead)

    Davies, Nigel (Epping)

    Alport, C. J. M.

    Browne, Jack (Govan)

    de Chair, Somerset

    Amery, Julian (Preston, N.)

    Buchan-Hepburn, P. G. T.

    De la Bère, R.

    Amory, Heathcoat (Tiverton)

    Bullock, Capt. M.

    Deedes, W. F.

    Arbuthnot, John

    Bullus, Wing Commander E. E.

    Digby, S. W.

    Ashton, H. (Chelmsford)

    Burden, F. A.

    Dodds-Parker, A. D.

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

    Butcher, H. W.

    Donner, P. W.

    Astor, Hon. M. L.

    Butler, Rt. Hon. R. A. (Saffron Walden)

    Douglas-Hamilton, Lord Malcolm

    Baker, P. A. D.

    Carr, Robert (Mitcham)

    Drayson, G. B.

    Baldock, Lt.-Cmdr. J. M.

    Carson, Hon. E.

    Dugdale, Maj. Sir Thomas (Richmond)

    Baldwin, A. E.

    Channon, H.

    Duncan, Capt. J. A. L.

    Banks, Col. C.

    Churchill, Rt. Hon. W. S.

    Dunglass, Lord

    Baxter, A. B.

    Clarke, Col. Ralph (East Grinstead)

    Duthie, W. S.

    Beamish, Major Tufton

    Clarke, Brig. Terence (Portsmouth, W.)

    Eccles, D. M.

    Bell, R. M.

    Clyde, J. L.

    Elliot, Rt. Hon. W. E.

    Bennett, Sir Peter (Edgbaston)

    Colegate, A.

    Erroll, F. J.

    Bennett, Dr. Reginald (Gosport)

    Conant, Maj. R. J. E.

    Fisher, Nigel

    Bennett, William (Woodside)

    Cooper, Sqn. Ldr. Albert (Ilford, S.)

    Fletcher, Walter (Bury)

    Bevins, J. R. (Liverpool, Toxteth)

    Cooper-Key, E. M.

    Fort, R.

    Birch, Nigel

    Corbett, Lt.-Col. Uvedale (Ludlow)

    Foster, John

    Bishop, F. P.

    Craddock, Beresford (Spelthorne)

    Fraser, Hon. Hugh (Stone)

    Black, C. W.

    Cranborne, Viscount

    Fraser, Sir Ian (Morecambe & Lonsdale)

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

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

    Fyfe, Rt. Hon. Sir David Maxwell

    Bossom, A. C.

    Crosthwaite-Eyre, Col. O. E.

    Gage, C. H.

    Boyd-Carpenter, J. A.

    Crouch, R. F.

    Galbraith, Cmdr. T. D. (Pollok)

    Boyle, Sir Edward

    Crowder, Capt. John (Finchley)

    Gammans, L. D.

    Bracken, Rt. Hon. B.

    Crowder, Petre (Ruislip—Northwood)

    Garner-Evans, E. H. (Denbigh)

    Braine, B. R.

    Cundiff, F. W.

    Gates, Maj. E. E.

    Braithwaite, Sir Albert (Harrow, W.)

    Cuthbert, W. N.

    Gomme-Duncan, Col. A.

    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)

    Darling, Sir William (Edinburgh, S.)

    Gridley, Sir Arnold

    Bromley-Davenport, Lt.-Col. W.

    Davidson, Viscountess

    Grimston, Hon. John (St. Albans)

    1176

    1177

    Grimston, Robert (Westbury)

    McCallum, Major D.

    Ryder, Capt. R. E. D.

    Harden, J. R. E.

    McCorquodale, Rt. Hon. M. S.

    Salter, Rt. Hon. Sir Arthur

    Hare, Hon. J. H. (Woodbridge)

    Macdonald, Sir Peter (I. of Wight)

    Sandys, Rt. Hon. D.

    Harris, Frederic (Croydon, N.)

    Mackeson, Brig. H. R.

    Savory, Prof. D. L.

    Harris, Reader (Heston)

    McKibbin, A.

    Scott, Donald

    Harvey, Air Cdre. A. V. (Macclesfield)

    McKie, J. H. (Galloway)

    Shepherd, William

    Harvey, Ian (Harrow, E.)

    Maclay, Hon. John

    Smiles, Lt.-Col. Sir Walter

    Harvie-Watt, Sir George

    Maclean, Fitzroy

    Smithers, Peter (Winchester)

    Hay, John

    MacLeod, Iain (Enfield, W.)

    Smyth, Brig. J. G. (Norwood)

    Head, Brig. A. H.

    MacLeod, John (Ross and Cromarty)

    Snadden, W. McN.

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

    Macmillan, Rt. Hon. Harold (Bromley)

    Soames, Capt. C.

    Heald, Lionel

    MacPherson, Major Niall (Dumfries)

    Spearman, A. C. M.

    Heath, Edward

    Maitland, Cmdr. J. W.

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

    Henderson, John (Cathcart)

    Manningham-Buller, R. E.

    Spens, Sir Patrick (Kensington, S.)

    Hicks-Beach, Maj. W. W.

    Marlowe, A. A. H.

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

    Higgs, J. M. C.

    Marples, A. E.

    Stevens, G. P.

    Hill, Mrs. E. (Wythenshawe)

    Marshall, Douglas (Bodmin)

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

    Hill, Dr. Charles (Luton)

    Marshall, Sidney (Sutton)

    Stewart, Henderson (Fife, E.)

    Hinchingbrooke, Viscount

    Maude, Angus (Ealing, S.)

    Stoddart-Scott, Col. M.

    Hirst, Geoffrey

    Maude, John (Exeter)

    Storey, S.

    Hollis, M. C.

    Maudling, R.

    Strauss, Henry (Norwich, S.)

    Holmes, Sir Stanley (Harwich)

    Medlicott, Brig. F.

    Stuart, Rt. Hon. James (Moray)

    Hope, Lord John

    Mellor, Sir John

    Studholme, H. G.

    Hopkinson, Henry

    Molson, A. H. E.

    Summers, G. S.

    Hornsby-Smith, Miss P.

    Monckton, Sir Walter

    Sutcliffe, H.

    Horsbrugh, Rt. Hon. Florence

    Moore, Lt.-Col. Sir Thomas

    Taylor, Charles (Eastbourne)

    Howard, Gerald (Cambridgeshire)

    Morrison, John (Salisbury)

    Taylor, William (Bradford, N.)

    Howard, Greville (St. Ives)

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

    Teeling, W.

    Hudson, Sir Austin (Lewisham, N.)

    Mott-Radclyffe, C. E.

    Teevan, T. L.

    Hudson, Rt. Hon. Robert (Southport)

    Nabarro, G.

    Thomas, J. P. L. (Hereford)

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

    Nicholson, G.

    Thompson, Kenneth Pugh (Walton)

    Hutchinson, Geoffrey (Ilford, N.)

    Nield, Basil (Chester)

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

    Noble, Cmdr. A. H. P.

    Thorneycroft, Peter (Monmouth)

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

    Nugent, G. R. H.

    Thornton-Kemsley, Col. C. N.

    Hutchison, Colonel James (Glasgow)

    Nutting, Anthony

    Thorp, Brig. R. A. F.

    Hylton-Foster, H. B.

    Oakshott, H. D.

    Tilney, John

    Jennings, R.

    Odey, G. W.

    Touche, G. C.

    Johnson, Howard (Kemptown)

    Ormsby-Gore, Hon. W. D.

    Turner, H. F. L.

    Jones, A. (Hall Green)

    Orr, Capt. L. P. S.

    Turton, R. H.

    Joynson-Hicks, Hon. L. W.

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

    Tweedsmuir, Lady

    Kaberry, D.

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

    Vane, W. M. F.

    Kerr, H. W. (Cambridge)

    Osborne, C.

    Vaughan-Morgan, J. K.

    Kingsmill, Lt.-Col. W. H.

    Peake, Rt. Hon O.

    Wakefield, Edward (Derbyshire, W.)

    Lambert, Hon. G.

    Perkins, W. R. D.

    Wakefield, Sir Wavell (Marylebone)

    Lancaster, Col. C. G.

    Peto, Brig. C. H. M.

    Walker-Smith, D. C.

    Langford-Holt, J.

    Pickthorn, K.

    Ward, Hon. George (Worcester)

    Law, Rt. Hon. R. K.

    Pitman, I. J.

    Ward, Miss I. (Tynemouth)

    Leather, E. H. C.

    Powell, J. Enoch

    Waterhouse, Capt. Rt. Hon. C.

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

    Prescott, S.

    Watkinson, H.

    Lennox-Boyd, A. T.

    Price, Henry (Lewisham, W.)

    Webbe, Sir H. (London)

    Lindsay, Martin

    Prior-Palmer, Brig. O.

    Wheatley, Major M. J. (Poole)

    Linstead, H. N.

    Profumo, J. D.

    White, Baker (Canterbury)

    Llewellyn, D.

    Raikes, H. V.

    Williams, Charles (Torquay)

    Lloyd, Rt. Hn. Geoffrey (King's Norton)

    Rayner, Brig. R.

    Williams, Gerald (Tonbridge)

    Lloyd, Maj. Guy (Renfrew, E.)

    Redmayne, M.

    Williams, Sir Herbert (Croydon, E.)

    Lloyd, Selwyn (Wirral)

    Remnant, Hon. P.

    Wills, G.

    Lockwood, Lt.-Col. J. C.

    Renton, D. L. M.

    Wilson, Geoffrey (Truro)

    Longden, Gilbert (Herts, S. W.)

    Roberts, Major Peter (Heeley)

    Winterton, Rt. Hon. Earl

    Low, A. R. W.

    Robertson, Sir David (Caithness)

    Wood, Hon. R.

    Lucas, Sir Jocelyn (Portsmouth S.)

    Robinson, Roland (Blackpool, S.)

    York, C.

    Lucas, P. B. (Brentford)

    Robson-Brown, W. (Esher)

    Lucas-Tooth, Sir Hugh

    Rodgers, John (Sevenoaks)

    TELLERS FOR THE NOES:

    Lyttelton, Rt. Hon. O.

    Roper, Sir Harold

    Mr. Galbraith and Mr. Vosper.

    McAdden, S. J.

    Russell, R. S.

    12 midnight.
    Mr. Boothby: I wish to raise a point of order concerning the last Division. When the Division was called, I found myself—
    The Chairman: Order. I have been directed by the Committee to report Progress. I think the hon. Member had better make his point in the House.
    Mr. Boothby: This is a matter of deliberate obstruction.
    Committee report Progress; to sit again Tomorrow.
    Mr. Deputy-Speaker (Major Milner): Mr. Boothby.
    Mr. Boothby: I should like to draw your attention, Mr. Deputy-Speaker, to the fact that when the last Division was called I found myself in the Ayes Lobby. I proceeded to make haste to get into the Noes Lobby. I was debarred from so doing by the massed forces of the entire Labour Party. I had a hard struggle against overwhelming odds. I submit that I was prevented by force by the Labour Party—
    Mr. Deputy-Speaker: Do I understand that the hon. Member did eventually vote in the proper Lobby?
    Mr. Boothby: No. They kept me in till the doors were locked.
    Mr. Deputy-Speaker: I shall direct inquiry to be made into the matter of complaint, and will report to the House.
    Mr. Churchill: I am very glad indeed, Mr. Deputy-Speaker, that you have not dismissed the matter summarily. It is quite certain that hon. Members ought not to thrust their way violently into the Lobbies, as happened a few weeks ago, or, should they be caught in the wrong Lobby, be debarred from recording their votes. [Laughter.] These are not laughing matters. We could easily come to physical violence if we wanted to. The object of Parliament is to substitute argument for fisticuffs. I thank you very much for saying that this matter will receive a searching inquiry under the authority of Mr. Speaker. If it be found that the hon. Gentleman was improperly or unfairly obstructed—[HON. MEMBERS: "Harried."]—I suppose that a Ruling with the power of the Chair will be given.
    Mr. Arthur Lewis Mr. Arthur Lewis (West Ham, North) rose—
    Mr. Deputy-Speaker: If the hon. Member is rising to debate that same matter, it has already been concluded. If it is on some other point of order, I am prepared to hear it.
    Mr. Lewis: I understood you to say there would be an inquiry. I want to know if, in that inquiry, consideration will be given to the question whether the Leader of the Tory harriers was not in the Government Ayes Lobby attempting to harry the Labour voters of the Labour Government.
    Mr. Deputy-Speaker: That may or may not be one of the matters coming out in the inquiry.

AGED SICK
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Royle.]
12.5 a.m.
Mr. Anthony Greenwood: The problem of the aged sick, to which I am drawing the attention of the House tonight, is one which is becoming more acute in view of the increased percentage of our population over retirement age, and it is one which we shall have to face during the next few years. There are two needs which exist side by side. The first is to keep our old people fit so that they can lead a normal happy existence, and, secondly, if those old people fall sick, we should provide adequate domiciliary and hospital services for them. I do not believe that today we are completely satisfying either of these needs.
All of us in this House must receive harrowing letters from constituents complaining about the difficulty of getting old people into the chronic sick wards of our hospitals. In my own hospital group area of Bury and Rossendale there are something like 150 old people waiting for admission to hospital, and in an admirable speech at Bournemouth last week the Parliamentary Secretary gave the figure of 7,000 for the whole country waiting for chronic sick beds.
I should be the last person to belittle the benefits which have flowed from the National Health Service and the National Assistance Act, but I am not sure that at the moment the old people are entirely gaining from either. I think most of us must feel a great deal of sympathy with an article that appeared in "The Times" on 10th April this year which referred to the "administrative no-man's-land" which exists between various welfare services. We must take steps to ensure that there is proper co-ordination between the National Health Service, the National Assistance Board, the local authorities and the voluntary organisations. At this stage, let me say how pleased I was that in his speech last week my hon. Friend referred to the valuable work the voluntary organisations are doing. I want to ask him tonight—and this is my first question—whether he is satisfied with the extent to which these various public and voluntary services are

1181
being co-ordinated for the benefit of the old people.
I believe that the problem is not primarily one of providing adequate accommodation; there is also the very important problem of getting a new outlook on the aged sick. First of all, I think, we have to stop them from going to hospitals if we can. We have got to see they are got to hospital when it is absolutely necessary. The figures in my own hospital group area in Lancashire show that 40 per cent. of those in chronic sick wards are not actually in need of hospital treatment. When old people are of necessity in hospital we must set out to cure them, and then we must try to get them out of hospital again to lead an ordinary existence. Today, unfortunately, too many old people are literally dumped on the steps of our big hospitals.
We know the doctors are overworked; we know families have difficulties and responsibilities to face up to; and all too often the accommodation in which the old people live is not really suitable for them in which to get the domiciliary treatment which we have it in mind to give them—while the worst thing anybody can do to old people who fall sick is to take them from their familiar surroundings, give them the impression they are not wanted, and so place them in conditions where it seems to them that the only hope of escape is death.
I suggest that the first thing we should do in dealing with this problem of old people is to keep them in their own homes wherever it is possible and suitable to do so. There they have the attention of their general practitioner, an old family friend. They can have the attendance of specialists available to them under the National Health Scheme. The services of physiotherapists and chiropodists must be available. Facilities for occupational therapy to patients in their own homes must be provided. Nursing must be available. Welfare organisations must provide for the laundering of dirty linen. Local authorities must go rather farther than they have done so far in the provision of home helps, and voluntary organisations must get down to the job of providing old people in their homes with meals and helping them in getting up coal, delivering library books and
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other jobs of that kind, which can mean so much to their comfort and welfare.
I believe that if we provide domiciliary treatment along these lines not only will it benefit the old people in helping to keep them fit, but it will also be in the interests of the public at large, because it will allow more effective use of hospital beds and has the added advantage of being cheaper. If we can provide domiciliary treatment of that kind, it will be at an expense of something like £3 a week, as against between £4 and £5 a week in hospital, and anything between £8 and £15 a week in the chronic sick wards of our hospitals. I want to ask whether, in fact, we are making progress in the development of such a domiciliary service.
If it is unsuitable for old people to stay in their own homes, then we need either the ordinary welfare type of hostel which caters for the person who is occasionally sick, or the different kind of hostel which caters for those who alternate between sickness and good health. That is the kind of accommodation we ought to be providing, so that old people who cannot look after themselves can have the advantage of accommodation of that kind and not go automatically into the chronic sick wards of our hospitals.
These are the kind of hostels being provided by big local authorities like Manchester, Salford, Lancashire County Council and local authorities in other parts of the country. We need more of these hostels so that, wherever possible, old people who would automatically go into chronic sick wards should be given a chance to recover and lead normal homes lives and not be condemned to the chronic sick ward. We have a saying in Lancashire—"they dee i' bed"—which, I am afraid, is all too true. For many old folk in the past admission to a chronic sick ward was tantamount to a sentence of death. If hospital treatment is necessary, then in the first place it should be on a short-term basis.
We find, unfortunately, that too often old people are put in bed in hospital for convenience, to keep them out of trouble, when it is not really necessary to have them in bed at all. Equally unfortunately, there is often no serious attempt to diagnose, and consequently no serious attempt

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to provide treatment. I am not suggesting that in any way as a criticism of the personnel who manage our hospitals. I mention it as evidence of the need for a new attitude of mind and for more adequate staffs than many hospitals have at the present time. I should not like anything I say tonight to be construed in any way as being criticism of the men and women who give such magnificent service in our hospitals, in work which is always cheerless and sometimes unpleasant.
Whatever the cause of the situation, the fact is that beds which could be used for other patients are today being occupied by men and women for the simple reason that they are old and nobody has made any effort to cure them of their trouble and get them fit again, so that they can get out and lead ordinary normal existences. Recently one hospital set up a long-term annexe and moved into it eight patients all of whom had been in the hospital occupying beds in the chronic sick ward for five years. During that time those eight people had taken up bed space which could have been used for the treatment of 360 acute surgical cases.
Besides the need for diagnosis, I suggest that every hospital ought to be encouraged by the Ministry of Health to set up a geriatric department. Geriatrics is a science which is still in its infancy. The efforts of Dr. Marjory Warren and Dr. Cosin have shown what can be done in rehabilitating old people. One of the results of their work has been that some hospitals which have followed the treatment they have prescribed for old people have been able to reduce the number of beds devoted to chronic sick to one-third or one-quarter of what it was before.
The first geriatric unit in a teaching hospital is that under the supervision of Lord Amulree at St. Pancras. In an article in "The Lancet" on 20th January, 1951, Lord Amulree gave tables showing what happened to two classes of patients, first, the patients who had been "inherited" and, secondly, the patients admitted after the geriatric unit was set up. Of the first class there were 155, and Lord Amulree wrote:
"We can say…that though 95 per cent. of these patients were at one time bedridden, by the end of the year their physical state and mental outlook had improved so much that the bedridden cases had been reduced to 10 per
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cent. The patients composing this 10 per cent. have gross physical deformities which make it impossible for them to sit in chairs. Many of these deformities we believe were preventable."
He goes on to discuss the 89 new cases admitted, and says:
"Of the 29 remaining in the hospital"—
which means that 60 were cured of their trouble during the year—
"—we consider that 18 (20 per cent. of the 89) are suitable for hostel accommodation; and in fact some of these patients are now awaiting the opening of a hostel which is to be attached to the hospital. Only 11 of the 29 (about 13 per cent. of the 89) are regarded as irremedial."
I give these figures to show what can be done by a hospital which gets down to the task of dealing with the aged sick, finding out what is wrong with them and putting them right.
My right hon. and hon. Friends at the Ministry of Health are aware of the problem and what can be done to deal with it. In 1948, and again in 1950, they issued circulars to the regional hospital boards emphasising that when these people enter hospital they should first go into the acute ward so that there can be no question of the chronic sick ward being inevitable. It seems to me that after treatment in the acute ward two courses are open. First, the patient, if cured and if proper accommodation and care are available, can go home, preferably after a stay in a convalescent home. Unfortunately, at the moment we do not appear to have enough convalescent homes to deal with cases of this kind.
The second course, if there is no home or if the patient is too ill or too weak to leave hospital, is that he should go to a special long-stay annexe attached to the hospital, with medical and nursing staff available. The effect of that would be to release extremely expensive equipment in the acute hospital ward for the purpose for which it was intended. I know that my hon. Friend has been devoting a good deal of attention to the question of long-stay annexes, and I hope he will tell us something about them when he replies. So long as my right hon. and hon. Friends are in charge of the Ministry of Health, I believe that the chronic and aged sick can be sure of sympathetic and imaginative treatment of a kind all too frequently denied them in the past.
12.20 a.m.
The Parliamentary Secretary to the Ministry of Health (Mr. Blenkinsop): I apologise for intervening so quickly in this short debate, but I am anxious to deal fairly fully with the remarks which have been made, because this is a subject of very real importance, and one which I am sure is of wide interest to everyone. In some quarters there is anxiety about the problem which my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) has raised and I wish to give as much information as possible, though I should have welcomed a much longer debate.
I agree most wholeheartedly with what my hon. Friend has said about the importance of preventing old people from becoming chronic cases The word "chronic" is a confession of failure and one which we do not want to use. It is true that, in the past, cases have been incorrectly labelled as chronic which have proved to be not chronic at all, and under treatment have been brought into quite active community life again. Therefore, our first care must be to improve our domiciliary services; to help to prevent cases from becoming chronic; and also to assist in the work of the hospitals in providing accommodation for those who can be discharged.
In our view the greatest need of all is to bring together the many voluntary and statutory agencies working in this field. It is now over a year ago that we issued a circular to local authorities urging them to take every measure to initiate the effective co-ordination of all the bodies engaged in welfare work for old people. I am glad to say there has been a great response to that. Many local authorities had already taken action before the circular was sent out, but there has been a further spurt of activity, and I am glad to see how many committees of this kind have been established. There are now 42 county old peoples' welfare committees, which is a considerable increase over the figure even of nine months ago. In general, they include both voluntary and statutory bodies. Our desire is to avoid the overlapping which sometimes occurs between voluntary bodies and to ensure that the knowledge which comes in to voluntary and official bodies is shared.
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I am particularly anxious to encourage the setting up of committees in those areas where this has not already been done, for it will prove a real sign of activity and an encouragement to everyone to do what they an to assist the voluntary bodies in the very many practical jobs which would ease the position of old people. That would help enormously in tackling this problem, and assist the hospitals as well.
Mr. J. N. Browne: Has the hon. Gentleman been given any guidance whether any particular Ministry has an overriding authority in any area in deciding about the care of old persons?
Mr. Blenkinsop: In general, the welfare services which are run by the local authorities, and for which the local authorities have responsibility, fall within the care and purview of the Ministry of Health. After the alteration in functions, there are, of course, certain matters dealing with housing and so on which are dealt with by the Ministry of Local Government and Planning, but the major responsibility and the whole of the work of the welfare committees of the local authorities come under the Ministry of Health.
Mr. Browne: The hon. Gentleman does realise that there is an overriding authority?
Mr. Blenkinsop: I do not see any difficulty there. The division as between the Ministry of Health and the Ministry of Local Government and Planning is not causing any difficulty in this problem. The difficulty which arises is one of the divisions that occur locally much more than nationally, and the changes made some months ago have not made the slightest difference in the prosecution of this work.
In addition to the work we are doing on the preventive side in the local committees, which we regard as very important—and we are taking further action to encourage increased activity—we are most anxious to help those who, with the best will in the world, cannot be treated in their own homes. As I am sure my hon. Friend knows, many local authorities have set up residential hostels under the provisions of the National Assistance Act and these are steadily being increased.

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There are now some 350 in England and Wales and I understand that another 400 are in preparation.
Those are small hostels and the 350 provide accommodation for about 8,000 old people. Those were intended mainly, if not entirely, for the healthy old, but, of course, cases naturally arise of people who fall into sickness—and, I am glad to say, out again—and that raises a problem of whether those cases should be moved into some other type of hostel or whether we can make provision to meet their needs where they are already. It is not a good thing to make more changes in the conditions and surroundings of old people than we can help. Therefore, I do not want to visualise the provision of too many varieties of accommodation, which might mean too many changes for the average old person.
There is, nevertheless, the problem of whether or not we can encourage the provision of some intermediate accommodation for those who are partly sick and partly well. I think this is a field in which we ought to have some experimental provision before we do anything very definite over the country as a whole. I am most anxious that no administrative difficulties, of which there will be plenty, shall stand in the way of provision of accommodation of this sort, and I am sure that, if there is a real need for accommodation of this type, we shall be able to provide it.
The main problem, however, still rests with the hospitals. It is true that this is not so much the problem of extra accommodation as one of trying to make better use of existing accommodation. I very much agree that it is possible, with a better turnover of hospital beds, to meet very much, if not the whole, of the very real and serious problem of the waiting list which now confronts us. I join with my hon. Friend in paying tribute to the very many who have done such fine work in the hospitals, particularly in the last year. He mentioned some names, and there are many others all over the country who have done fine work in this field.
We certainly are taking every step we can to encourage very much more of this active work. To be fully effective, this depends upon our securing exchanges
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between residential hostels and the hospitals. That often is not so easy to achieve as we would like. We want much more effective co-operation between all the different authorities concerned. That we are out to achieve, and we believe we are achieving it. It is more a matter of the co-operation of those concerned on the spot than of setting up committees at regional or national level.
But there is one particular field in which experimental work is being carried out which I am anxious to encourage. For instance, I went this morning to look at one hostel which has been recently opened. The funds were provided by the King Edward VII Hospital Fund for this hostel and also for a series of others which are to be opened shortly. These hostels, which are quite small, are residental, and are attached as annexes to particular hospitals. They are intended to cater for the type of case which is not a permanent bed case, but which does require regular nursing and medical care, but yet can, by the fuller use of both good nursing and medical care, be encouraged to become ambulant again and, we hope, fit to be discharged to his or her home. This much relieves the pressure on hospitals and beds, and is proving already to be of real value to the old people.
I have seen some of the old people who are in these hostels. I am delighted with the response they have achieved already in this very short period. I hope it will not be long before we have more of this type of accommodation. This, I think, will show that we are anxious to deal with this matter, not from one angle alone. We realise that that would be of no value. We want to attack the problem of the welfare and care of the aged sick from many different angles, so as to secure effective relief.
It is true that we must have effective co-operation from voluntary and statutory bodies to achieve that. Over the wider national field we want to secure co-operation between hospitals, local authorities and the professional services concerned. We are securing advice on this, and I believe that we shall shortly have constructive advice upon securing the extra co-operation between the main bodies concerned, which is so necessary. We shall not hesitate to act upon it as quickly as possible.
12.34 a.m.
Mr. J. Enoch Powell: The more one studies the expenditure on the hospital service, which is one of the most acute problems in the whole range of the social services, the more one is impressed by the fact that the cost of the social services is very largely governed by the rate of turn-over. As hon. Members have emphasised, the care of all sorts of aged sick and the turnover in the hospitals is of great importance, and it logically follows that the priority of any measures which take the aged sick out of the hands of the hospital service is equal to any other single
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direction in which the hospital service is being expanded. Also, that this measure, like any other measure which will promote a more rapid turn-over in the hospital service, and thus a reduction in overheads, will be the truest economy which we can carry out in that service.
The Question having been proposed after Ten o'clock on Wednesday 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 Twenty-five Minutes to One o'Clock.