HC Deb 18 June 1951 vol 489 cc162-77

Section thirty-three of the Finance Act, 1947, shall have effect as if there were substituted for the words "two thousand pounds," the words "three thousand pounds," and for the words "twelve thousand pounds," the words "eighteen thousand pounds," wherever they appear.—[Lieut.-Commander Braithwaite.]

Brought up, and read the First time.

Lieut.-Commander Braithwaite

I beg to move, "That the Clause be read a Second time."

This raises a matter which was discussed during the progress of the Finance Bill, 1949. Hon. Members who are interested will find at columns 1098 to 1112 of the OFFICIAL REPORT of 28th June of that year the debate which we had two years ago. On that occasion the right hon. and learned Gentleman, who was then Solicitor-General and has since been promoted to be senior Law Officer, told us that the costs of such a concession as was proposed would amount to £3,500,000. One imagines that that figure is maintained, roughly, in the present circumstances.

Hon. Members who study the history of this matter will find that under Section 33 of the Finance Act, 1947, profits below £2,000 per annum are exempt from Profits Tax and that in addition there are graduated rebates running from £2,000 to £12,000. The effect of the new Clause would be, first, to raise the exemption limits from £2,000 to £3,000 a year, and the graduated rebates would also rise to the range of from £3,000 to £18,000.

The objective is to help and encourage small businesses. I am sure that the right hon. Member for Colne Valley (Mr. Glenvil Hall), who used to be the Financial Secretary to the Treasury will from experience agree with me—

Mr. Glenvil Hall indicated dissent.

Lieut.-Commander Braithwaite

Do not let the right hon. Gentleman shake his head until he hears the proposition. I do not think he will disagree with the proposition that Income Tax reliefs are difficult to claim and that the Profits Tax seems a far more practicable field in which to give assistance to this type of business.

If the right hon. Gentleman disagrees—and I hope he does not I will call in aid another right hon. Gentleman, the right hon. Member for Huyton (Mr. Harold Wilson), who, as President of the Board of Trade, encouraged small manufacturers to become "merchant venturers," a phrase which naturally appealed to me as my constituency has always specialised in that type of person. He went on to say, in language which I am sure will commend itself to hon. Members on both sides of the Committee, and indeed to his successor, that they should be "merchant venturers" who will go forth to sell goods all over the world and develop new processes.

Those were the resounding words of the right hon. Gentleman, and I am sure we all agree that there is certainly need for new invention and the spirit of enterprise which our forefathers were so conspicuous in displaying. But, unlike the days of the original merchant venturers, the present rate of taxation makes it almost impossible to build up small industrial units today; it does, in fact, act as a discouragement—we discussed this earlier in the Bill—from risking capital in this way. My hon. and learned Friend and I, therefore, hold the view that this is a useful new Clause in helping that type of merchant venturer.

Mr. Selwyn Lloyd

I want to recommend this new Clause to the Committee with all the force I can command. The right hon. Gentleman disagreed with my hon. and gallant Friend and had literally to be forced to his feet to argue against the Clause in 1949. He will remember that occasion, when we had a long debate and there was no reply from the Government benches, for really they could not find any good reason to put forward against the Clause. Eventually, the right hon. Gentleman rose to his feet and, after saying he appreciated the force and substance of the case, said that really the Government could not afford it."

The position is different tonight because the Government this year propose to raise something like £66 million more in Profits Tax. We are simply asking by this new Clause for a rebate on a certain amount of that new money. The Chancellor has really conceded our case in principle because, in Clause 26, he has given a rebate to help a certain type of small business. I think the Economic Secretary will agree, and there is no need to quote the words of the Chancellor, that the rebate made in Clause 26 does help a certain type of director-controlled business. We say, as far as this new Clause is concerned, that it is equitable to extend some sort of concession to all types of small businesses.

We continually hear lip service to the idea that we want to encourage small businesses to develop. I do not know what the difference is between the horizontalists and the verticalists on the benches opposite, but I should have thought that whichever type one is that it was only fair to concede that a large sector of industry will remain with the smaller type of business and that those people definitely need some assistance at present if they are to do all the things that they have been exhorted to do.

The hon. Member for Edmonton (Mr. Albu), who I do not think is in the Committee now, has several times spoken with great frankness on this problem. I wish that Members opposite, who listen to his words of wisdom and other aspects of the argument, would pay some attention to what he has said about small businesses. He has said that he is not much in sympathy with the equity shareholder, the ordinary shareholder, in the large business. His argument, which I do not accept, is that the ordinary shareholder in a large company is not at great risk. Accepting that argument for a moment—as I say, I do not accept it—totally different considerations apply to the small company because whatever might be said about the large company I am certain that the ordinary shareholder in the small company is very much at risk; there is very much more chance of violent fluctuations in the fortunes of the smaller concern.

There are many small concerns which may not be director controlled and which may not be able to benefit from Clause 26. There may be companies which were originally one-man businesses but which have been formed into private companies, and which may find it necessary to pay out, possibly to the widow or relatives of the founder of the business, considerable sums by way of dividends. I am thinking of a certain small company about which I know, the policy of which has been to pay out the profits of the business by way of dividend so that various relatives of the people who originally founded the business can receive their share of the profits.

It would, of course, be possible, by a series of completely fictitious arrangements, to turn into directors people who really have no power to direct the business, etc. In the case of which I am thinking it has not been the policy to try to make use of some sort of tax avoiding device of that kind. That kind of company, where the bulk of the profits are distributed by way of dividend, receives no benefit from Clause 26. That sort of company would derive some benefit from this new Clause. It seems only equitable that if we are to make the Clause 26 type of concession the type of concession which this new Clause seeks should be made. That is a matter of equity as between the two types of small company.

To return from that ground to the main reason for putting forward this new Clause, I should have thought that on both sides of the Committee we wish to enable the small type of business to build up its resources, expand and take risks. Having regard to the change in the value of money from the time when the limit of £12,000 was fixed, I should have thought that there were strong grounds for suggesting the higher limit of £18,000.

I am certain that the Revenue would indirectly derive great benefit from the operation of a new Clause such as this. The money which would be preserved from the tax gatherer would be of great value to this kind of business and would encourage the taking of risks, the merchant adventuring of which my hon. and gallant Friend spoke, and in the long run would benefit the Revenue very much indeed. I am tired of hearing lip service given to the case of the smaller type of business, and I hope that tonight the Government will, in addition to the concession made in Clause 26, which is of limited scope, make the concession for which the new Clause asks, which is of much more general application.

10.0 p.m.

Mr. J. Edwards

As the hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite), pointed out, we discussed this matter two years ago, when very much the same arguments were advanced by those who supported a new Clause then. I am afraid that this time I must advance very much the same arguments as were then advanced in resisting it.

I do not think I need follow the hon. and gallant Gentleman in his exposition of the intention of the Clause—although I am not sure that he was right at the end about what it would do—except to bring out plainly that the real point of the proposed Amendment of the Finance Act, 1947, is quite substantially to increase the Profits Tax-free income of the firms that would be concerned. I submit to the Committee that it would be wrong to do that in present circumstances. The existing limits are intended to provide relief in quite small cases. and at the very moment when it is necessary to increase the yield of revenue from Profits Tax it would be quite inappropriate, I submit. to make a substantial increase in the limit for exemption.

The hon. and learned Member for Wirral (Mr. Selwyn Lloyd) also referred to the changes in the value of money. As I have said earlier, if we start to talk about changes in the limits because of changes in the value of money, there would be no end to the claims which could be put forward. Precisely the same argument could be used for a substantial increase in the Income Tax personal allowances. Precisely the same argument could be used for a change in the Surtax exemption limit. The plain answer is that we could not in present circumstances afford the loss of revenue which would be involved if this principle were accepted.

I think it important to ask the Committee to bear in mind that at the time, when we are still asking workers to exercise moderation in their pay claims, it would be undesirable to allow any counter argument on the fact that companies, even the smaller companies, were being granted an increase in their Profits Tax income. I appreciate that the amount involved is not large but it would appear that for a particular category there had been and would be a reduction.

Mr. Selwyn Lloyd

Does not the hon. Gentleman realise that in this type of business the relations between employer and employee are such that I should say that in 95 per cent. of the cases the workers would realise that this sort of concession was directly to the benefit of the workers themselves?

Mr. Edwards

That might be so in a particular firm but that is not what I am saying. I am saying that in present circumstances, when rates of tax are going up, it would be very difficult for us to defend reducing the yield we are getting in this case by increasing the amount of Profits Tax-free income accrueing to the companies in question, although it might very well be that in the individual companies concerned it would be thoroughly understood.

It was in Clause 26 that we made a limited concession, which I think applies at any rate to some of the companies which would be covered by this new Clause. The hon. and learned Gentleman argues that we should go further and make this extra concession. The concession that we made in Clause 26 cost us about £4 million net. The present Clause would cost in a full year something like £4¾ million net. In the circumstances, when we are trying to get a larger amount of revenue, we cannot make this concession. Of course, in some circumstances—if trade were not booming, and the like—this is the kind of thing which might well commend it self. However, we certainly cannot accept it this time.

Mr. F. Harris

The Economic Secretary took the line that no concession could be given. He seems to have forgotten that small businesses are having a tricky time from a financial point of view. I am interested in that part of the new Clause which suggests that the limit on Profits Tax should be raised from £2,000 to £3,000. The task of laying out money for buying and holding stocks is becoming more and more trying. Surely, with difficulties mounting as they are, the Treasury will have to come to the position in due course of giving a concession. The type of concession suggested seems to be the most sound. It would enable the small companies to have sufficient finances to carry on business.

In the last six or eight months it has become obvious that more people are actually asking for money in advance for the goods which they supply to these concerns. As a result, the small businesses are finding it increasingly difficult to lay out money for stocks. Instead of allowing for payment on account, the suppliers are asking the smaller concerns to pay in advance.

The Economic Secretary's argument was based on the fact that no concession could be made because the workers would say that it was wrong to do so when the country needed more revenue. That is entirely the wrong outlook. The outlook should be that if the concerns are taxed as they are today, they will find it increasingly difficult to carry on. Some people might say that that statement is far-fetched, but in the last six months it has become most obvious that that is the situation. The provision of finance is becoming more difficult. The small concerns which pay out such a large amount in taxation need some relief to enable them to continue in business.

Confirmation of my argument can be found in the statistics which show the large number of bankruptcies which are taking place among the small concerns, where the position is far from easy. Talk about trade booms might apply to the larger concerns, but it does not apply so much to those businesses to which I refer. The position of some of the small concerns is very serious. Here we have an opportunity, by giving relief on Profits Tax, to help them. I do not know what the cost of giving relief on Profits Tax would be, but obviously it would be nothing like the £4,750,000 referred to by the Economic Secretary. If a concession were given by raising the Profits Tax limit from £2,000 to £3,000, it would provide immediate help and it would not cost anything like the figure suggested.

It appears that the argument of the Treasury is the same as that put forward two years ago, and which will be put forward again in the future. They say that they cannot grant concessions because the workers do not wish to see them made at a time when the country needs more money for defence. Surely, that is a most short-sighted attitude.

Mr. David Eccles (Chippenham)

I want to take up the Economic Secretary on the question of provocation. He is getting £66 million more out of the Profits Tax, and we are asking for a rebate of 4 million. That would only be provocative if the Government said it was provocative. They are responsible for leading public opinion, and, if they were convinced that the rebate was worth it on its merits, it is quite wrong for them to say that it would be provocative. That is the negation of leadership, and it is the kind of thing which makes the re-armament programme extremely difficult. The Government will not explain the facts of industrial life to the people to whom they say they are responsible.

I want to put in a word for the small businesses in rural areas. We all agree that it would be a good thing if there was more diversification of industrial employment throughout the countryside. Anyone who represents a county division will know that it is becoming very hard to start a new business in a rural area, because the prospects of ever collecting sufficient cash with which to carry it through become harder and harder. In the interests of using our man power, and particularly our woman power—I am thinking of the daughters of farm workers, because there is generally a pool of female labour in rural areas—I think it would be right to make this concession, which would help these small businesses. Without a high birth-rate of new businesses, this country will not maintain its place, and, in my view, this £4 million would be a very good investment.

Mr. Walter Fletcher (Bury and Radcliffe)

The essence of the whole of this Finance Bill is that it has been keyed to the re-armament programme. It is perfectly clear, that, as the re-armament programme gets under way, it will seep through, as it always has done, to the smaller firms. Its first impact is on the big ones, but, eventually, when fully geared and working, it does suck in to its use the smaller firms. At that particular moment, the argument can be brought forward of the need of the smaller firms for extra relief to serve their businesses, which need will then make itself felt.

The higher cost of raw materials and higher wages costs mean that the need of these small firms for some help in order to keep running even at the normal speed is very much greater. They either have to go to the bank, which is not very desirable, or they must have some form of relief of taxation in order to build up their businesses. Even for the sake of the re-armament drive, which is the key to the whole of the Bill we are discussing, it would be wise if this particular concession were given at the present moment. Looking ahead, which may not be the usual practice of the Treasury Bench but which is very necessary, by the time that the re-armament programme has got through to the small firms many of them will not be there or will be in a crippled condition because this concession, and others like it, have not been given.

Mr. Lyttelton

I hope we have not heard the last word from the Treasury on this subject, because there are one or two more considerations which I should like to put before the Committee.

First of all, the small businesses are very seriously threatened already by Estate Duties. The general level of taxation and Estate Duties means that many proprietors of small businesses are obliged to sell out to big ones in order to find the money to pay the duties. All those with experience, as I have, of production in war-time know very well the contribution which the small industrial company can make to our industrial effort. They provide that flexibility which is above all necessary in the production of armaments, because it does not pay to introduce small modifications into great lines of production.

Hon. Members will no doubt remember that when the Ford Plant at Willow Run was completed and modifications had to be introduced into the Liberator aeroplane, they were taken away from the main plant and the modifications introduced elsewhere. We were able to avoid that sort of thing by the great flexibility of British industry in the existence of hundreds of small firms. I think that everybody who listened to the argument this evening will realise that they are really seriously threatened by the level of taxation. I believe that this concession would do something to revive the small business which has made such a large contribution in the past, and is capable of doing so in the future. 10.15 p.m.

I must say, in conclusion, that I am rather sorry that on this particular matter the old argument about provocation should again have been produced—that if we try to govern properly and to bring some of these small businesses into being, it will provoke somebody or other. I have far too high a regard for the worker of this country to believe that he will swallow such utter poppycock as that. These concessions are quite small in character and take place in businesses where the worker can see what is happening. I do not think they are provocative. I trust that the Treasury are going to have second thoughts about this and will give us a more sympathetic answer.

Lieut.-Commander Braithwaite

I was hoping that we should have heard one more word from the Economic Secretary, because I think it would be a pity if the debate on this Clause were concluded without one of his remarks being challenged. He said that the object of this Clause was to raise the limit of free income. With respect to the Economic Secretary, it does nothing of the kind.

Mr. J. Edwards

I said Profits Tax free income. In every case that I used the term "free income," I used the words "Profits Tax" in front of it.

Lieut.-Commander Braithwaite

With respect, the hon. Gentleman did not. That was the objection he gave. But, even if he did, he is still incorrect, because the new Clause also widens the rebate sphere from £3,000 to £18,000. What it is doing is to increase the rebate which, after all said and done, is really a different matter. When the hon. Gentleman says that this is a question of principle, we must remember that it is a principle embodied in the Socialist Government's own Income Tax law of 1947, so that there is nothing for him to get excited about in regard to that. It was enacted by the right hon. Gentleman the present Minister of Local Government and Planning with the approval of both sides of the House.

May I remind the Economic Secretary that these firms are not likely to be engaged on re-armament. It may be that they will be brought in later, but certainly not at the moment. I do not think he ought to use the argument that this is something which is going to give more profit to those who benefit from the rearmament programme. I think that argument was a little unworthy of him. I am sorry that the hon. Gentleman has introduced this note of gloom into the Committee after a day on which we have made such excellent progress, and when the Government have shown such a conciliatory attitude. I am sorry that he has reverted so late in the day, and I hope my hon. Friends will express their displeasure by voting against the Clause.

Air Commodore Harvey

I wish to put a point of view to the Committee which has not so far been mentioned. It is the availability of workers in the rearmament industry. I am told that already, long before the re-armament programme is under way, many firms are held up because they are unable to obtain workers, and that the necessity is probably going to arise for them to subcontract up to 50 per cent. of their work. This is having to be done by the small businesses employing 10 to 60 men who are carrying out the work with a few machine tools. Prices are steadily going up, and a firm with a capital of only £5,000 or £6,000 finds that its outlay on new equipment has greatly increased in the last 12 months.

A leading industrialist said to me the other day that he was quite certain the right hon. Member for Ebbw Vale (Mr. Bevan) was right; that the re-armament programme would not proceed because of the difficulties of obtaining labour. A large factory cannot be dispersed if the houses are not available for the workers.

If right hon. Gentlemen opposite want the re-armament programme to succeed, they must encourage the small businesses. Therefore, I would ask them to give this matter additional consideration, if not tonight, at any rate between now and the Report stage.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes. 276: Noes, 293.

Division No. 141.] AYES [10.20 p.m.
Aitken, W. T. Deedes, W. F. Johnson. Howard (Kemptown)
Alport, C. J. M. Digby, S. Wingfield Jones, A. (Hall Green)
Amery, Julian (Preston, N.) Donner, P. W. Joynson-Hicks, Hon L. W
Amory, Heathcoat (Tiverton) Drayson, G. B. Kaberry, D.
Arbuthnot, John Dugdale, Maj, Sir T. (Richmond) Kerr, H. W. (Cambridge)
Ashton, H. (Chelmsford) Duncan, Capt. J. A. L Kingsmill, Lt.-Col. W. H
Assheton, Rt. Hon. R. (Blackburn, W.) Dunglass, Lord Lambert, Hon. G.
Astor, Hon. M. L. Duthie, W. S. Lancaster, Col. C. G
Baker, P. A. D. Eccles, D. M. Langford-Holt, J.
Baldock, Lt.-Cmdr. J. M Eden, Rt. Hon. A. Law, Rt. Hon. R. K.
Baldwin, A. E Erroll, F. J. Leather, E. H. C.
Banks, Col. C. Fisher, Nigel Legge-Bourke, Maj- E. A. H
Baxter, A. B. Fletcher, Waiter (Bury) Lennox-Boyd, A. T
Beamish, Maj. Tufton Fort, R Lindsay, Martin
Bell, R. M. Foster, John Linstead, H. N.
Bennett, Sir Peter (Edgbaston) Fraser, Hon. Hugh (Stone) Llewellyn, D.
Bennett, Dr. Reginald (Gosport) Fraser, Sir Ian (Morecambe & Lonsdale) Lloyd, Rt. Hon. G. (King's Norton)
Bennett, William (Woodside) Fyfe, Rt. Hon. Sir David Maxwell Lloyd, Selwyn (Wirral)
Bevins, J. R. (Liverpool, Toxteth) Gage, C. H. Lockwood, Lt.-Col. J. C.
Birch, Nigel Galbraith, Cmdr. T. D. (Pollok) Longden, Gilbert (Herts, S.W)
Bishop, F. P Galbraith, T G. D. (Hillhead) Low, A. R. W.
Black, C. W. Gammans, L. D. Lucas, P. B. (Brentford)
Boles, Lt.-Col. D. C. (Wells) Garner-Evans, E H (Derbigh) Lucas-Tooth, Sir Hugh
Boothby, R. Gates, Maj. E E. Lyttelton, Rt. Hon. O.
Bossom, A. C Gomme-Duncan, Col. A McAdden, S. J.
Boyd-Carpenter, J. A Gridley, Sir Arnold McCorquodale, Rt. Hon. M. S.
Boyle, Sir Edward Grimston, Hon. John (St. Albans) Macdonald, Sir Peter (I. of Wight)
Bracken, Rt. Hon. B. Grimston, Robert (Westbury) Mackeson, Brig H R.
Braine, B. R. Hare, Hon. J. H. (Woodbridge) McKibbin, A.
Braithwaite, Sir Albert (Harrow, W.) Harris, Frederic (Croydon, N.) McKie, J. H. (Galloway)
Braithwaite, Lt,-Cr. G, (Bristol, N.W.) Harris, Reader (Heston) Maclay, Hon. John
Bromley-Davenport, Lt.-Col. W Harvey, Air Cdre. A. V. (Macclesfield) Maclean, Fitzroy
Brooke, Henry (Hampstead) Harvey, Ian (Harrow, E) MacLeod, lain (Enfield, W.)
Browne, Jack (Govan) Harvie-Watt, Sir George MacLeod, John (Ross and Cromarty)
Buchan-Hepburn, P. G. T. Hay, John Macmillan, Rt. Hon. Harold (Bromley)
Bullus, Wing Commander E. E Head, Brig. A. H Macpherson, Major Niall (Dumfries)
Burden, F. A. Headlam, Ll.-Col Rt. Hon Sir Cuthbert Maitland, Cmdr. J. W.
Butcher, H. W. Heald, Lionel Manningham-Buller, R. E.
Butler, Rt. Hn. R A. (S'ffr'n Wld'n) Heath, Edward Marlowe, A. A. H.
Carr, Robert (Mitcham) Hicks-Beach, Maj W. W Marples, A. E.
Carson, Hon. E. Higgs, J. M. C. Marshall, Douglas (Bodmin)
Channon, H. Hill, Dr Charles (Luton) Marshall, Sidney (Sutton)
Churchill, Rt. Hon. W. S. Hill, Mrs. E. (Wythenshawe) Maude, Angus (Ealing, S)
Clarke, Col. Ralph (East Grinstead) Hinchingbrooke, Viscount Maudling, R.
Clarke, Brig. Terence (Portsmouth, W.) Hirst, Geoffrey Medlicott, Brig. F.
Colegate, A. Hollis, M. C. Mellor, Sir John
Conant, Maj. R. J. E. Holmes, Sir Stanley (Harwich) Molson, A. H. E.
Cooper, Son. Ldr. Albert (llford, S.) Hope, Lord John Monckton, Sir Walter
Cooper-Key, E. M. Hornsby-Smith, Miss P. Moore, Lt.-Col. Sir Thomas
Corbett, Lt.-Col. Uvedale (Ludlow) Horsbrugh, Rt. Hon Florence Morris, Hopkin (Carmarthen)
Craddock, Beresford (Spelthorne) Howard, Gerald (Cambridgeshire) Morrison, John (Salisbury)
Cranborne, Viscount Howard, Greville (St. Ives) Morrison, Rt. Hon. W. S. (Cirencester)
Crookshank, Capt. Rt. Hon. H. F. C Hudson, Sir Austin (Lewisham, N.) Mott-Radclyffe, C. E.
Crosthwaite-Eyre, Col O. E. Hudson, Rt. Hon. Robert (Southport) Nabarro, G.
Crouch, R. F. Hudson, W. R. A. (Hull, N.) Nicholls, Harmar
Crowder, Capt. John (Finchley) Hulbert, Wing Cmdr N. J. Nicholson, G.
Crowder, Petre (Ruislip—Northwood) Hurd, A, R Nield, Basil (Chester)
Cundiff, F. W. Hutchinson, Geoffrey (llford, N.) Noble, Cmdr. A. H. P.
Cuthbert, W. N. Hutchison, Lt.-Com. Clark (E'b'rgh W.) Nugent, G. R. H.
Darling, Sir William (Edinburgh, S) Hutchison, Col. James (Glasgow) Nutting, Anthony
Davidson, Viscountess Hyde, Lt.-Col. H. M. Oakshott, H. D
Davies, Nigel (Epping) Hylton-Foster, H. B. Odey, G. W.
de Chair, Somerset Jeffreys, General Sir George O'Neill, Rt. Hon. Sir Hugh
De la Bare, R. Jennings, R. Ormsby-Gore, Hon. W D
Orr, Capt. L. P. S. Savory, Prof. D. L. Tilney, John
Orr-Ewing, Charles Ian (Hendon, N.) Scott, Donald Touche, G. C.
Orr-Ewing, Ian L. (Weston-super-Mare) Shepherd, William Turner, H. F. L.
Osborne, C. Smiles, Lt.-Col. Sir Waller Turton, R. H.
Peake, Rt. Hon. O. Smithers, Peter (Winchester) Tweedsmuir, Lady
Perkins, W. R. D. Smithers, Sir Waldron (Orpington) Vane, W. M. F.
Peto, Brig, C. H. M Smyth, Brig. J. G. (Norwood) Vaughan-Morgan, J K
Pickthorn, K. Soames, Capt. C Vosper, D. F.
Pitman, I. J. Spearman, A. C. M. Wade, D. W.
Powell, J. Enoch Spens, Sir Patrick (Kensington, S.) Wakefield, Edward (Derbyshire, W.)
Price, 'Henry (Lewisham, W.) Stanley, Capt. Hon. Richard (N. Fylde) Wakefield, Sir Wavell (Marylebone)
Prior-Palmer, Brig. O. Stevens, G. P. Walker-Smith, D. C.
Profumo, J. D. Steward, W. A. (Woolwich, W.) Ward, Hon. George (Worcester)
Raikes, H. V. Stewart, Henderson (Fife, E.) Ward, Miss I. (Tynemouth)
Rayner, Brig. R Stoddart-Scott, Col. M. Waterhouse, Capt. Rt. Hon. C
Redmayne, M. Storey, S. Watkinson, H.
Remnant, Hon. P. Stuart, Rt. Hon James (Moray) Webbe, Sir H. (London & Westminster)
Renton, D. L. M. Summers, G. S. Wheatley, Maj. M. J. (Poole)
Roberts, Maj. Peter (Heeley) Sutcliffe, H. White, Baker (Canterbury)
Robertson, Sir David (Caithness) Taylor, Charles (Eastbourne) Williams, Charles (Torquay)
Robinson, Roland (Blackpool, S.) Taylor, William (Bradford, N.) Williams, Gerald (Tonbridge)
Robson-Brown, W. Teeling, W. Wills, G.
Rodgers, John (Sevenoaks) Teevan, T. L Wilson, Geoffrey (Truro)
Roper, Sir Harold Thomas, J. P. L. (Hereford) Winterton, Rt. Hon. Earl
Ropner, Col. L. Thompson, Kenneth Pugh (Walton) Wood, Hon. R.
Russell, R. S. Thompson, Lt.-Cmdr. R. (Croydon, W.) York, C.
Ryder, Capl. R. E. D. Thorneycroft, Peter (Monmouth)
Salter, Rt. Hon. Sir Arthur Thornton-Kemsley, Col. C. N TELLERS FOR THE AYES:
Sandys, Rt. Hon. D. Thorp, Brig. R. A. F. Mr. Drewe and Mr. Studholme
Acland, Sir Richard Crawley, A. Griffiths, Rt, Hon James (Llanelly)
Adams, Richard Crosland, C. A. R. Griffiths, William (Exchange)
Albu, A. H. Crossman, R. H. S Grimond, J.
Alien, Arthur (Bosworth) Cullen Mrs. A. Gunter, R. J.
Allen, Scholefield (Crewe) Daines, P. Haire, John E. (Wycombe)
Anderson, Alexander (Motherwell) Dalton, Rt. Hon. H. Hale, Joseph (Rochdale)
Anderson, frank (Whitehaven) Darling, George (Hillsborough) Hale, Leslie (Oldham, W.)
Awbery, S. S. Davies, A. Edward (Stoke, N.) Hall, Rt Hon. Glenvil (Colne Valley)
Ayles, W. H. Davies, Harold (Leek) Hall, John (Gateshead, W)
Bacon, Miss Alice Davies, Stephen (Merthyr) Hamilton, W W
Baird, J. de Freitas, Geoffrey Hannan, W
Balfour, A. Deer, G. Hardy, E. A
Barnes, Rt. Hon. A. J. Delargy, H. J Hargreaves, A
Bartley, P. Diamond, J. Hastings, S.
Bellenger, Rt. Hon F J Dodds, N. N. Hayman, F. H
Bonn, Wedgwood Donnelly, D. Henderson, Rt. Hn Arthur (Tipton)
Benson, G. Driberg, T. E. N. Harbison, Miss M
Beswick, F. Dugdale, Rt. Hon. J (W. Bromwich) Hewitson, Capt. M.
Bevan, Rt. Hon. A. (Ebbw Vale) Dye, S. Hobson, C. R.
Bing, G. H. C. Ede, Rt. Hon. J. C. Holman, P.
Blenkinsop, A Edelman, M. Holmes, Horace (Hemsworth)
Blylon, W. R. Edwards, John (Brighouse) Houghton, D.
Board man, H. Edwards, Rt. Hon. Ness (Caerphilly) Hoy, J.
Booth, A. Edwards, W. J. (Stepney) Hudson, James (Ealing, N.)
Bottomley, A. G. Evans, Albert (Islington, S.W.) Hughes, Emrys (S. Ayrshire)
Bowden, H. W. Evans, Edward (Lowestoft) Hughes, Hector (Aberdeen, N.)
Bowles, F. G. (Nuneaton) Evans, Stanley (Wednetbury) Hynd, J. B. (Attercliffe)
Braddock, Mrs. Elizabeth Ewart, R Irvine, A. J. (Edge Hill)
Brook, Dryden (Halifax) Fernyhough, E. Irving, W. J. (Wood Green)
Brooks, T. J. (Nornunton) Field, Capt. W J Isaacs, Rt. Hon G. A.
Broughton, Dr. A. D. D. Finch, H. J. Janner, B.
Brown, Rt. Hon. George (Belper) Fletcher, Erie (Islington, E) Jay, D. P. T.
Brown, Thomas (Ince) Follick, M. Jeger, George (Goole)
Burke, W. A. Foot, MM. Jeger, Dr. Santo (SI. Pancras, S)
Butler, Herbert (Hackney, S) Forman, J. C. Jenkins, R. H.
Callaghan, L. J. Fraser, Thomas (Hamilton) Johnson, James (Rugby)
Carmichael, J. Freeman, John (Watford) Johnston, Douglas (Paisley)
Castle, Mrs. B. A Freeman, Peter (Newport) Jones, David (Hartlepool)
Champion, A. J. Gaitskell, Rt. Hon. H. T N Jones, Frederick Elwyn (W. Ham, S)
Chetwynd, G. R. Ganley, Mrs C. S Jones, Jack (Rotherham)
Clunie, J. George, Lady Megan Lloyd Jones, William Elwyn (Conway)
Cocks, F. S Gibson, C. W. Keenan, W.
Coldrick, W. Gilzean, A. Kenyon, C.
Collick, P. Gooch, E. G. Key, Rt. Hon C. W
Collindridge, F. Gordon-Walker, Rt. Hon. P. C. King, Dr. H. M.
Cook, T. F. Granville, Edgar (Eye) Kinghorn, Sqn. Ldr E
Cooper, Geoffrey (Middlesbrough, W.) Greenwood, Anthony (Rossendale) Kinley, J.
Cooper, John (Deptford) Greenwood, Rt. Hn. Arthur (Wakefield) Lang, Gordon
Corbet, Mrs. Freda (Peckham) Grenfell, Rt. Hon. D. R. Lee, Frederick (Newton)
Cove, W. G. Grey, C. F. Lee, Miss Jennie (Cannock)
Craddeck, George (Bradford, S.) Griffiths, David (Rother Valley) Lever, Leslie (Ardwick)
Lewis, Arthur (West Ham, N) Orbach, M Taylor, Robert (Morpeth)
Lewis, John (Bolton, W.) Padley, W E. Thomas, David (Aberdare)
Lindgren, G. S. Paget R T. Thomas, George (Cardiff)
Lipton, Lt.-Col. M. Paling, Rt. Hon Wilfred (Dearne V'lly) Thomas, lorwerth (Rhondda, W)
Logan, D. G. Paling, Will T. (Dewsbury) Thomas, Ivor Owen (Wrekin)
Longden, Fred (Small Heath) Panned, T. C. Thorneycroft, Harry (Clayton)
McAllister, G. Pargiter, G A Thurtle, Ernest
MacColl, J. E. Parker, J. Timmons, J.
Macdonald, A. J. F. (Roxburgh) Pearson, A. Tommy, F.
McGhee, H. G. Peart, T. F. Turner-Samuels, M
McGovern, J. Porter, G. Ungoed-Thomas, Sir Lynn
McInnes, J, Price, Philips (Gloucestershire, W.) Usborne, H.
Mack, J. D. Proctor, W. T. Vernon, W. F
McKay, John (Wallsend) Pryde, D. J. Viant, S P.
Mackay, R. W G (Reading, N) Pursey, Cmdr. H Wallace, H. W.
McLeavy, F. Rankin, J. Watkins, T E.
MacMillan, Malcolm (Western Isles) Rees, Mrs. D. Webb, Rt. Hon. M. (Bradford, C)
McNeil, Rt. Hon. H. Reeves, J. Weitzman, D
MacPherson, Malcolm (Stirling) Reid, William (Camlachie) Wells, Percy (Faversham)
Mainwaring, W. H. Rhodes, H. Wells, William (Walsall)
Mallalieu, E. L. (Brigg) Richards, R. West, D. G.
Mallalieu, J. P. W. (Huddersfield, E) Roberts, Emrys (Merioneth) Wheatley, Rt. Hon. John (Edinb'gh E.)
Mann, Mrs. Jean Roberts, Goronwy (Caernarvonshire) While, Mrs. Eirene (E. Flint)
Manuel, A. C Robertson, J. J. (Berwick) White Henry (Derbyshire, N E.)
Marquand, Rt. Hon. H A Robinson, Kenneth (St. Pancras, N.) Whiteley, Rt. Hon W
Mathers, Rt. Hon G Rogers, George (Kensington, N.) Wigg, G.
Mayhew, C. P Royle, C Wilcock, Group Capt C. A. B
Mellish, R. J. Shackleton, E. A. A. Wilkes, L.
Messer, F. Shawcross, Rt. Hon. Sir Hartley Willey, Frederick (Sunderland)
Middleton, Mrs. L Shurmer, P. L. E. Willey, Octavius (Cleveland)
Mikardo, Ian. Silverman, Julius (Erdington) Williams, David (Neath)
Mitchison, G. R Silverman, Sydney (Nelson) Williams, Rev. Llywelyn (Aberlillery)
Moeran, E. W Simmons, C J Williams, Ronald (Wigan)
Monslow, W. Slater, J. Williams, Rt. Hon. Thomas (Don V'lly)
Moody, A. S. Smith, Ellis (Stoke, S.) Williams, W T. (Hammersmith, S.)
Morgan, Dr. H B Smith, Norman (Nottingham, S.) Wilson, Rt. Hon. Harold (Huyton)
Morley, R. Snow, J. W. Winterbottom, Ian (Nottingham, C.)
Morris, Percy (Swansea, W) Sorensen, R. W Winterbottom, Richard (Brightside)
Mori, D. L. Soskice, Rt. Hon. Sir Frank Wise, F J.
Moyle, A. Sparks, J. A Woodburn, Rt Hon A.
Mulley, F. W. Steele, T. Woods, Rev. G S
Murray, J. D. Stewart, Michael (Fulham, E.) Wyatt. W. L.
Nally, W. Strachey, Rt. Hon. J. Yates, V. F.
Neal, Harold (Bolsover) Strauss, Rt. Hon. George (Vauxhall) Younger, Rt. Hon. K
Noel-Baker, Rt. Hon. P J Stross, Dr. Barnett
O'Brien, T. Summerskill, Rt. Hon. Edith TELLERS FOR THE NOES:
Oldfield, W. H. Sylvester, G. O. Mr. Popplewell and Mr. Wilkins.
Oliver, G H Taylor, Bernard (Mansfield)

Question put, and agreed to.