POST-WAR CREDITS (Hansard, 25 November 1953)

§ Mr. M. Follick (Loughborough)
This question I am raising tonight is very complicated, and I beg a little indulgence from the Chair, because I know that we must not bring the question of legislation into an Adjournment speech. This vexed question of post-war credits is a matter that should have been readjusted years ago. I am not putting on the Conservatives the entire blame for not having already introduced legislation to alter the present system of paying out these post-war credits. I think that we ought to have done it ourselves, when in power.

Mr. Deputy-Speaker (Mr. Hopkin Morris)
The hon. Member, himself, began by referring to the right rule. I think he must observe it.

§ Mr. Follick
I am most profoundly sorry, but I did give a little warning that such might happen in the course of my speech, and I craved your indulgence, Sir.
I am sure that there is, throughout the country, great resentment at the fraudulent way in which post-war credits are being administered.

§ Lieut.-Colonel Marcus Lipton (Brixton)
They are not being administered.

§ Mr. Follick
I think it is a frightful shame, and a slur on the workings of this House, that people who are desperately in need of the money that rightly belongs to them should not be considered, while other people who have no need of this supplementary money should have it almost forced upon them. It is laid down: in the law that a man has to attain the age of 65 years, and a woman 60 years, before getting the benefit of repayment of post-war credits.

§ Lieut.-Colonel Lipton
The hon. Member talks about a "benefit." It is not a benefit. It is an entitlement, and that, I think, is the better word to use.

§ Mr. Follick
It might be a better word legally, but the person who gets that money gets the benefit of it. What I am protesting against is their not getting the benefit of it, although they are entitled to it.
When I reached the age of 65 I was paid my post-war credits without any trouble and without the slightest questioning. I did not need them. When I got them, what did I do? I paid them back—I put them in the bank, which is the same thing as paying them back.

§ Lieut.-Colonel Lipton
Not quite.

§ Mr. Follick
I understand that the maximum that any individual can receive by way of post-war credits is about £300.

§ Mr. Douglas Houghton (Sowerby)
It is £325.

§ Mr. Follick
To one person £300 may be very little, yet to another person £10 or £15 or £20 may mean all the difference between ending his life in a decent way or in a poverty-stricken way. The Tories feel quite as strongly about these post-war credits as we do on these benches. I remember the trouble there was at Margate about them, when harsher words were used than I am using this evening.
As a Member of Parliament, I have received appealing letters, as have hon. Members opposite. I remember one that I had from a person dying of cancer, who had a very few months to live. We on these benches were in power then. I wrote to the Treasury, but they could do nothing about it because of the law, and the money could not be paid. Just think of the difference in comfort that £10, £20 or £30 might have made for that person in the last months of his life. After all, the money belonged to him. But nothing could be done for this man. I afterwards received a letter from the family saying that he had died in a miserable way.
There are other cases of people who are in desperate need. I remember one case of a man who was brought up before the magistrate and had the option of going to prison or paying a fine. He came to me and asked if he could have 460 his post-war credits with which to pay the fine.

§ Mr. Houghton
Is my hon. Friend suggesting that post-war credits should be used to subsidise sin?

Mr. Deputy-Speaker
I am not quite certain what the hon. Member's argument is directed to. Is he directing his argument to the suggestion that in certain specific cases post-war credits should be paid, or that the total amount should be paid? I understand that the position is this. Specific classes cannot be paid without legislation, but the total sum can be dealt with administratively. That being the case, the hon. Gentleman cannot on the Adjournment argue for the payment of post-war credits to specific classes.

§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
It may be of assistance to you, Mr. Deputy-Speaker, if I indicate that the only step possible in this direction without legislation is what you have indicated—a complete payment of all outstanding credits, which can be effected under the original legislation by Treasury order. Any other payment on a selective basis would require legislation.

Mr. Deputy-Speaker
In that case, the hon. Member must direct his argument on the Adjournment to the total sum.

§ Lieut.-Colonel Lipton
Pay the lot.

§ Mr. Follick
If that is the only manner in which I can make this protest, then I must obey the Chair, and say that it is the total sum with which I am concerned. The total sum after the war was, in round figures, £800 million out of which, roughly speaking, £185 million has been repaid. The total amount paid back up to 1953, including the years during the war, has been £214 million. That leaves nearly £600 million—

§ Mr. Houghton
It leaves £572 million.

§ Mr. Follick
I said "nearly"—to pay back. These repayments have been gradually falling off each year. I shall not take the first two years—1946–47 and 1947–48—because they included previous years. In 1948–49 the repayments amounted to £19 million; in 1949–50, to £17 million; in 1950–51, to £169 million; in 1951–52, to £16.2 million, and in 461 1952–53, to £16 million. There has been a gradual fall yearly, from £19 million to £16 million.
I contend that in considering these repayments we should not take too much notice of a fixed limit of 65 years of age. We should be more inclined to take notice of need. How are we to do so?

Mr. Deputy-Speaker
Order. The hon. Member is now referring to a specific class of people, and that would require legislation. He can deal with the total amount, but no other.

§ Mr. Follick
I am now speaking about the repayment of the total amount. I am not speaking of the repayments in any one year.

Mr. Deputy-Speaker
The question of specific need would not then arise.

§ Lieut.-Colonel Lipton
We are all in need.

§ Mr. Follick
We are all agreed—

§ Lieut.-Colonel Lipton
I said, "We are all in need."

§ Mr. Follick
—that something should be done on those lines to help the needy—even if it means paying back the whole amount—and not to help the people who are not in need. We have the National Assistance Board, which could tell us whether or not people are in need, so that we could make full use of legislation, and find legislative means by which this can be carried out.

Mr. Deputy-Speaker
Order. The hon. Member is again advocating legislation. He must keep off any argument which involves legislation.

§ Mr. Follick
I am suggesting legislation which already exists. Hon. Members on both sides of the House have told me that they would like to intervene in this debate. We all have the feeling that something is wrong in withholding this sum, even the complete sum, not to speak of smaller amounts—because I must not speak of them.
I should like to read two or three lines from a leading article in a newspaper today, mentioning a speech of the Chancellor of the Exchequer, and his representative here will understand that what the Chancellor has said must be true.

Hon. Members
No.

§ Lieut.-Colonel Lipton
My hon. Friend has now destroyed his case.

§ Mr. Follick
I am not referring to what we think, but what the Financial Secretary thinks. The leading article says: There remain to add a level of production now higher than at any time since the war, the substantial recovery of our gold and dollar reserves, the improvement in the balance of payments… That has all happened in the last year. If we are so well off and solvent, surely we can at least think of those poor people who are not only not solvent but are desperately in need of some help.

§ Mr. Douglas Houghton (Sowerby)
I hope that my language in dealing with this matter will be a little more temperate than that of my hon. Friend the Member for Loughborough (Mr. Follick). I hope, also, that I can keep within the rules of order on a matter which, from experience, we know is a very troublesome one to deal with on the Adjournment.
I am sure that the House will realise how the original conception of post-war credits has painfully misfired in the years since the war. It was, we believe, the conception of the late Lord Keynes, who was advising the Government on economic matters during the war. There is an interesting account of what was in the mind of Lord Keynes in Mr. Roy Harrod's biography of him, and with the permission of the House I should like to read an extract from Mr. Harrod's biography of the late Lord Keynes. It says: Reflecting upon the normal course of inflation it occurred to him that what really happened was that the capitalist class enriched itself by the rise of prices and emerged from the war better off by the amount of the increase in the National Debt to which they were enabled by the inflation to subscribe. His plan of compulsory saving would secure that a substantial part of the deficit was financed not by inflation borrowing but a levy upon wage packets in return for an undertaking to pay later. Thus, it would be the wage earners and not the profit takers who would emerge from the war as the main holders, in the form of deferred pay claims, of the newly created National Debt. It is true that these proposals did create a much larger credit for the great mass of the wage earners of the day than they 463 did for the rentier class or the well-to-do. As my hon. Friend the Member for Loughborough said, the maximum holding of post-war credits is about £300. I ought, I suppose, to declare an interest, because my holding is the maximum of £325, and if the existing rules continue it will be 10 years before I am paid out. The system adopted of repaying post-war credits has been by reference to the attainment of a certain age.
This is at variance with a promise made by the then Chancellor of the Exchequer when he introduced post-war credits for the first time in his Budget Speech of 7th April, 1941. The late Sir Kingsley Wood said: I am proposing, therefore, that the extra tax which any individual will pay by reason of the reduction in the personal allowances and earned income allowance will be offset after the war by a credit which will then be given"— which will then be given— in his favour in the Post Office Savings Bank."—[OFFICIAL REPORT, 7th April, 1941; Vol. 370, c. 1329.] That was the promise made at the time the post-war credits were introduced, and which were accompanied by a very severe increase in direct taxation; but for reasons which have been fully explained to this House by successive Chancellors of the Exchequer, partly the desire to avoid stimulating the inflationary movement, partly on account of the difficulty of raising in addition taxation or in borrowing any additional resources to repay such a huge amount, they could not do more than is being done now.
A number of suggestions have been made for accelerating the repayment and for extending the conditions upon which repayment may be made, such ideas as a progressive reduction in the age at which repayment should be made or payment to widows and next-of-kin or payment in cases of long illness.

Mr. Deputy-Speaker
All these suggestions, surely, would require legislation.

§ Mr. Houghton
I was about to say not only that I reject these on their merits, but that they would be out of order in this debate, Mr. Deputy-Speaker. I am not suggesting any of these things; I am, in fact, saying that each one of them, apart from requiring legislation, has inherent defects, anomalies and injustices, 464 quite apart from the difficulties of administration which perhaps I should not mention because, in my trade union capacity, I represent the people who have to repay the post-war credits, whether on a large scale or on a small scale.
I suggest that there is only one satisfactory thing to do about post-war credits—not to repay them all but to credit the credits into an account in the Post Office savings bank, as the author of post-war credits said would be done, or into savings certificates, at the option of the holder. I believe that, otherwise, the Chancellor of the Exchequer will be under constant pressure and that the farce of post-war credits will be more strongly criticised as the years go by.
Already, post-war credits have gone into the currency of music hall jokes. They are not treated seriously on the music hall stage, but they are treated very seriously on the platform and in the body of the halls of the Conservative Party conference, and not all the blandishments, persuasive eloquence and grasp of the case which we know the Financial Secretary to have succeeded in stemming the tide of criticism and resentment at his own party conference.
It may be argued that if a forced loan, which post-war credits were, is converted into a voluntary loan, the withdrawals might be on such a scale as to weaken the financial stability of the country, so that the Chancellor of the Exchequer would have to cover the withdrawals either by additional taxation or by additional borrowing. I think that in taking this bold step of converting a compulsory loan into an ordinary voluntary loan the Chancellor would have to impress upon people that if they rushed for repayment serious measures would have to be taken to offset the financial consequences. I believe that the public would respond.
Those who had money to lend, the better-off people, who had money in their pockets or in their banks, or were making profits out of the war—those who could lend voluntarily—have the right to withdraw the full amount, whatever it is, which they lent to the Government in the war. They can leave it to whom they like. They can even leave it to charity. But if we leave our post-war credits to charity, there is no provision, at the moment, for them ever to be repaid 465 The people who were not among this more fortunate class—the war workers, the wage earners—who were asked to give the maximum production, were asked at the same time to make the maximum financial sacrifice by deduction of Income Tax from their wages; and they are not allowed freedom of use of their money, whereas everybody else is.
Let me say, in passing, that there is nothing more salutary than taking tax out of a wage packet. It does not matter whether there is distress at home, it does not matter whether there is illness or domestic hardship, it does not matter whether one is passing through some temporary or even permanent financial crisis—that money is taken out of the wage packet whether one likes it or not.
The great mass of the well-to-do taxpayers are not in that unfortunate position. They pay under Schedule D, and anyone who pays tax under Schedule D knows that he can have, if he wants it, or if he takes it, considerable time in which to pay. Therefore, those who have the biggest stake in post-war credits today are those who suffered a compulsory loan by deduction from their wage packets.
I believe that this is the only way to end the present unsatisfactory position of post-war credits. Do anything else—reduce the age limit progressively, try to meet hard cases—and administrative difficulties immediately arise. Are we to have a tribunal to decide the degree of hardship upon which post-war credits are to be repaid? Are we to trouble the whole community by asking people to produce their birth certificates before they can get repayment? We can at least say at present that when post-war credits are paid out at the retirement ages there is automatic proof of age in 90 per cent. of the cases, because at that time proof of age has to be given to the Ministry of National Insurance, and Government Departments, being what they are, exchange information.
Any age much lower than retirement age would require independent and separate proof of age. I hope, therefore, that the Financial Secretary will be able this time to do a little more than just stonewall on this issue. I had the privilege to take part in an earlier debate on this subject on the Adjournment, instigated by my hon. Friend the Member for Southampton, Itchen (Mr. Morley); 466 but we got nowhere. I know that Adjournment debates are perhaps not the occasions for statements of major policy on the part of Her Majesty's Government, and we can only say this: if the Financial Secretary cannot do better this time than he did last time we shall be bound to leave him to the mercies of the Conservative Party conference.

§ Sir Edward Boyle (Birmingham, Hands worth)
I was interested to hear the hon. Member for Sowerby (Mr. Houghton) saying what a good thing it was to cease taxing wage packets and I hope he will remember, when addressing his constituents in Sowerby that the present Government have reduced the taxation of some 14 million wage packets. I will come in a moment to the suggestion of turning forced loans into voluntary loans and also to the Margate conference.
I think that it is only right when we are considering this question that we should first take into account the very difficult position which each Government has faced since the war over post-war credits. The hon. Member for Sowerby very rightly quoted from Mr. Harrod's "Life of Keynes." I suspect that there were other points in Keynes' mind. I think that one of the assumptions upon which a great deal of his war-time advice was based was that, after the war, in one or two years we might get back to unemployment, and that it would be very useful for whatever Government was in power to keep this spending money in reserve.
I think that one thing which vitiated Lord Keynes' economic thinking in his later years was his failure to realise that the balance of payments difficulties would constitute our prime economic problem after the war. We have had no employment difficulties since the war. I do not want to make a party point of this, but no less a Socialist than G. D. H. Cole once said that the party opposite never had to take steps to increase employment when the Socialist Party were in office.
The principal problem since the war has been our balance of payments problem and, therefore, the whole trend of our economic policy has had to be very different from that which Lord Keynes conceived in the 1940s, when we were still at war. The post-war credits have left 467 each Government with a very difficult situation.
The hon. Member for Loughborough (Mr. Follick) mentioned that the Chancellor of the Exchequer was always right. I have the greatest respect for the judgment of my right hon. Friend. I think he has the gift of accurate forecasting, and of being right very much more often than most people. But if, next year, he were to repay £572 million of post-war credits, my judgment in him would be a little bit shaken; and I am not happy even about the suggestion of turning a forced loan into a voluntary loan.
I do not want to go into detail about the present economic position, but I do not think that many people would dispute that the present level of consumption at home is just about as high as the country could afford—some would say that it is rather higher than we can afford. I do not think many would dispute that we could hardly afford to take steps which would very much step up the level of consumption at home. Certainly, if £572 million worth of post-war credits were to be repaid in the next Budget that would certainly step up consumption at home quite considerably.

§ Mr. Follick
Would the hon. Member concede that I mentioned £572 million only to be in order? What I suggested was that the needy should be paid, but that was out of order.

§ Sir E. Boyle
There were moments in the hon. Member's speech when I was rather reminded of the famous sentence in "Alice in Wonderland": Everybody has won, and everybody shall have prizes. The hon. Member wanted to indicate that he wished certain specific classes of people to win, but he could only keep himself in order by saying that everybody should win.
To return to the question of a voluntary loan, I am not quite as optimistic as the hon. Member that an appeal from the Chancellor of the Exchequer would have the effect that he would like. I am not trying to make a party point, but am looking at the thing realistically. Since the war there has been a steep rise in prices, and especially in the period after the opening of the war in Korea, not so very long ago. People simply do 468 not have the confidence that if they leave their savings in the Post Office, those savings, in a few years' time, will be worth anything like as much as they are worth today. One of the penalties we have to pay for the steady fall in the value of the £ since the war is that people would not be so ready to respond to an appeal of that kind.

§ Mr. Houghton
Surely the hon. Member knows that not only are millions of people leaving their money in the Post Office, but that millions of people are still putting their money into it.

§ Sir E. Boyle
I quite agree. Nevertheless, I still think that if we were to do as the hon. Member suggests and try to turn this forced loan into a voluntary loan, people's fears as to the value of money in the future would be a factor which militated against its success. Much as I respect the persuasive powers both of my right hon. Friend the Chancellor of the Exchequer and of my hon. Friend the Financial Secretary, I think that that would be taking too big a risk.
I am not making the mistake of asking my hon. Friend to anticipate his right hon. Friend's Budget statement, but it seems fairly clear that in the next Budget we must think a great deal about investment, both at home and abroad. It is unrealistic to expect my right hon. Friend to take any steps which would result in a large increase in consumption.
Just a word about Margate. The discussion at Margate was a very good one. I was one of the scrutineers in the count afterwards, and a very exciting job it was. My hon. Friend made a speech as persuasive as any he has made on the Finance Bill in the House. When I heard him trying to persuade his friends at Margate about post-war credits, I thought he was putting up the sort of performance that he used to put up two years ago when he tried to persuade my hon. Friend the Member for Oldham, East (Mr. Horobin) that the Excess Profits Levy was not quite such a bad thing after all. Even though, despite his efforts, my hon. Friend was not successful at Margate, the fact that the majority was a very narrow one was a tribute to his talents.

§ Mr. Emrys Hughes (South Ayrshire)
The hon. Member said that he took an intimate part in the ballot at the conference. Can he explain why it was a ballot vote?

§ Sir E. Boyle
That is not something of which the House normally takes cognizance. It is not too easy to count hands with two halls involved at the same time. There is nothing sinister about that.
I want to end on this note. We are in a difficult position today. On the one hand, post-war credits are an obligation which has to be met. The "Economist" made a useful point in an article a week or two ago when it pointed out that unless this post-war credits obligation is met we shall never be able to use a method of this kind again.
On the other hand, it is unrealistic not to take into account the economic position of the country today. I do not think that many people would dispute that in our financial policy for the immediate future we must be thinking of industry rather than of increasing consumption. It is because I am afraid that the proposals suggested by the hon. Member for Sowerby would lead to a fairly big increase in consumption that I cannot agree with him, given the economic circumstances of the country as they are at present.

§ Mr. Norman Smith (Nottingham, South)
I find myself in the very difficult position of agreeing with much that the hon. Member for Handsworth (Sir E. Boyle) said, though I cannot let him get away with the idea that a balance of payments difficulty is a post-war phenomenon. It is nothing of the sort. In the three years before 1939 this country had a substantial balance of payments deficit on overseas accounts. The then Tory Government did nothing about it, because in those days we were able to run down the overseas investments accumulated by our Victorian forefathers.
I agree with the hon. Member for Handsworth on two major counts, much as I dislike doing so. My hon. Friend the Member for Loughborough (Mr. Follick), who has performed a public service by raising this matter, relied mainly on humane considerations. That, however, is not much good, for we cannot make that a major factor in a discussion of this subject. I agree with the hon. Member for Handsworth that to pay out all this money at once might lead to difficulty, and, therefore, I will give the Financial Secretary an idea of how to do it and he 470 will be very grateful to me for the suggestion. It is a much better system than that suggested by my hon. Friend the Member for Sowerby (Mr. Houghton), because if this money were straight away paid out in cash unequivocally, there would be inflation.
If we did what my hon. Friend the Member for Sowerby suggested, there would still be inflation, because all sorts of people would cash these credits. I want the Financial Secretary to give very serious consideration to my suggestion about this, because there is no reason why he should not do what my hon. Friend the Member for Loughborough wants him to do. The existence of these post-war credits has the effect of making the working-class wage earner entirely sceptical about the whole business of savings, and I feel that we have got to have a serious saving campaign in the years immediately ahead.
I agree with the hon. Member for Handsworth that we have to restrict consumption at home, or at any rate we have toprevent it from rising. We must do that for all sorts of reasons which I will not go into now, although I suppose I could and still keep within the rules of order. In the next few years this country has to give away to our Colonies a lot of productive equipment so that they may raise their standards of living. That is one of the prices we have to pay for peace. We cannot meet colonial discontent with pattern bombing and the suppression of constitutions. We have to give a lot away on overseas account to our Colonies. We have to give unrequited exports by way of capital goods to enable them to raise their standard of living to something like our own.
I am not promising my working-class supporters that if we get a Labour Government at the next Election—as we will—everything is going to be easy, because it is not. We must have savings in this country.
I wonder whether the Financial Secretary has looked at a little book in the Library, Barclays Bank Monthly Review for November, 1953. There is a grim article in that issue. I am a Socialist and have advocated Socialism for many years, but I do not rejoice in the imminent breakdown in capitalism if it means that the people who put me into this House are going to starve.
471 The current issue of Barclays Bank Monthly Review points out that in the last five years, 1948 to 1952, personal saving has accounted for about only 3 per cent. of all new investment in this country. That is pretty grim. Personal savings are at a low ebb, which means that the capitalist system is on the way out unless somebody does something about it pretty quickly. Much as I want capitalism to go, I do not want it to do so until I have a new system ready to put in its place. We have to encourage saving in this country, and the greatest evil of the continuance of post-war credits in their present condition is that there is a wholehearted mistrust in working-class minds throughout the country of the entire financial set-up, the entire business of saving, the entire business of money.
I am not pleading for social credit, I am staying within the framework of orthodox finance. The time has come when we have to induce people to spend lesson consumption, particularly the luxurious forms of consumption of which many of the Labour supporters are rather fond. We must have some saving in this country, but we shall not get it while this ghost of post-war credits is grinning down all the time on the scene of the meeting where the savings campaign speaker is pleading his case. We just will not get it.
Another reason we have to pay these post-war credits off now is that there is something about them which is sinister, which is enough to make anybody cynical of the whole bag of tricks. I refer to the following circumstance. I am 64. I am due to be paid out on 31st January, 1955. Supposing something happened to me meanwhile, my dear wife, who would then be my widow, would actually be due to be paid out sooner than I would since she will be 60 next year. Supposing, however, that the two of us were killed in an aircraft crash or a railway smash, my heir is my daughter. She would not be able to have my post-war credit until the year 1983. Supposing, however, my daughter were to "go west" in 1982, my oldest grandchild would be the heir to my post-war credit and she, poor girl, could not inherit it until the year 2009.
This is too silly to be true, but it makes working-class people not merely suspicious 472 and resentful but completely contemptuous of the whole bag of tricks. The time has come when the Financial Secretary would be doing a good turn to the capitalist system, in which he believes and I do not, and he would be doing a good turn to the precarious economy of this country if he paid off all post-war credits. I feel that the system suggested by my hon. Friend the Member for Sowerby would not do because people cannot be trusted with the initiative in these matters. Yet, without any legislation, there is something which the Financial Secretary could do easily if he would. It would make rather a lot of work for the members of the trade union over which my hon. Friend the Member for Sowerby presides—

§ Mr. Houghton
We would do our best.

§ Mr. Smith
The Financial Secretary could do it next week without legislation. It would not mean inflation, and the people who voted for him would say that the Tory Goverment had done a good thing. All he has to do is to issue Treasury bills. They do not need to be for only one month or two or three, and there is no reason why they should not be for x months. The hon. Gentleman has only to fill in the number of months applicable to the case of the recipient of the Treasury bill. My own would be for £130-odd payable on 31st January, 1955. The only conceivable objection to the idea I am putting forward is that it would make a lot of clerical work, but no doubt my hon. Friend the Member for Sowerby would meet that.
If we had Treasury bills dated at the appropriate birthday of the recipient, the suspicions of the people who returned my hon. Friends and me to the House would be allayed. They would then have a document conveying interest to them at, I suppose, 2⅜ per cent. per annum. That is the rate of interest on the three-months Treasury bill and there is no reason why it should not be the rate of interest on the x-years Treasury bill. It would be very easy. It would be purely administrative. There would be no inflation with it, and confidence would be restored to the minds of the people. If the hon. Gentleman will do this, his party can have all the credit. It would do the country a lot of good.

§ Mr. Emrys Hughes (South Ayrshire)
I was interested in the speech of the hon. Baronet the Member for Handsworth (Sir E. Boyle) because of the light it threw on the mechanics of the Conservative Party. At Margate, we had the great example of the Conservative Party revolting against its leadership, a movement with which I, as a rank and file member of the Labour Party, cordially agree.
I wish to speak tonight on behalf of the completely disillusioned Tory working man who, after having given a democratic and overwhelming mandate to the Conservative Party on the subject of post-war credits, finds that the matter is raised on the first possible occasion not by a Conservative hon. Member but by my hon. Friend the Member for Lough-borough (Mr. Follick). If the platform had been defeated in the case of a Labour Party conference under the Labour Government, Labour hon. Members would have used the first available opportunity to bring pressure on their own Government to carry out the party's democratic mandate.

§ Mr. Houghton
Where are the Conservative hon. Members?

§ Mr. Hughes
Yes, where are they? Tomorrow, Conservative working men will want to know why only six Conservative Members of Parliament attended this momentous debate to carry out the instructions given by the rank and file to the Conservative Party. There is not one Conservative hon. Member from Scotland present.

§ Mr. Gerald Nabarro (Kidderminster)
There is one hon. Member for Worcestershire here, and that is what matters.

§ Mr. Hughes
I should like some further information from Conservative Party Members who are present about how the mandate was given by the rank and file. I was completely dissatisfied by the explanation given by the hon. Member for Handsworth. He is one of the few hon. Members opposite who speak with authority as economists. I presume that that was the reason why he was appointed a scrutineer at the Conservative Party conference. It needed somebody with a knowledge of Keynesian economics to 474 count the votes at the Conservative conference.

§ Sir E. Boyle
I merely happened to be at the end of the row nearest the room where the votes were being counted.

§ Mr. Hughes
That involves us in a further mystery. I asked the hon. Member to give us a little enlightenment as to why a ballot needed to be taken on the issue. His remarkable explanation was that they could not count the hands. So Conservative Party scrutineers cannot even count.

§ Sir E. Boyle
It was because the voting in both rooms was so close.

§ Mr. Hughes
If the Conservative Party cannot provide scrutineers who can count 2,000 votes, we cannot expect anything very definite from it in solving our economic problems.

§ Mr. Houghton
If my hon. Friend will permit me, in fairness to the Conservative Party conference and the scrutineers, I think we ought to admit that at the last T.U.C. we lost 1,700,000 votes.

§ Mr. Speaker
And in fairness to the rules of the House, I must say there seems to be no Ministerial responsibility for the matter which the hon Gentleman is now discussing.

§ Mr. Follick
On a point of order. Is this an Adjournment debate on post-war credits, on which I have asked for money to be paid to needy people, or is it a debate on the Margate conference? I thought it was a debate about money being paid to needy people.

§ Mr. Speaker
That is not a point of order.

§ Mr. Hughes
Unfortunately, there is some Ministerial responsibility on this matter. I know that you, Mr. Speaker, do not bother to read the reports of Conservative Party conferences, but I do, and I wish to inform you that the hon. Gentleman who replied from the platform on behalf of the Conservative Party was the Financial Secretary to the Treasury. Now, we have another mystery—whether that Minister has any responsibility.
I think that a serious attempt should be made by the Minister to clear up this matter. What does he intend to do to 475 appease his rank and file? What does he intend to do to yield to the clamant demand that is coming from the working men of the Conservative Party that these post-war credits shall be paid? If it is said that the Minister has no responsibility in this matter, I am tempted to agree, but I ask him to give us a more satisfactory answer than he gave to the Conservative Party conference at Margate.

§ Mr. Charles Doughty (Surrey, East)
Everybody who has lent money, of course, likes to be repaid, quite regardless of the purpose for which the money was used or whether the person who has to repay can pay without inflicting very great hardship on other people. As one who was not a member of the Government which borrowed the money—I think very few hon. Members sitting here tonight were here in 1942, 1943 or 1944 when the money was borrowed—it is not difficult for me to say that the money has been spent and is not there.
It has been spent upon conducting a war and in paying for it, or part of it, because future generations will have to pay for the rest, and any picture which suggests that this Government or any other Government is sitting upon £572 million and refusing to pay out to those who think it is time that it was paid out is an entirely false picture. The money has gone up in smoke, gone away in tanks, gone to the bottom of the sea in ships and in other methods that were very necessary at that time.

§ Mr. Houghton
The hon. Gentleman will probably agree that voluntary savings at that time went exactly the same way?

§ Mr. Doughty
Oh, no; I do not agree for one single moment that that was what was happening. It was taken at the time on the assumption and understanding that, sometime post-war, it would be repaid. Savings were put in on the understanding and with the guarantee that they would be repaid upon demand, which is a very big difference indeed.
The only matter which is being discussed in this debate is whether a Treasury order should be issued that this money should now be repaid. I should like to know from the Financial Secretary to the Treasury, if such an order 476 were made, by how much the Chancellor of the Exchequer would have to say next Budget day it was necessary to increase taxation in order that that Treasury order should be fulfilled. I make no guess, but at least a shilling would have to go upon the Income Tax of all the rest of the people. [Hon. Members: "Why not?"] Why not? Because the prosperity of this country and the prosperity of the people who live in it depends upon holding down, and if possible reducing, taxation, and, unless that can be done, we shall lose orders in the markets of the world and unemployment will start all over again.

§ Mr. Nabarro
I am sure that my hon. Friend does not want to mislead the House. The amount £572 million would not equal at the present rate the yield of 1s. in the £ on the Income Tax but but approximately 4s. in the £.

§ Mr. Doughty
I am very much obliged to my hon. Friend.

§ Mr. Follick
The hon. Gentleman was not in when I began my speech, and Mr. Deputy-Speaker ruled out certain observations that I made. My idea was not to pay out £572 million but to give some satisfaction to many needy people.

§ Mr. Doughty
I was in the House not only when the hon. Member opened his speech but for some time before. I heard him say that, and I heard Mr. Deputy-Speaker rule him out of order. Despite a second attempt to bring back by a devious method the same argument, he was again ruled out of order by Mr. Deputy-Speaker. I do not propose to follow the hon. Member into those wholly wrong paths into which he allowed himself to go until he was called to order.
Not only would that evil of excessive taxation be inflicted upon this country if such a task were undertaken, but the perils of inflation which we are now holding down to the utmost of our capability would be loosed upon the whole fabric of this country. What would happen if 572 million pounds notes were printed and distributed right throughout this country? Would there not be a scream about the inflationary effect that they would have? Would there not be a rise in prices? The proposals to which I have listened from the other side of the House amount to absolutely no solution of the problem.
477 What is the suggestion? That instead of paying the money out directly in cash we pay it out through the Post Office. It matters not what course we take for that purpose. If we say that instead of paying it through the post we pay it through the Post Office, it makes no difference at all. If we say that some people might leave it in the Post Office, I reply that it is just those people with the least feeling of patriotism who would be the first to draw it out.
If we choose Treasury bills, what is to happen to them? Are we to take them and discount them? I am sorry to hear that the hon. Member for South Ayrshire (Mr. Emrys Hughes) has such an unfortunate view of the mortality rate in his family. I only hope that he will last the few more months that are required, and we shall be happy to see him here, if there is not a General Election in the meantime, enjoying the luxury of his post-war credits. He is entitled to it.
We must always remember that this country carries a load of debt around its neck. The rate and method of repayment of these credits have been calculated, and I do not think it is quite so depressing an arithmetical and geometrical progression as the hon. Gentleman made out. So far as this country can afford, this debt—it is a debt and not money that is being withheld—is being repaid. Any other system would only result in inflation and excessive taxation with all its evil and its consequences of rising prices and unemployment.
Hard as it may be on those who have a genuine and honest difficulty, and while one fully appreciates their feelings as expressed at Margate, we must recognise the hard fact that £572 million cannot be handed out indiscriminately by this Government or by any other Government at the present time with any hope of maintaining lower taxation and a fall in the rising costs of living.

§ Mr. John McKay (Wallsend)
I have listened with great interest to this discussion. When it began I thought that it was going to be confined to a rather narrow field of thought, but, as it has continued, it has become wider and wider. I wondered what was the point of the hon. Member for Loughborough (Mr. Follick) 478 in putting down this subject for the Adjournment when he wanted the whole matter discussed. The discussion has been so wide that it has taken into consideration the question of the balance of payments, the question of the returning of this mighty sum of money to those to whom it is owed in this way and that, and also the fact that we are in such an economic predicament today that the great need for the moment is to start a tremendous campaign for saving money.
The big ideas which have been engendered by this debate appear to me to be rather off the point. The hon. Member for Loughborough said he hoped that hon. Members would try to impress the Treasury with the real problem that exists and with the real feelings of the people in the country about this matter. One can call it a debt, a loan, or what one likes, but the point is that this money is owing to the people.
The big problem just after the war ended was how the country could pay off this debt. Naturally, the Government had to experiment in this direction, and they did so on a very limited scale. They tied down the repayment of post-war credits to men of 65 and to women of 60. People were very patient for a few years because they realised the difficulties and the anomalies that existed in regard to this problem. But the sad experience of a large number of hon. Members has brought the conviction that whatever the difficulties may be—and no doubt there are many—and however great the anomalies that would arise may be, there is a tremendous amount of feeling in the country on this matter.
I want to impress upon the Treasury that this is a problem which can be modified. The original method can be amended, and how to do that is really the point of this discussion. I believe that the technical position is that we should consider the problem in its totality. Some amendment is required to meet the needs of the people to whom the money is owing. The only reason I have spoken upon the matter is to try to impress upon the Treasury, and the rest of the House that the time has now arrived when it should be realised that, whatever difficulties may exist, this is a debt owing to the people, which, though limited in its application, is creating very many anomalies and hardships in individual cases. The 479 time has come when any Government, if they are at all anxious to meet the expressed will and desires of the people, should make a real effort, during the ensuing months, to see what can be done.

§ Mr. Nabarro
The hon. Member used the expression "any Government." I hope he has read "Challenge to Britain." There is nothing in that about repaying post-war credits.

§ Mr. McKay
I expected that the hon. Member had sufficient experience to know that one does not put everything into the challenge. Everything is not put into a programme. Necessities and problems arise, and new thoughts form. As time goes on various Governments change their attitude and practice as new things, and thoughts, and arrangements emerge.

§ Mr. Stan Awbery (Bristol, Central)
So that the Financial Secretary to the Treasury should clearly understand the human problem that lies behind the question of post-war credits, he ought to go into the homes of some of our working people and see how they are endeavouring to manage with the wage that they are getting, but running into debt while, at the same time, money is owing to them by this Government.
This is not like many debts. An hon. Member said a few moments ago that the debt that was contracted compulsorily does not pay interest like most debts. Therefore, the contributor under the post-war credit system has lost possibly 3 or 4 per cent. for 12 years, and if, at the present time the cost of living is 10 or 15 per cent. more than it was when the money was invested, then his £100 would be worth £85 to £90.

§ Mr. Houghton
Perhaps my hon. Friend would permit me to say that, at 3 per cent. interest, there would be lost £184 million.

§ Mr. Awbery
I am not concerned with the great economic problems which the Financial Secretary to the Treasury will throw at us presently, but with the human side. I received a letter only this morning from a person who holds post-war credits. He said he had been ill for some time, is unable to work, and will be unable to work at all for the rest of his 480 life. He is running into debt and the Government are holding post-war credits belonging to him. He asks me whether I can press the Government to pay out his post-war credits so that he can clear himself now, instead of waiting until he is 65.
An hon. Member said that if he, himself, should die before he reaches 65 years, the money will fall to his wife; if she is not old enough to receive it it will go to his children, and thus it can go on from generation to generation.
The Financial Secretary may want to know how it is proposed to start repayment. I want to do it in a gradual way, and he can do it in a gradual way, by repaying first those people who are unable to work.

§ Mr. Speaker
I understand the position to be that it would require legislation to benefit any particular category of persons. The only subject which can be discussed on the Adjournment, in this connection, is paying back all the post-war credits, because that can be done without legislation.

§ Mr. Awbery
I want to point out that in delaying payment of post-war credits we are breaking faith with the people who made this contribution.

§ Mr. Awbery
The hon. Gentleman shakes his head, but yesterday we had an example of the Government breaking faith with the officers on the question of pensions. Now we are breaking faith with the people who gave their money during the stress and strain of the war to help this country out of its difficulty, and the time has now come when they should be repaid.

§ Sir W. Darling
I suggest that the Government are not breaking faith. The bargain that was made was that these sums of money which were withheld during the war would be repaid to men at the age of 65 and women at the age of 60. What bargain has been broken?

§ Mr. Awbery
I accept the statement of the hon. Gentleman that it was agreed that this money should be paid back when the Government are in a position to do so. But let us put ourselves in the 481 position of a man who holds post-war credits and is ill. He cannot get his post-war credits, and we say to the Government that they should pay them out because they have the money. If the Government can spend £3,500 million on armaments in three years, why cannot they pay out to post-war credit holders the money that is due to them?

§ Mr. Follick
Would my hon. Friend agree that if this money were paid out, a lot of it, especially in the case of well-to-do people, would go back into the bank and the Government would still have the use of it, while the remainder would go to needy people who require it?

§ Mr. Awbery
That would help the position of the country considerably. In many cases, if post-war credits were paid out the money would merely be transferred from one account to another.
People who write to me almost daily about post-war credits understand very little about the great economic problems that confront the country. They do not know a great deal about the Budget, but they know a good deal about the budget which they have to balance every Friday night. I ask the Financial Secretary to transfer himself, in imagination, from the Front Bench and from the Treasury into the kitchen of a working man who owns post-war credits, and to consider what he would think of the position when he found, on a Friday night, that he was running into debt and the Government owed him money. We urge the Government to give serious consideration to the problems of such people.

§ Mr John Arbuthnot (Dover)
The hon. Member for Bristol, Central (Mr. Awbery) said that he approaches this problem from the human angle, and I am certain that all hon. Members on both sides of the House who urge upon the Government that something should be done, for the holders of post-war credits approach it precisely from that angle. I myself have a number of constituents who are drawing National Assistance and who, at the same time, own post-war credits which they are unable to encash.
I have a suggestion which I should like to put to the Government for their consideration. I believe that this problem could be overcome if the post-war credits 482 were endorsed with the date on which the present holder became 60 in the case of a woman and 65 in the case of a man, and that a promise should be made that these post-war credits would be repaid at that date, quite regardless of who the holder of the post-war credits happened to be at that time. If that were done, those post-war credit documents would then become negotiable, and the people on National Assistance would be able to encash them for their current market value. This would mean in effect that these people in difficult circumstances would have an asset which they would be able to spend.

§ Mr. Speaker
Would the hon. Member's idea require legislation? I do not know if the endorsement of these certificates to render them negotiable securities would require legislation. I imagine it would.

§ Mr. Boyd-Carpenter
I should not like to make a dogmatic statement on the matter. I should be inclined to think that it would, but without further examination I should not like to say that that would definitely be so.

§ Mr. Speaker
I shall give the hon. Member the benefit of the doubt.

§ Mr. Arbuthnot
Thank you very much, Mr. Speaker. I am very much obliged. All I suggest is that the Government should consider the idea that I am putting forward. It has been suggested that my proposal would be inflationary, but I do not think that it would, because, just as some previous holders of post-war credits would find themselves in funds because they had sold those post-war credits, by the same token the people who had bought the post-war credits would find themselves with money frozen to the same amount.
I suggest that a proposal of that kind would go a long way towards meeting the problem of those people who are hard up, without being in any way inflationary. That would be of considerable assistance, but I am told that it would cost a certain amount of money. That is perfectly true. The estimates are that 483 there would be something in the nature of an additional payment to the tune of about £2 million a year, over the years, and an initial extra payment of £7 million would be required if we were to take into account those people who had died before reaching the age to encash their post-war credits.
I personally should confine this proposal to the present holders of post-war credits. It would be perfectly fair to do so. The initial payment of £17 million would not then be at issue, and the problem facing the Government could be solved for a matter of £2 million a year, which, bearing in mind the enormous advantage that it would be to many people in very difficult circumstances, is a burden that we should certainly shoulder.

§ Mr. Henry Usborne (Birmingham, Yardley)
I came into the House not with the intention of speaking in the debate but because the question of post-war credits is of great interest to all Members of Parliament. I have intervened—and I shall be very brief in doing so—very largely as a result of the extraordinarily interesting speech made by my hon. Friend the Member for Nottingham, South (Mr. Norman Smith). I urge very strongly that his suggestion should be supported.
I am particularly glad that the hon. Member for Dover (Mr. Arbuthnot) has disposed of that rather ridiculous criticism which was being ventilated in his normal fashion—with abuse—by the hon. Member for Kidderminster (Mr. Nabarro), because he did not understand it. It has now been pointed out, perfectly clearly, that if a Treasury bill, appropriately post-dated, was sold by one person, it must be bought by somebody else, and the mere fact of it being negotiable would not produce inflation. It would be inflationary only to the extent that in due course, on the appropriate date, it could be cashed, and that money would then add to the inflationary pool
The hon. Member for Handsworth (Sir E. Boyle) seemed to attack the general proposition on the grounds that although Lord Keynes was brought in in support by my hon. Friend the Member for Sowerby (Mr. Houghton), anything which 484 Lord Keynes proposed could be dismissed, because what Lord Keynes said had proved to be wrong, since his real anxiety was about a depression which has not yet arrived. The hon. Baronet—speaking as one economist about another—said that what Lord Keynes ought to have been anxious about was the problem of the balance of trade and the consequent financial problem. I also read that same book, the biography of the late Lord Keynes by Harrod, and I got the impression that Lord Keynes was vividly aware of this problem. The only mistake in fact that he made was in assuming that the instrument of the World Bank and the International Monetary Fund would be able to solve it. Towards the end of his life—

§ Mr. Nabarro
On a point of order. Are we allowed to discuss all of the Keynesian theories?

Mr. Deputy-Speaker
I understood the hon. Member to be developing the Keynesian theories in connection with post-war credits.

§ Mr. Usborne
I was merely developing, very briefly, a very small facet of them. If the hon. Member thinks that that is all of the Keynesian theories I think he had better keep quiet.

§ Mr. Nabarro
I know more about them than the hon. Gentleman ever will.

§ Mr. Usborne
I was not attempting to answer the hon. Member. I think it is a waste of time to try. I was trying to deal genuinely and seriously with an appropriate speech and an appropriate point ably made by the hon. Baronet the Member for Hands worth who is, unfortunately, not here at the moment, probably for a very excellent reason. I am sure he would have stayed if he could, and that he has not left us out of any discourtesy.

§ Lieut.-Colonel Lipton
How does my hon. Friend know?

§ Mr. Usborne
I think that all the points made on this side of the House are valid, and in so far as any criticism has been thrown at us we could easily answer it. I would make this point. The hon. Baronet the Member for Edinburgh. South (Sir W. Darling) argued—

§ Sir W. Darling
No hon. Baronet sits for that constituency. There has been no promotion.

§ Mr. Usborne
I beg the hon. Gentleman's pardon. I was carrying matters a little too far. However, the hon. Gentleman was making the point in an interjection that no faith was being broken because these post-war credits had always been associated with a given age for repayment, and that is not true.
Originally, when the money was taken off the citizens, it was understood—clearly understood—that it would be paid back as soon as might be. Everyone realised that that might be a few years after the war, but that then they would get it back. It was only in 1946, when it became clear that the situation was not unfolding as it had been envisaged that it would, that we had to put the age factor into the scales.

§ Sir W. Darling
"We"? In 1946, there was a Labour Government.

§ Mr. Usborne
The British Government in 1946, yes.

§ Mr. Nabarro
The Socialist Government.

§ Mr. Usborne
The real, underlying reason for post-war credits, the whole system of the loan, that was clearly understood by everyone, was that they would be a wonderful monetary instrument to use in the recession that was naturally expected to follow the war—naturally expected, but that, curiously, has not arrived.

§ Lieut.-Colonel Lipton
Because of the Labour Government.

§ Mr. Usborne
Because of the Labour Government, yes.
The long and the short of it is that this scheme proposed by my hon. Friend the Member for Nottingham, South does need very careful consideration. I want to underline this fact, that working people, ordinary people, do fed now that they have been very badly treated indeed in relation to post-war credits. They were quite convinced that they lent the money on short-term and that as soon as might be it would be given back. Now, by one means or another, one Government after another think of excuses by which apparently it will never get paid at all.
486 The point has been made in this debate that we do need savings and that unless we are honest with our people we cannot get people to believe in the honesty of the methods of saving. That is enormously cogent, and should be taken into consideration. A possible way to deal with the matter is by the issue of some scheme on the lines of a Treasury bill which would be dated and could be negotiated, which could be sold by those who are in need and bought by those who do not want the money at the moment.
This is a desparately important matter, much more important than most people think. Unless we do something about it very soon indeed we can never hope to persuade people to save in that or any other way because they will not trust the financial, banking mechanism of this country. Once bitten, twice shy.

§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
In accordance with custom, I suppose in the first place I should declare a personal interest, although it is a personal interest which, under the present law, is somewhat remote. I am also sorry to say that it is not quite as large a personal interest as that which the hon. Member for Sowerby (Mr. Houghton) disclosed.
I appreciate that this is a subject which rouses genuine and sincere feelings and that it is of legitimate and proper interest to a great many people in this country. Probably all hon. Members in their personal capacity from time to time experience moments of exasperation at contemplating a piece of paper containing certain figures with which they can do nothing useful at present. That is a very human and understandable feeling which it is undoubtedly the duty of all Governments to take into account.
There are, of course, two major difficulties in discussing this interesting and important topic on the Motion for the Adjournment. In the first place, there are the rules of order, which apparently compelled the hon. Member for Lough-borough (Mr. Follick) to advocate with his accustomed force and dexterity a proposal which he has indicated he does not want to be carried out—to advocate it in order that he might incidentally advocate proposals clearly out of order which he would like to see carried out.
487 That must inevitably constitute a very unsatisfactory method both for other hon. Members and for the hon. Member to whom it falls to reply from this Box to a discussion on a matter of this interest and importance. I must therefore ask hon. Members to appreciate that I am under precisely the same difficulties of the rules of order as have interfered in greater or lesser degree, in accordance with their adroitness in dealing with the rules of order, with hon. Members who have spoken.

§ Mr. Follick
rose—

§ Mr. Boyd-Carpenter
I am afraid I cannot give way. The hon. Member took much longer than the time which I have left.
The second point is that any proposal would inevitably be a budgetary matter. A decision to make available either the very large sum of money which the hon. Member for Loughborough has formally sought to be released or the smaller sum which I contemplate he had in mind would be essentially a matter to be considered by the Chancellor of the Exchequer in connection with his Budget proposals. These are inevitably, therefore, matters about which it would be very difficult for me to say anything definite at this stage of the year.
I hope we shall not cloud these discussions, as I thought at times the hon. Member for Loughborough and the hon. Member for Wall send (Mr. McKay) did, by seeking to introduce purely emotional and partisan considerations. The hon. Member for Loughborough used the word "fraudulent" and the hon. Member for Wallsend, as I understood him, expressed somewhat similar sentiments on the subject of policy in this matter.

§ Mr. Follick
The hon. Member's own people did.

§ Mr. Boyd-Carpenter
My own people are much better mannered. The hon. Member for Loughborough must recall this: if there is any force in that contention, the charge would lie more fully against right hon. Gentlemen opposite, who not only initiated the policy in operation under the existing law for payments at 65 and 60 but maintained it for some five years. I am not making any suggestion that their policy in that respect 488 was fraudulent or dishonest, but I am entitled to say that it is not relevant, true or helpful to make a similar suggestion when precisely the same policy is carried out by my right hon. Friend and myself. I hope we can discuss this matter as one of reason and importance without trying to cloud it with prejudicial and contentious adjectives which do not lie in the mouths of hon. Members opposite, who supported the late Administration with more or less fidelity.

§ Mr. Follick
On a point of order. I did point out that we were quite as much to blame in this matter.

Mr. Deputy-Speaker
That is not a point of order.

§ Mr. Boyd-Carpenter
I take it from that intervention that the hon. Gentleman's views are that the late Administration was fraudulent. That is not a matter for me to argue, and it may assist a calmer contemplation of this matter if I briefly review the facts.
These post-war credits were created under the Finance Act. 1941, and were created in place of the amounts of tax relief which were lost by the taxpayer by reason of the reduction in the personal allowances. A single person's allowance was reduced from £100 to £80, a married man's allowance from £170 to £140, earned income and age relief from one-sixth to one-tenth and the exemption limit from £120 to £110. The sums which we are discussing this evening arise in respect of the tax paid as a result of the reduction of these allowances which would not have been payable had these reductions not taken place.
Of the original £800 million—the hon. Member for Loughborough was not quite right as to the latest figures—£208 million has actually been paid out. A further £20 million was set off against Income Tax arrears under an arrangement made by the right hon. Member for Bishop Auckland (Mr. Dalton) when he was Chancellor of the Exchequer, leaving the figure, as the hon. Member for Sowerby correctly stated, of £572 million as the outstanding credit.
I have listened very carefully to this debate and I do not think that any hon. Member has seriously advocated the immediate payment out of the whole sum 489 of £572million. I think that I can take it that in substance if not in form there was substantial agreement on that.

§ Lieut.-Colonel Lipton
No.

§ Mr. Boyd-Carpenter
I will seek to analyse that in a moment. I think that most hon. Members will appreciate that the payment out of so large a sum in one instalment would quite clearly carry with it, not only very substantial and serious inflationary consequences, but in an effort to finance our payments or alternatively to counter-balance in some degree that inflationary pressure there would have to be an increase in taxation. That is the background of this matter.
This is the moral of the problem. If the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton), who in this, as in so many matters, is unlike so many of his hon. Friends, is really advocating that, I would ask him to think for a moment about the implications of the situation. The implications, I understand, are these. If it was, on his own showing, impossible for the late Government during six years to discharge their obligations—because I am sure he accepts my view that they were honourable people desirous of discharging national obligations if they could, and therefore the fact that they did not pay during the six years was because in their view it was impossible—and he thinks that within two years our financial policy has been so manifestly successful as to enable us to undertake this immense load. I hope that he will tell the electors of Brixton how successful has been the financial policy of the Government which from time to time he criticises.
That is really the implication of the hon. and gallant Gentleman when he suggests that it is now possible and reasonable for us to do in one step what the late Government, in my view in all the circumstances quite rightly, found themselves unable to do.

§ Mr. David Logan (Liverpool, Scotland Division)
Is it possible for the hon. Gentleman to tell us how they can get it?

§ Mr. Boyd-Carpenter
If the hon. Gentleman would not take up a number of precious seconds, it might increase my chances of doing so.
There is the problem. I cannot, for very clear reasons, go into the various 490 alternative proposals to that of the hon. Member for Loughborough which have been put forward, for the reason that they would involve legislation and that it therefore is not possible for me to comment upon them. I think, however, that I should not be straying beyond the rules of order and incurring Mr. Speaker's displeasure if I invited the attention of the House to the written answer which my right hon. Friend the Chancellor of the Exchequer gave on 10th November to my hon. and gallant Friend the Member for Edinburgh, West (Lieut.-Commander Hutchison), who had suggested one of these expedients. My right hon. Friend said: This and other suggestions for the payment of post-war credits will be considered when I am framing my Budget proposals, but I cannot, of course, say what the result of this consideration will be."—[OFFICIAL REPORT 10th November, 1953; Vol. 520, c. 27.] That makes it perfectly clear that my right hon. Friend has undertaken to consider the various proposals, which have been put forward from all quarters of the House, to see whether by means of adopting them or any variation of them it is possible to make progress in this matter.
I fully agree with what was so well said by the hon. Baronet the Member for Handsworth (Sir E. Boyle) in his quotation from the "Economist" that this is an obligation to be met, and that any suggestion that it was not accepted as an obligation to be met by any Government would have most serious repercussions throughout the financial field. Both the "Economist" and the hon. Baronet were saying a very sensible thing, which cannot be said too often in this context, and I fully associate myself with what they say.
Equally in the consideration which my right hon. Friend has said he will give to this subject, of course he will not—and here I reply to the hon. Member for Bristol, Central (Mr. Awbery)—ignore the human side of this problem, which he has very much in mind, and perhaps particularly in this context. Although I do not agree with a good deal of what the hon. Member for Bristol, Central said, he was in many ways on to a very good point in bringing this matter down to its human implications, and there is much force in what he said.
My hon. Friend the Member for Dover (Mr. Arbuthnot) ventilated a series of 491 very interesting proposals, which he has also been good enough to put forward on previous occasions. For the reasons I have already given, it clearly is not possible for me to say more than that those very interesting proposals deserve consideration, and, I am sure, will receive it. Obviously—my hon. Friend would be surprised if this evening I were to say anything else—I cannot comment further upon those proposals but they were certainly put forward with great clarity and gave grounds for a most interesting discussion.
The hon. Member for Nottingham, South (Mr. Norman Smith) treated us to a long possible vista of domestic catastrophe, which, I am sure it is the prayer of allhon. Member on both sides will not come to pass in his case. The grounds that he gave us for hoping for his survival over the next few months—his survival in the flesh if not as an hon. Member of the House—certainly reinforce our wishes for his good health. In his very amusing way the hon. Member touched on one of the difficulties of the system as it at present operates, in the fact that under the present regulations, misfortunes of death before the particular ages so fixed can result in postponement of the payment of the credit for a considerable period.
The hon. Member, with whom I do not always agree, was undoubtedly on an extremely important aspect of the situation. I remind him and the House, however, that that aspect was not created by any proposal for which this Government are responsible. It is the consequence of the original provision made by the right hon. Member for Bishop Auckland, when he was Chancellor of the Exchequer, under which these payments are made, and made only, on attaining the ages of 65 for a man or 60 for a woman.
I am not in any sense trying to shunt off responsibility for such alterations as may be found possible, but I think, in view of part of the tone of the hon. Member's speech, that I am entitled to suggest that if this be an anomaly and an outrage upon commonsense, then it was an anomaly and an outrage upon commonsense created by the right hon. Gentleman the Member for Bishop Auckland. As far as I remember, it was not criticised by the hon. Member at the time, 492 though I will give him the credit for having been very free with his criticism of the financial policy of all Governments, whether of his own party or on the other side of the House. [Interruption.]
The question has arisen of these Treasury bills, which the hon. and gallant Member for Brixton has been kind enough to remind me of in what he regarded no doubt as sotto voce. We all make that kind of mistake from time to time, and sometimes in a somewhat embarrassing way. There again, there is a proposal of interest not, of course, without cost, and it falls for consideration whether this matter would be dealt with more satisfactorily by expending such funds as may become available on the payment of interest on existing credits, rather than making these funds available for accelerating the final pay-off of the credits.
I am not expressing any dogmatic opinion at the moment. I am asking hon. Members to remember that to use the money in that way for the payment of interest means that there is proportionately less money on any hypothesis available for the final paying off of the credits. Therefore, perhaps there is an even balance, according to one's own point of view, as to which is the wiser and more equitable step to take.
I am not seeking to dismiss any such proposal out of hand this evening. I think probably I should be anticipating legislation if I did, and in any event this is the time of the year which does not permit me to indulge in any very precise forecast of what it may be possible for my right hon. Friend to do when he gives this matter the consideration which he has promised to give in connection with his Budget proposals.
Finally, I can add this. Most, if not all, of the speeches in this debate have been designed as contributions to the consideration of a matter which has been of concern to previous Governments, as I am perfectly certain it is to this Government. We shall certainly take full advantage of the views that have been expressed, and which are now recorded with habitual fidelity by the Official Report. We shall give the fullest weight to them on their merits, and those designed to be helpful will be given the full consideration that helpful suggestions deserve.
493 It is perhaps the merit of a debate upon the Adjournment that it enables views to be expressed in one way or another, subject always to the limitations of the rules of order, which, though they may not necessarily appear to have had an immediate effect, nonetheless are available for my right hon. Friend and for the Government to consider at leisure when framing their proposals.
I can give the assurance that all the views and proposals put forward will receive that consideration in the period of the year on which we are entering. I cannot forecast, of course what will be the result and it would be very wrong of me to do so. Certainly at this time of 494 the year in which financial proposals are considered, these matters will be before my right hon. Friend. Therefore, this debate comes very properly in point of time, and, despite the difficulties with which the hon. Member for Lough-borough was faced and which on the whole he successfully overcame, I am sure the debate has been a great help.