Commons Sitting of 8 July 1954

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  HARTLEPOOL PORT AND HARBOUR BILL
  Read the Third time, and passed.
  ROYAL WAREHOUSEMEN CLERKS AND DRAPERS' SCHOOLS BILL [Lords]
  Read the Third time, and passed, with Amendments.

  TEES CONSERVANCY (DEPOSIT OF DREDGED MATERIAL) BILL [Lords]
  (Queen's consent, on behalf of the Crown, signified.)
  Bill read the Third time, and passed, with Amendments.

ORAL ANSWERS TO QUESTIONS
  CIVIL DEFENCE

    Biological Warfare (Protection)
    Mr. Haleasked the Secretary of State for the Home Department what steps he has taken, and is taking, to instruct civil defence units in defence against bacteriological warfare.
    The Secretary of State for the Home Department and Minister for Welsh Affairs (Sir David Maxwell Fyfe): A pamphlet on "Biological Warfare" has already been issued for the use of heads of sections of the Civil Defence Corps and qualified civil defence instructors which describes in general terms the essentials of biological warfare and sets out the basic principles of personal and collective protection against it. The subject is also included in the curriculum of the Civil Defence Technical Training Schools for the information of instructors who in turn pass the information on to civil defence volunteers.
    Mr. Hale: Are the results of the recent experiments in the Bahamas with H.M.S. "Lomond" to be circulated, or are they to furnish a Whitehall pigeon-hole?
    Sir D. Maxwell Fyfe: That is another question. I wish the hon. Member would put it down on the Order Paper.

    Anglo-Scottish Co-operation
    Mr. Rankinasked the Secretary of State for the Home Department what arrangements for co-operation exist between Civil Defence Services in Scotland and in England.
    Sir D. Maxwell Fyfe: There is the closest co-operation between myself and the Secretary of State for Scotland and between the Scottish Departments and the English Departments at all levels. In particular, the Civil Defence Joint Planning Staff act for both countries and the Ministerial Committee over which I preside is responsible for co-ordinating action on all matters of policy.
    Mr. Rankin: As I gather from the Home Secretary that this unification exists only administratively, may I ask whether there is also a corresponding unity and inter-change at the working level? Does it not seem absurd to him that while there should be unity of command in the case of offensive weapons we should have this separation of command where civil defence of the population is concerned?
    Sir D. Maxwell Fyfe: As regards the second part of the hon. Member's question, I would be very slow to accept from one of my countrymen that all of my countrymen would agree to lose their independence on any subject. I assure the hon. Member that, in addition to administrative matters, we are considering the arrangements which he has in mind for mutual reinforcement and the like.

    Fire Stations (Location and Siting)
    Mr. Willeyasked the Secretary of State for the Home Department whether, in view of its general importance to civil defence, he will appoint a committee to examine and report upon the location and siting of fire stations.
    Sir D. Maxwell Fyfe: No, Sir. The peace and war-time considerations are quite different. For peace-time purposes

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    it is necessary for fire stations to be situated close to the risks they protect. As I stated in the civil defence debate on 5th July, the war-time fire service will be nationalised and essentially mobile, with the bulk of the personnel and equipment organised in mobile columns available for operation anywhere.
    Mr. Willey: Will the Home Secretary agree that the possibility of atomic warfare has entirely changed the nature of the demand likely to be made on civil defence, and that an essential part of the structure of civil defence lies in the fire stations? In view of this, will the Home Secretary look at this problem again, whether or not he accepts this as a solution?
    Sir D. Maxwell Fyfe: Certainly. As I have told the House, I am going into the whole matter and I shall be very glad to pay special attention to what the hon. Gentleman has said. I should be grateful if he would perhaps elaborate his idea a little more.
    Mr. H. Nicholls: When looking into this problem will my right hon. and learned Friend take into account the facilities in the control of local industries because the great cost of maintaining fire brigades throughout the country could be minimised to a great extent if full account was taken of the fire-fighting equipment stationed throughout the various industrial establishments?
    Sir D. Maxwell Fyfe: Certainly. I should be glad to consider that point.

  HOME DEPARTMENT

    Committee on Homosexuality (Terms of Reference)
    Sir R. Boothbyasked the Secretary of State for the Home Department whether he is now in a position to announce the membership and terms of reference of the committee which is to inquire into the existing laws relating to homosexual offences and prostitution.
    Sir D. Maxwell Fyfe: The terms of reference of the committee are to be:
    "To consider—

    (a) the law and practice relating to homosexual offences and the treatment of persons convicted of such offences by the courts; and

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    (b) the law and practice relating to offences against the criminal law in connection with prostitution and solicitation for immoral purposes;

    and to report what changes, if any, are in their opinion desirable."
    I am glad to be able to inform the House that Mr. J. F. Wolfenden, C.B.E., Vice-Chancellor of Reading University, has agreed to serve as chairman. I hope shortly to be in a position to announce the names of the other members of the committee.
    Sir R. Boothby: While thanking my right hon. and learned Friend far that answer, may I ask whether he will be able to announce the other names before the House rises for the Summer Recess?
    Sir D. Maxwell Fyfe: I very much hope so.

    Obscene Publications
    Mr. de Freitasasked the Secretary of State for the Home Department if he will refuse the request of certain organisations of book sellers that he supply them with a list of books and periodicals which have been held by the courts to be obscene, since the circulation of such a list would greatly assist persons seeking obscene literature.
    Mr. McKayasked the Secretary of State for the Home Department if he is aware that the National Federation of Retail Newsagents, Booksellers and Stationers is anxious to prevent the sale of obscene books and if he will consider giving this organisation the list of such books which is in the possession of his Department, so that local agents could be informed by the national organisation, and the flow of such books be curtailed.
    Sir D. Maxwell Fyfe: I have no power to declare a publication obscene. There exists a list of books condemned by the courts in recent years, but the publication of it would be misleading apart from the mischief to which the hon. Member for Lincoln (Mr. de Freitas) calls attention and I am satisfied that it would not be in the public interest to make it public.
    Mr. de Freitas: Is the right hon. and learned Gentleman aware that I certainly did not ask whether he had any power to declare a book obscene, which was the suggestion made in the Question of my hon. Friend the Member for Wallsend (Mr. McKay)? I referred to decisions in the courts.
    Mr. Awbery: Is the Minister aware that magistrates are coming to different decisions on the same book, and would it not be better to decide whether a book is obscene before it leaves the publisher rather than leave the question in the hands of the magistrates?
    Sir D. Maxwell Fyfe: I know how much the hon. Gentleman feels about this, but, with respect, I disagree. His first suggestion would lead to the establishment of a centralised censorship and his second would take away from the regional magistrates the right of expression of their views. Both of these I consider to be important points.
    Mr. Ede: Is it not a fact that many books which, if brought before the courts a few years ago, would have resulted in a conviction, are now published and read by the public at large?
    Sir D. Maxwell Fyfe: I have noticed that myself.
    Mr. I. O. Thomas: Would the right hon. and learned Gentleman indicate what general standards, if any, prevail among people responsible for dealing with these books? What standards are current in the determination of obscenity or non-obscenity?
    Sir D. Maxwell Fyfe: That is a question which would require a careful statement, and I should like the hon. Member to put it on the Order Paper.
    Mr. Ede: Would the right hon. and learned Gentleman consider circulating to clerks to magistrates the recent remarks of Mr. Justice Stable?
    Sir D. Maxwell Fyfe: I shall certainly consider it.
    Mr. de Freitasasked the Secretary of State for the Home Department whether he will appoint a committee to inquire into the working of the law relating to obscene publications.
    Sir D. Maxwell Fyfe: No, Sir. I am not satisfied that the appointment of a committee would serve any useful purpose.
    Mr. de Freitas: Would not the right hon. and learned Gentleman agree that the present state of the law, under which respectable publishers go in grave peril, is almost universally condemned by
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    those who are interested in the development of English literature, and that the time has arrived for an inquiry into this matter?
    Sir D. Maxwell Fyfe: As I have indicated, I do not agree, but I should be very grateful if the hon. Member would submit some of his considerations. I should willingly consider them.

    Dr. Joseph Cort (United Kingdom Residence)
    Captain Kerbyasked the Secretary of State for the Home Department what considerations led him to delay by one month Dr. Joseph Cort's departure from Britain; and on what date and at what hour this extended permit will expire.
    Sir D. Maxwell Fyfe: Dr. Cort asked on 24th June far an extension of one month in order to enable him to complete his personal arrangements before leaving the country. He had been told as long ago as 24th March last that I was not prepared to grant a further extension of his stay in the United Kingdom, but it was suggested to me that his arrangements for leaving had not been completed, pending the consideration which I had been asked to give to representations made more recently on his behalf, and, in the circumstances, I agreed that his stay should be extended for a further month for the purpose stated, on the understanding that no further extension could be expected.
    Dr. Cort's permitted stay will expire at midnight on 30th July.
    Captain Kerby: While thanking my right hon. and learned Friend for making it public, may I ask whether he will now ensure that this alien leaves the United Kingdom on that date?
    Hon. Members: Shame.
    Mr. Benn: Has the Home Secretary noticed that the university at which Dr. Cort has worked with such distinction has given him three months' salary? Does he not regard that as a very fine proof of confidence in the work and character of this man?
    Sir D. Maxwell Fyfe: I do not think that that relates to the Question.
    Mr. E. Fletcherasked the Secretary of State for the Home Department if, before the expiration of Dr. Cort's

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    permit to stay in this country, he will, in conjunction with the authorities of the United States of America, take steps to ascertain whether, on medical grounds, Dr. Cort would be liable for service with United States forces.
    Sir D. Maxwell Fyfe: No, Sir.
    Mr. Fletcher: Is not this really the acid test of the bona fides of Dr. Cort? Does not the Home Secretary really want to find a method of extricating himself from an unworthy position?
    Sir D. Maxwell Fyfe: On the general point, I really do not think that I can add to what I have said.
    Mr. Bennasked the Secretary of State for the Home Department whether, in reaching his decision not to grant political asylum to Dr. Cort, he took into account the victimisation of Dr. Cort's student friends, following upon their interrogation by the congressional investigating committee.
    Sir D. Maxwell Fyfe: I took fully into account the statements which Dr. Cort had made about his friends who had appeared before a Congressional Committee, but I could find nothing in these statements which would justify the conclusion that Dr. Cort's circumstances qualified him for political asylum.
    Mr. Benn: Is the right hon. and learned Gentleman aware that three of Dr. Cort's friends who were with him at Yale University in the Communist Party were dismissed from their posts following Congressional hearings, and that Dr. Cort had withdrawn four offers of assistant professorships in famous universities after his name was mentioned and two other of his colleagues were inducted into the Army and instantly court-martialled for semi-political offences?
    Sir D. Maxwell Fyfe: As to the first two points, I was aware of them and I have had put to me a description of the third point. I have only qualified it because I am not sure that it was in exactly the same form as the hon. Member put it. I took those points into account.
    Mr. Mikardo: Can the right hon. and learned Gentleman say why he has refused to see a deputation on this subject from the members of the trade union to
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    which Dr. Cort belongs, led by my hon. Friend the hon. Member for Hayes and Harlington (Mr. Skeffington), who is a member of that union?
    Sir D. Maxwell Fyfe: I saw three deputations. I do not think a further one could have added anything more.
    Mr. Bennasked the Secretary of State for the Home Department how many other cases there are on record, other than the case of Dr. Cort, of the United States Embassy having advised his Department of the risk of an American citizen losing his citizenship while a resident in Britain; and if he will give details.
    Sir D. Maxwell Fyfe: There is no record of any such case. The United States authorities do not advise my Department of cases in which a United States citizen here may lose his citizenship, and did not do so in the case of Dr. Cort until a specific inquiry on the point had been addressed to them.
    Mr. Benn: Has not the right hon. and learned Gentleman admitted that this is a complete precedent and that it would be a very dangerous thing if the action of a foreign Government, by the operation of their own laws, were able to get the administrative extradition of one of their own nationals living in this country whom they could not get under the normal extradition convention?
    Sir D. Maxwell Fyfe: It was not a precedent. It would have been a precedent to have acted the other way. This does not amount to administrative extradition. As I have pointed out more than once, Dr. Cort can go to any country he wishes and need not return to the United States.
    Mr. Bing: Does the precedent the right hon. and learned Gentleman has quoted refer to such persons as Lithuanians, Latvians and Estonians, whose passports are invalid since their States have ceased to exist?
    Sir D. Maxwell Fyfe: I dealt with that point last week.
    Dr. Kingasked the Secretary of State for the Home Department what reply his Department made to the request of Mrs. Cort to be allowed to stay in this country.
    Sir D. Maxwell Fyfe: Mrs. Cort has been informed that no objection will be raised to her staying in the United Kingdom until the end of this month, and that if she wishes to remain here longer she should apply setting out fully the reasons for which an extension is desired.
    Dr. King: Is not the distressing position of Mrs. Cort just an example of the human issues involved in granting political asylum? As this is not a political but a human question, will the right hon. and learned Gentleman consider the whole issue?
    Sir D. Maxwell Fyfe: I cannot reconsider the whole issue, but I shall be willing to look into this part of it, as I have said.
    Mr. Haleasked the Secretary of State for the Home Department on what date it first became known to the Home Office that Dr. Joseph Cort had been interviewed by the British police, at the request of the American authorities, and had refused to make a statement; when, and where, this interview took place; when it became known to the Home Office that a second interview had taken place and that a full statement had been made by Dr. Cort; when, and where, this interview took place; and when a full copy of that statement was first received at the Home Office.
    Sir D. Maxwell Fyfe: A report from the Chief Constable of Birmingham dated 16th December, 1953, was received by the Home Office on 18th December. This covered two interviews with Dr. Cart at the Birmingham Police Headquarters, the first on 10th December and the second on 15th December, and enclosed a copy of a statement made by Dr. Cort on the second occasion.
    Mr. Hale: In those circumstances, is it not very deplorable that the right hon. and learned Gentleman should have stated, in answer to a Written Question on 24th June:
    "In December, 1953, it became known to the Home Office that Dr. Cort…had refused to make a statement."—[OFFICIAL REPORT, 24th June, 1954; Vol. 529, c. 49.]
    Is not that statement so near to a complete falsehood as to be utterly indistinguishable from it?
    Sir D. Maxwell Fyfe: I do not agree with the hon. Member, and I am sorry
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    that he should take that view. When Dr. Cort saw the Birmingham police for the second time he said he denied as nonsense the allegation, which he said was implicit in the communication made to him by the Birmingham police, that he did not wish to make a more detailed statement to the American authorities through the British police and that he was ready at any time to give the Home Office any information it might desire for its own use.
    It is clear that this was a refusal to answer the questions addressed to him by the American authorities, and in that way he was putting himself in the position of refusing to comply with the requirements of the United States Selective Service Act. It has, therefore, been his conduct which has created this position.
    Mr. Ede: Would it not have been fairer and have given the House full information if, after the line in the Written Answer which said that Dr. Cort
    "had refused to make a statement"
    the right hon. and learned Gentleman had subsequently added, "he did make a statement which is in my possession"?
    Sir D. Maxwell Fyfe: If the right hon. Member takes that view, it is, of course, worthy of consideration, but I thought that my answer to the Question dealt with the whole situation. After that, I had several opportunities, of which I availed myself, of hearing the fullest accounts of what had happened, and I did so.
    Dr. Summerskill: Is the right hon. and learned Gentleman aware that the education authorities of this country have allowed Mrs. Cort to obtain a British medical qualification here, and has not that served to allay some of the suspicions of the right hon. and learned Gentleman in this matter?
    Sir D. Maxwell Fyfe: I have said this afternoon that the position of Mrs. Cort is quite different because, so far as I know, there is no question of there being any danger of her losing her nationality or returnability and I am quite prepared to consider her position.
    Mr. Bennasked the Secretary of State for the Home Department why he never communicated with Dr. Joseph Cort to obtain a statement from him about his relations with the United States authorities before deciding not to renew

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    his permit to remain in Britain; and why no action was taken on this after Dr. Cort, in a signed statement to the Birmingham criminal investigation department, had expressed his readiness to do so.
    Sir D. Maxwell Fyfe: The answer to the first part of the Question is that there was no reason to suppose that any statement by Dr. Cort on the subject could affect the decision.
    In his statement to the Birmingham police Dr. Cort offered to supply information to the Home Office for its own use, but since the Home Office was not involved in the procedure by which inquiries were made of Dr. Cort on behalf of the American authorities it did not require any statement from him.
    Mr. Benn: In view of the fact that Dr. Cort, although being, in effect, extradited, is denied any sort of hearing in this country, would not the right hon. and learned Gentleman have thought it a little fairer, before exercising his undoubted discretion, to have consulted Dr. Cort, either personally or by correspondence, about his side of the case?
    Sir D. Maxwell Fyfe: I must protest against the use of the word "extradited." After all, Dr. Cort issued a long statement of his own and representatives of Dr. Cort put all the points that could be made for him, and I considered them very carefully.
    Viscount Hinchingbrooke: While congratulating my right hon. and learned Friend on his handling of this matter, may I ask him whether he would not confirm that the opinions expressed in the House on the case of Dr. Cort, taken in conjunction with the close association of this country and the United States, and the wide reporting in that country of our Parliamentary proceedings, constitute the best and fairest assurance we can give that if Dr. Cort does return to the United States he will be justly and fairly treated?
    Mr. K. Robinson: Does not the Home Secretary now appreciate that by his unfortunate decision he has delivered a shattering blow at this country's tradition of political asylum and his own reputation for fair dealing? Will he not now take this last opportunity of reconsidering his decision?
    Sir D. Maxwell Fyfe: No, Sir.

    Political Asylum
    Mr. E. Fletcherasked the Secretary of State for the Home Department how many citizens of the United States of America have asked for political asylum in this country in recent years.
    Dr. Kingasked the Secretary of State for the Home Department the number of persons to whom this country has granted political asylum since November, 1951.
    Sir D. Maxwell Fyfe: The circumstances of individual cases in which political considerations are brought forward in support of applications to enter or remain in the United Kingdom vary so widely that no separate record of the disposal of such cases is kept. I am accordingly unable to supply the figures for which the hon. Members ask.
    Dr. King: Although he cannot give the figures, would not the Home Secretary agree that political asylum has been granted consistently since the war and under his own Ministry, and that that shows he believes in political asylum? Why does he continue to refuse it to a man whose only troubles lie in the fact that he was once a Communist?
    Sir D. Maxwell Fyfe: I explained at considerable length to the House last week, first, that political asylum Still exists and is operated in exactly the same way as it has always been, and, secondly, that in my opinion the gentleman in question does not come within the rules of political asylum.
    Mr. Shurmer: Has the Home Secretary not seen the letter that has arrived in this country from Dr. Brown, of the Harvard Medical School, which proves conclusively that Dr. Cort is being sent back to be persecuted and that his life will not be worth living if he goes back? Does the Home Secretary not agree that all the facts prove that this man has every justification for claiming political asylum in this country? Will the right hon. and learned Gentleman not consider the case again?
    Sir D. Maxwell Fyfe: That is the letter that is in the "Daily Worker." [HON. MEMBERS "No."] I think it is the same one. I am just identifying the letter. If the letter is relevant I shall consider it.
    Mr. Gower: For our information, can my right hon. and learned Friend say whether political asylum has ever been sought by or granted to a person who came from a country with a free and democratically elected Parliament?
    Sir D. Maxwell Fyfe: I think that that would mean two things: first, going through the files of the Home Office for roughly 100 years and, second, deciding what constituted a freely elected Parliament.
    Mr. C. Davies: Does the right hon. and learned Gentleman realise that the writer of that letter, Dr. Brown, is a very eminent scientist? Would he not look into the letter and then make inquiries to ascertain whether the facts stated by Dr. Brown are accurate or not? If they are, would he then consider whether he should change his mind?
    Sir D. Maxwell Fyfe: I indicated time and again last week the problem which I consider to be the nub of this matter. I have considered all the points that have been raised and it would not be honest if I said that there was any hope of my altering my decision.
    Mr. Shinwell: For the purpose of information, can the right hon. and learned Gentleman say whether the United States authorities have made a request to Her Majesty's Government for the return of Dr. Cort to the United States?
    Sir D. Maxwell Fyfe: Oh, no. I dealt with that last week and I made it clear that there has been no request.
    Mr. Shinwell: If that is so, and there seems to be some doubt about this matter, would not the Home Secretary give Dr. Cort the benefit of the doubt?
    Sir D. Maxwell Fyfe: The right hon. Gentleman has not got the point, which we discussed rather a lot.
    Mr. Shinwell: Yes, I have read the OFFICIAL REPORT.
    Sir D. Maxwell Fyfe: The position is that the reason that I did not allow Dr. Cort to stay was that his refusal to answer the demands to appear before the United States' Selective Service authorities made him liable to lose his citizenship. If someone is liable to lose his citizenship and, therefore, to become unreturnable he is not kept here.
    Mr. Wyattasked the Secretary of State for the Home Department what precedents there are for not extending an alien's permit because his home Government has threatened to make him Stateless.
    Sir D. Maxwell Fyfe: As I explained in reply to the Question asked by the hon. Member for Erdington (Mr. J. Silverman) on 1st July last, it is the normal practice to require aliens who apply for an extension of their permission to remain in the United Kingdom to produce evidence that they have return facilities to another country. Whenever it appears that there is a risk of such applicants losing their citizenship or re-entry facilities permission to remain is refused.
    Mr. Wyatt: Would not the Home Secretary agree that the real precedent of the case of Dr. Cort—and one which has been set by him—is that, for the first time in the history of this country, the right hon. and learned Gentleman has allowed his decision as to whether or not a permit shall be extended to be determined by what a body outside this country may do in a future unspecified circumstance? Has he not now surrendered his own authority over whether or not to extend permits to aliens here to an outside body?
    Sir D. Maxwell Fyfe: I have not made that precedent. I have acted on the basis, which I believe is accurate and right, that if the person in question takes action which may result in jeopardising his returnability, he cannot stay here.
    Mr. E. Fletcher: Would the right hon. and learned Gentleman say whether that criticism applies equally to the case of a visitor from behind the Iron Curtain, who is then threatened with losing his status in his home country and ceasing to be returnable there if he claimed political asylum?
    Sir D. Maxwell Fyfe: There are two questions and I hope that the House will keep them clear. There is returnability, which I have explained; I have also explained that returnability is subject to the qualification of the person being able to make out a case for political asylum. In my opinion, Dr. Cort did not make out such a case.

    Mentally Defective Prisoner, North London (Treatment)
    Lieut.-Colonel Liptonasked the Secretary of State for the Home Department whether he is aware that a 19-yearold man was sent to prison for three months by the North London magistrate on 5th June last, because no place was available in a hospital for mental defectives: and whether he will take steps to suspend the sentence and arrange for suitable hospital treatment.
    Sir D. Maxwell Fyfe: This man has been certified as a mental defective since his conviction and I shall be ready to make an Order under Section 9 of the Mental Deficiency Act, 1913, for his transfer to an appropriate institution if a vacancy can be found before his sentence expires. I understand, however, that all the mental deficiency hospitals in the region have long waiting lists and it may prove impossible to find a vacancy.
    In that event, I should not feel justified in recommending any interference with the sentence imposed by the magistrate in full knowledge of all the circumstances of the case.
    Lieut.-Colonel Lipton: Is it not quite monstrous that a mental defective should have to be sent to prison solely because the magistrate said that the hospital services seem to have broken down completely? Can the right hon. and learned Gentleman say that we are civilised while such a case exists?
    Sir D. Maxwell Fyfe: The hon. and gallant Member must ask my right hon. Friend the Minister of Health about the shortage of accommodation for mental defectives, but I must point out in fairness that the magistrate said:
    "There seems to be but one thing I can do to protect the public, and that is to send you to prison for three months."
    In view of that, it would be very difficult for me to let the man out.

    Foreign Nationals (Temporary Labour Permits)
    Mr. Haleasked the Secretary of State for the Home Department how many applications have been received by the Home Office in the last 12 months, to the most recent convenient date, for the cancellation or non-renewal of temporary labour permits of foreign nationals on the ground that they have
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    not complied with the military service laws of the countries concerned; from what countries these applications have been received; and in what cases, and in respect of what countries, action has been taken by the Home Office in accordance with such requests.
    Sir D. Maxwell Fyfe: There is no record of any such application.

    Football Pools (Prosecutions)
    Mr. Alportasked the Secretary of State for the Home Department how many prosecutions have been undertaken against promoters of football pools run for the benefit of local charities and sports clubs since 1951.
    Sir D. Maxwell Fyfe: I am advised that the conduct of a football pool by a club or charitable organisation is not in itself unlawful, but, if the competition is so conducted that it is a lottery, offences against the law relating to lotteries may occur. Information as to the number of prosecutions for such offences since 1951 is not available.

    Betting and Lotteries Legislation
    Mr. Alportasked the Secretary of State for the Home Department whether he will take an early opportunity of codifying the existing betting and lotteries legislation.
    Sir D. Maxwell Fyfe: The Government have been considering the recommendations of the Royal Commission on Betting, Lotteries and Gaming, some of which have been implemented in the Pool Betting Act. I cannot, in anticipation of the Queen's Speech, make any statement about the possibility of further legislation on this subject.

    Dr. Strasser (Entry Permit)
    Captain Kerbyasked the Secretary of State for the Home Department why Dr. Otto Strasser was refused permission to visit Britain in the spring of 1954.
    Sir D. Maxwell Fyfe: I considered that it would not be in the public interest to allow Dr. Strasser to come to the United Kingdom.
    Mr. Edelman: Will the right hon. and learned Gentleman in no circumstances yield to any pressure coming from Fascist

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    or Fascist fellow-travelling sources to admit this sinister character into this country?
    Mr. Shinwell: Did the right hon. and learned Gentleman observe that his hon. and gallant Friend who asked this Question, and who has apparently some solicitude for Dr. Strasser, referred just now to Dr. Cort as an alien who ought not to be allowed to remain here?
    Captain Kerby: Is my right hon. and learned Friend aware that Hitler put a sum of 1 million marks on Dr. Strasser's head, dead or alive?
    Sir D. Maxwell Fyfe: I was not aware of the actual number of marks, but I knew that he was on the black list.

    Palace of Westminster (Queen's Coroner)
    Sir H. Williamsasked the Secretary of State for the Home Department if he will state the name of the present holder of the office of Queen's Coroner for the Palace of Westminster.
    Sir D. Maxwell Fyfe: I understand that an inquest on a body lying within the Palace of Westminster would be held by the Coroner of the Queen's Household, Lieut.-Colonel W, H. L. McCarthy, D.S.O., M.C.

  WALES

    Annual Report (Government Proposals)
    Mr. Watkinsasked the Secretary of State for the Home Department whether he will give, in the annual report of Government action in Wales and Monmouthshire for the year ended 30th June, 1954, information on the action taken on the proposals of the Government, as outlined in Command Paper No. 9014 on Rural Wales.
    Sir D. Maxwell Fyfe: Yes, Sir.

    Spas, Breconshire and Radnorshire (Use)
    Mr. Watkinsasked the Secretary of State for the Home Department whether he will consider asking the Council for Wales and Monmouthshire to inquire into the possibilities of utilising the special facilities of the spas in Breconshire and Radnorshire for the treatment of certain
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    diseases and for rehabilitation of persons who could benefit by modern medical science in good surroundings.
    Sir D. Maxwell Fyfe: It is for the council to decide on the subjects which it wishes to investigate, but I will draw its attention to the hon. Member's suggestion.

  EMPLOYMENT

    Agricultural, Engineering and Building Workers (Pay)
    Mr. Osborneasked the Minister of Labour the basic wage rates and the approximate average weekly earnings in 1939 of agricultural workers, skilled engineers and building operatives, respectively; and the corresponding figures today.
    The Minister of Labour and National Service (Sir Walter Monckton): As the answer is long and includes detailed information, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Osborne: Without having seen the figures, could I ask my right hon. and learned Friend whether the increases in wages in these three industries have been greater than the increases in productivity? Is there no relation between the productivity of the labour and the increase in wages?
    Sir W. Monckton: I think it would be more convenient to my hon. Friend if he postponed that question until he has seen these figures.
    Mr. J. Harrison: Does the Minister agree that productivity and wages are not always synonymous terms in regard to responsibility for the final product?
    Mr. Osborne: They ought to be.
    Mr. Harrison: What about machinery?
    Sir W. Monckton: Wages and productivity cannot be compared at all as a matter of arithmetic.
    Following is the answer:
    In agriculture the average minimum rate of wages for ordinary adult male workers at 1st September, '1939, was 34s. 9d. a week in England and Wales and 33s. 4d. a week in Scotland. The corresponding rates today are 120s. throughout England and Wales and 116s. throughout Scotland. For engineering fitters the average of the time rates in the principal districts of the United Kingdom was 69s. 2½d.

    2329
    at 1st September, 1939, and is now 146s. For bricklayers the corresponding figures are 73s. 4d. in 1939, and 168s. today; for building trade labourers they are 55s. 1d. and 147s. 4d., respectively.
    Figures of actual earnings are only available for broader industry groups, the latest pre-war figures relating to October, 1938, and the latest post-war figures to October, 1953. For all categories of adult male wage-earners in the metals, engineering and shipbuilding industries the average weekly earnings at these two dates were 75s. and 202s. 10d. For all adult male wage-earners in building and contracting they were 66s. and 183s. 8d.
    Average earnings in agriculture are not avail- able for 1938 or 1939. During the year, April, 1952, to March, 1953, the average weekly earnings of hired regular adult male workers in agriculture in Great Britain amounted to 133s. 2d.
    NOTES
    1. Agriculture. For agriculture the figures of both rates and earnings include the value of certain allowances in kind.
    2. Engineering. The rates given for engineering fitters are the averages of the recognised district time rates of fitters in 16 principal centres in the United Kingdom.
    3. Building. In the building industry the agreements specify only hourly rates. The weekly rates have been computed by multiplying the hourly rates (the average of recognised rates in 39 large towns in the United Kingdom) by the average number of hours in a full ordinary week, summer and winter hours being taken into account for this purpose.

    Glamorgan
    Mr. Gowerasked the Minister of Labour how many people in Glamorgan were registered as unemployed at the latest convenient date; how many notified vacancies there were on that date; and how these figures compare with those of a year ago.
    Sir W. Monckton: The number of un- employed persons on the registers of employment exchanges in Glamorganshire at 14th June, 1954, was 10,636, and the number of vacancies notified to those employment exchanges and remaining unfilled at 30th June was 4,647. The figures for corresponding dates in 1953 were 13,800 and 4,530 respectively.

    Barry
    Mr. Gowerasked the Minister of Labour how many people in the borough of Barry were registered as unemployed at the latest convenient date; how many notified vacancies there were at that date; and how these figures compare with those of a year ago.
    Sir W. Monckton: The number of unemployed persons on the registers of the Barry employment exchange and youth employment office at 14th June, 1954, was 460 and the number of vacancies notified to these offices and remaining unfilled at 30th June was 185. The figures for corresponding dates in 1953 were 414 and 193, respectively.

    Buckinghamshire
    Mr. John Hallasked the Minister of Labour the number of persons registered as unemployed in Wycombe and the county of Buckinghamshire, respectively, as at the last recorded date, as against the same period in 1952 and 1953.
    Sir W. Monckton: For the High Wycombe Employment Exchange and Youth Employment Office the figure for 14th June, 1954, was 220 compared with 815 at 16th June, 1952, and 329 at 15th June, 1953. The corresponding figures for all employment exchanges and youth employment offices in Buckinghamshire were 641, 1,399 and 848, respectively.
    Mr. John Hallasked the Minister of Labour the number of employment vacancies registered in Wycombe and the county of Buckinghamshire, respectively, as at the last recorded date, which could not be filled at that date.
    Sir W. Monckton: At 30th June, the number of vacancies remaining unfilled was 1,050 for the High Wycombe Employment Exchange and Youth Employment Office, and 4,481 for all employment exchanges and youth employment offices in Buckinghamshire.

  NATIONAL SERVICE
  Mr. Keenanasked the Minister of Labour the total number of those medically rejected for National Service after being called up, and those called up after deferment, for 1948, 1949, 1950, 1951, 1952 and 1953, figures for each category being shown separately.
  Sir W. Monckton: As the answer contains a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
  Mr. Keenan: I thank the right hon. and learned Gentleman for his effort to satisfy me in this matter. Do the figures

  2331
  indicate what I have been seeking to ascertain, namely, the numbers of those who are medically rejected after deferment? Will the Minister consider the point that medical examination might always be carried out when a person is eligible for call-up, and so avoid difficulties that emerge later?
  Sir W. Monckton: If I may first deal with the second part of the hon. Gentleman's supplementary question, it would be difficult to arrange that conveniently because deferment might cover a number of years and it would certainly be necessary to examine persons again if that was so done. In reply to the first part of the hon. Member's supplementary question, I would point out that it is difficult to explain, by the table of figures which I have given in answer to his Question, the fundamental point, which is that if one takes the class of a particular year, one has to go through the whole period during which that class would be liable for call-up in order to satisfy oneself whether people are really escaping, which is what the hon. Gentleman wants to know. I have written to the hon. Member explaining how that can be shown.
  Following is the table:

  Year

  Number of men rejected on medical grounds

  Estimated number of men who had been deferred and were called up in year

  (1)

  (2)

  (3)

  1948

  …

  27,750

  22,000

  1949

  …

  36,370

  44,000

  1950

  …

  47,314

  62,000

  1951

  …

  43,856

  57,000

  1952

  …

  42,829

  54,000

  1953

  …

  42,112

  62,000

  COST OF LIVING
  Mr. Leatherasked the Minister of Labour to publish a comparison of the trends in the wages index and the cost-of-living index from June, 1947, up to the latest available date.
  Sir W. Monckton: As the answer is in tabular form I will, with permission, circulate it in the OFFICIAL REPORT.
  Mr. Leather: While I appreciate that the figures may be somewhat lengthy,
  2332
  may I ask the Minister what is the increase in the respective figures since this Government came to power?
  Sir W. Monckton: I am not sure that I could give that figure exactly, but I would say that the comparison between the Rates of Wages Index and the Retail Prices Index is that they started with the wages index below and they are now approximately the same
  Following is the table:

  Period

  Rates of Wages Index

  Retail Prices Index

  June, 1947

  100

  100

  Average of:

  July-December, 1947

  102

  102

  1948

  106

  108

  1949

  109

  111

  1950

  111

  114

  1951

  120

  125

  1952

  130

  136

  1953

  136

  140

  January-May, 1954

  140

  141

  May, 1954

  142

  141

  Mr. G. Darlingasked the Minister of Labour to what extent the Retail Prices Index has been influenced by the high prices for fresh vegetables in May and June.
  Sir W. Monckton: The index figures for June are not yet available. In mid-May, apart from a small rise in the prices of potatoes, vegetable prices were generally no higher than in mid-April and they did not therefore induce any upward movement of the index figure for May. Between mid-March and mid-April, however, seasonable increases in the prices of fresh vegetables had raised the all items figure of the retail prices index by nearly one-half of a point.
  Mr. Darling: Is the right hon. and learned Gentleman satisfied that the index correctly measures the changes in the cost of living? Surely the present abnormally high prices for fresh vegetables should make a greater difference to the index than he had indicated.
  Sir W. Monckton: I do not think that there is any inaccuracy. In the Ministry of Labour Gazette we point out from time to time any changes of this sort which occur, and they can be differentiated from the whole index

  2333
  figures. I can show the hon. Gentleman relevant extracts from the Gazette, if it will assist him.

  MINISTRY OF HEALTH

    Mental Patients
    Sir G. Lloydasked the Minister of Health in what circumstances patients in mental hospitals are allowed to take up paid outside work; and, when they do so, what contribution they pay towards the cost of keeping them in hospital.
    The Minister of Health (Mr. Iain Macleod): The patients concerned are those who have reached a stage at which employment in paid occupations outside the hospital is possible and likely to aid progress towards recovery. The amounts paid by such patients as a contribution towards the cost of maintenance in hospital vary according to earnings, but the maximum amount recoverable is £2 15s. a week.
    Mr. Manuel: What precautions are taken to see that mental defectives employed outside the institutions get the proper rate for the job?
    Mr. Macleod: It is the responsibility of the medical superintendent of the hospital to make individual arrangements.
    Mr. Hector Hughesasked the Minister of Health if he is aware that many local authorities are reluctant to allow homes for the after-care of mental patients to be set up in their areas; and what is the policy of his Department in this matter.
    The Parliamentary Secretary to the Ministry of Health (Miss Patricia Hornsby-Smith): No case of this kind has been brought to my right hon. Friend's attention. He would hope and expect that local authorities would deal with such proposals in the same way as they treat other kinds of convalescent accommodation.
    Mr. Hughes: Will the hon. Lady take it from me that many of the people who have the misfortune to be afflicted suffer the terrible penalty of being treated as "untouchables" in regard to employment and social contact? Will he try to rescue them from that terrible fate?
    Miss Hornsby-Smith: I think that the hon. and learned Member is referring to a different matter when he mentions employability.
    Mr. Shinwell: May I ask the hon. Lady what is represented by the flowers she is wearing?
    Hon. Members: Answer.
    Mr. Speaker: Order. That is a matter which does not fall within the administrative responsibility of the hon. Lady.
    Mr. Hector Hughesasked the Minister of Health how many homes for the after-care of mental patients exist in England and Wales; where they are situated; what their accommodation is; how many patients they contain; and of what categories.
    Miss Hornsby-Smith: Precise information on all these points is not available. The Mental After-Care Association provides directly or indirectly 23 homes in Kent, Surrey, Sussex, Suffolk and Northamptonshire, with accommodation for 524 patients and 463 at present in residence. Two homes are reserved for short-term cases; the remainder provide for long-term cases and for patients on holiday from mental hospitals. The Ex-Servicemen's Welfare Association provides two homes for 50 patients in all.
    Mr. Hughes: While thanking the hon. Lady for that reply, may I ask whether she would put me under a further obligation by telling me how those figures compare with the corresponding figures for Scotland?
    Miss Hornsby-Smith: That is not within the purview of my Department.

    Mental Defectives, Durham (Accommodation)
    Mr. Shinwellasked the Minister of Health the number of mentally defective persons for whom application has been made for admission to suitable institutions in the county of Durham and for whom no accommodation is at present available.
    Mr. Iain Macleod: One hundred and sixty-one.
    Mr. Shinwell: Is not this a somewhat alarming figure and does not it disquiet the right hon. Gentleman? Is he aware

    2335
    that among these cases are several of young persons? Will he hurry up the provision of accommodation for them?
    Mr. Macleod: All waiting list figures disquiet me, and it is true that these are perhaps the worst of all. We are doing what we can. Since the appointed day there have been 550 new beds provided in the region and there is a scheme in hand for a further 200 beds, so that about 750 extra beds have been provided since the appointed day. The problem still remains, but, as I say, we are doing what we can.
    Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that mental defectives are having to be sent to prison because there is no room available for them in mental hospitals? Will he look at an answer given by his right hon. and learned Friend the Home Secretary today on this subject which "passes the buck" to the Minister of Health?
    Mr. Macleod: Yes, Sir, I have seen that, and I am in communication with my right hon. and learned Friend on the matter.

    Children in Hospital (Parents' Visits)
    Mrs. Jegerasked the Minister of Health with whom authority rests to determine the frequency of visiting by parents to children in hospitals under the National Health Service; and what difference is made in the rules in such hospitals if the children are in pay beds.
    Mr. Iain Macleod: Visiting arrangements, for both National Health Service and private patients, are the responsibility of hospital management committees and boards of governors.
    Mrs. Jeger: Has the Minister followed the correspondence which appeared recently in the "Manchester Guardian" on this subject, and which indicates that while there has been a wide welcome to the lead given by his Department there are still many hospitals which adopt a very unhelpful attitude towards parents in this situation? Can he tell the House whether or not he is quite powerless to help?
    Mr. Macleod: I have issued a circular which has been welcomed, and I am following it up. But there are many cases
    2336
    of special circumstances in the hospitals—for example, infectious diseases hospitals—which make it difficult for those responsible for the running of the hospitals to do as much as I, and I have no doubt, as they would like to do to allow parents to see their children.

    Smoking (Lung Cancer)
    Mr. Gowerasked the Minister of Health what information has been gained by officers of his Department about investigations in other countries into the relationship between smoking and cancer of the lung; and what steps he is taking to make this information available in the United Kingdom.
    Mr. Iain Macleod: Officers of my Department and of the Medical Research Council have been in close touch with investigations into this question in other countries, all of which have been or will be published in the medical and scientific Press and are freely available to persons concerned.
    Mr. Gower: Will my right hon. Friend do all that is possible in this matter? Will he bear in mind that there are thousands of smokers who are anxious to know that cancer of the lung is not caused by smoking, and that there are few topics about which so many people are seriously worried?
    Mr. Macleod: I recognise the great public interest in this matter, but I have no intention of speculating in advance of proof.
    Mr. Bottomley: Is not it a fact that cancer of the lung is the most serious of all the cancerous growths, and does not an increase in the disease coincide with heavy smoking by women, particularly since 1925?

    Maternity Home Fire, Reading (Report)
    Mr. F. M. Bennettasked the Minister of Health whether he is yet in a position to publish the result of his inquiry into the recent Dellwood Maternity Home fire, in Reading.
    Mr. Iain Macleod: I have given most careful consideration to the report of the Regional Hospital Board Committee of Inquiry into the fire and I am satisfied that it has covered very thoroughly all

    2337
    aspects of this most tragic and unfortunate disaster. The report is now available to hon. Members in the Library and copies will be supplied to parties directly interested on request to my Department.
    Looking back on tragic events of this nature it is always possible to have second thoughts, but I consider that the action taken by the hospital authorities both in the provision of the accommodation and in the matter of medical and nursing supervision was reasonable, and that there was no negligence or breach of duty on their part. The steps taken for the rescue and subsequent treatment of the babies were, in my view, in accord with the highest traditions of the hospital service.
    My Department is preparing advice to hospital authorities on fire precautions generally and I will see that this takes account of the lessons to be learned. I also understand that my right hon. Friend the Minister of Housing and Local Government is considering possible strengthening of the relevant building byelaws.
    Mr. Bennett: While agreeing that no monetary grant can possibly compensate parents in their tragic loss, may I ask whether my right hon. Friend can say that irrespective of the question of strict legal liability he is prepared sympathetically to consider ex gratia grants to those concerned?
    Mr. Macleod: On the question of compensation, as I have said, in my view death was not caused by neglect or breach of duty, but was due to misadventure, and that was the verdict of the coroner. Nevertheless, I am sure that if there are cases where particular circumstances are involved the hospital management committee will be very glad to look at them as sympathetically as they can.
    Mr. Bennett: May I thank my right hon. Friend for that generally sympathetic answer and ask him whether he can say that, in effect, his words mean that each case will be judged individually and sympathetically?
    Mr. Macleod
    Dr. Summerskill: Can the right hon. Gentleman say how often this hospital has been inspected?
    Mr. Macleod: It is inspected regularly. In fact, it has one of the very finest records in the whole of the country in regard to the number of deaths, both maternal and infant, that have taken place.

    Elderly Married People (Homes)
    Mr. H. Johnsonasked the Minister of Health (1) whether he is satisfied that adequate powers are possessed and adequate provision made by local authorities for homes for aged and infirm married couples;
    (2) whether he will send a circular to local authorities calling attention to the desirability of publicising the existence of homes for elderly married people where they are allowed to live together.
    Miss Hornsby-Smith: County and county borough councils have all the necessary powers under Part III of the National Assistance Act and my right hon. Friend is satisfied that the proportion of accommodation for old people provided for elderly and infirm married couples is normally reasonable. Before approving proposals for the construction of residential accommodation for elderly people in need of care and attention, care is taken to ensure that a number of double bedrooms for married couples are included. Local authorities are well aware of that policy and have undertaken in their schemes for development of the service to make this type of provision.
    Mr. Johnson: Has my hon. Friend's attention been called to the tragedy of Mrs. Lily Dudgeon, who died on the beach at Brighton after sleeping out because she feared that if she went into a local authority residential home she would be separated from her husband, who was an old-age pensioner? Can my hon. Friend confirm that, in fact, the woman was offered accommodation by Brighton Corporation and that any separation would have been only temporary? Does she not think that it would be good to have additional national publicity to dispel this ignorance and to avert any further tragedy of this nature?
    Miss Hornsby-Smith: My right hon. Friend is aware of the tragedy of this case but, in view of the publicity that has been given to it, it is fair to point out that, when this couple were evicted from

    2339
    their accommodation, on the day they made application to the local authority they were offered Part III accommodation, which they declined. It is not always possible immediately on application to find double married accommodation, because that would mean leaving some idle and empty which might be used for priority cases. The couple were told that it was hoped within a reasonable time to give them joint accommodation. They refused the offer of Part III accommodation, and we all regret the tragedy which ensued.
    I hope that the publicity given to the Question and answer will assure those who have criticised the service that the local authorities offered accommodation and proper shelter to this couple.

  MINISTRY OF FOOD (FUTURE)
  Mr. Hurdasked the Prime Minister whether arrangements have now been made to disband the Ministry of Food and transfer the few remaining functions to other Departments.
  The Prime Minister (Sir Winston Churchill): I have nothing to add to what I told my hon. Friend on 6th April.
  Mr. Peart: In view of the uncertainty on meat prices and the uncertainty in the farming community on the policy of the Government towards marketing, will the Prime Minister be very cautious in this matter and not heed the doctrinaire people behind him?
  The Prime Minister: I will certainly heed the injunction of the hon. Gentleman.

  WAR PENSIONS (FREE VOTE)
  Sir I. Fraserasked the Prime Minister if he will make a further statement on war pensions and war widows' pensions; and if the Government will allow a free vote of the House following a debate on this subject.
  The Prime Minister: I am sorry to disappoint my hon. Friend. I cannot add to the Chancellor of the Exchequer's statement on this important subject of 12th April.
  2340
  The answer to the latter part of the Question must be in the negative. It is the duty of the Government to accept responsibility for any action of this character proposed.
  Sir I. Fraser: Will my right hon. Friend ask the Ministers concerned to read the report of the proceedings of the British Legion conference at Whit-sun? Further, is he aware that all the facts in this matter are known and can he say whether the Government will deal with this much-overdue question as soon and as generously as possible?
  The Prime Minister: I am sure that due attention will be paid to the report of the proceedings in question and that any hopeful suggestions which arise will be given effect to in due course.
  Mr. Mikardo: Is the unwillingness of the right hon. Gentleman to allow a free vote in this matter due to the fact that he does not again want to be bullied by some of his hon. Friends into ignoring the findings of the House?

  EUROPEAN DEFENCE COMMUNITY (FRANCE)
  Mr. Edelmanasked the Prime Minister whether, following his discussion with President Eisenhower on South-East Asia and the European Defence Community, he will invite the French Prime Minister to London in order to coordinate British, United States and French policy.
  Mr. Wyattasked the Prime Minister whether he will now invite the French Prime Minister to London to discuss British policy towards the European Defence Community Treaty.
  The Prime Minister: Both before and since the visit of my right hon. Friend the Foreign Secretary to Paris for talks with the French Prime Minister on 20th June, we have maintained the closest contact with the French Government. This contact will, of course, continue. Much though I should welcome a meeting myself with Monsieur Mendès-France, I would not feel justified in pressing him, at the present time, while he has so many urgent problems to occupy him.
  Mr. Edelman: While thanking the Prime Minister for that reply, may I ask him whether it might not be for the general convenience if a personal meeting of that kind could be held before 20th July?
  The Prime Minister: The Foreign Secretary will be meeting M. Mendès-France after Monday at Geneva.
  Mr. Wyatt: Does not the Prime Minister think that, now at last there is a French Government with a Prime Minister who looks like achieving stability—[HON. MEMBERS: "Oh."]—it would be better to talk to him about possible variants of the European Defence Community Treaty rather than to issue a communiqué together with President Eisenhower telling him to do something which he says he cannot do and which the French Parliament will not let him do?
  The Prime Minister: That is a matter of opinion which is not included in the Question on the Order Paper.
  Mr. Noel-Baker: Will the Prime Minister tell the French Prime Minister that in view of his very gallant part in the R.A.F. during the war he will be a very welcome visitor to London when he can afford the time to come?
  The Prime Minister: No doubt his attention will be drawn to the right hon. Gentleman's very apposite question.

  MINISTER OF DEFENCE (VISIT TO WASHINGTON)
  Mr. Wyattasked the Prime Minister the purpose of the projected visit of the Minister of Defence to Washington.
  The Prime Minister: My noble Friend is visiting the United States on the invitation of Mr. Charles Wilson, the United States Secretary of Defence. He will have general discussions with Mr. Wilson and his advisers and will visit a number of establishments at which the latest types of American arms and equipment are being developed. There are also military and strategic questions on which there will be an interchange of opinion with the highest professional authorities in the United States.
  Mr. Wyatt: Does the Prime Minister think that his noble Friend will be more successful than he was in bridging differences with the United States?
  The Prime Minister: Comparisons are odious.

  UNITED STATES AID
  Mr. Donnellyasked the Prime Minister whether he will express the thanks of the British people to the Government of the United States of America for all the financial aid that has been received, and, at the same time, inform the United States Government that, in view of present circumstances, Her Majesty's Government does not propose to accept any more.
  The Prime Minister: I am ready at all times to express the thanks of the British people for the massive aid we and other free countries have received from the United States of America. For the future, most of the aid we expect to receive will be in the form of military equipment. Her Majesty's Government will accept and put to good use this contribution to the common defence of the free world.
  Mr. Donnelly: Does that answer mean that the right hon. Gentleman thinks that, in view of the amounts involved, it would lead to a much better Anglo-American relationship if we did not accept the financial aid which is given in financial form for military equipment usually manufactured here? Can he say why it is essential for us to have what is not a vast amount which is involved at present?
  The Prime Minister: It is well known that this country bore an altogether unique and exceptional strain on its economy by the exertion which it made in the late war during a large portion of which its people were the sole defenders of the cause of freedom. I have not, therefore, at any time felt ashamed to receive aid from loyal allies and friends devoted to purposes in which their interests are as keen as ours.
  Mr. Pannell: Does not the right hon. Gentleman remember that during the period of office of the Labour Government he sneeringly referred to American aid as charity?
  The Prime Minister: It has that aspect, but I think that that does not necessarily detract from its usefulness or welcome character.
  Mr. H. Morrison: Are we then to take it that if a Labour Government receives American aid—which we and, I think, the country appreciated—that is charity, but if a Tory Government receives American aid it is an expression of good will between the two countries?
  The Prime Minister: The right hon. Gentleman is evidently endeavouring to pick a quarrel.

  PRIME MINISTER (APPOINTMENT OF SUCCESSOR)
  Mr. Pagetasked the Prime Minister if he will introduce legislation to amend the constitution by authorising the Prime Minister to appoint his successor.
  The Prime Minister: No, Sir. This is a prerogative of the Crown. It is for the Sovereign to decide whether to ask the opinion of the first Minister of the Crown about the choice of his successor and whether to act in accordance with that opinion. No legislation is needed.
  Mr. Paget: In that case, will the Prime Minister tell us by what authority he announced in the United States that the Foreign Secretary would be his successor? Did not that announcement infringe not only the Prerogative of the Crown, but also the prerogative of the 1922 Committee?
  The Prime Minister: The hon. and learned Gentleman is endeavouring to be offensive all round. I certainly do not recall ever having said anything of the kind. I have always held the opposite view very strongly. If the hon. and learned Gentleman will send me that quotation, I will look into it; I may well have been misreported. I certainly should not presume to commit such a constitutional error as that.
  Mr. A. Henderson: Is the right hon. Gentleman aware that the Labour Party would prefer their own leader should be the Prime Minister after the next General Election?
  Hon. Members: Which one?

BUSINESS OF THE HOUSE
Mr. Attlee: May I ask the Leader of the House to state the business for next week?
The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir. The business for next week will be as follows:
MONDAY, 12TH JULY—Report stage of the Address relating to the Gift of a Mace to the Federation of Rhodesia and Nyasaland.
Third Reading: Finance Bill, which it is hoped to obtain by about 7 o'clock;
Report and Third Reading: Electricity Reorganisation (Scotland) Bill.
Committee and remaining stages: Summary Jurisdiction (Scotland) Bill [Lords], which is a consolidation Measure.
Committee stage: Army and Air Expenditure, 1952–53; and
Greenwich Hospital and Travers' Foundation.
Lieut.-Colonel Lipton: Is that all?
Mr. Crookshank: If hon. Members study the business in further detail, they will find that it is not very oppressive.
TUESDAY, 13TH JULY—Report and Third Reading: Town and Country Planning Bill.
WEDNESDAY, 14TH JULY—Supply [21St Allotted Day] Committee:
Debate on Foreign Affairs.
Report and Third Reading: Transport Charges, &c. (Miscellaneous Provisions) Bill.
THURSDAY, 15TH JULY—Supply [22nd Allotted Day] Committee:
Debate on Industry and Employment in Scotland.
FRIDAY, 16TH JULY—Second Reading: Isle of Man (Customs) Bill.
Committee and remaining stages: Gas and Electricity (Borrowing Powers) Bill.
Further consideration: Pests Bill [Lords].
Report and Third Reading: Charitable Trusts (Validation) Bill [Lords].
It may be convenient if I inform the House that a debate will take place on Crichel Down during the week after next—probably on Tuesday, 20th July.
Mr. Woodburn: With regard to the Scottish business next Thursday, since there is to be a continuing debate for two days, will the Government arrange as far as possible to have the following Supply Day as near as they can to the one on Thursday?
Mr. Crookshank: I can only note what the right hon. Gentleman says.
Mr. T. Brown: Will the Government find time to discuss the Motion relating to the social and economic conditions of the old-age pensioners, which has been on the Order Paper for some time?
[That this House, having regard to the increased cost of living in the basic essentials of life, agrees that a substantial increase in old-age pensions is most urgent and necessary.]
Mr. Crookshank: I am afraid that I have no time to offer for that purpose.
Mr. Ellis Smith: In view of the worldwide interest aroused by the visit of the Prime Minister and the Foreign Secretary to Washington and the important statement which the Prime Minister is to make on Monday, would it not have been advisable to have had the statement debated so that the opinions of the British people could have been reflected in this House by their elected representatives when the statement was made?
Mr. Crookshank: I am not quite clear what the hon. Gentleman has in mind, but I did say that there will be a debate on foreign affairs on Wednesday, which may suit him.
Mr. Blenkinsop: In view of the "small" amount of business announced for Monday, would is not be possible to squeeze in the Food and Drugs Bill?
Mr. Crookshank: I think that the amount of business for Monday looks longer and more complicated than it will probably turn out to be. The Government hope to be able to find time for the Second Reading of that Bill before we rise for the Summer Recess.
Mr. Edward Evans: Might I ask you a question on business, Mr. Speaker, and that is whether you have yet decided the fate of the Ministers of the Crown (Fisheries) Bill, which had its Second Reading on 25th June and in respect of which you said last week that you would give us a decision this week?
Mr. Speaker: I intend to make a statement about it today after the Prime Minister has made a statement on another matter.
Dr. King: Is the Leader of the House aware that it is now some months since the House unanimously requested the Government to do something for pensioners and others living on fixed incomes? Will he not bring before the House before the end of this month some proposals of the Government to meet the unanimous request of the House?
Mr. Crookshank: I am afraid that that is another matter.
Mr. Harold Davies: In view of the vital importance of the results of the visit of the Prime Minister and the Foreign Secretary to Washington, does not the Leader of the House think that we ought to have a two-day debate, as it will be three months before we meet again and in the interim vital and far-reaching decisions may be made?
Mr. Crookshank: That does not rest with me. There are Supply Days. One of the Supply Days has been chosen by the Opposition for this purpose. If they want other days for it, no doubt they will themselves suggest it.
Mr. Bing: Does not the right hon. Gentleman consider foreign affairs to be of sufficient importance for the Government to give a day of their time to it?
Mr. Crookshank: The fact is that we are rapidly approaching the end of July, and therefore the number of Government days is strictly limited—unless there are suggestions that we should sit into August and possibly into September.

MEMBERS' EXPENSES (SESSIONAL ALLOWANCE)
The Prime Minister: With your permission, Mr. Speaker, I will make a statement on the same topic as I mentioned to the House a fortnight ago today.
The Government have already recognised the financial difficulties in which many hon. Members find themselves. Those difficulties are unusual because they arise largely out of the nature of a Member's duties, which require him to expend substantial sums in their discharge—sums which, if expended in any other employment, would properly be reimbursed by the employer. In most cases, no doubt, the most important item is subsistence—the extra costs of living which are incurred by attendance at Westminster. For most hon. Members this means not only being obliged to take many more meals away from home than most other people, but incurring also the much more significant cost of residence in two places.
Having examined the precedents in Commonwealth Legislatures and overseas, the Government have decided that the most equitable and practical way of meeting this situation is by the institution of a sessional allowance. This will be payable to those Members who choose to draw it at a rate of £2 for every day (other than a Friday) on which the House sits. It can be drawn monthly or at such other times as may be arranged to suit the convenience of individual Members. A Supplementary Estimate will be laid as soon as possible.
This allowance will constitute a cash reimbursement, related to the actual sittings at Westminster, of the subsistence and other expenditure which Members are obliged to incur. Members will still remain eligible under the existing law for relief from Income Tax on their salaries (as distinct from the new allowance) in respect of expenses "wholly, necessarily and exclusively" incurred in the performance of their duties. They will continue under their existing obligation to justify to the Inland Revenue authorities their claims in respect of their total expenses. The justification to the Revenue will therefore include those expenses in respect of which they draw the sessional allowance. The sum drawn in the form of the new allowance will be deducted
2348
by the Inland Revenue from the total expenses on which the Member would otherwise be entitled to claim relief.
The allowance will not be drawn by Ministers or by the Officers of the House.
Mr. Attlee: The Prime Minister will realise that hon. Members on this side of the House consider that the arguments advanced by the Select Committee appointed by the House in favour of a straight increase of salary are still valid, and that the Committee examined various alternatives. We also believe that it is right that, where there is a matter concerning the House of Commons which is decided by a majority of the House of Commons, the Government of the day should implement that decision. The present proposal undoubtedly will assist some Members, and, so far as that is concerned, it does relieve what I think bears a good deal of weight in the minds of hon. Members who do not like to feel that their colleagues in the House are suffering.
I should like to ask the Prime Minister as from what date this proposal will come into force. I would finally say that, although it does something, I do not think that the line that has been taken is really in accord with the dignity and authority of this House, and I am quite sure that the right hon. Gentleman, in his visit overseas, has seen a curious comparison in the treatment of Members of other Legislatures, who I do not think work harder than hon. Members here.
Mr. C. Davies: May I ask the Prime Minister whether a further and full opportunity will be given to this House to debate the Government's proposal, for the reason that the Government have now decided to ignore, and in fact to flout, the opinion of a substantial majority of this House, after inviting the opinion of the House as to what should be the correct attitude to be adopted by the Government?
The Prime Minister: I think it would be better to get this settled at once, without prolonging the present severe conditions in order to have a further debate upon a matter which has been most thoroughly examined, not only in the Chamber, but in the minds of bon. Members and indeed throughout the country. [HON. MEMBERS: "Date?"]

2349
Further discussions will take place through the usual channels about the date.
Mr. Lee: Is the Prime Minister aware that even the most rigorous of religious bodies does not make every Friday a fasting day, and why should Members of Parliament?
The Prime Minister: It is not thought that the special conditions which constitute a heavy expense to Members operate as fully on Fridays as on other days.
Mr. Mellish: Is the right hon. Gentleman aware that, although some of my hon. Friends and I fast on Fridays, even so, we still eat?

PRIVATE MEMBERS' BILLS (WITHDRAWAL)
Mr. Speaker: I have a short statement to make in answer to a question put to me by the hon. Member for Lowestoft (Mr. Edward Evans).
I was asked at this time last Thursday a number of questions concerning the withdrawal of the Ministers of the Crown (Fisheries) Bill, and I promised to look further into the points raised. Having done so, I find that what I then said was a correct statement of the practice of the House.
A Public Bill presented or introduced by a Private Member remains in the charge of that Member, and he retains over it certain rights not possessed by any other Member. The Manual of Procedure, in paragraph 224, states that:
"A Bill other than a Lords' Bill may also be withdrawn by notice given at the Table before the day on which the Bill stands as an Order of the Day."
I find that, from 1932 to 1939, five Private Members' Bills were so withdrawn by the Members in charge of them, after they had been read a Second time and committed to a Standing Committee. In four of these cases, the Bills had been allocated to a particular Standing Committee. In one, as in this case, the Bill had not been so allocated. The most recent example I can find was in January, 1953, when the hon. Lady the Member for Lanarkshire, North (Miss Herbison) withdrew the Foundry Workers (Health and Safety) Bill after the Bill had been read a Second time and allocated to a Standing Committee.
It is therefore clear that the withdrawal of the Ministers of the Crown (Fisheries)
2350
Bill was in accordance with the practice of the House.
Mr. Edward Evans: May I thank you, Mr. Speaker, for that considered judgment. In view of the fact that the hon. Member who introduced this Bill canvassed the support of Members on all sides, which was very readily accorded to him, but took no opportunity to consult with them when, having supported him right through the Second Reading of that Bill, he took it upon himself to withdraw it, is not that against the tradition of courtesy between Members on both sides of this Chamber?
Mr. Speaker: I am afraid that those circumstances do not affect the points of procedure and practice to which I have given some attention.
Mr. Bing: Further to that point of order. Perhaps it would be possible for you, Mr. Speaker, to express some opinion on this matter. The five Bills which you cited, I think I am right in saying, were Bills which were debated in this House for only a short time, and this was a Measure which occupied the whole of a Friday. It does seem unfortunate that one hon. Member, after a long debate on the Bill, when he was refused permission to withdraw and when the Bill had received a unanimous Second Reading from the House, should be in a position to do what the House had refused him permission to do. Surely there would be considerable public difficulty if the Chancellor of the Exchequer, abandoning his position, were to withdraw the Finance Bill? We cannot possibly exclude these possibilities.
In these circumstances, I hope it will be possible for you to express the view that it is undesirable that an hon. Member should introduce a Bill, occupy a whole day with it and then be able to withdraw it without the permission of the House.
Mr. Speaker: That is not a point of order. It does not affect the position of the hon. Member in question as the Member in charge of the Bill.
Mr. Hector Hughes: Further to that point of order. Where is the line to be drawn between one Bill and another—for example, between a Private Member's Bill and the Finance Bill? [Interruption.] Does this not put hon. Members and the House into a difficulty when, after

2351
discussing the Measure—[Interruption]—it is withdrawn, whether it is a Private Member's Bill or the Finance Bill?
Mr. Speaker: I find it hard to give a coherent answer to the hon. and learned Gentleman's question, or to so much of it as I heard distinctly.
Mr. I. O. Thomas: Could you indicate to the House, Mr. Speaker, for its future guidance, at what stage in the proceedings on a Bill the House acquires complete possession of it?
Mr. Speaker: The House has possession of the Bill when the Bill is before it and the House is discussing it.
Mr. Pannell: On a point of order. Your predecessor once said that it was reasonable that the House should allow an hon. Member to speak, so that you could hear what the hon. Member was saying. Can you state that you heard what my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes) said?
Mr. Speaker: I heard sufficient of it to guess its general tenor. If it concerned itself to some extent with the contingency of the Chancellor of the Exchequer withdrawing the Finance Bill, that is a hypothetical circumstance.
Mr. Hector Hughes: Further to that point of order. You could not have heard correctly what I said, Mr. Speaker. I spoke distinctly, but there was such a noise in the House when I was putting my question that it must have been difficult for you to hear it. It was quite other than what you apparently thought it was. My question was: Where is the line to be drawn between one Bill and another? When an hon. Member introduces a Bill and invites the House to discuss it for a whole day, presumably the House has some possession or power over the Bill, some power of decision whether the Bill should go on or not. Es there any difference in kind between the Finance Bill, on the one hand, and this Private Member's Bill, on the other hand?
Mr. Speaker: I have stated the practice of the House in this matter. I have expressed no opinion on the merits of the action of individual Members in withdrawing or not withdrawing Bills. That does not fall within my province at all.
Mr. Edward Evans: Would it be competent for me to re-introduce the Bill at any time?
Mr. Speaker: Yes. The Motion which the hon. Member sought to withdraw was, "That the Bill be now read a Second time." The hon. Member could introduce it again. The Bill is now withdrawn, put out of existence, but it can be reintroduced.
Mr. I. O. Thomas: I hope that I am mistaken, Mr. Speaker, in thinking that you did not grasp completely the point I was putting. My question was: At what stage in the proceedings on a Private Member's Bill does it become the complete property of this House, when the House has authority to determine that the Private Member cannot withdraw it? Your answer was that it remained the property of this House. [HON. MEMBERS: "No."] In that case, it would appear to contradict the practice of this House that the Bill has been withdrawn. Therefore, I again put the question to you: At what stage in the proceedings on a Bill does it become the complete property of this House, and the Private Member's right to withdraw the Bill is terminated?
Mr. Speaker: The answer I gave to the hon. Member was, I think, sufficient. The Bill is the property of the House when the Bill is before the House for discussion. Between stages, as the precedents show, the hon. Member in charge of the Bill can withdraw it.

BUSINESS OF THE HOUSE
Motion made, and Question proposed,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House)."—[Mr. R. A. Butler.]
Mr. Mikardo: On a point of order, Mr. Speaker. Which hon. or right hon. Gentlemen moved this Motion?
Mr. Speaker: The Chancellor of the Exchequer.
Question put, and agreed to.

SCOTTISH ESTIMATES
Committee of Supply discharged from considering the Estimate set out hereunder and the said Estimate referred to the Scottish Standing Committee:
Class VIII, Vote 12, Department of Agriculture for Scotland.—[Mr. Crookshank.]

ORDERS OF THE DAY
  FINANCE BILL
  As amended (in Committee and on recommittal), further considered.
  FINANCE BILL

    Clause 16.—(NEW PROVISION FOR "INVESTMENT ALLOWANCES.")
    3.58 p.m.
    Mr. Hugh GaitskellI beg to move, in page 11, line 19, to leave out "instead of," and to insert "in addition to."
    We make no apology for returning to this important Clause on investment allowances. The Amendment I am moving was discussed in the Committee as one of a number of Amendments put down by my hon. and right hon. Friends. We have selected this particular one as, on the whole, the most attractive of the various alternatives which we put to the Government in Committee.
    The purpose of the Amendment is to allow the initial allowance to continue in addition to the investment allowance in the case of industrial building. The Chancellor of the Exchequer gave us an undertaking in Committee that he would look at the whole question of allowances for industrial building between the Committee and the Report stages. He said:
    "I may be of the same opinion on Report, but as this is a point on which we wish to keep the goodwill of industry and get an improvement in investment, I will give the undertaking to look at all the speeches and all the Amendments again before the Report stage."—[OFFICIAL REPORT, 16th June, 1954; Vol. 528, c. 2035.]
    We had hoped that, as a result of that examination, the Chancellor of the Exchequer would have felt able to put down a Government Amendment to meet us on the point that we are making, but as he has not done so we are once again arguing that some change should be made in the Bill as regards allowances for industrial building.
    I do not need to go over the argument at great length but, briefly, this is our case. We believe that it is right that industrial building should be stimulated. I should like particularly to refer to the, not one but several, speeches of my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), who has stressed the great importance to industry of being given some encouragement in this direction. He has gone into this matter in
    2354
    detail and has made a number of suggestions, including, for instance, that there should be greater standardisation of types of factories for particular purposes. I understand that his suggestions have been very well received in industry generally.
    4.0 p.m.
    Therefore, I say that industrial building should be encouraged. I do not think that the Government are at odds with us in that. It is true that the Chancellor of the Exchequer said in Committee that the Government gave priority, as it were, to investments in plant and machinery, but he certainly also wished to stimulate industrial building.
    The question then arises as to how an increase in industrial building is possible on physical grounds. Obviously, if the Government had been able to show that in present circumstances there was really no possibility of additional building resources being made available for industrial building, that would have been a good argument against providing any further stimulus: but that is not the position according to the Chancellor of the Exchequer. This is what the right hon. Gentleman said on 16th June:
    "The right hon. Gentleman asked whether industrial building was living up to its resources or whether there was any slack. Unfortunately there is more slack in the building industry than in other industrial sectors. It is possible and important that this sector of the building industry, namely, industrial building, should come to the front whether there is slack or not. It is important to encourage it for the sake of industrial output, While I am not acknowledging that there is much slack in the building industry"—
    that was slightly contradictory to what the right hon. Gentleman had said before—
    "I say that this is a priority and that in any case the matter is important."—[OFFICIAL REPORT, 16th June, 1954; Vol. 528, c. 2032–3.]
    It is quite evident, therefore, that, so far as physical capacity is concerned, the Chancellor is satisfied that it is available.
    The next question is whether the provisions of the Bill are designed or are likely to encourage industrial building. I do not think that now there can be any doubt about what the effects of the change-over from investment allowances to initial allowances amount to. We have stressed continually from this side of the House and in Committee that the change from initial allowance to investment allowance leaves the industrialist

    2355
    who wishes to build, as before, with the 10 per cent. allowance in the first year. In the case of the investment allowance, all that it does is to add an extra five years at 2 per cent. from the forty-fifth to the fiftieth years of the life of the building. I cannot see how anybody can argue that this small concession, to be enjoyed 45 years hence, is likely to have any significant effect on the willingness of any industrialist to go in for new building.
    I am not criticising the Government wholly for the fact that there is so little stimulus. There is no doubt that the law as it stands has, in recent years certainly, given greater encouragement to the purchase of plant and equipment than to industrial building. I said in Committee that there were good reasons for that because of the tightness of the building industry and the scarcity of resources which was natural after the war. But whatever the reason may be, there is an enormous difference in the kind of encouragement which the investment allowance gives to introduce new plant and machinery, not only because it is a higher rate—20 per cent.—but also because of the way in which the depreciation is calculated, on a steadily reducing basis, and because the rate of life of the plant and machinery is so much shorter.
    Therefore, there can be no doubt that there is this difference between the encouragement given by the investment allowance as it now stands to industrial building, on the one side, and to the introduction of plant and machinery, on the other side. The series of Amendments that we moved last time were designed to correct that. We were encouraged by what the Chancellor had to say on this subject during Second Reading to put down our Amendments. He made it plain that he recognised that we had a point of considerable substance, and we were very disappointed when he agreed to none of the Amendments during the Committee stage. Now, we return to this particular Amendment, which on the whole we prefer to the others.
    What the Amendment does is to allow the initial allowance to continue so that, in effect, the industrialist who decides to
    2356
    go in for new building is now able to obtain, not only the investment allowance at 10 per cent. in the first year, but also an initial allowance of the same amount of 10 per cent. Against that, he would lose the last five years of the capital allowance, which he would receive under the Bill as it now stands. In other words, the industrialist gets the writing off in the first year—the full 10 per cent.—instead of the 2 per cent. in each of the years between the forty-fifth and the fiftieth years. I do not think there can be much doubt that that is bound to be much more attractive as a proposition to any industrialist who contemplates new building.
    When we put this proposal forward among the other alternatives in Committee, we had no adequate answer whatever from the Government. All that the Chancellor said was:
    "I do not like the second alternative of reintroducing the initial allowances."
    The reason he did not like it was never disclosed. The Financial Secretary had given a rather more elaborate but equally unconvincing explanation why the Government would not accept it. Speaking of the method of having the initial allowance and investment allowance both applying, the Financial Secretary said:
    "It would be a somewhat complicated and cumbersome method which would involve those engaged in industry in a great deal of trouble and, as my right hon. Friend explained at an earlier stage, it is one of the main purposes of this Clause to substitute the investment for the initial allowance over a very large part of the field in which the initial allowance is at present operating."—[OFFICIAL REPORT, 16th June, 1954; Vol. 528, c. 2034, 2021]
    The second part of that explanation was merely to repeat that it was the purpose of the Clause to replace the one allowance for the other, but it was not an explanation why that should be done. As for the argument that this proposal is a "somewhat complicated and cumbersome method," I do not think the right hon. Gentleman can have meant that seriously. As compared with the complexities of capital allowances generally in relation to taxation, this is certainly a minor matter. The right hon. Gentleman would agree that it is not very difficult to calculate the extra 10 per cent. that would be allowed in the first year in place of the 2 per cent. between the forty-fifth and fiftieth years. We cannot accept that

    2357
    as a serious explanation of the Government's refusal to accept the Amendment. It is, in fact, insulting both to the Inland Revenue and to industrialists to suppose that they could not possibly work the system or that there was any particular difficulty about it.
    The only other argument that has been used is that of cost. The cost, we are told, in the first year would be £4 million and in the second and some subsequent years £7 million. But since this is a case of reintroducing the initial allowance, that, at any rate, is something which in theory, at least, is ultimately repayable to the Treasury. In other words, there would be a reduction, as I have said, in the extent to which the industrialists could write off the buildings a long time ahead. It is arguable that by then some other new buildings would be being built and, therefore, that the Treasury would always be out of pocket. But the Government themselves accept this distinction between initial allowances and investment allowances—and I do not want to go into that argument any more—so they cannot argue very seriously that this is an exceptionally heavy expense.
    If the Government still press that argument, I would very strongly stress two points. First, I do not think that in terms of inflationary pressure there will be any danger of the increased expenditure here giving rise to anything that we really need worry about. As I have argued previously it would be offset by an increase in undistributed profits—in corporate saving. I think that there need be no anxiety on that account.
    Secondly, if we are right in this—and I think that we have good reason to believe that we are—to the extent that the initial allowance does stimulate a little more industrial building it will be abundantly worth while. It will be just as worth while as the increase in investment in plant and machinery which it is the object of the 20 per cent. allowance to bring about.
    We feel that up to now we have had no satisfactory answer whatever to this particular proposal. We think that the Government have simply paid lip-service—and only lip-service—to the very legitimate complaint that, as this now stands in law and as it is in the Bill, industrial building simply will not get the encouragement that it ought to get. I hope
    2358
    that even at this very late stage the Government will change their minds. This is a simple Amendment. There can be no argument as to drafting; there would be no difficulty in the Government accepting it on those grounds. I very much hope they will see their way to do this.
    Mr. Anthony Crosland: I have never been able to understand why, if the Chancellor wants to hurry the Finance Bill through, he does not offer a substantial monetary bribe to those of us on the back benches always to persuade our right hon. Friend the Member for Leeds, South (Mr. Gaitskell) to open the debates. He does so in such an admirable manner that there is very little left to be said by those of us who previously thought of intervening. I shall therefore speak only briefly to underline one or two of his remarks.
    Like him, I was both surprised an disappointed that no Amendment was put on the Order Paper by the Chancellor himself, in view not only of his encouraging hints during the Second Reading debate but of the course the debate took in Committee. I think no detached and fair-minded observer who listened to our debates on the various Amendments on industrial building which we put down in Committee could possibly have denied that the Government had very much the worse of those debates. An extremely strong case was made out from these benches.
    The Financial Secretary's reply was so inadequate that the Chancellor was compelled to intervene half an hour later, and his own speech was neither thorough nor very convincing. From the extent to which our arguments prevailed, and from the Chancellor's own words, I think that everyone in the Committee was left with the impression that something would be done between that stage and the Report stage. It was therefore disappointing, to say the least, to see the Order Paper empty of any Government proposal.
    So far as I know, the position is not in dispute at all. Everyone wants more industrial building than we are now getting, not only for the reason which my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) has always stressed, in order to modernise our industrial buildings, but also for the reason that clearly we shall not get an increase

    2359
    in production over the next 10 years with-our expansion of capacity. There is no dispute about that. I imagine that there is little dispute that the present trend in industrial building is not sufficiently upward for anybody to be able to say that the problem is being solved and that we need not do anything to assist.
    4.15 p.m.
    If there is no dispute that we need more industrial building than we are getting under our present taxation system, why do the Government so resolutely refuse to make one of the changes we are urging? It is not as though they can say that in the Finance Bill as presented to the House there is already a large incentive to industrial building. The position, as my right hon. Friend said, is that in this year's Finance Bill there is virtually no new incentive to industrial building of any kind whatever. So it seems a passive attitude for the Government to adopt.
    The pressure for a concession towards industrial building does not merely come from this side of the House. It has been discussed in the financial Press over the last two months and many in the industrial world—and Mr. Chambers very obviously—have pressed for this most strongly. It is not just a party dispute; our attitude has very strong backing from leaders of industry.
    I wonder whether the Economic Secretary realises that the investment allowance Clause as it stands gives to certain industries virtually no help whatsoever. I will take, if I may, an industry in which my hon. and learned Friend the Member for Kettering (Mr. Mitchison), who is not in his place at the moment, is also interested—the boot and shoe industry. The new 20 per cent. allowance on plant and machinery is of no assistance to that industry. It is not one which buys new equipment but, almost entirely rents it from the British United Shoe Machinery Company. The boot and shoe firms therefore get no assistance from the 20 per cent. allowance on plant and machinery and virtually none from the 10 per cent. investment allowance on industrial building, which takes no effect until the 46th year. That industry is wholly unaffected by this Clause. It is an industry which, like the industries to which my hon. Friend the
    2360
    Member for Ashton-under-Lyne has so often referred, badly needs an improvement in its present standard of industrial building.
    As my right hon. Friend pointed out. our Amendment in effect brings forward the 10 per cent. investment allowance from years 46 to 50 to the first year. In other words, if one looks over the whole 50-year period during which the building is written off it does not increase the allowance but brings it forward from right at the end to right at the beginning of that period.
    In Committee we had from the Treasury Bench not one argument against the proposal—none of significance, at least. From the Chancellor we only had this extraordinary phrase. "I do not like it"—a descent from a rational level of argument to a merely petulant level.
    From the Financial Secretary we had the statement that what we proposed was too complicated and cumbersome to be carried through. That is hardly a point to be taken very seriously. All we ask the accountants to do is to add the 10 per cent. investment allowance to the 10 per cent. initial allowance in the case of industrial building, which is not a task of monumental arithmetical difficulty. In the case of industrial building, it surely cannot be beyond the wit of man to put those two together. That is really all we heard against what we are now suggesting in our Amendment.
    The only other point was an historical one made by the Financial Secretary that, under the scheme of initial allowances introduced by the Labour Government, plant and machinery had always had more favourable treatment than had industrial building. Of course, that is the case and it has never been denied. For most of the period plant and machinery drew an initial allowance at double the rate of that for industrial building, and for a brief period it was higher still. This has never been denied.
    Today the position is completely diffent from what it was five years ago. Five years ago these industries were under such strain that we had an elaborate system of building licences which had the effect of keeping building below what it would have been otherwise. The Government pride themselves that in the last few years they have been gradually

    2361
    relaxing the system of building licences. Presumably that means it is their positive objective to encourage a great deal more industrial building. They take the view that the resources are available and that industry should be encouraged to use them. If by relaxing the system the Government are giving industry encouragement, why should they not also give it inducement? Arguments based on the historical pattern of a few years ago are irrelevant in the completely altered conditions of today.
    In Committee the Chancellor said that he agreed that industrial buildings ought to be given a high priority, yet he is not prepared now to do anything about it. When he replies, the Economic Secretary must say whether he thinks the investment allowances, considering this change from the years 1946 to 1950, do give any additional inducement over what existed before. If he admits, as I think he is bound to admit, that they do not, is there any meaning at all in all the statements made by the Chancellor that this really important matter should be attended to? I ask the Economic Secretary not to take refuge merely in very detailed calculations and arguments, but to come face to face with this essential point. Does he think investment allowances will be any substantial inducement at all? If not, why on earth does the Chancellor not do as we ask?
    Mr. J. Grimond: I think we are entitled to have from the Government some further explanation of why they resist this Amendment and why they resisted Amendments in a similar strain which were moved in Committee. Apparently there is a considerable change in the outlook of their collective mind between the Second Reading and today. In the Second Reading debate the Chancellor showed that they were very much impressed by the case put by the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and seemed to suggest that he would do something in the direction of giving further inducement to industrial building.
    There are usually two reasons why Governments may resist Amendments of this kind on the Finance Bill. One is because of the cost involved. It has been suggested that the cost in this case would not be more than £7 million and, in the long run, it would be nothing. I cannot
    2362
    help feeling that if there were lost to the Revenue £7 million in the near future which would be compensated by a lesser amount deducted from the Revenue in the far future that would be well worth while for the object we have in mind. Secondly, the Government might urge that the purpose is carried out by the Clause as it stands, but I do not think that can be said seriously. In point of fact there will be practically no inducement to undertake new industrial building if the Clause is left as it is.
    In the Committee debates the Financial Secretary tried to pour a certain amount of oil on troubled waters by saying that everyone was right. In the view of some hon. Members opposite there would be a concrete advantage at once but in the view of hon. Members on this side of the House the advantage would be postponed for nearly 50 years. To paraphrase George Orwell, some were more right than others. There is no doubt that among those who were more right were the people who argued that in point of fact this would not benefit anyone until about 50 years hence. I have a very small personal experience of the effect because I happen to be connected with discussions on whether some new building should be carried out or not. The fact that 50 years hence some advantage may accrue has a very small effect on our minds today. We have to give people something more than that. An advantage to what we might call our lineal descendants is rather too remote.
    It may be that big businesses have planned their capital development and some company chairmen have argued that these investment allowances, while they enable people to keep a certain amount of money, may not have a great effect on capital programmes. I think. however, they will have an effect on the smaller companies. But when we come to the question of buildings, I do not think it sufficient to apply an inducement which will not take effect for 50 years. We want to make these investment allowances effective before that. We want to spur on the Government to have the courage of their convictions. Their convictions are that industry should be encouraged to put more money into building and new machinery, and so on. Can they honestly tell us that this Clause as it stands will be enough? I believe this Amendment would go a long way to tip

    2363
    the balance of those companies considering whether it is worth laying out a certain amount on new buildings or not.
    The point has already been made, and is a very strong one, that the time has been reached at which we should divert resources from house building to factory building. Many people still live in very bad housing conditions, but employment is also extremely important and, looking to the future of those very people, I think the time has come when we must make a change and concentrate to some extent on factory building.
    For all these reasons—which have been argued at length, but not really answered by the Government—I hope the Amendment will be accepted, or that we shall be given some stronger reasons than we have had for rejecting it.
    Mr. Gerald Nabarro: I intervene for one moment because the whole case put by the Opposition today and previously in Committee seems to rest on a premise that there is a need to encourage and stimulate new industrial building and that there is a shortage of industrial buildings. In fact, I can find no evidence at all to support that view. One has only to study the national or provincial Press, any day of the week, to find innumerable factories offered for sale. I am not suggesting that they are always necessarily in the right places or of the right construction, but there is evidently no overall evidence whatever of a pressing shortage of factory space.
    The second point I want to make is in connection with many speeches on this subject by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). He often tells us of the urgent need for reconstruction of 'buildings used in the textile industry. Of course, in a measure, that is true because the textile industry is a very old industry both in the branches of the industry in the hon. Member's constituency and elsewhere in Lancashire and also in the case of another branch of the textile industry, in Kidderminster, which has suffered because many of its buildings are old.
    But I would remind the hon. Member and those of his hon. Friends who support his arguments that an increase in the investment allowance, or a duality of initial and investment allowances such as this Amendment proposes, would not
    2364
    necessarily have the stimulating effect which the hon. Member desires, because a large part of the cost of the reconstruction of old buildings in the textile industry and other industries is reckoned, in any event, as a revenue charge on company accounts. It is not by any means always considered as a capital charge.
    What this Amendment is purporting to do, if anything at all—I challenge whether it would do anything at all in view of the general factory situation—is to encourage the construction of new factories. Not only do I believe the Amendment would be ineffectual because there is evidently no overall shortage of factory space in this country taking into account the normal development going on year by year, but a second consideration which is equally important is that a large part of the normal reconstruction, modernisation and rehabilitation of factories goes on year by year in order to match changes in the machinery, lay-out and improvements in machine tools installed. That type of building reconstruction is often a revenue charge, anyway, and thus would not become the subject of initial or investment allowances, such as the combination proposed in this Amendment.
    Therefore, I am driven to the conclusion—and this is a view similar to that which I expressed in Committee—that no additional fiscal stimulus is needed for new industrial building, and that my right hon. Friend is right in concentrating much greater stimulus in the Bill—it is twice as great—upon plant and machinery.
    4.30 p.m.
    Mr. H. Rhodes: I am not surprised at the remarks made by the hon. Member for Kidderminster (Mr. Nabarro). Such remarks have been made in my part of the world for about 100 years, and that is why the Opposition feel so strongly and are determined to do something about this. Does not the hon. Member realise that we are discussing something which goes a small way—of course it does not go all the way—to stimulate investment in the private sector of industry, about which the Chancellor of the Exchequer complained bitterly when he opened his Budget? We have here a small opportunity to stimulate the Government to do a little more generously what we want done in the country generally.

    2365
    If we do not have stimulation of this kind of investment in the private sector—I know there would have to be a fine balance to ascertain the cost of doing it—we shall have to have compulsion in time in the old industries, or else in the long run, if we do not have compulsion—I am warning the House about this—we shall have a stampede like we did in the case of Jarrow and many other Development Areas when we tried to do so much in such a short time. We did it very well, but it was at a terrific cost which the country would probably not be able to afford again when the time came. We have here an opportunity to press forward what we believe to be right.
    Hon. Members have already been into the mechanics of the Amendment. I saw the hon. Member for Kidderminster shaking his head at references to the 46th, 47th, 48th, 49th and 50th years. The advantage, or the lack of advantage, of this proposal over the initial allowance is that it does not come into operation until the 46th year. In Committee we made a case for bringing the investment allowance into line with the allowance in respect of machinery, but it was not acceptable. Here we propose to marry the old initial allowance and the investment allowance. This keeps the Chancellor's figure where it was; all it does is to concertina the allowance in the first year to the extent of five years' capital allowance.
    There are many chief inspectors of taxes who already allow just as much as is allowed in the Bill for machinery when a manufacturer who is putting in machinery builds a factory incidental to the installation of the machinery. In such a case not only does the investment allowance apply but also the amount allowed per year runs exactly in line with that allowed for machinery. We know that we are pushing at a half-open door here. I urge the Economic Secretary to act as a good host this afternoon and open the door wide to a good idea or two. He should accept our proposal as a small instalment for the future and as an inducement to private industry to invest more.
    My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) mentioned the remarks which I made when we debated the Budget. What I then said about the means whereby large-scale
    2366
    operation could be made has attracted considerable attention. In one instance it was said that those ideas would be extremely valuable for new towns. I am not concerned so much about new towns but about old towns. If the Economic Secretary or the Chancellor would accompany me home one Friday and, during the railway journey, see what is happening in Mossley, which is part of my constituency, it would not be long before he would be thoroughly convinced.
    There we have new houses being erected in a district where very few houses were built before the war. The situation was that even the local authority advertised for new industries to come there on the basis that the wages which they would be required to pay would be little more than dole. The reason why there was no rush by industry to take advantage of that was that new industries could not be housed in the district. There have since been some developments and one or two good factories have been erected, but, by and large, there is a dreary succession of old buildings along the valley. As I said in Committee, one cannot go into agriculture in my part of the world; one must have a roof over one's head to do a job of work. However, we are putting up fine houses, but yet we are neglecting the very thing to which the Government ought to be paying attention.
    There are countries which have tackled the problem the other way round. I remember speaking to someone who went to Stalingrad when that great city was being developed. The workers were under the corrugated iron roofs of factories which were adaptable to all manner of industries. That approach has not been our approach. There is no doubt that a tremendous amount of work and capital have been put into housing, and I plead for a little bit of a turn round. To have fine houses on the hillside and in the valley miserable buildings in which new industries cannot possibly be housed, is an anachronism.
    I suppose it is true that private enterprise discards a marginal investment at any time. If it cannot make a profit from the money it borrows, it gives up, and that certainly appertained before the war. But we cannot discard human beings any more. They will not stand for it, and we cannot switch populations

    2367
    from one part of the country to another any more. Therefore, we must have buildings into which industries can go in order to provide a living for the people on the spot. The capital is already being put into the houses, and it is about time the capital was put into the factories as well.
    There is a terrific job which must be tackled before very long in Lancashire and Yorkshire. It is time that we stopped thinking in terms of the results of the activities of the old joint stock companies. My remarks apply not only to Lancashire but over the border too. People who want to see the picture as it affects industry should consult the joint committee report on the spacing of machinery, which was brought out in 1949. That bears very much on this problem, although nothing was ever done about it, because it was not possible in those days.
    I wonder if the Economic Secretary realises that in that report the whole of the textile industry was divided into three parts—the A's, the B's and the C's. The A's were new factories or altered R.O.F. factories which were turned over to the wool industry; the B's were the ones which could be converted with some expenditure; and there was the big C group which the joint committee of employers and trade unionists gave up. They could not do anything with them at all. Those were factories where oil was seeping through the floor and which were all of a jitter when the engines started up. Those are the factories where new machinery cannot he introduced because it will not fit.
    This state of affairs is not confined to this country. We find the same story if we read about the shift of population and of industry in America. Last year there was published a report which had been made at the instigation of five governors in New England. If we substituted Lancashire for Fall River, and altered the names of other places in the report to suit various parts of this country, we should get the picture of the situation as it occurred here. In fact, that is what the "Manchester Guardian" said in a review of this report.
    But the Americans had the big advantage that they were able to export pools of cheap labour elsewhere. They moved
    2368
    a lot of this labour down below the Mason-Dixon line. But it does not alter the fact that those people who lived in Fall River are still there. That is why they are doing the very thing that we are asking the Government to do today—that is to encourage new building. In settling populations, that is most essential, and it is also a human thing to do.
    Although we do not claim that this Amendment will effect the necessary cure—there will have to be a major operation some time—this Amendment is an earnest of what every right-thinking person has in mind.
    4.45 p.m.
    The Economic Secretary to the Treasury (Mr. R. Maudling): As the right hon. Member for Leeds, South (Mr. Gaitskell) said in moving this Amendment, this subject was discussed fully in Committee and a number of speeches were made, particularly by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). My right hon. Friend said that he would consider the subject again in the light of those speeches, but he had already said that he was chary of making a concession and he gave four reasons which weighed and still weigh in my right hon. Friend's mind in considering this matter.
    He said that he was chary about making a concession, first because it would make it difficult to hold the line that he had adopted; secondly, because it would add £4 million to the cost; thirdly, because he did not want to indulge in the complicated legislation needed to do it the other way round and change buildings from the straight-line basis to the reducing-balance basis; and fourthly because he still thought that it was plant and machinery which particularly required the investment allowance and not the buildings.
    In accordance with the undertaking which my right hon. Friend gave, he has studied again very carefully this whole problem in the light of what was said by hon. Members in Committee, but he has come to the conclusion on balance—it was not a very definite balance one way or the other, but, as I have said, he reached that conclusion on balance—that it would be better not to make any change in the proposals as originally introduced in the Finance Bill. It is perfectly true that the stimulus given to investment in new plant and machinery

    2369
    is greater than that given to investment in new buildings. No one would deny that. But I would ask hon. Members opposite not to write off entirely the benefit of this investment allowance in respect of industrial buildings.
    It is true that in terms of the annual taxation bill, the difference between an investment allowance and an initial allowance does not make itself felt until the 45th year, but I should have thought—although I cannot admit to as much practical experience as many other hon. Members—that in considering an investment in a new industrial building, the question in the mind of the investor is the period over which the initial cost will be written off. The fact that the benefit does not actually accrue in terms of tax assessment for 45 years does not mean that it is not of some benefit.
    Secondly, I cannot help thinking that, while there may be differences between industry and industry, and area and area, it is a little artificial to make too much of a distinction between an industrial building and plant and machinery. The purpose of the building it to hold the plant and machinery, and surely, when considering what to do to stimulate new productive investment as a whole, we want to consider what would be the effect on a potential investor of an allowance which would affect his new investment as a whole—that is, plant and machinery and buildings taken together.
    Mr. Rhodes: That is precisely what we have been doing; we have been considering that aspect of the matter. But if, as the Economic Secretary has said, he attaches tremendous importance to the machinery, we say that the full benefit of investment in machinery cannot be obtained until the receptacle is ready for the installation. That is why we want to speed it up.
    Mr. Maudling: I do not think I have made my point sufficiently clear. My point is that the investor, deciding whether to invest in a new factory, will consider the tax allowance which he will get in respect of machinery and in respect of the building as a single whole. If it is said that one should be more generous than the other, I think that that is an artificial argument, because what weighs with the investor is not the allowance he gets on the plant or the allowance he gets on the building, but the total allowance
    2370
    he gets on the two together. Of course, I agree that that does not apply to all industries.
    My right hon. Friend has considered this matter very carefully, but he has come to the conclusion that he cannot accept this Amendment. Of the four reasons which I have mentioned, the one relating to the legislation for changing buildings from the straight-line basis to the reducing-balance basis does not apply to this Amendment. The question of the relative importance of plant and machinery and buildings I have attempted to deal with. The other two reasons are the most relevant to this Amendment.
    The first is because, as my right hon. Friend said, to accept an Amendment of this kind would make it more difficult to hold the line he had adopted, namely, the line drawn between industrial building and commercial building. He has been anxious not to give away the position adopted by this Government and preceding governments that the important thing to do is to stimulate industrial building.
    My right hon. Friend did feel that there is an argument that there is an unfair discrimination against commercial building, and that if he were to increase still further the allowance on industrial building, the case for admitting commercial building as well would become in practice, if not in theory, more compelling. That is, briefly, what he had in mind in coming to a decision.
    On the question of cost, the cost of accepting this Amendment and having an initial allowance as well as an investment allowance would be £4 million in the first year and £7 million in subsequent years. It would be difficult to say what is actually the cost to the Budget of an initial allowance. I think that the right hon. Gentleman was at slight variance with the hon. Member for Gloucester, South (Mr. Crosland) on this point. If the hon. Member for Gloucester, South is right, then, of course, what the Treasury and the revenue loses by way of initial allowance is, in practice, lost once and for all to the Exchequer.
    So far as the right hon. Gentleman's argument is concerned, I cannot accept his argument about the economic effects of the initial allowance. I think that his point was that if we granted an initial

    2371
    allowance in addition to the investment allowance, we might have a transfer of savings from public savings to corporate savings. I cannot help feeling that if his object in granting an initial allowance is to provoke more expenditure on investment, he cannot simultaneously provoke the same amount of additional savings.
    Whatever the economic effects of this proposal, the Budgetary effects would be to impose on the Budget an additional charge of £4 million for the first year and £7 million in subsequent years. I do not think that there is any argument, on either side, that the more stimulus we can give to investment in British industry the better. This is really a question of judging whether we can afford to give this stimulus in the light of the cost and the light of possible repercussions in
    respect of other types of building, particularly commercial building.
    My right hon. Friend considered this with great care, and he came to the conclusion that on balance he would not be justified at the present moment, in the present circumstances, in accepting the Amendment. He is grateful to hon. and right hon. Members opposite for the arguments and suggestions which they have advanced on this matter, and he hopes that by refusing to accept the Amendment he has not given the impression that he does not value the suggestions which have been made, but, on balance, he feels that he is not justified in accepting the Amendment at the present time.
    Question put, "That 'instead of,' stand part of the Bill."
    The House divided: Ayes. 263; Noes, 230.

    Division No. 194.]

    AYES

    [4.54 p.m.

    Aitken, W. T.

    Crowder, Petre (Ruislip—Northwood)

    Hirst, Geoffrey

    Allan, R. A. (Paddington, S.)

    Darling, Sir William (Edinburgh, S.)

    Holland-Martin, C. J.

    Alport, C. J. M.

    Davidson, Viscountess

    Hopkinson, Rt. Hon. Henry

    Amery, Julian (Preston, N.)

    Deedes, W. F.

    Hornsby-Smith, Miss M. P

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Digby, S. Wingfield

    Horobin, I. M.

    Anstruther-Gray, Major W. J.

    Dodds-Parker, A. D.

    Horsbrugh, Rt. Hon. Florence

    Arbuthnot, John

    Donaldson, Cmdr. C. E. McA

    Howard, Gerald (Cambridgeshire)

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

    Donner, Sir P. W

    Howard, Hon. Greville (St. Ives)

    Baldock, Lt.-Cmdr. J. M.

    Doughty, C. J. A.

    Hudson, Sir Austin (Lewisham, N.)

    Baldwin, A. E.

    Douglas-Hamilton, Lord Malcolm

    Hulbert, Wing Cdr. N. J.

    Banks, Col. C.

    Drayson, G. B.

    Hurd, A. R.

    Barlow, Sir John

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Hutchison, Sir Ian Clark (E'b'rgh, W.)

    Baxter, Sir Beverley

    Duncan, Capt. J. A. L.

    Hyde, Lt.-Col. H. M.

    Beach, Maj. Hicks

    Duthie, W. S.

    Hylton-Foster, H. B. H.

    Bell, Ronald (Bucks, S.)

    Eccles, Rt. Hon. Sir D. M.

    Iremonger, T. L.

    Bennett, F. M. (Reading, N.)

    Eden, Rt. Hon. A.

    Jenkins, Robert (Dulwich)

    Bennett, Dr. Reginald (Gosport)

    Eden, J. B. (Bournemouth, West)

    Johnson, Eric (Blackley)

    Bennett, William (Woodside)

    Erroll, F. J.

    Johnson, Howard (Kemptown)

    Birch, Nigel

    Finlay, Graeme

    Jones, A. (Hall Green)

    Bishop, F. P.

    Fisher, Nigel

    Joynson-Hicks, Hon. L. W.

    Boothby, Sir R. J. G.

    Fleetwood-Hesketh, R. F.

    Kaberry, D.

    Bossom, Sir A. C.

    Fletcher-Cooke, C.

    Kerby, Capt. H. B

    Boyd-Carpenter, Rt. Hon. J. A.

    Ford, Mrs. Patricia

    Kerr, H. W.

    Boyle, Sir Edward

    Fort, R.

    Lambton, Viscount

    Braine, B. R.

    Foster, John

    Lancaster, Col. C. G

    Braithwaite, Sir Albert (Harrow, W.)

    Fraser, Hon. Hugh (Stone)

    Langford-Holt, J. A.

    Braithwaite, Sir Gurney

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Leather, E. H. C.

    Brooke, Henry (Hampstead)

    Fyfe, Rt. Hon. Sir David Maxwell

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

    Brooman-White, R. C.

    Galbraith, Rt. Hon. T. D. (Pollok)

    Legh, Hon. Peter (Petersfield)

    Browne, Jack (Govan)

    Gammans, L. D.

    Lennox-Boyd, Rt. Hon. A. T.

    Buchan-Hepburn, Rt. Hon. P. G. T

    George, Rt. Hon. Maj. G. Lloyd

    Lindsay, Martin

    Bullard, D. G.

    Glover, D.

    Linstead, Sir H. N.

    Bullus, Wing Commander E. E.

    Godber, J. B.

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

    Burden, F. F. A.

    Gomme-Duncan, Col. A.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Butcher, Sir Herbert

    Gough, C. F. H.

    Lockwood, Lt.-Col. J. C.

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

    Gower, H. R.

    Longden, Gilbert

    Campbell, Sir David

    Grimston, Hon. John (St. Albans)

    Low, A. R. W.

    Carr, Robert

    Grimston, Sir Robert (Westbury)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Cary, Sir Robert

    Hall, John (Wycombe)

    Lucas, P. B. (Brentford)

    Channon, H.

    Hare, Hon. J. H.

    Lucas-Tooth, Sir Hugh

    Clarke, Col. Ralph (East Grinstead)

    Harris, Frederic (Croydon, N.)

    McCorquodale, Rt. Hon. M. S.

    Cole, Norman

    Harrison, Col. J. H. (Eye)

    Macdonald, Sir Peter

    Colegate, W. A.

    Harvey, Ian (Harrow, E.)

    Mackeson, Brig. Sir Harry

    Conant, Maj. Sir Roger

    Harvie-Watt, Sir George

    Mackie, J. H. (Galloway)

    Cooper, Sqn. Ldr. Albert

    Hay, John

    Maclay, Rt. Hon. John

    Cooper-Key, E. M.

    Heald, Rt. Hon. Sir Lionel

    Maclean, Fitzroy

    Craddock, Beresford (Spelthorne)

    Heath, Edward

    Macleod, Rt. Hon. Iain (Enfield, W.)

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

    Higgs, J. M. C.

    MacLeod, John (Ross and Cromarty)

    Crosthwaite-Eyre, Col. O. E.

    Hill, Dr. Charles (Luton)

    Macmillian, Rt. Hon. Harold (Bromley)

    Crouch, R. F.

    Hill, Mrs. E. (Wythenshawe)

    Macpherson, Niall (Dumfries)

    Crowder, Sir John (Finchley)

    Hinchingbrooke, Viscount

    Maitland, Patrick (Lanark)

    Manningham-Buller, Rt. Hn. Sir Reginald

    Ramsden, J. E.

    Summers, G. S.

    Markham, Major Sir Frank

    Rayner, Brig. R

    Sutcliffe, Sir Harold

    Marlowe. A. A. H.

    Redmayne, M.

    Taylor, William (Bradford, N)

    Marples, A. E.

    Rees-Davies, W. R

    Teeling, W.

    Marshall, Douglas (Bodmin)

    Remnant, Hon. P.

    Thomas, Rt. Hon. J. P. L. (Hereford)

    Maude, Angus

    Ronton, D. L. M.

    Thomas, Leslie (Canterbury)

    Maudling, R.

    Ridsdale, J. E.

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

    Maydon, Lt.-Comdr. S. L. C

    Roberts, Peter (Heeley)

    Thornton-Kemsley, Col. C. N

    Medlicott, Brig F.

    Robertson, Sir David

    Tilney, John

    Mellor, Sir John

    Robinson, Sir Roland (Blackpool, S.)

    Touche, Sir Gordon

    Molson, A. H. E.

    Robson-Brown, W.

    Turner, H. F. L.

    Moore, Sir Thomas

    Rodgers, John (Sevenoaks)

    Turton, R. H.

    Morrison, John (Salisbury)

    Roper, Sir Harold

    Tweedsmuir, Lady

    Nabarro, G. D. N.

    Ropner, Col. Sir Leonard

    Vane, W. M. F.

    Neave, Airey

    Russell, R. S.

    Vaughan-Morgan, J. K.

    Nicholls, Harmar

    Ryder, Capt. R. E. D.

    Vosper, D. F.

    Nicolson, Nigel (Bournemouth, E.)

    Savory, Prof. Sir Douglas

    Wakefield, Edward (Derbyshire, W)

    Nield, Basil (Chester)

    Schofield, Lt.-Col. W.

    Wakefield, Sir Wavell (St. Marylebone)

    Noble, Comdr. A. H. P

    Scott, R. Donald

    Walker-Smith, D. C.

    Nugent, G. R. H.

    Scott-Miller, Cmdr. R.

    Wall, Major Patrick

    Nutting, Anthony

    Shepherd, William

    Ward, Hon. George (Worcester)

    Oakshott, H D.

    Simon, J. E. S. (Middlesbrough, W.)

    Ward, Miss I. (Tynemouth)

    Odey, G. W.

    Smithers, Peter (Winchester)

    Waterhouse, Capt. Rt. Hon. C.

    O'Neill, Hon. Phelim (Co. Antrim, N.)

    Smithers, Sir Waldron (Orpington)

    Watkinson, H. A.

    Orr, Capt. L. P. S.

    Snadden, W. McN.

    Webbe, Sir H. (London & Westminster)

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

    Soames, Capt. C.

    Wellwood, W.

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Spearman, A. C. M

    Williams, Gerald (Tonbridge)

    Page, R. G.

    Speir, R. M.

    Williams, Sir Herbert (Croydon, E.)

    Peake, Rt. Hon. O.

    Spens, Rt. Hon. Sir P. (Kensington, S.)

    Williams, Paul (Sunderland, S.)

    Peto, Brig. C. H. M.

    Stanley, Capt. Hon. Richard

    Williams, R. Dudley (Exeter)

    Pickthorn, K. W. M.

    Stevens, Geoffrey

    Wills, G.

    Pilkington, Capt. R. A

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

    Wilson, Geoffrey (Truro)

    Pitman, I. J.

    Stewart, Henderson (Fife, E.)

    Wood, Hon. R.

    Pitt, Miss E. M.

    Stoddart-Scott, Col. M.

    Powell, J. Enoch

    Storey, S.

    TELLERS FOR THE AYES:

    Price, Henry (Lewisham, W.)

    Strauss, Henry (Norwich, S.)

    Sir Cedric Drewe and

    Prior-Palmer, Brig. O. L

    Stuart, Rt. Hon. James (Moray)

    Mr. T. G. D. Galbraith.

    Raikes, Sir Victor

    Studholme, H. G.

    NOES

    Acland, Sir Richard

    Davies, Ernest (Enfield, E.)

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

    Albu, A. H.

    Davies, Harold (Leek)

    Herbison, Miss M.

    Allen, Arthur (Bosworth)

    Davies, Stephen (Merthyr)

    Hobson, C. R.

    Allen, Scholefield (Crewe)

    de Freitas, Geoffrey

    Holman, P.

    Anderson, Frank (Whitehaven)

    Deer, G.

    Holmes, Horace

    Attlee, Rt. Hon. C. R.

    Delargy, H. J.

    Holt, A. F.

    Awbery, S. S.

    Dodds, N. N.

    Houghton, Douglas

    Bacon, Miss Alice

    Donnelly, D. L.

    Hoy, J. H.

    Balfour, A.

    Dugdale, Rt. Hon. John (W Bromwich)

    Hubbard, T. F.

    Beattie, J.

    Ede, Rt. Hon. J. C

    Hudson, James (Ealing, N.)

    Bence, C. R.

    Edelman, M.

    Hughes, Emrys (S. Ayrshire)

    Benn, Hon. Wedgwood

    Edwards, Rt. Hon. John (Brighouse)

    Hughes, Hector (Aberdeen, N.)

    Benson, G.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hynd, H. (Accrington)

    Bing, G. H. C.

    Edwards, W. J. (Stepney)

    Hynd, J. B. (Attercliffe)

    Blackburn, F.

    Evans, Albert (Islington, S.W.)

    Irving, W. J. (Wood Green)

    Blenkinsop, A.

    Evans, Edward (Lowestoft)

    Isaacs, Rt. Hon. G. A.

    Blyton, W. R.

    Fernyhough, E.

    Janner, B.

    Boardman, H.

    Fienburgh, W.

    Jeger, George (Goole)

    Bottomley, Rt. Hon. A. G

    Fletcher, Eric (Islington, E.)

    Jeger, Mrs. Lena

    Bowden, H. W.

    Follick, M.

    Jenkins, R. H. (Stechford)

    Bowles, F. G.

    Forman, J. C.

    Johnson, James (Rugby)

    Braddock, Mrs. Elizabeth

    Fraser, Thomas (Hamilton)

    Jones, David (Hartlepool)

    Brockway, A. F.

    Freeman, John (Watford)

    Jones, Frederick Elwyn (West Ham, S.)

    Brook, Dryden (Halifax)

    Freeman, Peter (Newport)

    Jones, Jack (Rotherham)

    Broughton, Dr. A. D. D.

    Gaitskell, Rt. Hon. H. T N

    Keenan, W.

    Brown, Rt. Hon. George (Belper)

    Gibson, C. W.

    Kenyon, C.

    Brown, Thomas (Ince)

    Glanville, James

    Key, Rt. Hon. C. W

    Burke, W. A.

    Gordon Walker, Rt. Hon. P. C

    King, Dr. H. M

    Burton, Miss F. E.

    Greenwood, Anthony

    Kinley, J.

    Butler, Herbert (Hackney, S.)

    Grey, C. F.

    Lawson, G. M.

    Castle, Mrs. B. A.

    Griffiths, Rt. Hon. James (Llanelly)

    Lee, Frederick (Newton)

    Champion, A. J.

    Grimond, J.

    Lee, Miss Jennie (Cannock)

    Clunie, J.

    Hale, Leslie

    Lever, Leslie (Ardwick)

    Coldrick, W.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Lindgren, G. S.

    Collick, P. H.

    Hall, John T. (Gateshead, W.)

    Lipton, Lt.-Col. M

    Corbet, Mrs. Freda

    Hamilton, W. W.

    MacColl, J. E.

    Cove, W. G.

    Hannan, W.

    McInnes, J.

    Craddock, George (Bradford, S.)

    Hardy, E. A.

    McLeavy, F.

    Crosland, C. A. R.

    Hargreaves, A.

    MacPherson, Malcolm (Stirling)

    Crossman, R. H. S.

    Harrison, J. (Nottingham, E)

    Mallalieu, E. L. (Brigg)

    Cullen, Mrs. A.

    Hastings, S.

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

    Daines, P.

    Hayman, F. H.

    Mann, Mrs. Jean

    Dalton, Rt. Hon. H.

    Healey, Denis (Leeds, S.E.)

    Manuel, A. C.

    Darling, George (Hillsborough)

    Healy, Cahir (Fermanagh)

    Marquand, Rt. Hon H. A

    2374

    2375

    Mason, Roy

    Pryde, D. J.

    Thomas, George (Cardiff)

    Mayhew, C. P.

    Pursey, Cmdr. H.

    Thomas, Iorwerth (Rhondda, W.)

    Mellish, R. J.

    Reid, Thomas (Swindon)

    Thomas, Ivor Owen (Wrekin)

    Messer, Sir F.

    Reid, William (Camlachie)

    Thomson, George (Dundee, E.)

    Mikardo, Ian

    Rhodes, H.

    Thornton, E.

    Mitchison, G. R

    Richards, R.

    Timmons, J.

    Monslow, W.

    Robens, Rt. Hon. A.

    Tomney, F.

    Moody, A. S.

    Roberts, Goronwy (Caernarvon)

    Ungoed-Thomas, Sir Lynn

    Morley, R.

    Robinson, Kenneth (St. Pancras, N.)

    Usborne, H. C.

    Morris, Percy (Swansea, W.)

    Rogers, George (Kensington, N.)

    Warbey, W. N

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

    Ross, William

    Weitzman, D.

    Moyle, A.

    Royle, C.

    Wells, Percy (Faversham)

    Mulley, F. W.

    Shackleton, E. A. A.

    Wells, William (Walsall)

    Noel-Baker, Rt. Hon. P. J

    Shinwell, Rt. Hon. E.

    West, D. G.

    Oldfield, W. H.

    Short, E. W.

    Wheeldon, W. E.

    Oliver, G. H.

    Shurmer, P. L. E.

    White, Mrs. Eirene (E. Flint)

    Orbach, M.

    Silverman, Sydney (Nelson)

    Whiteley, Rt. Hon. W.

    Oswald, T.

    Simmons, C. J. (Brierley Hill)

    Wigg, George

    Padley, W. E.

    Skeffington, A. M.

    Wilcock, Group Capt. C. A. B.

    Paget, R. T.

    Slater, Mrs. H. (Stoke-on-Trent)

    Willey, F. T.

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

    Slater, J. (Durham, Sedgefield)

    Williams, Rev. Llywelyn (Abertillery)

    Paling, Will T. (Dewsbury)

    Smith, Ellis (Stoke, S.)

    Williams, W. R. (Droylsden)

    Palmer, A. M. F.

    Smith, Norman (Nottingham, S.)

    Willis, E. G.

    Pannell, Charles

    Sorensen, R. W.

    Wilson, Rt. Hon. Harold (Huyton)

    Pargiter, G. A.

    Soskice, Rt. Hon. Sir Frank

    Winterbottom, Ian (Nottingham, C.)

    Parker, J.

    Sparks, J. A.

    Winterbottom, Richard (Brightside)

    Parkin, B. T

    Steele, T.

    Woodburn, Rt. Hon. A.

    Paton, J.

    Strachey, Rt. Hon. J.

    Wyatt, W. L.

    Pearson, A.

    Strauss, Rt. Hon. George (Vauxhall)

    Yates, V. F.

    Pearl, T. F.

    Summerskill, Rt. Hon. E.

    Younger, Rt. Hon. K.

    Popplewell, E.

    Swingler, S. T.

    Porter, G.

    Sylvester, G. O.

    TELLERS FOR THE NOES:

    Price, J, T. (Westhoughton)

    Taylor, Bernard (Mansfield)

    Mr. Wilkins and Mr. John Taylor

    Proctor, W. T.

    Taylor, Rt. Hon. Robert (Morpeth)

    Mr. Crosland: I beg to move, in page 11, line 44, after "one-fifth," to insert:
    "or, in the case of the fuel-saving machinery or plant mentioned in the next following subsection, one quarter."
    This Amendment is intended to give to certain types of plant and machinery designed to save fuel an investment allowance of 25 per cent, instead of one of 20 per cent. It will be remembered that we had a debate on a rather similar Opposition Amendment last year, to which the Chancellor replied by making one of his less felicitous speeches in which he descended from the very high moral tone which he usually adopts, and which, to use his own words in reference to another speech, created no intellectual stir in the Chamber, or indeed stir of any other kind, if it comes to that. I hope that he will make his speech this year on a rather higher level, and will go into the question rather more thoroughly.
    This is a particularly propitious, or perhaps unpropitious moment—I am not sure which—to be discussing questions of fuel economy in the light of the National Union of Mineworkers' Conference which has been going on this week and in the light of the very sombre warnings given to that conference. The decisions on various other matters discussed at the conference give pain in some quarters and pleasure in others. But they are not our concern, at any rate not this evening.
    2376
    This conference has listened to extremely grave warnings about the coal position both from its own officers, Mr. Jones and Mr. Horner, and also from Sir Hubert Houldsworth himself. There can be no question that the coal position is extremely alarming. Both sides of the House said last year that the situation was serious even then, but it is clearly a great deal more serious now.
    We have had this year an increase in output of a little over 1 million tons. Exports are about the same as last year which, I think, nobody considers large enough. If our exports of coal could be considerably increased, it would be of great benefit to the country. Stocks are about the same as last year, but they ought to be larger, because industrial consumption is increasing. Therefore, last year's figures are inadequate.
    What is really serious is the fact that, compared with the increase in output of only 1 million tons, consumption has gone up by over 3 million tons. Nobody doubts that the coal position during this coming winter is going to be a very unsatisfactory one. Once again we have announced that we shall import coal from abroad, and that is something which nobody likes.
    Of course, it could be said by whichever Minister replies that any concessions to fuel saving equipment in July will not

    2377
    have much effect on the position this winter, because some forms of this equipment take, possibly, two or three years to instal and another year before any appreciable effect is felt from their use. I do not think that is a sufficient argument against accepting the concession this year, because there is every indication that the coal picture is going to be as bleak in five, 10 or 15 years' time as it is in 1954.
    I think that every committee and every body which has studied the long-term position is agreed on how difficult the outlook is. The Ridley Committee said that the home demand for coal in some 10 years' time would amount to 230 million tons. The Federation of British Industries, which I should have thought had more reason on their side, put the figure of the home demand in about 10 years' time at 260 million tons. The Ridley Committee and the National Coal Board have both been talking in terms of exports in 10 years' time being about 30 million tons. That figure is a good deal lower than our export figure in the 1920s, and is one which the Economic Commission for Europe certainly thinks can be exceeded, since its own calculation was that by that time there will be a European coal gap of no less than 50 million tons.
    It does not matter which calculation we take. It is perfectly clear that, looking ahead, the demand for coal, both for home industry and also for export, is going to be very much greater than the amount of coal which, even on the most favourable assumptions, we can produce in this country. If it is the case that in a few years' time the demand for coal is going to be a great deal greater than we can supply, then, obviously, it is right that we should emphasise the question of fuel economy.
    This is not a party matter, and except for the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) who intervened rather unexpectedly in the debate last year, it is not an issue upon which there is any disagreement at all. Everybody is agreed that large savings of fuel can be made in industry. Indeed, the hon. Member for Kidderminster (Mr. Nabarro) has made this point again and again in this Chamber.
    The hon. Member for Garston (Sir V. Raikes) said last year that in five years
    2378
    or so, industry could certainly save 9 or 10 million tons of coal by fuel economies. The Ridley Committee reported in exactly the same terms, and I do not think there is any dispute that large savings can be made. Nor is there any dispute about the fact that industry needs an incentive if it is to save coal, because, except in the case of three or four notable industries, fuel costs are an extremely small proportion of total costs.
    Last year, in reply to a debate on an Amendment which we then put down to give 100 per cent. initial allowances to certain fuel equipment, the Chancellor rejected our plea while admitting that the matter was of the greatest possible importance. He rejected it not in one of his rather patriotic, idealistic and ethical sounding speeches, but in one of his rather more debating speeches, taking refuge very largely in the fact that the wording of the Amendment was bad. I have this morning re-read the speeches on that occasion, and I have come to the conclusion that he misread the Amend-milt, but that is not particularly germane at the moment.
    The Chancellor of the Exchequer (Mr. R. A. Butler): Is the hon. Gentleman suggesting that I cannot be forensic and patriotic at the same time?
    Mr. Crosland: I am sure that the Chancellor is one of the very few people who can come within sight of this duality of character. But more normally he is a Jekyll and Hyde character and adopts either one or other of his rather contrasting personalities.
    Assuming we have got the right hon. Gentleman in a patriotic and moralising attitude this afternoon, I hope he will not take refuge in the fact that there may be some flaws in the drafting of our Amendment. Of course, it is difficult to draft an Amendment perfectly when in Opposition, and this year we have had less time than usual between the Committee stage and the Report stage. I do not think, however, there is a great deal wrong with it, or if there is that it is very serious. But, if the Chancellor is willing to accept the principle, he can say it is badly drafted if he likes, provided he agrees with the substance of it.
    Last year the right hon. Gentleman admitted the great importance of the

    2379
    subject and admitted that the existing loan scheme of the Ministry of Fuel and Power had largely broken down. Out of £1 million loans provided under that scheme, only some 4 per cent. had, in fact, been taken up. Therefore, the Chancellor, in collaboration with the Minister of Fuel and Power, did make a small concession in respect of the loan scheme. He extended the category of equipment to which it should be applied, and extended the period of repayment. He made it two years instead of one year interest free.
    We have now observed how this scheme has worked, and the Minister of Fuel and Power has given the House, on more than one occasion, figures of how much of this money has been loaned. The last figure that he gave was on 28th June this year when, in answer to a Question, he said:
    "Under the new Government loan scheme I have approved 51 schemes amounting to £339,000."—[OFFICIAL REPORT, 28th June, 1954: Vol. 529, c. 876.]
    Those are better than the figures in the previous scheme, but can this really be considered a rapid rate of improvement? We on this side of the House think not.
    It might be argued that the scheme was only operating for a year and, therefore, why not give it another year. That, I think, would be a powerful argument if the thing appeared to be going full steam ahead and if the loans were being made at a rapid rate. But on the basis of the figures we have been given I do not think that progress under this scheme is really such that we can be happy about our present arrangements.
    There is this further point about it. If we were going to ask what kind of inducement ought to be given to industry to instal this equipment, I could understand that at a time when industry was short of cash, a loan scheme was the natural way of dealing with the matter. Two years ago it could be argued—indeed, it was argued—that industry was then short of cash. Nobody thinks that today. The Economic Secretary in a previous debate admitted that the great majority of firms are not short of cash.
    I cannot think that a loan scheme of any kind is a strong inducement to firms that are not short of cash. Apart from the fact that there are two years' interest
    2380
    free, the offer of loans on favourable terms will not make the installation of equipment more profitable than it would otherwise be. It would only make the money available to most firms, and money available now through a loan scheme is not relevant to a position such as that in which we find ourselves today.
    What we require today is not to offer loans but to make the installation of this type of equipment more profitable to industry. That is exactly what we are seeking to do in this Amendment. The fact is that an investment allowance does give an additional return on any investment, and we are seeking to increase this still further on this particular kind of investment. I hope that whoever replies to this debate will deal with this point, which is fundamental. The concept of a loan was obviously the correct approach at a time when industry was short of cash, but now that industry is not short of cash a loan is an irrelevant type of approach and what is wanted is something to increase the net return and the profitability on this sort of equipment. That is what we are pressing for.
    5.15 p.m.
    What objections can be used against this suggestion? First of all, we can have the old familiar objection that there are practical difficulties. The Ridley Committee wanted to advocate a concession, not of this exact kind but somewhat parallel. It was, in fact, a 100 per cent, initial allowance. They did not do so, however, because after discussion with the Inland Revenue, they were convinced that there were great practical difficulties.
    The Inland Revenue, with all due respect to my hon. Friend the Member for Sowerby (Mr. Houghton), have a rather professional vested interest in creating practical difficulties when a Minister asks whether some new scheme should be adopted or not. Whatever the position two years ago, it cannot be said that there are practical difficulties about defining the sort of equipment which we have in mind, because it is already defined by the Ministry of Fuel and Power for the purposes of the loan scheme. Clearly, if this type of equipment and plant can be identified for the purpose of giving firms loans, it can be identified for the purpose of giving firms a higher investment allowance. It really would

    2381
    not be fair to take seriously now the argument that there were great practical difficulties in defining and identifying the type of equipment that we have in mind.
    It might be objected that a comparatively small concession of this kind will not save much coal. I might say that the only reason why we suggested a small concession is that, in view of the Chancellor's mood of obstinacy during the whole of the proceedings on this year's Finance Bill, we thought it would be a waste of time to suggest a concession involving a more substantial amount. We have tried to attract his interest by making it comparatively small and not costly.
    But, in any case, I would suggest to the Committee that, supposing it is stated that this kind of concession will only save 500,000 tons or a million tons of coal, it does not, therefore, mean that this is not worth doing. A small marginal saving of coal can be of the greatest possible importance because we are working on such a narrow margin the whole time. A million tons of coal may not sound very important when we think that our total consumption of coal is 220 million tons, but that one million tons might easily make the difference between having a coal crisis and not having a coal crisis.
    The value to the country of one million tons of coal is its equivalent in industrial output which would be lost by its not being there. One million tons of coal could make a difference in one year of 5 per cent. in industrial output. In 1947, for a brief period there was a very small coal shortage which was reflected in a huge drop in industrial output. So I hope that hon. Members will not say that, because the saving in terms of coal is comparatively small, therefore the saving to the country is not of the greatest possible importance.
    Lastly, I suppose the principal objection that will be brought forward is the objection that we cannot discriminate in favour of a single industry. Despite the fact that both this year on the investment allowance and last year on the initial allowances we asked for discrimination for a number of separate industries, I personally have a great deal of sympathy with the argument that the Treasury cannot discriminate over the whole field of
    2382
    taxation. I think my hon. Friend the Member for Sowerby very naturally takes a similar view.
    I think, therefore, that it is very natural for the Treasury Bench to say on the various Amendments from this side of the House—I think there were from five to ten this year—asking for larger investment allowances for this and that industry, that this is a degree of discrimination which will make the whole thing really hopeless.
    I hope that they will notice that this year at this stage, we were careful not to put this fuel saving Amendment on the Order Paper with other Amendments proposing discriminating treatment which we put forward on the Committee stage, but have brought it forward separately on Report. We made the differentiation in order to make the point that we regard this is a separate issue. In other words, if a concession were made on this point we would not say that the Government should make a concession on machinetools or shipbuilding and various other things. I hope that whoever answers the debate will not take refuge behind the general argument about discrimination, but will accept the fact that we put this on quite a different level from other cases which we have argued.
    Even the argument against discrimination can be pressed very much too far. This Government, following the example of previous Governments, have themselves discriminated in initial allowances and investment allowances. Initial allowances were given for mining works and extractive industries at a rate double that given to other industries. This year, when the change was made to investment allowances, again the mining and extractive industries, alone of all industries, are given the choice between a 20 per cent. investment allowance and a 40 per cent. initial allowance. Therefore, there is already in Government policy a perfectly clear discrimination in favour of mining works and we might say that the principle has been accepted. It would not involve establishing some quite new and revolutionary principle now to give the discrimination that is given in the case of mining works also to fuel saving equipment.
    Again, the Government discriminate in favour of the coal industry by having a loan scheme at all. They do not offer

    2383
    loans on these exceptionally favourable terms to the chemical, engineering or textile industries. Therefore, I do not think that the Minister can say that the Government cannot discriminate in favour of this kind of plant, machinery and equipment when the Minister of Fuel and Power, with the support of the entire House, already discriminates in its favour.
    Although I have a horrible feeling that we shall hear about the discrimination argument and that that will constitute 50 per cent. of the case against us, I hope that, at any rate, the case will be put rather more subtly than it was put last year. I hope that the Economic Secretary will not content himself with saying in a rather high falutin' fashion that all discrimination of any kind is bad. I hope that he will address himself to the fact that the Minister of Fuel and Power already does this, and that even in the sphere of investment allowances and initial allowances there is already discrimination in favour of certain types of industry.
    I am sorry that the Chancellor is not replying to this debate. Considering all that has been said about the coal situation in recent days, I would have hoped that he would have signalled the importance which he attaches to the subject by replying himself, as he did last year, Although last year we did not get a very sympathetic reply, at least we did have a reply from him. He said last year that he was going to give the loan scheme a trial for a year and that he would report to the House or to the Committee when the next Finance Bill was discussed whether he thought that it was functioning adequately or not. Therefore, I would have hoped that we should have an interim report from the Chancellor and a statement on whether he thinks something further should be done. Taking the long view, I think the House might reasonably conclude that the loan scheme, although useful and an improvement on its predecessor, is still not enough and that something additional should be done.
    Mr. Austen Albu: I beg to second the Amendment.
    In seconding this Amendment, I hope that I shall not sound as pessimistic as
    2384
    my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) did towards the end of his speech, because I hope that we shall have a more satisfactory reply than the one last year. I should like to say how very pleased we are to see the Parliamentary Secretary to the Ministry of Fuel and Power here. His presence shows an attitude towards these debates which is very different from that which we have come to expect from the Board of Trade. When we discuss industry in general we very rarely have a representative from the Board of Trade in the Chamber. It is an indication of the seriousness with which this matter is taken that the Parliamentary Secretary to the Ministry of Fuel and Power has left his other very serious duties to be here.
    I am sure that we all admire the persistence with which my hon. Friend the Member for Gloucestershire, South has pressed this matter year after year. There is no doubt about its seriousness or that he feels very strongly about it, as we all do on both sides of the House. As he said, although such a concession, small as it is, can hardly have much effect on the position this year, nevertheless the situation is one which we have to envisage for quite a number of years ahead.
    I know that there are hon. Members and people outside who think that in a few years' time we shall have atomic energy generation and that anxiety about coal will not matter. That is the most arrant nonsense, because it will be years before we can substitute power generation by atomic energy for the existing methods, and the capital required for such a programme will be far too great to envisage it in short-term. There are others who say that we should and could turn over to increasing use of oil. There is already a very substantial turnover to oil on the railways and in industry, but the House will not be unaware of the view which I hold about the future of our balance of payments problem and the continuing necessity to save imports.
    When we bear in mind that our net imports last year were of the value of £240 million, we can see that any substantial substitution of petroleum for coal or an increase in home consumption of petroleum must inevitably have a serious effect on our balance of payments. I agree that the position would be very much worse if, owing to the shortage of

    2385
    coal, industry had to close down. I should be certainly in favour of importing oil in those circumstances; but that is not the argument. The argument is whether we can afford to import at that rate and lose the exports of coal to which my hon. Friend the Member for Gloucestershire, South referred.
    There are very few hon. Members on the benches opposite at the moment. We happen to be discussing investment in industry and not Estate Duty, when no doubt the House will fill up. When we are discussing the expansion of our industries, few hon. Members of the party opposite are here. There are hon. Members opposite who speak very freely about coal production with knowledge based only on experience of the subject, when the economic situation, and particularly the manpower situation, was very different indeed. In the best circumstances, even with the most brilliant management, the most enthusiastic workers, and the highest standard of investment, can we imagine that there will be a radical increase in coal production in the next 10, 15 or 20 years?
    We hope that when the present capital plans of the Coal Board come to fruition there will be a substantial increase in production, but we have to remember that even today the output per man-shift is rising and has continued to rise. As the "Manchester Guardian" points out in a very interesting leading article today,
    "…the miners are regularly attending a much larger number of shifts, year in, year out, than ever in any period of years in the 1930s, and probably than ever in history."
    It is true, of course, that very rarely before in the history of the coal industry has there been continuous employment in all pits. Now there is, and the truth is, as the "Manchester Guardian" points out,
    "…we do not really know what is a reasonable number of shifts to ask a man to maintain…."
    in the pits. Before the war, in many districts the demand was high enough for work to be continuous, and it is quite likely, as the figures seem to indicate, that absenteeism was higher than it is today.
    5.30 p.m.
    It is, therefore, no good reading moral lessons to the miners, attacking management and administration, and thinking
    2386
    that by some magic twist we can revert to a situation where the production of exports is very much lower, there is considerable unemployment and, therefore, very many more workers in the mines. We must realise that we shall never go back to freely available and cheap coal, any more than we shall to freely available and cheap food, in the sense that we had it before the war. We shall never go back to a situation where the community exploits miners and agricultural workers.
    That being so, we must put a true value upon the use of coal. Some people think that coal is too cheap. My hon. Friend the Member for Gloucestershire, South has sometimes almost seemed to take that view, and I am not sure that I do not agree with him. After all, our coal is cheaper than it is anywhere else in Europe. In any case, the price of coal does not prevent many industrial firms from wasting it.
    There are some industries in which coal is responsible for a very high proportion of the cost, but in the vast majority of industries that is not so, and the owners do not think it is worth while to make a special effort to save it. They are showing their ignorance, because if they cared to make the necessary estimates many of them would find that they could make considerable profits, even without any loan or investment allowance from the Government. Works and employment managers are so concerned to see that the cost of their heating and steam production is not a very high proportion of their total costs that they are unwilling to go to the trouble of installing simple equipment to save coal.
    In this case we need both a stick and a carrot. We must have the stick of higher prices for the coal industry and the carrot supplied by the Amendment. Hon. Members have no doubt seen the report of the survey of the use of steam and power made by the Ministry of Fuel and Power, which shows that only about one-third of the potential electric power that could be generated by the use of back pressure engines or turbines is being generated at the present time. This is a complicated and difficult type of installation, which involves not only the cost of plant and machinery but of consultancy, skilled engineering, and technical advice. A firm must think very seriously about this type of installation

    2387
    before going ahead with it, because the calculations are not easy. Nevertheless, it is quite clear that in many cases it would be of very great value.
    It does not appear as that the Government's loan scheme is offering a sufficient inducement—although one would have thought that no inducement were needed. Besides the highly complicated scheme which I have just mentioned there are much more simple ones which could be put into operation, but which are still ignored. One would think that it was only common sense that not only buildings but piping and even some plant and machinery and equipment should be insulated, but one can go into many factories where the pipes are not insulated or lagged, and there is nothing on the roof but the bare tiling, or whatever the covering happens to be. The loss of heat because of this is absolutely appalling.
    We need to make a much stronger drive to persuade industry to save fuel. My hon. Friend the Member for Gloucestershire. South has gone through all the objections that can be raised. I do not entirely agree with him that the Government cannot be more discriminatory than they are at present. I realise the difficulties, but I believe that in some cases, especially with regard to definitions, they are not so great as they may appear. This Amendment is an example not of discrimination between industries, but in the use of quite well known types of plant and equipment, or types of building work, which are quite simply and easily described.
    I can think of the kind of comparison that we had during the war. I know that in those days money was much less of an object, but a scheme existed for the relighting of factories, whereby we could get the whole cost of relighting our factories from the Ministry of Supply. The factory which I managed did so. It was a quite separate arrangement. The relevant regulation said that under certain conditions of light measurement the whole cost of improving the lighting in a factory engaged in war production would be paid for by the Treasury. That is quite a simple scheme. It does not discriminate between industries, but it is an incentive to the installation of certain equipment. That is exactly what the Amendment seeks to achieve.
    2388
    It is not as if the Government have not considered the question of making rather more discriminatory allowances. My hon. Friend has referred to some examples, and the Economic Secretary, during the Committee stage, in reply to the debate upon our Amendment to make the investment allowance more discriminatory, said that very serious consideration was being given to the matter. It is not as if it was something altogether outside the minds of the Government. Nor can some of the other arguments put forward by the Economic Secretary on that occasion be used today. In this case there is no element of an export subsidy or loan.
    If the Government are serious about this matter and hold the same view of the future prospects as that of my hon. Friend and myself, they ought to make this concession. It is not a very great one, but if it were made it would be an indication of the seriousness with which the Government view the matter, and the importance which they attach not only to increased coal production but to coal saving and fuel saving as a whole.
    Mr. Nabarro: The hon. Member for Gloucestershire, South (Mr. Crosland) said that my right hon. Friend the Chancellor gave an unsympathetic reception last year to the proposal put forward by hon. Members opposite for increasing the fiscal incentives for installation of industrial fuel efficiency equipment. I should like to refute that suggestion at once. I had long and earnest conversations with m) right hon. Friend and with his Inland Revenue officials over a period of some months before the introduction of the 1953 Budget, and throughout those conversations it was evident to me that my right hon. Friend was extremely sympathetic in the matter of the need for making arrangements to provide an added incentive for greater industrial fuel efficiency. It was also evident, however, that very grave practical difficulties were involved.
    Nevertheless, my right hon. Friend made one important concession last year. to which neither the hon. Member for Gloucestershire, South nor the hon. Member for Edmonton (Mr. Albu) has made adequate reference this afternoon. My right hon. Friend extended substantially the scope of the loans scheme for

    2389
    industrial fuel-saving equipment. Furthermore, by arrangement with the Ministry of Fuel and Power, he did something of much greater importance from the fiscal point of view, and something which has a direct relationship to the Amendment. The period for repayment of the industrial fuel efficiency loans was extended in order that it should be made the same period as that allowed by the Inland Revenue for wear and tear purposes upon the plant installed.
    The practical effect of such an arrangement is not sufficiently realised in industry, and is not. I think, completely understood in the House. What it means is this: if an industrialist spends £10,000 upon a piece of fuel-economising equipment and obtains a Government loan for it, and if, as is normal in the case of such equipment, he arranges with the Inland Revenue that the period of wear and tear allowances to apply to that piece of plant and machinery shall be 20 years, then, under the loan scheme, the period of repayment of the loan will also be 20 years. It follows that each annual repayment against the loan is a sum equal to the annual amount of the wear and tear allowance granted by the Inland Revenue. One cancels the other out or it is an absolute equation.
    Thus, the only cost of the new equipment to the industrialist is the net amount of the interest charged on the loan after deduction of Income Tax. That is a relatively small annual charge, and is more than adequately covered by the additional profit which is earned by the industrial undertaking as a result of the economy in coal at today's relatively—I stress "relatively"—high cost. It is therefore not correct to say that the loan scheme does not carry with it an adequate incentive for the installation of industrial fuel-saving equipment. In its purely fiscal aspects, it has a direct relationship to the proposal of the hon. Member for Gloucestershire, South.
    There is a second point which is of great importance. We inaugurated the loans scheme for industrial fuel-saving equipment on the present more comprehensive basis a matter of only six or eight months ago. Since then, as a result of the proposals made by the Ridley Committee, and later by the Pilkington Committee, an autonomous fuel efficiency organisation for industry has been established, called the National Industrial Fuel
    2390
    Efficiency Service. It is autonomous and largely financed by the National Coal Board, the British Electricity Authority and the nationalised gas industry. That organisation covers every aspect of industrial fuel efficiency and is often responsible for examining schemes submitted for these loans, which are later approved or otherwise by the Ministry of Fuel and Power.
    This fuel efficiency organisation has been in being only since 1st May, 1954. The loans scheme, on its enlarged basis, has been in being for only a little longer. In my view, it would be a grave mistake to try so soon to alter the whole basis of encouraging and stimulating industrial fuel efficiency by changing to the type of incentive which is proposed b) the hon. Member for Gloucestershire, South, supported by the hon. Member for Edmonton. I want to give this new basis, the industrial fuel organisation, and the loans scheme a fair run, at least for 18 months or two years.
    Moreover, as a simple point for the hon. Member for Gloucestershire, South, the effect of the present loan scheme, the lengthened period of repayment and the relating of each annual repayment to the amount of each year's wear and tear allowance on the industrial fuel-economising equipment installed is precisely what he advocated last year. The practical effect of it is a 100 per cent. initial allowance, because it means that the industrialist has to find no money to meet the capital cost of the equipment at all, and year by year has to find no money out of net resources for the repayment of the loan.
    For all those reasons, I hope that my right hon. Friend will think that this Amendment does not represent a suitable means, at this moment, of encouraging industrial fuel efficiency. I hope he will rely upon the schemes already in force. Nothing which I have said should be taken as being in any way derogatory to the cause, which I am glad to say is a non-party political cause, of stimulating greater efficiency in the burning of coal—our single raw material asset in this country and a wasting asset at that—by the very large number of industrial undertakings which have to use it for generating power, for raising steam, for heating and processing, and for a multiplicity of other purposes.
    5.45 p.m.
    Mr. Douglas Houghton: I want to say a few words about administration. We in the House understand policy much better than we understand administration, especially when we are administering the law, in which there can be no ad hoc decisions and no gounds for dealing with taxpayers or other citizens purely on the basis of expediency. Every taxpayer whose circumstances are similar to those of another taxpayer is entitled to expect the same treatment under the Income Tax law as that accorded to the other man, and that is what makes discrimination in tax relief so difficult to administer.
    We should all agree that tax reliefs as a system of economic policy must be used with great care and only when there is an overwhelming case for doing so. I believe that there are much stronger grounds for using tax reliefs as a system of social policy than for using them as a means of economic policy, especially in a society in which industry is largely in the hands of private enterprise.
    There will obviously be difficulties about administration if there is too much discrimination and unless there are ways and means by which the taxpayer can prove his title to the allowance. My hon. Friend the Member for Gloucestershire, South (Mr. Crosland) said that there had been a certain amount of restraint in the course of the Committee stage of the Finance Bill this year, and we are confining ourselves to this single proposal in favour of a measure of tax relief in a direction which right hon. and hon. Members on both sides of the House will agree is important.
    Perhaps the salvation of the Amendment from the administrative point of view is that the Ministry of Fuel and Power would come into it. It seems to me that there are to be some means of satisfying the Inland Revenue—which in terms of practical day-to-day work means the local inspector of taxes—that the money has been so spent and that it has been spent in the manner intended by the Act; and that there is no reason to doubt the facts of the matter. These are the grounds on which some form of discrimination becomes extremely difficult to administer unless we have a staff of technicians and specialists of one kind or another who, by physical inspection, are able to bring the necessary evidence to
    2392
    the Inland Revenue on which it can make its decision.
    Many years ago, when I first went into the Inland Revenue, there was a tax known as Inhabited House Duty, and there was a physical inspection of shops which it was claimed were lock-up shops in order to make sure that there was no living accommodation which was accessible from the business part of the premises. That was repealed many years ago, but I give it as an illustration of the problems which exist when the Inland Revenue does not know whether the facts are as stated by the taxpayer and there are no practical means of finding out.
    If the Inland Revenue says that there are difficulties about this sort of thing, who am I to say that there are not? I have never found that the Inland Revenue exaggerated the difficulties of administration. The chief complaint of the staff is that it underrates them and makes promises to the Chancellor which are extremely difficult to carry out or does not advise him properly of the difficulties of what he proposes to do.
    Any reasonable person looking at this Amendment could say that there are safeguards which will make the Amendment practicable from the point of view of administration, and I trust that in giving the reply which he is already impatient to make—I hope it will be favourable—the Economic Secretary will not devote too much time to the administrative difficulties but will attend to the other and more serious points which support the Amendment moved by my hon. Friend.
    Mr. Maudling: I accept the advice of the hon. Member for Sowerby (Mr. Houghton) about administrative difficulties in this matter, and I prefer to base my arguments on a rather different approach.
    The hon. Member for Edmonton (Mr. Albu) perhaps went a little wide of this Clause in dealing with the problems of the coal-mining industry and the reasons for them. It would be interesting to debate them, but I feel that this is not the time to do so. I shall try to deal with this Amendment, bearing in mind the warning which I receive from time to time from the hon. Member for Gloucestershire, South (Mr. Crosland) to be neither highfalutin nor sub-intellectual. I shall try to follow his own model of brevity and discretion.

    2393
    The proposal here is to give to this particular form of plant and machinery, fuel-saving equipment, a higher investment allowance than to other forms. There is obviously no dispute about the fact that the whole situation gives rise for concern and that coal should be used as economically as possible. The argument is whether this is the right way to encourage more economy in the use of coal by industry.
    My real objection to this proposal is that it introduces discrimination in circumstances in which it is difficult to justify it. During our discussions in Committee we spoke at length on the principle of discrimination and I advanced various reasons why the Government have decided that it is wrong to introduce that principle into the tax structure in circumstances such as these. In moving the Amendment, the hon. Member pointed out that the general question of discrimination is not at issue here, and so I shall not repeat the arguments which I used then. Leaving that on one side, his argument is that here is a very special case on its own, where special tax allowance should be given for this form of equipment because of the great shortage of coal.
    I wonder whether it is as special as all that. Supposing one made this special tax and investment allowance, it would be a net gain to the taxpayer and not merely anticipation. If we gave special concessions in the case of machinery designed to save coal, what about machinery designed to save dollar-costing goods, Petroleum, for example, as was mentioned by the hon. Member for Edmonton. Although the problem of obtaining coal in this country is very great, there is also the problem of ensuring that we get the imports we require.
    Mr. Albu: If we gave a concession of this sort it would save imported petroleum exactly as it would save coal.
    Mr. Maudling: That is exactly my point. The people saving imported petroleum by other methods would ask why they should not receive the same treatment, and I should find it very difficult to argue against that.
    In this case there is special provision made by the Government to encourage firms to install fuel-saving machinery.
    2394
    The hon. Member for Gloucestershire, South used that as an argument that discrimination was already admitted. I cannot accept his argument. The position I have tried to maintain on previous occasions is that it is wrong to discriminate in the tax structure between one taxpayer and another. If we have different rates of investment allowances those rates should clearly apply to different things. Obviously, buildings should be treated differently from plant and machinery, because there is so much difference in the period of life of buildings and of plant and machinery. Here hon. Members are suggesting discrimination between two different kinds of machinery, and it is the opinion of the Government that it is wrong to do that by means of tax concessions.
    But it may be right to assist one form of machinery by special schemes such as loans. Reference has been made this afternoon to the loan scheme, particularly by my hon. Friend the Member for Kidderminster (Mr. Nabarro) who illustrated in a most interesting manner the way in which this loan arrangement works out in the minds of industrial investors. The latest figures reveal that 55 schemes have been approved for loan, amounting to £377,000, and a further 47 schemes, involving £247,000, are under consideration. I think that it is clear, therefore, that considerable progress is being made in that direction.
    What is the position of an industrialist who installs fuel-saving equipment of an efficient kind? I think that it is quite clear from the figures that machinery of this kind—one cannot particularise too much, but broadly speaking I would say fuel-saving equipment of this kind—should pay for itself in terms of fuel economy in four or five years. The industrialist investing in this type of machinery gets the regular capital allowance; a special loan, with the great advantage involved to which my hon. Friend referred; and in addition, under this year's Budget, he will get the investment allowance. So already there is an incentive to an efficient industrialist to install machinery of this kind.
    My conclusion is that what is required is not further financial incentives, but far wider publicity about what is already available. I gained the impression that

    2395
    my hon. Friend the Member for Kidderminster would agree with that point of view, in that he stressed that the present advantages are not sufficiently known among industrialists. He referred to the National Industrial Fuel Efficiency Service, and I understand that they are now promoting a wide publicity campaign to encourage firms to take greater advantage of the Government's loan scheme. I am sure that that is the right way to go about this matter. There are great advantages for industrialists and companies from the installation of this type of machinery.
    Mr. Nabarro: I agree that the National Industrial Fuel Efficiency Service is promoting a vast publicity campaign, but will my hon. Friend call in aid the Treasury information unit? Surely that is the appropriate body to explain the fiscal points to which I referred, by which an industrialist can recover, over a period of years, practically the whole initial cost of the plant and machinery?
    Mr. Maudling: I will certainly consider that suggestion, which I regard as a valuable one.
    I would sum up the attitude of the Government to this Amendment in this way. Here we have fuel-saving plant, and its installation is, generally speaking, a good business proposition for the company concerned. We have a Government scheme involving special loans to encourage industrialists to install that type of machinery. In addition, we have the allowances, and I do not feel that we should be justified in going further, when obviously the advantages already in existence are not fully known.
    I suggest that we concentrate on informing industry of the existing advantages to be obtained from making full use of the Government scheme and from investing in fuel-saving machinery. I am sure that this debate will prove of considerable assistance in furthering that process of education, which is the right way to encourage the use of this equipment.
    Mr. Gaitskell: During the debate on the last Amendment, my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) referred in terms, which might have been complimentary or reproachful, to the way in which I moved the Amendment. He described it as "thorough."
    2396
    I will return him the compliment, or the reproach, by saying that he has done a good job with this Amendment.
    It is not necessary for me to argue the points over again, but I wish to comment on some of the things which the Economic Secretary has said. He rejected this Amendment first, on the ground that if we gave special concessions to the installation of fuel-saving and coal-saving machinery, we ought to do the same for oil. I had some experience in this field as Minister of Fuel and Power, and the fact is that the waste of solid fuel is always far more serious than the waste of oil fuel. I think that is recognised by everyone.
    6.0 p.m.
    We are really concerned here with the out-of-date installations for burning solid fuel. I do not think that the Minister can ride off on the ground that really we ought to do it for oil as well. There has not been a problem with oil but there has been one with solid fuel. There has been not only the problem of the shortage of coal, but the knowledge that coal was being very wastefully used.
    The hon. Gentleman also put forward the usual argument that we could not have discrimination on fiscal matters of this kind. He did not deal adequately with the examples given by my hon. Friends where there is already such discrimination. There is discrimination in the case of ships. The owners are allowed the 40 per cent. initial allowance or the investment allowance, as they think fit. There is no special circumstance there. One cannot call a ship an installation, but it is certainly a form of capital expenditure. Here we have another form.
    I do not accept the argument that we must beware of discrimination. I do not think that it is any more than an anxiety, which I understand, on the part of the Treasury and the officials of the Inland Revenue, that by reason of discrimination in favour of one type of installation they may be driven to having to make similar concessions to others and that the whole matter will get so hopelessly complicated that it will be difficult to administer.
    But as my hon. Friends have pointed out, in this instance we have a very simple criterion to apply. The matter is covered by the second of the two Amendments, namely, the fact that the Ministry of Fuel

    2397
    and Power have all the machinery for deciding whether a piece of fuel-burning equipment does or does not fall within the class which should be encouraged. I do not accept the hon. Gentleman's argument in that respect.
    The third argument was that, while the Government did not see their way to produce discrimination in this field, nevertheless they believed in fuel economy and they were helping out in other ways. The hon. Member for Kidderminster (Mr. Nabarro) made great play with what has been done through the loan scheme. The loan scheme is predominantly for those who are short of capital. That would be a reasonably good argument, in the light of what the hon. Member said, in comparison with initial allowances, but the whole purpose of the investment allowance was to deal with the lack of incentive and not the shortage of capital.
    Though I do not wish in any way to decry the loan scheme, I would say that the difficulty is that it does not provide the incentive. It is all very well to say that industrialists are stupid and that they do not understand that there would be great advantages. That may be true, but the fact remains that industry generally has not gone as far as we would like it to go in this direction. I am not making reproaches now. As a matter of fact, successive Governments over the years have done a very good job on fuel efficiency. The work began during the war and it was carried on later.
    Mr. Nabarro: Would the right hon. Gentleman also admit that successive Governments have pleaded that they cannot give any greater incentives, because that would lead to discrimination? It was the right hon. Gentleman himself who turned down my plea during the consideration of the Finance Bill in 1951 on the very ground of discrimination.
    Mr. Gaitskell: We have had occasional references—and I do not object—
    to the 1951 Budget. I can only repeat that the circumstances in which that Budget was brought in were quite exceptional and refer to the enormous increase in expenditure which we had to face in that year as well as the heavy pressure involved in the early stages of the defence programme on the whole of the engineering industries. That constituted a special situation.
    Now we have a coal situation which is recognised to be causing anxiety in the Government and in the country generally. We know that it is caused by a very sharp increase in coal consumption. There has been an increase in the first half of this year of over 3 million tons. An annual rate of increase of 6 million tons a year is a formidable one to meet, especially if at the same time the National Coal Board has to devote, as it must, a good deal of its resources to long-term development such as the sinking of new pits, reconstruction, and so on.
    It is overwhelmingly clear that a very special effort should be made in fuel economy. Here is an opportunity which I thought the Government would take. They might reasonably have said that this would not be enough that this could not do the trick. Then I should have said that they should try it anyhow, because it is desperately important that we should save fuel. I should have thought that the Government would have jumped at the opportunity to give the additional incentive. There is no need to decry anything else that has been done, but why not do this as well?
    In view of the answer which the Economic Secretary gave, which seemed to us unconvincing in the light of the situation, I suggest to my hon. Friends that we should divide the House.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes, 224; Noes, 262.

    Division No. 195.]

    AYES

    [6.7 p.m.

    Acland, Sir Richard

    Benn, Hon. Wedgwood

    Brockway, A. F.

    Albu, A. H.

    Benson, G.

    Brook, Dryden (Halifax)

    Allen, Arthur (Besworth)

    Bing, G. H. C.

    Broughton, Dr. A. D. D.

    Allen, Scholefield (Crewe)

    Blackburn, F.

    Brown, Rt. Hon. George (Belper)

    Anderson, Frank (Whitehaven)

    Blenkinsop, A.

    Brown, Thomas (Ince)

    Attlee, Rt. Hon. C. R.

    Blyton, W. R.

    Burke, W. A.

    Awbery, S. S.

    Boardman, H.

    Burton, Miss F. E.

    Bacon, Miss Alice

    Bottomley, Rt. Hon. A. G

    Butler, Herbert (Hackney, S.)

    Balfour, A.

    Bowden, H. W.

    Castle, Mrs. B. A.

    Beattie, J.

    Bowles, F. G.

    Champion, A. J.

    Bence, C. R

    Braddock, Mrs. Elizabeth

    Clunie, J.

    Coldrick, W.

    Irving, W. J. (Wood Green)

    Rhodes, H.

    Collick, P. H.

    Isaacs, Rt. Hon. G. A.

    Richards, R.

    Corbet, Mrs. Freda

    Janner, B.

    Roberts, Goronwy (Caernarvon)

    Cove, W. G.

    Jeger, George (Goole)

    Robinson, Kenneth (St. Pancras, N.)

    Craddock, George (Bradford, S.)

    Jeger, Mrs. Lena

    Rogers, George (Kensington, N.)

    Crosland, C. A. R.

    Jenkins, R. H. (Stechford)

    Ross, William

    Crossman, R. H. S.

    Johnson, James (Rugby)

    Royle, C.

    Daines, P.

    Jones, David (Hartlepool)

    Shackleton, E. A. A.

    Dalton, Rt. Hon. H.

    Jones, Frederick Elwyn (West Ham, S.)

    Shinwell, Rt. Hon. E.

    Darling, George (Hillsborough)

    Jones, Jack (Rotherham)

    Short, E. W.

    Davies, Ernest (Enfield, E.)

    Keenan, W.

    Shurmer, P. L. E.

    Davies, Harold (Leek)

    Kenyon, C.

    Silverman, Julius (Erdington)

    Davies, Stephen (Merthyr)

    Key, Rt. Hon. C. W.

    Silverman, Sydney (Nelson)

    de Freitas, Geoffrey

    King, Dr. H. M.

    Simmons, C. J. (Brierley Hill)

    Deer, G.

    Kinley, J.

    Skeffington, A. M.

    Delargy, H. J.

    Lawson, G. M.

    Slater, Mrs. H. (Stoke-on-Trent)

    Dodds, N. N.

    Lee, Frederick (Newton)

    Slater, J. (Durham, Sedgefield)

    Donnelly, D. L.

    Lee, Miss Jennie (Cannock)

    Smith, Ellis (Stoke, S.)

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

    Lever, Leslie (Ardwick)

    Smith, Norman (Nottingham, S.)

    Ede, Rt. Hon. J. C.

    Lindgren, G. S.

    Sorensen, R. W.

    Edwards, Rt. Hon. John (Brighouse)

    Lipton, Lt.-Col. M.

    Soskice, Rt. Hon. Sir Frank

    Edwards, W. J. (Stepney)

    McInnes, J.

    Sparks, J. A

    Evans, Albert (Islington, S.W.)

    McLeavy, F.

    Steele, T.

    Evans, Edward (Lowestoft)

    MacPherson, Malcolm (Stirling)

    Stokes, Rt. Hon. R. R.

    Evans, Stanley (Wednesbury)

    Mallalieu, E. L. (Brigg)

    Strachey, Rt. Hon. J.

    Fernyhough, E.

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

    Strauss, Rt. Hon. George (Vauxhall)

    Fienburgh, W.

    Mann, Mrs. Jean

    Summerskill, Rt. Hon. E.

    Fletcher, Eric (Islington, E.)

    Manuel, A. C.

    Swingler, S. T.

    Fellick, M.

    Marquand, Rt. Hon. H. A

    Sylvester, G. O.

    Forman, J. C.

    Mason, Roy

    Taylor, Bernard (Mansfield)

    Fraser, Thomas (Hamilton)

    Mayhew, C. P.

    Taylor, John (West Lothian)

    Freeman, John (Watford)

    Mellish, R. J.

    Taylor, Rt. Hon. Robert (Morpeth)

    Freeman, Peter (Newport)

    Messer, Sir F.

    Thomas, George (Cardiff)

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

    Mikardo, Ian

    Thomas, Iorwerth (Rhondda, W.)

    Gibson, C. W.

    Mitchison, G. R.

    Thomas, Ivor Owen (Wrekin)

    Glanville, James

    Monslow, W.

    Thomson, George (Dundee, E.)

    Gordon Walker, Rt. Hon. P. C.

    Moody, A. S.

    Thornton, E.

    Greenwood, Anthony

    Morgan, Dr. H. B. W.

    Timmons, J.

    Grey, C. F.

    Morley, R.

    Tomney, F.

    Griffiths, Rt. Hon. James (Llanelly)

    Morris, Percy (Swansea, W.)

    Ungoed-Thomas, Sir Lynn

    Hale, Leslie

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

    Usborne, H. C.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Moyle, A.

    Warbey, W. N.

    Hall, John T. (Gateshead, W.)

    Mulley, F. W.

    Weitzman, D.

    Hamilton, W. W.

    Oldfield, W. H.

    Wells, Percy (Faversham)

    Hannan, W.

    Oliver, G. H.

    Wells, William (Walsall)

    Hargreaves, A.

    Orbach, M.

    West, D. G.

    Harrison, J. (Nottingham, E.)

    Oswald, T.

    Hastings, S.

    Padley, W. E.

    Wheeldon, W E.

    Hayman, F. H.

    Paget, R. T.

    Whiteley, Rt. Hon W

    Healey, Denis (Leeds, S.E.)

    Palmer, A. M. F.

    Wigg, George

    Healy, Cahir (Fermanagh)

    Pannell, Charles

    Willey, F. T.

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

    Pargiter, G. A.

    Williams, Rev. Llywelyn (Abertillery)

    Herbison, Miss M.

    Parker, J.

    Williams, Rt. Hon. Thomas (Don V'll'y)

    Hewitson, Capt. M.

    Parkin, B. T.

    Williams, W. R. (Droylsden)

    Hobson, C. R.

    Paton, J.

    Willis, E. G.

    Holman, P.

    Peart, T. F.

    Wilson, Rt. Hon. Harold (Heyton)

    Holmes, Horace

    Plummer, Sir Leslie

    Winterbottom, Ian (Nottingham, C.)

    Houghton, Douglas

    Popplewell, E.

    Winterbottom, Richard (Brightside)

    Hoy, J. H.

    Porter, G.

    Woodburn, R. Hon. A.

    Hubbard, T. F.

    Price, J. T. (Westhoughton)

    Wyatt, W. L

    Hudson, James (Ealing, N.)

    Proctor, W. T.

    Yates, V. F.

    Hughes, Emrys (S. Ayrshire)

    Pryde, D. J.

    Younger, Rt Hon. K.

    Hughes, Hector (Aberdeen, N.)

    Pursey, Cmdr. H.

    Hynd, H. (Accrington)

    Reid, Thomas (Swindon)

    TELLERS FOR THE AYES:

    Hynd, J. B. (Attercliffe)

    Reid, William (Camlachie)

    Mr. Wallace and Mr. Wilkins.

    NOES

    Aitken, W. T.

    Bishop, F. P.

    Butcher, Sir Herbert

    Alian, R. A. (Paddington, S.)

    Black, C. W.

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

    Alport, C. J. M.

    Boothby, Sir R. J. G.

    Campbell, Sir David

    Amery, Julian (Preston, N.)

    Bossom, Sir A. C.

    Carr, Robert

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Boyd-Carpenter, Rt. Hon. J. A.

    Cary, Sir Robert

    Anstruther-Gray, Major W. J.

    Boyle, Sir Edward

    Channon, H.

    Arbuthnot, John

    Braine, B. R.

    Clarke, Col. Ralph (East Grinstead)

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

    Braithwaite, Sir Albert (Harrow, W)

    Clarke, Brig. Terence (Portsmouth, W.)

    Baldwin, A. E.

    Braithwaite, Sir Gurney

    Cole, Norman

    Banks, Col. C.

    Brooke, Henry (Hampstead)

    Colegate, W. A.

    Barlow, Sir John

    Brooman-White, R. C.

    Conant, Maj. Sir Roger

    Baxter, Sir Beverley

    Browne, Jack (Govan)

    Cooper, Sqn. Ldr. Albert

    Beach, Maj Hicks

    Buchan-Hepburn, Rt. Hon. P. G. T

    Cooper-Key, E. M.

    Bell, Ronald (Bucks, S.)

    Bullard, D. G.

    Craddock, Beresford (Spelthorne)

    Bennett, F. M. (Reading, N.)

    Bullus, Wing Commander E. E

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

    Birch, Nigel

    Burden, F. F. A

    Crosthwaite-Eyre, Col. O. E

    2400

    2401

    Crouch, R. F.

    Iremonger, T. L.

    Raikes, Sir Victor

    Crowder, Sir John (Finchley)

    Jenkins, Robert (Dulwich)

    Ramsden, J. E.

    Crowder, Petre (Ruislip—Northwood)

    Johnson, Eric (Blackley)

    Rayner, Brig. R.

    Darling, Sir William (Edinburgh, S.)

    Johnson, Howard (Kemptown)

    Redmayne, M.

    Davidson, Viscountess

    Jones, A. (Hall Green)

    Rees-Davies, W. R.

    Davies, Rt. Hn. Clement (Montgomery)

    Joynson-Hicks, Hon. L. W.

    Remnant, Hon. P.

    Deedes, W. F.

    Kaberry, D.

    Renton, D. L. M.

    Digby, S. Wingfield

    Kerby, Capt. H. B

    Ridsdale, J. E.

    Dodds-Parker, A. D.

    Kerr, H. W.

    Roberts, Peter (Heeley)

    Donaldson, Cmdr. C. E. McA

    Lambton, Viscount

    Robertson, Sir David

    Donner, Sir P. W.

    Lancaster, Col. C. G

    Robinson, Sir Roland (Blackpool, S)

    Doughty, C. J. A.

    Langford-Holt, J. A.

    Rodgers, John (Sevenoaks)

    Douglas-Hamilton, Lord Malcolm

    Leather, E. H. C.

    Roper, Sir Harold

    Drayson, G. B.

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

    Russell, R. S.

    Drewe, Sir C.

    Legh, Hon. Peter (Petersfield)

    Ryder, Capt. R. E. D.

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Lennox-Boyd, Rt. Hon. A. T.

    Savory, Prof. Sir Douglas

    Duncan, Capt. J. A. L.

    Lindsay, Martin

    Schofield, Lt.-Col. W.

    Duthie, W. S.

    Linstead, Sir H. N.

    Scott, R. Donald

    Eccles, Rt. Hon. Sir D. M

    Lloyd, Maj. Sir Guy (Refrew, E.)

    Scott-Miller, Cmdr. R.

    Eden, Rt. Hon. A.

    Lockwood, Lt.-Col. J. C.

    Shepherd, William

    Eden, J. B. (Bournemouth, West)

    Longden, Gilbert

    Simon, J. E. S. (Middlesbrough, W.)

    Erroll, F. J.

    Lucas, Sir Joseph (Portsmouth, S.)

    Smithers, Peter (Winchester)

    Finlay, Graeme

    Lucas, P. B. (Brentford)

    Smithers, Sir Waldron (Orpington)

    Fisher, Nigel

    Lucas-Tooth, Sir Hugh

    Snadden, W. McN.

    Fleetwood-Hesketh, R. F

    McCorquodale, Rt. Hon. M S

    Spearman, A. C. M.

    Fletcher-Cooke, C.

    Macdonald, Sir Peter

    Speir, R. M.

    Ford, Mrs. Patricia

    Mackeson, Brig. Sir Harry

    Spens, Rt. Hon. Sir P. (Kensington, S.)

    Fort, R.

    Mackie, J. H. (Galloway)

    Stanley, Capt. Hon. Richard

    Foster, John

    Maclay, Rt. Hon. John

    Stevens, Geoffrey

    Fraser, Hon. Hugh (Stone)

    Maclean, Fitzroy

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

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Stewart, Henderson (Fife, E.)

    Galbraith, Rt. Hon. T. D. (Pollok)

    MacLeod, John (Ross and Cromarty)

    Stoddart-Scott, Col. M.

    Galbraith, T. G. D. (Hillhead)

    Macmillan, Rt. Hon. Harold (Bromley)

    Storey, S.

    Gammans, L. D.

    Macpherson, Niall (Dumfries)

    Strauss, Henry (Norwich, S.)

    George, Rt. Hon. Maj. G. Lloyd

    Maitland, Patrick (Lanark)

    Stuart, Rt. Hon. James (Moray)

    Glover, D.

    Manningham-Buller, Rt. Hn. Sir Reginald

    Summers, G. S.

    Godber, J. B.

    Markham, Major Sir Frank

    Sutcliffe, Sir Harold

    Gomme-Duncan, Col. A

    Marlowe, A. A. H.

    Taylor, William (Bradford, N.)

    Gough, C. F. H.

    Marples, A. E.

    Teeling, W.

    Gower, H. R.

    Marshall, Douglas (Bodmin)

    Thomas, Rt. Hon. J. P. L. (Hereford)

    Graham, Sir Fergus

    Maude, Angus

    Thomas, Leslie (Canterbury)

    Grimond, J.

    Maudling, R.

    Thornton-Kemsley, Col. C. N.

    Grimston, Hon. John (St. Albans)

    Maydon, Lt.-Comdr. S. L. C.

    Tilney, John

    Grimston, Sir Robert (Westbury)

    Medlicott, Brig. F.

    Touche, Sir Gordon

    Hall, John (Wycombe)

    Mellor, Sir John

    Turner, H. F. L.

    Hare, Hon. J. H.

    Molson, A. H. E.

    Turton, R. H.

    Harris, Frederic (Croydon. N)

    Moore, Sir Thomas

    Tweedsmuir, Lady

    Harrison, Col. J. H. (Eye)

    Morrison, John (Salisbury)

    Vane, W. M. F.

    Harvey, Ian (Harrow, E.)

    Nabarro, G. D. N.

    Vaughan-Morgan, J. K.

    Harvie-Watt, Sir George

    Neave, Airey

    Vosper, D. F.

    Hay, John

    Nicholls, Harmar

    Wade, D. W.

    Head, Rt. Hon. A. H.

    Nicolson, Nigel (Bournemouth, E.)

    Wakefield, Edward (Derbyshire, W.)

    Heald, Rt. Hon. Sir Lionel

    Nield, Basil (Chester)

    Wakefield, Sir Wavell (St. Marylebone)

    Heath, Edward

    Noble, Comdr. A. H. P.

    Walker-Smith, D. C.

    Higgs, J. M. C.

    Nugent, G. R. H.

    Wall, Major Patrick

    Hill, Dr. Charles (Luton)

    Nutting, Anthony

    Ward, Hon. George (Worcester)

    Hill, Mrs. E. (Wythenshawe)

    Oakshott, H. D.

    Ward, Miss I. (Tynemouth)

    Hinchingbrooke, Viscount

    Odey, G. W.

    Waterhouse, Capt. Rt. Hon. C.

    Hirst, Geoffrey

    O'Neill, Hon. Phelim (Co. Antrim, N.)

    Watkinson, H. A.

    Holland-Martin, C. J

    Orr, Capt. L. P. S.

    Webbe, Sir H. (London & Westminster)

    Holt, A. F.

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

    Wellwood, W.

    Hopkinson, Rt. Hon. Henry

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Williams, Gerald (Tonbridge)

    Hornsby-Smith, Miss M. P.

    Page, R. G.

    Williams, Sir Herbert (Croydon, E.)

    Horobin, I. M.

    Peake, Rt. Hon. O.

    Williams, Paul (Sunderland, S.)

    Horsbrugh, Rt. Hon. Flerence

    Peto, Brig. C. H. M.

    Williams, R. Dudley (Exeter)

    Howard, Gerald (Cambridgeshire)

    Peyton, J. W. W.

    Wills, G.

    Howard, Hon. Greville (St. Ives)

    Pickthorn, K. W. M.

    Wilson, Geoffrey (Truro)

    Hudson, Sir Austin (Lewisham, N.)

    Pilkington, Capt. R. A.

    Wood, Hon. R.

    Hulbert, Wing Cdr. N. J.

    Pitman, I. J.

    Hurd, A. R.

    Pitt, Miss E. M.

    TELLERS FOR THE NOES:

    Hutchison, Sir Ian Clark (E'b'rgh, W.)

    Powell, J. Enoch

    Mr. Studholme and

    Hyde, Lt.-Col. H. M.

    Price, Henry (Lewisham, W.)

    Mr. Richard Thompson.

    Hylton-Foster, H. B. H.

    Prior-Palmer, Brig. O. L.

    Clause 27.—(REDUCED RATE OF DUTY ON CERTAIN BUSINESS ASSETS.)
    6.15 p.m.
    Mr. F. J. Erroll: I beg to move, in page 29, line 25, at the end, to insert:
    Where an interest in a partnership passes on death the deceased shall be deemed to have
    2402
    an interest in the hereditaments and machinery or plant referred to corresponding to his interest in the partnership assets.
    The Amendment is intended to deal with partnerships so far as they are affected by the Clause and is designed to remedy a legal gap in the relief proposals. As I understand the position—in this

    2403
    complicated field I am open to correction by the Financial Secretary—in the case of a partnership at will—that is to say, one without a partnership agreement—a share in the real property of the partnership does not pass on the death of a partner.
    These situations are governed by Section 33 (1) of the Partnership Act, 1890, which holds that on a partner's death the partnership is dissolved. What then happens is that the deceased partner's interest in the firm has to be ascertained according to rules set out in Section 44 of the Act, and the interest becomes a sum of money constituting a debt due from the surviving partners to the estate of the deceased.
    I imagine that in these circumstances—here I shall welcome the elucidation of the Financial Secretary—it will be held that what passes is not an interest in an industrial business, whether hereditament, plant or machinery, but a mere money claim, which would not qualify for the relief which the Clause proposes to provide.
    Nevertheless, this seems to me to be a case where relief should be given, and I will show how I imagine it should operate. It might, in the first place, be argued that the efficiency of the partnership would not be affected by the death of one of the partners, particularly as under the Partnership Act the interest in the partnership is dissolved on the death of a partner. However, in this sort of business there is usually a very strong family connection, and although the interest in the partnership might be held to be dissolved, the probability is that a relation of the deceased partner would wish to enter the business as a partner, or, if he was already in the business as a junior, would wish to become a partner.
    The surviving individual would in all probability be one of the principal beneficiaries under the will of the deceased partner, because he would be a close relation, and as a beneficiary, and no doubt the principal beneficiary, he would only be receiving money with which to buy himself back into the partnership and it would be after that money had borne Estate Duty at the appropriate rate. He would then, in fact, be less well equipped than he should be to restore to the partnership the working capital which it required in order to maintain itself. He
    2404
    would be worse off to the extent that, as matters stand at present, he would not be able to get the relief which the Clause ought to be designed to give him.
    The efficiency of such partnerships will be affected if the relief is not given, and the reasons are the same as those in the case of other family businesses. I hope very much that the Government will accept this small Amendment which closes a legal gap in their relief proposals.
    Mr. John Arbuthnot: I beg to second the Amendment.
    My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) has moved the Amendment so thoroughly and with such clarity that very little remains to be said. The Amendment follows on naturally from the provisions which the Government have introduced in Clause 27 of this Bill, in which relief is given to industrial hereditaments. Its purpose is to ensure that partnerships, and particularly partnerships in which there is no partnership agreement, are included in the benefits given by Clause 27.
    The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): My hon. Friends have made it clear that they, are concerned with the application of the benefits given by this Clause to the cases of partnerships. I have studied their Amendment carefully, and, as it is phrased, I must say that it would not have the effect of extending the provisions of the Bill in this respect at all.
    Where, under the Clause as it stands, an interest in a partnership, which is the expression used in the Amendment, passes, it does receive, proportionately, the benefits of the Clause, and therefore in that case there is no legal gap, to adopt the phrase used by my hon. Friend the Member for Altrincham and Sale (Mr. Erroll). But, as I understand his speech, my hon. Friends are not so much concerned with that, but with the wider question, much more frequently arising, of whether, on the death of a partner, what passes is not part of the interest in the partnership, but, in the much more usual case, a sum of money, and in that case, as I think my hon. Friends have indicated, the provisions of this Clause do not apply. Therefore, though the Clause as it stands deals only with the passing of an interest in a partnership, I think that, in view of the interest of my hon. Friends

    2405
    in the other and much more frequent case, when what passes is a sum of money, I, should say a word or two about the general merits of the matter.
    I agree that the passing of a sum of money is the more frequent where there is a partnership deed. Whether what passes is an interest in a partnership or a sum of money depends on the terms of the deed, and therefore, in the drawing up of a partnership deed, it is very much a matter for the partners concerned whether they desire to frame their partnership deed in a way which will attract the benefits of this Clause or not. On the other hand, in the case of a partnership at will, the Partnership Act, 1890, in Section 33, provides that what passes shall be a sum of money, and these are really the cases with which my hon. Friends are concerned, because, in respect of a partnership deed, it depends on the way it is framed, and we can assume that in framing it the partners will do it in such a way as to suit their particular circumstances.
    My hon. Friends say that, in the case of a partnership at will, the benefit of this Clause should be given. It is true that, in the sort of case to which my hon. Friends have referred—the case where the money passes to a near relative, who desires to continue the partnership business—there is an argument in favour of extending the benefits of this Clause to that sort of case, but that is not the only case by any means, and we must deal with this matter on the broad general merits, which are these.
    Where, on a death, a partner has to pay a sum of money to the executors of the deceased, it is of no significance at all to the partnership whether that sum of money is paid net or gross of Estate Duty. It is of great interest to the dependants of the deceased partner, but, as far as the partnership is concerned, and as far as its continued operation as a business is concerned, if it has to pay, say, £50,000, it makes no difference at all to the working of the partnership whether or not that £50,000 is paid over entire to the executors and they have to find the appropriate sum in Estate Duty; the working of the partnership is not affected one way or another.
    On that basis, it really seems to me that the proposal of my hon. Friends, though it appeals naturally to one's sympathies, in respect of the beneficiaries of
    2406
    the deceased person's estate is not really within the intention of this Clause as it was outlined by my right hon. Friend. My right hon. Friend made it clear that one of the major purposes of this Clause was to assist the operation of the family business, of which a partnership is a particular example, and the proposal in the Amendment to extend the benefits of this Clause would extend it into a sphere where the health of the family business does not really arise. Looking at the matter from a purely sympathetic and compassionate point of view, we should be driven by this Amendment to extend the ambit of the Clause very widely.
    For these reasons, and quite apart from the fact that the actual drafting of the Amendment does not achieve what my hon. Friends want it to do, on the merits of the matter it would not be possible to accept this proposal, involving some departure, though not a very great one, from the main purpose of the Clause. I appreciate, however, the intention with which the Amendment was put forward, and, indeed, would not wish in any way to diminish the very valuable share which partnership activities take in the economic and industrial life of the country.
    Mr. Erroll: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Glenvil Hall: I beg to move, in page 31, line 34, after "into," to insert:
    "before or is entered into within three years after the death."
    This Clause deals with the partial relief from Estate Duty given to family businesses, and subsection (9), to which our Amendment relates, deals with those businesses and companies to which relief will not be granted The Amendment is designed to close a gap of a very different kind from that which has been referred to by the hon. Member who moved the last Amendment. This matter was fairly fully' debated in Committee, when my hon. Friend the Member for Islington. East (Mr. E. Fletcher), with his usual lucidity and brevity, moved this particular Amendment with such clarity that even the right hon. and learned Gentleman the Solicitor-General had to agree that there was a great deal of substance and force in what he had said.
    In fact, when the Solicitor-General began his speech, we had great hopes that

    2407
    he was going to accept the Amendment, but, having said that there was everything in the point put forward, he went on to erect what we thought were Aunt Sallies in order to knock them down again, and to show that, although there might be something in it, and although, in fact, there was everything in what my hon. Friend had said, nevertheless there were certain difficulties. The Government, however, would watch the matter very carefully during the coming year.
    6.30 p.m.
    The Solicitor-General gave what we thought were very insubstantial reasons for turning down the Amendment. I listened to what he said with great care, and I re-read it. His chief reason for turning down the Amendment, in spite of the fact that he thought it reasonable, was that there might be a sale
    "because there is no suitable member of the family left to run the business."
    A more fantastic reason for turning down the Amendment was
    "because the surviving member of the family does not consider it suitable for him to run."—[OFFICIAL REPORT, 24th June, 1954; Vol. 529, c. 726.]
    That surely cuts the whole ground from under the concession of 45 per cent., which is a considerable one. It is to be given only because there is a certain amount of feeling that family businesses, after paying Estate Duty, would find themselves deprived of assets necessary for the continuance of the business on the family basis, and would have to be broken up and sold. It was demonstrated beyond all doubt by the Inland Revenue, after going into this matter at some length, that there was very little in the suggestion that family businesses had had to be liquidated wholesale from one end of the country to another. Nevertheless, the Government moved the Clause, and we were willing to accept it because we wanted to be reasonable.
    Here undoubtedly is a loophole which should be closed. We are suggesting in our Amendment that if a sale takes place within a period of three years after the death, the full weight of Estate Duty should apply to the estate. We think that is reasonable, and it is obvious that the Government think it is reasonable, but they will not accept our suggestion. They did not put it into the Bill them-
    2408
    selves, and they dislike accepting it from this side of the House. They also think that the Estate Duty department might have a little extra work to do in watching these estates over the proposed longer period.
    The arguments from our side of the Committee were so strong that the Chancellor of the Exchequer had to intervene, following the Solicitor-General, and he, like the Solicitor-General, agreed that there was a great deal in our contention. He said that he would watch the situation, but added that nothing could be done this time. It is absurd to leave this matter over for a further period of years. If we leave the stable door open all that time, a good many horses will have disappeared. There is no reason why, if the Government make this concession, it should not be as watertight as possible.
    The arguments used by the Chancellor of the Exchequer and the Solicitor-General were not very convincing. If the surviving member of the family does not want to carry on the business, obviously it will cease to be a family business. If the family takes steps within a reasonable period—we say three years—to sell the business, the obvious intention is not to continue it on the family basis, and we do not see why relief should be granted in those circumstances.
    I have every confidence that the Solicitor-General, having slept on this matter, having considered what was said then and what was said then having sunk in, is now about to rise in this place and say that, on behalf of the Government, he accepts the Amendment which I now move.
    Mr. Grimond: I would say one word on this Amendment. Its purpose was clearly stated in the Committee, and has been reiterated by the right hon. Member for Colne Valley (Mr. Glenvil Hall). It is designed to prevent a man from buying up a family business simply for the purpose of getting a lower rate of death duty. His heirs, having no interest in the business, will probably sell it or its assets, thereby defeating the very purpose which the Chancellor of the Exchequer had in mind in giving this concession. This is not an unlikely event. I have already seen advertisements in newspapers offering for sale family businesses, and pointing out that they will be liable only to a lower rate of death duty.

    2409
    The right hon. Member for Colne Valley criticised some parts of the Solicitor-General's speech in Committee. Some of his arguments did not seem very conclusive against the Amendment then moved. I would draw attention to another part of the speech of the Solicitor-General. It was apparent that he agreed that there was a loophole and that it was undesirable that the concession should be used by people who simply wanted to get a lower rate of death duty. He went on to say:
    "One does not wish to take those steps in advance. In my view, it is better to keep a close watch on the position to see whether exploitation does take place, and, if so, to note what devices are used and to stop the use of them."—[OFFICIAL REPORT, 24th June. 1954; Vol. 529, c. 728–9.]
    If there are obvious loopholes in the Clause, we ought to stop them up now. Otherwise, the quickest and cleverest men will get through them and then steps will be taken to stop the loopholes retrospectively, which will be highly objectionable. If it is not done retrospectively some people will have got away with it; I do not say immorally and certainly not illegally, but in a way which the House and the Government think undesirable. In due course, other people who are in exactly the same position will be unable to do the same thing.
    This method of dealing with fiscal legislation, in which draft Bills are put forward with obvious doubts and loopholes is objectionable. It may in some cases prove necessary to amend fiscal provisions against unforeseen results, but to leave obvious loopholes in its provisions should not be a method which the Government advocate while the Bill is still under debate. They should not be stopped up retrospectively. I think what the Solicitor-General had in mind, when he spoke about people who take advantage of the Clause, was that they might be brought in by some form of retrospective legislation. That surely would be highly undesirable.
    The Solicitor-General (Sir Reginald Manningham-Buller): In moving the Amendment, the right hon. Member for Colne Valley (Mr. Glenvil Hall) raised a subject which we discussed, and I would say very fully discussed, in the Committee. He hardly did justice to the arguments advanced from this side of the Committee, and he has quite clearly
    2410
    quoted two passages from my speech right out of context. He has confused illustration with argument. I will make no point about that. This is a narrower Amendment than the one we discussed on that occasion.
    Mr. Glenvil Hall Mr. Glenvil Hall rose—
    The Solicitor-General: I hope the right hon. Gentleman will let me reply. We want to get on to the next debate, on much bigger issues.
    Mr. Glenvil Hall: The right hon. and learned Gentleman made an assertion which makes it appear that I have been unfair to him and to the arguments that he advanced in Committee. I quoted what he actually said. The rest of his argument advocated an Amendment which was taken at the same time, and which was moved by the hon. Member for Orkney and Shetland (Mr. Grimond).
    The Solicitor-General: I think that the right hon. Gentleman was unfair to my argument, because he took sentences completely out of their context. Anyone can form his own opinion about that by looking at the OFFICIAL REPORT.
    I would remind the House that the Amendment now moved is narrower than the one then under discussion, and is consequently more objectionable than the previous one which sought to deal not only with the case of a private business for sale, but also with the case of a company which was wound up within the period. I then indicated that one of the difficulties in dealing with companies was where the company was not wound up but there was a sale of shares. It is, in fact, very difficult to overcome that possible way of operating.
    This Amendment is the more objectionable because, were it accepted, it would apply only to private businesses and not to companies which would be affected by subsection (2, b). That is a very strong objection to the Amendment. I say now, as I said on the last occasion, that there is some substance in the point put forward, and the right hon. Gentleman is quite wrong in thinking that we are not prepared to recognise the force of any arguments advanced from the benches opposite.
    It really would be wrong to accept this Amendment not only for the reasons which I advanced on the last occasion

    2411
    but because it would not cover the held to anything like the same extent as the previous Amendment, unsatisfactorily as it was covered by that Amendment. I dealt, I hope, satisfactorily with the Amendment discussed at the same time in the name of the hon. Member for Orkney and Shetland (Mr. Grimond). I then indicated the hardship that the time-limit which he proposed to impose might create.
    To give another example, If a time limit were imposed, for even three years, only in relation to businesses, it would be very hard and unfair where a death occurs and where someone of the family carries on a business coming within the intentions of this Clause and then, within the three-year period, the person carrying on the family business dies and there is no one left to continue it. In such a case, the benefit of this Clause would be taken away. That, I think, would be very hard.
    The difficulty here is to distinguish between operations designed to abuse the provisions of the Clause, and what I might call the unfortunate events which occur, where there is no intent to engage in tax avoidance or to secure an improper tax benefit. That difficulty of distinguishing between the two makes it impossible at the present moment to accept any Amendment on the lines suggested.
    If such an Amendment were accepted, it would mean that one would have to hit a number of such unfortunate cases as well as hitting some of those one would want to hit. I reiterate once again that, although in this instance there is great force in the argument, we hope that there will not, in fact, be abuse of the Clause. If there is, it may possibly take one of two or three different forms. But directly we see which form, if any, emerges, I can assure the House that we shall give immediate consideration to preventing the use of that form, without injuring the genuine family business of the sort I have instanced.
    6.45 p.m.
    My right hon. Friend the Chancellor, when he took part in the debate, said that he thought it more likely that we should adhere to our decision to allow the Clause to operate, and that then, if any abuse should arise in future years,
    2412
    we should deal with it in the light of experience. We have given most careful consideration to the point, because, as I have indicated all along, we feel that there is some substance in the view advanced as to the possibility of the improper use of the Clause.
    Having given further consideration to the matter, we adhere to our view, having regard to all the circumstances, that it is better to retain the Clause as it now stands. I hope that I have not dealt with the point too shortly, and, equally, that I have not dealt with it at too great a length. I have confined my remarks to perhaps a shorter compass than I might otherwise have done because we discussed the matter very fully in Committee, and because I know that the House wants to get on to the next Clause, which raises some very big issues.
    Mr. Eric Fletcher: It is perfectly true that the House wants to get on to the next Clause, which raises some very big issues, but I do not think that the House would be content to do that until it had dealt satisfactorily with this Clause. I do not believe that anyone listening to the right hon. and learned Gentleman would really regard the explanation which he has given this evening as being in any way satisfactory.
    What did the Solicitor-General say? He started by complaining that my right hon. Friend had today moved an Amendment in a more limited form than the one which was considered in Committee. He then went on to say that one of his reasons for rejecting the Amendment was that it was not precisely the same as the earlier Amendment, to which he adduced arguments in opposition in Committee.
    We are not concerned with the other Amendment; we are concerned today with dealing with a matter which both the Solicitor-General and the Chancellor recognises as being a serious and genuine complaint. Indeed, in urging us to come to a decision on the last occasion, the Chancellor said that he recognised the spirit of perfect sincerity in which the Amendment was put forward.
    I think that we are perfectly entitled to complain that on this Clause we have been treated with very scant civility by the Solicitor-General. He really has not done justice to the arguments put forward by my right hon. Friend. Here is a case

    2413
    in which, admittedly, there is the possibility of considerable abuse of these concessions. In fact, the hon. Member for Orkney and Shetland (Mr. Grimond) pointed out that it is apparent, from advertisements already appearing in the Press, that some subtle persons have already discovered that quite advantageous benefits can be obtained by purchasing, shortly after the death of an individual, businesses which have benefited from this concession in respect of Estate Duty.
    What were the arguments put forward by the Solicitor-General for opposing this Amendment? In Committee, his chief argument was that if Estate Duty was allowed to remain in suspense for more than three years, it would involve the Estate Duty Office in a duty to supervise all estates during that period. In other words, he put forward an administrative difficulty. All hon. Members who have any experience of these matters know perfectly well that it is part of the job of the Estate Duty Office to keep watch on estates over a long period of years. Claims frequently arise for the revision of Estate Duty and Succession Duty and no real administrative difficulty arises in this connection.
    Even if it did, the Solicitor-General contradicted himself both in Committee and today by saying that, instead of accepting this Amendment, he preferred to keep a close watch on the matter. How can he keep a close watch on the matter unless he imposes on the Estate Duty Office precisely the same responsibility of supervising these matters which he gave as one of the administrative difficulties for not accepting the Amendment? That argument strikes me as being so hollow and insincere that I do
    not think the right hon. and learned Gentleman could have intended to put it forward seriously.
    Here is a situation in which, as both the Chancellor and the Solicitor-General have recognised, there is the possibility that this provision will be exploited for ulterior purposes, and the possibility certainly that, if it is exploited for those ulterior purposes, it will defeat the whole object of these Estate Duty concessions, which are reserved for the continuity of family businesses. In the light of evidence which has already accumulated, surely it is monstrous for the Solicitor-General to refuse this Amendment on the grounds which he has given.
    He said that the Amendment does not go far enough and that, if he accepted it, there should be another Amendment to deal with cases of companies being wound up. We are concerned not with the technicalities of draftsmanship but with the acceptance of the principle. I think it perfectly disgraceful that the Solicitor-General—particularly in view of what he and the Chancellor said in Committee—should have adopted this completely unrelenting attitude this evening. During the Committee stage of the Finance Bill we did not have a single concession, despite the numerous Amendments which were put forward. I can only regard the Government's attitude in these matters as being completely obscurantist and indefensible. For those reasons, I hope that my hon. and right hon. Friends will carry their views into the Division Lobby.
    Question put, "That those words be there inserted in the Bill."
    The Committee divided: Ayes, 217; Noes, 249.

    Division No. 196.]

    AYES

    [6.53 p.m.

    Acland, Sir Richard

    Braddock, Mrs. Elizabeth

    Crossman, R. H. S.

    Allen, Arthur (Bosworth)

    Brockway, A. F.

    Daines, P.

    Allen, Scholefield (Crewe)

    Brock, Dryden (Halifax)

    Dalton, Rt. Hon. H.

    Anderson, Frank (Whitehaven)

    Broughton, Dr. A. D. D.

    Darling, George (Hillsborough)

    Attlee Rt. Hon. C. R.

    Brown, Rt. Hon. George (Belper)

    Davies, Ernest (Enfield, E.)

    Awbery, S. S.

    Brown, Thomas (Ince)

    Davies, Harold (Leek)

    Bacon, Miss Alice

    Burke, W. A.

    Davies Stephen (Merthyr)

    Beattle, J.

    Burton, Miss F. E.

    de Freitas, Geoffrey

    Bence, C. R.

    Butler, Herbert (Hackney, S.)

    Deer, G.

    Benn, Hon. Wedgwood

    Castle, Mrs. B. A.

    Delargy, H. J.

    Benson, G.

    Champion, A. J.

    Dodds, N. N.

    Bing, G. H. C.

    Clunie, J.

    Donnelly, D. L.

    Blackburn, F.

    Coldrick, W.

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

    Blenkinsop, A.

    Collick, P. H.

    Ede, Rt. Hon. J. C.

    Blyton, W. R.

    Corbet, Mrs. Freda

    Edwards, Rt. Hon. John (Brighouse)

    Boardman, H.

    Cove, W. G.

    Edwards, W. J. (Stepney)

    Bottomley, Rt. Hon. A. G.

    Craddock, George (Bradford, S.)

    Evans, Albert (Islington, S.W.)

    Bowles, F. G.

    Crosland, C. A. R.

    Evans, Edward (Lowestoft)

    Evans, Stanley (Wednesbury)

    Kinley, J.

    Rogers, George (Kensington, N.)

    Fernyhough, E.

    Lawson, G. M.

    Ross, William

    Fienburgh, W.

    Lee, Frederick (Newton)

    Royle, C.

    Fletcher, Eric (Islington, E.)

    Lee, Miss Jennie (Cannock)

    Shackleton, E. A. A.

    Follick, M.

    Lever, Leslie (Ardwick)

    Shinwell, Rt. Hon. E.

    Forman, J. C.

    Lindgren, G. S.

    Short, E. W.

    Fraser, Thomas (Hamilton)

    Lipton, Lt.-Col. M.

    Shurmer, P. L. E.

    Freeman, John (Watford)

    McInnes, J.

    Silverman, Julius (Erdington)

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

    McLeavy, F.

    Silverman, Sydney (Nelson)

    Gibson, C. W.

    Mallalieu, E. L. (Brigg)

    Simmons, C. J. (Brierley Hill)

    Glanville, James

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

    Skeffington, A. M.

    Gordon Walker, Rt. Hon. P. C.

    Mann, Mrs. Jean

    Slater, Mrs. H. (Stoke-on-Trent)

    Greenwood, Anthony

    Manuel, A. C.

    Slater, J. (Durham, Sedgefield)

    Grey, C. F.

    Marquand, Rt. Hon. H. A

    Smith, Ellis (Stoke, S.)

    Griffiths, Rt. Hon. James (Llanelly)

    Mason, Roy

    Smith, Norman (Nottingham, S.)

    Grimond, J.

    Mayhew, C. P.

    Sorensen, R. W.

    Hale, Leslie

    Mellish, R. J.

    Soskice, Rt. Hon. Sir Frank

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Messer, Sir F.

    Sparks, J. A.

    Hall, John T. (Gateshead, W.)

    Mikardo, Ian

    Steele, T.

    Hannan, W.

    Mitchison, G. R.

    Stokes, Rt. Hon. R. R.

    Hargreaves, A.

    Monslow, W.

    Strachey, Rt. Hon. J.

    Hastings, S.

    Moody, A. S.

    Strauss, Rt. Hon. George (Vauxhall)

    Hayman, F. H.

    Morgan, Dr. H. B. W.

    Summerskill, Rt. Hon. E.

    Healey, Denis (Leeds, S.E.)

    Morley, R.

    Sylvester, G. O.

    Healy, Cahir (Fermanagh)

    Morris, Percy (Swansea, W.)

    Taylor, Bernard (Mansfield)

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

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

    Taylor, John (West Lothian)

    Herbison, Miss M.

    Moyle, A.

    Taylor, Rt. Hon. Robert (Morpeth)

    Hewitson, Capt. M.

    Mulley, F. W.

    Thomas, George (Cardiff)

    Hobson, C. R.

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

    Thomas, Ivor Owen (Wrekin)

    Holman, P.

    Oldfield, W. H.

    Thomson, George (Dundee, E.)

    Holmes, Horace

    Oliver, G. H.

    Thornton, E.

    Holt, A. F.

    Orbach, M.

    Timmons, J.

    Houghton, Douglas

    Oswald, T.

    Tomney, F.

    Hoy, J. H.

    Padley, W. E.

    Ungoed-Thomas, Sir Lynn

    Hubbard, T. F.

    Paget, R. T.

    Wade, D. W.

    Hudson, James (Ealing, N.)

    Palmer, A. M. F.

    Warbey, W. N.

    Hughes, Emrys (S. Ayrshire)

    Pannell, Charles

    Weitzman, D.

    Hughes, Hector (Aberdeen, N.)

    Pargiter, G. A.

    Wells, Percy (Faversham)

    Hynd, H. (Accrington)

    Parker, J.

    Wheeldon, W. E.

    Hynd, J. B. (Attercliffe)

    Parkin, B. T.

    Whiteley, Rt. Hon. W.

    Irvine, A. J. (Edge Hill)

    Paton, J.

    Wigg, George

    Irving, W. J. (Wood Green)

    Peart, T. F.

    Wilkins, W. A.

    Isaacs, Rt. Hon. G. A.

    Plummer, Sir Leslie

    Willey, F. T.

    Janner, B.

    Popplewell, E.

    Williams, Rt, Hon. Thomas (Don V'll'y)

    Jeger, George (Goole)

    Porter, G.

    Williams, W. R. (Droylsden)

    Jeger, Mrs. Lena

    Price, J. T. (Westhoughton)

    Willis, E. G.

    Jenkins, R. H. (Stechford)

    Proctor, W. T.

    Wilson, Rt. Hon. Harold (Huyton)

    Johnson, James (Rugby)

    Pryde, D. J.

    Winterbottom, Ian (Nottingham, C.)

    Jones, David (Hartlepool)

    Pursey, Cmdr. H.

    Winterbottom, Richard (Brightside)

    Jones, Frederick Elwyn (West Ham, S.)

    Reid, Thomas (Swindon)

    Woodburn, Rt. Hon. A.

    Jones, Jack (Rotherham)

    Reid, William (Camlachie)

    Wyatt, W. L.

    Keenan, W.

    Rhodes, H.

    Yates, V. F.

    Kenyon, C.

    Richards, R.

    Younger, Rt. Hon. K.

    Key, Rt. Hon. C. W

    Roberts, Goronwy (Caernarvon)

    King, Dr. H. M.

    Robinson, Kenneth (St. Pancras, N.)

    TELLERS FOR THE AYES:

    Mr. Bowden and Mr. Wallace

    NOES

    Aitken, W. T.

    Billiard, D. G.

    Doughty, C. J. A.

    Alport, C. J. M.

    Bullus, Wing Commander E. E

    Douglas-Hamilton, Lord Malcolm

    Amery, Julian (Preston, N.)

    Burden, F. F. A.

    Drayson, G. B.

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Butcher, Sir Herbert

    Drewe, Sir C.

    Anstruther-Gray, Major W. J.

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

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Arbuthnot, John

    Campbell, Sir David

    Duncan, Capt. J. A. L.

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

    Carr, Robert

    Duthie, W. S.

    Baldwin, A. E.

    Cary, Sir Robert

    Eden, Rt. Hon. A.

    Banks, Col. C.

    Channon, H.

    Eden, J. B. (Bournemouth, West)

    Barlow, Sir John

    Clarke, Col. Ralph (East Grinstead)

    Erroll, F. J.

    Baxter, Sir Beverley

    Clarke, Brig. Terence (Portsmouth, W.)

    Finlay, Graeme

    Beach, Maj. Hicks

    Cole, Norman

    Fisher, Nigel

    Bell, Ronald (Bucks, S.)

    Colegate, W. A.

    Fleetwood-Hesketh, R. F.

    Birch, Nigel

    Conant, Maj. Sir Roger

    Fletcher-Cooke, C.

    Bishop, F. P.

    Cooper, Sqn. Ldr. Albert

    Ford, Mrs. Patricia

    Black, C W.

    Craddook, Beresford (Spelthorne)

    Fort, R.

    Boothby, Sir R. J. G.

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

    Foster, John

    Boyd-Carpenter, Rt. Hon. J. A.

    Crosthwaite-Eyre, Col. O. E.

    Fraser, Hon. Hugh (Stone)

    Boyle, Sir Edward

    Crowder, Sir John (Finchley)

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Braine, B. R.

    Crowder, Petre (Ruislip—Northwood)

    Galbraith, Rt, Hon. T. D. (Pollok)

    Braithwaite, Sir Albert (Harrow, W)

    Darling, Sir William (Edinburgh, S.)

    Galbraith, T. G. D. (Hillhead)

    Braithwaite, Sir Gurney

    Deedes, W. F.

    George, Rt. Hon. Maj. G. Lloyd

    Brooke, Henry (Hampstead)

    Digby, S. Wingfield

    Glover, D.

    Brooman-White, R. C.

    Dodds-Parker, A. D.

    Godber, J. B.

    Browne, Jack (Govan)

    Donaldson, Cmdr. C E McA

    Gomme-Duncan, Col. A

    Buchan-Hepburn, Rt. Hon. P. G. T

    Donner, Sir P. W.

    Gough, C. F. H

    2416

    2417

    Gower, H. R.

    Mackeson, Brig. Sir Harry

    Roper, Sir Harold

    Graham, Sir Fergus

    Mackie, J. H. (Galloway)

    Russell, R. S.

    Grimston, Hon. John (St. Albans)

    Maclay, Rt. Hon. John

    Ryder, Capt. R. E. D.

    Grimston, Sir Robert (Westbury)

    Maclean, Fitzroy

    Savory, Prof. Sir Douglas

    Hall, John (Wycombe)

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Schofield, Lt.-Col. W.

    Hare, Hon. J. H.

    MacLeod, John (Ross and Cromarty)

    Scott, R. Donald

    Harris, Frederic (Croydon, N.)

    Macmillan, Rt. Hon. Harold (Bromley)

    Scott-Miller, Cmdr. R.

    Harrison, Col. J. H. (Eye)

    Macpherson, Niall (Dumfries)

    Shepherd, William

    Harvey, Ian (Harrow, E.)

    Maitland, Patrick (Lanark)

    Simon, J. E. S. (Middlesbrough, W.)

    Harvie-Watt, Sir George

    Manningham-Buller, Rt. Hn. Sir Reginald

    Smithers, Peter (Winchester)

    Hay, John

    Markham, Major Sir Frank

    Smithers, Sir Waldron (Orpington)

    Head, Rt. Hon. A. H.

    Marlowe, A. A. H.

    Snadden, W. McN.

    Heald, Rt. Hon. Sir Lionel

    Marples, A. E.

    Spearman, A. C. M.

    Heath, Edward

    Marshall, Douglas (Bodmin)

    Speir, R. M.

    Higgs, J. M. C.

    Maude, Angus

    Spens, Rt. Hon. Sir P. (Kensington, S.)

    Hill, Dr. Charles (Luton)

    Maudling, R.

    Stanley, Capt. Hon. Richard

    Hill, Mrs. E. (Wythenshawe)

    Maydon, Lt.-Comdr. S. L. C.

    Stevens, Geoffrey

    Hinchingbrooke, Viscount

    Medlicott, Brig. F.

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

    Hirst, Geoffrey

    Mellor, Sir John

    Stewart, Henderson (Fife, E.)

    Holland-Martin, C. J.

    Molson, A. H. E.

    Stoddart-Scott, Col. M.

    Hopkinson, Rt. Hon. Henry

    Moore, Sir Thomas

    Storey, S.

    Hornsby-Smith, Miss M. P.

    Morrison, John (Salisbury)

    Strauss, Henry (Norwich, S.)

    Horobin, I. M.

    Nabarro, G. D. N.

    Stuart, Rt. Hon. James (Moray)

    Horsbrugh, Rt. Hon. Florence

    Neave, Airey

    Studholme, H. G.

    Howard, Gerald (Cambridgeshire)

    Nicholls, Harmar

    Summers, G. S.

    Howard, Hon. Greville (St. Ives)

    Nicolson, Nigel (Bournemouth, E.)

    Sutcliffe, Sir Harold

    Hudson, Sir Austin (Lewisham, N.)

    Nield, Basil (Chester)

    Taylor, William (Bradford, N.)

    Hulbert, Wing Cdr. W. J.

    Noble, Comdr. A. H. P.

    Thomas, Rt. Hon. J. P. L. (Hereford)

    Hurd, A. R.

    Nugent, G. R. H.

    Thomas, Leslie (Canterbury)

    Hutchison, Sir Ian Clark (E'b'rgh, W.)

    Oakshott, H. D.

    Thornton-Kemsley, Col. C. N.

    Hyde, Lt.-Col. H. M.

    Odey, G. W.

    Tilney, John

    Hylton-Foster, H. B. H.

    O'Niell, Hon. Phelim (Co. Antrim, N.)

    Touche, Sir Gordon

    Iremonger, T. L.

    Orr, Capt. L. P. S.

    Turner, H. F. L.

    Jenkins, Robert (Dulwich)

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

    Turton, R. H.

    Johnson, Eric (Blackley)

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Tweedsmuir, Lady

    Johnson, Howard (Kemptown)

    Page, R. G.

    Vane, W. M. F.

    Jones, A. (Hall Green)

    Peake, Rt. Hon. O.

    Vaughan-Morgan, J. K.

    Joynson-Hicks, Hon. L. W

    Peto, Brig. C. H. M.

    Vosper, D. F.

    Kaberry, D.

    Peyton, J. W. W.

    Wakefield, Edward (Derbyshire, W.)

    Kerby, Capt. H. B.

    Pickthorn, K. W. M.

    Wakefield, Sir Wavell (St. Marylebone)

    Kerr, H. W.

    Pilkington, Capt. R. A

    Walker-Smith, D. C.

    Lambton, Viscount

    Pitman, I. J.

    Wall, Major Patrick

    Lancaster, Col. C. G.

    Pitt, Miss E. M.

    Ward, Hon. George (Worcester)

    Langford-Holt, J. A.

    Powell, J. Enoch

    Ward, Miss I. (Tynemouth)

    Leather, E. H. C.

    Price, Henry (Lewisham, W.)

    Waterhouse, Capt. Rt. Hon. C

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

    Prior-Palmer, Brig. O. L

    Watkinson, H. A.

    Legh, Hon. Peter (Petersfield)

    Raikes, Sir Victor

    Webbe, Sir H. (London & Westminster)

    Lennox-Boyd, Rt. Hon. A. T.

    Ramsden, J. E.

    Wellwood, W.

    Linstead, Sir H. N.

    Rayner, Brig. R

    Williams, Gerald (Tonbridge)

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Redmayne, M.

    Williams, Sir Herbert (Croydon. E.)

    Lockwood, Lt.-Col. J. C.

    Rees-Davies, W. R

    Williams, Paul (Sunderland, S.)

    Longden, Gilbert

    Remnant, Hon. P

    Williams, R. Dudley (Exeter)

    Law, A. R. W.

    Renton, D. L. M.

    Wills, G.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Ridsdale, J. E.

    Wilson, Geoffrey (Truro)

    Lucas, P. B. (Brentford)

    Roberts, Peter (Heeley)

    Wood, Hon. R.

    Lucas-Tooth, Sir Hugh

    Robertson, Sir David

    McCorquodale, Rt. Hon. M. S.

    Robinson, Sir Roland (Blackpool, S.)

    TELLERS FOR THE NOES:

    Macdonald, Sir Peter

    Rodgers, John (Sevenoaks)

    Mr, Richard Thompson and

    Mr. Robert Allan.

    Clause 31.—(AGGREGATION.)
    Sir Patrick Spens: I beg to move, in page 38, line 25, to leave out "on his behalf or."
    I desire to press this Amendment once again in the hope that the Financial Secretary, who promised to consider the matter before the Report stage, will agree that these words would be better out than in. I have looked at the Sections to which he referred in his speech in Committee, namely, Section 24 of the 1936 Finance Act and Section 28 of the 1949 Finance Act. Where those words are used in those Acts, they deal with the charge of or exemption from
    2418
    Estate Duty upon property situated outside Great Britain. I am quite unable to understand what they mean in their context in those Acts, but that does not matter. The point is that they have been repeated in this Clause, which deals with quite a different subject matter.
    In my view, the whole scheme of the Clause, as indicated by the Financial Secretary during the Committee stage, might be seriously infringed if these words are allowed to remain in. The Financial Secretary referred to certain logical divisions. He said that there ought to be aggregated the free estate of the deceased plus property settled by him, or settlements made out of

    2419
    property belonging to him, on the one side, and all other settled property on the other. That is the logical division at which the Clause is aiming, but if these words are left in it seems to me that settlements of property other than that belonging to the deceased could be brought in, and it would therefore be possible to tax a large block of property, aggregated with the free estate, which ought not to be so aggregated if the logical division is as I have stated.
    Two examples have been suggested to me by learned friends of mine. If the deceased is a member of a class on behalf of which class some settlement is made, such as a settlement for blind persons, it cannot be intended that any benefit to the deceased under such a settlement should be aggregated with the man's free estate. The other example is one to which the Financial Secretary himself referred during the Committee stage. He suggested that property belonging to a company of which the deceased was a governing director might be settled by his direction. All I can say is that if it is property of the company it is not property of the deceased, and if the settlement is made by the company on behalf of the deceased—which I should think would be a most improper settlement, and probably completely invalid—I should not have thought that it would, in any event, be aggregated with the deceased's free estate. In those circumstances, I hope that the Financial Secretary will decide that these words are better out than in.
    Mr. Boyd-Carpenter: As my right hon. and learned Friend said, we had a short discussion upon this point in Committee. I am inclined to think that my right hon. and learned Friend exaggerates the importance and the effect of the words which he seeks to delete. I told him that the words were included because they had been used in—as it seemed to me—the somewhat similar circumstances of the two Sections to which he has referred. Upon looking at the words and trying to see what effect they would have, however, I am bound to admit that I cannot conceive of any circumstances in which they would in any way affect the matter. In those circumstances, if my right hon. and learned Friend desires to
    2420
    press the Amendment, I should not desire to thwart him.
    Amendment agreed to.
    Mr. Boyd-Carpenter: I beg to move, in page 38, line 36, to leave out from "then," to the end of line 42, and to insert:
    "the rate of estate duty to be paid on any such policy, money or interest so included (hereinafter referred to as 'a life insurance') shall be determined as follows:—

    (a) in respect of the value of any life insurance or interest in a life insurance to which immediately after the death any one person is absolutely and indefeasibly entitled for his own benefit Otherwise than by virtue of a purchase for consideration in money or money's worth (whether of that life insurance or interest or of the policy or otherwise), the rate shall be that appropriate to the value or aggregate value of that life insurance or interest and of any other life insurance or interest in a life insurance to which he is so entitled;

    (b) subject to the foregoing paragraph, the rate shall be that appropriate to the aggregate value of all the life insurances or, if there is only one, to the value of that life insurance:

    Provided that for the purposes of this sub-section—

    (i) there shall be left out of account any life insurance in respect of which estate duty neither is payable on the death nor would be if the duty were payable on estates of however small a principal value; and

    (ii) where any life insurance or interest in a life insurance is immediately after the death subject to a mortgage or charge, the mortgage or charge shall be disregarded and the life insurance or interest shall be valued accordingly; and

    (iii) in relation to life insurances and interests therein which then form part of the unadministered estate of a deceased person this subsection shall have effect as if that person had been then living and entitled to those life insurances and interests.

    (3) For the purposes of paragraph (a) of the last foregoing subsection the value of any interest in a policy of assurance or moneys received under such a policy shall be arrived at by apportioning the total value of the policy or moneys according to the respective values of the interest in question and of the interest a person would have if, except for the interest in question, he were absolutely and indefeasibly entitled to the policy or moneys."
    This Amendment embodies the proposal in respect of which my right hon. Friend the Chancellor of the Exchequer authorised me to give an undertaking in Committee in connection with an Amendment moved by my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser). The House will recall that the

    2421
    Clause, as introduced, reversed the position which had existed for many years by providing for the aggregation of proceeds of policies of assurance with each other for the purpose of determining the rates of Estate Duty which would be applicable. As I explained during the Second reading debate, that proposal was brought forward to counter the abuse which had developed of persons taking out a number of small policies below the Estate Duty exemption limit in favour of the same person, and so completely evading Estate Duty on what might be a large sum of money.
    In the debate in Committee, after a full discussion, I undertook on my right hon. Friend's behalf to bring forward a proposal under which this new provision in the Bill would operate to aggregate separately only those moneys arising from policies of assurance in respect of identifiable beneficiaries, and I indicated that, so far as unidentifiable beneficiaries were concerned, I thought that the Clause would have to continue to stand as it then stood. The Amendment, in my submission, carries out that undertaking.
    The House will remember that I warned the Committee that there would be a considerable number of complications to be dealt with. Perhaps it would be of assistance to the House if I touched on the details of the Amendment which, I suggest, deals reasonably and sensibly with the points of difficulty, some of which I referred to during the debate in Committee. The broad effect of the proposal is, if I may use once again the metaphor I used in Committee of the ring fence, to treat as being within individual ring fences the proceeds of all the policies of insurance in favour of each named individual. We aggregate, that is to say, all the policy moneys that go to each particular identified individual and then retain the original provision of the Clause under which policy moneys were aggregated within one ring fence so far as unidentified beneficiaries are concerned. That is, broadly, the purpose and, I suggest, the effect of the Amendment.
    It is, of course, necessary to deal with the case of the identified beneficiaries—to give an obvious example, such of my children as attain the age of 21. It seems to us that the most satisfactory way of dealing with them, in view, apart from
    2422
    anything else, of the difficulties of dealing with them satisfactorily on any other basis, is to put them in one ring fence of their own, and I think it is proper to put them in a separate ring fence from the unidentifiable beneficiaries since it might otherwise be possible in certain cases to get round the effect of the Clause by leaving certain policies to named beneficiaries and to others who would be those beneficiaries, but, in a form of words, not expressly identifiable. I think we get round that by putting unidentifiable beneficiaries in a ring fence of their own.
    Paragraph (a) carries out this main intention. Hon. Members will observe the words
    "… otherwise than by virtue of a purchase for consideration in money or money's worth …"
    That provision is designed to deal with the difficulty, to which I referred in Committee, of the possibility of abuse arising in this way. The assured person might bequeath a large number of policies to one named beneficiary and during his life that named beneficiary might sell the policies to investment houses. At the moment, therefore, of the assured person's death the holders of the policies would be a number of investment houses. Therefore, if we did not insert this provision, none of those policies would be aggregated with another. That would be a method of abuse, and by excluding from the benefits of the Clause cases where policies have been sold I think we effectively prevent that possibility. That is the explanation of that exclusion.
    Paragraph (b) reproduces the substance of the original subsection as it stood in the Bill as introduced, and applies, as I have already indicated, where the beneficiaries are unidentifiable.
    The proviso deals with a number of smallish points of difficulty. Sub-paragraph (i) deals with a point I referred to in moving an Amendment in Committee. It is to make sure and quite clear that policies of less than £2,000—or, in future, less than £3,000—shall be aggregated with other policies. There was some doubt whether the Bill as it stood had that effect. Sub-paragraph (ii) of the proviso makes aggregable the amount that the insurance company pays out to the beneficiary on death without reduction the third sub-paragraph deals with the rather awkward problem of the case

    2423
    where the beneficiary dies before the insured person and the estate is not wound up but is still under administration at the time of the death of the assured person. To deal with that we have provided that the beneficiary shall be treated for this purpose as if he is still alive, and that artificial resuscitation of him for this purpose gets us out of the particular difficulty of the benefit of the policies going in the direction in which the beneficiary's estate might fall to be distributed.
    7.15 p.m.
    The last part of the Amendment secures for the purposes of valuation under the Clause that the life and reversionary interest in the policy shall together amount to its total value.
    The Clause is, I am afraid, a little complicated, but it is less complicated than I feared it would be when we discussed it in Committee, and will deal with the abuse mentioned on Second Reading. It will secure that, in the case I have described of an individual who takes out a large number of small policies in respect of the same beneficiary, aggregation of those policies with each other will continue to be applied. It therefore goes far enough to check the abuse, though it does not, as I have indicated, go as far as the original provision. The original provision, in our view, went too far, inasmuch as it aggregated policies the benefit of which was going to different named individuals.
    This is, of course, a difficult subject, on which opinions can, and no doubt do, legimately differ. Whichever alternative we adopt, the original alternative of aggregating all the insurance policies with each other but separate from the main estate, or the present proposal of aggregating policies in so far as they go to identifiable individuals or generally to unidentifiable, either course is, no doubt, subject to a certain degree of attack on the ground of logic. I think one could attack either. Whether, if one were constructing a system de novo, one could construct a system on these lines is, perhaps, an open question.
    However, we are dealing with a situation that in fact exists as a result of a state of affairs that has lasted now for 60 years, a state of affairs in which
    2424
    those policies of insurance were treated as a separate estate, and as we are dealing with this problem against that background it does seem sensible to modify it so far as is necessary to check the abuse—that we are doing—but not to carry it farther than necessary to check the abuse. In our judgment, the original proposal went farther than was necessary to check the abuse that had developed.
    Mr. G. R. Mitchison: Would the right hon. Gentleman elucidate one point for me? He referred to, the first sub-paragraph of the proviso in terms which I certainly did not understand. He said it was to deal with the case of small policies, and that where they were aggregated no duty would be payable, but what it appears to do is to leave out of account any policies of any size in respect of which Estate Duty is not payable on death, apart from any question of value.
    Mr. Boyd-Carpenter: I think that the hon. and learned Gentleman's difficulty is that he probably was not in the Committee when we discussed an Amendment to which I have just referred. The Clause, as originally drafted, was intended to provide for the exclusion of policies in which the deceased had not had an interest. I am speaking from memory, but I think I gave an example of a case of a policy taken out on a deceased's life by his wife on premiums solely furnished by her. But we thought it would also exclude from aggregation estates which did not fall to pay Estate Duty because they were below the exemption limit, While maintaining the exclusion in respect of those cases, in my view this Amendment makes it clear that where Estate Duty is not payable merely by reason of the size of the estate being below the exemption limit, none the less those estates shall be aggregated for this purpose.
    I think it is clear, but if the hon. and learned Gentleman had not followed the previous debate I can understand that what I said might possibly have misled him. That is the provision which we make, and in our view it meets the difficulty which had arisen and with which, as I indicated, we regarded it as our duty to deal—namely, the abuse in

    2425
    respect of a large number of small policies. It does not carry the matter further than is necessary to deal with that abuse, and, in so doing, pays attention to what has been the practice for 60 years in this country under a variety of Governments.
    Mr. Mitchison: Will the right hon. Gentleman observe that I did follow the previous debate, but I am not at all sure that I have followed his proviso?
    Mr. Speaker: It has been suggested to me that our proceedings might be expedited if a single discussion were to take place on this matter and upon the Amendments to this proposed Amendment. If the House were to agree that the words proposed to be left out should not stand part of the Bill, I would then put the Question "That those words be there inserted in the Bill"; and if on that a general discussion took place, and, if desired, it were carried to a Division, that would provide one way of dealing with the matter. But I should like to make it clear so that there is no misunderstanding that if the Question "That those words be there inserted in the Bill" is carried in the affirmative, it will inhibit me from calling any of the Amendments to the proposed Amendment. I say this in order that there shall be no misunderstanding whatsoever.
    Mr. Glenvil Hall: I think I have got the matter clear, Mr. Speaker, and that what you have said is agreeable to my hon. Friends on this side of the House. We appreciate that this matter has been discussed before. We do not want to carry the proceedings too far or into too much detail, so long as we can state our points of view which are embodied in the Amendments to the Chancellor's proposed Amendment.
    Mr. R. A. Butler: We agree, Mr. Speaker In fact, the crystal clarity of your observations compares very well with the Amendment which we have moved.
    Question, "That the words proposed to be left out stand part of the Bill" put, and negatived.
    Motion made, and Question proposed, "That those words be there inserted in the Bill."
    Mr. Roy Jenkins: We are dealing with an extremely complicated matter and a very compli-
    2426
    cated Amendment, but I think that, with the possible exception of the point which was raised by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), the Financial Secretary, as he usually does, explained the Amendment with great lucidity. It certainly appeared to me that it gives effect to what he said he would attempt to give effect to when he announced the concession in Committee.
    In spite of that, we do not like the Amendment. My right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) made it clear in Committee that we did not like it, and we have not liked it any more as a result of thinking about it during the interval. We have put down the Amendments to which you have referred, Mr. Speaker, and which we are not at the moment moving, but which we are able to discuss at this stage, which seek to limit the extent of the concession.
    To use the right hon. Gentleman's metaphor of the ring fence, our proposals seek to do this. Instead of putting the estate into an indefinite number of parts, as the present Government Amendment proposes to do, and instead of leaving the estate in two parts as the Clause as originally drafted seeks to do, our Amendment seeks to put it into three parts, each of them with a ring fence around them. The first part would be the main part of the estate. The second part would be any money accruing, as a result of insurance policies, to the widow or, for the sake of sex equality, to the widower; and the third part would be any insurance policies accruing to any other people. That would limit substantially the extent of the concession which the Government have proposed.
    I must say that we would prefer not to have the concession at all, and that we have not heard either in Committee or in the lucid speech of the Financial Secretary any reasons to indicate why, if the Government thought it really necessary to bring forward this Clause at all and correct the admitted abuse, the effect of the Clause should be lessened as it is by this Amendment. It seems to me that the proposal which is put forward in this Amendment is open to fairly obvious and substantial abuse—indeed, a new form of abuse.
    Under the arrangements which are proposed, by which an individual may not get round the Estate Duty provisions by

    2427
    taking out an indefinite number of small policies in favour of one beneficiary, but may achieve the same result by taking out a number of policies in favour of a different beneficiary, it is difficult to see why it should not be possible for a number of people to arrange mutually compensating bargains by which they each make over sums in favour of each other's children, so that very much the same effect is obtained as would be obtained if we did not have this attempt to block up the loophole altogether. I would have thought that, from that point of view, this matter ought to be considered again.
    Despite what the right hon. Gentleman has said about the position during the last 60 years and the position which has existed in respect of the Married Women's Property Act, I do not think we are really convinced that there is a case for treating insurance policies in an entirely different way from the rest of the estate. I am not at all sure, from what he said in his extremely interesting speech in Committee, that we do not carry the hon. Member for Hall Green (Mr. Aubrey Jones) with us on this point. I know that he wants an entirely different approach to the whole question of Estate Duty. He wants the duty levied on the individual who receives it according to how much money has come in, and not on the individual who is leaving the money according to how much his estate is. That seems to me to be an arguable point of view, but I think he agrees that, until we can do that, there is no logical basis for saying that we should treat the estate of a man who carries a great deal of life insurance in an entirely different way from the way in which we treat an individual who, for various reasons, does not happen to do anything of the sort.
    It is not directly bearing on the point to say that this has been the position, as the Financial Secretary said, for 60 years. In fact, I think he slightly underestimates the period, because I believe the date of the Married Women's Property Act was 1880, so that it would be a period of 74 years.
    Mr. Boyd-Carpenter: What I had in mind was the date of the Finance Act. 1894.
    Mr. Jenkins: The right hon. Gentleman's intervention makes in advance the
    2428
    point that I was about to make, and that is that the Married Women's Property Act, from which stems this separation of these insurance policies from the rest of the estate, was introduced before Estate Duty was ever thought of. We have all heard a lot about Sir William Harcourt in these debates.
    7.30 p.m.
    My right hon. Friend the Member for Bishop Auckland (Mr. Dalton), in his speech yesterday, invited the Chancellor to join him and Sir William in a glorious trio of those who reduced the Estate Duties at the lower end. Sir William is reputed to have said. "We are all Socialists now." I think that remark was not true. There is one other remark by Sir William which seems to me more apposite to what we are discussing now and of which I would remind the Chancellor, because I think that it may have some application to occasions when he has to deal with the more recalcitrant and property-conscious among his own back benchers.
    One of Sir William Harcourt's friends complained that Sir William had no landed ideas, to which Sir William replied, "You have the land; leave the ideas to me." I think that the only difference about that is that I am not at all sure that the right hon. Gentleman has not the land as well as the ideas. However, it is quite clear what is the position here under the Married Women's Property Act, and I think that the Financial Secretary is straining a point when he attempts to say that we must, therefore, respect the position which has grown up over the last 60 years.
    He said that if he had been dealing with the matter de novo he might have arrived at a different solution. But surely we are to a large extent dealing with the matter de novo in this Bill. The only thing which, I understand, is not de novo is the Married Women's Property Act which was brought into being to deal with an entirely different set of circumstances when there was no Estate Duty 60 years ago.
    This is the first time that we have faced up to what we want to do about insurance policies in which the person taking out a policy has no interest. The Government have brought forward two solutions. While I think that the Government have a better solution in mind—

    2429
    the Financial Secretary hinted at it—we have to put up with the solution which he says is not a good one because the position which has existed over the last 60 years is not clear. It is a very unsatisfactory position in which we are left.
    During these rather long drawn-out and not altogether uninteresting debates on the Finance Bill, no issue has brought out greater disagreement between both sides of the House than on this question of Estate Duty. I think that one of the most significant remarks which the Chancellor has made in the course of his intervention in our debate was the one which he made yesterday when replying to a debate in which the right hon. Member for Blackburn, West (Mr. Assheton) came out with a very strong proposal for Estate Duties in almost any form. He indicated his position clearly by saying that the members of the Chamberlain family came of a very radical family so far as he was concerned.
    The Chancellor gave a very broad hint that if things were a little easier he would like to do away with the very heavy burden of Estate Duty on large estates.
    Mr. R. A. Butler: I never said that we should do away with it altogether.
    Mr. Jenkins: I think that the Chancellor is quite right. I did not imagine or think that he intended it to be imagined that estates were to be entirely free of Estate Duties. He did announce that he would go for a rate of Estate Duties which would be much less an equalising weapon than it is at present. Nothing has brought out the difference between the two sides of the House more than this question affecting property passing from a deceased person to an heir of one sort or another. That applies to this Amendment which we regard as quite unnecessary and with which we are thoroughly unsatisfied.
    Sir P. Spens: I start by thanking my right hon. Friend for introducing this Amendment. I think that it is a very great improvement indeed on the Clause as it originally stood. It would be interesting to go into an historical discourse about the origin of the Married Women's Property Act and death duties generally, but I want only to look at the position as I understood it to be when the Finance Bill was introduced.
    2430
    The Married Women's Property Act has been made more and more use of during the recent years. It has been made use of by two quite different sets of people. It has been made use of by thousands of people of limited means who make provision for their widows and for their children, and in nearly all those cases they take out one policy for their widow and one policy for each child. There have been a small number of people who have found that by taking out a large number of policies in favour of their widow or their children they can get benefits for each particular party.
    The proposal which the Government originally brought in was, of course, a complete attack upon all the benefits of the Married Women's Property Act, and the people who would have been most hit by it were the people of more limited means. I have been perfectly amazed to listen to the speeches from the other side and the whole-hearted attack made on the Married Women's Property Act and the provisions which people of limited means, during the last 20 or 35 years, have been making for those among the very class which, I would have thought, hon. and right hon. Gentlemen opposite desire to represent in this House.
    Mr. Percy Daines: What evidence has the right hon. and learned Gentleman of that? I was in the insurance industry for 20 years, and I never came across a single case of that in the whole of my experience.
    Sir P. Spens: I do not know what estates the hon. Gentleman operated, but I can tell him that, so far as I know, there are many hundreds of policies under the Married Women's Property Act taken out every year by people of very limited means who, so far as I possibly can, I desire to protect.
    Mr. Glenvil Hall: If we can clear up this point, the right hon. and learned Gentleman's speech will be more intelligible to all of us. Some of us are not quite sure what he means by a person of limited means. Does he mean people with £500, £750, £1,000, or more? I would remind him that it will now be possible for a person to take up single policies on anything up to £3,000.
    Sir P. Spens: I was referring to people of small incomes rising up to junior

    2431
    executives in business of £500 to £1,500 a year. These are the people who very largely take out these policies. The proposal here, so far as the Government are concerned, is that a ringed fence goes round each lot. That seems to me right. Let me deal with the ringed fence round the widow or widower.
    It seems here extremely hard that a policy taken out in favour of children should be aggregated with other policies which there happen to be on a man's life. That seems to me to be pretty unkind when one thinks about it, and I should have thought the ringed fence ought to be round the widow and widower and the children.
    The reason why I think the Government plan is right is this. After all, policies are taken out, not only under the Married Women's Property Act, but also as ordinary life insurance policies for the benefit of dependants and employees and people of that sort. They are comparatively small policies—£500, £1,000. £1,500 or something of that sort. There may be, in addition, policies running into thousands taken out by the deceased on his life. If we aggregate them together, these small policies for individuals have to bear the full weight of Estate Duty on the aggregation of all the policies. That seems to me to be wrong. That is got rid of by the Government's plan of the aggregation—the ringed fence—being round each beneficiary who takes a policy upon death.
    This is a good Clause, and I have only one comment to make. Under the Married Women's Property Act a very common form of policy is a policy for the widow, if she survives, for life and afterwards to the children. Unfortunately, I gather that that type of policy would not come within paragraph (a) but would have to be under paragraph (b), because on the death there would be no person
    "absolutely and indefeasibly entitled for his own benefit.…"
    That may be unavoidable, but it is the one point in paragraph (a) which will hit a great number of these policies. I think that they are the best type of policy and should be encouraged in every possible way. Subject to this one comment, I congratulate my right hon. Friend and
    2432
    express my thanks and, I am sure, those of many of my hon. Friends for the Amendment.
    Mr. G. R. Mitchison: The right hon. and learned Member for Kensington, South (Sir P. Spens) has just found that some of the provisions about Estate Duty are unkind. Taxation is usually unkind in one sense of the word. Life is sometimes unkind, and death is almost invariably unkind.
    It seems to me that, on the Government side, there is only one really logical person, and that is the hon. Member for Hall Green (Mr. Aubrey Jones). He thought that the whole basis of Estate Duty was wrong, and that it ought to depend on the means of the person receiving and not on the size of the estate of the deceased. That is perfectly logical. But with this Clause we are getting into a quite hopeless state of confusion about the existing situation as a result of some sentimental reasons advanced in favour of a very limited class of person by hon. Members opposite. I say "very limited class of person" because there are very many people who have never been in a position to take out policies of this kind and who are never likely to be able to do so.
    My first comment on the Clause and the whole matter is that much the easiest way to deal with this question would have been to put the whole of the moneys coming from life insurance policies of this nature into the estate, to aggregate them and then, if it was desired to make special provision for the widow and children, to do it in the straightforward way by giving them a special concession in the rate of Estate Duty, such as they used to have under the legacy and succession duty. I doubt whether that is the right thing to do, but that, at any rate, is a simple and clear way of doing it.
    The present position is that not all widows benefit under this practice, but simply the widows and children of people who have taken out a particular form of provision for them—that is to say, a particular form of life insurance. Other provisions have not attracted the advantage that this provision has attracted by reason of a section in the Married Women's Property Act which was in all probability introduced for a quite different purpose.

    2433
    It is a very poor defence of an abuse, because it has, admittedly, been an abuse, to say that it is an old one and, therefore, when it is being altered we will make only a small alteration. Surely, once it is recognised that there has been abuse, the right thing to do is to reconsider the whole position and see what ought to be done and not hesitate to take fairly sweeping steps in order to do so. The essential things to aim at in a matter of this sort are, first, that the provisions that are put into the Bill should be as simple as possible and, secondly, that it should conform with ordinary ideas of fairness.
    7.45 p.m.
    I do not regard the Amendment or the Clause as in any way clear. The Clause is an excellent monument of obscurity and I shall not take up time by going through all the details of it. In the Amendment we begin by having a "policy, money or interest" referred to as "a life insurance," and a little further on we find an "interest in a life insurance." That, therefore, means an interest in an interest. I leave it to the Chancellor or whoever replies to tell us what that means and why it is there. We could go through the Clause and find point after point which the ordinary person and, indeed, the skilled person would find just as much difficulty in interpreting as I found myself in doing so. The more obscure we make fiscal legislation, in the long run the more likely we are to afford opportunities for evasion.
    Next, on the fundamental facts, let us see what is proposed. First, there is the ordinary estate. Next, there is to be, say, the provision far the widow. Next, if there are four children, there is to be a separate ringed fence round each of them. What is the common fairness in this? Why should this form of provision for children, if that is the way we regard it, be entitled to this special treatment. Suppose that the deceased had had, say, four houses, bits of property let out to people. The party opposite are rather in favour of a property-owning democracy, are they not? Surely the property is not merely to be confined to life insurances, however great some people's interest in them may be. It would include perhaps a house or two. Why not?
    Assume that there are five houses of the deceased person, and one goes to the
    2434
    widow and the other four to the children. I need not say to the House that that all forms part of the estate and gets no benefit. All the sob stuff that we have been hearing about providing for the widow and the children for some obscure reason is perfectly sound, so we are told, when it is applied to this particular form of life insurance; but when it is applied to any other provision—for instance, the houses in which many humble savings are invested—it is no longer a sound principle. It is nonsense to approach the matter in that way.
    I should have thought that the simplest thing with an estate is to confine ourselves to two obvious classes, one of which is the widow. It must be remembered that widows have had special treatment as, for example, in the case of intestacy. If we are to make a special benefit at all and to do it in this rather illogical and inconvenient way, there is a special case for giving it to the widower or to the widow. But once that is done, I see no reason whatever for drawing a separate ringed fence around all the other interests concerned. I am talking, of course, about the "absolutely and indefeasibly entitled" beneficiaries to whom the Financial Secretary was referring.
    Suppose, for instance, that a man has, say, five Children and makes provision for them by taking out a separate policy for each of them. What is the moral difference between his doing that and taking out one policy for the five children or the survivors of them? Where is the moral element? Why should those five people, because they have five separate policies, be entitled to a special advantage that would not accrue to a family as a whole, if the policy was taken out in general terms so that until the event happened one could not know to which person it would apply? What is the moral difference between that kind of case and the case of five children, each of them having a clean-cut special policy and who therefore are entitled to a specially reduced rate of duty?
    I cannot see it at all, and I suggest that here, by way of complication, we are getting into real injustice, and opening a door to evasion. I hope that the House will reject the whole Amendment. If we are to have it, I would prefer the limitation I have just been outlining, but I believe that the original clause did not go far enough. I believe that what is

    2435
    now proposed is far too complicated, has no real foundation in fairness and even within the narrow limits which the right hon. Gentleman has set himself, is quite the wrong way of doing it.
    It is only as a very last hope, as it were, that I should recommend the Amendments which we put down. They are one degree better than the Chancellor's Amendment, but by far the best thing is to reject the whole.
    Mr. Aubrey Jones: The debate so far has been one between precedent and logic. My right hon. Friend the Financial Secretary has stood for precedent and hon. Members opposite stand for logic. As a good Conservative, I cannot be other than reverent towards precedent. Equally as a Welshman, I cannot close my ears to the claims of logic. It is true that the arrangement represented by this Amendment has existed for over 70 years and I am entirely in agreement with my right hon. Friend that we ought not to get away too quickly or too precipitately from something which has been sanctified by this long history.
    What worries me is whether the concession represented by this Amendment can, on the basis of precedent, be a permanent concession. I welcome the concession, but I think that I may claim for myself a greater degree of farsightedness than my hon. Friends. I wish to make the concession permanent, and it would seem to me that the only way to do so is to follow out the logic of the Amendment. Hon. Members opposite and I are, I think, at one in wishing to be logical. The difficulty is that our logic differs. Hon. Members opposite, or at any rate the hon. and learned Member for Kettering (Mr. Mitchison), wished to carry to its full conclusion the present logic of Estate Duty and to assimilate the Amendment to the present corpus of law. I wish to do the opposite. I wish to assimilate the present corpus of law to the Amendment. I wish to see the Amendment carried further. They must vote against it, and I must vote for it.
    One may well ask, if this illogic, this absence of logic, has existed for 70 years, why cannot it go on existing? The truth of the matter is, it seems to me, that the illogic has become apparent only within the last few years. It became
    2436
    apparent only when the exemption limit was raised from a nominal figure to £2,000. It then became profitable for a person to distribute his property in parcels of life assurance policies of under £2,000, and so avoid duty.
    That loophole is closed by the Clause, but a lesser loophole would remain under the Amendment. My hope is that people would not resort to this lesser loophole, but it would be very serious and disastrous if they did. If they were to do so—which is the last thing that the Financial Secretary would desire—the concession could not possibly last. At some time or other a Chancellor would come to this Chamber and say, "Advantage has been taken of this provision to secure mitigation of Estate Duty, and I cannot countenance it."
    Were that so, the argument of precedent would no longer avail. For that reason—and despite the obvious reluctance of the Financial Secretary—I wish once again to press upon him the claims of logic. I shall not enter again into the long and abstruse argument which I inflicted upon hon. Members during the Committee stage. I was interested in the disquisition which we heard yesterday from the right hon. Member for Bishop Auckland (Mr. Dalton). We were told that Estate Duty has retained its shape for 60 years. The right hon. Gentleman described it as the hest of taxes. Whatever may have been said of it in the past, I contend that current rates of taxation have altered the position completely.
    With current rates of taxation as they are, a living person can no longer provide for the duties which becomes payable on his death. They are in fact payable by his heirs, and those heirs pay duty relating not to what they receive or to their own circumstances, but to the circumstances of someone else altogether. 'That appears to me to be fundamentally unjust. For that reason I pleaded with the Committee for the inclusion in the corpus of death duties of an acquisition duty. It is the acquisition principle which is represented by the Amendment, but in a confused and inchoate way.
    I believe that the concession given by my right hon. Friend and represented by the Amendment may be made permanent if we reintroduce an acquisition duty settled on a proper basis of principle and

    2437
    applied to all forms of property, not only to property represented by life assurance policies. I do not ask for it straight away. I plead here, as I pleaded in Committee, for an inquiry into the matter; and while I understand the reluctance of my right hon. Friend to look into all these matters afresh, I urge on him that he, probably more than anyone else, has an interest in so doing.
    It seems to me that death duties, far more than duties on income or duties on profits, touch people in some of their very deepest instincts and affections. That being so, if the principle of the death duty seems unjust, then the statute in the long run will suffer. Indeed, I would contend from what we have heard in our debates on the subject that the statute on this matter is subject to considerable strain. My right hon. Friend has an interest in safeguarding the reputability of the statute, and in my judgment that can only be done in the long run by initiating an inquiry on the lines I suggested in Committee, and for which I would plead again today.
    8.0 p.m.
    Mr. Houghton: I am sure that we are all agreed that the speeches we have heard have shown how much there is still to be learned about the philosophy and logic of Estate Duty. The more I heard the hon. Member for Hall Green (Mr. Aubrey Jones) speak, the more I believed that he is too pure in heart to belong to the Conservative Party. I am sure he will forgive me if I turn from his musings on Estate Duty to the more practical question raised by the right hon. and learned Member for Kensington, South (Sir P. Spens), who I am glad to see has remained in the Chamber.
    He reproached us on these benches for not taking care of people of limited means. He said that he was astonished to hear speeches from these benches which seemed to be so indifferent to the welfare of those of limited means and the provision which they were trying to make for their wives and families. When my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) asked the right hon. and learned Gentleman to define a person of limited means, he replied—and I took his words down—"Those who have risen to the position of executives on, say, £500 to £1,500 a
    2438
    year." That was his definition of persons of limited means. Presumably the right hon. and learned Gentleman supports the Chancellor and opposes my hon. Friends on the ground that the Chancellor is taking care of those of limited means whereas we are not.
    I want to ask the right hon. and learned Gentleman how much insurance of this kind he thinks people of limited means can afford. It would be possible for a person of limited means to take out a policy for £3,000 in the interests of his widow and three separate policies of £1,000 for each of his three children—a total of £6,000; and under the Amendment which we are discussing in relation to the Chancellor's Amendment, no Estate Duty would be payable on that £6,000. But the total cost of the insurance would be well over £300 a year in premiums. What person on £500 a year can afford to pay £300 a year in insurance premiums for this modest provision?
    Sir P. Spens: The hon. Member has completely misunderstood me. Of course a man on £500 does not pay £300 a year in premiums. He pays a much smaller sum and does not insure for as much as £3,000. As he earns a higher income, so he takes out another policy.
    Mr. Houghton: The right hon. and learned Gentleman has merely proved my point, which is that persons of limited means can afford only limited amounts of insurance—and those limited amounts of insurance would be exempt from Estate Duty anyway, and they would be still more exempt—
    Sir P. Spens: Provided that at the time of death the testator had no other property.
    Mr. Houghton: No. What we are dealing with here is insurance taken out in the interest of the wife and family. These insurances will be separately calculated for Estate Duty and will be treated entirely distinctly from the free estate of the testator. It does not matter what he leaves in other forms of property. We are concerned only with the amount of insurance which he has left to his wife and family, which would be exempt from Estate Duty, for he would take advantage of the loopholes, some of which the Chancellor proposes to retain. I think the House will agree that a person of limited means between £500 and £1,500 a

    2439
    year is not at all concerned either with what the Chancellor proposes or with what we propose.
    Who is concerned with it? This surely must be realised: this is the field of operation of those with large incomes. It is not a scrap of good talking about persons of limited means. What does insurance cost per £1,000 for a man of 40 years of age? Surely it is at least £50 in premiums each year per £1,000 for a policy of this kind. One can work it out that if this sort of provision for the wife and children is to be undertaken, as it is undertaken, with a view to avoidance of Estate Duty, it will be done on a big scale, otherwise it is not worth doing at all.
    Mr. Frank Tomney: It is possible to take out two policies for £1,000 and obtain the benefit of each.
    Mr. Houghton: At the present time it is possible for a person to take out 10 policies, one each year—not more than that because of the voluntary restrictions imposed by the life insurance offices—in the name of the same beneficiary, and each of those will be treated as a separate estate. The Chancellor proposes to stop that avoidance, even under the amended Clause—let us be quite fair to him.
    What we are suggesting is that he is retreating from the right and proper position which he adopted of aggregating all these policies for all beneficiaries and treating them as an estate separate from the free estate of the testator. Already a great concession is being made in treating these policies as separate estates, even if aggregated—a very big concession indeed. To lump the two things together would in many cases mean that they would attract a much heavier rate of Estate Duty.
    Let us acknowledge that, as the Chancellor proposes to meet the situation, he is stopping up one loophole, but he is allowing very large concessions to continue. I wonder whether he, or whoever is to reply, will tell us how much revenue he is giving away, making the comparison between his original Clause and his new proposal. It looks to me as if there is a considerable difference in the Estate Duty received, between the original proposal and the modified proposal which the
    2440
    Chancellor is now making, because of the treatment of each policy, or each set of policies for each beneficiary, as a separate estate.
    I do not see why the right hon. Gentleman is doing this. Consider the person who takes out policies of £4,000 for his wife and £4,000 for each of his two children—£12,000 in all. Why, under the modified proposal, does the Chancellor intend to make a gift of about £600 in relief from Estate Duty? What justification is there for doing that? As the figures go higher, of course, the concession becomes greater.
    Much has been said about the Married Women's Property Act. Under our proposal the sanctity of that Act is preserved. We would make special provision for the widow, but we do not propose that that advantage should be given to each of the other beneficiaries—and I am sure that that would strike any reasonable person as being quite fair.
    Undoubtedly this has been a large source of avoidance of Estate Duty and we on these benches regret that the Chancellor did not stick to his guns. Had he done so, we would have supported him. He has given inadequate reasons for the variation made by the proposal which he now puts forward. If it is suggested that it has been put forward in the interests of people with limited means, let us disabuse our minds of that before we proceed to the final stage of the Bill.
    Mr. Glenvil Hall: I had hoped that the Chancellor would intervene at this point, but if he prefers to follow me I will, of course, speak now.
    Mr. R. A. Butler: The reason I did not rise was not through any desire not to speak, but because, as the Financial Secretary had opened the debate, I thought the right hon. Gentleman would like to speak at this stage.
    Mr. Glenvil Hall: Certainly.
    My hon. Friend the Member for Sowerby (Mr. Houghton) has really made my speech for me. He dealt with the only significant contribution which has been made to the debate from the other side of the House. It came from the right hon. and learned Member for Kensington, South (Sir P. Spens). I must say—and I think he is aware of this from what has been said by my hon. Friends

    2441
    —that his speech startled us, for it seemed to us, on all the facts, to be at variance with the position as we see it.
    I listened carefully to the Financial Secretary. I agree with one of my hon. Friends who remarked that the Financial Secretary, as usual, had explained the matter in a lucid and clear way. This is a most complicated Amendment. Part of our case is that we see no reason for the Amendment, complicated or otherwise. Undoubtedly, as was pointed out by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), this will cause a good deal of doubt in the minds of those who may be affected by it, and perhaps some work for the profession which my hon. and learned Friend adorns. However, if all that happens as a result is that we help, on the one side, very rich people, and on the other, well-to-do barristers, that is no reason why we should approve the Government's proposal.
    Even at this late hour, we should like to hear that the Chancellor has had second thoughts and that he has decided to accept the arguments deployed from this side of the House. I can only assume that, if the original Clause had not been good, it would not have been put into the Bill. If that is correct—the Clause was good and the Chancellor thought that it was wise and right, why is it now necessary for the Government to propose an Amendment to it? If after careful thought—and I know that careful thought is always given to the contents of the Finance Bill—the Clause was introduced, why is it that now in such a short space of time the Chancellor, and those associated with him should have had second thoughts?
    The Financial Secretary told us that the original Clause went too far. When was it discovered that it went too far? As far as we can see, it was only when pressure was brought to bear from the Government back benches. Perhaps we shall be told by the Chancellor that the matter has been debated by the 1922 Committee. It may be that that Committee informed the Chancellor that in this matter he had gone too far.
    This is one of the few radical proposals in the Bill yet, although in our view it does not go far enough, within a remarkably short space of time the
    2442
    Treasury Bench comes to the conclusion that the provision was too revolutionary. The fact is that the Clause as it now stands does not go far enough. We should have liked to see it tightened up, not loosened.
    I wish to make some brief observations on the speech of the right hon. and learned Member for Kensington, South (Sir P. Spens). As I have said, my hon. Friend the Member for Sowerby covered most of the points which he made, but I must say that, for my own part, it seems incredible that anyone in any part of the House should imagine that the proposed' Amendment will, in fact, help the small man—the man of whom the right hon. and learned Gentleman spoke as the person of moderate means. I intervened to ask him what he meant by this description and when he replied he laid down fairly wide limits. He said that moderate means meant from £500 to £1,500 a year.
    I understood further from what he said that such a man would be one who had reached the executive class. I understood the right hon. and learned Gentleman to mean by that somebody who was not starting at the beginning, but, in a sense, had reached the kind of position from which he would rise no higher. He had ceased to be in the lower grades of his profession or occupation.
    Sir P. Spens: I meant a man who rises in the course of the years from £500 to £1,500 a year and takes out insurance as he gets better off.
    8.15 p.m.
    Mr. Glenvil Hall: It is obvious that on an income of £500 a year most people would find that difficult. Their families would be young and most of their income would be earmarked for other purposes than this type of insurance. I therefore assume that the man concerned would have to be receiving at least £1,000 a year, and perhaps more, before he could begin to take out policies of this kind. Even then, it is obvious that by that stage he would no longer be young. In all probability he would be in his fifties.
    Everybody knows that when a man reaches that age the premiums he has to pay are pretty high. Such a person would have to pay a premium of some hundreds a year to take out a policy which would do him any good under the Clause. He

    2443
    would, I think, hesitate very long before, for this purpose and this purpose only, he would sink premiums to the extent of many hundreds of pounds in this way.
    The plain fact should be obvious in every part of the House, that whilst this provision will help people of substantial means, the small men and women—even those with an income of £1,500 a year—will not be helped very much, if at all. The right hon. and learned Gentleman seemed to forget, though I am sure that the Chancellor does not, the Amendment accepted yesterday. Although the actual Amendment accepted was moved from the opposite side of the House, all the running and the pressure came from this side of the House and was really moved in essence by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton).
    The Chancellor will recollect, if the right hon. and learned Member for Kensington, South does not, that now estates exceeding £3,000 and not exceeding £4,000 will only pay Duty of 1 per cent. That is a small sum. This provision must surely mean therefore that only people who have very high incomes or assets and substantial amounts at their command and who are willing to sink them in insurance policies of this kind will be those who will benefit.
    For that reason, we reject the proposals of the Chancellor. We think that they give to very rich people much more than they are entitled to in this direction. Instead of closing a gap and reducing what has become an abuse, the Government Amendment only helps that abuse to continue. Therefore, if the Chancellor cannot see his way to meet us in any way, I must advise my hon. and right hon. Friends to carry their opposition into the Division Lobby.
    Mr. R. A. Butler: I hope that my speech may conclude the debate on this important matter on which we have had a variety of useful speeches. The Amendments suggested by the Opposition are absolutely intelligible and quite clear. That is a very good way in which to end our debates. I should like to pay a tribute to the hon. and learned Member for Kettering (Mr. Mitchison) who serves in such a useful capacity to the Opposition in helping them with this difficult legal drafting We can understand the Amend-
    2444
    ments clearly, and the more we understand them the less we like them. I am afraid that my answer to the right hon. Member for Colne Valley (Mr. Glenvil Hall) is that we are unable to accept them. What they do is restore the position to the original Clause, with a slight expansion, as has been explained by Opposition speakers.
    The right hon. Gentleman said that I changed to the new Amendment on the Report stage under pressure from the 1922 Committee. During much of the course of the Finance Bill the theme song of the Opposition has been that the Government are so rigid that they are unable to move. Yet when the Government do move they are regarded as being under pressure from some revolutionary junta in the 1922 Committee. The Opposition cannot have it both ways. I am not conscious of ever having discussed the matter with the 1922 Committee, and if I did discuss it with them, I am doubtful if they would understand it any better than the hon. and learned Member for Kettering at present understands the drafting of the Amendment which we put on the Order Paper.
    It is true that some of my very learned and able right hon. and hon. Friends who have sat with assiduity through our Finance Bill debates have shown a particular interest in this matter. So have I and my right hon. Friend the Financial Secretary, who moved the Amendment with such clarity. The reason for the change is quite simple; we were impressed by the arguments put forward just as, strange to relate, I was impressed by the arguments which the right hon. Member for Bishop Auckland (Mr. Dalton) used yesterday.
    It shows that as we now draw rapidly to the conclusion of our debates on the Finance Bill we are being accommodating to both sides of the House, which is the right way in which to conclude our discussions. We have learned from these discussions to be even more accommodating than we were last year, and we have ended up with a concession to the Right today and a concession to the Left yesterday. I hope that our aim will prove that our attitude will in future be killing when we have a target in front of us.
    The right hon. Member for Colne Valley claimed that this was not a very desirable course of action. If it is not

    2445
    a very desirable course of action, why did not his Government tackle this abuse during their period of office? We dealt with this abuse when it was brought to our attention. We might have thought of it earlier, but the fact is that we dealt with the abuse in the original Bill as printed at the Committee stage.
    Mr. Glenvil Hall: There are two simple answers to the right hon. Gentleman. The first is that the Labour Government could not do everything in one period of office. We did a great deal. I thought that right hon. and hon. Gentlemen opposite felt that we did too much. The second answer is that this abuse really became an abuse which ought to be attended to as a result of the action of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) in 1946 in relieving estates up to £2,000. It was only then that it really became a substantial scandal, and it took some years to grow.
    Mr. Butler: Then the actions of the right hon. Member for Bishop Auckland were so nefarious that they created opportunities for evading a law which it then took the right hon. Gentleman and his colleagues five years to perceive. I do not think that the right hon. Gentleman added to the validity or strength of his argument by his intervention.
    The fact is that this position has existed, not to the extent of the abuse announced by the Financial Secretary in the earlier stages of our debates, but with the possibility of abuse, since 1894. When we came to consider the attitude adopted by some of my right hon. and hon. Friends, we thought it perfectly reasonable that, in the words of the Financial Secretary, a ring fence should be put round a policy of assurance taken out for a child. We think that that is a reasonable proposal for each individul child, and, according to the terms of the Clause, those whose titles can be absolutely claimed according to the terms of the Amendment which we put on the Order Paper. That is a perfectly reasonable restoration of the original position.
    Our main desire originally was to stop the abuse of an indefinite number of small policies being taken out in the interests of the same person. However, on reconsidering the matter with the care that we always devote to reconsideration, we thought it not unreasonable that the
    2446
    Amendment should be made. Indeed, I see great value in the Amendment, because I do not think it is illegitimate that in the case of a child, particularly in a case related to the Married Women's Property Act, a ring fence should be put round it. I can see nothing immoral in it, and I can see considerable advantages in it.
    One or two points have been raised by right hon. and hon. Gentlemen in their speeches. The hon. and learned Member for Kettering raised some very technical points. They are so detailed that I will have a little interview with him after the conclusion of the Finance Bill.
    The hon. Member for Sowerby (Mr. Houghton) asked how much we should lose on this Amendment compared with the original proposition. It is a case not of how much we shall lose but of how much less we shall claw back, because the object of the original draft was to stop an abuse, and, as I think we shall stop an abuse, it cannot be said that there is a necessity to claw back the amount which would have been saved by the original drafting but which will now be conceded in the case of a ring fence being put round a child's assurance policy. I have made inquiries and attempted to define the amount, but I cannot give an accurate assessment. I am, however, assured that the figures are not alarming. Certainly, I did not have to consider this as being an action in which I was making any great hole in the budgetary position as I envisaged it.
    I do not think I need take up the points made by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens). It was from his speech that the argument started as to whether we were trying to help the rich or the poor. The right hon. Gentleman opposite said that the Clause was intended to help very rich people and well-to-do barristers. That is gross exaggeration. I hope that the people of this country, if they are following our discussions at the present moment—about which I am in some doubt—will, next time they consult their lawyers, ask them whether those who take out insurance policies under the Married Women's Property Act can all be classified as belonging to the two classes of very rich people or well-to-do barristers like the hon. and learned Member for Kettering.

    2447
    I do not believe that those are the only people who will profit by the Clause. If I thought that the hon. and learned Member for Kettering would make a packet out of it, it would give me all the more encouragement to proceed with the Amendment; but I do not believe that is the case.
    I believe that there are many people of reasonable and modest means, such as those referred to by the hon. Member for Sowerby in his illustration of the amount of the premium, for whom it will not be impossible to take out an insurance policy. I believe that many of those people will take advantage of this opportunity. However, I do not believe that those who went into this affair as a racket and took out 50 policies for the same person and thereby attempted to avoid Estate Duty, will find that the law as we leave it today makes it worth their while to perpetuate the racket. Therefore, in view of that, I ask the House to pass this Amendment, to reject the Amendments moved from the other side, and proceed to the conclusion of the discussions on the Finance Bill this year.
    8.30 p.m.
    Mr. Gaitskell: While we appreciate the caustic reference to the 1922 Committee, which might even be described, to use a favourite phrase of the Chancellor himself, as wounding, and while we also appreciate his very friendly and appreciative remarks about my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I must say that, as far as its substance is concerned, we thought his speech was utterly deplorable.
    I do not propose to rehearse the arguments again, except to say that I really
    think he ought not to expect us to swallow the talk about people of limited means. I suppose it could be a question of what the Chancellor and the right hon. and learned Member for Kensington, South (Sir P. Spens) understand by that phrase, but the plain fact is that, with the scale of Estate Duty as it is now, nobody will make very much out of dividing up insurance policies among their children if the total estate is under £10,000. That is the plain fact of the matter. The duty on £10,000 is only 4 per cent., so that comes to £400.
    I agree that one can save part of it, but the really big savings are going to come out of the big estates, such as those of £100,000, in which case the Estate Duty is 45 per cent. You can reduce that to whatever figure you like, according to the number of beneficiaries, and, as I showed during the Committee stage, it could be reduced to nothing in the final stage. But these are the people who are to gain, and, whatever the Chancellor and the right hon. and learned Gentleman may say, these are the plain facts of the matter. Whether or not the right hon. Gentleman regards them as very rich or not, I do not know, but they certainly are rich.
    However, we have had a long debate, we have expressed our point of view with great clarity and vigour, and it only remains for us to express our views in the usual way, which we shall do with particularly strong feeling, when we go into the Division Lobby.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes. 251; Noes, 214.

    Division No. 197.]

    AYES

    [8.31 p.m.

    Aitken, W. T.

    Braine, B. R.

    Craddock, Beresford (Spelthorne)

    Allan, R. A. (Paddington, S.)

    Braithwaite, Sir Albert (Harrow, W.)

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

    Alport, C. J. M.

    Braithwaite, Sir Gurney

    Crosthwaite-Eyre, Col. O. E.

    Amery, Julian (Preston, N.)

    Brooke, Henry (Hampstead)

    Crowder, Sir John (Finchley)

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Brooman-White, R. C.

    Crowder, Petre (Ruislip—Northwood)

    Anstruther-Gray, Major W. J.

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Darling, Sir William (Edinburgh, S.)

    Arbuthnot, John

    Bullard, D. G.

    Davidson, Viscountess

    Baldwin, A. E.

    Bullus, Wing Commander E. E.

    Deedes, W. F.

    Banks, Col. C.

    Burden, F. F. A.

    Digby, S. Wingfield

    Barber, Anthony

    Butcher, Sir Herbert

    Dodds-parker, A. D.

    Barlow, Sir John

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

    Donaldson, Cmdr. C. E. McA

    Baxter, Sir Beverley

    Campbell, Sir David

    Donner, Sir P. W.

    Beach, Maj. Hicks

    Carr, Robert

    Doughty, C. J. A.

    Bell, Philip (Bolton, E.)

    Cary, Sir Robert

    Douglas-Hamilton, Lord Malcolm

    Bell, Ronald (Bucks, S.)

    Channon, H.

    Drayson, G. B.

    Bennett, Dr. Reginald (Gosport)

    Clarke, Col. Ralph (East Grinstead)

    Drewe, Sir C.

    Birch, Nigel

    Clarke, Brig. Terence (Portsmouth, W.)

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Bishop, F. P.

    Cole, Norman

    Duncan, Capt. J. A. L.

    Black, C. W.

    Colegate, W. A.

    Duthie, W. S.

    Boyd-Carpenter, Rt. Hon. J. A.

    Conant, Maj. Sir Roger

    Eden, Rt. Hon. A.

    Boyle, Sir Edward

    Cooper-Key, E. M.

    Eden, J. B. (Bournemouth. West)

    Finlay, Graeme

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Robertson Sir David

    Fisher, Nigel

    Lockwood, Lt.-Col. J. C.

    Robinson, Sir Roland (Blackpool, S.)

    Fleetwood-Hesketh, R. F

    Longden, Gilbert

    Rodgers, John (Sevenoaks)

    Fletcher-Cooke, C.

    Low, A. R. W.

    Roper, Sir Harold

    Ford, Mrs. Patricia

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Ropner, Col. Sir Leonard

    Fort, R.

    Lucas, P. B. (Brentford)

    Russell, R. S.

    Foster, John

    Lucas-Tooth, Sir Hugh

    Ryder, Capt. R. E. D.

    Fraser, Hon. Hugh (Stone)

    McCorquodale, Rt. Hon. M. S

    Savory, Prof. Sir Douglas

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Macdonald, Sir Peter

    Schofield, Lt.-Col. W.

    Galbraith, Rt. Hon. T. D. (Pollok)

    Mackeson, Brig. Sir Harry

    Scott, R. Donald

    Galbraith, T. G. D. (Hillhead)

    Mackie, J. H. (Galloway)

    Scott-Miller, Cmdr. R.

    George, Rt. Hon. Maj. G. Lloyd

    Maclay, Rt. Hon. John

    Shepherd, William

    Glover, D.

    Maclean, Fitzroy

    Simon, J. E. S. (Middlesbrough, W.)

    Godber, J. B.

    Macleod, Rt. Hon. Iain (Enfield, W.)

    Smithers, Peter (Winchester)

    Gomme-Duncan, Col. A

    Macmillan, Rt. Hon. Harold (Bromley)

    Smithers, Sir Waldron (Orpington)

    Gough, C. F. H.

    MacPherson, Malcolm (Stirling)

    Snadden, W. McN.

    Gower, H. R.

    Macpherson, Niall (Dumfries)

    Spearman, A. C. M

    Grimston, Hon. John (St. Albans)

    Maitland, Patrick (Lanark)

    Speir, R. M.

    Grimston, Sir Robert (Westbury)

    Manningham-Buller, Rt. Hn. Sir Reginald

    Spens, Rt. Hon. Sir P. (Kensington, S.)

    Hall, John (Wycombe)

    Markham, Major Sir Frank

    Stanley, Capt. Hon Richard

    Hare, Hon. J. H.

    Marlowe, A. A. H.

    Stevens, Geoffrey

    Harris, Frederic (Croydon. N.)

    Marples, A. E.

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

    Harrison, Col. J. H. (Eye)

    Marshall, Douglas (Bodmin)

    Stewart, Henderson (Fife, E.)

    Harvey, Ian (Harrow, E.)

    Maude, Angus

    Stoddart-Scott, Col. M

    Harvie-Watt, Sir George

    Maudling, R.

    Storey, S.

    Hay, John

    Maydon, Lt.-Comdr. S L C

    Strauss, Henry (Norwich, S.)

    Head, Rt. Hon. A. H.

    Medlicott, Brig. F.

    Stuart, Rt. Hon. James (Moray)

    Heald, Rt. Hon. Sir Lionel

    Mellor, Sir John

    Summers, G. S.

    Heath, Edward

    Molson, A. H. E.

    Sutcliffe, Sir Harold

    Higgs, J. M. C.

    Moore, Sir Thomas

    Taylor, William (Bradford, N.)

    Hill, Dr. Charles (Luton)

    Morrison, John (Salisbury)

    Teeling, W.

    Hill, Mrs. E. (Wythenshawe)

    Nabarro, G. D. N.

    Thomas, Rt. Hon. J. P. L. (Hereford)

    Hinchingbrooke, Viscount

    Neave, Airey

    Thomas, Leslie (Canterbury)

    Hirst, Geoffrey

    Nicholls, Harmar

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

    Holland-Martin, C. J.

    Nicolson, Nigel (Bournemouth, E.)

    Thornton-Kemsley, Col. C. N.

    Hopkinson, Rt. Hon. Henry

    Nield, Basil (Chester)

    Tilney, John

    Hornsby-Smith, Miss M. P

    Noble, Comdr. A. H. P.

    Touche, Sir Gordon

    Horobin, I. M.

    Nugent, G. R. H.

    Turner, H. F. L.

    Horsbrugh, Rt. Hon. Florence

    Oakshott, H. D.

    Turton, R. H.

    Howard, Gerald (Cambridgeshire)

    Odey, G. W.

    Tweedsmuir, Lady

    Howard, Hon. Greville (St. Ives)

    O'Neill, Hon Phelim (Co. Antrim, N.)

    Vane, W. M. F.

    Hudson, Sir Austin (Lewisham N)

    Orr, Capt. L. P. S.

    Vaughan-Morgan, J. K.

    Hulbert, Wing Cdr. N. J.

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

    Vosper, D. F.

    Hurd, A. R.

    Orr-Ewing, Sir Ian (Weston-super-Mare)

    Wakefield, Edward (Derbyshire, W.)

    Hutchison, Sir Ian Clark (E'b'rgh. W.)

    Page, R. G.

    Wakefield, Sir Wavell (St. Marylebone)

    Hyde, Lt.-Col. H. M.

    Peake, Rt Hon. O.

    Walker-Smith, D. C.

    Hylton-Foster. H. B. H

    Peto, Brig. C. H. M

    Wall, Major Patrick

    Iremongor, T. L.

    Peyton, J. W. W.

    Ward, Hon. George (Worcester)

    Jenkins, Robert (Dulwich)

    Pickthorn, K. W. M.

    Ward, Miss I. (Tynemouth)

    Johnson, Eric (Blackley)

    Pilkington, Capt. R. A

    Waterhouse, Capt. Rt. Hon. C.

    Johnson, Howard (Kemptown)

    Pitman, I. J.

    Watkinson, H. A.

    Jones, A. (Hall Green)

    Pitt, Miss E. M.

    Webbe, Sir H. (London & Westminster)

    Joynson-Hicks. Hon. L. W

    Powell, J. Enoch

    Wellwood, W.

    Kaberry, D.

    Price, Henry (Lewisham, W.)

    Williams, Gerald (Tonbridge)

    Kerby, Capt. H. B.

    Prior-Palmer, Brig. O. L

    Williams, Sir Herbert (Croydon, E.)

    Kerr, H. W.

    Raikes, Sir Victor

    Williams, Paul (Sunderland, S.)

    Lampton, Viscount

    Ramsden, J. E.

    Williams, R. Dudley (Exeter)

    Lancaster, Col. C. G

    Rayner, Brig. R.

    Wills, G.

    Langford-Holl, J. A

    Redmayne, M.

    Wilson, Geoffrey (Truro)

    Leather, E. H. C.

    Rees-Davies, W. R

    Wood, Hon. R.

    Legge-Bourke Maj. E. A. H.

    Remnant, Hon. p.

    Lennox-Boyd, Rt Hon. A. T.

    Ronton, D. L. M.

    TELLERS FOR THE AYES:

    Lindsay, Martin

    Ridsdale J. E.

    Mr. Studholme and Mr. Legh.

    Linstead, Sir H. N.

    Roberts Peter (Heeley)

    NOES

    Acland, Sir Richard

    Boardman, H.

    Cove, W. G.

    Adams, Richard

    Bottomley, Rt. Hon. A. G.

    Craddock, George (Bradford, S.)

    Allen, Arthur (Bosworth)

    Bowden, H. W.

    Crosland, C. A. R.

    Allen, Scholefield (Crewe)

    Bowles, F. G.

    Crossman, R. H. S.

    Anderson, Frank (Whitehaven)

    Braddock, Mrs. Elizabeth

    Daines, P.

    Attlee, Rt. Hon. C. R.

    Brockway, A. F.

    Dalton, Rt. Hon. H.

    Awbery, S. S.

    Brook, Dryden (Halifax)

    Darling, George (Hillsborough)

    Bacon, Miss Alice

    Broughton, Dr. A. D. D.

    Davies, Rt. Hn. Clement (Montgomery)

    Beattie, J.

    Brown, Rt. Hon. George (Belper)

    Davies, Ernest (Enfield, E.)

    Bellenger, Rt. Hon. F. J

    Brown, Thomas (Ince)

    Davies, Harold (Leek)

    Bence, C. R.

    Burke, W. A.

    Davies, Stephen (Merthyr)

    Benn, Hon. Wedgwood

    Burton, Miss F. E.

    de Freitas, Geoffrey

    Benson, G.

    Butler, Herbert (Hackney, S.)

    Deer, G.

    Bing, G. H. C.

    Castle, Mrs. B. A.

    Delargy, H. J.

    Blackburn, F.

    Champion, A. J.

    Dodds, N. N.

    Blenkinsop, A.

    Clunie, J.

    Dugdale, Rt. Hon John (W Bromwich)

    Blyton, W. R.

    Collick, P. H

    Ede, Rt. Hon. J. C.

    2450

    2451

    Edwards, Rt. Hon. John (Brighouse)

    King, Dr. H. M

    Roberts Goronwy (Caernarvon)

    Edwards, W. J. (Stepney)

    Kinley, J.

    Robinson Kenneth (St. Pancras, N.)

    Evans, Albert (Islington, S.W.)

    Lawson, G. M.

    Rogers, George (Kensington, N.)

    Evans, Edward (Lowestoft)

    Lee, Frederick (Newton)

    Ross, William

    Evans, Stanley (Wednesbury)

    Lee, Miss Jennie (Cannock)

    Royle, C.

    Fienburgh, W.

    Lever, Harold (Cheetham)

    Shackleton, E. A. A.

    Fletcher, Eric (Islington, E.)

    Lever, Leslie (Ardwick)

    Short, E. W.

    Follick, M.

    Lindgren, G. S.

    Shurmer, P. L. E.

    Forman, J. C.

    Lipton, Lt.-Col. M.

    Silverman, Julius (Erdington)

    Fraser, Thomas (Hamilton)

    MacColl, J. E.

    Simmons, C. J. (Brierley Hill)

    Freeman, John (Watford)

    McInnes, J.

    Skeffington, A. M.

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

    McLeavy, F.

    Slater, Mrs. H. (Stoke-on-Trent)

    Gibson, C. W.

    Mallalieu, E. L. (Brigg)

    Slater, J. (Durham, Sedgefield)

    Glanville, James

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

    Smith, Ellis (Stoke, S.)

    Gordon Walker, Rt. Hon. P. C.

    Mann, Mrs. Jean

    Smith, Norman (Nottingham, S.)

    Greenwood, Anthony

    Manuel, A. C.

    Sorensen, R. W.

    Grey, C. F.

    Marquand, Rt. Hon. H. A.

    Soskice, Rt. Hon. Sir Frank

    Griffiths, Rt. Hon. James (Llanelly)

    Mason, Roy

    Sparks, J. A.

    Grimond, J.

    Mayhew, C. P.

    Steele, T.

    Hale, Leslie

    Mellish, R. J.

    Stokes, Rt. Hon. R. R.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Messer, Sir F.

    Strauss, Rt. Hon. George (Vauxhall)

    Hall, John T. (Gateshead, W.)

    Mitchison, G. R

    Sylvester, G. O.

    Hamilton, W. W.

    Monslow, W.

    Taylor, Bernard (Mansfield)

    Hannan, W.

    Moody, A. S.

    Taylor, John (West Lothian)

    Hargreaves, A.

    Morgan, Dr. H. B. W.

    Taylor, Rt. Hon. Robert (Morpeth)

    Hayman, F. H.

    Morley, R.

    Thomas, George (Cardiff)

    Healey, Denis (Leeds, S.E.)

    Morris, Percy (Swansea, W.)

    Thomas, Ivor Owen (Wrekin)

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

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

    Thomson, George (Dundee, E.)

    Herbison, Miss M.

    Moyle, A.

    Thornton, E.

    Hewitson, Capt. M.

    Mulley, F. W.

    Tomney, F.

    Hobson, C. R.

    Noel-Baker, Rt. Hon. P. J

    Ungoed-Thomas, Sir Lynn

    Holman, P.

    Oldfield, W. H.

    Wade, D. W.

    Holt, A. F.

    Oliver, G. H.

    Wallace, H. W.

    Houghton, Douglas

    Orbach, M.

    Warbey, W. N.

    Hoy, J. H.

    Oswald, T.

    Weitzman, D.

    Hubbard, T F.

    Padley, W. E.

    Wells, Percy (Faversham)

    Hudson, James (Ealing, N.)

    Paget, R. T.

    Wells, William (Walsall)

    Hughes, Emrys (S. Ayrshire)

    Palmer, A. M. F.

    Wheeldon, W. E.

    Hughes, Hector (Aberdeen, N.)

    Pannell, Charles

    White, Mrs. Eirene (E. Flint)

    Hynd, H. (Accrington)

    Pargiter, G. A.

    Whiteley, Rt. Hon. W.

    Hynd, J. B. (Attercliffe)

    Parker, J.

    Wigg, George

    Irvine, A. J. (Edge Hill)

    Parkin, B. T

    Wilkins, W. A.

    Irving, W.J. (Wood Green)

    Paten, J.

    Willey, F. T.

    Isaacs, Rt. Hon. G. A.

    Peart, T. F.

    Williams, Rt. Hon. Thomas (Don V'll'y)

    Janner, B.

    Plummer, Sir Leslie

    Williams, W. R. (Droylsden)

    Jeger, George (Goole)

    Popplewell, E.

    Willis, E. G.

    Jeger, Mrs. Lena

    Porter, G.

    Wilson, Rt. Hon. Harold (Huyton)

    Jenkins, R. H. (Stechford)

    Price, Philips (Gloucestershire, W.)

    Winterbottom, Ian (Nottingham, C.)

    Johnson, James (Rugby)

    Proctor, W. T.

    Winterbottom, Richard (Brightside)

    Jones, David (Hartlepool)

    Pryde, D. J.

    Woodburn, Rt. Hon. A.

    Jones, Frederick Elwyn (West Ham, S.)

    Pursey, Cmdr. H.

    Wyatt, W. L.

    Jones, Jack (Rotherham)

    Reid, Thomas (Swindon)

    Yates, V. F.

    Keenan, W.

    Reid, William (Camlachie)

    Younger, Rt. Hon. K.

    Kenyon, C.

    Rhodes, H.

    Key, Rt. Hon. C W.

    Richards, R.

    TELLERS FOR THE NOES:

    Mr. Holmes and Mr. J. T. Price.

    Question put, and agreed to.

  Fifth Schedule.—(AMENDMENT CONSEQUENTIAL ON ABOLITION OF PERMANENT ANNUAL CHARGE FOR NATIONAL DEBT.)
  Mr. Boyd-Carpenter: I beg to move, in page 50, line 25, after "Debt," to insert:
  "(including any such enactment contained in an Act of the same Session as this Act, passed at the same time as or after this Act)."
  Clause 32, to which this Schedule is attached, abolishes the permanent annual charge for the National Debt, and the Schedule makes certain consequential
  2452
  alterations in other Statutes. The purpose of this Amendment is to secure that these consequential changes are also effected in Bills at present before Parliament.
  Mr. Gaitskell: The Government will no doubt be glad to hear that, in view of the lucid and comprehensive explanation given by the Financial Secretary, we on this side of the House do not propose to oppose the Amendment.
  Amendment agreed to.
  Bill to be read the Third time Tomorrow, and to be printed [Bill No. 141].

HOUSING REPAIRS AND RENTS BILL
Lords Amendments considered.

Clause 2.—(POWER OF LOCAL AUTHORITIES TO RETAIN FOR TEMPORARY ACCOMMODATION CERTAIN HOUSES IN CLEARANCE AREAS.)
Lords Amendment: In page 3, line 34. leave out "as aforesaid" and insert:
"of providing such accommodation as is mentioned in subsection (1) of this section, or in the case of which it appears to them desirable that it should be retained for either of the purposes mentioned in paragraphs (a) and (b) of the last foregoing subsection."
Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): This Amendment raises a question of Privilege. If the House agrees, I shall cause a special entry to be made in the Journal.
8.43 p.m.
The Minister of Housing and Local Government (Mr. Harold Macmillan): I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment was made in another place on the representations of the local authority associations. Subsection (4) empowers a local authority to purchase houses for patching in a clearance area notwithstanding the fact that clearance orders have already been made in respect of them before the commencement of the Act. These are mainly pre-war clearance orders which, owing to the housing shortage, were not enforced.
The powers under this subsection will extend to houses which were not intended to be patched, but which were required for the support of patched houses or in connection with other purposes, such as the storage of tools and equipment. Houses required by local authorities for this purpose may already have been made the subject of clearance orders as were other houses, and, therefore, it seems reasonable that local authorities should have the right to purchase them in the same way as the others.
Mr. A. Blenkinsop: I just want to say that this is not a very important Amendment, and that we regard it as consequential to some of the discussions which we had earlier.

Clause 6.—(LICENCLS FOR TEMPORARY OCCUPATION OF HOUSES SUBJECT TO EXISTING DEMOLITION OR CLEARANCE ORDERS.)
Lords Amendment: In page 6, line 31, after "rent" insert "repairs."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment, which was brought to our attention by the Opposition in the other place, seeks to make explicit what we certainly intended to be implicit in the Clause already, and, therefore, we very much hope that the House on all sides will agree with the other place by accepting the Amendment.
Mr. Geoffrey de Freitas: My hon. Friends and I agree with this Amendment. The noble Lord, Lord Silkin, who moved it in another place, was vigilant in the passage of the Bill through the other place and my right hon. and hon. Friends and I would like to thank him. After all, this is one of his Amendments.
Lords Amendment: In line 10 at end, insert:

New Clause A.—(FURTHER PROVISIONS ABOUT OVERCROWDING.)
A.—(1) If it appears to a local authority, in the case of a house within their district, or of part of such a house, which is let in lodgings or occupied by members of more than one family, that excessive numbers of persons are being accommodated on the premises having regard to the rooms available, the authority may serve on the occupier of the premises or on any person having the control and management thereof, or on both, a notice—

(a) stating, in relation to any room on the premises, what is in the authority's opinion the maximum number of persons by whom it is suitable to be occupied as sleeping accommodation at any one time, or, as the case may be, that it is in their opinion unsuitable to be occupied as aforesaid; and

(b) informing him of the effect of subsection (3) of this section.

(2) For the purposes of paragraph (a) of the foregoing subsection a notice may, in relation to any room, prescribe special maxima applicable in any case where some or all of the persons occupying the room are under such age as may be specified in the notice.
(3) Any person who has been served with a notice under this section shall be guilty of an

2455
offence it, after the notice has become operative,—

(a) he causes or knowingly permits any room to which the notice relates to be occupied as sleeping accommodation otherwise than in accordance with the notice; or

(b) he causes or knowingly permits to be accommodated on the premises such a number of persons that it is not possible, without contravention a the foregoing paragraph or the occupation as sleeping accommodation of some part of the premises for which a maximum is not specified under paragraph (a) of subsection (1) of this section, to avoid persons of opposite sexes and over the age of twelve years (other than persons living together as husband and wife) occupying sleeping accommodation in the same room

(4) Any person committing an offence under this section shall be liable on summary conviction to a fine not exceeding five pounds and, where the offence of which he was convicted continues after conviction, to a further fine not exceeding two pounds for every day for which the offence so continues.
(5) Section fifteen of the principal Act (which provides for an appeal against certain notices and orders under Part II of that Act and determines the date on which a notice or order is to become operative) shall apply in relation to a notice under this section as it applies in relation to a notice under the said Part II requiring the execution of works and in section one hundred and fifty-seven of that Act (which confers powers of entry for purposes connected with housing) the reference in paragraph (d) to Part IV of the Act shall include a reference to this section.
(6) Where a local authority has served a notice under this section in respect of any premises, they may at any time withdraw the notice, without prejudice to anything done in pursuance thereof or to the service of another notice, or, if there is any material change of circumstances, they may substitute for the notice a further notice under this section; and, where a notice is withdrawn, subsection (3) of this section shall cease to apply in relation to the premises, without prejudice to its further application if a subsequent notice is served in respect of the same premises.
(7) The powers exercisable by a local authority under this section shall be without prejudice to those conferred by the last foregoing section, and nothing in this section shall be taken as prejudicing the provisions of Part IV of the principal Act (which relates to oven crowding in separate dwelling houses).
8.45 p.m.
Mr. Deputy-Speaker: This Amendment raises a question of Privilege. If the House agrees, I shall cause a Special Entry to be made in the Journal.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This new Clause is designed to fill a gap which might otherwise exist in the
2456
power of local authorities. It does not revive the byelaw-making power but empowers the local authorities to serve notices on occupiers as to the way in which sleeping accommodation in lodging houses and other places may be used, and makes the breach of their requirements an offence. It removes a weakness which would otherwise exist in the full powers of the local authorities.
Mr. Blenkinsop: This is a rather more important matter. We had quite a debate on this question in Committee. It was pointed out then that, with the fairly sweeping abolition of the byelaw-making powers of local authorities, there was a good deal of anxiety not only about lodging houses but about other matters. In so far as this new Clause meets a very small part of the problem we raised at that time, we are, of course, very grateful.
Some little anxiety was mentioned by Lord Silkin in another place, and also by ourselves in Committee, as to whether local authorities would fully recognise their responsibility to provide other accommodation for those who might be displaced in carrying out the provisions of this particular Amendment and other provisions in the Bill. While we have had a certain easement of our anxiety by references made in another place, and by the Minister pointing out that it is most highly unlikely that the local authority would carry out the procedure unless it was quite satisfied that it had other accommodation available, it is worth asking the Minister whether he will draw the attention of local authorities to this point.
Mr. C. W. Gibson: There is one point which seems to need clarification. The Minister said that under this Bill the byelaws built up by local authorities to deal with overcrowding have gone. As I understand this Amendment, it provides that, where a local authority is satisfied that in its area there are over-occupied houses, it can give a notice to the owners that such houses are over-occupied and order them to reduce the occupation. To me it seems that thereby the person turned out loses completely the protection of the Rent Restriction Acts. Perhaps the Minister can tell the House whether that is correct.
A further point is that I do not see how the housing authorities are to

2457
administer this without themselves building up some rules and regulations as to what constitutes overcrowding. Is it to be the old legal definition of more than two persons to a room? If so, it will not work, in view of the quite proper reference in the Amendment to the separation of the sexes after they reach a certain age. If this arrangement is to work effectively, all local authorities will have to build up a working system incorporating a definition of overcrowding. I very much doubt whether many local authorities will operate the scheme.
What happens in a case where the children of the family have grown up and married but, owing to the housing difficulty, are compelled to live at home, as many thousands still are, and, legally, overcrowd their accommodation? Are the parents subject to an order from the local authority forcing them to reduce the overcrowding and turn out their own sons and daughters without any rent restriction protection or guarantee that alternative accommodation will be provided?
Those are points to which the Minister should pay some attention and endeavour to meet in some way. Apart from those considerations, the Amendment is a good one, because it attempts to deal with a problem which local authority byelaws used to attempt to deal with, if not always too successfully. Subject to receiving a reply upon the points which I have raised, I see no objection to the Amendment.
Mr. J. A. Sparks: I want to reinforce the argument made by my hon. Friend the Member for Clapham (Mr. Gibson). It seems to me that, on the one hand, the right hon. Gentleman has swept away the whole system of byelaws which local authorities have established over the years to deal with precisely this problem and, on the other, has substituted an alternative which, though good as far as it goes, does not go far enough. First, as my hon. Friend has said, local authorities cannot deal properly with each individual case unless they can have reference to some sort of code. The proposed Amendment seems to permit local authorities to do certain things, but they will have some difficulty in deciding precisely what direction they should give in regard to a number of cases which may be very similar to one another.
2458
It seems to me that, with the passing of time, local authorities will inevitably have to reinstitute a code—whether we call it a system of byelaws or something else—if they are to exercise their powers fairly and impartially. If they are permitted to do so under the Amendment, the right hon. Gentleman has gone very far towards meeting our case. If, on the other hand, the Amendment merely permits local authorities to deal with each case on its own merits, there will be a great deal of confusion. It is not incumbent upon a local authority to deal with case A in the same way as it has dealt with case B, in spite of the fact that the conditions in both cases are roughly equal.
So I should like the right hon. Gentleman to say a word on this aspect of this problem—whether he expects local authorities, because of the powers he gives them, to evolve a code that they will apply impartially in all these cases that will come before them. Otherwise, I can see that this provision will lead to a good deal of confusion.
Mr. H. Macmillan: By leave of the House, I would answer the important points that have been raised. As regards rent restriction, this Clause deals only with lodgers, and lodgers are not covered by rent restriction provisions. So that question does not arise. As regards the question the hon. Member for Clapham (Mr. Gibson) asked, which was raised by Lord Silkin in another place, as to whether it would be wise to make the provision that alternative accommodation must be provided by the local authorities.
I think it would be wiser to leave it as we now leave it in the case of demolition orders. There is no legal obligation on a local authority, when it makes a demolition order, to provide alternative accommodation, though I think that local authorities do provide alternative accommodation when they find themselves able to do so. I think we ought to leave the matter of lodging houses in the same way, knowing that it will be dealt with in the same manner by the local authorities.
As to the question the hon. Member for Acton (Mr. Sparks) raised, I do not know whether the local authorities will develop a code, but no doubt they will develop a practice which itself will develop into a code. We have a great

2459
variety of situations in our cities, and in this matter of alternative accommodation—an important one, the most important of all—the practice will vary greatly, with the opportunities open to local authorities to do what they ought to do. We have given them powers, and by so doing have met a great many of the requests made to us before, and we must let practice develop according to what the situation may be.

Clause 15.—(AMENDMENTS OF HOUSING ACT, 1949.)
Lords Amendment: In page 13, line 42, leave out "ten" and insert "fifteen."—[Special Entry.]
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Those who followed our debates will remember that we had considerable difficulty about what was the proper expectation of life of a house for which an improvement grant was to be made. I was so anxious, as I am and as all the Government are, to get on with this rather cheap way, compared with the cost of new building, of getting proper accommodation, that I was anxious to reduce it from 30 years, which seemed to us an unduly high limit, and I argued for 10. Hon. and right hon. Gentlemen opposite argued for 20. By one of those arrangements which seem particularly suitable in a revising Chamber, it has been agreed that it should be 15. Although I know that that does not meet all that hon. and right hon. Gentlemen opposite asked for, I hope that they will feel that we have gone some way to meeting them, and that we may leave it to the wisdom of the local authorities how they operate the improvement grant system with this little extra latitude allowed to them.
Mr. de Freitas: As the right hon. Gentleman has pointed out, we wanted 20 years. We moved an Amendment to that effect in Committee. It was not carried. Another place suggests 15 years. We preferred 20 to 10 and we prefer 15 to 10, although we still prefer 20.
Lords Amendment: In page 14, line 4, leave out "a period equal to the period" and insert:
2460
"whichever is the shorter of the following two periods, that is to say—

(a) thirty years; or

(b) a period equal to that.—[Special Entry.]

Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is little more than a drafting Amendment. It is to put the position of a leaseholder in correspondence with that of the improvement grant system.

Clause 23.—(RENT NOT TO BE INCREASED ABOVE TWICE GROSS VALUE.)
Lords Amendment: In page 20, line 16, at end, insert:
(4) Subsection (2) of section seven of the Act of 1938 (which relates to the ascertainment of the amount payable by the landlord for rates) shall apply for the purposes of this section as it applies for the purpose of computing the increase of rent permissible under paragraph (b) of subsection (1) of section two of the Act of 1920.
9.0 p.m.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The Amendment is designed to bring the provisions as to the amount to be deducted for rates for the purpose of calculating or ascertaining the working of the "stopper" into line with the provisions of the Rent Acts applied by this subsection. Those provisions enable a landlord, in increasing rent on account of increased rates payable by him, to include in the increase any amount of discount or allowance made to him by the local authority for collecting them. The effect of applying this provision is that in making the calculations as to what point the stopper operates, that is the amount deducted for rates, any allowance made to the landlord by the rating authority will be treated as part of the amount payable by the tenant.
Mr. Blenkinsop: This appears to make the existing position even more complex than before. We cannot see any major harm in it, however, and therefore we do not oppose it.

Clause 24.—(NOTICE AND DECLARATIONS PRELIMINARY TO RECOVERY OF REPAIRS INCREASE.)
Lords Amendment: In page 20, line 26, leave out "containing," and insert "accompanied by."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is the first of a series of Amendments—I think there are 14 altogether—which are really little more than drafting Amendments. Clause 24 (1) requires the notice of repairs increase to contain the declarations which are provided for. The purpose of the Amendment is to enable the forms of declaration, which will vary with circumstances, to be prescribed separately and to accompany rather than be contained in the notice of the increase; which will make it much easier to get the forms printed, distributed and made more readily available.
Mr. Blenkinsop: I wish to take this opportunity of asking for some assurance of the Minister, which I am sure he is ready to give, that it is his intention to ensure that the tenant shall get the Fullest possible information as to the procedure which he can follow, and as to what the landlord has actually done in order to qualify for the increase which he is claiming.
Mr. Macmillan: If I may reply, by leave of the House, I can assure the hon. Member that, although we are awaiting for the Royal Assent before we can act, we have been working at preparing all the necessary forms and explanatory pamphlets in a simple way as well as the legal forms in order to make the matter as widely understood as possible.
Lords Amendment: In page 20, line 27, after "declaration," insert "in the prescribed form."
Mr. H. Macmillan: I beg to move. "That this House doth agree with the Lords in the said Amendment."
This Amendment and the ones immediately following are consequential.
Further Lords Amendments agreed to: In page 20, line 30, after "declaration," insert "in the prescribed form."
Leave out line 36, and insert:
"(3) The forms prescribed for the purposes of this section shall be such as, taken together, to."
In line 43, after "increase," insert:
"or a declaration accompanying such a notice."
In line 44, after "notice," insert "or declaration."
In line 46, after "notice," insert "or declaration."
In page 21, line 3, after "notice." insert "or declaration."
In line 4, leave out "of increase," and insert "or declaration."

Clause 25.—(DETERMINATION WHETHER CONDITIONS FULFILLED TO JUSTIFY INCREASE OF RENT.)
Lords Amendment: In page 21, line 25, leave out "annul the certificate and thereupon" and insert:
"order that the certificate shall cease to be in force.
(3) Where an order is made under the last foregoing subsection as respects a certificate"
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment and the next one are linked together. They were made to meet a point which was raised by Lord Silkin in another place. It was suggested that landlords might unduly delay the institution of proceedings for the recovery of arrears of repairs increase held by a tenant on the strength of a certificate of disrepair which the landlord considered to have been incorrectly granted; the validity of which, therefore, he proposes to test by proceeding against the tenant for recovery. I should have thought that if there was an undue delay that might act harshly upon the tenant, and this Amendment, suggested by the noble Lord and accepted by the Government, and the next one, give power to the court, if they are satisfied that the landlord has been dilatory in instituting proceedings, to make the proper consequential reduction in the arrears to be collected.
Mr. Blenkinsop: While we are prepared to accept this Amendment, we have always felt, in Committee and in another place, that it was quite monstrous, after a local authority had issued a certificate of disrepair on which the tenant could feel that he could rely, for the landlord to be able to go to the

2463
courts and get it set aside, so that, in fact, the tenant would have no security by getting a certificate.
Although this Amendment to a very slight extent mitigates the hardship in the sense that it relieves the tenant from having to pay back a great mass of arrears due to the dilatory action of the landlord, it in no way deals with the major point which we raised in Committee, and about which we still feel very deeply, and which more and more local authorities are coming to realise means that none of their certificates which they may or may not issue has any certainty of action at all. Therefore, while we are willing to accept the Amendment, we realise that it in no way meets the points which we have raised.
Mr. James MacColl: These proceedings draw one's attention to the fact that there is a happy land far, far away where there is no Guillotine. This matter, which is the subject of this Amendment, was never discussed in Committee or on Report because it was not reached owing to the falling of the Guillotine. It is a very important question and one which, I agree with my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), goes to the root of the whole of this procedure, and one which will create a shocking feeling of uncertainty not only among tenants but among local authorities and officials who have no means of telling whether or not their certificates will be regarded as valid.
There is the additional, and what seems to me monstrous, corollary, that the proceedings under which these certificates are to be determined take the form of proceedings against the tenant for rent, and presumably in any such proceedings the tenant will be the defendant, who, if he loses the action in the county court, will be liable to pay the costs of the action. We have the incredible position of a public authority sending its official, who has nothing to do with the tenant or landlord, to arbitrate on this question, to interpret the law and to make a decision quite impartially on the matter. If he happens to be a bad sanitary inspector, or happens to meet a county court judge who takes a different view about the vague definition of repairs in the Bill, the wretched tenant is to be
2464
penalised and may have to pay the costs of the proceedings. It is difficult to imagine anything more outrageous on the tenant.
One point rather worries me. The next Amendment, in line 26, says
"that the court may, if it appears just so to do by reason of undue delay by the landlord in bringing the proceedings…"
Does that include the landlord and his predecessor in title?
What is likely to happen will be something like this. The certificate of disrepair is produced to the landlord and he accepts it. He may think that it is inherently just or he may not want to bother about it further. He accepts it, and on the basis of that certificate the rent increase is deducted. At some subsequent date the landlord sells the property or assigns it to another landlord, who is rather more expert in the devious routes of getting round the Rent Restrictions Acts.
That new landlord may say, "Ah, but we can shake this certificate. It is well known that Judge So-and-so cannot stand the sight of sanitary inspector So-and-so. Let us have a good run for our money." This landlord takes the matter into the county court and gets the certificate upset. He would not be in delay—he would have moved on his nefarious business as quickly as he could—but his predecessor would have delayed. Will this delay by the previous landlord be sufficient to protect the tenant, or will the county court be forced to order that the certificate ceased to be in force back to the date when the original application was made to the local authority?
If that happens, there will be a wonderful traffic in buying up houses with certificates of repair in order to get them withdrawn and to get the arrears collected back. Therefore, the very difficulty which the Amendment is designed to meet may still remain. I wish that the right hon. Gentleman would address his mind to this problem.
Mr. Gibson: The Amendment is a considerable improvement from the point of view of tenants, who will be able, as I understand the Clause, if they fail in the county court, to have the certificate dated from some other date than that on which the landlord first served the claim on the tenant. The court will be able to fix it from any date

2465
it likes after the date of the first serving of the notice. That is all to the good.
This is what bothers me. There will be a large number of requests for certificates of disrepair all over the country. If my correspondence or the things one hears at the many meetings I have had to attend in connection with the Bill are any guide, there will be a spate of objections by tenants and claims on local authorities for certificates of disrepair. The landlords will be able to take all those tenants to the county court. That in itself would be frightening enough to most ordinary tenants in the back streets of our great cities.
This, surely, is another strong argument for introducing legal aid in county courts. It has always seemed to me that there has been quite unnecessary delay in implementing that part of our law. Unless we can get assistance under the Legal Aid and Advice Act for tenants in county courts—it can only be done by Government action—tenants whose certificates of disrepair are challenged will be in great difficulty, not only in having to meet the cost, but in many cases they will be frightened into ceasing to resist the claims of landlords who, under the Bill, would not strictly be entitled to the advance in rent for which they were claiming. I hope that the Government will take note of this point.
9.15 p.m.
Mr. G. Lindgren: The Amendment enables me again to call attention to the whole emphasis of the Bill from start to finish: the privilege for the landlord and the bias against the tenant.
May I deal with the question of the certificate granted when the tenant considers that the property is not in good repair? He can apply to a local authority for a certificate of disrepair. If the sanitary inspector refuses to grant it, that is an end to the matter; the tenant has no court of appeal, there is nowhere he can go to rectify what he may feel to be a wrong decision by the sanitary inspector.
On the other hand, if the tenant takes advantage of his right under the Bill to go to the sanitary inspector for a certificate of disrepair, and the certificate is granted, then immediately, the Minister, being a friend of the landlord, provides the landlord with an opportunity to upset
2466
the certificate of disrepair which the local authority has issued. The responsibility for issuing the certificate is that of a public authority, but when it is challenged by the landlord, the responsibility for bearing the cost of court action can fall upon the tenant.
Let no one imagine that county court procedure can be cheap. Property owners are trade unionists in their way; they belong to associations of property owners who brief solicitors and counsel, and the hierarchy within the legal profession means that there have to be corresponding layers of professional assistance on the other side. This means that any tenant who is challenged by a landlord may have to face an expenditure of £20. In giving that figure, I am being modest: I was about to say "conservative," but I should not like anybody to accuse me of that. These proceedings can easily cost the tenant £20.
I ask the Minister bluntly, what right has he to place a possible obligation on the tenant, where the landlord challenges a local authority's certificate, to meet a cost of £20? While the Amendment makes some concession in that the landlord who delays cannot get all the money hack, it is nevertheless monstrous, in my view, that no protection should be given to the tenant from one end of the Bill to the other.
Mr. Sparks: I want to reinforce what has been said by my hon. Friends. Will the right hon. Gentleman consider whether the county court is the place where this matter should be settled? There are other bodies which I should have thought would be competent to make a decision in such a case. It is not essentially a legal question. We have rent tribunals and courts in existence, and I should have thought that the Minister could consider whether it was possible in such cases as this, where the landlord challenges a certificate of disrepair, to take the matter to the rent tribunals. These tribunals are familiar with such problems.
If they were taken to the rent tribunal, the tenant would not be involved in the risk of having to pay costs in the event of the certificate being disallowed. I cannot see why the right hon. Gentleman wants to involve the county court in this matter at all, and I ask him to reconsider it and

2467
to see whether it is not possible for these cases to be referred to the rent tribunals.
Further Lords Amendment made: In page 21, line 26, at end insert:
Provided that the court may, if it appears just so to do by reason of undue delay by the landlord in bringing the proceedings, order that it shall be deemed to have been in force until such date as may be specified in the order.

Clause 27.—(PASSING ON OF REPAIRS INCREASE TO SUB-TENANT.)
Lords Amendment: In page 24, line 3, leave out, "and subsection (3)" and insert:
"Any form prescribed for the purposes of this subsection shall contain such information as appears to the Minister expedient for informing the sub-tenant of the effect of the notice; and subsection (4)"
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is consequential on the previous Amendment in the first part. The second part brings it into line with Clause 24 (4).

Clause 32.—(EXCLUSION FROM RENT ACTS OF LETTINGS BY LOCAL AUTHORITIES. DEVELOPMENT CORPORATIONS, AND HOUSING ASSOCIATIONS AND TRUSTS.)
Lords Amendment: In page 28 line 20, after "whole" insert:
"or substantially the whole."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is rather peculiar and it has a certain interest. It is designed to remove a doubt as to whether one housing trust to which Clause 33 refers, the Sutton Dwellings Trust would be prevented from being a housing trust as defined in the second part of subsection (9) by reason merely of the fact that its funds, which are required to be devoted to charitable purposes and are in fact devoted to the provision of housing accommodation for poor members of the working class, are in addition the funds are charged with the payment of a small amount annually for the maintenance of the grave of the founder of the Trust. Since this small sum has to be paid this
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trust might be held not to be within the terms of a housing trust. The point came to our notice and I feel that hon. Members would feel it right that we should correct the matter.
Mr. Gibson: As one of the trustees. I merely wish to say that we believe that this slight alteration in the Clause will cover the caring for the grave without putting us outside the terms of the Bill. We are grateful to the Minister for putting the matter right.
Further Lords Amendment agreed to: In line 23, leave out "them" and insert:
"the whole or substantially the whole thereof."
Lords Amendment: In page 35, line 35, at end, insert:

New Clause B.—(DATE FOR PERMITTED INCREASES FOR INCREASES IN RATES.)
B.—(1) Subsection (2) of section three of the Act of 1920 (which relates to the time as from which permitted increases of rent are recoverable from a tenant) shall have effect, in relation to increases permitted by paragraph (b) of subsection (1) of section two of the Act of 1920 (which provides for increases of rent in respect of increases in the amounts payable by the landlord for rates), subject to the following provisions:—

(a) any such permitted increase shall be recoverable from, and in respect of the period beginning with, the day specified in the next following subsection;

(b) where at the time when the notice of increase is served the tenant is a statutory tenant, the amount of any such permitted increase may include an amount in respect of a period immediately preceding that mentioned in the last foregoing paragraph and beginning not earlier than six weeks before the date of service of the notice of increase nor earlier than the beginning of the statutory tenancy, and any amount so included shall be deemed to be rent due on the day specified in the next following subsection.

(2) The day referred to in the last foregoing subsection—

(a) where at the time of service of the notice of increase the tenant is a statutory tenant, is the next day after the service of the notice on which an instalment of rent is payable under the terms of the statutory tenancy.

(b) in any other case, is the day after the date on which by virtue of subsection (1) of section one of the Rent Restrictions (Notices of Increase) Act, 1923, the notice of increase operates to terminate the tenancy.

(3) Where under any tenancy the amount of any such permitted increase for rates as is mentioned in subsection (1) of this section is recoverable without a notice to terminate the tenancy being necessary in order to make

2469
the increase effective, the foregoing provisions of this section shall apply as they apply where at the time when the notice of increase is served the tenant is a statutory tenant, but with the substitution of references to the tenancy for references to the statutory tenancy.
(4) In this section the expression 'notice of increase' means the notice of intention to increase rent served in conformity with subsection (2) of section three of the Act of 1920.
(5) In accordance with the foregoing provisions of this section the said subsection (2) shall be amended as follows:—

(a) after the words 'no such increase shall' there shall be inserted the words 'save as provided by section (Date for permitted increases for increases in rates) of the Housing Repairs and Rents Act, 1954';

(b) the words 'or, where such increase is on account of an increase in rates, one clear week' shall cease to have effect.

Read a Second time.
Mr. de Freitas: I beg to move, as an Amendment to the Lords Amendment, in subsection (1), to leave out paragraph (b).
I hope that the eloquence of my hon. Friend the Member for Widnes (Mr. MacColl) will convince the Minister.
Mr. MacColl: I hope that it will be possible for me to explain our attitude to this new Clause which has been proposed in another place, and to give a general picture, without unduly trespassing outside the rules of order.
As I understand the position, this new Clause is designed ostensibly to meet the recommendation contained in the second Report of the Ridley Committee issued in 1945. It deals with the problem of making adjustments in controlled rents in order to meet increases in rates. Under the present legislation a landlord who receives a demand note for an increased rate may add to the weekly rent an increase of a comparable amount. The difficulty which has arisen is that the landlord may get caught in two ways.
In the first place, he has to give one clear week's notice before he raises the rent, and that may miss the next rent day, and therefore he may be a fortnight or so in arrears. The second problem with which the new Clause deals is that the demand note may arrive some time after the resolution has been passed by the council making the new rate. One gathers that there are people fortunate enough to live in the area of a local authority where this sort of thing happens. In most cases it arrives too quickly.
2470
One gathers that there are cases where it may arrive some weeks after the new financial year—or the six months, it may be—has commenced. Then, although the landlord may know, he cannot reimburse himself from the tenant because he has not had the demand note. I understand that those are the two points which the new Clause is designed to meet.
Our first objection is that this is no time and this is no Bill in which to introduce such a provision. In Committee upstairs we made many proposals for reforming the Rent Acts to meet injustices to the tenants. The most notable example was the problem of succession to a tenancy on the death of the tenant and the widow. There were other examples where we tried to deal with practical cases and to soften the impact of the Bill upon the tenant. In almost every case the Minister stonewalled by saying, I am not reforming the Rent Acts; "I am dealing with a very specialised and narrow point, namely, the increase of rents to meet repairs."
That was the basis upon which the right hon. Gentleman introduced the Bill. That was the basis on which he resisted Amendments proposed by the Opposition in Committee. It was on that understanding that the Bill went to another place. Therefore, I suggest that it really is intolerable that in a Bill dealing with that narrow point which has been carefully considered in this House, another place should take it upon itself to insert this proposal making a change in the ordinary rent restriction legislation.
The proposal has nothing to do with repairs at all. It is irrelevant to the main purpose of the Bill, which is to deal with the problem of the cost of repairs. This deals with a problem which has existed now for many years. This flaw, if it be a flaw, in the Rent Acts goes back to 1920, I suppose. I was not frightfully active before then and I cannot remember whether it was in the 1915 or the 1920 Act. I remember noticing the point when I read the 1920 Act. It may have been in the 1915 Act; I do not know. There it is. We got along quite well without too much difficulty.
Every argument which the Minister used to resist our proposals for amending the Bill in favour of the tenant could be used against this proposal which merely

2471
deals with an anomaly which has become accepted because it is something that has gone on for some time. Therefore, our first objection is that it is wrong to put in a proposal of this sort which will have the effect of increasing the rents of the tenants.
There is a second difficulty to which I should draw attention. The proposal is that a landlord shall be able to claim six weeks' arrears of increase. It is true that the amount of the average increase on a weekly rent will not be very much. It may be that the amount involved in six weeks will not be very large, but the whole point of the weekly tenancy is that the tenant knows where he is. He knows his obligations, and the first charge on the weekly wage is the rent. The rent is put on one side and paid over to the landlord on a Monday morning. The payment of the rent is regarded as a primary obligation. This is not something which the tenant has avoided. It is the local authority which is to blame.
9.30 p.m.
This proposal will create debts for tenants. They will be faced with substantial claims for six weeks' arrears of the increase. That is a basic factor affecting the daily lives of weekly tenants which this House ought not to accept. The Bill was passed in this House for another purpose, and I object to another place tacking on to it a proposal to raise rents in this manner. We should object to it on the grounds that if we are going to reorganise and reconstruct the Rent Restrictions Acts, we shall do the job as a whole and look not only at the things which will help landlords but also at the things which will help tenants.
I shall try to deal with the third point which arises if I can do so without getting out of order. It is the problem arising from the fact that the proposal is unilateral in its effect. It is extremely disingenuous for anyone to suggest that this is carrying out the proposals of the Ridley Report. The problem which arises is what happens if rates fall. It may seem strange to the House, but in the 1920 Act it was not at all clear that when rates fell the tenant could cease to pay the increase. In 1924, in the case of Strickland v. Palmer, the divisional court decided that the tenant could not claim a reduction in his rent if there was a reduction in the
2472
rates. That decision was upset by the Court of Appeal, and it is upon the decision of the Court of Appeal in that case that the present law rests that it is possible for a tenant to get back the increase when the rates fall.
The decision arises out of the interpretation of Section 2 (1, b) and Section 12 (1, d) of the 1920 Act. I need not bother the House by reading the whole of the judgment of Lord Justice Acland on the subject, but I strongly recommend it to any of my hon. Friends who require a pleasant evening's reading. The proposal of the Ridley Report in paragraph 74—
Mr. Deputy-Speaker: It is not clear to me how that matter arises on this Amendment.
Mr. MacColl: I do not know that it is quite clear to me either, Mr. Deputy-Speaker. I am only trying to avoid bothering the House by making two speeches. The point arises mainly on the second Amendment, which relates to the fact that the proposal is not bilateral in that it is for the benefit of the landlord and not for the benefit of the tenant. If that is your direction, Mr. Deputy-Speaker, I will happily make another speech on the subject in a few moments' time.
Our real object in seeking to delete the paragraph is that, although it sounds a complicated problem, there is a very important principle behind it, which is that, having had this dreadful Bill foisted upon us, we should restrict its mischief as much as possible. The Minister took the line that he was dealing only with the problem of the repairs. If that is his line, he must harden his heart against another place and stick to that line. Therefore. it is not something which should be brought in at this very late stage. That is the first point.
The second point is that, of all proposals to introduce into a Bill of this sort, the one least to be expected by the House was that which places tenants in the position of having to meet six weeks' arrears of increase of rates when it is not their fault at all that those arrears have been occasioned. Surely, the whole principle in weekly tenancies is that the tenant knows where he is from week to week, and can be quite sure that, having paid the landlord on Monday morning, he need have no more fears.
Mr. H. Macmillan: It is difficult to discuss this Amendment without relation to the Clause which it is proposed to alter, and indeed the hon. Member was allowed to explain what the new Clause did. He explained it extremely well, and has really saved me the trouble of doing it again, because he put the case very fairly and clearly.
Perhaps it would also help our discussion if I indicated that we propose to ask the House to accept the second Amendment, which seems to us to be perfectly fair and logical. Indeed, I indicated that to the hon. Gentleman when we thought that this matter was to come before us on another day, and we arranged that the correct wording should cover the point which the hon. Gentleman had in mind. Therefore, this Amendment is a negative of the new Clause, because, if carried, the new Clause would really cease to be operative, so that, in arguing that point, the hon. Gentleman was right and in order, because he was arguing on the basis whether or not the new Clause should be added to the Bill.
I was very conscious of the strength of the point which the hon. Gentleman made. He did not try to argue against the Clause as such, and I think he was fright, because it is fair, logical and it removes an anomaly. I think that it was for this reason that Lord Silkin said that, on the whole, it was a reasonable Amendment, and, after all, the noble Lord speaks with a good deal of authority. I think, therefore, that there is no objection to the substance of the Clause—which this Amendment would destroy—but that one should ask whether it is timely and whether it is right to put it in at this stage.
I shall be perfectly frank with the House and say that I have, broadly speaking, resisted any attempt to use this Bill, which is mainly to deal with the problem of keeping houses in repair, for undertaking a general review of the rent restriction system, but, like all good resolutions, there have been some exceptions to it, and the two major exceptions were both agreeable, I think, to the Opposition.
The first was to meet the point in the case of the passing of a tenancy where a woman was separated from her husband, which led to some anomalies and hard-
2474
ships. It was not strictly to do with my main purpose, but I accepted it. The second was really more important and covered a point which had aroused a great deal of interest in the Opposition and carried support from them. That was to prevent abuse of the power of getting control of an agricultural cottage by buying the cottage, then declaring it to be an agricultural cottage, and thereby obtaining possession of it. That was quite a large issue. On those two occasions I thought it right to advise the Committee to go a little wider, and to break our own rule.
Therefore, having done that on one or two occasions, I hope that I may be forgiven for saying that it is not unreasonable—the proposed new Clause being generally agreed to be a good one by both sides in another place—to say that it meets a point, and that we could perfect it by accepting the second Amendment to the Lords' Amendment, to deal with this happy situation. I should have done it myself, but I frankly admit that I did not think the problem of falling rates was likely to be very oppressive. The Amendment certainly makes it logical. I admit that it is a breach of our general rule, but there have been the other breaches. I hope that the House will feel that it is right on this occasion to agree with the Lords Amendment.
Mr. Blenkinsop: I am afraid that on this side of the House the matter does not take on the same rosy view as it does with the Minister. I confess that by announcing that he intends to accept the second Amendment he makes the position much more logical than it stood originally on the Order Paper.
It is fair that we should point out that at the earlier stages of the Bill we strongly pressed for many valuable Amendments to be made to the Rent Restrictions Acts. The Minister has referred to one or two small but valuable changes which he made, after great agitation from this side of the House. It seems rather extraordinary that, after the Bill had gone to another place, there should arise this quite novel point, in the sense that it had not been the subject of discussion in the Committee. I do not mean that it has never been raised in public discussions.
Mr. John Hay: The hon. Member may recall that on the Report stage my hon. Friend the Member for Bedfordshire, South (Mr. Cole) and myself moved an Amendment with the very point in mind that is contained in this Lords Amendment. It is therefore not a novel point. Perhaps the hon. Gentleman was not listening on that occasion.
Mr. Blenkinsop: Then it is due to pressure from the landlords' association.
Mr. Hay: We did not press the Amendment, because the Parliamentary Secretary said exactly what the hon. Member for Widnes (Mr. MacColl) has just said about amending the Rent Restrictions Acts.
Mr. Blenkinsop: The landlords' association has a much stronger influence in another place than its representatives have in this House, which is a sad commentary upon the constitutional position of this House. If we are to have the pressure of the landlords, let us have it here and not in another place where we tend to lose sight of what happens.
Seriously, I do not think we should quite brush aside the point that although the sums involved may be small, as we admit, this does not count very considerably with many of the people who are likely to be affected by the Bill. This is a small, further annoyance and difficulty that many tenants may have to face. Because of that, we think the Minister should have thought again about whether it is worth while bringing in the whole of this new Clause at all.
I make this final appeal to the right hon. Gentleman on what I am sure he will regard as a relatively small matter—whether it would not be worth his while to say to their Lordships that, in view of the whole background of the matter, it is hardly worth while pursuing it.
Amendment to the Lords' Amendment negatived.
9.45 p.m.
Mr. de Freitas: I beg to move, as an Amendment to the Lords Amendment, in subsection (5), at the end, to add:
(6) Where for any period for which a rate is demanded (hereinafter referred to as "the rating period") the amount of the rate is increased, and by virtue of paragraph (b) of subsection (1) of this section the amount of
2476
any consequent permitted increase for rates includes an amount in respect of a period preceding that mentioned in paragraph (a) of that subsection, paragraph (d) of subsection (1) of section twelve of the Act of 1920 (which provides that any increase in rates payable by a landlord shall be deemed to be payable by him until the rate is next demanded) shall not so extend the period for which the increase is recoverable as to make it longer than the rating period.
The Minister indicated that the words on the Order Paper had benefited from the assistance of the draftsmen in finding words to meet the purpose of the Amendment which was down in the names of myself and some of my hon. Friends. As the House will be aware, my hon. Friend the Member for Widnes (Mr. MacColl), speaking on the last Amendment, just got to the interesting point of discussing the Ridley Report when it was deemed better that we should make it to more purpose on this Amendment. I hope, therefore, that my hon. Friend will have the opportunity of catching your eye, Mr. Deputy-Speaker, so that he may continue the discussion.
Mr. MacColl: I am grateful to the Minister for one thing. Those of my hon. Friends who have sometimes wondered whether or not I was an asset on this side of the House, will now realise what an asset I am. It would appear that a speech from me led the right hon. Gentleman to accept an Amendment for once in a way from this side of the House, which is a very unusual thing for him to do. However, as he has accepted it, I think it would be unbecoming of me to refresh the House with an account of what the Ridley Committee had to say about the matter, and how, in the original form, its recommendation had been disregarded.
As my hon. Friend said, there were originally two Amendments, one of which I drafted. It occupied four lines on the Order Paper, whereas we now have an Amendment which is more satisfactory and which occupies eight lines. I realise now that it is an unpardonable thing to try to impose something short and the more ample language of the Parliamentary draftsmen is more satisfactory.
The right hon. Gentleman said that this did not amount to anything. Of course, we do not know what the right hon. Gentleman has got up his sleeve for next Session. He talked in a big way about the reform of local government. Perhaps

2477
it would be inappropriate to ask what his intentions are, but we should be very grateful, nevertheless, if he would tell us.
There is another point. Under the new valuation proposal, it is quite possible that some types of property might have a fall in rates, although the general amount collected in rates did not fall. Adjustments of rates from one property to another might make the fall quite substantial, and, therefore, in justice we feel that we ought to press this matter in our Amendment.
Amendment to the Lords Amendment agreed to.

Clause 45.—(SERVICE BY POST.)
Lords Amendment: In page 36, line 28, at end, insert:
(2) So much of subsection (5) of section seven of the Act of 1938 as enables documents to be served on agents or persons receiving rent shall apply for the purposes of this Part of this Act as if references therein to the principal Acts included references to this Part of this Act.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment.
This Amendment is little more than a drafting Amendment. It puts right what was originally in the Bill as drafted, and allows a certificate to be served upon the landlord's agent.

Clause 46.—(PROCEDURE OF TRIBUNAL)
Lords Amendment: In page 36, line 29, at beginning, insert:
(1) Subsection (1) of section seventeen of the Act of 1920 (which empowers the Lord Chancellor to make rules and give directions for the purpose of giving effect to that Act) shall apply in relation to this Part of this Act as it applies in relation to that Act.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment.
This is a point of some importance, and I think the House will feel that it helps us in the problem. It is a machinery provision to enable rules as to county court procedure under Part II of the Bill to be made by the Lord Chancellor under Section 17 (1) of the Rent Act, 1920. Without this provision, the ordinary county court procedure might be thought to apply. It was thought desirable to
2478
make the special procedure applicable to rent restriction matters provided for in the rules made by the Lord Chancellor. It has the effect of making the procedure simpler and cheaper. Applications are heard by the registrar in an informal atmosphere and the parties usually appear in person without being represented by either a solicitor or counsel. Either party can require applications to be referred by the registrar to the county court judge, but broadly speaking they are dealt with in a simpler way. We want to give power to the Lord Chancellor to provide the same procedure, which is less expensive and better for those cases.
Mr. Donald Wade: May I ask whether these rules will have any effect on the timing of these proceedings, as compared with ordinary procedure in the county court? Earlier this evening we referred to the possibility of delay on the part of a landlord, but delays may be due not only to dilatoriness on the part of landlords but to an abundance of work falling upon the county court. Is any special provision to be made to deal with this new and possibly considerable work? Will there be anything in the rules which will enable this type of litigation—if it is to be called litigation—to be dealt with more speedily than some which, unfortunately, takes a considerable time in the county court.
Mr. H. Macmillan: I will, of course, bring to my noble Friend's attention what my hon Friend has said.
Mrs. E. M. Braddock: I am not an expert on county court rules, registrars or anything else, but I should like to ask one question. Will this allow the registrar of the county court to say that costs can be given to the tenant against the local authority if the tenant loses the case on the evidence submitted by the sanitary officer of the local authority? It is a very important point indeed. The tenant would not take action in the county court at all, nor would the landlord take action against the tenant, were it not for the certificate issued by the sanitary officer of the local authority. Under such circumstances, would it be possible for the tenant to claim from the local authority the costs which would otherwise be levied upon him because of the certificate of repair issued by the local authority?
Mr. Blenkinsop: I hope that the Minister may be able to clear up the point raised by my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock). I hope too that he may be able to take this opportunity to give some assurance that he is in touch with the Attorney-General with regard to the whole question of making legal aid available in the county court and that this mater is at least under active consideration. He will appreciate that the whole value of these proceedings and of the slight modification made in this proposed Amendment—to which we do not object—depends very largely indeed upon whether or not the tenant concerned can have the benefit of the legal aid scheme which everyone understood was to be made available to them at a later stage.
Mr. Sparks: Will the right hon. Gentleman explain what precise advantage this proposal will have for the tenant? The tenant is obviously concerned with the decisions, either of the registrar or of the court itself, to disallow a certificate of disrepair. Is there any advantage in the suggestion which the Minister makes in relation to the liability of the tenant for costs in the event of a certificate of disrepair being disallowed? Or is he now telling us that, instead of this matter being referred to the court and incurring all the legal consequences and costs involved, it may now be settled by reference to the registrar? If it can be settled by a reference to the registrar, could the right hon. Gentleman tell us what the effect of that would be on both the landlord and the tenant on the question of costs? If costs are to be just the same there is no advantage in this proposition, but if they are to be very much lower or non-existent there will be an advantage.
Mr. H. Macmillan: With the leave of the House, perhaps I may speak yet again. I am sure hon. Members opposite would not feel that this was an appropriate occasion to make a declaration of the intentions of the Government; nor would it be in order. In answer to the hon. Member for Liverpool, Exchange (Mrs. Braddock) and other hon. Members, I can say that the Amendment does not alter the rights, duties and functions of the court. All it does is to apply a procedure which the Lord Chancellor
2480
has applied since 1920 in rent restriction cases. If the Amendment had not been put down he would not have been able to make provisions similar to those which have worked successfully for 30 years. The object is to provide for a simpler and cheaper procedure in the first instance. The Amendment gives him powers to make regulations on similar lines in cases similar to those in which the procedure to which I have referred has been applied successfully for many years. I shall take account of all the other points which have been raised and note them as important contributions.

Clause 47.—(INTERPRETATION OF PART II.)
Lords Amendment agreed to: In page 36, line 41, at end, insert:
"'Act of 1938' means the Increase of Rent and Mortgage Interest (Restrictions) Act. 1938;"

Second Schedule.—(PROOF OF PAST REPAIRS BY LANDLORD.)
Lords Amendment agreed to: In page 42, line 5, leave out "in the prescribed form".
Lords Amendment: In page 42, line 6, leave out "the period of twelve" and insert:
"such period of twelve months as may be specified in the declaration being a period falling within the fourteen".
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The object of the Amendment is to secure that the landlord will not be prejudiced in complying with the expenditure test if there is a delay—unreasonable or not—in reaching agreement with the tenant on any matter which is provided for in the Bill, such as agreeing about the proportion of responsibility for repairs as divided between landlord and tenant, or the proportion of the rent representing the cost of the provision of services.
The House will remember that the period of 12 months during which the necessary work must have been carried out is a period ending with the date of service of the notice of increase, and it is thought that if the service of such notice were to be delayed because of discussions, the work which was carried out during the two months before the period of 12 months began to run would be excluded,

2481
although it might represent a very large part of the necessary work. In those circumstances, I hope that the House will agree to give the landlord the greater latitude of 14 months in which to carry out work which will count in his claim for an increase of rent.
Mr. Blenkinsop: This is another example of latitude being given to the landlord, although we do not get a friendly reception when we propose measures to look after the tenant. We regard this proposal as being very similar to the one contained in an Amendment discussed and, unhappily, passed during the Committee stage, whereby a landlord was given permission to choose any three out of four years in computing the amount he had spent in repair. It was decided by the Committee that the landlord should be able to choose any three out of four years. That was naturally to his advantage, because he would choose the three years during which he had incurred the greatest expenditure. Here again, another minor change is made to benefit the landlord, and to ensure that he can make eligible for inclusion the greatest amount of expenditure that can possibly be squeezed into this period of 12 months. He is again able to choose for himself the period.
This is just a further instance of the way in which the party opposite has been doing its best all through our consideration of this Measure to look after the interests of the landlords. I confess that it did not satisfy another place. It was made perfectly clear that it was thought that many landlords would not regard this as sufficient. Nevertheless, the Minister is certainly doing his best, under pressure of the representations that, we understand, he has been having ever since the Bill was presented, to look after the landlords' interests, and from our point of view on this side of the House this is another illustration of the attitude of the party opposite.
10.0 p.m.
Mr. Gibson: The reason given by the Minister in justification of this Lords Amendment was quite unconvincing. He said that it was to prevent a landlord's right from being prejudiced because of argument that might arise, but there is plenty of protection for landlords in the Bill, and plenty of provision to enable necessary arrangements to be made for rent increases if they carry out the terms
2482
of the Bill. This Lords Amendment will apply to every landlord, not merely to landlords who have got themselves into arguments with their tenants. This is another of the efforts to nibble away the protection of the rights of tenants of ordinary working-class property. It is typical of the type of thing our people ought to have expected when they put this Government into office. I have been unable to persuade anyone that we ought to divide against this Lords Amendment, but I am glad that we are not letting it go without protest.
Mr. Albert Evans: When the Bill first came before the House the Minister strongly emphasised that he was putting into the Bill two safeguards for tenants. This concession to the landlords is a definite weakening of one of the very safeguards the right hon. Gentleman trumpeted so much about when he first explained the Bill to the House. His intentions were apparently good: he was trying, he said, to hold the balance between landlord and tenant, and he was giving two safeguards to tenants. Now, through another place, he is taking away a considerable part of one of the safeguards. I am surprised that a Minister of the Crown should adopt this back-door method of using another place to negative his earlier expression of good faith, and his declaration that he was trying to hold the balance between landlords and tenants.
Lords Amendment: In page 42, line 7, leave out "containing," and insert "accompanying."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Lords Amendment is consequential on the long series of Amendments.
Lords Amendment: In page 42, line 13, leave out "notice of increase may in lieu of" and insert:
"declaration required by the said paragraph (b) to accompany a notice of increase may, in lieu of being."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is another in the same series of Lords Amendments we have agreed to.
Further Lords Amendments agreed to: In page 42, line 14, leave out "contain" and insert "be."
In line 15, leave out "in the prescribed form."
In page 43, line 2, leave out "of a notice of increase containing" and insert "with a notice of increase of."
Lords Amendment: In page 43, line 10, at end, insert:
6. If in such a declaration any person makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular he shall be liable on summary conviction to a fine not exceeding thirty pounds.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is an Amendment of importance. I gave an assurance, at the end of the Report stage, that we would meet a point raised by hon. and right hon. Gentlemen opposite, and this Amendment has been put in the Bill in another place to meet it. It is designed to provide a further safeguard for the tenant by making it a summary offence if the landlord knowingly or recklessly makes a statement in his declaration that work of the required value has been carried out; and it follows the appropriate form for giving that strengthening safeguard to ensure that declarations are made both truthfully and with a sense of responsibility.
Mr. de Freitas: The right hon. Gentleman did give that assurance at the end of the Report stage, and the Lord Chancellor moved this Amendment in another place. There are so few safeguards for the tenant. This is some safeguard—small, but we clutch it.
Mr. Sparks: For what reason did the Minister advise the figure of £30? Why should it not be £50, or £100 or more—or less? How has he arrived at that figure? He has not said.

Fifth Schedule.—(REPEALS.)
Lord Amendment: In page 46, line 37, column 3, at end, insert:
"in section three, in subsection (2), the words from 'or where such' to 'one clear week'."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is consequential on an earlier Amendment.
Lords Amendment: In page 47, line 59, column 3, at end insert:
In section twenty-three, in paragraph (d) of subsection (1) the words "in all respects."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a drafting Amendment to pick up a point which was made in Committee.

NON-INDIGENOUS RABBITS (IMPORT PROHIBITION)
10.8 p.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. G. R. H. Nugent): I beg to move.
That the Non-Indigenous Rabbits (Prohibition of Importation and Keeping) Order, 1954, dated 10th June, 1954, a copy of which was laid before this House on 15th June, be approved."
This order is made under the Destructive Imported Animals Act, 1932. The effect of it is to implement one of the more important recommendations made by the Myxomatosis Advisory Committee to the effect that non-indigenous rabbits should not be imported, and that powers should be taken to prevent their importation. At the present time myxomatosis is spreading rapidly among the rabbits in this country. Large numbers are being destroyed, and it would obviously be in every way detrimental if there could now be imported non-indigenous rabbits which were immune to this particular virus, so setting up a new rabbit population to take the place of those that are dying out. It is for that reason that I am now moving this Order, and I ask the House to give it their approval.
10.9 p.m.
Mr. A. J. Champion: We support the Order which is a very sensible provision to prevent what might happen if certain commercial interests think it desirable in their own interests to import a species of rabbit that would be immune from the disease which we rather hope will wipe out all or most of our rabbit population.

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One question which occurs to me in this regard is this: if myxomatosis completely wipes out our rabbit population, and by means of this Order we are prevented from getting any imported rabbits at all, from whence will the Prime Minister get future Ministers to replace some of those who look like going shortly?

AIRLINE PILOTS (SERVICE CONDITIONS)
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Studholme.]
10.10 p.m.
Mr. Harold Davies: After the interesting discussions on rents and rabbits, I think that this is an appropriate moment to deal with a vital issue which this House does not often get the chance of touching. I refer to the problem of the service conditions of our airline pilots of the British airways corporations.
I should like to point out that I am not raising this matter from a party political point of view. This is a vital issue concerning Britain's economic prosperity and Britain's place in the flying world. There is, undoubtedly, a problem before us with regard to the service conditions of our B.O.A.C. pilots and possibly those employed on private lines. I think that it would be appropriate, in the 15 minutes for which I shall be speaking, first to pay tribute to these pilots who fly passengers all over the world.
We have in Britain pilots who have to get the highest possible navigational certificates in the world, and whose sense of responsibility and record of millions of miles of flying without major accidents is second to none. Too often this House, when debating the Civil Aviation Estimates and other Estimates, forgets that we may not be giving the best possible conditions to our pilots and, therefore, not getting the best type of recruitment.
On 17th March, 1954, the National Joint Council for Civil Air Transport, the employers' side of the Pilot Officers' Panel, and the employees' side of the Panel discussed the issue of wage increases. We are told in this House that this is a matter of nationalised corporations. I hope that we shall find some
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formula by means of which we can put down vital Questions about conditions in some of our nationalised industries. Difference existed for a long time between both sides, and eventually, an award was given to 1,241 pilot officers employed by the airways corporations. They received an award of some 8 per cent.
Claims had been put forward in June, 1947, December, 1950, and July, 1953, and another claim was put forward which was considered last March. In the trade union world we often deprecate long-drawn-out, squalid negotiations—as, for instance, on the conditions of Members of the House of Commons. In July, this claim was put forward, and the result of the claim was an increase of 8 per cent. I do not want to bore the House by giving the details of the pay rates of second officers, first officers, junior captains, senior captains and senior captains, first class. I will pick out one or two examples.
The claim would have meant that there would have been a minimum pay to the second officer of £1,220 a year, and minimum pay to the senior captain, first class—a very responsible highly-qualified individual—of £3,225. The award last March gave, instead of these claims, £995 for second officer and £2,395—I am talking of minima, not maxima—to a senior captain, first class.
To some people that may seem a remuneration commensurate with the job, but those of us who know anything about it or have had the privilege of flying behind "the man up front" many thousands of miles in various parts of the world, know that the payment is not commensurate with the responsibilities now needed by a civil aviation pilot. The emphasis of this debate, therefore, is on conditions and recruitment of men for the civil airline services.
Is the Minister satisfied that the supply of pilots for civil aviation is assured? Does he think that present pay and conditions are such as will encourage the very best type of recruit to this most important profession? Transport is civilisation, and in this modern shrinking world we want dependability, safety and rapidity of movement. We take the lead in aircraft design and in the type of man who flies those 'planes, but today he is not getting the encouragement that he should get.

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Therefore, on the question of recruitment, I draw the Minister's attention to the memorandum on the supply of pilots for civil aviation which was prepared by the Air League of the British Empire, Airwork, B.E.A., B.O.A.C., the British Airline Pilots' Association and others. There is not the slightest doubt that there is an inadequacy of supply.
For several years civil operators have felt an increased anxiety concerning the future supply of commercial air pilots. As long ago as 1947, the Wilcock Committee on Recruitment, Training and Licensing of Personnel for Civil Aviation was set up. Events have proved that it is inadvisable for civil aviation to look exclusively to the Royal Air Force for its supply of pilots. That source of supply may have been adequate for civil aviation in its early days, but the Royal Air Force supply of pilots is now no longer satisfactory as the sole, or even the main, source of recruits to civil aviation.
After the last war, the Government then in power decided to train a large number of National Service men to be pilots. This policy has ceased and National Service men are no longer trained as pilots. Furthermore, during the last few months the situation has been aggravated because the discontinuation of the training of National Service men means that we cannot draw in on our wider pool of capable men. There is an interesting analogy. Because there is a certain snobbish bar about certain types of sport in Britain, like tennis and golf, we find that Britain is not able to draw on its resources. I believe that it is necessary to establish a scheme, and a subsidised scheme, to train men for the civil air services.
The modern civil pilot must be of a sufficiently high academic and intellectual standard to pass severe examinations. He must secure professional qualifications. He must get advanced licences, and during his progress up to, and even beyond, the rank of senior captain, he is required to have medical tests every six months. He must pass flight tests every six months. Because of the technical requirements of the profession, the pilot is becoming even more specialised. A man cannot move from one aeroplane to another—from a
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Viscount to a Comet or from an Elizabethan to another type—as a man can move from one motor car to another, and we are making of the pilot a highly trained, specialised individual.
One of the snags is that if at the six-monthly medical examination the pilot does not pass the doctor, a highly skilled and specialised man is suddenly cut 'ff from his livelihood. Are these things taken into consideration sufficiently in the consideration of pay and conditions of the men who fly our civil airline services?
I believe that a democratic system of flying training could be developed and that the Government—the Ministry of Transport and Civil Aviation, together with the Ministry of Education—should work out a policy by which young boys between 16 and 18 years would be trained for flying these wonderful British planes which British designers put on the commercial airlines.
It would involve some expenditure. The son of an ordinary family cannot afford to be trained, for it costs too much. It costs £3 an hour to fly a single-engined plane and £15 an hour for a twin-engined plane. If, in training, a man wants to do 80 to 250 hours' flying, a colossal sum of money is involved—a sum which many people could not find for their sons. Why should we not be training these boys who want to go into this service?
There is an annual wastage of at least 5 per cent. among our civil pilots. This means that every year between 70 and 120 new pilots are wanted, which means that every year 400 young men should be trained for civil aviation. They should not be called up for National Service. To call them up would be penny wise and pound foolish, because it is no good suggesting that we should train them in National Service in the R.A.F. That is a completely different type of training.
Unfortunately, in this mad world in which we live, the R.A.F. need to train men in bomb-sighting. The type of training is different from that involved in the responsibility of a man taking an aeroplane worth nearly £1 million from one end of the earth to the other with people aboard. He must have a different type of training from that given to the brave boy who flies the R.A.F. aircraft of war—yet the civil aviation pilot will be there, when the hour comes, if the country needs him. Why put him into National Service

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in the interim? I hope some kind of scheme of training will be worked out.
As I said at the beginning of the debate, since 1947 there have been two alterations in the salary structure for pilots and yet a senior captain, with eight years' seniority, is £37 10s. worse off because of the changes in the pension scheme. This is ridiculous. It is time that Parliament and the public realised the importance of the British pilot in our commercial and industrial life.
The speed of change and improvement in aircraft has been higher since 1947 than in the previous 27 years. The Chancellor of the Exchequer is asking for productivity, and we have had no greater productivity than in the R.A.F. Let me give an example. The heaviest aircraft we were flying in 1947 was the York, weighing 66,500 1b., seating capacity 21, speed 200 miles per hour. In 1951 we were flying the Stratocruiser, weight 145,800 1b., capacity 70 people, speed over 300 miles per hour; and yet the size of the crew had been reduced while the responsibility of the captain had been increased.
In 1951 the Viking did 4,896 passenger miles per hour. The Viscount gives 14,194 passenger miles per hour and the Elizabethan 12,397 passenger miles per hour. There we see productivity as in no other branch of industry. The result has been that more passengers are being carried faster and more revenue is being taken by the corporations. In 1947 the route mileage of British airlines was 39,957,000 miles. In 1952–53 the mileage was 58,542,000, with less crew and greater responsibility than ever before.
The pilot has a medical examination every six months. He may be found to be suffering from a disease which he has contracted in the tropics. He has to eat many of his meals while in the air and he does an increasing amount of night flying. The more instruments he must carry, the more technical must be his training. He receives no payment for overtime and he is always on call. He spends a great deal of time out of the country but no recognition of this is made by the Inland Revenue in regard to his Income Tax.
British planes carry British mail cheaper than any other airline. If the mail were carried by foreign planes or by an American airline, the full rate
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would have to be paid. Why should not the British corporations get the full rate for mail? When British 'planes carry troops from Britain to Suez, the corporations are paid £23 per head. The shipping companies get £30. If those figures are correct, that is not right.
I think it time that this matter of a tax concession for pilots was considered. In the Royal Air Force officers receive a bounty of £3,000 after 12 years' service. I think that something similar should be given to the senior captains of B.O.A.C. and the other corporations who, at the age of 50, have finished their responsible flying life.
Recruitment is difficult, because training is so costly. Why should not the Government introduce a subsidised training scheme for airline pilots who must be 100 per cent, efficient? A pilot who makes an error does not get another chance. He must not make a mistake. I thought therefore that this was the right moment to rise this problem which will confront the Ministry of Transport and Civil Aviation and the corporations more and more as our efficiency in the air increases.
10.28 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo): I wish to apologise to the hon. Member for Leek (Mr. Harold Davies) for having missed the opening sentences of his speech. I can assure him that it was not discourtesy on my part. It took me rather longer to get up the stairs than it did for the hon. Member to start off on his jet-propelled speech. But he was good enough to supply me in advance with, information about some of the matters he proposed to raise, which was of value because I wished to answer them to the best of my ability.
I am grateful to the hon. Member for having raised this important subject, and I have listened with interest to the lucid way in which he presented the problem. I readily recognise that his intention in ventilating this matter arises solely from his interest in the human aspects of those who work in the sphere of civil air transport.
I think that the arguments of the hon. Member may be divided into two parts.

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First, there is the remuneration which civil air transport pilots receive, and secondly the recruitment of an adequate number of new pilots to meet the requirements of this ever-expanding industry. I certainly cannot accept the suggestion that British civil air pilots are working under unsatisfactory terms and conditions of service, that is, if their terms and conditions of service were a matter of determination by Her Majesty's Government, which, of course, as I have already said, is not the case.
Mr. Harold Davies: The Minister knows as well as I do that an American pilot in the same seniority as a British pilot has 114 per cent, more pay than a British captain of the same rank, and yet that British captain has had to pass the most difficult flying navigational test in the world today.
Mr. Profumo: I readily recognise that, and I wish to be as generous as may be to the standards and achievements of the British air pilots. It is difficult trying to compare the pay of a British and American pilot.
Mr. Harold Davies: I agree.
Mr. Profumo: The same argument might be applied to Service men. We must remember the standard of living and other considerations which go to make up the terms and conditions of people in any trade or industry.
The terms and conditions on which pilots are employed by the corporations and the independent companies are a matter for negotiation between the trade unions representing them, the British Air Line Pilots' Association, and the employers. These pilots are in no way Government employees, and the process of settling their terms and conditions is not one in which the Government have any standing. Section 20 of the Air Corporations Act, 1949, imposes on the corporations the duty of setting up joint machinery for the settlement by negotiation of terms and conditions of employment of persons employed by the corporation, with the provision for reference to arbitration in default of such settlement in such cases as may be determined by or under such agreements.
Both corporations have fulfilled the responsibility laid upon them by Section 20
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of the Act by establishing, in collaboration with appropriate trade unions, the National Joint Council for Civil Air Transport, on which the British Air Line Pilots' Association is represented, and of which there is a special panel to discuss and negotiate the terms and conditions of employment of pilots.
The terms and conditions of employment by independent companies are governed by Section 15 of the Civil Aviation Act, 1949. This Section does not require the companies to participate in the National Joint Council for the industry, but they are, in fact, full members of the employers' side of that council, so that the same body is the forum for negotiations on the terms and conditions of employment of both the corporations and independent company pilots. I thought the hon. Member would like to know that.
The constitution of the National Joint Council for Civil Air Transport provides that its object shall be to secure the development of the largest possible measure of joint action between the employers and the employees with a view generally to the maintenance of good conditions in civil air transport. I think the hon. Member will already recognise that the council has so far had a very large measure of success in attaining its objective.
Moreover, it has provided in its constitution a procedure for the settling of differences on terms and conditions of employment which makes provision for the reference of disputes which cannot be settled within the industry to the industrial court, whose decision is final and binding on the parties if they differ. The British Air Line Pilots' Association recently made use of this procedure by taking a claim for an increase in the salaries of pilots employed by the corporations to the industrial court. As the hon. Member has pointed out, the court awarded that a certain increase in salary should be made and the two corporations have, in fact, already put the court's award into effect. Thus full use has been made of the established machinery for settling corporation pilots' salaries, and I must emphasise again that the Government have no standing in the matter.
The question of recruitment of pilots is receiving Government attention. The Wilcock Committee, which examined re

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cruitment, training and licensing of personnel for civil aviation in 1947, recommended that from the point of view of the national economy the fullest use should be made of ex-R.A.F. pilots. In addition, it recommended the adoption of a scheme of scholarships for training direct entry pilots to civil aviation because of an estimated shortfall of pilots from the Royal Air Force source from 1951 onwards, but events have shown that the figures on which the conclusions were based were over-estimated.
The policy of Her Majesty's Government continues for the present to be that ex-Service pilots provide a source of trained pilots for civil aviation. The effect of the change of policy in Royal Air Force pilot training is at present under examination with the Air Ministry with a view to ascertaining the extent to which pilots from the Services will meet the future needs of civil aviation. If the results of the examination with the Air Ministry show the need for an auxiliary scheme, the recent proposals made by the Air League of the British Empire will receive most careful and sympathetic attention from my Department.
However, the Government cannot commit themselves—I want to make this plain—in advance to accepting any scheme which involves a measure of Government subsidy. This would have to be most carefully examined in relation to the Government's policy in other comparable fields.
I ought here to utter a warning, that one of the difficult problems would be the question of the exemption of young men in this field from their ordinary National Service.
Lastly, the hon. Member asked certain specific questions. The difference between sea trooping and air trooping rates to the Canal Zone which he raised has, I assure him, no effect on the pay of pilots. The Government must endeavour to move troops by the most economic means, taking account of strategic and personnel considerations, and the fact that the Government pay less for air trooping per passenger to the Canal Zone than by sea trooping means only that the former is more economic as a means of transport on that route. As the hon. Member no doubt knows, air trooping contracts are awarded on the basis of competitive tendering, and I am sure that he will
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agree that no Government of any complexion would desire to pay a contractor more than he asks, particularly as they would be using taxpayers' money in doing so.
With regard to rewards on retirement of pilots, it is true that commissioned pilots in the Royal Air Force who have served on a 12-year basis receive on retirement a gratuity of £3,000, but it should be remembered that, just as Regular R.A.F. officers have pension arrangements which do not apply to those under the 12-year arrangement, so the corporations have a pension scheme which makes provision for early retirement. Under this scheme pilots may, with the consent of the corporations, and having completed 10 years' service, retire as early as 40 and draw an immediate pension. In addition, the scheme provides for accident and death benefits and premature withdrawal from service. I believe that the pension arrangements which exist are a substantial attraction to service with the corporations.
The hon. Member suggested that as pilots live abroad so much of their time they should be given some measure of tax concession. I am afraid that I am not able to answer him entirely on that matter, but I would point out that pilots do not have to bear overseas living costs out of their basic pay. Apart from amenities in kind, including meals and accommodation, they receive daily overseas allowances. In the case of the corporations, these allowances have been fixed at 19s. 6d. a day for captains and 15s. a day for first and second officers while flying on services to countries outside Europe.
Mr. Harold Davies: I know that, but the hon. Member has been to New York and he will know how far 19s. 6d. a day will go in New York, Sydney and other places, with laundry and everything else to be taken into account.
Mr. Profumo: I agree that, unfortunately, the situation is not as good as it used to be in the old days, for the £ does not go as far as it used to. However, under the present Government the £ is now very much stronger. We are dealing with all the points which the hon. Member has in mind, but I note the comment which he has made.
The hon. Member mentioned the payment to B.O.A.C. for carrying mail, but

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I think that he is under a misapprehension there. Foreign airlines do not receive a higher rate for carrying G.P.O. mails than does the B.O.A.C. I will gladly clear that matter up for the hon. Gentleman by correspondence with him if he desires more detail. There is not time to do so now.
However, I hope I have said enough to assure him of various things, first that we are most conscious of the services that these airline pilots give to the country, and of the tremendous importance and
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responsibility that rests on their shoulders; also that the Government are not directly concerned, and cannot, of course, be directly concerned, with the pay and conditions of airline pilots—
The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standby Order.
Adjourned at Twenty Minutes to Eleven o'Clock.