Commons Sitting of 5 June 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  BRITISH ARMY

    Home Guard (Commissions)
    Dame Irene Wardasked the Secretary of State for War how many notifications of commissions in the Home Guard have been issued since this organisation was disbanded.
    The Secretary of State for War (Mr. Antony Head): The Home Guard has not been disbanded, but is on a reserve basis with a small active cadre in each battalion. Since the reorganisation was completed on 1st March 101 commissions in the Home Guard have been granted to fill vacancies in the active cadre.
    Dame Irene Ward: In view of his Answer to this Question, will my right hon. Friend make it perfectly plain to the country as a whole, as one of my most prominent constituents, a very loyal member of the Home Guard, thinks that the War Office is idiotic and wonders how many people were sitting dispatching commissions after the main duties of the Home Guard had ceased? It seems a most tremendous waste of money.
    Mr. Head: No, I can assure the hon. Lady that she is wrong about that. We have kept the Home Guard on a reserve basis so that it can be mobilised quickly. To do that we have to have a small active cadre in each battalion.

    National Service
    Mr. Lewisasked the Secretary of State for War by what annual amount his Department's estimates could be reduced if National Service were abolished.
    Mr. Head: The saving would depend on the size of the Regular Army, which in turn depends on Regular recruiting. It would also be influenced by where that Army was stationed. I therefore do not think a realistic estimate is possible at this stage.
    Mr. Lewis: Is it not a fact that there would be quite a large saving of money? Is not this one way in which both the right hon. Gentleman and the Government could implement their promises to cut the cost of living? If we were to cut down on this and put these men on to useful work, would that not be helping the balance of payments position? Will the right hon. Gentleman put that suggestion to the Chancellor and the Cabinet?
    Mr. Head: That is another question, but I would agree with the hon. Member that undoubtedly there would be a saving, a considerable saving.
    Mr. Allaunasked the Secretary of State for War if he will abolish the fifteen days' reserve training for National Service men in view of its interference with industry, domestic life and family financial commitments.
    Mr. Head: No, Sir.
    Mr. Allaun: Is the right hon. Gentleman aware that many one-man firms are being endangered because the proprietors are unable to obtain substitutes while they are doing their fifteen days' training? Is he aware that in many cases employers do not make up the men's wages, and that consequently they suffer financial hardship, so that some of these men and their families cannot have their ordinary summer holidays?
    Mr. Head: We have gone into this question frequently in this House, and I do not think I can answer it by way of answer to a supplementary question. A great many employers do make up their men's wages, and men are paid at camp.

    Assembly Centre, London
    Vice-Admiral Hughes Hallettasked the Secretary of State for War why it is necessary to have a troop assembly centre in the London area; and what was the practice before the war.
    Mr. Head: It is needed to accommodate soldiers and sailors and their families leaving or returning to this country by air. It also accommodates others who get held up in London overnight on their way to or from Germany. It has to be in or near Central London because the airfields used for air trooping are spread round London. Such a centre was not required before the war because there was then no regular troop movement by air.
    Vice-Admiral Hughes Hallett: Will my right hon. Friend have regard to the need for economy in this matter? Why should not men who travel in specially chartered aeroplanes assemble at Service aerodromes where Service accommodation is available? And, in cases where men travel as passengers in ordinary commercial flights, does not my right hon. Friend agree that the modern Service man is just as capable of catching an aeroplane if left to his own resources as anyone else?
    Mr. Head: I would agree about catching an aeroplane. The point is that when men are arriving in large numbers from Singapore it would not be practicable for them to make arrangements for their own accommodation overnight. If they had a long way to go, they would be left high and dry.

    Accountants
    Mr. E. Johnsonasked the Secretary of State for War how many professional accountants are employed by his Department; and on what branches of the work of the Department they are engaged.
    Mr. Head: Three cost accountants are employed in the contracts organisation.
    Mr. Johnson: Would it not reduce the possibility of error in the keeping of the accounts, and, indeed, be more economical in the long run, to employ professional accountants instead of leaving the work to those who have no special training in accountancy?
    Mr. Head: That question was gone into in some detail by the Crick Committee. I have not time now to go into the details, but, broadly speaking, we train our own audit people on the accounting side and we do not think the importation of a large number of outside accountants would be a desirable
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    step. The Committee did not recommend that we should.
    Mr. Hoy: Is it not a fact that the War Office is unable to take complete stock because of lack of officials? Is the right hon. Gentleman giving any consideration to that aspect of the matter?
    Mr. Head: It is true that to take stock of every single thing we hold would require a very large number of officials, and there is already pressure on me to cut down the staff; we have to strike a balance between the two requirements.

    Officers (Redundancy)
    Mr. J. Johnsonasked the Secretary of State for War how many brigadiers are unemployed at this moment; and what redundancy he expects amongst Army officers in the near future.
    Mr. Head: Eight, including five who were recently serving with the Arab Legion. I do not expect redundancy in the near future.
    Mr. Johnson: Is the right hon. Gentleman aware that there is some anxiety amongst officers on this score, particularly brigadiers, in the event of the cutting down of National Service? Would the right hon. Gentleman look back to some of his speeches of less than ten years ago about colonial forces in Africa and employ some of the surplus officers and N.C.O.s in future in building up our forces in Africa, if and when the need arises?
    Mr. Head: The cutting down of National Service would release a large number of National Service officers. As to the question about the colonial forces, it does not look to me, with short-service commissions and for other reasons, that that is a likely possibility in the near future.
    Major Legge-Bourke: Is my right hon. Friend aware that it is becoming almost notorious that an enormous number of brigadiers are doing trumped-up jobs at present in order to absorb a number of brigadiers becoming redundant, partly as a consequence of the winding up of A.A. Command?
    Mr. Head: That is not true. If my hon. and gallant Friend will let me have details of any specific instances of

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    brigadiers doing trumped-up jobs, I will certainly look into them, but I know of none.
    Mr. Strachey: Do the right hon. Gentleman's answers mean that he sees very little prospect of employing these redundant brigadiers in what used to be their main occupation, which was becoming elected as Conservative Members of Parliament?

    Grange Camp, Kempston (Mess Party)
    Mr. Allaunasked the Secretary of State for War if he is aware that the only work given to three National Service men during their 15 days' reserve training at the Headquarters, A.E.R., Royal Army Service Corps, Grange Camp, Kempston, in May was to make five cardboard costermonger barrows for an officers' mess cocktail party and that 50 others were given no training but were employed as waiters, batmen, cleaners and gardeners; and what steps he proposes to take to prevent a repetition of such a state of affairs.
    Mr. Boardmanasked the Secretary of State for War if he has investigated the case, details of which have been sent to him, concerning the Royal Army Service Corps Camp, Kempston, at which three Reservists there for 15 days' military training were employed for 7 days making five cardboard costermonger barrows for use at an officers' mess cocktail party; if he is aware that in at least one case there was no other duty or training of any kind; how many men were similarly employed; and what action he is taking to prevent a repetition of such waste of manpower.
    Mr. Head: I assume that these Questions are based on an article in the Manchester Press. Three National Service men, including the writer of the article, volunteered to make these barrows in their spare time. The writer of the article was employed on clerical duties during his training in camp.
    The 50 men described as having been given no training were all men who had failed to reach the necessary standard for trades training in their specialist units. Many of them had had their camp dates altered at their own request. They were therefore employed as general duties men for the administration of the whole camp.
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    General duties men are essential for the running of the camp and if these men had not done this duty then qualified specialists would have spent part of their time doing general duties.
    Mr. Allaun: Is the Secretary of State aware that most of these men's time was spent making cardboard wheels for the barrows and attaching to them gold painted leaves and writing "chez" followed by the name of the cook who was to serve lobsters and sucking pig? Is it surprising, in view of these kinds of incidents, that the fifteen days' training is becoming increasingly to be regarded by the men as a bad joke?
    Mr. Head: What the hon. Member has described sounds very funny and highly ridiculous, but what he omitted to say, and what the writer also omitted to say, was that the men volunteered to do this in their spare time. The individual who wrote the article had the date of his camp changed because he wanted to be married. We let him change, but if he had been to the camp he otherwise would have gone to he would have been doing proper duties.
    Mr. Boardman: As there is some obvious dispute about the facts of this case, will the right hon. Gentleman hold an inquiry, when all the interested parties can give their evidence? Surely the right hon. Gentleman appreciates that this is not an isolated case? It is grossly unfair to these young fellows and to their employers that they should be uprooted from their civil jobs to waste time in this stupid fashion. For how long can the country afford to indulge in this kind of comic opera?
    Mr. Head: I do not think this is a disputed question. I have not heard it contradicted that the men did this in their spare time after volunteering to do it.
    Mr. W. R. Williams: As there is a great deal of concern in the Manchester district since the disclosure in the Manchester Evening News, would the right hon. Gentleman like to make a comment on three observations in that paper? The first is that one man had to water the R.S.M.'s mackintosh to get the creases out. The second is that another man was given a bucket and told to go round picking up stones and that, having picked

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    up five, he gave it up as a bad job. The third is that a draughtsman was asked to write out party invitations—
    Mr. Speaker: I think that is enough for one supplementary question.
    Hon. Members: Answer.
    Mr. Head: Those allegations were all in the article written by this journalist. I have been into them and will answer in detail. On the R.S.M. question, this was not a National Service man. Ten invitations were written by a copperplate writer, who volunteered to do it. I can see no vice in that.
    Mr. Boardman: On a point of order. The right hon. Gentleman has not answered part of my question—
    Mr. Speaker: That is not a point of order.

    Troops, Germany (Accommodation)
    Mr. Stracheyasked the Secretary of State for War whether he is satisfied with the situation created by the lapse of requisitioning powers for British troops and their families in Germany; and whether adequate alternative accommodation has now been provided.
    Mr. Fernyhoughasked the Secretary of State for War what representations he has made to the Bonn Government in connection with Flat 25, Altenbrucher Damm, Duisburg, which is no longer available to the British Forces in Germany.
    Mr. Head: Her Majesty's Ambassador in Bonn and Headquarters, British Army of the Rhine, are in close touch with the Federal and Land Governments about German responsibility for making early arrangements to meet their Treaty obligations for housing. I know of only three cases of difficulty, including the one mentioned by the hon. Member for Jarrow (Mr. Fernyhough). This soldier has been rehoused.
    Mr. Strachey: Would not the Secretary of State agree that, according to the Press at any rate, cases are arising in which our troops are losing accommodation, and that it is of great importance that adequate accommodation should be given? Were not these powers abandoned very rashly before alternative arrangements had been made?
    Mr. Head: Oh, no. This was a matter, as the right hon. Gentleman probably knows, which did not go through the German Parliament. It is a comparatively small percentage, about 10 per cent., which is in question, and we think that by building, by buying leases and by other means we shall get over the problem. However, I would be the first to admit that it is a difficult one. We are watching it very closely.
    Mr. Fernyhough: Does the right hon. Gentleman not realise that, unless we can come to some real understanding with the Bonn Government, cases of this description will give rise to hardship and much bad blood, and that incidents may develop,.which would cause extreme ill-feeling between our people and the Germans? Does he not think that strong representations should be made to the Bonn Government to get over the misunderstanding, so that incidents such as these may not arise in future?
    Mr. Head: We want to do all we can to avoid friction in this matter, and our Ambassador and our Headquarters have been in touch with the Bonn Government and with various provincial Governments concerned. I think they have done everything possible to avoid friction, and I hope there will not be any more in future.

    Chisledon Camp
    Mr. F. Noel-Bakerasked the Secretary of State for War when he expects work on the demolition of the disused part of Chisledon Camp to be completed.
    Mr. Head: Within six months.

    Troops, Cyprus (Wiltshire Regiment)
    Mr. F. Noel-Bakerasked the Secretary of State for War what duties have been assigned to the 1st Battalion the Wiltshire Regiment in Cyprus; and how many casualties this unit has so far suffered.
    Mr. Head: This battalion has been employed on normal internal security duties, which consist of patrolling, cordoning and searching areas, guard, escort duties, etc. Since it went to Cyprus on 18th January, one soldier has died of wounds and seven have been wounded.
    Mr. Noel-Baker: Is the right hon. Gentleman aware that there is a very

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    natural anxiety among the relatives of many of these men? Is he satisfied that there is nothing further he can do to get prompt and full information about their safety, the conditions under which they are serving and the job they are doing? Secondly, would the Minister like to make some comment about how these troops, officers and men, are carrying out the exacting and sometimes unpleasant duties with which they are now faced in Cyprus?
    Mr. Head: I think that the general system of command control, intelligence and operations policy in Cyprus is such that it gives all the regiments who have this difficult and dangerous task the best possible chance of doing it with a minimum of casualties. I have been there, and I know that the hon. Member has also visited the island, and I indeed was full of admiration both for the moderation with which these duties were carried out and the high morale of all the troops.

    Campaign Pensions (Personal Case)
    Mr. L. Haleasked the Secretary of State for War whether he is aware that under the present regulations the eligibility for special campaign pension is still based on a maximum income for a married couple of 38s. a week and that an Oldham man who holds the India Medal, the Frontier Tirah Medal and the Queen's South African Medal, has been refused a campaign pension on the ground that he is receiving the old-age pension; and what steps he will take to deal with this position.
    Mr. Head: Provision for such awards was withdrawn in 1931.
    Mr. Hale: But is the right hon. Gentleman aware that
    "Then it's Tommy this, an' Tommy that, an' ' Tommy, 'ow's yer soul?'
    But it's ' Thin red line of 'eroes when the drums begin to roll "?
    And is it the policy of Her Majesty's Government that I should tell this octogenarian who marched to the tune of "Soldiers of the Queen" 60 years ago to establish a multi-racial society in South Africa that he cannot have an old-age pension because there are too many old-age pensioners and he cannot have a campaign pension because there are too few?
    Mr. Head: The hon. Member has made a very rapid and interesting speech, but his basic facts are wrong. When the present benefits of the Welfare State were brought in, this pension became redundant, but it does not make sense to say that a married couple are receiving 38s. a week. All are getting more than that.

    Troops, Malaya
    Mr. Brockwayasked the Secretary of State for War what forces are stationed in Singapore, in Johore Bahru at the entrance to the causeway from the mainland; and in South Malaya; and what is the reason for the strengthening of troops in this area.
    Mr. Head: We do not give details of this kind.
    Mr. Brockway: Is the right hon. Gentleman aware that there is a great deal of apprehension in Singapore because of the strengthening of these forces and the concentration of forces? Will he remove any impression that this concentration is due to the immediate political situation there?
    Mr. Head: I do not know about the apprehension in Singapore, but it is our duty to maintain law and order there. I think there would be much more apprehension if it were felt that we were going to fail in our duty in that respect.

    Overseas Deaths (United Kingdom Burial Costs)
    Mr. Allaunasked the Secretary of State for War if he is aware that it is estimated to cost the parents of a Salford National Service man £120 to have his body brought home from Germany for burial; and if he will give an estimate of the annual charge on public funds if in such cases of deaths on home postings the costs were paid by his Department.
    Mr. Head: The cost of providing the special coffin required by international regulations and transporting a body from Germany varies between about £80 and £140. To pay the cost for all overseas stations would amount to about £50,000 per year.
    Mr. Allaun: But if young men are to be conscripted, is there not a moral responsibility to bring these coffins home if the parents so desire? Surely the

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    miserable sum which the Minister mentioned is not too much to spend on relieving their parents' distress.
    Mr. Head: I am not sure that the hon. Member is absolutely right about being certain that this policy would relieve parents' distress. On some occasions, it might increase it. This whole question was gone into very carefully after the war. I can give the hon. Member further details, but I believe that the original decision made then was the right one.

    Missing Soldiers, Cyprus
    Mr. Donnellyasked the Secretary of State for War whether he will make a statement regarding the fate of Lance-Corporal Harry Gordon Hill and Private Ronald Shilton, both of the British forces stationed in Cyprus.
    Mr. Head: Lance-Corporal Hill was last seen in Cyprus on 19th December, 1955, and Private Shilton on 17th April, 1956. E.O.K.A. leaflets printed in English and Greek claimed that both the soldiers were hanged on 10th May and that their bodies were secretly buried as a reprisal for the execution of the two Greek Cypriots Karaolis and Demetrious. No trace of evidence has been found that the soldiers were held by E.O.K.A. It is significant that before the executions they never stated that the soldiers were held as hostages and no attempt was made to use them as a basis for bargaining. The leaflet was inaccurate in some respects. I regret to say that we have no information from any source to show what has happened to these two men.
    Mr. Donnelly: Is the right hon. Gentleman aware that, in view of the vast security forces available in Cyprus and the fact that one of these men has been missing for a very long time, his answer is most unsatisfactory? While there is no evidence that these men have been hanged, there is no evidence to show that they have not. It is a very grave matter, and a terrible tragedy may have occurred. Is the right hon. Gentleman aware that the public are left with the impression, because of prevarication, that the Government may not be prepared to face the consequences of public opinion in this country as a result of what may have happened?
    Mr. Head: I think that that is misrepresenting the facts. Nobody is more
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    upset than I am that these two men are missing. I am merely saying that they are missing and that it is claimed that they were held and hanged. From the information that we have, the facts suggest that that is a misrepresentation and that they were not held and not hanged, but nobody can be certain.
    Mr. Strachey: Is not the real position that these tragedies on both sides and these outrages on both sides will go on as long as the Government's present policy in Cyprus continues?

    Surplus Army Uniforms
    Mr. Brockwayasked the Secretary of State for War if he will examine the practicability of dyeing surplus Army uniforms and selling them for civilian use instead of cutting them up for use as dusters and similar purposes.
    Mr. Head: This is being done.
    Mr. Brockway: Is the right hon. Gentleman aware that many of us who have been pressing for this will welcome that answer?

  TRADE AND COMMERCE

    Exports to China (Concrete Dumpers)
    Mr. Beswickasked the President of the Board of Trade if he will remove from the list of goods restricted for export to China, 15 cwt. and I ton concrete dumpers.
    The Minister of State, Board of Trade (Mr. A. R. W. Low): No, Sir. But my right hon. Friend is ready to consider, on their merits, any applications for the export of concrete dumpers to China to be licensed under the exceptions procedure.
    Mr. Beswick: Does not the Minister realise that it is impossible for a manufacturer to go to the expense of getting an order when he does not learn until he has spent the money and secured the order whether or not he will be permitted to export the goods? Cannot he give some assurance before an individual firm embarks upon the necessary expenditure?
    Mr. Low: I do not think that is the way in which this matter works. I think

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    that the procedure can work quite satisfactorily, and if the hon. Member's constituent who is concerned would like to get in touch with us, we will do our best to help him.
    Mr. Beswick: What earthly purpose is served by preventing machines of this kind being exported to China?
    Mr. Low: My Answer said that we have made use of the exceptions procedure when we have considered these cases on their merits, and that seems to me to be serving a good purpose.
    Mr. Jay: Are the Government content with that exceptions procedure, or are they still pressing through international negotiations for some much more general relaxation?
    Mr. Low: I cannot add to what was said by my right hon. Friend the Minister of State for Foreign Affairs on 14th May, when he said that the discussions, of which the right hon. Gentleman knows, are not yet concluded.

    Film (German Processing)
    Mr. Swinglerasked the President of the Board of Trade if his attention has been drawn to the action of a film production company in transferring to Germany for processing the negative of a film called, "Escape in the Sun," during the course of a trade dispute with the Association of Cinematograph Technicians; and if he will give an assurance that he will refuse import licences to film processed abroad on account of trade disputes.
    Mr. Low: No licences are required for the import of exposed films from Germany.

    Lancashire Cotton Industry
    Mr. Haleasked the President of the Board of Trade whether he is aware of the further diminution in employment in the Lancashire cotton industry; and whether he will discuss with the Secretary of State for the Colonies proposals for the expansion of exports of cotton yarn and cloth in those territories.
    Mr. Low: My right hon. Friend is aware of the employment position in the Lancashire cotton industry. He is in close touch with the industry through the Cotton Exports Committee and otherwise
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    on all questions of exports. The Colonial Territories admit our cotton goods without import restrictions, with the exception of Jamaica.
    Mr. Hale: Would the right hon. Gentleman examine the figures which have been circulated by the Cotton Board? If he does so, he will see that there has been a very considerable diminution in all cotton imports by Colonial Territories in the last few years. Is he aware that spindle hours dropped by 14 per cent. from 1954 to 1955 and loom hours by 8 per cent. and that that is a very serious set-back for a very important industry?
    Mr. Low: I am, of course, aware of these matters. The diminution has been in colonial imports from this country. Total colonial imports have increased very considerably and, as the standard of living in the Colonies rises, we hope that there will be more scope for imports of Lancashire cotton goods.
    Mr. Bottomley: What steps are Her Majesty's Government taking to draw the attention of exporters in this country to the fact that earnings as a result of the recent lifting of the embargo on trade with China will mean increased money and ability to buy goods?
    Mr. Low: I think that they are quite aware of that.

    Congo Basin Treaties
    Mr. Haleasked the President of the Board of Trade whether, in view of the serious effect of the Congo Basin Treaties on the Lancashire cotton industry, he will discuss with the other United Kingdom Ministers concerned the question of the revision of those treaties.
    Mr. Low: The Congo Basin Treaties have, for the past 70 years, prevented the Colonial Governments in this area from giving us preferences on cotton textiles and other things, and they have protected our position in countries in this area outside the British Commonwealth. Their revision, if that were practicable, would not by itself help the Lancashire textile industry.
    Mr. Hale: Is the right hon. Gentleman aware that, taking the three East African territories alone, their cotton piece goods imports in the last recorded quarter, as provided by the Cotton Board, were 7½ per cent. from the United Kingdom and

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    over 80 per cent. from India and Japan? In view of the help that we give to these countries and the responsibility we take, surely the time has come when the right hon. Gentleman should look at this matter. There multilateral treaties are not sacrosanct for ever.
    Mr. Low: I am aware of these facts and of the desirability of our exports to East Africa and other places being increased, but I do not think that a revision of the Congo Basin Treaties will necessarily by itself bring about that result.
    Lieut.-Colonel Schofield: What was the point of the Anglo-Japanese Peace Treaty of 1951 denying Japan any rights under the Congo Basin Treaties if, by so doing, it has made no difference at all to Japan's ability still to enjoy the lion's share of the East African market?
    Mr. Low: That raises a special question on Japan. This question is about the Congo Basin Treaties generally which affect an enormously large number of countries.

    Bankruptcy Laws
    Sir F. Medlicottasked the President of the Board of Trade if he is aware of the extent to which the bankruptcy laws are used by debtors to exploit their creditors; if he is satisfied that the law in regard to bankruptcy offences is being adequately enforced; and if he will make a statement.
    The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker Smith): I am not aware that the bankruptcy laws are being used by debtors to exploit their creditors; but, if my hon. Friend has evidence of such exploitation, I suggest that he should bring it to the notice of the Committee on Bankruptcy Law Amendment which is sitting under the chairmanship of His Honour Judge Blagden. I have no reason to think that the law in regard to bankruptcy offences is not being adequately enforced.
    Sir F. Medlicott: Is my hon. and learned Friend aware that many people embark upon enterprises on credit without either the hope or intention of paying up if things go wrong, knowing that they can escape their liabilities by passing through the Bankruptcy Court? Will he not look further into the question
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    of tightening up the law relating to the obtaining of credit over and above the cases where the technical offence of obtaining money by false pretences exists?
    Mr. Walker-Smith: The Blagden Committee is engaged in the task of reviewing the adequacy or otherwise of the existing law. Perhaps my hon. Friend would sympathetically consider my suggestion that he should get into touch with that Committee?
    Mr. Fernyhough: Would not the hon. and learned Gentleman agree that there are far too many bankrupts now due to the policy being pursued by Her Majesty's Government?
    Mr. Walker-Smith: No, Sir, I cannot accept the implication of the hon. Gentleman's supplementary question.

    Domestic Hollow-ware
    Mr. Simmonsasked the President of the Board of Trade (1) what action he proposes to deal with the loss of trade now being experienced by the hollow-ware industry;
    (2) if he will make representations in regard to subsidised dumping of hollowware products by Eastern European countries and Western Germany in Nigeria and the Gold Coast, in the interests of the British export trade.
    Mr. Low: The value of exports of domestic hollow-ware during the first four months of this year is 19 per cent. below the value of similar exports in the same period last year. This is mainly due to reductions in our exports to African territories which have been affected by a marked intensification of competition. The hollow-ware industry has made representations to the Board of Trade about this matter, but the evidence of dumping so far provided has not been conclusive. The services of the Board of Trade are always available to help in finding and developing additional markets overseas.
    Mr. Simmons: Is the Minister aware that I have sent him figures which lead one to suppose that some form or organised dumping is going on? Will he further pursue his inquiries into that matter?
    Mr. Low: Certainly, Sir.

    Motor Industry
    Mr. Osborneasked the President of the Board of Trade, in view of the fact that motor car exports were down for the fourth month in succession, being 26,082 for April, 1956, against 33,345 for April, 1955, and making only 99,592 for the first four months of this year against 123,928 for the same period last year, if he will invite both sides of the industry to meet him to see how far the price of our cars can be reduced, so that they may be more readily sold abroad, and a slump in the industry be arrested.
    Mr. Low: My right hon. Friend is advised on matters affecting the Motor Industry by the National Advisory Council, on which both sides of the industry are represented and which meets regularly. The next meeting is on 27th June, when the industry's exports will be considered. Prices must, of course, be matters for the commercial judgment of the manufacturers.
    Mr. Osborne: In view of these alarming figures, which show a fall in exports in each of the last four months, and in view of the fact that there is a slump starting in the Detroit motor industry, does not the Minister think that we ought to get our own people together and put our own house in order before that American setback really hits us in this country?
    Mr. Low: But our people come together, and my right hon. Friend is in touch with them through the National Advisory Council.
    Mr. Lewis: When the National Advisory Council meets, would the Minister put to them the suggestion contained in the Question, which is an admirable one, particularly that of trying to save money and cutting down the prices of cars? Would it not be a good thing if a few more Sir Bernard Dockers were sacked and we got on with the job of reducing the prices of cars?
    Mr. Low: I am certain that the motor car manufacturers know full well the importance of cutting costs. It is in their own interest. Their livelihood depends upon increasing their production and increasing exports, and I have no doubt that they will do so if they can.

    Factory Building and Extensions (Development Areas)
    Mr. H. Wilsonasked the President of the Board of Trade how many proposals he has rejected for building factories and factory extensions in Development Areas over the past six months; and if he will make a statement about his policy in this regard.
    Mr. Walker-Smith: No application for an industrial development certificate for a privately financed factory has been rejected in a Development Area in the period to which this Question relates. As regards applications for the building or extension of Government-financed factories, no precise figures of cases rejected are available, as no statistics are kept of inquiries or proposals which are tentative or obviously without claim on Government finance. However, no applications outside this latter category have been finally rejected in the period in question. But in view of the need for the strictest economy in Government expenditure, it has been necessary to defer consideration of all proposals for the provision of new Government-financed factories or extensions under the Distribution of Industry Act save in a very few cases of special importance and urgency. The applications which may qualify for this special category are under consideration, and the remainder have been deferred. The latter will be reviewed as soon as economic circumstances permit.
    Mr. Wilson: But does this not mean that the Government have made a major change in Development Area policy without informing the House, and that what has been the admitted policy ever since the end of the war has now been changed? Further, does it not mean that the Government are refusing to build factories, many of which may be essential, if they have to be built on public account, but that there is no control whatsoever of inessential private factory building?
    Mr. Walker-Smith: Taking the first of the right hon. Gentleman's supplementary questions, I do not agree with him that this is a major change in policy. It is a change in the tempo of the application of the machinery of the Distribution of Industry Act. In regard to industrial development certificates, the right hon. Gentleman well knows that there we are

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    bound by our statutory duties as defined by Section 14 (4) of the Town and Country Planning Act, 1947.
    Mr. Jay: Is it not utterly unprecedented at any time since the war for the Government to refrain from building factories in Development Areas on the grounds of saving money, and is not this a policy of lunacy, to try to help the country out of its present difficulties by not building new factories?
    Mr. Walker-Smith: I am sorry if the right hon. Gentleman finds the policy of trying to save money unfashionable. On the contrary, I should have thought that it was right to review the application of the machinery of this Act in accordance with the general economic position of the country.
    Mr. Jay: Does the hon. and learned Gentleman see no distinction between spending money on the building of new factories and spending money on current consumption?
    Mr. Walker-Smith: That is precisely why these applications have been divided into the two categories to which I have referred, and why those of special importance and urgency have been picked out for special treatment.
    Mr. Wilson: On a point of order, Mr. Speaker. This is clearly a change of policy, and in view of the hon. and learned Gentleman's unsatisfactory answer, he can be sure that we on this side of the House will find an opportunity of raising the matter in debate.
    Mr. H. Wilsonasked the President of the Board of Trade why he has rejected the proposal to build on the Huyton Industrial Estate an extension to a factory, particulars of which have been supplied to him, in view of the contribution that would be made to employment in a Development Area and to exports, including dollar exports.
    Mr. Walker-Smith: The company concerned were informed in March this year that we could not in current circumstances approve their application for the building at public expense of a large extension to their present factory; and they have substituted a smaller scheme, which is now under consideration.
    Mr. Wilson: Yes, but is this not a clear case of a factory that would make
    866
    a contribution to dollar exports as well as to employment in a Development Area? Will the hon. and learned Gentleman answer this question. Is it not a fact that essential factory building of this kind is being held up owing to the economy drive of the Government, and that the Government have so far refused to take powers to make corresponding cuts in inessential factory building that does not help our export trade?
    Mr. Walker-Smith: No, this application comes within the category of those to which I referred in answer to the right hon. Gentleman's previous Question, namely, of special importance and urgency, on which a decision will be made shortly. In arriving at that decision, both the factors to which the right hon. Gentleman refers, employment and export contribution, will be taken closely into consideration.
    Mr. Wilson: But if the hon. and learned Gentleman admits that this comes under the heading of special urgency, both for employment and exports, why has the company been asked to withdraw its major proposal for an extension which would make a major contribution to exports, and has been asked to substitute a very small scheme in its place which can make only a small contribution to increased exports?
    Mr. Walker-Smith: My reference to its being included in this category was a reference to the current application, which is the modified application, and which is now the only thing before us.
    Mr. Hamiltonasked the President of the Board of Trade the total amount of new factory building provided in the Scottish Development Area in each of the last four years; and what were the comparable figures for the developing mining areas in East Scotland.
    Mr. Walker-Smith: As the Answer is rather long and contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Hamilton: Can the Minister indicate whether the figures relating to the developing mining areas of East Fife in the east of Scotland are negligible or otherwise? If they are, in view of the importance of these areas to the economic well-being of the country as a whole, will Lie take additional powers to seek to attract industry into them?
    Mr. Walker-Smith: The figures are, of course. much smaller than those for the central Development Area in Scotland, but in the central Development Area the figures of labour available are much higher and there is a heavy concentration of industry. I will bear in mind everything the hon. Member has said about the importance of the area which he represents.
    Mr. Woodburn: Would the hon. and learned Gentleman also ask his right hon. Friend to compare the lowering of factory building in Scotland as a whole with that allowed in London in recent years? Is it not a wrong policy to bolster up already over-populated areas and to allow sparsely populated areas to be depleted still further?
    Mr. Walker-Smith: As the right hon. Gentleman is well aware, there has been a very substantial contribution of new factory building in Scotland over these years. The factory building in London has mainly been in respect of extensions to firms already there.
    Following is the answer:
    According to the latest information available to the Board of Trade, the area of new factory space completed in the Scottish Development Area in each of the last four years was as follows.

    sq. ft.

    1952

    2,037,000

    1953

    2,341,000

    1954

    2,159.00

    1955

    2,168,000

    The comparable figures for the developing coalfield areas of East and West Fife, Alloa and the Lothians are:

    sq. rt.

    1952

    168,000

    1953

    158,000

    1954

    242,000

    1955

    99,000

    All the figures relate to new factories and factory extensions of over 5,000 sq. ft. for which industrial development certificates have been issued. They do not include new buildings and extensions approved for the National Coal Board.

    Brazilian Exchange Rates
    Mr. Russellasked the President of the Board of Trade if he is aware that in the last few weeks the exchange rate of the Brazilian cruzeiro has been manipulated so as to nullify the increased tariff preference granted to British Colonial Territories on bananas; and if he will make a statement.
    Mr. Low: There have been changes recently in the structure of Brazilian exchange rates, but bananas are only one of the many commodities affected. It is too early to say what the effect might be on exports of bananas from British Colonial Territories. I am, however, watching the position, and we shall approach the Brazilian Government if it appears that the increased preference is being frustrated.
    Mr. Russell: If a change has been made in the exchange rate affecting bananas, would not my right hon. Friend agree that it is a violation in spirit, if not in letter, of the agreement recently negotiated, under which the preference was obtained in return for a concession given to Brazil on Brazil nuts?
    Mr. Low: The question is whether the intent of the agreement recently reached will or will not be frustrated, and that we must wait and see.
    Mr. K. Thompson: Is not this an example of the need for a discussion of the overall position of our trade with Brazil at present, and will not my right hon. Friend consider the earlier representations which I have made to him on this point?
    Mr. Low: That is another question. We have recently had discussions with Brazil on payments, and, as my hon. Friend knows, we have reached a satisfactory agreement with them on a more multilateral system of trade.
    Mr. Bottomley: As the House quite recently approved the arrangement whereby Brazil nuts were given reduced tariffs in consideration of the preference given to colonial bananas, are we to take it that we shall review that arrangement and that the House will be informed with a view to disowning the Order which we passed earlier?
    Mr. Low: I said that I was watching the position and would approach the Brazilian Government if that became necessary.

    Factories, Swindon
    Mr. F. Noel-Bakerasked the President of the Board of Trade what steps he is taking to encourage London firms to open factories in Swindon.
    Mr. Walker-Smith: The expansion of Swindon is designed to relieve congestion in the London area, and the Board of Trade try to interest suitable firms in the advantages which Swindon can offer.
    Mr. Noel-Baker: Is the hon. and learned Member aware that, although Swindon has been very successful in getting a large number of Londoners and other immigrants settled there, only one London firm has so far moved to Swindon, and that is a firm employing only 80 workers? Is it not time that his Department tried to do more about it?
    Mr. Walker-Smith: The hon. Member will appreciate that we have no power to compel London firms to go to Swindon, but he can be assured that no application of any London firm to go to Swindon has been refused. Unfortunately, the distance makes it difficult for some of the smaller firms to transport their undertakings to Swindon, but we will certainly continue to do all we can in this direction.

    Australian Import Quotas
    Mr. Bottomleyasked the President of the Board of Trade if he will make a statement about the further cut in imports into Australia of British exports.
    Mr. Low: The Australian authorities have not announced any change in the present level of import quotas.
    Mr. Bottomley: Is the Minister aware that over the last two years the Prime Minister of Australia and Minister of Trade have continually called attention to this, and that recently there were widespread reports in the Press that further import cuts were to be made? This is due to Her Majesty's Government's trade policy. When will they review the matter with a view to helping exporters to send their goods to Australia?
    Mr. Low: The right hon. Gentleman knows abo it the trade discussions. There was a report in the Press on 31st May, and I made inquiries about it, but I have not been able to find any confirmation of the proposals mentioned in the Financial Times article, which he probably saw.

    G.A.T.T. (Negotiations)
    Mr. Bottomleyasked the President of the Board of Trade what concessions have been made by Her Majesty's Government as a result of the recent tariff
    870
    negotiations under the General Agreement on Tariffs and Trade.
    Mr. Low: My right hon. Friend will be making a statement on 7th June about these negotiations.
    Mr. Bottomley: In the meantime, can I be assured that the Commonwealth Governments and the home manufacturers of goods concerned were fully consulted before any tariff concessions were made?
    Mr. Low: I think all that will be covered in the statement or the White Paper. Statements have previously been made about consultations, to which I have nothing to add.

    Foreign Textiles (Anti-Dumping Duties)
    Air Commodore Harveyasked the President of the Board of Trade what steps he is now taking to prevent dumping of foreign textiles in this country.
    Mr. Low: As my right hon. Friend the Lord Privy Seal told the House on 7th March, the Government intend to introduce, early next Session, legislation to permit the imposition of anti-dumping duties in appropriate cases.
    Air Commodore Harvey: I am glad to hear that news. Will my right hon. Friend bear in mind that many firms, particularly in my constituency, are at present suffering very grievously from dumping and excessive imports? Will he see what could be done in the next six months, because the position is steadily worsening?
    Mr. Low: I am aware of allegations, but I have no clear evidence that textiles are being dumped. I will, of course, pay attention to any evidence brought to my notice.
    Mr. Bottomley: Is the right hon. Gentleman aware that most hon. Members are having dumped on them a good many bits of material and some dangerous weapons showing that dumping is going on?

    Japanese Grey Cloth
    Mr. Fisherasked the President of the Board of Trade why large quantities of Japanese grey cloth are allowed duty-free into this country provided that, after processing here, they are re-exported as British.
    Mr. Low: Japanese grey cloth within an annual quota of £3 million is imported into the United Kingdom for finishing and re-export to colonial and other markets. In addition, some Japanese grey cloth, the import of which has been licensed by Colonial Governments, is also imported into the United Kingdom for finishing and re-export. These imports give work to the finishing industry which would go to other countries if the imports were not allowed. Duty-free entry is afforded, except for rayon grey cloth, under regulations issued in accordance with Section 40 of the Customs and Excise Act, 1952, which continued powers originally given in 1932.
    Mr. Fisher: Might I put three very short questions to my right hon. Friend arising out of his Answer? Are not these Japanese imports, to say the least, somewhat prejudicial to the British textile industry; secondly, why should we make things so easy for Japan, who did not make things particularly easy for us during the last war; and, thirdly, why should we not take steps to safeguard our textile industry such as other countries, notably the United States, take to safeguard theirs?
    Mr. Low: These imports are not prejudicial to the interests of the Lancashire textile industry as a whole. They help the finishing industry. Our agreement with Japan does not necessarily make things easy for Japan. It is a balanced agreement and, in return for quotas which we grant, we get valuable quotas in Japan. Our trade relations with Japan are regulated by the Anglo-Japanese Trade and Payments Agreement, and the trade quotas are made under it, and I think they are satisfactory to British trade as a whole.
    Mrs. Castle: Has the Minister's attention been drawn to Mr. Cyril Lord's proposal that Japanese cloth should be allowed duty-free into this country only on condition that it is re-exported to Commonwealth markets? He feels that this would give some protection to the Lancashire industry. Could the Minister state the Government's attitude to that proposal?
    Mr. Low: I have seen the various things which Mr. Cyril Lord has sent round to all of us. I understood that his proposal about Japanese imports was
    872
    that they should not be allowed even for re-export, but on that I think he is wrong and that he does not represent the view of the Lancashire industry as a whole.

  NATIONAL FINANCE

    Overseas Loans and Grants
    Mr. E. Johnsonasked the Chancellor of the Exchequer the total cost to the Exchequer of loans, grants and gifts of money made to countries outside the British Commonwealth and to international organisations, respectively, during the financial year 1955–56; and what proposals have been made involving a continuance of this type of expenditure during the current financial year.
    The Chancellor of the Exchequer (Mr. Harold Macmillan): As the Answer consists of a table of figures, I will, with my hon. Friend's permission, circulate it with the OFFICIAL REPORT.
    Mr. Johnson: Is my right hon. Friend aware that the answer to my Question requires only two figures? Would he not agree that it would be much better to conserve our resources for our own use and for the development of the Commonwealth instead of handing out largesse to other countries from which we get no thanks and few advantages?
    Mr. Macmillan: Perhaps my hon. Friend will look at the figures in the reply, when perhaps we could have a discussion or he might wish to put down further Questions.
    Following is the answer:

    —

    1955-56

    Provision in Estimates for 1956–57

    £

    £

    (a) Loans and grants to countries outside the British Commonwealth

    37,327,189

    17,415,510

    (b) Subscriptions to the budgets of international organisations

    5,656,088

    6,791,503

    (c) Grants to bodies rendering international assistance

    3,594,328

    3,304,000

    Bank Rate
    Mr. Osborneasked the Chancellor of the Exchequer if he will reduce considerably the Bank Rate in view of the fact that it no longer acts in a major deflationary way because of the existing rate of taxation but is adding to the financial burdens of local authorities and impeding business expansion that ought, in the national interest, to take place.
    Mr. H. Macmillan: Monetary policy remains flexible and the Bank Rate will be varied as circumstances require. But my hon. Friend underrates the deflationary effect of the present level of interest rates.
    Mr. Osborne: What is the use of controlling the cost of money through a high Bank Rate and at the same time leaving volume uncontrolled? What steps will my right hon. Friend take to control volume so that price control can be effective? Is he not aware that the present policy in some respects is undoubtedly having an influence on the cost of living?
    Mr. Macmillan: These deep subjects are difficult to deal with by question and answer. There are some who say that it is possible to make money scarce without making it dear. There are some who say that to make it dear does not help to make it scarce. All I can say is that the trend is that the various weapons, of which monetary policy is one, will be successful in overcoming our difficulties.
    Mr. H. Wilson: Since this deep subject was referred to in a number of speeches from this side of the House during the debate on the Finance Bill and the Chancellor did not even deign to enter the debate to reply, will he answer these questions today? First, is he aware that the high Bank Rate is both increasing Government expenditure very heavily and increasing our remittances overseas; second, while we on this side do not accept his over-reliance on monetary weapons, is he not aware that the Bank Rate is not having the effect which he wants it to have on bank advances, and will not do so as long as the Bank of England continues to keep the Joint Stock Banks replenished so far as their cash basis is concerned?
    Mr. Macmillan: That series of questions is no nearer to the possibility of
    874
    dealing with this matter by question and answer than those raised before. All I say is that both sides of the House accept the view that the Bank Rate is one of the methods of control which it is wise to use—monetary policy is partly effected by the Bank Rate and partly by a general policy. I am not saying that we yet have absolute proof about whether the reintroduction of these methods will succeed or not, but I am very confident, as a result of the last few months, that we are beginning to overcome our difficulties, so long as we do not throw unnecessary spanners into the works.
    Mr. H. Wilson: Surely the Chancellor is aware that this anxiety is shared in all parts of the House and that there is great anxiety in the City of London among people of different views about whether this Bank Rate policy is working. Since the right hon. Gentleman says that he cannot answer it in question and answer, will he, having regard to the very grave position of sterling today, take an early opportunity of making a statement at the Dispatch Box in relation to sterling, and particularly the problem of the Bank Rate?
    Mr. Macmillan: The last question which the right hon. Gentleman has asked has not been in the general public interest and has tended to accentuate our difficulties rather than to help them. I repeat that the results of the gains which we have made in the reserves and the results of the gain in the balance of payments in the last five months give us great confidence in the future.
    Mr. Gaitskell: If things are going as well as the Chancellor suggests, why does he keep on making speeches about coming disaster?
    Mr. Macmillan: I do not say that they are going so well. I say that if we use these weapons sensibly and carry on a wise policy, we shall overcome our difficultles.

    Domestic Hollow-ware
    Mr. Simmonsasked the Chancellor of the Exchequer if he will give consideration to the removal of the 30 per cent. Purchase Tax on hollow-ware to assist the industry to maintain full employment in face of subsidised dumping by Eastern European countries and Western Germany.
    Mr. H. Macmillan: No, Sir. I do not think such a step would be justified.
    Mr. Simmons: Is the Chancellor aware that, since he imposed the tax last October, there has been considerable unemployment in the industry and considerable subsidised dumping? Will he reconsider this matter, for some very old employees of the industry are losing their jobs as a result of this?
    Mr. Macmillan: That is another question. The question I was asked was whether, in view of the dumping of hollow-ware, I would consider altering this tax. We have no evidence such as that to which the hon. Member refers.

    Road Works (Public Loans)
    Mr. E. Johnsonasked the Chancellor of the Exchequer if he will prepare plans to invite subscriptions to a loan for road construction.
    Mr. H. Macmillan: No, Sir. I do not think this method of financing road construction desirable in present circumstances.
    Mr. Johnson: Does not my right hon. Friend agree that such a loan would not only hclp to defray the cost of building modern roads, which are so badly needed, but would also be a most effective way of attracting new savings? Would not people invest much more readily in a project of this kind, of which they would approve, than in the more conventional type of Government security?
    Mr. Macmillan: That is a matter for consideration. I have tried to widen the general scope of saving.

    Savings (Par Bonds)
    Mr. McKibbinasked the Chancellor of the Exchequer whether he will consider issuing a savings certificate, to be called a "par bond," on which no interest would be paid but which would be redeemable at any time at the same spending value as at the date when purchased.
    Mr. H. Macmillan: No, Sir. I fear I could not accept this plan.
    Mr. McKibbin: Does my right hon. Friend not consider that these par bonds would be an indication to the world of the Government's confidence in their ability to stabilise or decrease the cost
    876
    of living? Does he not consider that many investors would purchase them to nullify a possible fall in the value of the £? Will he investigate a scheme being worked on similar lines in Finland?
    Mr. Macmillan: Many considerations have to be taken into account in the issuing of Government bonds, and I must say I could not accept this particular suggestion.

    ECONOMIC POLICY AND AUTOMATION (SOCIAL PROBLEMS)
    Mr. G. Brownasked the Prime Minister whether he is aware that the joint impact of the Government's economic policy and automation on large sections of British industry is giving rise to social problems which are causing great public anxiety; and whether he will state the Government's proposals to meet the situation.
    The Prime Minister(Sir Anthony Eden): The Government's policy is to safeguard full employment by improving our balance of payments and strengthening our reserves. It is only the failure to do this which should cause public anxiety and could give rise to widespread hardship. To achieve our object we must accept changes in the use of our resources and labour.
    As successive Governments have recognised, full employment does not mean that every individual is guaranteed his particular job for as long as he wishes to stay in it. Changes in our pattern of employment are a necessary condition of full employment as a whole. Her Majesty's Government will, of course, do all they can to ease the process of transfer for the individual worker.
    As regards automation, I would refer the right hon. Gentleman to the full statement I made to the House on 10th May.
    Mr. Brown: Is the Prime Minister aware that, while these general statements are all right, what is really worrying at the moment is that there seems to be no provision to enable men who may be displaced to become mobile and move somewhere else—there are no houses in which to live, no arrangements for travelling time or lodging allowances? Did

    877
    the Prime Minister hear the replies of the Parliamentary Secretary to the Board of Trade today, when we were told that new factory building is being discouraged at this moment, thereby giving people displaced or affected by automation the great fear that there will not be jobs to which they can move, even if they accept this principle?
    The Prime Minister: The right hon. Gentleman's fears in that particular case of automation are not justified. At present, all sorts of arrangements are being made in the Midlands, and in that area there is a great excess of demand for labour over the men available to fill the jobs. That is true in particular in respect of a recent dispute, upon which I do not wish to touch at the moment, where special arrangements have been made by the Ministry of Labour to ensure that anybody who becomes redundant shall be speedily re-employed.
    Mr. Brown: May I press the Prime Minister on this issue? Setting up an office of the Ministry of Labour in a factory is mechanically the sensible thing to do, but it is not our information—will the Prime Minister check this?—that there are jobs or can be jobs available in Coventry. Of course, if this spreads to other towns—as it ought to do and must do very quickly—there will shortly be a run on jobs in many towns and men will have to move. If export figures continue to decline, there will be no jobs at all. [Interruption.] I am sorry but this is urgent, for we shall run into trouble unless we face this matter now. Will the Prime Minister consult industrialists and trade union leaders who are very worried about this and himself take some firm action?
    The Prime Minister: I do not at all object to a series of questions on this topic. I fully realise its great importance. We have given it very careful consideration and will continue to watch it. There are certain things which the Government can do, but there are other things which industry is probably better left to do for itself without Government interference. I can assure the right hon. Gentleman that we are conscious that there is a problem here, but I do not take as pessimistic a view as he does about the problem of unemployment in the area to which he was referring.
    Mr. Shinwell: Will the Prime Minister help hon. Members on this matter which is causing some anxiety in all quarters of the House and outside? He spoke of the Government wishing to transfer men from industries where they are regarded as redundant to industries where they can find employment. Would he be good enough to set forth in a White Paper, or in the OFFICIAL REPORT, what the Government have in mind about this and what they think it is possible for the Government to do to ease the strain?
    The Prime Minister: I will certainly consider that. As the House knows, the Ministry of Labour has certain responsibilities in this matter—for instance, in respect of retraining and so on—which it has to discharge and will discharge to ease these transfers; but I will certainly consider the right hon. Gentleman's suggestion.
    Mr. J. Griffiths: In studying these questions, will the Prime Minister bear in mind that one of the gravest consequences is what happens to the skilled craftsman of 45 or 50 who loses his job? Will he consider that problem in the light of the information given earlier by the Parliamentary Secretary to the Board of Trade, that the Government are making a change in their policy for the Development Areas and in the building of Government factories? Does he rule out the possibility of Government factories being built so that these men who lose their jobs may find other employment?
    The Prime Minister: We had some Questions on automation the other day. I agree that the main problem is of the older man, and that is one of the matters which the Ministry of Labour has particularly under its care. I can assure the House that we are conscious of this problem. At the same time, as a nation we have to be careful not to get so rigid in this matter that we cannot do the redeployment that we have to do.
    Mr. Gresham Cooke: Is it not true that in the last few years thousands of men have moved into Coventry of their own accord and initiative and found accommodation? Is it not, therefore, equally true that these men will show initiative again and move to fresh areas where work is required and find accommodation once more?

BILL PRESENTED
  GOVERNORS' PENSIONS
  Bill to amend the Pensions (Governors of Dominions, &c.) Acts, 1911 to 1947, presented by Mr. Lennox-Boyd; supported by Mr. Hare, Mr. H. Brooke, and Commander Noble; read the First time; to be read a Second time upon Thursday and to be printed. [Bill I44.]
ORDERS OF THE DAY

  FINANCE (No. 2) BILL
  Considered in Committee.
  [SIR CHARLES MACANDREW in the Chair]

  FINANCE (No. 2) BILL

    Clause 1.—(TOBACCO.)
    3.31 p.m.
    Mr. Tom Brown: I beg to move, in page 2, line 4, at the end to insert:
    (3) Section four of the Finance Act. 1947 (which provides for relief for pensioners), shall have effect as if the reference in paragraph (a) of subsection (1) thereof to the increase in the retail price of tobacco occasioned by the duties imposed by that Act included (in addition to the reference provided for by subsection (7) of section one of the Finance Act, 1948) a reference to the effect of the further increase in the retail price of tobacco occasioned by the provisions of this section.
    This afternoon I start with a distinct advantage, inasmuch as my appeal is addressed to the Chancellor of the Exchequer—who has already left his place. He is a smoker and should not, therefore, be prejudiced against the Amendment. From the observations which I have made over a number of years I have found that he is fond of his pipe. He is also fond of his cigarette and an occasional cigar. After having listened to the arguments from hon. Members on this side of the Committee, I do not think that he will venture to refuse to accept the Amendment.
    Another advantage is that during the course of his speech on the fourth day of the Budget debate he failed to reply to many requests from hon. Members on both sides to give consideration to the plight of the old-age pensioners. When questioned by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) about tobacco tokens, he said:
    "That is a wider question which I will debate when we come to the discussion on the Finance Bill. As the right hon. Gentleman said, ' It is all open '. I do not propose to enter into these details at the moment. I think that it would be better to leave it to the Finance Bill debates."—[OFFICIAL REPORT, 23rd April, 1956; Vol. 551, c. 1570.]
    We now have an opportunity of responding to the request which he then made.
    During the Budget debate many hon. Members on both sides referred to the effect that the Budget would have upon the condition of old-age pensioners and, since then, several Questions have been

    881
    tabled by hon. Members on bath sides indicating that the increase in Tobacco Duty would be an additional hardship in the lives of old-age pensioners. That is why we have put down this Amendment.
    Whatever may be our political philosophies, it is generally agreed that if there is one section of the community which is hard-hit by present-day conditions it is the old-age pensioners and those in the lower income groups. It is also generally agreed that if there is anything we can do to help this section of the community we should do it. That section is feeling the full blast of the economic blizzard which has descended upon us, as I can substantiate from my experiences when visiting these people in their homes.
    In July, these people will experience a further increase in the cost of living, brought about by the removal of the subsidy on milk. I hope that you will not rule me out of order, Sir Charles. Furthermore, in September further inroads will be made upon their economic conditions, by way of the increase in the price of bread, through the removal of the remaining bread subsidy. In September, whether or not we like it, old-age pensioners and all other workers will have to pay the highest price for a loaf of bread since the days of Cobden and Bright. That is a reflection upon the policy of the Government—but I know that if I continue to refer to other commodities whose price has been increased I shall be ruled out of order, so I will leave the matter there.
    The question whether smoking is or is not a bad habit is not under discussion. The main question before us now is whether we can help those who have reached the eventide of life to enjoy that eventide by making it easier for them to have their pipe of tobacco, their cigarette and their pinch of snuff. We must remember that the people for whom we are pleading are those who, during their activities in various vocations through the years which now lie behind them, played their part well by a manifestation of loyalty, devotion and courage and helped in no small way to enable this nation to attain its position as one of the greatest nations of its size in the world.
    For what they have done in the past, for the country, for industry and for commerce, they are entitled to any help that the Government can afford to give.
    882
    Surely, this Committee will not deny them some solace in their solitude. Let it be remembered that many of the old-age pensioners and people in the lower income groups live in loneliness, and loneliness is a terrible thing. If, by enabling them to have a pipe of tobacco or a cigarette, we can alleviate that loneliness, let us do so.
    In my constituency, there are a number of clubs for old people. I visit them occasionally. Whether hon. Members will laugh at me or not does not concern me, but when on those visits I take with me a few of my old pipes which have been cleaned up, and I also take a little extra tobacco. Believe me, there is nothing which gives the old people greater joy than being able to enjoy an extra pipe of tobacco. It has a wonderful psychological effect on them.
    It is not much that we are asking for these old people. According to prison regulations, men who are serving sentences for wrong-doing are allowed 1 oz. of tobacco a week or 100 cigarettes. Shall we deny the same thing to these people who are at liberty and who have done no wrong? The whole thing is crazy, in my opinion. I am not finding fault with prison regulations. But the people responsible for drawing up the regulations realised that, to a smoker, a pipe of tobacco is a source of consolation. If that can be afforded, even to those who are in bondage, surely people at liberty should be able to enjoy at least a pipe of tobacco or a cigarette. The visits which I occasionally make to these clubs for old people make me feel angry at the situation in which these old folk find themselves. They cannot afford more than I oz. of tobacco a week.
    I know that there are many arguments which may be advanced against this proposal. We are told that they ought to save on this and on that. But I suggest that no hon. Member would be able to provide for the tobacco he required out of such a meagre pension as these old people receive from the Government. I do not intend to weary the Committee by giving details of the numbers of budgets which I have received from old-age pensioners living in various parts of the country, but I have failed to find any indication that these old people are able to make provision for buying the amount of tobacco which

    883
    would give them satisfaction or even some consolation.
    The history of the Tobacco Duty is very interesting. Anyone who cares to examine how it has grown over the years will be amazed and staggered. It is almost three hundred years since a duty was first placed on tobacco. It originated in the year 1660. Then the duty on 1 lb. of tobacco was 2d. In the early part of the eighteenth century the duty was raised to 6½d. In 1910, the figure was 3s. 8d. per lb. In 1915, it was 5s. 6d. In 1917, it reached 7s. 4d. In that year the agitation against the high Tobacco Duty was so strong that the then Government were compelled to reduce is to 6s. 5d. per lb.—
    Sir John Barlow: Will the hon. Member give way?
    Mr. Brown: I will give way in a moment.
    From 1918 to 1926 the figure stood at 8s. 2d. By 1931 there had been a slow but gradual increase, and in that year the figure was 9s. 6d. per lb. In 1939, it was 11s. 6d.; in 1940, 17s. 6d.; in 1942, 29s. 6d.; in 1945, 38s. 8d. and on 16th April, 1947, when a concession to old-age pensioners was made by my right hon. Friend the Member for Bishop Auckland it stood at 54s. 10d. per lb. On 7th April, 1948, it was raised to 58s. 2d. On 17th April of this year it was raised to 61s. 2d. per lb. Every time, without exception, the increase in the Tobacco Duty has hit the old-age pensioners and people in the lower income groups. Now I will give way to the hon. Baronet.
    3.45 p.m.
    Sir J. Barlow: I wonder whether the hon. Member, as part of his obvious researches, can tell the Committee what was the price of the tobacco leaf at the various times when the Tobacco Duty was increased?
    Mr. Brown: If the hon. Baronet will examine the records, he will soon find what was the price of tobacco per oz. in the years which I have mentioned. From my own experience I can tell him that there was a time during my youth when I fetched tobacco for my dear old dad and paid ld. for it. One put the ld. on the weight side of the scales and the
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    tobacco was put on the other side to balance the 1d. and one got a pennyworth of tobacco. In those days that was a godsend to the old-age pensioner.
    What is the size of the family with which we have to deal, and to which the proposal contained in this Amendment will apply? It is well we should examine that. The number of pensioners benefiting from the relief of 2s. 4d. per week increased from 2–24 million in 1953–54 to 2?38 million in 1954–55. Of course, the cost of the concession originally made by my right hon. Friend the Member for Bishop Auckland also rose. It rose from £13?8 million to £14·6 million over the same period. If we examine the receipts from the Tobacco Duty, even the net receipts, we find that in 1950 the figure was £544 million, and in 1955–56 it was £650 million, a figure undreamed of when the duty was imposed so many years ago.
    According to the OFFICIAL REPORT of 24th April this year, in a Written Answer to Questions the Chancellor of the Exchequer said:
    "Just over 2½ million pensioners are at present getting this benefit, and the estimated cost for the year 1956–57 is about £15½ million."-[OFFICIAL REPORT, 24th April, 1956; vol. 551, c. 124.]
    On the same date—again I have extracted this information from the OFFICIAL REPORT—the Chancellor of the Exchequer said that the cost to the Treasury of increasing the value of the old-age pensioners' tobacco vouchers to include the increase in the Tobacco Duty would be about £2¼ million in the first full year.
    Therefore, if we add to the already known cost of £14·9 million for the last year the estimated cost of £2¼ million for this concession, we reach £17 million as the total cost of giving this concession to old-age pensioners and those in the lower-income groups. The Chancellor of the Exchequer budgeted for a surplus of £464 million. Surely we are not asking too much that he should continue this concession to these sections of the community for the services they have rendered to the country.
    The Chancellor of the Exchequer is a smoker. I am not saying that he is a heavy smoker. I see him sometimes enjoying a pipe, and rightly so, and occasionally a cigar or a cigarette, and rightly so. When he went to Newcastle he enjoyed a cigar. I am not finding

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    fault. He even said, "A little of what you fancy does you good". I am asking him not to forget that what he enjoys he ought not to deny to others. I understand that his London residence is at 11, Downing Street. If he went there, tonight, looked on the mantlepiece and failed to find his pipe or his cigarette case, M.I. 5 would be called in and would have to find that pipe immediately because the right hon. Gentleman would want a smoke. That is all that the old folk want. That is what they are entitled to and ought to get, and that is why I have moved this Amendment.
    The Financial Secretary to the Treasury (Mr. Henry Brooke): No one better than the hon. Member for Ince (Mr. T. Brown) could have been chosen by the Opposition to engage the sympathetic feelings of the Committee towards this Amendment. All of us thank him for the very human way in which he presented his case.
    The hon. Gentleman said that the Chancellor had failed to reply on this matter at the close of the Budget debate. That has given the hon Gentleman his opportunity to canvass the matter now. He has overlooked the fact that, perhaps as a foretaste of this debate, I discussed this very question at some length when moving the Second Reading of the Bill. I did that purposely because I felt sure that this was a subject which it would be right for the Committee to debate, and that it might be of value to hon. Members on all sides if I indicated at that stage the reasons why my right hon. Friend had reached this conclusion.
    Mr. T. Brown: I am not attacking the Financial Secretary of the Treasury at all. Far be it from me to do that. My target this afternoon is the Chancellor of the Exchequer.
    Mr. Brooke: I hope the hon. Gentleman will not mind my rising at once. Let me come clean and say that I cannot expect that I shall close this debate. I hope he will not mind my developing somewhat the case which it was my duty to put before the House on Second Reading. I always feel that it is right for a Treasury Minister to indicate the cost of any Amendment, regardless of its merits. If the Amendment were accepted, it would cost £2¼ million in a full year. I should make it clear that it is not on
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    the financial magnitude or otherwise of that figure that I am resting my case. I give the figure as a piece of information which the Committee should have.
    The story of this Tobacco Duty relief is that in 1947 the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) put up the Tobacco Duty very sharply. There was a further increase in 1948. Those two increases had the effect of raising the price of cigarettes by 50 per cent. We had never experienced a price rise of that kind in a dutiable commodity before. The Labour Government decided that their right course would be to temper the wind to the old-age pensioner. No wonder, because it is well known that many old people smoke freely, and an increase of 50 per cent., almost at a blow, in the price of one of the necessities of the old people would indeed be a heavy impost.
    Mr. Douglas Jay: The two increases together may have been 50 per cent. I think that the right lion. Gentleman is right. What was the percentage increase of the second rise on its own?
    Mr. Brooke: The first increase was about 43 per cent. and the second was 6 per cent. or 7 per cent.
    The right hon. Gentleman the Member for Battersea, North (Mr. Jay) put a similar question to me on the Second Reading and I was quite frank about it. I have no intention of running away from this question. I am well aware that the increase of duty in this Budget is comparable to the increase in the 1948 budget. At that time the Tobacco Duty relief of 2s. a week which had been granted in 1947 was increased to 2s. 4d. What the hon. Member for Ince wishes now is that it should be increased from 2s. 4d. to 2s. 8d.
    Mr. Brown: 2s. 8½d.
    Mr. Brooke: I was leaving out the halfpenny, for the purposes of my argument.
    Mr. Brown: It is very important to the old-age pensioners.
    Mr. Brooke: The effect of the present increase in the duty is to put up the price of cigarettes by 5 per cent., which is nothing like 50 per cent.

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    It is an interesting fact that tobacco and cigarettes have risen in price far less than almost everything since 1948. I appreciate the hon. Gentleman's argument about what happened in 1948, but he will find it hard to develop an argument that old-age pensioners should be given additional help in meeting the cost of tobacco and cigarettes because of a steep increase in price. The prices of many things have risen by 50 per cent. since 1948. Retirement pensions have been raised by this Government by more than 50 per cent. On the other hand, the actual rise in the price of tobacco is 5 per cent. since the Budget, and the total increase in the price of tobacco and cigarettes since 1948 is about 10 per cent.
    Mr. John Rankin: Will the right hon. Gentleman remember that during the period he is covering the size of the cigarette has considerably decreased, while the price has gone up?
    Mr. Brooke: The hon. Member may argue in that way if he wishes, but the fact remains that the price of tobacco and cigarettes has remained stable over the last eight years to an extent which we all wish were true of other things we buy. The hon. Member for Ince is urging that, despite all that I have said, the Tobacco Duty relief should be increased from 2s. 4d. to 2s. 8½d. per week.
    4.0 p.m.
    We have to examine just what effect that would have and whom it would help. I say nothing whatever about the wisdom or otherwise of the right hon. Gentleman's decision in 1947, when he imposed that tremendous increase in the duty. I appreciate how he felt that the old-age pensioner could not stand that increase without some assistance. As is well known, however, on both sides of the Committee, the Tobacco Duty relief scheme has given rise to constant complaint and a fairly widespread sense of injustice.
    The hon. Member for Ince spoke, and naturally so, because he wished to make his case, from the standpoint of the ordinary old-age pensioner, the man or woman drawing a retirement pension under the National Insurance Acts. The Tobacco Duty relief, however, applies only, and has always applied only, to certain classes of pensioner and not to
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    others. It applies to the ordinary retirement pensioner, to the non-contributory old-age pensioner and to people drawing blind pensions under the 1936 Act.
    It applies to people drawing widows' or widowed mothers' allowances under National Insurance Acts, although those are not very many. All the other pensioners, however, who are in exactly the same position and who will be affected in precisely the same way by this Budget change, have no benefit whatever from Tobacco Duty relief.
    The reason for that is that when the Labour Government introduced the relief, in 1947, they found that there was no other way of administering it except in such a manner that it benefited only those who drew pensions by weekly books at a post office. Other pensioners, therefore, are excluded although their claim in equity, one would think, was just as great.
    War disability pensioners do not get the relief. People drawing railway pensions do not receive it. People drawing police pensions cannot get it. People drawing Service pensions, war widows drawing war widows' pensions and industrial disability pensioners are denied it. They are excluded—I must say, artificially excluded—because no way of administering the relief has been discovered which would operate at reasonable cost and bring them in.
    I am sorry that no Government have discovered a means of overcoming this difficulty, but the fact remains that it has been looked at by successive Governments, of different colours, and no one has found an alternative method of administering the scheme.
    Mr. T. Brown: The argument concerning the classes of cases enumerated by the right hon. Gentleman was advanced in 1947 and again in 1948, but outstanding above all that was the desire of the House, on both sides, to help the old-age pensioner. We anticipated that at least something would be done to bring in the other grades and give them the same concession as was given to the old-age pensioner.
    Mr. Brooke: I do not think it was realised in 1947 or 1948 how strong a sense of grievance these regulations would create which pick out certain pensioners for benefit and exclude others.

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    In the course of his argument, the hon. Member referred to the removal of part of the subsidies on milk and bread, but that, of course, affects all pensioners. What he said was no argument at all for selecting certain pensioners and giving them help over their tobacco.
    It is not only a sense of grievance between one type of pensioner and another. It is also a grievance, as, I am sure, hon. Members have sensed in their constituencles, between smokers and nonsmokers. I have constantly been asked Questions in the House seeking to know why people who are non-smokers cannot he given comparable benefit to the Tobacco Duty relief and I can well appreciate that a powerful case of that kind can be made. If, however, there is that grievance, the hon. Member's Amendment would accentuate it. It would give more to the smokers while helping the non-smoker not at all.
    There are, therefore, those two quite separate but severe grievances, and I am bound to advise the Committee that a third grievance is growing up. I am made aware of this also through letters which I receive from hon. Members, on both sides. I here is a grievance among the honest people, who, quite rightly refrain from making a declaration that they are habitual smokers, against those who are not habitual smokers but who, I am sorry to say, are attracted by the possibility of getting 2s. 4d. a week if they make a false declaration that they are habitual smokers and thereby bring themselves within the benefit of the relief. There are these three different grievances, all quite separate and all with considerable justification behind them.
    Mr. Gordon Walker: Is the right hon. Gentleman not proving too much? If we follow the logic of his argument, he will be in favour of abolishing the existing benefit to old-age pensioners, for he is only saying that these grievances exist now. If he really means this, he should abolish the existing reliefs. If he does not mean it, he should be prepared to extend the benefits, because the grievances will not be any worse than now in so far as they exist at all.
    Mr. Brooke: The grievances would be worse because the effect of the Amendment would be in every case to widen the gap which is the whole cause of complaint.
    890
    There is no doubt whatever that the present operation of the Tobacco Duty relief scheme causes injustice between one pensioner and another and between one person and another. While I fully appreciate the human strength of the case which the hon. Member for Ince has made, I must equally put it to the Committee that by accepting the Amendment we would be worsening a situation which is very unsatisfactory already and which is admitted on both sides to be far from satisfactory.
    This Budget increase in 1956 is small compared with the 1947 increase. I grant that it is equal to the 1948 increase, but several things have happened since then. First, the unsatisfactory nature of the relief scheme has become more and more apparent. Secondly, tobacco and cigarette prices have lagged behind other prices. Thirdly, although the hon. Member spoke of the meagre pension which people receive from the present Government, he must be aware that it was increased by nearly a quarter last year and that this pension, which he describes as so meagre, has a greater purchasing power than it had throughout a large part of the time of the Labour Government.
    I must advise the Committee that we should not be bettering the situation by accepting the Amendment. I fully understand how it engages public sympathy. I entirely agree that we should debate it, but I hope I have made clear to the Committee that there is a very substantial case in favour of the Chancellor's action.
    Mrs. Barbara Castle: We have listened to one of the most dishonest speeches ever made in the Committee. We have had from the Financial Secretary a long technical explanation about how undesirable this Tobacco Duty relief is. It would have had some sort of validity had he or his right hon. Friend the Chancellor of the Exchequer been prepared to say to the Committee, "There are these malpractices, these injustices. The only answer is to wipe the whole thing out and to have, instead, a general increase in old-age pensions."
    As recently as yesterday this argument was put to the Government Front Bench by one of their own hon. Members, and the Minister of Pensions and National Insurance, in dismissing it, made it clear that this was not Government policy at all. The Minister of Pensions and

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    National Insurance yesterday, when he was asked whether it would not be better to abolish the tobacco token scheme altogether and compensate all old-age pensioners, smokers and non-smokers alike, by an increase in pension of 2s. 6d. replied flatly—and I suppose that he is a Member of the same Government as his right hon. Friend the Chancellor of the Exchequer—
    "Retirement pensions are National Insurance payments depending on contributions, and a change in this rate would involve wider considerations than that of the tobacco token scheme.'
    Mr. Edward du Cann: I asked that Question yesterday, and I think I ought to say that the impression that I had from the Answer given by the Minister of Pensions and National Insurance was not that the Government did not accept my suggestion. Rather I was referred to the Financial Secretary to the Treasury. Hence my presence here today.
    Mrs. Castle: I shall follow up the attack of the hon. Member yesterday, because I think that he will be as disappointed as we are over this matter. I have the hon. Member's supplementary question in front of me, and the reply of the Minister of Pensions and National Insurance. The Minister said:
    "Questions about this scheme "—
    not about old-age pensions increases—
    "as my hon. Friend will be aware, are put to my right hon. Friend the Chancellor of the Exchequer…. "-[OFFICIAL REPORT, 4th June, 1956; Vol. 553, c. 691]
    Now we are putting them, and we have had the answer. The answer is that there will not be an abolition of the scheme. There is merely to be a refusal to bring it up-to-date to match the increase in prices. Therefore, I think that the hon. Member has been answered, and, as he has got his answer, all the arguments that we have had this afternoon from the Financial Secretary are totally irrelevant.
    It is no good telling us about a sense of grievance between smokers and nonsmokers among old-age pensioners. There will be a far greater sense of grievance among all old-age pensioners of every category by the fact that the Government are once again doing a little economising at their expense. I think that the nonsmokers will stand by the smokers on this, because it is typical that the nonsmokers have had it on the bread subsidy,
    892
    and now the smokers are having it also on the tobacco tokens.
    On every single item, the Government come along and say that the increase is only 1d., 2d. or 3d., and the cost of living generally for the old-age pensioner creeps up. When we put this to the Government, we have smarmy words about the human story and that there are technical objections to the tobacco token scheme. We challenge the Government to get rid of the tobacco token scheme and to give an overall increase to old-age pensioners to offset it. We would accept that if the overall increase met the situation, but until the Government do that the technical arguments of the Financial Secretary are merely a smoke-screen over the Government's policy, which is one of miserable cheese-paring at the expense of old-age pensioners on every possible occasion. That is the real grievance behind the old-age pensioners' feelings today.
    Neither will it do for the Financial Secretary to say that tobacco has gone up less in price than anything else. It may have done. But now the Government are deliberately putting it up in price by a tax addition and telling the old-age pensioners that they must stand the burden. Whether we look at the particular items of the cost of living or at the general level of prices, we say that there is not a ld. or a margin which will permit of old-age pensioners bearing any additional burden.
    Everyone in the Committee this afternoon ought to be ashamed to put even a 2d. burden on old-age pensioners, when we compare their relative standard of living with that of any Member of Parliament. Yet we sit here in our smug complacency and say, "It is only 2d. They can once again tighten their belts a little." When the Questions were asked from this side of the House about the steady increase in the burden on old-age pensioners because of the abolition of the bread subsidy and the increase in the tobacco tax, we were told not to take particular items but to take the general rise of prices, because that is what matters.
    4.15 p.m.
    I am prepared to do so, but the Financial Secretary must know that by the time the last increase was given to meet the cost of living, the rise in prices had

    893
    already overtaken that increase. The last increase was out-of-date before it was given. We have now to start a long painful agitation to enable old-age pensioners once again to catch up, and they are the last people in the country who can afford to fall behind. We know that last year retail prices went up by over 4 per cent. In The Times yesterday a statement by the Royal Statistical Society gave a forecast of what is to happen to retail prices this year. The estimate is that the increase this year in retail prices will be 5·6 per cent., or possibly more—a steeper rise than it was last year.
    Of course, it does not matter to the Chancellor of the Exchequer whether prices go up by 5·6 per cent., but how long have old-age pensioners to wait? We are told today that this is a great human story and that there are technical objections to the tobacco token scheme. It is time that the House of Commons got angry with the Government and their treatment of old-age pensioners.
    Yesterday, the Minister of Pensions and National Insurance came here with cool, calm arrogance and quoted from the Phillips Committee, saying that that Committee said that the main rates of benefit under National Insurance should not be subject to frequent alterations, and that the old-age pensioners had better wait until enough time has elapsed for it to be administratively desirable to consider a further increase. But if the rates of benefit ought not to be subject to frequent alterations, according to the Phillips Committee, the fact is that, as a result of Government policy, we are having a series of frequent reductions in the rates of benefit.
    That is what the Government policy means. It does not mean that benefits are standing still; it means that they are being reduced, not merely by inflation but by deliberate acts of Government policy in the frequent changes which we have been having. Old-age pensions are being deliberately reduced by the Government cutting the bread subsidy. They are now being deliberately reduced by increasing the tobacco tax. The Government are themselves, therefore, making a mockery of the arguments which they used yesterday.
    Mr. Scholefield Allen: Perhaps my hon. Friend was not old enough to smoke before the war, but I wonder
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    whether she knows of any other item which has risen in price since those days from 11½d. to 3s. 10d.?
    Mrs. Castle: I may be a litle dense, but I do not follow my hon. and learned Friend.
    Mr. Scholefield Allen: The rise in the price of 20 cigarettes is from 11½d. to 3s. 10d. Does my hon. Friend know of any other item which has shown as great a rise in price?
    Mrs. Castle: I am grateful to my hon. and learned Friend, but I think the Government's recent figures are enough to be going on with. I admit that if we turned back to the 1930s the position would be worse still; but I like an up-to-date analysis of the Government's crimes. If we are to have from the Chancellor the same sort of technical set-up that we have had from the Financial Secretary this afternoon, the country will know the attitude of the Government towards that most helpless section of the community, the old-age pensioners.
    Mr. du Cann: I am pleased to learn that my right hon. Friend has decided not to accept this Amendment, because it does not and cannot provide an answer to what we all recognise to be a difficult problem. The proposal of the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in his autumn Budget, in 1947, to introduce the tobacco token relief scheme was a praiseworthy attempt to protect certain classes of old-age pensioners from the enormous increase in the Tobacco Duty which he saw fit to impose upon everybody else.
    One can sympathise with and applaud his aim, but the tragedy is—and this was well brought out by the speech of the Financial Secretary this afternoon—that, in practice, the relief scheme has proved to be so unfair that one can go so far as to say that it is really almost impossible to see any reason for its continuance. However much one may sympathise with the aim of the authors of this Amendment, even if one suspects the political purpose of some of the arguments put forward, it is clear that, far from alleviating distress among old people, the Amendment, if carried, would make a bad situation worse by perpetuating an injustice.
    The tobacco token scheme as it exists is unfair, as my right hon. Friend has

    895
    demonstrated, between different classes of pensioners. Why should it be suggested, for instance, that those who are drawing a war disability pension or a railway pension should not be entitled to benefit from the scheme? What have these people done that they cannot have the same benefits to which the other classes are entitled? In addition, it is unfair in respect of those people who are entitled to apply for relief, if they so wish. One can say that it is unfair and unreasonable from almost any and every point of view.
    If we consider the people who are entitled to benefit at this stage, we can perhaps divide them into three classes. There is the minority of people who are genuinely habitual smokers. There is a small group who, understandably, draw these tokens and give the cigarettes to members of their own household or their families. Last, but by no means least, there is the still smaller section of the community which trades in these tokens. In other words, this is a scheme which virtually forces some old people into dishonesty.
    Mr. A. E. Hunter rose—
    Mr. du Cann: I will not give way. [HON. MEMBERS: "Oh."] It is reasonable that I should not give way. I have little experience of the Committee and am entitled to ask the indulgence of the Committee when making only my second speech. I am making no charge against old-age pensioners at all.
    Since I first raised this flatter in my maiden speech, and asked Questions about it, one of which has been quoted by the hon. Lady the Member for Blackburn (Mrs. Castle), I have received a number of letters from old-age pensioners fully backing up everything which my right hon. Friend the Financial Secretary said and everything which I said. There is a great sense of injustice among all classes of old people at the existence of this scheme. They want it abolished, as I should like to see it abolished. It is unfair between different classes of pensioners— [Interruption.] The right hon. Member for Belper (Mr. G. Brown) is very good at interrupting, as we know; he has great experience of it. This scheme is unfair to different classes of people and unfair between those who are
    896
    entitled to benefit from it. If we accept the Amendment we add to the injustice, and I am therefore glad that we are to reject it.
    I am glad to make common cause with the hon. Member for Ince (Mr. T. Brown); it is right, if I may say so with respect, that an older Member and a younger Member should make common cause in this matter for the old people.
    Mr. Donald Chapman: But look at the company which the hon. Member for Taunton (Mr. du Cann) keeps.
    Mr. du Cann: I agree with the hon. Member for Ince that we must endeavour to do something positive. In fairness, we must—I do not suggest today—abolish the scheme at the earliest possible date and increase those pension rates which we have the power to increase. I am aware of the recent pension increases under the Government and it is right that attention should be called to them, but I suggest that in due course we should go the whole distance, irrespective of cost.
    Some say that the margin of comfort for old-age pensioners is small. I say that the margin of existence for them at any time is small. With a projected Budget surplus of the size of which we are all aware, I do not believe that we cannot afford in due time to do better for the old-age pensioners, and I hope with all my heart that the suggestion to abolish the scheme and increase certain pension rates will commend itself to my right hon. Friend.
    Mr. Michael Stewart: Nothing that has been said by hon. Members opposite alters one simple fact about this Clause in its unamended form —that it will increase the burden of taxation on a certain section of old-age pensioners. If everything which has been alleged about the present working of the scheme by the hon. Member for Taunton (Mr. du Cann) were true, it would still be beyond dispute that there are a great many old-age pensioners who are fully entitled to benefit and were intended to benefit from the scheme, and that all of them will be hit by the operation of the Finance Bill if the Amendment is not accepted.
    The issue which the Committee is discussing, and the only issue which,

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    under the rules of order, it can discuss is whether we are to hit them or not— and that is the answer to the hon. Member for Taunton. May I say to him that it is our custom in the House that there is only one occasion on which an hon. Member can plead inexperience in defence against interruptors? I must say that his speech did not appear to be a defence of the Government. Had we been debating the tobacco token scheme as a whole, it would have been a most interesting speech, but we are not discussing the scheme as a whole. The same comment applies to some arguments advanced by the Financial Secretary. Is it suggested that if we make the value of this concession 2s. 8½d. instead of 2s. 4d. it will add any weight to such criticisms of the scheme as may be made at present?
    I do not dispute, nor, I think, does anyone, the validity of some of those criticisms—that it has not proved possible to embrace every kind of pensioner which one could embrace and that some old-age pensioners who have not acquired the smoking habit do not take kindly, perhaps, to this scheme. But if there are complaints, and if there is a feeling of injustice, is it to be suggested that those feelings will be increased by a nice proportion when the value of the concession is increased from 2s. 4d. to 2s. 8½d.? All those complaints will be exactly what they were when this increased tax has been imposed.
    If we carry the Clause in its unamended form we do not remove a single one of the objections which have been raised to the tobacco scheme as a whole. All we do by passing the Clause unamended is to hit by the tax a certain section of old-age pensioners. That ought always to be an extremely distasteful thing to do. What the Financial Secretary did not seem to realise was that if there were any justification for that, the burden of producing that justification lay with him. The Committee ought not to want to increase the taxation of those pensioners. We ought to do it only if the most overwhelming argument for doing it has been advanced.
    What did the Financial Secretary do? He proceeded to advance one argument after another, each of which, if it were valid, would lead to a conclusion quite different from that to which he wished to lead the Committee. He began by saying
    898
    that the Amendment would cost £2¼ million, but I am at least glad that he did not advance that as an argument for rejecting the Amendment. I do not think the Government will be prepared to say at this juncture that they have brought the country to such a pass that we can be delivered from disaster only by collecting £2¼ million in taxation of old-age pensioners. We must accept that statement, as I think he meant it to be accepted, as a mere point of information and in no sense an argument against the Amendment.
    He then suggested that these concessions were granted in earlier Budgets because the rise in the price of tobacco was so steep that it was essential to give the concession, but in reply to an interjection by my right hon. Friend the Member for Battersea, North (Mr. Jay). he had to agree that on the second occasion on which this concession was given the rise was only 4d. Now it is 4½d. and if there was a justification, as I think we all agree there was, for extending this concession on the second occasion, there is a further justification for extending it now.
    4.30 p.m.
    Most remarkable of all was the Financial Secretary's suggestion that if we really wanted to help the old people we should not bother so much about tobacco, as there were other articles which had increased in price much more in the last eight years. That really is the most remarkable proposition. It is as if the Government were saying to the old-age pensioners "This Government, partly by their neglect and partly by their deliberate policy, have succeeded in pushing up the prices of a great many things much more than they have pushed up the price of tobacco, and that is now a reason why we should push up the price of tobacco as well."
    It is the Financial Secretary's itch to go on sticking a bit of tax on anything within reach, as was very well pointed out in earlier debates by my right hon. Friend the Member for Huyton (Mr. H. Wilson). The right hon. Gentleman looks round at the cost-of-living-index figure. He notes the Government's success in pushing up the price of almost everything, shakes his head over tobacco and says, "I have not succeeded in pushing that up quite so much as. I have

    899
    the price of other articles. Let us do it, therefore, and make sure that the old-age pensioners bear the brunt as well as anyone else."
    That is what his argument meant, if it meant anything. I should have thought that the common-sense conclusion was that, if old-age pensioners are finding that everything else is very dear, that is surely an argument against making their tobacco dearer as well. That is why I think the Committee could reasonably accept the Amendment of my hon. Friend.
    We are not discussing completely from the start what ought to be the level of Tobacco Duty. We are in a situation created by earlier legislation, in which it is administratively easy and straightforward to raise the Tobacco Duty without burdening the old-age pensioners. It may or may not be desirable that those legal and administrative arrangements should exist, but they do exist, and the Government do not propose to sweep them away. We say that as long as they do exist, and as long as old-age pensioners face their present difficulties—which have been added to by this Government—it is reasonable to use those legal and administrative arrangements to prevent the increase in the price of tobacco falling upon them.
    Moreover, we have to notice this about tobacco. Smoking is, as some of us know to our cost, very much a matter of habit, and the older one gets the harder it is to break that habit. That is why it can be a really desperate hardship for an old person to be in such a position that every time he buys a packet of cigarettes or a little tobacco he feels that he is really being extravagant but, because of long years of habit, he simply cannot resist the temptation to buy. People who have by no means reached the age of the old-age pensioner feel that same pull, one way or the other, when they have to arrange their private budgets. There is really no excuse for putting this increased burden and vexation and anxiety upon old-age pensioners, with their limited means and long years of habit.
    I think it is generally agreed that the Government's financial proposals for this year are, on the whole, of a rather trivial, and almost flippant, nature. What is remarkable about them is that even in a trifling Budget like this the Government
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    do not lose the opportunity to "go" for bread and for tobacco—bread, which is for many old-age pensioners their staple article of diet; and tobacco, which is for many of them their only luxury. No doubt the Government will tell us that it represents only point so and so in the cost of living. It is partly that attitude that is so distasteful; that even in a trivial little Budget like this they cannot miss the opportunity to make a little worse off those people who already find life difficult. If right hon. Gentlemen opposite have any generosity at all, for goodness' sake let them look at the matter again and accept the Amendment.
    Mr. A. E. Hunter: I should first like to refute the statement made by the hon. Member for Taunton (Mr. du Cann) that some old-age pensioners sell these tokens. He has offered no evidence to support his statement and if he refers to HANSARD he will find that some months ago his right hon. Friend the Financial Secretary stated that there was no evidence of any abuse by the selling of these tokens. I hope, therefore, that when he reflects upon the matter he will withdraw his statement, for it is unfair to make that statement without evidence.
    I support this Amendment because it is a human one and one which will give some comfort to old people. At the present time this is a small concession. Old-age pensioners drawing a State pension under the National Insurance scheme receive this allowance of 2s. 4d. a week. It does not amount to a great deal, yet it means a lot to these old people. My hon. Friend the Member for Fulham (Mr. M. Stewart) said, quite rightly, that the tobacco habit is hard to break, and for those who have smoked all their lives it is not a habit that can easily be put aside. It gives comfort to lonely old people, and old people are often by themselves and need some consolation. Though statements have been made by medical people about the habit causing cancer of the lung, the habit is yet so strong that I am afraid the statement is not likely to have a great effect on the sale of cigarettes and tobacco.
    The old people are in a special class. In the main, they have the smallest incomes. They do not get many of the luxuries of life. They often do not get very good food. They rarely get the comfort of holidays unless those holidays

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    are organised by Darby and Joan Clubs or by the National Federation of Old-Age Pensions Associations. and smoking is one of their small pleasures.
    The Financial Secretary said that the proposal would cost £2¼ million which, broken down, means roughly 4d. per week according to him, and, according to my hon. Friend the Member for Ince (Mr. T. Brown), 4½d. per week. This is a very small concession. Surely we can afford £2¼ million in order to maintain for old-age pensioners the full concession that was given to them in 1947. I appeal to the Chancellor, even at this late hour, to make this concession and so make sure that the old people who have the smallest incomes do not go without what is a luxury to them in the evening of their lives. It is mean of the Government not to give this concession.
    Mr. Denis Howell: This is a matter of very great principle to anybody connected with our social life. One has only to serve on a local authority, or to visit old people's homes, or Darby and Joan Clubs and the like in one's own constituency to realise the great part smoking plays in the life of the old people. I do not smoke, but as a non-smoker I have been struck by the sustenance these old people seem to get out of the habit and the considerable hardship to which they are put to find the extra money involved.
    As I say, there is a very important principle involved. The Financial Secretary dealt with the increases in pensions that have been given under this Government. They have gone up, and I think 40s. is the present weekly pension for single people. Even since that was given, just before—and conveniently just before—the last Election, there have been increases in the cost of living generally. In this very Bill which we are discussing, increases are imposed on the cost of milk and bread. An increase in the cost of coal was announced last week, and an announcement by the Central Electricity Board has indicated that the cost of electricity will go up. This morning there is the news that the cost of gas is to go up, and in Birmingham, a constituency of which city I represent, an announcement has been made that an application to increase transport fares is to be made.
    One can therefore see that the cumulative effects of all these increases in the
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    cost of living will certainly constitute the major part of the worries of these old folk. Although the cold logic of the Treasury might find it undesirable to increase what they undoubtedly regard as an anomaly, those of us who have some responsibility for social conditions and for the social atmosphere in relation to old people think that a concession which was given in the past might reasonably be continued to cover the increased duties in this case.
    I must say that I regard the opposition of the Treasury to this Amendment as one of the most paltry arguments to which this House could have been subjected for very many years indeed. I find the arguments of the Financial Secretary amazing. It was not my intention to speak in this debate until I listened to the Financial Secretary and could not believe the arguments put forward on behalf of the Treasury. Those arguments fall into three categories, and I should like to say something about each of them.
    First, he dealt with the anomaly that other pensioners are not involved. The very simple way of dealing with that would be to include all the pensioners who are not included already. I am not at all impressed by the argument that, because both the major parties in the House have met this problem in the past and have done nothing about it, it is impossible of solution. Although a young man, I find it increasingly the case that there are few things that are impossible in this world.
    I am satisfied that, if the Chancellor of the Exchequer made up his mind and decided to include all pensioners within the scope of this privilege, a way would soon be found to do so. Indeed, I have a sneaking feeling that, when this privilege was first granted by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), he was probably told the very same thing—that it was impossible to grant it, even under the original dispensation, though, in fact, a way found round the difficulty.
    I am also aware of the fact that, twelve months ago, the present Government were faced with the Birmingham Corporation. Bill, which proposed free travelling facilities for old people, and it was said on that occasion that there were anomalies

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    exactly similar to those which the Financial Secretary has been talking about today. It was pointed out then that the concession did not include all pensioners, but excluded some, and it was this very Government, who are today saying that they are not willing to extend this privilege because of the anomalies, which placed that Bill on the Statute Book, and are therefore responsible for the situation about which they are complaining today.
    Secondly, the Financial Secretary drew a distinction between smokers and nonsmokers which I find rather amazing. He said that we cannot extend the scope of this concession to smokers because many people are non-smokers, and they will not get the benefit of it. Is not that precisely the same basis on which the Government draw the taxation from tobacco in the first place? Surely, the Government actually get the tax on the same discrepancy. They receive the tax from the people who smoke and not from the people who do not smoke. I am a nonsmoker, and therefore I am not paying my fair share of the taxation.
    Fundamentally, I am a believer in direct taxation. For the Chancellor of the Exchequer to draw so much money from indirect taxes, and then to say that the people who pay the bulk of the indirect taxes cannot get a little of the benefit because those people who do not pay indirect taxes would not benefit, seems to be a very deplorable argument, which one would not expect from the Treasury on an occasion like this.
    4.45 p.m.
    Finally, we heard from the Financial Secretary, in guarded tones—and it was supported by the hon. Member for Taunton (Mr. du Cann) in more unguarded tones—a suggestion that there was a great deal of dishonesty going on among old people so far as trading in tobacco tokens is concerned.
    Mr. H. Brooke: I am quite sure that I did not use the words "a great deal of dishonesty". There is some dishonesty, and it is complained about. I cannot tell how much there is, but there is no doubt whatever that this is a serious source of grievance, however much actual justification there may be.
    Mr. Howell: I was very careful in my remarks to say that the Financial Secretary used guarded tones, and, of course, I am glad of the right hon. Gentleman's interruption, because I at once acquit him and apologise to him if I falsely represented his position. He is now saying that there is a grievance, and a sense of grievance obviously springing from the point with which I was dealing and with which the hon. Member for Taunton dealt more forcefully. It is that people are selling these coupons, and the Financial Secretary, in the intervention which he has just made, has made the point about this question of grievance, and has also given the answer to a question I was about to put to him about the evidence for that statement.
    The right hon. Gentleman has said that he cannot produce the evidence, and, of course, he cannot do so. If, in fact, anything like this is going on on a wide scale, it is not an argument against this concession, but an argument against the people whom we pay to enforce the laws. One would have thought that that sort of abuse, if it exists, ought to be dealt with. If it exists on a sufficiently wide scale to be produced as one of the three main planks in the Treasury's arguments today, I submit that it ought to be backed up with evidence. The fact is that we have had no evidence at all about it from the Financial Secretary, who has admitted that he has none, and we have certainly had none from the hon. Member for Taunton.
    Mr. du Cann: I ought to make it quite clear that I have made the most careful inquiries, and that I have had letters from constituencies other than my own in reference to this point. I have spoken to large numbers of old-age pensioners in my constituency and others, and I find that it is really well-known by anybody who tries to study the problem of the old-age pensioners that there is, as I have said and as has been said also by the Financial Secretary to the Treasury, a great deal of unhappiness at the effect resulting from this scheme, because the position of the old-age pensioners was so marginal as to force them into what one might perhaps best describe as an understandable "fiddle".
    Mr. Howell: I understand that the position of the hon. Member for Taunton now is that he has made a very careful

    905
    and detailed study of the problem, but yet he is still unable to produce any evidence. That seems to be the burden of his interruption. At any rate, if the hon. Member has any evidence, he can still address the Committee; I am sure that my hon. Friends on this side of the Committee would be most anxious to give him every facility. One ought not to make that sort of statement in this Committee without backing it up with evidence. All of us expect that there are some small anomalies, and that some people actually do that sort of thing.
    It is the same kind of suggestion as was made about the effect of the Birmingham Corporation Bill and the proposal for free travel which I mentioned earlier. We have had the very same charges levied against us in Birmingham, suggesting that if we conceded free travel facilities to old-age pensioners, some of them would give their passes to other people, and there would be considerable dishonesty, etc. I want to say most emphatically, on all evidence available to the Birmingham city transport undertaking, that these charges proved to be entirely false. In fact, the old jeople jealously guard those privileges and are very careful not to abuse them.
    I believe that abuse, where it does exist, is very restricted indeed, and that any such cases of abuse ought to be dealt with by prosecuting the people concerned and not by using such a feeble argument as one of the main points of the Treasury's refusal to accept the Amendment of my hon. Friend.
    I believe that, on the grounds which I have put to the Committee and those which other hon. Members have put, the Government's case here fails. I believe that because of the increasing difficulty in which the old-age pensioners find themselves in these days, this concession ought to be made. These are the people who came through the years of the slump, without any opportunity of putting by nest-eggs in the 'thirties and the days of depression, and the people who need much more of our sympathy. Most of them are without the benefit of superannuation schemes to which they can turn. They are the people who are really feeling the full brunt of the cost of living today; their position is far more difficult than that of any others.
    Old-age pensioners require, not only our sympathy—which, from what I have
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    heard today, they have from both sides of this Committee—but they require action, speedy action. The first and best sign of action that the Government could take would be for them gracefully to accept the Amendment which we are now discussing.
    Mr. W. A. Wilkins: I rise, not so much to add to the pleas which have been made by my hon. Friends, as to say a word in the ear of the hon. Member for Taunton (Mr. du Cann). I believe that those on this side of the Committee have been rather shocked by the extravagant tone of the speech which he made on this subject this afternoon. The only excuse which can be offered is the one which he himself offered, that of inexperience.
    If the hon. Member had been in the House for any length of time, I think he would not have indulged in such generalisations. Many of us, both inside and outside the Committee, believe that generalisations are usually unfair and that it is wrong to condemn a section of the community because of the wrongdoing of, perhaps, a very small number. I do not accept the hon. Gentleman's inference that there is such a considerable amount of dishonesty, or, to use the word which he subsequently substituted, of "fiddling." in tobacco coupons as he seemed to imply.
    I do not know what other hon. Members do. We all have old-age pensioners coming to us, asking us to sign their application forms. I am always most careful about the signing of these application forms. I always point out to people the nature of the document they are signing, and what they are telling the Chancellor of the Exchequer they do. If we were all rigid about the appending of our signatures to documents of this kind, there would be very small opportunity for dishonesty. However, accepting that perhaps there is a limited number of people who sign the document quite wilfully, perhaps wrongfully, I still suggest to the Committee that it is entirely wrong for us to impose a penalty upon the vast majority of those who obtain the benefit of this concession.
    I would plead with the Chancellor of the Exchequer, even now, not to close his mind entirely to the proposal in this

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    Amendment. The hon. Member for Taunton did suggest, again by inference, that there may be some political purpose actuating the authors of the Amendment. Again, I would say to him that clearly his suggestion springs from inexperience; this matter has been a hardy annual in every Budget in this House since 1947. I think I have taken a part in every debate, during the Committee stage, trying to retain or advance the concession to old-age pensioners in this matter. Indeed, it is my very proud claim that I was probably largely, if not entirely, instrumental in persuading the then Chancellor of the Exchequer, my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) to make this concession in the first place. I am more proud of that fact than I would have been if we had failed on that occasion.
    I should like to remind the Chancellor of the Exchequer that on that occasion, when this concession was first made, the then Chancellor, having listened to the debate, agreeing that there was some point in the arguments we had advanced, told us that there was a grave technical difficulty—exactly the language of the Financial Secretary to the Treasury this afternoon. But he did go so far as to say that his officials in the Treasury would look at the matter sympathetically. They would see whether there was any way whereby the scheme could be made reasonably watertight. He said he did not expect they would be able to tie it up completely so that there would be no evasions; but they would look at it and try to find a scheme which could be put into operation for the benefit of old people. The scheme which we have now is the scheme which was then produced, following upon that debate.
    I find the situation rather strange. At that time, in 1947, there was good will shown on both sides of the House towards old-age pensioners; it was not a monopoly of sympathy that we had; it was the sympathy of the whole House. I would even say that it might have been because of the unanimous feeling in the House that the then Chancellor of the Exchequer was prepared to bend his time and study to the offering of the concession. I would suggest to hon. Members opposite that if they showed the same enthusiasm now, when they are members of the Government, as they showed then
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    as members of the Opposition, when they could exert pressure without responsibility, it might well be we could even shift their own Chancellor this afternoon. Perhaps more voices from those upon the opposite benches may be linked to the plea we are making to him today.
    I would ask the Chancellor to look again at this, and to consider whether he is satisfied that the technical objections which we are told have been raised are in any way substantial, whether they are insurmountable. Can those objections not be overcome? If he is still adamant, if he is still unwilling to make this perfectly reasonable concession to the old folk, then, if he gives credence at all to the alleged suggestions by nonsmokers that they are penalised as compared with old-age pensioners who do smoke, he ought to give some consideration to the suggestion of my hon. Friend the Member for Blackburn (Mrs. Castle) that there should be an overall increase, thereby eliminating any cause for complaint in any section.
    I am speaking entirely personally now; I do not know whose views I represent, other than my own, but I think that in these days, in the light of experience, I would prefer to see an overall increase. Failing that, I believe we ought still to continue to make this concession available to old people, very largely because they are the victims of habit. The majority of those of us who smoke know very well that we would like to give it up, and we know that we find it extremely difficult to do so. These old men have probably been smoking their pipes for 40 or 50 years, and it is not very easy for them to throw them in the dustbin and say that they have finished with smoking.
    I would plead with the Chancellor to think again about it. If he cannot make the concession provided for in the Amendment we are offering to him this afternoon, perhaps he would give further consideration to some overall increase for the benefit of all old-age pensioners.
    Mr. M. Turner-Samuels: I am quite sure that the Chancellor of the Exchequer is a very humane individual. He has sat here very patiently, listening very intently to the speeches which have been made on this side of the Committee, and I am sure that he has registered in his mind the fact that

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    there is obviously a feeling on this side that a deep injustice is being done to old-age pensioners by imposing this added burden upon them. That, as a starting point, will, I know, urge the Chancellor to consider whether he ought not to make some concession to that strong feeling which has been so forcibly shown.
    The Chancellor of the Exchequer is the guardian of the great fortunes of this country; he has, at the Treasury had to deal with thousands of millions of pounds. I would ask him whether he really does not think that this small item which we are now discussing, this imposition which he is putting on the old-age pensioners, is an egregiously shabby act.
    5.0 p.m.
    What regret in addition is that the hon. Member for Taunton (Mr. du Cann) should have gone out of his way to add insult to this injury by the allegation of dishonesty which he made. I am perfectly certain he is thoroughly ashamed of himself now for doing it, and he ought to be. He did give some evidence of it, and that is to his credit, in the intervention which he made in a speech made by one of my hon. Friends. The hon. Member for Taunton, in his intervention, advisedly refrained from using the objectionable and unfounded term which he had used before, namely that of dishonesty, and substituted some other words, which showed that he was striving very strenuously to get out of the unwarrantable position which he had put himself in during his speech.
    I ask the Chancellor, who, I am sure, wants to give his full attention to this matter—notwithstanding that I have no doubt he is preparing a reply to the speeches which have been made, to try to justify this very deep injustice which is being done—why he is doing this. Why do this particular thing against a helpless and aged section of the community? This tax may appear to be a small sum to the Treasury, but it is a very large sum to old-age pensioners. The Chancellor will no doubt reflect that the less people have anything, however small, assumes large proportions. What may be small to other people—is very substantial to them. Therefore, he should see that this is a very large item to the old-age pensioner. It may be only 4½d. on paper,
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    but in their pocket it is a very considerable consideration.
    The Financial Secretary, who really, in logic, made a most deplorable speech, no doubt because he found it very difficult to justify what is being done, gave us a reason—although he did so by the way— that there was, in this matter, a £2¼ million loss involved if this burden were not in fact thrown on old-age pensioners. Of course that is not correct and the Chancellor knows it is not correct. This is not a loss at all. This is a question of the imposition of a new tax. There is no question of a loss here; it is, in fact, a question of a gain. So far as any loss is concerned it is the old-age pensioner who is being made to carry it. There is no question here of any £2¼ million loss at all. It is a £2¼ million gain taken from the old-age pensioner.
    The Financial Secretary also seemed to think that this matter came under some sort of law of gravity. Of course we know that the price of things is going up all the time. Indeed, one of the main targets of the Government seems to be to raise the cost of living. They have done it successfully during the whole time they have been in office, and it is still going on. The Financial Secretary seemed, because of that, as I say, to have the idea that this was a sort of law of gravity, and the fact that other things were rising in cost made it necessary for the price of tobacco also to rise a little more. That is patently stupid and perfectly wrong.
    I ask the Chancellor to take the following into account, because he knows it to be the correct position. The allowance that was made to the old-age pensioner with regard to tobacco was a concession to the pensioner because he needed it. I think that as a starting premise the Chancellor will concede that that is correct. If he concedes that, then it follows that if the old-age pensioner needed that help then, the cost of living has since become greater and greater, and he now needs that help more than ever. In those circumstances I ask the Chancellor how he can possibly justify this new burden which he is seeking to put on this helpless and aged section of the community?
    We have been told that it is being done —this seems to be the only reason—because not to do it would be unfair to others. There has been no attempt to

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    justify that perfectly nonsensical argument. Originally it was regarded as proper and just—as undoubtedly it was then, and still is—that this concession should be made to the old-age pensioner because of his financial inability to meet the ordinary necessities of life. Why is that argument not valid today? In my submission it is stronger today than ever it was. How can it be said now that it is unfair to others if it was not unfair when the concession was first made?
    I ask the Chancellor to see whether he cannot put this Budget through without having to place upon it the stigma that it is to carry by this attack upon a small and not very well-off part of the community. Surely this small sum of money, which is involved as a possible gain and not as an incurred loss, cannot commend itself to the Treasury as being so absolutely essential to the welfare of the country and to the soundness of our finances that it must be imposed upon this particular class of people?
    I ask the Chancellor, is there any need for this? Why is he seeking to do it? Why is he, on the one hand, accepting the position that the old-age pensioner should have had this tobacco concession previously and then, at all events partially, destroying that concession by now reducing that very concession through the imposition of this new taxation in regard to the very tobacco upon which it rests? I therefore ask the right hon. Gentleman to think again about this matter, to see whether it is not possible to rid the Budget of what I submit will be an unfortunate stigma.
    Mr. Thomas Hubbard: I speak with some authority in regard to old folks as the honorary President of the Scottish Old-Age Pensioners' Association and also as a vice-president of the British Council of Old-Age Pensioners' Associations. In my opinion, old-age pensioners do not want concessions; they ought not to need concessions, They are very proud people.
    It is shocking that anyone should for one moment cast doubts on the honesty of old-age pensioners. They are honest and their standard of morality is very high. Anyone who suggests under any circumstances that one of the reasons for not granting the concession is that old people do not know how to behave themselves,
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    that they might trade—in fact have traded —in tobacco coupons, is something that is shocking. The hon. Member who made such a suggestion ought to rise forthwith and withdraw it.
    Mr. du Cann: Since the hon. Member for Kirkcaldy Burghs (Mr. Hubbard) is looking at me, may I say—and I think it is important that I should say it— that I went through a whole list of reasons why I thought the concession should be withdrawn? At the end of the list—and if the hon. Member will read the record tomorrow he will see that it was the last of the reasons I gave—I said that a very small number of pensioners sell these tobacco tokens to other people. That is something which has been repeated on both sides of the Committee. Everyone who knows something about old-age pensioners knows it to be true. There is a minority who trade in these tobacco coupons. I have no intention of casting reflections on the honesty of old-age pensioners as a whole. Of course not, but there is a minority who, because their standard of living is marginal, trade in the tokens. I do not accuse them of anything. Indeed, I feel sympathy with them, but it is a fact, and it is right to bring it out, and I stand by what I said and do notwithdraw it.
    Mr. Hubbard: That is a rather long interruption. If the hon. Gentleman had produced any facts to support his allegations, no one would complain, but he has not done so. He did not say how many of the old people were doing this. He said he had information. How solid was it? How much was there of it? Does he know of one case? Does he know of twenty cases? Does he know what proportion of the 5 million old-age pensioners get tobacco concessions in the first instance? What proportion of them, does he allege, try to dispose of the tokens?
    Mr. du Cann: Since I am being pressed I am quite willing to answer, and I am grateful to the hon. Member for allowing me to do so. I am myself an officer of an old-age pensioners' society. I have made inquiries about this matter. I am not prepared to say any more about it at this stage, but I shall very willingly discuss the matter with the hon. Member in private in due time if he wishes. There is a criminal offence involved in this.
    The Temporary Chairman (Mr. George Thomas): If the hon. Member wishes to speak again he will have an opportunity, but interruptions by any hon. Member ought not to be too long and sustained.
    Mr. E. G. Willis: Is it not in accordance with the custom of the Committee, Mr. Thomas, that if an hon. Member makes an accusation, which, he says, is of a criminal offence, against members of the community, he should substantiate the accusation here in the Committee?
    The Temporary Chairman: That remains the responsibility of the hon. Member who makes the charge.
    Mr. Hubbard: I shall leave the matter there, Mr. Thomas. I am quite sure that the old-age pensioners, of whom the hon. Member claims to be an officer, will know how to deal with him and what he has said about them. This is the first time in the twelve years I have been a Member of Parliament that I have heard such a charge levelled against the old-age pensioners.
    The old people who today are drawing these concessions are people who, by dint of great saving during their working lives, when their wages were very low, managed to put a bit by, only to find now that the value of their savings has declined because of rising prices. In my constituency, just before the First World War, the average wage was about 17s. a week, and in agriculture there were workers drawing only 12s. a week. In spite of those low wages, by doing without holidays, by denying themselves every little pleasure which they possibly might have had, they managed to save a few pounds. They stored them carefully away in their banks. Those savings have not the value which they had when they were put by.
    It is really shocking that, in those circumstances, the Chancellor seeks to add to the financial strain on the old people. I have been a Member of this House long enough to know that hon. and right hon. Members opposite would not individually be hard on the old-age pensioners. Individually, they are as anxious as we on this side of the Committee are to help them. How collectively they can be so mean to the old-age pensioners I shall never be able to understand. Individually, they put their hands
    914
    in their pockets at Christmas time to bring out contributions to Christmas parties for the old people. They contribute to their outings, etc. Yet when they have responsibility in Government they impose, through the Budget, new burdens on the old people. They take this opportunity of being collectively stringent.
    It is nonsense to say that this is a matter of only 4½d. That is the sort of argument which hon. and right hon. Members opposite always put forward when any price goes up. When bread went up in price they argued that it meant only a copper or two. They said that that would not affect the old-age pensioners very much. When milk went up in price they argued that that meant only a copper or two. When the price of coal goes up they say it is only a copper or two. When vegetable prices go up it is only a matter of a copper or two, they say.
    They must realise that all these gradual increases, which have taken place since they came to power in 1951, which, indeed, began even before that, in the days of the Labour Government, amount in the aggregate to a very great burden on the old people. They make a financial problem for them which is really baffling, and they are made to suffer all the time.
    What business is it of the Chancellor whether the old people smoke or not? Smoking is the only pleasure which many of them have. Many of them, now that they are retired, have the first chance in their lives of having a smoke in peace and quietness. Now that for the first time they have long leisure hours and time to enjoy a quiet smoke the Government deny them that pleasure by making it too expensive. Is there one hon. Member on the other side of the Committee who agrees that that is right? If so, would he say so?
    Do hon. Members opposite think it right that the old people should smoke less? Would the Chancellor of the Exchequer suggest that they should smoke less? Of course he would not. No one would dare to suggest that old-age pensioners ought to cut out smoking—not even the doctors on the committees investigating lung cancer would suggest that, because for the majority of the old people that aspect does not matter very much.

    915
    The Chancellor sets out to acquire more money by increasing the duty on tobacco. It would be so easy for him to make a corresponding increase in the amount of the old-age pensioners' tobacco concession so that the old-age pensioners would not be any worse off than they were before, despite the increase in duty. I am, as I said before, opposed to concessions, as are the old people themselves. Why should they have to produce coupons in shops to get tobacco? It is only because their pensions are too low. In every respect the old people are the greatest sufferers of all.
    5.15 p.m.
    The last time I spoke in this Chamber about the old-age pensioners I spoke about the pension increments which they could earn by working more years in industry. The old people were told that if they worked a few more years longer they would get an improved pension, and many were induced to work for some years more in the hope and expectation of receiving an improved pension in the hope of getting a little more comfort through the extra few shillings. Some of them thought of their smoking, and wanted the extra few shillings to enable them to enjoy this little pleasure in the eventide of their lives. Now they lose it, because in estimating supplementary pensions the increments in pension are taken into account, and so they are of no benefit to them whatever. And now it seems the Government are not even prepared to reconsider this matter which is before the Committee.
    Whenever one goes to conferences of the old-age pensioners one finds that they have one plea only. They say, "We have worked hard all our lives and have made our contribution to the country. If we had been fortunate enough to have been in jobs for which superannuation was payable, and now had decent pensions, all would be well. Having laboured all our lives, and being no longer able to work, are we to be set aside to live in misery, or merely to exist?"
    That is the question they ask. It can be answered by this Committee. It can be answered in one way only. So far as it lies in our power we must see that the old people get the maximum pleasure in the eventide of their lives. I plead with the Chancellor of the Exchequer. If he will accept the Amendment the old folk
    916
    of the country will give him a hearty "Thank you". Some of them have served in two wars, let him remember. Let him accept this Amendment and show that he and the other Ministers can be as sympathetic collectively as they often are individually.
    The concession would permit of a little pleasure without the sacrifice of a necessity—perhaps of food. The Chancellor of the Exchequer has only to say he will give further consideration to the matter to win the thanks of the old-age pensioners and of hon. Members of this Committee, even, I am sure, of those sitting behind him.
    Dr. Horace King: I had hoped that the pleas which have been made by my hon. Friends would have been reinforced by appeals from hon. Members opposite, because there must be many back benchers on the Government side who have the same interest in and affection for old folk as my hon. Friends. If we could have reinforcement from back benches on the Government side, one speech from them today would be worth a dozen from this side. [HON. MEMBERS: "They always are."] I am quite willing to give way at once to the first backbencher opposite to make a plea on behalf of the old-age pensioners' tobacco allowance this afternoon.
    I think that I can say quite sincerely to the Chancellor of the Exchequer that if the Whips were off the Amendment would be carried and the old folk would get the concession that we on this side of the Committee seek to give them. The experience of one hon. Member is as valuable as another's in this debate, and against the investigations which have been made by the hon. Member for Taunton (Mr. du Cann) I might say that I too have some experience of old people. Indeed, I have a peculiar experience in that I am one of the few hon. Members who spend time entertaining old folk in their clubs. Whatever letters the Chancellor may receive from individual old-age pensioners, I have never heard in many years of experience and in many contacts with old folk, individually and in old folk associations, any grudging by the non-smoking old-age pensioners of the concession which those who smoke get by their tobacco allowance.

    917
    It is worth observing that old folk are much more cheerful and generous than people of our generation, and their attitude, on the whole, has never been to grudge any concession that any group of them manages to obtain. By the same token, if the Government choose to abolish the tobacco concession and give in lieu of it some concession in cash to all old-age pensioners, I am quite sure that those who have enjoyed the tobacco concession would be delighted to think that non-smokers were also getting the benefit. I say to the hon. Member for Taunton that to me it is a remarkable fact and a tribute to the character and quality of our old-age pensioners that not every old-age pensioner has claimed the tobacco allowance.
    It would have been quite possible, when this concession was given, for every old-age pensioner suddenly to discover that all his life he had had a passionate desire for smoking and suddenly to take up this noxious habit in order to qualify for the allowance. There may be odd exceptions. There are odd exceptions in any group of people. There is nothing in the whole range of community benefits which is not "fiddled" by somebody, but to make this part of the case against the tobacco concession is a very unfortunate intervention on the part of the hon. Member for Taunton.
    I sometimes wonder when those who bear the unfair burdens of indirect taxation are going to revolt. It is about time that we had a Poujadist movement of beer drinkers and tobacco smokers in this country which could bring the Chancellor to his knees in a week by staging a strike. [HON. MEMBERS; "Oh."] I notice that future occupants of the Treasury Bench are alarmed at the prospect of such a strike.
    If there is no danger of the mass of people indulging in strike action and depriving themselves of beer and tobacco in order to get the Chancellor to reduce the taxation on those commodities, obviously one could not expect such action from old people. They cannot meet the Chancellor's new Budget proposal to charge them the extra amount on tobacco by doing what millions of other people have failed to do in spite of resolutions to give up made every time any Chancellor imposes extra duty on tobacco or beer. Their habits are obviously far too long established and too strong.
    918
    Therefore, this means for all of them a new expense which they must meet, and it is our experience that they can meet it only by going without some of the other things which they must have, some of the bare necessities of life.
    I do not regard the Financial Secretary's argument that this tax concession will cost £2¼ million as an argument in favour of not making it. I regard that as an argument for the Amendment. This £2¼ million is a measure—and I am surprised at the figure—of the size of the new burden that we are putting on about the poorest group in the country. On the wider economic battle that we are fighting, there may be difference of opinion about the instrument that the Chancellor is using, but in his battle against inflation I do not think that the Chancellor could justify putting on the shoulders of the old-age pensioners a £2¼ million burden for any economic reason, for any part of the great financial and economic strategy of the Government. To this £2¼ million, which the old-age pensioners have to bear, we must also add the burden of the increase in price of all the other things on which they spend their money —the food, the milk, the coal and the rest.
    The Chancellor of the Exchequer should remember that whereas the new duty on cigarettes and tobacco is an irritation to people like myself, because the percentage of increase is very tiny, the percentage increase to the old-age pensioners is really quite colossal. If the right hon. Gentleman imposed to the same extent on people of average income the burden that he will be imposing on the old-age pensioners who smoke by not accepting the Amendment, he would indeed get a revolt from the smokers.
    I understand that the Chancellor always has room to manoeuvre in his Budget. In a Budget with such a colossal surplus as is the case this year, his room to manoeuvre is so vast that he can almost get lost in the space. I also understand that Chancellors have a habit of making concessions from time to time, and I am pleading with the right hon. Gentleman to make this concession today.
    Measured against the vast surplus for which he has budgeted, the concession is nothing, but the burden itself is a heavy one to the poor old people who will have to carry it. This has nothing to do

    919
    with inflation and deflation. The right hon. Gentleman need not be alarmed that if he gives back this £2¼ million spending-power to the old folk they will buy television sets and the motor cars which we cannot sell, and all the rest of the commodities whose consumption he wants to damp down. They will use the £2¼ million, as they use every tiny scrap of their income, for the necessities of life. Even if we on this side of the Committee are not supported, as we had hoped to be, by hon. Members opposite, I hope that the Chancellor will make this concession and give the Committee stage of the Finance Bill a good, healthy and generous start.
    5.30 p.m.
    Mr. W. T. Proctor: The simple question which confronts us is whether we are going to support the mean, sordid, miserable and unnecessary action of the Chancellor. I think it was unnecessary for the Chancellor to make this proposal in the first instance, and I am as surprised as the previous speaker about the amount of money which the right hon. Gentleman expects to take from the old-age pensioners. The Financial Secretary revealed that £2¼ million will be collected from these people in order to help tide us over our alleged difficulties. The right hon. Member for Woodford (Sir W. Churchill) once said that 5s. is a very small amount of money unless one has not got it. Whilst this sum may be regarded by the Chancellor as very small, since he is dealing in millions of pounds, it is a large sum for the old-age pensioners who are living on what we are so prone to be proud about, the Welfare State.
    I am not pleased with what we have accomplished as a Welfare State. I remember well the first report of Sir William Beveridge, as he then was. He calculated his proposals upon the basis of providing 3d. a meal for the old-age pensioners. That was all he provided. I have had some experience of such a provision because it was the amount that a grateful railway company allowed me when I first worked for it. I received 11s. a week, of which 4s. went for lodgings, and I had 1s. a day left, so I know what 3d. a meal means. That standard has not taken into account the increase in the cost of living, and it is a shameful act on
    920
    the part of the Chancellor to impose this burden on these people. It is also unnecessary, and I hope that the Committee will refuse to give the right hon. Gentleman the necessary authority.
    The Chancellor is a reasonable man, especially so in his early writings. I hope he will read the letter of the hon. Member for Aberdeenshire, East (Sir R. Boothby) in the News Chronicle today. Let us hope that the close collaboration of the hon. Gentleman with some of the old ideas of the Chancellor will cause the right hon. Gentleman to return to some of those ideas in dealing with our present difficulties. It would be much more appropriate for him to do that, to take a grand view of reorganising our national life, than to commit the sordid act of taking £2¼ million from the pockets of our old-age pensioners in this way.
    The hon. Member for Taunton (Mr. du Cann) intervened in this debate. We are always pleased to hear a new Member 'speak, and I was specially interested to note what he had done. Yesterday he attacked the Government and hoped that they would adopt a scheme of abolishing these coupons and of giving every old-age pensioner an increase. That is not a new suggestion. Every hon. Member of this House has received that proposal from the old-age pensioners. I have myself sent it along to the Chancellor, and so have dozens and dozens of other hon. Members, and it has been turned down by previous Chancellors.
    I am sorry to disappoint the hon. Member for Taunton by telling him that this is not a new scheme, but we are glad that he is supporting it. If he could have had his way yesterday he would have given a great benefit to all the old-age pensioners. Those not included in the present scheme would have been included by his suggestion. Today, however, when my right hon. Friend proposes a scheme that will benefit every old-age pensioner now receiving coupons to the extent of £2¼ million, for some mysterious 'reason the hon. Gentleman opposes it.
    The hon. Gentleman could do something tangible this afternoon by going into the Lobby and voting for a real benefit for those people, but he refuses to do so, and by some extraordinary reasoning, which I cannot understand,

    921
    says that because of yesterday he cannot take this action today. I am surprised that the hon. Gentleman cannot find a better excuse for not opposing his own Whip—
    Mr. du Cann: If the hon. Gentleman will allow me to interrupt, my point is a logical one, with which I am sure the majority of hon. Members of this Committee will agree. It is no good giving a benefit to some old-age pensioners. What we want to do is to give it the maximum number.
    Mr. Proctor: That is right. We want to give it to the maximum number, and the maximum number to which the hon. Gentleman can give it today is represented by those who smoke and receive coupons. If he comes into the Lobby with us it will prove his courage, if not his logic, because many hon. Members before him have defied their Whips.
    The hon. Gentleman made another suggestion. He asked why the railway pensioners should not have this concession as well. I must point out to him that the abolition of this scheme would prevent railway pensioners from having the benefit. So it is no good praying them in aid for abolishing the scheme. The logical thing for the hon. Gentleman to do is to ask that all the old-age pensioners should come into the present scheme.
    By every process of reason, by every process of common sense, logic and honesty, the hon. Gentleman should come with us into the Lobby this afternoon. I beg him to do so for his own good, especially when he goes back to his old-age pensioners, in order to be able to explain his position to them. Before I made this speech the hon. Gentleman might have said, "I did not know exactly what I was doing," but now he understands that he is taking part in an attack upon the old-age pensioners by supporting the Chancellor of the Exchequer. Unless he changes his mind, which I hope he will, the hon. Gentleman will be helping to filch £2¼ million from their pockets. It is a despicable business.
    Sitting here we perhaps do not realise the difficulties in the homes of old-age pensioners. Today we have to face many great difficulties, to take big decisions and to make sweeping changes in order to put this country on its feet. Only the
    922
    other day the Chancellor warned the trade unions and all other sections of the community. In his next speech the right hon. Gentleman will be able to tell the country what has been accomplished. He has raised the Bank Rate. He has put all those who need houses in a difficult position. The one shining thing he can claim is that he has filched £2¼ million from the old-age pensioners who are in the worst position of any section of the community.
    If the hon. Member for Taunton makes another speech, he will be able to say, "I did it." I hope, however, we shall not allow £2¼ million to be taken from the old-age pensioners in this way. We are not as badly off as that. I ask the Chancellor of the Exchequer to ponder over this small matter in the light of the immense sums of money with which he is dealing, and to make this concession.
    Mr. Willis: There is no doubt that the only point at issue in this debate is whether or not we as a nation at present have to take £2¼ million from the old-age pensioners. All the other arguments that we have heard about the anomalies and the alleged dishonesty are beside the point. They are really condemnations of a scheme, and should be argued in connection with the alteration of that scheme, not in connection with whether or not we should extend that scheme to give an additional 4d. or 4½d. to the pensioners. The only point at issue is whether we, under a Tory Government, have reached such a deplorable position financially that we have to filch £2¼ million from the old-age pensioners. I should have thought that any Government would have been ashamed to admit it.
    The only arguments by the Financial Secretary have been about the way in which pensions have increased and other things have risen in price. To what extent are these arguments valid? Recently I asked some Questions of the Minister of Pensions and National Insurance, who said—he said it several times in consecutive weeks—that the pensioner's purchasing power today is about the same as it was in 1947. That means that the improvement in our standard of living since 1947 has not been shared by old-age pensioners.
    In other words, according to the Minister of Pensions and National Service, old-age pensioners are relatively worse

    923
    off today than they were seven years ago, and despite the fact that they are worse off relatively than they were ten years ago, when we had just emerged from war, we are now going to take £2¼ million a year from them.
    It is a shabby thing to do. The old-age pensioner is given a sum to keep himself for a week which many hon. Members and people outside spend on one meal. Why go to the poorest? Why not let the amount be paid by people who can afford a couple of pounds for a meal instead of by old-age pensioners?
    The Financial Secretary has given us no real argument at all. All he has done has been successfully to draw a red herring across the debate by talking about anomalies and the increases that there have been in the pensions, increases which have in any case come too late and have merely brought old-age pensioners up to the standard which they had in 1947. The arguments advanced by the right hon. Gentleman have been paltry ones.
    I would ask the Chancellor to look at the matter again. The country has nearly 1½ million people seeking National Assistance because they cannot live on their pensions. They are people who have difficulty in obtaining sufficient food for themselves. According to Edinburgh's medical officer of health, speaking recently at Stirling, many of them do not get sufficient food and suffer from malnutrition. Yet the Chancellor says to them "We want another £2¼ million from you". What a state to sink to.
    I do not know what the Government are coming to. They want to put the nation on its feet by allowing it to indulge in a great gamble. They seek to put B.O.A.C. on its feet by selling drink at London and Prestwick airports. These are the remedies of the Tory Government. We have now reached the stage where, in order to pull us out of our difficulties, we have to take £2¼ million from the old-age pensioners.
    I sincerely hope that the Chancellor will have second thoughts about this matter. It is a question not simply of £s. d. but of bread and butter. We are discussing human misery. I should have thought that the Chancellor would, without question, have been magnaminous and accepted the Amendment.
    Mr. William Ross: When the Budget was introduced and when we had the Budget debate I really thought that this was one of those things with which we meet so often in a Budget —the Chancellor standing firm on Budget day, but in Committee on the Finance Bill giving way after a little hesitation. This is obviously the kind of Amendment that the Chancellor should accept. Not a single person, not even the hon. Member for Taunton (Mr. du Cann), who has been badgered about so much, would object if the Chancellor said, "I have been convinced by the arguments. I believe that the provision would be unfair. I will accept the Amendment."
    5.45 p.m.
    The debate has gone on a long time, but the Chancellor has said nothing and has given no indication at all. The interventions by the Financial Secretary are such as to lead my colleagues and me to believe that the hearts of those in the Treasury have been hardened against the arguments that we have put forward on behalf of the old-age pensioners.
    My hon. Friend the Member for Edinburgh, East (Mr. Willis) is right. What is at stake here is whether or not, as a consequence of passing Clause I and increasing the price of tobacco, we should pass the extra cost on to the old-age pensioners who have hitherto been protected by a concession. It has nothing to do with the fact that there are anomalies. I should have been delighted if the Chancellor had recognised the injustice of the anomaly and had decided to increase the pension by an equivalent amount and to permit all pensioners to spend the increase in the way they wished. The Chancellor has not done that.
    We have to recognise that there is another thing that the Chancellor has done. He is a Chancellor in search of £100 million. If he had thought that there was no hardship he would have wiped out the concession altogether. Instead, he retains the concession without making it a real one and without facing up to the difficulty that he has created by increasing the price of tobacco. Recognising that there is hardship, he continues the former concession. He must equally recognise that there is an additional hardship because he insists that

    925
    the pensioner should pay more. There is no justification for any dodging of the issue by any hon. Member opposite. The plain, stark fact is that the Chancellor's case, if it is a case at all, must rest on the basis that he requires to tax old-age pensioners to the extent of £2¼ million.
    Apparently the only way in which we can reach a plateau of stability is by taxing old-age pensioners to the extent of £2¼ million. There is no plateau of stability for old-age pensioners. Even with the increases given during the past year, they have been pushed nearer and nearer the brink of misery. Now we have the Chancellor saying that old-age pensioners who smoke have to take a step nearer the edge before the nation can reach a plateau of stability. Is not the Chancellor ashamed to be still insisting on this? Hardship exists and the Chancellor recognises that it does because he has not wiped out the concession. We ask him to make the concession real. By not increasing the concession, he is creating hardship.
    All the arguments about dishonesty are fantastic. Is there any provision in the Finance Acts which has not caused some dishonesty? Can we not all think of Income Tax evasion dodges in respect of which the Government, if they acted properly, could have saved far more than they are demanding from the old-age pensioners? As to moral issues, we are looking forward to a debate on another Clause with regard to which there is some concern about the morals of the nation. Are we not straining things a little far in condemning all old-age pensioners who take the coupons and saying that they are dishonest?
    There is less dishonesty, if there is any dishonesty at all, in that respect than in any other aspect of the Budget. It was not old-age pensioners who used to sell petrol coupons. This talk of a "fiddle" about the price of tobacco and the price of beer reminds me of a nursery rhyme with which, because of my two young children, I am these days familiar. It tells of a king who called for his pipe, his glass and his fiddlers three. Judging by the price of a pipe and a glass in these days, he would have been better advised to call for his fiddlers first in order to "fiddle "the price.
    I hope that the Chancellor has heard enough from this side of the Committee,
    926
    coupled with his failure to get any backing from his own side—because the silence of hon. Members opposite is telling and means that hon. Members opposite are ashamed of what the Chancellor is doing, even if he is not—to make him decide to accept the Amendment.
    Mr. Percy Shurmer: There is very little that can now be said about this matter; all possible arguments have been used, Nevertheless, I hope that the Chancellor will think again on this question. I hope that he has not closed the book, and that there is still a chance that he will give this concession. I think I am correct in saying that the first statement which the financial Secretary made was that he wanted to make it clear to the Committee that this was not a question of £2¼ million. If it was not that which caused the Government to turn down the Amendment, what is the reason for refusing the Amendment and thus allowing old-age pensioners an extra 4½d. per coupon?
    It has already been said that there are anomalies in all sorts of concessions. Whatever the concession, there will always be certain people who will grumble and say that others ought not to have this or that concession because they themselves do not get it. As the right hon. Member for Woodford (Sir W. Churchill) once said about Members' salaries, if we give nobody anything at all until everybody has something, nobody will ever get anything. That is true. If wo do not give concessions because people are grumbling about concessions, we will never give any concessions.
    I am a smoker. I agree that it can be said that if one wants food, one should go without luxuries. However, it has already been said that to poor people a smoke is a great luxury and one of the few which they get. There is no social worker who is not continually pleading on behalf of old-age pensioners that if they lose a halfpenny, it is a hardship. They have to look after every farthing and, indeed, it is a shame that farthings are not spent in shops as they were years ago, when we could buy a farthing's worth of something. Even so, pensioners would then have to look at every farthing.
    I do not want to say too much about the hon. Member for Taunton (Mr. du Cann), but it is true that occasionally an

    927
    old-age pensioner hands a packet of cigarettes to his son; but his son may hand a packet of cigarettes to him when he has a packet and the old-age pensioner has not. It is not true that that old-age pensioner is dishonest. In every aspect of life one can find somebody who "twists" and none of us is not guilty of doing something in our lives for which, were we caught, we would be punished.
    I live in a city where there is one of the largest bodies of old-age pensioners, known as the Sons of Rest Association. In every part in Birmingham are huts where old-age pensioners can meet. I have lived in a poor slum district all my public life and I have never yet heard a person ask "I do not smoke, why should pensioners? "I have never even heard it said that pensioners who do not smoke should have coupons for milk.
    The Financial Secretary, after saying that the Government were not concerned with the £2¼ million, referred to the anomalies which exist because some pensioners are not able to get the coupons. Those pensioners must be receiving amounts over and above that drawn by a pensioner who has only his pension plus National Assistance. For the average pensioner to get a penny less constitutes a real hardship. In the City of Birmingham men and women thirty and forty years ago worked for 15s. and 16s. a week. When I first went to Birmingham I worked in a factory for 15s. 9d. a week for a 54-hour week. Those old people were unable to save for a rainy day.
    They were the people who built the great industries of Birmingham and of the rest of the country. They served in the First World War, and some who served in the Boer War are still alive. They are people who have only the last few years of their lives to live. I feel sure that the Chancellor can find some way to make this concession, and to add another 4½d. to the value of the tobacco tokens for old-age pensioners. If we had a free vote, hon. Members opposite would join with us, and they would not bring the Government down if this concession were granted. I ask the Chancellor to give old-age pensioners a chance to have a little extra comfort. Giving them this extra 4½d. will not break the country.
    Mrs. Jean Mann: I did not intend to enter the
    928
    debate because I have always felt that there was a great volume of opinion in the House about old-age pensioners and that almost everyone agreed with everyone else. I have often felt that the case of widows has been understated, because everyone was so intent about old-age pensioners. I have therefore withdrawn from recent debates about old-age pensioners, but this afternoon I am constrained to speak after searching the faces of hon. Members opposite. I shall not say, as Disraeli did, that they represent not Vesuvius in eruption, but extinct volcanoes.
    What impresses me is that when in 1947 my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), as Chancellor of the Exchequer, steeply upgraded the tobacco tax, there was rebellion by 300 Labour Members. They saw at once that such a steep upgrading would affect the old-age pensioners and back bench Labour Members gave their Front Bench no rest or peace. That is why I looked at the extinct volcanoes opposite. There are so few of them even to look at, in spite of the fact that this is an important discussion. There are only six altogether, apart from the Front Bench and its satellites. My hon. Friend the Member for Kirkcaldy Burghs (Mr. Hubbard) said that he knew that, individually, hon. Members opposite could be quite generous and he hoped that, collectively, they would prove equally generous tonight.
    6.0 p.m.
    I know that hon. Members opposite are meeting their constituents and telling them that they have every sympathy with the old-age pensioners. Again, however, I contrast their attitude with that of my colleagues when the Labour Party was in power. We had the courage to attack our Front Bench and let it know that we were not supporting a change which meant so much to old-age pensioners. As a result of back bench pressure from almost every Labour Member a rather revolutionary change was made, namely, the issue of the tobacco token book. If the Labour Chancellor at that time had wanted to plead administrative difficulties he could have done so, for the production of such a book meant an entirely new departure.
    There were then further difficulties. Not all old-age pensioners smoked. We

    929
    had to consider what we could do about that. The then Chancellor could have presented us with monumental obstructions to our demands. The present Chancellor, however, has an easy administrative task. These tobacco coupons are all dated and marked "2s. 4d.". He merely has to announce that the coupons are now worth 2s. 8d., and that is the end of his administrative difficulties. He really has no argument on that score.
    We are becoming accustomed to the argument put forward by people who say, "After all, what is 4d. extra for an ounce of tobacco? It really does not matter very much," or, "What is 2d. extra upon a loaf of bread? If you divide a loaf into 24 slices it works out at a decimal fraction of 1d. per slice. What is this 10. extra on a pint of milk? If you split the bottle into three, it amounts only to ½d. per third of a pint." We get that argument all the time, while we have additions of Id. here and 2d. there time after time. This argument is put forward by statisticians who are accustomed to spending perhaps 30s. on a meal. I hope that this argument will not be put forward today, because all these small additions, having continued over so long a period, are having their effect on the appearance of old-age pensioners.
    During the last 20 years I have become accustomed to looking at my audiences. When an hon. Member has an audience gathered together it is very interesting for him just to look at it. I have been amazed at the change in the appearance of mothers and young working women. In some cases it is hardly possible to tell the difference between the working girl and the duchess. It is very pleasant to see that.
    I can remember in 1946 and 1947 old-age pensioners coming to my meetings wearing fine new coats and looking very well and very young. I now notice that their coats are beginning to get shabby and threadbare and their footwear is becoming very badly worn. All male Members will know that a decent shirt is a pretty costly item for an old-age pensioner these days. I have been wondering why they come to my meetings with mufflers round their necks. I am afraid it is because they feel that their shirts are becoming rather shabby, especially round the necks. Some of them cannot even afford a shirt.
    930
    The signs of increasing hardship are all there, visible and very pathetic to see. These people cannot look forward to obtaining work next year; all they can look forward to is seeing their coats getting shabbier and their linoleum becoming more worn, with no money to buy their necessary food, underwear and other articles.
    The Temporary Chairman (Mr. G. Thomas): I am sorry to interrupt the hon. Member. I have tried to give her as much latitude as I can, but we must get to the question of the tobacco token, and the proposal contained in the Amendment.
    Mrs. Mann: I am very sorry to have gone so wide of the Amendment, Mr. Thomas. I ask the Chancellor to take all these matters into consideration. I have tried to soften his heart. I do not think that he is a hard-hearted man. Surely it is not worth his standing up to all these innuendoes and opposition for the sake of £2¼ million.
    Mr. A. G. Bottomley: I am quite sure that my hon. and right hon. Friends will join with me in congratulating my hon. Friend the Member for Ince (Mr. T. Brown) for tabling this Amendment and also for the way in which he delivered his speech in support of it. I believe that hon. Members opposite secretly share his sentiments, and that if they could they would go into the Lobby tonight and vote with the Opposition.
    At least, the hon. Member for Taunton (Mr. du Cann), who had to face the electors very recently, knows what they think about these matters—and he is the only hon. Member opposite who has given any verbal support to the plea for further consideration to be given to the case of old-age pensioners. It is true that he did not support the Amendment; he took the view which is held by many people, that the pension should be an adequate one, and that old-age pensioners should not have to depend upon concessions, charity or assistance.
    I imagine that most hon. Members meet their constituents fairly regularly. Now we have what are termed "surgeries" and constituents come to see their Members. At my "surgery" last Friday there were a number of people to see

    931
    me, not out of politeness, but because of an anxiety to communicate with me. A deputation from the old-age pensioners of Rochester and Chatham came to my office before their usual time to make the strongest possible representations against the behaviour of the Chancellor and his attitude toward old-age pensioners as revealed by his Budget.
    My view, and it is shared by my hon. Friends, is that the Chancellor has been rather vicious in his attitude towards old-age pensioners. Not only is there this additional tax which will add to the cost of their one pleasure, but, also, in the same Budget, essentials of life such as bread and milk, have been taxed. It would seem that the right hon. Gentleman has singled out this section of the population for the harshest treatment. As he is a kindly disposed man, I should have thought that the right hon. Gentleman would desire to remedy that. I think that he might easily have followed what my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was able to do in 1947, and pass on this relief to the old-age pensioners.
    When my right hon. Friend suggested this concession, in 1947, those who had to operate the scheme put forward the most formidable arguments against it. It was their duty to do so, but it is also the duty of Ministers to over-ride the carefully thought-out plans and tidy arrangements which good civil servants consider necessary if that is desirable for political reasons. I suggest to the right hon. Gentleman that on this occasion there are good political reasons for giving this concession to the old-age pensioners.
    I am sure that my right hon. and hon. Friends were intensely disappointed by the arguments advanced by the Financial Secretary. When the right hon. Gentleman rose so early in the discussion we thought that he was proposing to accept this Amendment. Why, otherwise, should he take part in the discussion so soon? But we were disappointed. One of the arguments deployed by the right hon. Gentleman was that old-age pensioners are not now so badly off. He suggested that they could go one cigarette short if they found it too difficult to meet the cost. But they had had an increase in their pension which more than adequately
    932
    repaid any difficulties they might now find.
    On the figures presented by his colleagues in the Government the Financial Secretary is wrong in that estimation. The Minister of Pensions and National Insurance was not very encouraging yesterday. According to official reports the indication is that the present pension is not adequate to meet the standard laid down in 1954, when there was an increase of 4s. The then Minister of Pensions and National Insurance said that the yardstick of the standard and the amount of the pension should be the number of people who were receiving National Assistance.
    Today, the number of people receiving National Assistance is 1,600,000. If we include wives, the figure would probably amount to over 2 million, a higher number than ever before. It may be 3 million, but I am being conservative in my estimate. Last year, the National Assistance Board was compelled to give an increase of 2s. 6d. a week because of rising costs. That let in other people who previously were not in receipt of assistance and the number increased by 30,000. In other words, the pension given in 1954 is inadequate for present day standards, and, therefore, the arguments of the Financial Secretary are not supported by facts and, in my view, are weak arguments with which to support the proposal to put this additional tax on old-age pensioners.
    6.15 p.m.
    The Financial Secretary was rather unwise to single out old-age pensioners as being less honourable than other members of the public. It was unfortunate that he should do so. When the scheme was introduced, in 1947, everyone realised that it was a risk and that it was necessary to make provision to impose penalties on people who broke the law. People had to sign forms to say that they would smoke the tobacco themselves, or that they were "habitual smokers". Is it suggested that honourable men and women who signed those documents have so abused this scheme that the Minister has to make the comments which he made this afternoon?
    Is the Financial Secretary proposing to support the statements he has made by evidence? How many cases have been

    933
    taken to the courts? If none has been taken, why not? Is there no evidence? These allegations should not be made against members of the public particularly the old-age pensioners who, in my opinion—I am sure it is shared by the majority of the people in this country— are more honourable than many other citizens. I hope, therefore, that upon reflection the Financial Secretary will consider he was unwise to advance that argument.
    The right hon. Gentleman said that the estimated cost was about £2¼ million. I have made some rough calculations and, while I do not doubt the accuracy of the right hon. Gentleman's statement, I hope that he will give me some further information so that I may be clear. The figures show that in 1953–54 there were 2¼ million pensioners and the cost of the scheme was £13·8 million. As a result of the 1946 Act, more people received retirement pensions than before and it was inevitable that the number of pensioners would increase.
    In 1954–55, the cost had gone up to £14·6 million. As I understand, the estimated cost for 1956–57 is £15½ million. If we subtract the £14·6 million from £15½ million the answer does not amount to £2¼ million. But I am a layman. I have only worked this out to the best of my ability, and so far as I can see, the amount will not be an increase of £2¼ million. If I am wrong, perhaps the Chancellor will corect me and show me how that figure is arrived at.
    Most of my hon. Friends have rightly said that in this manner we are hitting at the one pleasure of the old-age pensioners. Most of them were brought up in the days long before there was any scare about lung cancer, or any need to save dollars by not buying Virginia tobacco. A good many of us have been influenced, by one consideration or another, to become non-smokers. I happen to be in the fortunate position of being a non-smoker, but most of these old people are accustomed to their cigarette or pipe of tobacco. They cannot afford the things which the average person can afford to do. They cannot afford to go to the theatre or the cinema or to a football match, or to go to the dog race-track or enjoy other pleasures.
    934
    These old folk have to sit at home, and a cigarette or a pipe of tobacco is their one pleasure. Here we are denying them opportunity of indulging in it to the full. One old-age pensioner told me that he had another pleasure. which was reading the weekly newspaper. "But as a result of this tax," he said "I shall not be able to buy a newspaper." His means were so frugal that he had to decide either to give up smoking or the newspaper, and apparently he proposed to give up the newspaper.
    The Financial Secretary said that the price of cigarettes had gone up less than anything else for some years past. That is not the best way of judging the matter. Even if cigarettes have not gone up, the profits have. The year 1954 was a record profit year for the tobacco manufacturers and distributors, who paid a dividend of 21 per cent. Why? The commodity had not gone up in price that year. It was automation, and the fact that the manufacturers were able to reorganise their industry and produce the goods much better than before, which led to the higher profit.
    What the Financial Secretary said may be true of the manufacturers, but none of us here can escape our responsibility for adding to the burden of the old people. Hon. Members who are smokers will recall that a packet of cigarettes Which cost 11½d. some years ago today costs 3s. 10d. Not many other commodities have risen so steeply in price over the years. The argument of the Financial Secretary was equally weak on that point.
    In introducing his Budget, the Chancellor of the Exchequer said that tobacco was a mere revenue raiser. It was estimated that last year £680 million would be yielded by the Tobacco Duty. Under the new proposals the estimate is £707 million. If this duty is imposed solely on revenue-producing grounds, the Chancellor could easily afford to give up the £2¼ million. Surely he does not want that money from the old-age pensioners. On that argument he ought to be prepared to meet us and not put the additional tax on the old-age pensioners.
    The Financial Secretary said on Second Reading, and he repeated it this afternoon, that he did intend to pass the increased duty on to the old-age pensioners who smoked. He drew an analogy with the time when the tax was

    935
    raised by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), who increased the duty by six times. Now the increase was so small that it was necessary to pass it on. Is the conclusion to be drawn that if the increase had been much higher it would not have been passed on? We have not had an answer to that point. If it would have been passed on in a larger amount it should more easily be passed on in a smaller amount.
    There was an anomaly, the Financial Secretary went on to say, in that classes of pensioners were not getting the concession. He mentioned railway pensioners, police pensioners, Service pensioners, war widow pensioners, and industrial disability pensioners, who do not benefit from the tax concession. The remedy is simple; let him include them all. If he says that it is impossible to do so. I suggest that my hon. Friend the new Member for Walthamstow, West (Mr. Redhead), who worked in the Customs and Excise Department, would, I have not the least doubt, if he were acting as Chancellor of the Exchequer, soon find a way in which the concession could be given.
    I believe that the Chancellor of the Exchequer does not like this tax and that if he had the courage he would do away with it. He is not prepared to do away with it, so he is nibbling at it and hopes in this way to remove the concession in due course for the old-age pensioners. Let him do it, and we will be with him, if at the same time he gives them a pension adequate to meet all their needs.
    I make a plea to the Chancellor to do something about this matter. I believe that Tobacco Duty relief is one of the concessions he will make on the Finance Bill. He has enough troubles already and he will have more later. He has enough unpopularity; I ask him not to earn more by incurring the wrath and displeasure of the old-age pensioners and of all fair-minded persons. My strongest plea is that he should give in, on the ground of justice to the old-age pensioners who, at this time, must be the concern of us all.
    The Chancellor of the Exchequer (Mr. Harold Macmillan): The Committee has no reason to regret the time that we have occupied in discussing this important
    936
    Amendment, or the tone in which the debate has been carried on. It was introduced by the hon. Member for Ince (Mr. T. Brown) in a speech so moderate and persuasive that I found it exceedingly difficult not to be charmed into agreement.
    The debate was ended for the Opposition by the right hon. Member for Rochester and Chatham (Mr. Bottomley) in a speech of great moderation and fairness. If one or two hon. Members deviated into an attack on the Budget or a little bit of class warfare, that was not altogether unexpected. Some hon. Members find it difficult to resist those temptations. The hon. Member for Fulham (Mr. M. Stewart) called my Budget "trivial" and "flippant". There is a surplus of £460 million. If I had that surplus proportionately in my private affairs I would not regard it as trivial or flippant.
    Broadly speaking. we have all tried to face the problem. The hon. and learned Member for Gloucester (Mr. Turner-Samuels) appealed to me, always in very friendly terms, and so did other hon. Members, including the hon. Member for Birmingham, All Saints (Mr. D. Howell). I do not see him for the moment in his place. His constituency, it seems to me, must throw a very heavy burden of responsibility upon him.
    It was the speech of the hon. Member for Bristol, South (Mr. Wilkins) which gave us the picture in the fairest and simplest way. He reminded the Committee of what happened. He told us that in 1947 there was an enormous increase in the Tobacco Duty of about 43 per cent. and that in the following year there was an increase of about 6 per cent. If it had been reversed, if there had been an increase of 5 per cent. in 1947, I feel absolutely certain that there would have been no coupon scheme.
    I think the hon. Member for Bristol, South will agree that it was because of the enormous increase of 50 per cent. that practically all the Members of the party opposite and of the party now on this side of the Committee—reversed, as we were then—felt that this was a tremendously heavy burden to put suddenly upon the old-age pensioner who smoked tobacco, without providing for any change or review of the pension. I say honestly

    937
    that I am certain that in the reversed circumstances the scheme would never have been invented.
    It was invented to find a way out of a political difficulty. I am not saying that in the narrow sense. The difficulty was felt by the whole Committee. This scheme was devised to try to maintain the 43 per cent. increase in the Tobacco Duty without creating too much political difficulty. It was devised hurriedly between the Committee and the Report of the Finance Bill. Everyone admits that to give a special remission of tax or special coupons for a particular commodity, which just over half of them claim and just under half of them do not claim, is not a very good scheme or method of helping old people. If hon. Members were considering the best way of dealing with the problems of the old-age pensioner in relation to costs, taxes and prices, no one would think of this particular scheme.
    What has come out of this debate is a very valuable agreement that as soon as may be this sort of scheme ought to be considered. I am not saying that the agreement is general, but there was general agreement that there are difficulties in the scheme. As it was very hurriedly put together, it has not been easy to administer. It leaves out large classes of pensioner. Whatever the right hon. Member for Rochester and Chatham may say, I do not think that even his hon. Friend the new hon. Member for Walthamstow, West (Mr. Redhead) would be able to put it right. My Department attempted three times during the period of the Labour Government to put it right; and could not succeed. The scheme is not easy to work and is not satisfactory.
    We come down to the point whether I ought, when I was making this 5 per cent. increase in the duty, automatically to have given the additional coupon. Had it been the other way round and had there been the rise in 1947 and 1948 of only about 5 per cent., I am sure that the scheme would never have been born. It was introduced to meet a special political difficulty brought about by the heavy increase of 1947.
    6.30 p.m.
    We have kept the whole temper of this debate friendly and have tried to consider the matter objectively. Had I thought of
    938
    saying, "Yes" first of all, it would have been much easier, we would have avoided two hours of this debate and I might have been rather more popular. Of course, I thought of it, but I must say, frankly, that I did not feel it right to fortify and, as it were, almost to perpetuate the scheme automatically by saying, seven years after the last increase, that whenever there is a rise in the duty, even of 5 per cent., there must always be a new coupon value. To fortify and perpetuate the scheme as that would do is not, I think, the right way.
    The tone of the statements made today has been very modest. We often say that our own side of the House when we are in office does better than the other side, but the truth is that the story of the treatment of all pensioners as a whole by the country since the war is not a bad story. We have tried to shoulder our responsibilities and each Government, in turn, has had to deal with them.
    Only in April, 1955, was the last increase made for the old-age pensioners and there was, of course, the one three years before. I do not rely too much upon the statistical arguments but I am informed—
    Mr. Ross: It may be that the increase came into force in April, 1955, but the legislation was introduced towards the end of 1954.
    Mr. Macmillan: It came into force in 1955. If we were to ride off on the purely statistical argument, I am informed by the statisticians who serve me that, measured in real terms, even at today's prices of everything, the pensions give a greater value in real terms than at the end of 1951, after the pensions increase of October, 1951. [Interruption.] People mention individual commodities which show a rise and, therefore, I am entitled to reply that, measured in real terms, while I am not satisfied that they are the perfect pensions, the pensions are more satisfactory than when we took over the Government in October, 1951.
    Mr. Willis: The right hon. Gentleman must be aware that his right hon. Friend the Minister of National Insurance and Pensions has said in the House that the approximate purchasing power of the pension at the beginning of this year was the same as in 1947.
    Mr. Macmillan: That was not the argument I was presenting. Hon. Members opposite have presented their arguments and have no doubt, as all of us do, chosen figures which suit them. I am saying that, measured in real terms, in spite of all the denunciations which fall so easily and loosely from the lips of certain hon. Members opposite, taking into account all the rises in prices, the pensions give a great deal more support to the old-age pensioner than during the Labour Party's tenure of office.
    After this valuable discussion, some of the implications of which I will, of course, consider, I ask the Committee to resist the Amendment and not to perpetuate a system, specially devised for this special tax, to give this special type of benefit to a particular type of pensioner, and only to half of them. I do not consider that that is the right way for the House of
    Commons to meet its obligations for the old-age pensioner and I hope that for this reason the Committee will reject the Amendment.
    Mr. Bottomley: The Chancellor of the Exchequer has had to battle against himself, either to accept the humane appeal of my hon. Friend the Member for Ince (Mr. T. Brown)—he acknowledged that he was nearly convinced by our case— or to give way to the cold, calculating, administrative machine behind him. He chose the latter course. I am quite sure that all of us on this side, as well as the country, deplore his choice and we shall show it by registering our vote.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 205. Noes 260.

    Division No. 199.]

    AYES

    [16.35 p.m.

    Ainsley, J. W,

    Dugdale, Rt. Hn. John (W. Brmwch)

    Jones, J. Idwal (Wrexham)

    Albu, A. H.

    Dye, S.

    Jones, T. W. (Merioneth)

    Allaun, Frank (Salford, E.)

    Ede, Rt. Hon. J. C.

    Kenyon, C.

    Allen, Arthur (Bosworth)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Key, Rt. Hon. C. W.

    Allen, Soholefield (Crewe)

    Edwards, Robert (Bilston)

    King, Dr. H. M.

    Anderson, Frank

    Evans, Albert (Islington, S.W.)

    Lawson, G. M.

    Awbery, S. S.

    Evans, Edward (Lowestoft)

    Ledger, R. J.

    Bacon, Miss Alice

    Fernyhough, E.

    Lee, Miss Jennie (Cannock)

    Balfour, A.

    Finch, H. J.

    Lever, Leslie (Ardwick)

    Ballenger, Rt. Hon. F. J.

    Fletcher, Eric

    Lindgren, G. S.

    Bence, C. R. (Dunbartonshire, E.)

    Forman, J. C.

    Logan, D. C.

    Benn, Hn. Wedgwood (Bristol, 8.E.)

    Fraser, Thomas (Hamilton)

    Mabon, Dr. J. Dickson

    Benson, G.

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

    McGhee, H. C.

    Beswick, F.

    Gibson, C. W.

    Mcinnes, J.

    Blackburn, F.

    Gooch, E. D.

    McKay, John (Wallsend)

    Blyton, W. R.

    Gordon Walker, Rt. Hon. P. C.

    McLeavy, Frank

    Boardman, H.

    Greenwood, Anthony

    Mahon, Simon

    Bottomley, Rt. Hon. A. C.

    Grenfell, Rt. Hon. D. R.

    Mallalieu, E. L. (Brigg)

    Bowen, E. R. (Cardigan)

    Grey, C. F.

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

    Bowles, F. G.

    Griffiths, David (Rother Valley)

    Mann, Mrs. Jean

    Boyd, T. C.

    Griffiths, Rt. Hon. James (Lianelly)

    Marquand, Rt. Hon. H. A.

    Brockway, A. F.

    Griffiths, William (Exchange)

    Mason, Roy

    Broughton, Dr. A. D. D.

    Crimond, J.

    Mayhew, C. P.

    Brown, Rt. Hon. George (Belper)

    Hale, Leslie

    Messer, Sir F.

    Brown, Thomas (Ince)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Mitchison, G. R.

    Burke, W. A.

    Hamilton, W. W.

    Monslow, W.

    Burton, Miss F. E.

    Hannan, W.

    Moody, A. S.

    Butler, Herbert (Hackney, C.)

    Hastings, S.

    Morris, Percy (Swansea, W.)

    Butler, Mrs. Joyoe (Wood Green)

    Hayman, F. H.

    Morrison,Rt.Hn.Herbert(Lewis'm,S.)

    Castle, Mrs. B. A.

    Healey, Denis

    Mort, D. L.

    Champion, A. J.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Moss, R.

    Chapman, W. D.

    Herbison, Miss M

    Moyle, A.

    Clunie, J.

    Hobson, C. R.

    Mulley, F. W.

    Coldriok, W.

    Holmes, Horace

    Neale, Harold (Bolsover)

    Collick, P. H. (Birkenhead)

    Howell, Charles (Perry Barr)

    Noel-Baker, Francis (Swindon)

    Collins, V. J.(Shoreditch & Finsbury)

    Howell, Denis (All Saints)

    Oliver, G. H.

    Corbet, Mrs. Freda

    Hoy, J. H.

    Orbach, M.

    Cove, W. C

    Hubbard, T. F.

    Oswald, T.

    Craddock, George (Bradford, S.)

    Hughes, Cledwyn (Anglesey)

    Owen, W. J.

    Cronin, J. D.

    Hughes, Emrys (S. Ayrshire)

    Paget, R. T.

    Grossman, R. H. S.

    Irving, S. (Dartford)

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

    Cullen, Mrs. A.

    Janner, B.

    Paling, Will T. (Dewsbury)

    Dalton, Rt. Hon. H.

    Jay, Rt. Hon. D. P. T.

    Palmer, A. M. F.

    Darling, George (Hillsborough)

    Jager, George (Goole)

    Pargiter, G. A.

    Davies,Rt.Hon.Clernent(Montgomery)

    Jeger, Mrs.Lena(Holbn & St.Pncs,S.)

    Parker, J.

    Davies, Ernest (Enfield, E.)

    Jenkins, Roy (Steohford)

    Paton, John

    Davies, Harold (Leek)

    Johnson, James (Rugby)

    Pearson, A.

    Delargy, H. J.

    Jones, David (The Hartlepool')

    Plummer, Sir Leslie

    Dodds, N. N.

    Jones, Elwyn (W. Ham, S.)

    Price, J. T. (Westhoughton)

    Donnelly, D. L.

    Jones, Jack (Rotherham)

    Price, Philips (Gloucestershire, W.)

    Proctor, W. T.

    Sparks, J. A.

    Wheeldon, W. E.

    Pryde, D. J.

    Steele, T.

    White, Mrs. Eirene (E. Flint)

    Randall, H. E.

    Stewart, Michael (Fulham)

    White, Henry (Derbyshire, N.E.)

    Rankin, John

    Stones, W. (Consett)

    Wilcock, Group Capt. C. A. B.

    Reeves, J.

    Strachey, Rt. Hon. J.

    Wilkins, W. A.

    Reid, William

    Stross,Dr.Barnett(Stoke-on-Trent,C.)

    Willey, Frederick

    Robens, Rt. Hon. A.

    Summerskill, Rt. Hon. E.

    Williams, David (Neath)

    Roberts, Goronwy (Caernarvon)

    Sylvester, G. 0.

    Williams, W. R. (Openshaw)

    Rogers, George (Kensington, N.)

    Taylor, Bernard (Mansfield)

    Williams, W. T. (Barons Court)

    Ross, William

    Taylor, John (West Lothian)

    Willis, Eustace (Edinburgh, E.)

    Royle, C.

    Thomas, lorwerth (Rhondda, W.)

    Wilson, Rt. Hon. Harold (Huyton)

    Shurmer, P. L. E.

    Thomson, George (Dundee, E.)

    W interbottom, Richard

    Silverman, Julius (Aston)

    Turner-Samuels, NI.

    Woodburn, Rt. Hon. A.

    Simmons, C. J. (Brierley Hill)

    Ungoed-Thomas, Sir Lynn

    Woof, R. E.

    Skeffington, A. M.

    Viant, S. P.

    Yates, V. (Ladywood)

    Slater, Mrs. H. (Stoke, N.)

    Warbey, W. N.

    Younger, Rt. Hon. K.

    Slater, J. (Sedgefield)

    Weitzman, D.

    Zilliacus, K.

    Smith, Ellis (Stoke, S.)

    Wells, Percy (Faversham)

    Sorensen, R. W.

    West, D. G.

    TELLERS FOR THE AYES:

    Mr. Short and Mr. Deer.

    NOES

    Agnew, Cmdr. P. G.

    Eden,Rt.Hn.SirA.(Warwick&L'm'tn)

    Iremonger, T. L.

    Aitken, W. T.

    Elliot, Rt. Hon. W. E.

    Irvine, Bryant Godman (Rye)

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

    Emmet, Hon. Mrs. Evelyn

    Jenkins, Robert (Dulwich)

    Alport, C. J. M.

    Errington, Sir Eric

    Jennings, J. C. (Burton)

    Amery, Julian (Preston, N.)

    Farey-Jones, F. W.

    Johnson, Dr. Donald (Carlisle)

    Amory, Rt. Hn. Heathooat (Tiverton)

    Fell, A.

    Johnson, Erie (Blackleg)

    Anstruther-Gray, Major Sir W. J.

    Fisher, Nigel

    Jones, Rt. Hon. Aubrey (Hall Green)

    Arbuthnot, John

    Fleetwood-Hesketh, R. F.

    Joseph, Sir Keith

    Armstrong, C. W.

    Fletcher-Cooke, C.

    Joynson-Hicks, Hon. Sir Lancelot

    Ashton, H.

    Fort, R.

    Kaberry, D.

    Atkins, H. E.

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Keegan, D.

    Baldock, Lt.-Cmdr. J. M.

    Freeth, D. K.

    Kerby, Capt. H. B.

    Baldwin, A. E.

    Galbraith, Hon. T. G. D.

    Kerr, H. W.

    Banks, Col. C.

    Gammons, Sir David

    Kershaw, J. A.

    Barlow, Sir John

    Garner-Evans, E. H.

    Kimball, M.

    Barter, John

    George, J. C. (Pollok)

    Kirk, P. M.

    Baxter, Sir Beverley

    Gibson-Watt, D.

    Lagden, G. W.

    Bell, Philip (Bolton, E.)

    Glover, D.

    Lambert, Hon. C.

    Bell, Ronald (Bucks, S.)

    Godber, J. B.

    Lancaster, Col. C. G.

    Bennett, Dr. Reginald

    Comme-Duncan, Col. Sir Alan

    Langford-Holt, J. A.

    Bevins, J. R. (Toxteth)

    Gough, C. F. H.

    Leather, E. H. C.

    Bidgood, J. C.

    Gower, H. R.

    Leavey, J. A.

    Biggs-Davison, J. A.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Leburn, W. G.

    Birch, Rt. Hon. Nigel

    Green, A.

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

    Bishop, F. P.

    Gresham Cooke, R.

    Legh, Hon. Peter (Petersfield)

    Black, C. W.

    Grimston, Hon. John (St. Albans)

    Lindsay, Hon. James (Devon, N.)

    Body, R. F.

    Grimston, Sir Robert (Westbury)

    Lindsay, Martin (Solihull)

    Boothby, Sir Robert

    Grosvenor, Lt.-Col. R. G.

    Linstead, Sir H. N.

    Bossom, Sir A. C.

    Gurden, Harold

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

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

    Hall, John (Wycombe)

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Boyle, Sir Edward

    Hare, Rt. Hon. J. H.

    Lloyd-George, Maj. Rt. Hon. G.

    Braine, B. R.

    Harris, Reader (Heston)

    Longden, Gilbert

    Braithwaite, Sir Albert (Harrow, W.)

    Harrison, A. B. C. (Maldon)

    Low, Rt. Hon. A. R. W.

    Brooke, Rt. Hon. Henry

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

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Brooman-White, R. C.

    Harvey, John (Walthamstow, E.)

    Lucas-Tooth, Sir Hugh

    Browne, J. Nixon (Craigton)

    Harvie-Watt, Sir George

    Macdonald, Sir Peter

    Bryan, P.

    Hay, John

    McKibbin, A. J.

    Burden, F. F. A.

    Head, Rt. Hon. A. H.

    Mackie, J. H. (Galloway)

    Butcher, Sir Herbert

    Heald, Rt. Hon. Sir Lionel

    McLaughlin, Mrs. P.

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

    Heath, Rt. Hon. E. R. G.

    Maclean, Fitzroy (Lancaster)

    Campbell, Sir David

    Henderson, John (Cathoart)

    Macmillan, Rt. Hn. Harold(Bromley)

    Cary, Sir Robert

    Hicks-Beach, Maj. W. W.

    Maddan, Martin

    Chichester-Clark, R.

    Hill, Rt. Hon. Charles (Luton)

    Maitland, Hon. Patrick (Lanark)

    Clarke, Brig. Terence (Portsmth, W.)

    Hill, Mrs. E. (Wythenshawe)

    Markham, Major Sir Frank

    Conant, Maj. Sir Roger

    Hill, John (S. Norfolk)

    Marlowe, A. A. H.

    Cooper-Key, E. M.

    Hinchingbrooke, Viscount

    Marples, A. E.

    Cordeaux, Lt.-Col. J. K.

    Hirst, Geoffrey

    Marshall, Douglas

    Corfieid, Capt. F. V.

    Holland-Martin, C. J.

    Mathew, R.

    Crowder, Sir John (Finchley)

    Hope, Lord John

    Maude, Angus

    Crowder, Petre (Ruislip—Northwood)

    Hornsby-Smith, Miss M. P.

    Maudling, Rt. Hon. R.

    Cunningham, Knox

    Horobin, Sir Ian

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

    Currie, G. B. H.

    Horsbrugh, Rt. Hon. Dame Florence

    Medlicolt, Sir Frank

    Dance, J. C. G.

    Howard, Hon. Greville (St. Ives)

    Milligan, Rt. Hon. W. R.

    D'Avigdor-Goldsmid, Sir Henry

    Howard, John (Test)

    Molson, Rt. Hon. A. H. E.

    Deedes, W. F.

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

    Moore, Sir Thomas

    Dodds-Parker, A. D.

    Hughes, Hallett, Vice-Admiral J.

    Morrison, John (Salisbury)

    Donaldson, Cmdr. C. E. McA.

    Hughes-Young, M. H. C.

    Mott-Radolyffe, C. E.

    Doughty, C. J. A.

    Hulbert, Sir Norman

    Nabarro, G. D. N.

    du Cann, E. D. L.

    Hurd, A. R.

    Nairn, D. L. S.

    Duncan, Capt. J. A. L.

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

    Neave, Airey

    Duthie, W. S.

    Hyde, Montgomery

    Nicholls, Harmar

    Eccles, Rt. Hon. Sir David

    Hylton-Foster, Sir H. B. H.

    Nicolson, N. (B'n'm'th, E. & Chr'oh)

    942

    943

    Nield, Basil (Chester)

    Robertson, Sir David

    Tiley, A. (Bradford, W.)

    Noble, Comdr. A. H. P.

    Robson-Brown, W.

    Tinley, John (Wavertree)

    Nugent, G. R. H.

    Rodgers, John (Sevenoaks)

    Touche, Sir Gordon

    Nutting, Rt. Hon. Anthony

    Roper, Sir Harold

    Turner, H. F. L.

    Oakshott, H. D.

    Russell, R. S.

    Tweedsmuir, Lady

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

    Schofield, Lt.-Col. W.

    Vane, W. M. F.

    Orr, Capt. L. P. S.

    Scott-Miller, Cmdr. R.

    Vaughan-Morgan, J. K.

    Osborne, C.

    Sharpies, R. C.

    Vosper, D. F.

    Page, R. G.

    Shepherd, William

    Wakefield, Edward (Derbyshire, W.)

    Pannell, N. A. (Kirkdaie)

    Smithers, Peter (Winchester)

    Walker-Smith, D. C.

    Partridge, E.

    Spearman, Sir A. O. M.

    Wall, Major Patrick

    Pilkington, Capt. R. A.

    Speir, R. M.

    Ward, Hon. George (Worcester)

    Pitman, I. J.

    Spens, Rt. Hn. Sir P. (Kens'gt'n, 8.)

    Ward, Dame Irene (Tynemouth)

    Pitt, Miss E. M.

    Stevens, Geoffrey

    Waterhouse, Capt. Rt. Hon. C.

    Pott, H. P.

    Steward, Harold (Stockport, S.)

    Whitelaw, W.8.1.(Pertrith & Border)

    Powell, J. Enoch

    Steward, Sir William (Woolwich, W.)

    Williams, Paul (Sunderland, S.)

    Price, Henry (Lewisham, W.)

    Stewart, Henderson (Fife, E.)

    Williams, R. Dudley (Exeter)

    Prior-Palmer, Brig. 0. L.

    Studholme, Sir H. G.

    Wills, G. (Bridgwater)

    Raikes, Sir Victor

    Summers, Sir G. 8. (Aylesbury)

    Wilson, Geoffrey (Truro)

    Ramsden, J. E.

    Taylor, William (Bradford, N.)

    Wood, Hon. R.

    Redmayne, M.

    Teeling, W.

    Woollam, John Victor

    Rees-Davies, W. R.

    Thomas, Leslie (Canterbury)

    Yates, William (The Wrekin)

    Remnant, Hon. P.

    Thomas, P. J. M. (Conway)

    TELLERS FOR THE NOES:

    Renton, D. L. M.

    Thompson, Kenneth (Walton)

    Colonel J. H. Harrison and

    Rippon, A. G. F.

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

    Mr. Barber.

    siobsrt, Sir Peter (Healey)

    Thornton-Kemsley, C. N.

    Motion made, and Question proposed, That the Clause stand part of the Bill.
    6.45 p.m.
    Mr. Bottomley: We have had an interesting debate on this tax concession to old-age pensioners. We have had a Division the result of which means that they will not enjoy it, so now the tax is passed on and everyone concerned will have to meet a further rise in the cost of living at a time when I would have thought that the Chancellor himself would have wished to prevent that happening.
    I belong to a very responsible trade union and I, in common with my colleagues in that movement, realise that claims for increases in wages are not the best way to meet our economic difficulties at present. I put it to the Chancellor that every time he takes action which pushes up the cost of living it makes it impossible for responsible trade union leaders not to recognise that the wage earner must have extra pay to meet the cost of the essentials of life. Some people would put tobacco and cigarettes in that category. It is one of their greatest pleasures. Many men and women would prefer to go without other commodities rather than tobacco and cigarettes.
    I do not know whether the Chancellor has taken into account what the additional rise in the index figure will be as a result of this increased tax on tobacco and cigarettes I would still like to press him to consider the whole situation, but there is not much prospect of that after he has been so stone-
    944
    hearted to the appeals made on behalf of old-age pensioners on the tobacco tax. He said, and he has been supported by the Financial Secretary, that the increased tax is for revenue raising purposes. The Financial Secretary said that it would mean an extra 2d. on a packet of 20 cigarettes.
    My right hon. Friend the Member for Huyton (Mr. H. Wilson), on the Second Reading of the Bill, was able to show that the amount going to the Chancellor would, in fact, be lid., which means that the tobacco manufacturers and distributors will get another ¼d. Was the Chancellor aware of that? What advice was given by the tobacco adviser to the Board of Trade? Was there an agreement that the tobacco manufacturers and distributors should have this extra ¼d.? I see no reason why they should have it.
    As I have already said, in I954, as a result of the year's working, the tobacco manufacturers made a record profit and were able to pay a dividend of 21 per cent. I believe that the following year the profits and dividend were even greater than that. So there is no need for them to have additional money in this way. I would have thought that if the Chancellor is really concerned about additional revenue he would have seen to it that the whole of the 2d. came to him and that nothing at all went to the manufacturers.
    Perhaps the Chancellor of the Exchequer will tell us something more about how the 2d. is reached, whether, in fact, an agreement was made with the tobacco manufacturers and distributors

    945
    that they should have this extra farthing and how he justifies this further addition to the cost of living when there is no sign that the manufacturers or distributors are lacking in profit or rewards for their services.
    If the Chancellor will only look back, as apparently he has done in connection with the relief to old-age pensioners, he will find that Sir Stafford Cripps, when Chancellor of the Exchequer, had to meet a similar proposition in the case of the tax on matches. The manufacturers came to him and said that if they could level up the price it would be easier for them to carry the burden of the additional tax rather than reduce the number of matches. Sir Stafford Cripps, to the best of my recollection, remedied that position by putting on the increased tax, so there is a precedent for this and perhaps the Chancellor will see how it was achieved.
    I do not wish to prolong the debate, and I certainly do not want to repeat all that was said earlier about old-age pensioners and the way in which they have suffered. I would merely ask the Chancellor to consider the additional burden put upon the workers and others generally by reason of the increase in the cost of living, adding, at this time of all times, to our economic problems. I hope that even at this late hour the Chancellor will consider whether he can raise the required Revenue by other means than by increasing the Tobacco Duty. I would ask the Financial Secretary to give further consideration to the propositions which I have made.
    Mr. Frederick Mulley: My right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) has dealt very fully and adequately with the scandal perpetrated by the Government in respect of old-age pensioners. My right hon. Friend also asked why the Treasury did not recoup itself by the full extent of 2d. instead of giving a present of one-eighth of that amount to the tobacco manufacturers. I hope that we shall have a convincing reply to that.
    I wish to touch upon the wider considerations involved. Perhaps I should declare an interest in that I smoke. I believe that the tobacco smoker is called upon to pay an unduly high proportion of our total burden of taxation. The figures are impressive. The Chancellor
    946
    hopes to obtain from the tax £707 million in the present financial year. Last year, he secured £668 million. This year, the estimate for the total service of the National Debt is also £707 million. That is about one and a half times the cost of the National Health Service. I suggest that any smoker who suffers lung cancer as a result of his indulgence need feel no reluctance about availing himself of the National Health Service, because he will more than have paid for such attention as he may require.
    The proposed increase is a bad one. I am against increasing indirect taxation at this time when, in relation to the export field and wages at home and in Government policy, we are generally trying to hold the cost of living. It is no good the Government saying that it is not an item which affects the cost of living. Because I believe indirect taxation to be regressive in character, I regret that the Chancellor should have sought to put an additional impost on people who already bear more than a fair proportion of our taxation.
    I feel that the smoker is particularly hard hit I do not think it is possible to put a tax on anything else which hits the non-smoker only and not the smoker. It may be said that the Chancellor might have experimented in other fields, but, generally speaking, it is true that it would be hard to devise a tax which would apply to non-smokers or non-drinkers and would not also affect the smoker and the drinker.
    It is time some attention was paid to this section of the community. While, on medical grounds, it might be foolish to smoke, I cannot see any moral vice in smoking. People who drink may derive some benefit even on health grounds. I do not believe it to be moral weakness to have a moderate glass of beer or whisky, or whatever beverage one fancies.
    The Chancellor's adoption of the easy way out by pushing the taxation on to this section is to be deplored. It certainly is a simple method. Tobacconists throughout the country are the unpaid agents of the Customs and Excise. Administratively, it is an easy way to raise revenue. It is to be deplored. It is time those who drink or smoke, or in some other way provide the Treasury with vast sums of money, had their views

    947
    considered. I hope that even at this late stage the Government may give further consideration to these matters.
    Mr. H. Brooke: If the hon. Member far Sheffield, Park (Mr. Mulley) is arguing that the Tobacco Duty is rather high, I could not agree with him more. I am sure that my right hon. Friend gained no pleasure whatever from his announcement in his Budget speech that he felt it necessary to make a further increase.
    However, I would remind the Committee that the reason for the increase embodied in the Clause is not simply a grasping desire for more revenue at all costs. It is part of a combined operation in the Budget by which the Chancellor had to find means of financing certain savings measures which he announced at the same time. "Savings" was the theme of his Budget, and he judged it to be the moment when, above all, he must offer all-round incentives to people of all kinds to save their money.
    My right hon. Friend needed to offer further stimulus. As will be seen when we come to later Clauses, in certain respects, that cost a lot of revenue. The hon. Member may say that the Chancellor could have taken the easy course and said, "We will let that revenue go ", but this is a time when the whole world is watching Britain. In particular, it is watching the Chancellor to see whether he is managing the economic affairs of the country with a firm grip. He is doing something which is obviously unpopular in itself by increasing the Tobacco Duty. Had he let things go, it would have been noted all round the world that he was prepared to see his surplus reduced.
    He intended to make it clear above all else that he would safeguard and protect and, indeed, somewhat increase the surplus. That is why he had to find means of increasing somewhat both direct and indirect taxation. He has increased direct taxation by Clause 24. He has increased indirect taxation by this Clause. After very careful consideration, he judged that of all the unpleasant alternatives in the indirect field, the Tobaco Duty was the one which could best bear a further increase.
    The right hon. Member for Rochester and Chatham (Mr. Bottomley) asked me
    948
    about the amount of the increase and the gap between the increase and the retail price. It is incorrect to say that the fraction is going into the pockets of the manufacturers. The manufacturers have announced that the retail distributors' margin needed to be increased and will here gain a small increase. If the right hon. Gentleman will look back over the history of the Tobacco Duty, he will see that successive Chancellors of all parties have judged the precise amount of extra Duty required to achieve a certain result in relation to the circumstances of the day. Where the increase has had a retail effect of 2d. he will find, historically, that the actual amount of additional tax has varied from one Budget to another.
    7.0 p.m.
    There is a further point on which there may be misapprehension. The right hon. Gentleman the Member for Battersea, North (Mr. Jay) raised it one day when he asked about manufacturers' stocks. I have heard the suggestion made that the increase in the duty will put a wonderful windfall profit into the pockets of the manufacturers. In this case, the manufacturers have given an undertaking to put such profit to reserve, to be used in financing the higher duty. In doing so they are, as the right hon. Gentleman, who takes a great interest in these things will notice, acting strictly in accordance with the recommendations of the Hutton Committee, which the Government have accepted.
    The Committee made it clear that in its view, when indirect taxation was increased or reduced, it would not be appropriate to take special legislative action about stocks. Most sincerely do I hope that the tax on tobacco will not remain at this present level for the rest of my natural life. When the tax is reduced the manufacturers will automatically lose any profit which has accrued to them on this occasion.
    Mr. Jay: But do not the tobacco manufacturers always put the extra profit to reserve when the tax goes up? And as the tobacco tax, unlike Profits Tax, always goes up and never comes down, does not this reserve get larger and larger?
    Mr. Brooke: I greatly hope that we shall see the tobacco tax going down,

    949
    because I would have thought that that tax was nearly, if not quite, at its fiscal maximum.
    I have explained this because I sensed that there was some misapprehension about the precise effect upon the manufacturers of this change in tax. That is why I have been perfectly frank and have attempted to answer as fully as I could the various questions which have been asked. I may not have satisfied the right hon. Member for Rochester and Chatham (Mr. Bottomley) about the tax—he dislikes it; none of us likes it—but I hope I have been able to answer the questions which he put to me.
    Mr. Roy Jenkins: In replying to fairly detailed Amendments, the Financial Secretary is developing a most engaging habit of enunciating general fiscal principles. The Committee will well remember his famous fiscal principle about the "yawning gap" and it seems that he has got near to announcing a number of almost equally striking principles in the course of his short speech just now.
    He has told us quite clearly that this tax has to be related directly to the Chancellor's savings concessions. Those concessions cost money and have to be paid for in this way. I find that a rather surprising argument to come from the Financial Secretary in this context. We arc all very used to hearing from the other side of the Committee arguments that money saved is just as good as— indeed, in some respects, better than —money paid to the Revenue. It is, therefore, surprising to be told that when we have what is proclaimed to be a great savings Budget we must have an addition to indirect taxation to pay for it.
    The right hon. Gentleman also told us that it was essential that we should have the extra 2d. on cigarettes so that the world might know that the Chancellor was keeping a firm grip on the economy. I think it would have been better to have said "taking" rather than "keeping" a firm grip on the economy. I am sure that the Chancellor himself, in view of all, the figures we have had since, and about which I thought he spoke in surprisingly complacent terms this afternoon, would feel that the world has responded to this clarion call for 2d. on tobacco in precisely the way that he would think it ought to.
    950
    He appears to have thought that this year world opinion was poised in such a way that it was demanding from the Chancellor an extra 2d. on tobacco to fortify his Budget surplus and thus be convinced that he was keeping—or taking —a firm grip on the economy. Presumably the Financial Secretary, who has been at the Treasury for some time, under different Chancellors, would take the view that the world was expecting something very different last year from the previous Chancellor.
    I was also surprised to hear the Financial Secretary justifying the effect of the extra duty on the price of tobacco on the ground that what the manufacturers were now gaining they would lose later, and that we could confidently expect reductions in the duty in future on the ground, as I understood, that the tobacco tax in his view had now reached its fiscal maximum. That was his phrase. That, again, struck me as a peculiar argument. The argument which is being put forward with greater or less justification from the Treasury Bench for this particular increase at present is that tobacco has become relatively very much cheaper over the last few years. Now that we are on the Chancellor's "plateau" it will become relatively very much cheaper in the future. Costs generally are rising at a rate of about 5 per cent. a year, which constitutes the Chancellor's plateau. In those circumstances to claim that the duty had reached its fiscal maximum was, I think, a rash claim for the Financial Secretary to make.
    From the point of view of world opinion I should have thought that one of the most important things for the Chancellor to do to get a firm grip on the economy would be to try to introduce a little stability into our price structure. In that connection, any increase in indirect taxation at present is greatly to be deplored. I therefore feel that this is a bad Clause and I shall have no difficulty at all in voting against it.
    Mr. Harold Wilson: I do not intend to retain the Committee long, but I must refer to the speech made by the Financial Secretary just now. It was given with all his customary courtesy and plausibility. We have come to know those speeches as Finance Bill succeeds Finance Bill. He gave as the reason for the tax change embodied in Clause 1 that

    951
    the whole world was looking to the Chancellor for a sign that he was maintaining, as he said, a grip on the situation.
    To us on this side that seems very odd. We cannot understand why it is that the whole world was looking to the Chancellor when he formulated his Budget this year, but that for some reason the attention of the world was distracted from the previous Chancellor's activities in 1955. Certainly, nothing that that Chancellor did in 1955 would have given any encouragement or comfort to the world at large. However, if I were to follow that point at any great length, I am sure I should be getting out of order.
    It is interesting that we are now finding in one Finance Bill after another the argument that it is necessary to increase some form of indirect taxation on the ground that the world is looking to the Chancellor for a lead. In October last the whole future of the £sterling apparently depended on the Chancellor's not relaxing his grip on coal and cinder sieves and sifters, and pots and pans, pan scrubbers and the rest, and the £ it would seem, was only saved, temporarily, by the Chancellor of that day putting Purchase Tax on those household essentials.
    Now we are told that the financial world outside this country will have no confidence in the Chancellor or his actions or his policies or in the future of sterling unless we have this increase of 2d. on a packet of cigarettes, and that is the reason given by the right hon. Gentleman for the action of the Chancellor. Of course, when he talks about the Chancellor taking a grip on the situation, these, at any rate, are words which are to some extent encouraging. Our fear about the situation is that the Chancellor has now divested himself of all responsibility for the economic and financial position of this country. Again, obviously, I could not pursue that point very far and still remain in order.
    When the Chancellor makes speeches about his being an alarm clock, it is an extraordinary psychological thing that he has convinced himself. He goes round the country saying that he is an alarm clock, which is not the traditional function of the Chancellor of the Exchequer, and I should like to see some evidence from the Chancellor that he is taking that
    952
    grip of the economic situation to which the Financial Secretary referred.
    The Deputy Chairman (Sir Rhys Hopkin Morris): Order. The right hon. Gentleman is now skirting the limits of the rules of order.
    Mr. Wilson: I was trying to relate that point to the Clause, which deals with tobacco, Sir Rhys. Obviously, the relevance of the increased price of tobacco to the Chancellor's Newcastle speech will have been obvious to the Committee and I do not need to labour it.
    If I understand the Chancellor's policy rightly, he believes that we have reached a plateau as far as prices are concerned —a somewhat sloping plateau—or that we shall shortly reach that plateau. [An HON. MEMBER: "Order."] With respect, I prefer to take my rulings of what is in order from the Chair and not from the hon. Gentleman, who does not seem to be following with his usual perspicacity the relevance of the argument. If he had been, he would understand the difficulty of maintaining price stability in the few weeks which follow an increase in indirect taxation, for instance, in such things as tobacco, with which I think the hon. Gentleman is concerned.
    As my hon. Friend the Member for Sheffield, Park (Mr. Mulley) reminded us, tobacco is a not unimportant constituent in the cost-of-living index, and, therefore, an increase in the price of tobacco is bound to have some effect on the cost-of-living index. Not only does it have a direct effect, but the psychological effect is out of relation and out of all proportion to the relatively small effect which it has on the cost-of-living index itself. All I would say on that point is that, from the point of view of the cost of living and from that of the stabilisation of wages, on which the Chancellor has made a number of eloquent but very costly and disastrous speeches recently, this Clause is absolutely out of accord with what the Chancellor is after in that direction.
    While I am referring to the plateau of the Chancellor's speech, may I say that I was rather surprised to hear the remarks of the Financial Secretary about retailers' margins. He frankly admitted, in answer to my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) that the price of tobacco has gone up more than the tax, and that it has gone

    953
    up in response to the change in taxation but by a bigger amount. He says that this was to meet an increase in retailers' margins. I only wish that the right hon. Gentleman, or the Chancellor himself, had spent a little more time telling us what is the relation between the increase in retailers' margins, on the one hand, and a plateau of price stabilisation, on the other, and in what way the Chancellor's appeal for wage restraint also applies to retailers in the matter of margins.
    The last point—and I can see that the hon. Member for Wokingham (Mr. Remnant) is getting impatient; whether he wants to make a speech or divide with us against this Clause I do not know.
    Mr. Peter Remnant: If the right hon. Gentleman wishes me to interpose in order that I may more clearly understand his argument, would he let me know when he will be referring to the Clause?
    Mr. Wilson: If the hon. Gentleman had studied Clause I as fully as some of us on this side of the Committee have done, he would see that I was never very far from the Clause, and that, if I had been, you, Sir Rhys, I am quite sure, would have been the first to have drawn my attention to that fact.
    7.15 p.m.
    The point is that this Committee, in fulfilment of its traditional duty in assenting to proposed changes in taxation—and it should not be necessary to remind the hon. Member for Wokingham of this Committee's historic duty in that connection—has to decide whether it is or is not reasonable to impose an increase in taxation bringing in a revenue of £30 million, and whether it is desirable or not.
    Surely, in this modern age, in this twentieth century, into which we hope the hon. Gentleman will one day enter, it is an important matter to relate the desirability of a particular Clause not merely to the narrow revenue considerations, but to the broader economic considerations, including the Government's economic policy, if any. With respect, and I had to explain this to the hon. Gentleman, I was trying to relate the provisions of Clause 1, which deals with tobacco, to the Government's economic policy.
    954
    The last point that I want to make— and I was already on it when the hon. Gentleman interrupted—is that I want to avoid any possible misunderstanding arising from the remarks of my hon. Friend the Member for Sheffield, Park, in his earlier intervention. He pointed out that, by a singular coincidence, the expected yield from the Tobacco Duty under Clause 1 in the current financial year exactly equals, or almost exactly equals, the National Debt charge for the year.
    I should like to make it clear, and I am sure that my hon. Friend will agree with this interpretation of what he was saying, that he was not linking the two figures together in the sense that if, as we all hope, there is a reduction in the National Debt charge, it does not mean that automatically the Tobacco Duty should follow it up or down. If there were to be an increase in the National Debt charge, we hope that the Chancellor would not immediately put up the tax on tobacco. I should make it clear on behalf of my hon. Friend that he referred to the National Debt charge purely coincidentally, in drawing attention to the very interesting and singular phenomenon that the two figures given in the financial statement of the Government happened to be the same.
    Mr. Mulley: I am rather surprised that my right hon. Friend the Member for Huyton (Mr. H. Wilson) should have sought to make that point, knowing how quickly the Financial Secretary reacts to any suggestions of this sort. I should not like it to be thought that we are to have any further impositions of taxation.
    The Deputy-Chairman: This is inserting a speech in another.
    Mr. Mulley: I only wanted to make it clear that the only connection between the National Debt charge and the yield from the Tobacco Duty is that both represent money spent for which there is nothing to show afterwards.
    Mr. Wilson: That is a very interesting and weighty pronouncement into which I do not propose to enter at this stage, unless it is felt essential in order to relate the point to Clause 1.
    We have had, as the Chancellor himself said, a very good and very good-tempered debate on the Amendment in the names

    955
    of my right hon. and hon. Friends and myself. If the hon. Member for the Isle of Thanet (Mr. Rees-Davies) wishes to intervene, I should be delighted to accommodate him.
    Mr. W. R. Rees-Davies: Does the right hon. Gentleman really think it necessary to spend four hours chewing the cud on tobacco?
    Mr. Wilson: I think that the contributions of the hon. Member to the Finance Bill this year have not been such that he was entitled to make that observation. I think he will find that the Chancellor will be the first to agree, as day succeeds day on this Bill, that we on this side of the Committee have been extremely helpful to him in getting his Finance Bill through. I would point out to the hon. Gentleman that the previous Finance Bill took five days and contained only five Clauses, and that, on the same ratio, this one could take 49 days, but probably will not.
    1 would, therefore, suggest that the hon. Gentleman's intervention was a little misplaced, and that, if there is any waste of time in this Committee today, it would appear to come from hon. Members opposite, who have put down far more Amendments than we have. Perhaps I may now return to the subject of tobacco, from which I was diverted by the untimely, and if I may say so, contumacious intervention of the hon. Gentleman.
    Earlier today we had a debate about old-age pensioners. We have had one or two brief observations on the Question, "That the Clause stand part of the Bill ", to which the Financial Secretary has given a partial answer, but he has not satisfied anyone on this side of the Committee either about the cost of living in relation to the Government's stabilisation policy or about the, to us quite unnecessary increase in retail margins and possibly, manufacturers' margins—there appears to be some dispute about that—arising out of this particular tax change.
    It is not principally for those reasons that we intend to divide the Committee against the Clause. Had the Chancellor finally succumbed to the blandishments of my hon. Friend the Member for Ince (Mr. T. Brown), and had he accepted the Amendment which we moved earlier, we should not perhaps have felt moved
    956
    to vote against this particular Clause tonight; but, in fact, it is this Clause which contains an increase in indirect taxation which we regard as unnecessary in the circumstances, and not tempered by the concession to old-age pensioners for which we have asked.
    In these circumstances, we cannot agree that this Clause ought to form part of this Finance Bill, and we shall, therefore, call upon our hon. Friends who vote against the Clause standing part of the Bill.
    Mr. F. Beswick: I wish to ask just one question of the Chancellor, and, if he cannot answer now, I should appreciate it if he would give me some information later on. Can he tell us whether he has taken into account Commonwealth Preference in agreeing to this continuing increase of the tax upon tobacco? As I understand, the Preference is a fixed one. In the first place, when the tax was very low, the Preference was an important one and it did encourage the Dominion and Colonial grower, but, as the tax has continually increased, the value of the Preference has continually decreased, until today, when, as I understand, it is practically negligible.
    I am wondering whether the Chancellor has taken this into account, and, if so, whether he proposes to do anything about it. As we all know, the expenditure of dollars on tobacco is one of our most serious problems. In so far as we increase the tax, it does in some way also lessen the incentive to purchase Commonwealth tobacco, increasing the consumption of United States tobacco. It does seem that the point is worth taking into account, and I should like to know whether the Chancellor has considered it.
    Mr. H. Brooke: I would like to assure the hon. Gentleman the Member for Uxbridge (Mr. Beswick) that these changes in the duty will leave the preferential margins for Commonwealth tobacco unchanged.
    Mr. Beswick: That is what I am afraid of. The fact is that if one is to give the same degree of Preference, one has to increase the amount. If the amount is left unchanged, the value of that amount, on the higher price of tobacco, becomes proportionately less. Has it been increased in percentage?
    Mr. Brooke: The margin, the gap in money, remains unchanged.
    Mr. Gordon Walker: The percentage value of that margin has, presumably, been decreased by the Chancellor's action now.
    Mr. H. Wilson: I think it ought to be said that my hon. Friend the Member for Uxbridge (Mr. Beswick) has raised a very important point, one to which we might perhaps want to return at a later stage. We have our own views on this matter,
    pand about the relative importance of bulk buying and Preference as a means of encouraging Commonwealth tobacco, but I think we might save those observations until we discuss the relevant Schedule.
    Unless my hon. Friends have any other important points to raise, we, for our part, would be quite ready to come to a conclusion upon the Question.
    Question put: —
    The Committee divided: Ayes 255, Noes 199.

    Division No. 200.1]

    AYES

    [7.25 p.m.

    Agnew, Cmdr. P. G.

    Eccles, Rt. Hon. Sir David

    Johnson, Dr. Donald (Carlisle)

    Aitken, W. T.

    Eden,RtHn.SirA.(Warwick&L'm'tn)

    Johnson, Eric (Blackley)

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

    Elliot, Rt. Hon. W. E.

    Johnson, Howard (Kemptown)

    Alport, C. J. M.

    Emmet, Hon. Mrs. Evelyn

    Jones, Rt. Hon. Aubrey (Hall Green)

    Amery, Julian (Preston, N.)

    Errington, Sir Eric

    Joseph, Sir Keith

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Farey-Jones, F. W.

    Joynson-Hicks, Hon. Sir Lancelot

    Anstruther-Gray, Major Sir W. J.

    Fell, A.

    Kaberry, D.

    Arbuthnot, John

    Fisher, N igel

    Keegan, D.

    Armstrong, C. W.

    Fleetwood-Hesketh, R. F.

    Kerby, Capt. H. B.

    Ashton, H.

    Fletcher-Cooke, C.

    Kerr, H. W.

    Atkins, H, E.

    Fort, R.

    Kershaw, J. A.

    Baldook, Lt.-Cmdr. J. M.

    Foster, John

    Kimball, M.

    Baldwin, A. E.

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Kirk, P. M.

    Banks, Col. C.

    Freeth, D. K.

    Lagden, G. W.

    Barber, Anthony

    Gammans, Sir David

    Lambert, Hon. G.

    Barlow, Sir John

    Garner-Evans, E. H.

    Lancaster, Col. C. G.

    Barter, John

    George, J. C. (Pollok)

    Langford-Holt, J. A.

    Baxter, Sir Beverley

    Gibson-Watt, D.

    Leather, E. H. C.

    Bell, Philip (Bolton, E.)

    Glover, D.

    Leavey, J. A.

    Bell, Ronald (Bucks, S.)

    Gomme-Duncan, Col. Sir Alan

    Leburn, W. G.

    Bennett, Dr. Reginald

    Gough, C. F. H.

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

    Bevins, J. R. (Toxteth)

    Gower, H. R.

    Legh, Hon. Peter (Petersfieid)

    Bidgood, J. C.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Lindsay, Hon. James (Devon, N.)

    Biggs-Davison, J. A.

    Green, A.

    Lindsay, Martin (Solihull)

    Birch, Rt. Hon. Nigel

    Gresham Cooke, R.

    Linstead, Sir H. N.

    Bishop, F. P.

    Grimston, Hon. John (St. Albans)

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

    Black, C. W.

    Grimston, Sir Robert (Westbury)

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Body, R. F.

    Gurden, Harold

    Lloyd-George, Maj. Rt. Hon. G.

    Boothhy, Sir Robert

    Hall, John (Wycombe)

    Longden, Gilbert

    Bossom, Sir A. C.

    Hare, Rt. Hon. J. H.

    Low, Rt. Hon. A. R. W.

    Bowen, E. R. (Cardigan)

    Harris, Reader (Heston)

    Lucas, Sir Jocelyn (Portsmouth, S.)

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

    Harrison, A. B. C. (Maldon)

    Lucas-Tooth, Sir Hugh

    Boyle, Sir Edward

    Harrison, Col. J. H. (Eye)

    Macdonald, Sir Peter

    Braine, B. R.

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

    McKibbin, A. J.

    Braithwaite, Sir Albert (Harrow, W.)

    Harvey, John (Walthamstow, E.)

    Mackie, J. H. (Galloway)

    Brooke, Rt. Hon. Henry

    Harvie-Watt, Sir George

    McLaughlin, Mrs. P.

    Brooman-White, R. C.

    Hay, John

    Maclean, Fitzroy (Lancaster)

    Browne, J. Nixon (Craigton)

    Head, Rt. Hon. A. H.

    McLean, Neil (Inverness)

    Bryan, P.

    Heald, Rt. Hon. Sir Lionel

    Macmillan,RtHn.Harold(Bromley)

    Burden, F. F. A.

    Heath, Rt. Hon. E. R. G.

    Maddan, Martin

    Butcher, Sir Herbert

    Henderson, John (Cathoart)

    Maitland, Hon. Patrick (Lanark)

    Campbell, Sir David

    Hicks-Beach, Maj. W. W.

    Markham, Major Sir Frank

    Carr, Robert

    Hill, Mrs. E. (Wythenshawe)

    Marlowe, A. A. H.

    Cary, Sir Robert

    Hill, John (S. Norfolk)

    Marples, A. E.

    Chichester-Clark, R.

    Hinchingbrooke, Viscount

    Marshall, Douglas

    Clarke, Brig. Terence (Portsmth, W.)

    Hirst, Geoffrey

    Mathew, R.

    Conant, Maj. Sir Roger

    Holland-Martin, C. J.

    Maude, Angus

    Cooper-Key, E. M.

    Hornsby-Smith, Miss M. P.

    Maudling, Rt. Hon. R.

    Cordeaux, Lt.-Col. J. K.

    Horobin, Sir Ian

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

    Corfield, Capt. F. V.

    Horsbrugh, Rt. Hon. Dame Florence

    Medlicott, Sir Frank

    Craddock, Beresford (Spelthorne)

    Howard, Hon. Greville (St. Ives)

    Milligan, Rt. Hon. W. R.

    Crowder, Sir John (Finchley)

    Howard, John (Test)

    Molson, Rt. Hon. A. H. E.

    Crowder, Petre (Ruislip—Northwood)

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

    Moore, Sir Thomas

    Cunningham, Knox

    Hughes Hallett, Vice-Admiral J.

    Morrison, John (Salisbury)

    Currie, G. B. H.

    Hughes-Young, M. H. C.

    Mott-Radclyffe, C. E.

    Dance, J. C. G.

    Hulbert, Sir Norman

    Nabarro, C. D. N.

    D'Avigdor-Goldsmid, Sir Henry

    Hurd, A. R.

    Nairn, D. L. S.

    Deedes, W. F.

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

    Neave, Airey

    Dodds-Parker, A. D.

    Hyde, Montgomery

    Nicholls, Harmar

    Donaldson, Cmdr. C. E. McA.

    Hylton-Foster, Sir H. B. H.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    du Cann, E. D. L.

    Irvine, Bryant Godman (Rye)

    N ieid, Basil (Chester)

    Duncan, Capt. J. A. L.

    Jenkins, Robert (Dulwich)

    Noble, Comdr, A. H. P.

    Duthie, W. S.

    Jennings, J. C. (Burton)

    Nugent, G. R. H.

    Nutting, Rt. Hon. Anthony

    Russell, R. 8.

    Turner, H. F. L.

    O'Neill, Hn. Phelim (Co. Antrim, N

    Schofield, Lt.-Col. W.

    Tweedsmuir, Lady

    Orr, Capt. L. P. S.

    Scott-Miller, Cmdr. R.

    Vane, W. M. F.

    Osborne, C.

    Sharpies, R. C.

    Vaughan-Morgan, J. K.

    Page, R. G.

    Shepherd, William

    Vosper, D. F.

    Pannell, N. A. (Kirkdale)

    Smithers, Peter (Winchester)

    Wade, D. W.

    Partridge, E.

    Spearman, Sir A. C. M.

    Wakefield, Edward (Derbyshire, W.)

    Pilkington, Capt. R. A.

    Speir, R. M.

    Walker-Smith, D. C.

    Pitman, I. J.

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Wall, Major Patrick

    Pitt, Miss E. M.

    Slovens, Geoffrey

    Ward, Hon. George (Worcester)

    Pott, H. P.

    Steward, Harold (Stockport, S.)

    Ward, Dame Irene (Tynemotith)

    Powell, E. Enoch

    Steward, Sir William (Woolwich, W.;

    Waterhouse, Capt. Rt. Hon. C.

    Price, Henry (Lewisham, W.)

    Studholme, Sir H. G.

    Whitelaw, W.S.I.(Penrith & Border)

    Raikes, Sir Victor

    Taylor, William (Bradford, N.)

    .Williams, Paul (Sunderland, S.)

    Ramsden, J. E.

    Teeling, W.

    Williams, R. Dudley (Exeter)

    Redmayne, M.

    Thomas, Leslie (Canterbury)

    Wills, G. (Bridgwater)

    Rees-Davies, W. R.

    Thomas, P. J. M. (Conway)

    Wilson, Geoffrey (Truro)

    Remnant, Hon. P.

    Thompson, Kenneth (Walton)

    Wooilam, John Victor

    Renton, D. L. M.

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

    Yates, William (The Wrekin)

    Robertson, Sir David

    Thornton-Kemsley, C. N.

    TELLERS FOR THE AYES:

    Robson-Brown, W.

    Tiley, A. (Bradford, W.)

    Mr. Oakshott and Mr. Godber

    Rodgers, John (SevenOaks)

    Tilney, John (Wavertree)

    Roper, Sir Harold

    Touche, Sir Gordon

    NOES

    Ainsley, J. w.

    Gordon Walker, Rt. Hon. P. C.

    Mayhew, C. P.

    Albu, A. H.

    Greenwood, Anthony

    Messer, Sir F.

    Allaun, Frank (Salford, E.)

    Grenfell, Rt. Hon. D. R.

    Mitchison, C. R.

    Allen, Arthur (Bosworth)

    Grey, C. F.

    Monslow, W.

    Allen, Scholefield (Crewe)

    Griffiths, David (Rather Valley)

    Moody, A. S.

    Anderson, Frank

    Griffiths, Rt. Hon. James (Llanelly)

    Morris, Percy (Swansea, W.)

    Awbery, S. S.

    Griffiths, William (Exchange)

    Morrison,Rt.Hn.Herbert(Lewis'm,S.)

    Bacon, Miss Alice

    Hale, Leslie

    Mort, D. L.

    Bence, C. R. (Dunbartonshire, E.)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Moss, R.

    Benn, Fin. Wedgwood (Bristol, 8.E.)

    Hamilton, W. W.

    Moyle, A.

    Benson, G.

    Hannan, W.

    Mulley, F. W.

    Beswick, F.

    Hastings, S.

    Neal, Harold (Bolsover)

    Blackburn, F.

    Hayman, F. H.

    Oliver, G. H.

    Blyton, W. R.

    Healey, Denis

    Orbach, M.

    Boardman, H.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Oswald, T.

    Bottomley, Rt. Hon. A. G.

    Herbison, Miss M.

    Owen, W. J.

    Bowles, F. G.

    Hewitson, Capt. M.

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

    Boyd, T. C.

    Hobson, C. R.

    Paling, Will T. (Dewsbury)

    Brockway, A. F.

    Howell, Charles (Perry Barr)

    Palmer, A. M. F.

    Broughton, Dr. A. D. D.

    Howell, Denis (All Saints)

    Pargiter, C. A.

    Brown, Rt. Hon. George (Belper)

    Hoy, J. H,

    Parker, J.

    Brown, Thomas (Inoe)

    Hubbard, T. F.

    Parkin, B. T.

    Burke, W. A.

    Hughes, Cledwyn (Anglesey)

    Paton, John

    Burton, Miss F. E.

    Hughes, Emrys (S. Ayrshire)

    Pearson, A.

    Butler, Herbert (Hackney, C.)

    Hunter, A. E.

    Price, J. T. (Westhoughton)

    Butler, Mrs. Joyce (Wood Green)

    Irving, S. (Dartford)

    Price, Philips (Gloucestershire, W.)

    Castle, Mrs. B. A.

    Janner, B.

    Proctor, W. T.

    Champion, A. J.

    Jay, Rt. Hon. D. P. T.

    Pryde, D. J.

    Chapman, W. D.

    Jeger, George (Goole)

    Randall, H. E.

    Clunie, J.

    Jeger, Mrs.Lena(Holbn & St.Pnos,S,) Rankin, John

    Rankin, John

    Coldrick, W.

    Jenkins, Roy (Stechford)

    Reid, William

    Collick, P. H. (Birkenhead)

    Johnson, James (Rugby)

    Robens, Rt. Hon. A.

    Collins,V. J. (Shoreditch & Finsbury)

    Jones, Rt. Hon. A. Creech(Wakefield)

    Roberts, Goronwy (Caernarvon)

    Cove, W. G.

    Jones, David (The Hartlepools)

    Rogers, George (Kensington, N.)

    Craddock, George (Bradford, S.)

    Jones, Elwyn (W. Ham, S.)

    Ross, William

    Cronin, J. D.

    Jones, Jack (Rotherham)

    Royle, C.

    Crossman, R. H. S.

    Jones, J. Idwal (Wrexham)

    Short, E. W.

    Cullen, Mrs. A.

    Jones, T. W. (Merioneth)

    Shurmer, P. L. E.

    Dalton, Rt. Hon. H.

    Kenyon, C.

    Silverman, Julius (Aston)

    Darling, George (Hillsborough)

    Key, Rt. Hon. C. W.

    Simmons, C. J. (Brierley Hill)

    Davies, Harold (Leek)

    King, Dr. H. M.

    Skeffington, A. M.

    Deer, G.

    Lawson, G. M.

    Slater, Mrs. H. (Stoke, N.)

    Delargy, H. J.

    Ledger, R. J.

    Slater, J. (Sedgefield)

    Dodds, N. N.

    Lee, Miss Jennie (Cannock)

    Smith, Ellis (Stoke, S.)

    Donnelly, D. L.

    Lever, Leslie (Ardwick)

    Sorensen, R. W.

    Dugdale, Rt. Hn. John (W. Brmwch)

    Lindgren, G. S.

    Sparks, J. A.

    Dye, S.

    Logan, D. G.

    Steele, T.

    Ede, Rt. Hon. J. C.

    Mabon, Dr. J. Dickson

    Stewart, Michael (Fulham)

    Edwards, Rt. Hon. Ness (Caerphilly)

    McGhee, H. G.

    Stones, W. (Consett)

    Edwards, Robert (Bilston)

    McGovern, J.

    Strachey, Rt. Hon. J.

    Evans, Albert (Islington, S.W.)

    McInnes, J.

    Stross,Dr.Barnett(Stoke-on-Tren,t,C.)

    Evans, Edward (Lowestoft)

    McKay, John (Wallsend)

    Summerskill, Rt. Hon. E.

    Fernyhough, E.

    McLeavy, Frank

    Sylvester, G. 0.

    Fletcher, Eric

    Mahon, Simon

    Taylor, Bernard (Mansfield)

    Forman, J. C.

    Mallalieu, E. L. (Brigg)

    Thomas, lorwerth (Rhondda, W.)

    Fraser, Thomas (Hamilton)

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

    Thomson, George (Dundee, E.)

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

    Mann, Mrs. Jean

    Turner-Samuels, M.

    Gibson, C. W.

    Marquand, Rt. Hon. H. A.

    Ungoed-Thomas, Sir Lynn

    Gooch, E. G.

    Mason, Roy

    Usborne, H. C.

    960

    961

    Viant, S. P.

    White, Henry (Derbyshire, N.E.)

    Winterbottom, Richard

    Warbey, W. N.

    Wilkins, W. A.

    Woodburn, Rt. Hon. A.

    Weitzman, D.

    Willey, Frederick

    Woof, R. E.

    Wells, Percy (Faversham)

    Williams, David (Neath)

    Yates, V. (Ladywood)

    Wells, William (Walsall, N.)

    Williams, W. R. (Openshaw)

    Younger, Rt. Hon. K.

    West, D. G.

    Williams, W. T. (Barons Court)

    Zilliacus, K.

    Wheeldon, W. E.

    Willis, Eustace (Edinburgh, E.)

    White, Mrs. Eirene (E. Flint)

    Wilson, Rt. Hon. Harold (Huyton)

    TELLERS FOR THE NOES:

    Mr. Holmes and Mr. John Taylor.

    Clause ordered to stand part of the Bill.
    Clause 2.—(EXCISE DUTY ON STRENGTHENED CIDER AND PERRY.)
    Mr. Bryant Godman Irvine: I beg to move, in page 2, line 8, at the beginning, to insert:
    "unless made exclusively of fruit grown in the United Kingdom".
    When the Chancellor of the Exchequer first mentioned to the House this duty on perry and cider, he said that the reason he was proposing it was so that he could protect the Revenue and remove unfair competitive advantage. Since the Budget proposals have been made, it has become more and more clear that there will not be many people who will be caught by these proposals. My information is that a great many cider manufacturers are considering reducing the strength of their cider so that it will fall below the 15 degrees proposed in Clause 2. So that although my right hon. Friend said that he was expecting to get £400,000 in a full year as a result of this tax, I wonder whether he still feels that this will be so?
    Inquiries that I have been able to make indicate that only three people will be caught by this Clause. One happens to be in my constituency, and that is why I have put forward this Amendment. That manufacturer employs between sixty-five and seventy men, and he uses 3,500 tons of apples in a good year. My first point is that I am wondering whether there will be only three people caught by this tax, and that therefore it will not produce the revenue suggested by my right hon. Friend.
    The other side of the story is that on British wines a tax of 10s. 6d. a gallon is being paid, and it might be said that if the production of ciders of this strength is allowed, the result might be that the Revenue would not be getting the money which it would otherwise expect on British wines, because such ciders would be taking the trade away. That would be an extraordinary exercise on the part of the Chancellor, since he comes to this House and suggests that when anything
    962
    is imported it is something which we ought to try to cut down. We are used to people coming here from the Treasury and telling us that our imports are too high. You will know, Sir Rhys, that British wine is made from imported must, whereas many ciders are made from British apples. There are notable exceptions to that rule, because a lot of other pulp comes into this country from Normandy without paying any duty. It seems to me that there might be a good case for the Chancellor making an exception in respect of ciders produced from apples grown in this country, because they are using home-produced goods which would enable the needs of the country to be met.
    The Chancellor will be aware that apple producers have never said that they are getting extremely good returns from their crops, and even a small reduction in the quantity required to make cider would make a real difference to the market for British apples. So the second point which I ask the Financial Secretary to look at is whether there is not a good case for British cider made from British apples being exempted from the provisions of this Clause.
    It may well be that the Financial Secretary is not able to go all that way with me, and of course there will be a possibility between now and another stage of the Bill for a proposal which would enable British cider, made in the way I have outlined, to pay a tax which would enable it to compete fairly with British wine and imported wine. At the moment I am told that there are five imported wines which would be sold cheaper than British cider after it has paid the duty required under this Clause. In those circumstances I ask the Committee to accept my Amendment.
    Mr. Percy Wells: I support the Amendment.
    Although I know very little about the chemistry of cider manufacture, I am informed that the Clause, if it is passed as it stands, may be disastrous to the manufacture of cider in Kent. The largest

    963
    producer of farmhouse cider in Kent says that at best it will mean a 50 per cent. reduction for him and at worst a complete stoppage of production.
    I am concerned not so much with the producer of cider as with the producer of apples. Apple growers will suffer considerably if the Clause is applied to cider such as is produced in Kent, the reason being that it is produced from sub-standard apples, a lower grade of apple, which is normally unsaleable in the ordinary market. If that market is taken from the Kent growers it will mean that certainly the small growers will suffer a minor disaster. They are already suffering considerably as a result of the last Price Review. I am instructed that if the Clause is allowed to stand it will mean a considerable blow to the Kent fruit growers.
    There has been an increase in the production of cider in Kent in recent years. The apple and pear producers of Kent have come to look upon the sale of substandard fruit to the cider and perry manufacturers as an outlet for apples which would otherwise be completely unmarketable. Further, an export trade is being built up in the sale of farmhouse cider, and I should have thought that the Chancellor ought at least to be somewhat interested in that aspect. I hope that the Amendment will be accepted, for it will help people who fear that their position, already difficult, will be made much worse.
    Major H. Legge-Bourke: Although my constituency is not one of the main cider producing areas, it contains many apple growers.
    One of the important features of the cider making industry is that it takes lower-quality apples than are required for dessert purposes. In this country we tend to waste apples to an appalling degree. It is iniquitous that we should import apples from Italy before we are certain that our home crop has been taken up.
    Clause 2 is somewhat of a mixed blessing. It appears that there ought to be some resistance to imports, and I am glad to hear about that, but at the same time I want to make sure that we do not punish the home apple growers. I do not think that I have ever seen a subsection worded in such a confused manner as subsection (1).
    The Deputy-Chairman: It occurs to me that such a comment would be more fitting on the Question, "That the Clause stand part of the Bill."
    Major Legge-Bourke: The Amendment will not make sense, Sir Rhys, unless we all understand what it means. The Amendment seeks to insert some words at the beginning of subsection (1). As I understand the meaning of the subsection with the Amendment, it will roughly be that "Unless made exclusively of fruit grown in the United Kingdom, any intoxicating liquor made from apple juice in its natural state at the beginning of that process, containing no ethyl alcohol derived from other materials, and regarded within the meaning of the excise Acts (which includes perry) as cider, though of lower strength, shall, if of fifteen degrees of proof or greater, be deemed for the purposes of those Acts to be sweets and not cider."
    My interpretation may be confusing enough to the Committee, but I think it is slightly clearer than the original version. If the Financial Secretary feels that he can accept the Amendment, I hope that he will try to make the wording a little clearer than it is now.
    7.45 p.m.
    If, by means of the Clause, the Government can restrict the importation of apple pulp, it would be highly desirable that they should agree to add the words suggested by my hon. Friend the Member for Rye (Mr. Godman Irvine). I am sure it is not the Government's intention to damage home apple growers at the same time as they are trying to protect them by applying the duty. I am sure that the Committee would feel that the cider producers whom we want to encourage are those who are prepared to use as much as possible of the home crop rather than rely on cheap imports of inferior quality.
    That is why I find some difficulty in knowing exactly what to say about the Amendment and the Clause. I want by all the means in my power to protect the home growers, and ensure that the consumers are not presented with cider which pretends to be made from home-grown apples but is not. I hope that we can eliminate as soon as possible imported pulp from home-made and home-mar keted cider.
    Mr. Bottomley: I welcome the Amendment moved by the hon. Member for Rye (Mr. Godman Irvine), and I support what has been said by my hon. Friend the Member for Faversham (Mr. P. Wells).
    The hon. Member for Rye asked how much revenue would be obtained as a result of the burden to be placed upon one of our home-producing industries. This is not a new tax. Once before a tax was placed on cider and perry—of 4d. a gallon. I think. It was removed in the only Budget presented to the House by the late Lord Baldwin, and this was done because it was shown that as a result of it the production of cider and perry declined and the revenue was insufficient to justify the tax.
    The Government may be repeating what happened then, and they are doing it at a time when it is advisable for us to use all the home-produced commodities that we possibly can. The Amendment is designed to that end recognise that it does not remove the tax. but it encourages the home industry and places a burden upon competitors who are not always careful about the way in which they compete with us. Earlier today the Government said that they are considering introducing an anti-dumping law, but that is some time ahead. At the moment. we have to deal with the problem as it confronts our cider and perry industry.
    The general impression is that the industry is in the western parts of the country, but the contributions by hon. Members have shown that other areas are interested. My hon. Friend the Member for Faversham has shown that Kent is very much interested. I am interested in the matter although I do not sit for a rural constituency in Kent. I have received from the National Farmers' Union representations obviously on similar lines to those made to the hon. Member for Rye.
    The farmers in Kent have gone further, because they say that they have a particular method of making cider. They claim that it is the best in the world. I do not dispute that, but apparently they are afraid of what will happen under the Clause. They have to add sugar and are afraid that the addition of sugar might be held to be something more than natural fermentation and that for that reason the product will attract the tax, whereas other producers of cider apples and perry will not pay the tax.
    966
    Indeed, I begin to wonder why perry is included. I tried to find out something about perry and I am told that it cannot be bought in London and most of the South without a special order, but I suppose there is sufficient justification for its inclusion. I should like to develop one or two points made by the hon. Member for Rye and my hon. Friend the Member for Faversham about the necessity of building up a home trade, but I cannot develop that in view of your last comment, Sir Rhys. Perhaps on the next Amendment, or on the Question, "That the Clause stand part of the Bill," I might have an opportunity of making a further contribution.
    Mr. H. Brooke: I hope that I may be able to set a number of fears at rest. In replying to the Amendment so persuasively moved by my hon. Friend the Member for Rye (Mr. Godman Irvine), I must recall to the Committee the original and sole reason why my right hon. Friend proposed this duty. It is not just to rake in another £400,000 of revenue, and most emphatically it is not to injure the cider or cider apple industry. It is simply and solely to protect the Revenue duty on British wines.
    It is universally agreed that where there is a Revenue duty on a commodity, it is desirable that that duty shall apply to all competitive products, because otherwise the State is indulging in unfair discrimination against the taxed article and in favour of the competitive untaxed article. There is and has been for a number of years a duty on British wines technically known as sweets. There has grown up a manufacture of specially strengthened ciders and perries which in alcoholic content rival British wines. A number of people may, therefore, have felt that for one purpose they were just as well worth buying and, indeed, for other purposes, perhaps purity, or cheapness or something else, more worth buying than British wines.
    The effect of that whenever it happens is inevitably to erode the yield of the duty from the dutiable article, because consumption swings over to the non-dutiable article. We saw signs of that happening, and it is for that reason that a duty similar to the duty on British wines is being imposed by Clause 2 on the artificially strengthened ciders and perries.
    The Amendment suggests that there should be omitted from this duty these

    967
    strong ciders and perries, if they are made exclusively from fruit grown in the United Kingdom. However, so far as I am aware, all the manufacturers of the strong ciders and perries use, or aim to use, exclusively fruit grown in the United Kingdom. They may not be able to do so, if there is a bad harvest here, but certainly it is not their policy to use imported fruit. The effect of the Amendment would be to kill the purpose which the Chancellor is seeking to secure. It would in fact free from duty the very products on which he feels he must impose the duty in order to be fair as between them and the British wines of even greater alcoholic strength.
    My hon. Friend the Member for Rye mentioned revenue. I cannot say whether it will be precisely £400,000. I agree with him that a number of the manufacturers seem likely to reduce the strength of their product in order to escape the effects of Clause 2. I made clear in my Second Reading speech that we should certainly not in any way regard that as an evasion of the duty. Everybody is free to 'do that, if he wishes. The product concerned will cease to be of comparable alcoholic strength and therefore will not be strictly competitive with British wines. It will become a weaker drink, and there will no longer be a risk of people turning away from the dutiable article in order to drink an equally strong, but cheaper, because untaxed, drink.
    That is what lies behind this proposal. I fully agree with my hon. Friend that if the manufacture of the strengthened ciders and perries were to cease altogether, clearly the direct yield of Clause 2 would be nil, but, on the other hand, we should be protected from the ebbing away of the duty on British wines which will otherwise follow. A number of hon. Members rightly referred to the possible effect that the Clause will have on cider apple growers. I hope that I can satisfy the Committee and still hon. Members' fears.
    I know, for instance, that some people have sprung to the false conclusion that this is a pointer to a general tax on cider and perry. They feel that that is what the Chancellor has his eye on. The fact is that products taxed under Clause 2 are being taxed precisely because they are not ordinary cider and perry, and we have
    968
    made clear that cider and perry made by ordinary processes and farmhouse cider of whatever strength will not be liable to the tax.
    Mr. P. Wells: Would the right hon. Gentleman agree that ordinary processes would include a process which included the addition of sugar, because the apples concerned are not grown purely as cider apples, but are apples of a dessert or cooking character.
    Mr. Brooke: I think that we have the wording right. If the hon. Member has further suggestions to make, we will certainly examine them. I am not an expert in any of these processes of manufacture. I am advised that the words:
    "…unless it has undergone no other process than a single process of fermentation…"
    and the remaining words of the subsection draw a demarcation line rightly and sensibly between ordinary strong ciders and perries and others.
    Mr. Bottomley: Does that mean that to attract tax, brandy, or a spirit of that kind, has to be added? Is that the intention of the wording? If so, would the addition of sugar be regarded as natural fermentation? If the Financial Secretary can assure us that the addition of sugar would not bring the product within the scope of the Clause, we shall be satisfied.
    Mr. Brooke: I am in some difficulty in pursuing this.
    The Deputy-Chairman: This discussion will be more fitting on the Motion, "That the Clause stand part of the Bill."
    8.0 p.m.
    Mr. Brooke: At this stage, if I stick to the question of cider apples, which are clearly affected by the Amendment, I think it would be better. The suggestion has been made that this duty will heavily reduce the demand for cider apples in various areas.
    Mr. Wells: Not only for cider apples.
    Mr. Brooke: So far as we can ascertain, at their peak period these strengthened ciders and perries accounted for no more than 3 per cent. of the total consumption of cider and perry. My hon. Friend the Member for Rye rightly pointed out that some manufacturers are reducing the strength of their product so as to escape this duty. That will mean that the amount of dutiable cider and

    969
    perry will become considerably less than 3 per cent. of the whole. I should not be at all surprised if it fell to about I per cent. That would mean that 99 per cent. of the whole product would be completely unaffected by the Clause, and the only difference which it could make would be by way of restricting the remaining I per cent. I cannot think that it could seriously be maintained that that would knock cider apple growers out of business.
    Within the scope allowed by the Amendment, I have sought to explain the Chancellor's intentions. I fully understand the apprehensions voiced by my hon. Friend the Member for Rye and others, but I must advise the Committee that to accept the Amendment would invalidate the whole purpose which the Chancellor is seeking to secure. I hope that what I have said will convince many people, both in the House and outside, that their apprehensions that the provision would cause the demand for cider apples to fall away are really groundless.
    Mr. Sidney Dye: I never thought that I should sit here and listen to a Conservative Financial Secretary denouncing an Amendment which seeks to insert in a Clause the words:
    "unless made exclusively of fruit grown in the United Kingdom".
    I do not think that I have ever heard a Financial Secretary make out a case without any bottom to it—at least. so badly as he did upon this occasion. He has told us that the proposal has been put forward because there has been a movement away from the drinking of British wines and towards this reinforced cider and perry.
    What evidence has he that that is the case? Flow can he prove that people who previously drank these British wines have gone over to what is described as a purely home-grown product? Is this merely an assumption, or has the provision been inserted because one set of producers has lobbied at the Treasury against another set? The clearest conclusion that any hon. Member listening to the Financial Secretary's speech can come to is that those who are interested in producing British wines have been able to convince the Treasury that if only a tax can be put upon this type of cider and perry less of it will be produced and
    970
    drunk, and British wines will be in greater demand.
    It might be that if people are discouraged from drinking this type of cider and perry they will begin to drink imported wines of an entirely different character. It therefore appears that it is just as likely that this duty will damp down the production of a purely home-grown product and will encourage British people to drink an imported product. Some anxiety is, therefore, merited, especially in this year, when the indications are that we shall have the heaviest apple crop ever grown in this country. Never before have our apple trees been so full of blossom, and never before has so much of the blossom set. There is an indication that we shall have an extremely heavy crop, and the only outlet for a considerable part of it will be through the manufacture of cider.
    It is not the case that exclusively cider apples go into the production of cider To ordinary apple growers cider is the only outlet for a considerable proportion of their product in years of extra heavy crop, as this year inclines to be. It therefore seems that in supporting the Amendment we are endeavouring to safeguard a purely home-grown product, whereas the proposal in the Bill is likely 'to encourage the drinking of imported wines at the expense of the home product.
    This recent development is an example of private enterprise by British industry to try to capture some of the trade previously enjoyed by foreigners. Surely that was the purpose which people had in mind in setting out to produce this brand of cider and perry. But at the moment when they have obtained a foothold in the market by a Conservative Administration clamps down on them and says, "You cannot proceed with this kind of enterprise; you cannot support a purely home-grown article. We must obtain a greater Excise duty upon the imported wines." That seems to be an extraordinary case, and the Financial Secretary can hardly expect hon. Members, even on his side of the Committee, 'to support him.
    Mr. John Hall: Having listened to the discussion which has centred round the Amendment, I am puzzled to understand why so much concern should be expressed. As my

    971
    right hon. Friend has pointed out, the Clause deals with ciders of a particularly high alcoholic content, and it is already known, and appreciated by my right hon. Friend, that many manufacturers of these types of cider and perry have already reduced the strength of their product so that they are no longer within the terms of the Clause and will not be called upon to pay duty.
    I venture a guess that the provision will make no difference to the consumption of apples, whether home-produced or imported. The type of drinks to which we are referring sell very largely because of the large-scale advertising indulged in by the companies concerned. They have been able to build successful businesses by their sales promotion, and an alcoholic content of 14·5 instead of 15 degrees will make no difference at all to them. I doubt whether the object which my right hon. Friend has in mind, of protecting and helping British wines which are now suffering from unfair competition, will be achieved by this provision. I do not think that it will make the slightest difference.
    If that is the object, and the idea of the Clause is to make it easier for British wine manufacturers to compete with this type of drink, why cannot we have the same protection for beer? If we look at the alcoholic strength of beer, we find, for example, that the average light bottled beer has a strength of about five degrees and the average draught beer a strength of between six and seven degrees. Comparing that with cider, we find that bottled cider is about six or seven degrees and draught cider between eight and nine. There we have a drink of a higher alcoholic strength than beer yet it is completely free of any Excise duty.
    I suggest that there is an untapped source of revenue not yet explored by the Treasury. A tax might be imposed on all cider, whether of a higher alcoholic content or the ordinary cider which we know under the names of Whiteways, Gaymers, Bulmers, or whatever it might be. I consider that we are making heavy weather of this Amendment. It is obvious that the whole reason of the Clause is to force manufacturers to reduce the alcoholic strength of specialised cider and perry drinks to a point where the Treasury consider people will be encouraged to go back to drinking British
    972
    wines. If the Government succeed in that purpose, presumably they will have done a fairly good job.
    I do not consider that the hon. Member for Norfolk, South-West, (Mr. Dye) is right in saying that the manufacturers of specialist wines have been trying to capture part of the foreign wine trade. They have been going for the British wine trade, which is a large trade. They have succeeded admirably in capturing a good deal of that trade, and more power to their elbows. I do not think that the growers of apples, whether from Kent, Sussex, Hereford, or Devon, will be affected by this Clause. I speak with some professional experience of cider making and the purchasing of apples for cider making.
    If I am not out of order I should like to refer to the question of the addition of sugar. Most cider manufacturers add sugar to their cider. if the Clause were intended to catch them, I think there would be a tremendous outcry by all the cider manufacturers in the country.
    Mr. Sydney Irving: The speech made by the hon. Member who has just spoken will aggravate the already existing fears of the Kent fruit growers that this is just a first step and that this duty may be extended in the future, although I do not think there is any chance of the hon. Member himself arriving at the Treasury to do so in the next twelve months, but neither the statement by the Minister nor the comments of the hon. Member for Wycombe will settle the fears of apple growers, particularly those in Kent. In recent times they have suffered considerably. Their fruit is of a poorer quality, prices have been depressed and there has been a considerable wastage of fruit in the county. The growers there feel that any possibility of cider attracting this duty will further depress the market for their fruit and they consider that everything ought to be done to encourage the development of home production.
    I am not aware of the intricacies of the manufacture of this product, but it seems that Kent growers are in a peculiar position. The Kent apples are cull apples and, I understand, require even greater fortification than vintage apples. The Kent growers would welcome a much clearer statement from the Minister about the question of fermentation and whether

    973
    the addition of sugar is regarded as something separate from the ordinary processes of fermentation. I am given to understand that various climatic conditions affect the proof content of cider and it may be possible that in the special case of Kent apples the duty would be attracted. Therefore, we should be grateful for a clearer statement from the Minister on this matter at some stage, and we hope that he will give it further consideration.
    8.15 p.m.
    Mr. H. Brooke: I am anxious to do everything I can for the Kent farmers. Last Friday, I drove a hundred miles through Kent and I realised afresh what a lovely county it is. I should hate to have it on my conscience that I was doing any harm to the Kent farmers. The figures which I have quoted show that, so far as we can judge, not more than I per cent, of the total quantity of cider consumed in this country will become liable for this duty. I hope that will be a reassurance, in that it shows that so far as 99 per cent. is concerned, this Bill will make no difference whatever.
    I appreciate the point about sugar, and I hope that hon. Members will read subsection (1) again. My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) said that the Clause was obscure, but I think that if one reads the subsection slowly the meaning does sink in. Under this Clause nothing is to be taxed unless it is
    "of fifteen degrees of proof or greater strength."
    Those who are afraid that the addition of ordinary sugar to cider will render it taxable, will find that the addition of ordinary sugar certainly does not raise its strength above 15 degrees of proof. Unless the cider is of that strength, nothing else matters. It is not taxable.
    What follows is a safeguard to ensure that ordinary farmhouse cider, even though it happens to be above 15 degrees of proof, will not be liable for tax, unless it has had a special strengthening treatment. But the fact that apples happen to be rather sour and more sugar is needed to make good cider will not bring the drink within the scope of this Clause. The hon. Member for Dartford (Mr. Sydney Irving) said that some people feared that the Chancellor was casting envious eyes on cider and the hon.
    974
    Member for Wycombe (Mr. John Hall) almost tempted me.
    I cannot anticipate the intention of future Parliaments, nor do I intend to anticipate future Budgets. But I made the intentions of my right hon. Friend as clear as I could when I said that he was proposing to tax these drinks because they were not ordinary ciders. It is for purely fiscal reasons that this Clause is required. I assure the hon. Member for Norfolk, South-West that the fears of the farmers are greatly exaggerated. I am sure that this Clause will not put difficulties in the way of their disposal of a great apple crop. I hope that in the circumstances, and after this elucidation of the matter, my hon. Friend will feel disposed not to press his Amendment.
    Mr. Godman Irvine: I am very sorry that the Financial Secretary has not been persuaded by the arguments which have been advanced to him. It is disappointing to me that my right hon. Friend is more interested in protecting the revenue derived from British wines than seeing that British apples are produced and turned into beverages to be used in this country. My right hon. Friend has had the various points put forward to him, but I hope he will disregard the observations of my hon. Friend the Member for Wycombe (Mr. John Hall). Perhaps he will look at the others and, on a future occasion, consider the possibility of allowing British fortified cider to be taxed at a slightly lower rate. In the circumstances, I beg to ask leave to withdraw the Amendment.
    Mr. Bottomley: I am disappointed with the hon. Member for Rye (Mr. Godman Irvine). He presented a very strong case, but the Financial Secretary to the Treasury did not answer any of the points that he raised. The Minister answered many other points, some of which I tried to make myself, but your predecessor in the chair, Sir Austin, was a little harsher than you. Perhaps I can stake a claim for leniency later on. I shall advise my hon. and right hon. Friends not to allow withdrawal of the Amendment. In the circumstances, we shall support the Amendment.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 190, Noes 236.

    Division No. 201.]

    AYES

    [8.20 p.m.

    Ainsley, J. W.

    Hale, Leslie

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

    Albu, A. H.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Paling, Will T. (Dewsbury)

    Allen, Arthur (Bosworth)

    Hamilton, W. W.

    Palmer, A. M. F.

    Allen, Scholefied (Crewe)

    Hannan, W.

    Parker, J.

    Anderson, Frank

    Hastings, S.

    Parkin, B. T.

    Awbery, S. S.

    Hayman, F. H.

    Paton, John

    Bacon, Miss Alice

    Henderson, Rt. Hn. A (Rwly Regis)

    Pearson, A.

    Bence, C. R. (Dunbartonshire, E.)

    Herbison, Miss M.

    Proctor, W. T.

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Hewitson, Capt. M.

    Pryde, D. J.

    Benson, G.

    Hobson, C. R.

    Randall, H. E.

    Beswick, F.

    Howell, Charles (Perry Barr)

    Rankin, John

    Blackburn, F.

    Howell, Denis (All Saints)

    Reid, William

    Blyton, W. R.

    Hoy, J. H.

    Robens, Rt. Hon. A.

    Boardman, H.

    Hubbard, T. F.

    Roberts, Goronwy (Caernarvon)

    Bottomley, Rt. Hon. A. G.

    Hughes, Cledwyn (Anglesey)

    Rogers, George (Kensington, N.)

    Bowles, F. G.

    Hughes, Emrys (S. Ayrshire)

    Ross, William

    Boyd, T. C.

    Hunter, A. E.

    Royle, C.

    Brookway, A. F.

    Irving, S. (Dartford)

    Short, E. W.

    Broughton, Dr. A. D. D.

    Janner, B.

    Shurmer, P. L. E.

    Brown, Rt. Hon. George (Belper)

    Jay Rt. Hon. D. P. T.

    Silverman, Julius (Aston)

    Brown, Thomas (Ince)

    Jeger, George (Goole)

    Simmons, C. J. (Brierley Hill)

    Burke, W. A.

    Jeger, Mrs. Lena(Holbn&St.Pnes,S.)

    Skeftington, A. M.

    Burton, Miss F. E.

    Jenkins, Roy (Steohford)

    Slater, Mrs. H. (Stoke, N.)

    Butler, Herbert (Hackney, C.)

    Johnson, James (Rugby)

    Slater, J. (Sedgefield)

    Butler, Mrs. Joyce (Wood Green)

    Jones,Rt.Hon.A.Creech(Wakefield)

    Smith, Ellis (Stoke, S.)

    Castle, Mrs. B. A.

    Jones, David (The Hartlepools)

    Sorensen, R. W.

    Champion, A. J.

    Jones, Jack (Rotherham)

    Sparks, J. A.

    Chapman, W. D.

    Jones, J. Idwal (Wrexham)

    Steele, T.

    Clunie, J.

    Jones, T. W. (Merioneth)

    Stewart, Michael (Fulham)

    Coldrick, W.

    Kenyon, C.

    Stones, W. (Consett)

    Collick, P. H. (Birkenhead)

    Key, Rt. Hon. C. W.

    Strachey, Rt. Hon. J.

    Collins, V.J. (Shoreditoh & Finsbury)

    King, Dr. H. M.

    Stross,Dr.Barnett(Stoke-on-Trent,C.)

    Cove, W. C.

    Lawson, G. M.

    Sylvester, G. O.

    Craddock, George (Bradford, S.)

    Ledger, R. J.

    Taylor, Bernard (Mansfield)

    Cronin, J. D.

    Lee, Miss Jennie (Cannock)

    Thomas, lorwerth (Rhondda, W.)

    Crossman, R. H. S.

    Lever, Leslie (Ardwick)

    Thomson, George (Dundee, E.)

    Cullen, Mrs. A.

    Lindgren, G.S.

    Turner-Samuels, M.

    Dalton, Rt. Hon. H.

    Logan, D. G.

    Ungoed-Thomas, Sir Lynn

    Darling, George (Hillsborough)

    Mabon, Dr. J. Dickson

    Usborne, H. C.

    Davies, Harold (Leek)

    McGhee, H. G.

    Viant, S. P.

    Deer, G.

    McGovern, J.

    Warbey, W. N.

    Delargy, H. J.

    McInnes, J.

    Weitzman, D.

    Dodds, N. N.

    McKay, John (wallsend)

    Wells, Percy (Faversham)

    Donnelly, D. L.

    McLeavy, Frank

    Wells, William (Walsall, N.)

    Dugdale, Rt. Hn. John (W.Brmwoh)

    Mahon, Simon

    West, D. G.

    Dye, S.

    Mallalieu, E. L. (Brigg)

    Wheeldon, W. E.

    Ede, Rt. Hon. J. C.

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

    White, Mrs. Eirene (E. Flint)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mann, Mrs. Jean

    White, Henry (Derbyshire, N.E.)

    Edwards, Robert (Bilston)

    Marquand, Rt. Hon. H. A.

    Wilkins, W. A.

    Evans, Albert (Islington, 8.W.)

    Mason, Roy

    Willey, Frederick

    Evans, Edward (Lowestoft)

    Messer, Sir F.

    Williams, David (Neath)

    Fernyhough, E.

    Mitchison, G. R.

    Williams, W. R. (Openshaw)

    Fletcher, Eric

    Monslow, W.

    Williams, W. T. (Barons Court)

    Forman, J. C.

    Moody, A. S.

    Willis, Eustace (Edinburgh, E.)

    Fraser, Thomas (Hamilton)

    Morris, Percy (Swansea, W.)

    Wilson, Rt. Hon. Harold (Huyton)

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

    Morrison,Rt.Hn.Herbert(Lewis'm,S.)

    W interbottom, Richard

    Gibson, C. W.

    Mort, D. L.

    Woodburn, Rt. Hon. A.

    Gooch, E. G.

    Moss, R.

    Woof, R. E.

    Gordon Walker, Rt. Hon. P. C.

    Moyle, A.

    Yates, V. (Ladywood)

    Greenwood, Anthony

    Mulley, F. W.

    Younger, Rt. Hon. K.

    Grey, C. F.

    Neal, Harold (Bolsover)

    Zilliacus, K.

    Griffiths, David (Bother Valley)

    Oliver, G. H.

    TELLERS FOR THE AYES:

    Griffiths, Rt. Hon. James (Llanelly)

    Orbach, M.

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

    Griffiths, William (Exchange)

    Oswald, T.

    Owen, W. J.

    NOES

    Agnew, Comdr. P. G.

    Baxter, Sir Beverley

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

    Aitken, W. T.

    Bell, Philip (Bolton, E.)

    Boyle, Sir Edward

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

    Bell. Ronald (Bucks, S.)

    Braine, B. R.

    Amery, Julian (Preston, N.)

    Bennett, Dr. Reginald

    Braithwaite, Sir Albert (Harrow, W.)

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Bevins, J. R. (Toxteth)

    Brooke, Rt. Hon. Henry

    Arbuthnot, John

    Bidgood, J. C.

    Brooman-White, R. C.

    Armstrong, C. W.

    Biggs-Davison, J. A.

    Bryan, P.

    Ashton, H.

    Birch, Rt. Hon. Nigel

    Burden, F. F. A.

    Atkins, H. E.

    Bishop, F. P.

    Butcher, Sir Herbert

    Baldwin, A. E.

    Black, C. W.

    Campbell, Sir David

    Banks, Col. C.

    Body, R. F.

    Carr, Robert

    Barber, Anthony

    Boothby, Sir Robert

    Cary, Sir Robert

    Barlow, Sir John

    Bossom, Sir A. C.

    Chichester-Clark, R.

    Barter, John

    Bowen, E. R. (Cardigan)

    Clarke, Brig. Terence (Portsmth, W.)

    976

    977

    Conant, Maj. Sir Roger

    Howard, Hon. Greville (St. Ives)

    Nield, Basil (Chester)

    Cooper-Key, E. M.

    Howard, John (Test)

    Nugent, G. R. H.

    Cordeaux, Lt.-Col. J. K.

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

    Oakshott, H. D.

    Corfield, Capt. F. V.

    Hughes Hallet, Vice-Admiral, J.

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

    Craddock, Beresford (Spelthorne)

    Hulbert, Sir Norman

    Orr, Capt. L. P. S.

    Crowder, Sir John (Finchley)

    Hurd, A. R.

    Osborne, C.

    Cunningham, Knox

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

    Page, R. C.

    Currie, G. B. H.

    Hyde, Montgomery

    Pannell, N. A. (Kirkdale)

    Dance, J. C. G.

    Hylton-Foster, Sir H. B. H.

    Partridge, E.

    Davies,Rt.Hn.Clement(Montgomery)

    Irvine, Bryant Godman (Rye)

    Pilkington, Capt. R. A.

    D'Avigdor-Goldsmid, Sir Henry

    Jenkins, Robert (Dulwich)

    Pitman, I. J.

    Deedes, W. F.

    Jennings, J. C. (Burton)

    Pitt, Miss E. M.

    Donaldson, Cmdr. C. E. McA.

    Johnson, Dr. Donald (Carlisle)

    Pott, H. P.

    du Cann, E. D. L.

    Johnson, Eric (Blackley)

    Powell, J. Enoch

    Duncan, Capt. J. A. L.

    Johnson, Howard (Kemptown)

    Price, Henry (Lewisham, W.)

    Duthie, W. S.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Raikes, Sir Victor

    Eccles, Rt. Hon. Sir David

    Joseph, Sir Keith

    Ramsden, J. E.

    Eden,Rt.Hn.SirA.(Warwick&L'm'tn)

    Joynson-Hioks, Hon. Sir Lancelot

    Redmayne, M.

    Elliot, Rt. Hon. W. E.

    Kaberry, D.

    Rees-Davies, W. R.

    Emmet, Hon. Mrs. Evelyn

    Keegan, D.

    Remnant, Hon. P.

    Errington, Sir Eric

    Kerby, Capt. H. B.

    Robson-Brown, W.

    Farey-Jones, F. W.

    Kerr. H. W.

    Rodgers, John (Sevenoaks)

    Fell, A.

    Kershaw, J. A.

    Roper, Sir Harold

    Fleetwood-Hesketh, R. F.

    Kimball, M.

    Russell, R. S.

    Fletcher-Cooke, C.

    Kirk, P. M.

    Schofield, Lt.-Col. W.

    Fort, R.

    Lagden, G. W.

    Scott-Miller, Cmdr. R.

    Foster, John

    Lambert, Hon. C.

    Sharpies, R. C.

    Fraser, Sir Ian (M'cmbe&Lonsdale)

    Langford-Holt, J. A.

    Shepherd, William

    Freeth, D. K.

    Leather, E. H. C.

    Smithers, Peter (Winchester)

    Galbraith, Hon. T. G. D.

    Leavey, J. A.

    Spearman, Sir A. C. M.

    Gammans, Sir David

    Leburn, W. G.

    Speir, R. M.

    Garner-Evans, E. H.

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

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    George, J. C. (Pollok)

    Legh, Hon. Peter (Petersfield)

    Stevens, Geoffrey

    Gibson-Watt, D.

    Lindsay, Hon. James (Devon, N.)

    Steward, Harold (Stockport, S.)

    Glover, D.

    Lindsay, Martin (Solihull)

    Steward, Sir William (Woolwich, W.)

    Godber, J. B.

    Linstead, Sir H. N.

    Studholme, Sir H. C.

    Gomme-Duncan, Col. Sir Alan

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

    Taylor, William (Bradford, N.)

    Gough, C. F. H.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Teeling, W.

    Gower, H. R.

    Lloyd-George, Maj. Rt. Hon. G.

    Thomas, Leslie (Canterbury)

    Grant-Ferris, Wg Cdr. R,(Nantwich)

    Longden, Gilbert

    Thomas, P. J. M. (Conway)

    Green, A.

    Low, Rt. Hon. A. R. W.

    Thompson, Kenneth (Walton)

    Gresham Cooke, R.

    Lucas-Tooth, Sir Hugh

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

    Grimond, J.

    Macdonald, Sir Peter

    Thornton-Kemsley, C. N.

    Grimston, Hon. John (St. Albans)

    MoKibbin, A. J.

    Tiley, A. (Bradford, W.)

    Grimston, Sir Robert (Westbury)

    Mackie, J. H. (Galloway)

    Tilney, John (Wavertree)

    Gurden, Harold

    McLaughlin, Mrs. P.

    Touche, Sir Gordon

    Hall, John (Wycombe)

    Maclean, Fitzroy (Lancaster)

    Turner, H. F. L.

    Hare, Rt. Hon. J. H.

    Maomillan,Rt.Hn.Harold(Bromley)

    Tweedsmuir, Lady

    Harris, Reader (Heston)

    Maddan, Martin

    Vane, W. M. F.

    Harrison, A. B. C. (Maldon)

    Maitland, Hon. Patrick (Lanark)

    Vaughan-Morgan, J. K.

    Harrison, Col. J. H. (Eye)

    Markham, Major Sir Frank

    Vosper, D. F.

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

    Marpies, A. E.

    Wade, D. W.

    Harvie-Watt, Sir George

    Marshall, Douglas

    Walker-Smith, D. C.

    Hay, John

    Mathew, R.

    Ward, Dame Irene (Tynemouth)

    Head, Rt. Hon. A. H.

    Maude, Angus

    Waterhouse, Capt. Rt. Hon. C.

    Heald, Rt. Hon. Sir Lionel

    Maudling, Rt. Hon. R.

    Whitelaw, W.S.I.(Penrith & Border)

    Heath, Rt. Hon. E. R. G.

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

    Williams, Paul (Sunderland, S.)

    Hicks-Beach, Maj. W. W.

    Medlicott, Sir Frank

    Williams, R. Dudley (Exeter)

    Hill, Rt. Hon. Charles (Luton)

    Milligan, Rt. Hon. W. R.

    Wills, G. (Bridgwater)

    Hill, Mrs. E. (Wythenshawc)

    Molson, Rt. Hon. A. H. E.

    Wilson, Geoffrey (Truro)

    Hill, John (S. Norfolk)

    Morrison, John (Salisbury)

    Wood, Hon. R.

    Hirst, Geoffrey

    Nabarro, G. D. N.

    Wooilam, John Victor

    Holland-Martin, C. J.

    Nairn, D. L. S.

    TELLERS FOR THE NOES

    Hornsby-Smith, Miss M. P.

    Heave, Airey

    Mr. Hughes-Young and

    Horohin, Sir Ian

    Nicholls, Harmar

    Mr. E. Wakefield.

    Horsbrugh, Rt. Hon. Dame Florence

    Nicolson, N. (B'n'm'th, E. & Chetah)

    Motion made, and Question proposed, That the Clause stand part of the Bill.
    8.30 p.m.
    Mr. G. R. Mitchison: Unaccustomed as I am to public drinking, I find the Clause rather puzzling. I agree in that respect with the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke). It is probably about the only thing which he and I have agreed about for a long time.
    978
    I should like to ask the Financial Secretary one or two questions. I hope I am right in asking him. I rather understand that some Customs Paris, choosing between the Chancellor of the Exchequer and his right hon. colleagues, has handed him the apple. It is a matter for nice argument whether it was rightly done, but the right hon. Gentleman in due course will tell us.
    My first question is a simple one. I have always regarded cider as something

    979
    that the brewer sold for occasions when one did not want beer or was too poor to buy it. I have always considered that the brewers regarded cider as a rather shamefaced substitute for beer, and were a little sorry when the public appeared to show quite a liking for it. I confess that I think it is quite a good drink.
    When we get to strong cider—fortified cider, over 15 degrees proof spirit—it suddenly becomes taxed as sweets; that is to say, it becomes taxed as wine. Why does the right hon. Gentleman have a tax for strong cider different from the tax for strong beer? I have just been consulting the "Brewers' Almanac," and I find that 15 degrees is about the point at which one gets to strong beer. I do not know why cider, having remained cider up to 15 degrees, and having been, by some Treasury hypothesis, turned into something else, elects to become wine. misnamed sweets, instead of becoming beer. Clearly, it is not either. It is rather like the little joke about the tortoise which was being accepted for carriage on the railway.
    If I may add a small further point, I would ask if I am right in thinking— assuming a cider of just over 15 degrees— that if it were taxed as strong ale, it would bear less tax as strong ale than it bears as sweets? I have been making the most careful calculations but the methods of levying tax on beer are hideously complicated, although the brewer understands them—shades of Mr. Geoffrey Bing, whose absence from the House many of us deeply regret. There appear to be good reasons why brewers should have a singularly perfect understanding of the taxation of beer. That is my first set of questions to our Aphrodite of the night.
    Next, I should like to know a little more of what the Clause means. I find it difficult to follow. That is clearly because I do not know about fermentation and matters of that sort. Does the part that begins
    "unless it has undergone no other process than a single process of fermentation …"
    mean that it cannot be fermented twice? Perhaps we can be told. Does
    "was made from apple or pear juice which at the beginning of that process was in its natural state …"
    980
    mean that one can add the sugar, but not before beginning the fermentation, and that it must be put in during the fermentation? My researches into cider making led me to the conclusion, doubtless erroneous, that cider became rather stronger if the sugar was put in during the fermentation instead of before; and my insight into the Treasury mind, always a somewhat dark and mysterious place, is not sufficiently deep to understand whether this is an objection to sugar generally or to sugar before one begins the fermentation.
    Next I come to ethyl alcohol. These people who make cider and who drink cider are simple souls, and I rather regret that they should be confused by references to ethyl alcohol. They probably know no more about the lady than I did until quite a short time ago. I went and looked her up in the Library, and at last I began to have some inkling of what I might call the spiritual reason for this somewhat odd Clause. What is she? She is, I understand, the hypothetical radical of the dicarbon series.
    It is not so long ago since the Chancellor was the hypothetical radical of the Tory Party. Indeed, at one period, he made some very pointed references to his right hon. Friends—if indeed they were his friends—then occupying the Treasury Bench and described them as a series of extinct volcanoes. The point at which a volcano becomes extinct is almost a matter of opinion, but certainly at least he was a hypothetical radical. Is this ethyl alcohol being brought in simply as some curious reference to the right hon. Gentleman's past, and, if not, would the right hon. Gentleman, who is to reply, be good enough to tell us a little more about the lady and her origins?
    What I should like to know about her origins is nothing in any way scandalous at all. I merely want to know if one can get her out of sugar, because that is rather material. I listened to what the right hon. Gentleman had to say about this, and I was a little uncertain about his attitude to sugar. It seemed to me—again, I say, without much practical experience of these matters—that ethyl alcohol had something to do with what we call the "kick in it" or something of that sort, and that it was augmented, increased and enlivened by the

    981
    addition of sugar at some stage or another.
    Of course, one can put more and more sugar in, but if sugar is within the scope of the Clause, then I suppose that we get our ethyl alcohol that way. Either this single process of fermentation includes the addition of sugar or it does not; and if it does include the addition of sugar, how much can be put in? Is sugar, in fact, "other materials "? feel certain that the right hon. Gentleman must find difficulty in hiding his contempt for someone who knows so remarkably little about cider making, and at the picture of a miserable lawyer trying to interpret a Clause about a duty. I hope that he will restrain himself from any violence in his criticism and just answer three questions, which I will repeat now quite briefly.
    First, why does cider become wine and not beer when it gets beyond a certain strength? Second, would it pay more duty or less duty if it- were beer? is this in fact another brewers' plot? There have been so many of them in connection with the Tory Party that we never know where we are. Thirdly, what about ethyl alcohol dear lady—and sugar? Does ethyl alcohol come entirely from sugar if nothing else is added? Has the addition of sugar no result in producing ethyl alcohol and, if so, is there any limit to the amount of sugar that can be put in. in the single process of fermentation?
    There we are—a number of puzzling questions; and all these are put before the simple farmer making his cider in some Kentish farmhouse. It is not a very good introduction to a Clause to find a lot of simple farmers writing to their Members of Parliament, apprehensive whether this unintelligible bit of legislation will, or will not, affect them.
    Mr. Remnant: I think you would agree, Sir Austin, that this is hardly the place, even if I had the knowledge, for a discourse on fermentation or the lady friends which the hon. and learned Member for Kettering (Mr. Mitchison) finds in the Clause, but I can assure him on one point—as far as I am aware there is no brewers' plot in this, except in so far as the brewers have apparently provided a peg on which the hon. and learned Member could make a quite irrelevant speech. [HON. MEMBERS: "Withdraw."] I am
    982
    sorry if I have offended the hon. and learned Gentleman or his hon. Friends. If I have, I willingly apologise.
    Mr. Chapman: The hon. Member has offended the Chair. He should withdraw.
    Mr. Remnant: If I have caused any offence I will withdraw what I said. I will say that I do not think the speech was pertinent.
    Mr. Mitchison: I do not mind what the hon. Member says.
    Mr. Remnant: There seems to be a licensing point in the Clause which requires attention. It is true, as the hon. and learned Member said, that sweets are included in a wine licence, but there are a number of beer-on and beer-off licensees who have been selling cider up to now. I am not clear, and I have no definite information, whether they have been selling cider of the category which comes within the Clause, although I would say that they probably have. Whereas a dealer with a similar licence can acquire a sweets licence at any time, a beer-on or beer-off licence holder can apply for alterations to that licence only at the annual brewster sessions.
    Mr. Ross: This is quite irrelevant.
    Mr. Remnant: As I understand the Clause, it means that from 18th July until the next brewster sessions he will not be allowed to sell fortified cider as covered by the Clause and will then be in the hands of the generous treatment afforded by the licensing justices. I have no doubt that on a reasonable request the licensing justices will allow him to alter his licence or will give him a fresh licence enabling him to sell cider, but in the meantime, as I understand, customers of that house will be debarred by the Clause from enjoying in that house the drink which they like. I suggest to my right hon. Friend that that is not intended and that, if I am correct, he should take steps to see that it is altered.
    Mr. Rees-Davies: The hon. and learned Member for Kettering (Mr. Mitchison), who opened the debate with a most interesting definition, asked whether ethyl was a sugar baby or a brewers' doll. The answer is that in this Clause she is a "Baby Cham "; and it is a "Baby Cham" ith which this Clause is designed to deal.

    983
    I did not speak on the Amendment because I took the view, after I had heard the Financial Secretary speak, that everything which he said about the Kent industry was undoubtedly correct. I do not believe for one moment that the Kent growers will be affected by the Clause— at least, not when it is considered carefully. None the less, for reasons which he gave, I think that this is a very bad Clause indeed. It is a Civil Service Clause. It is full of good morals, but good morals and good drink seldom, if ever, go hand in hand. Wherever one tries to improve morals in this regard one will invariably ruin a good drink.
    8.45 p.m.
    What I do not like about the Clause is that, beyond any doubt, it will ruin a most excellent drink and one which I myself have enjoyed for many years. I do not want to mention names of firms, but one is a "Merry" firm and there is also one which deals in "Baby Cham." Those are the drinks which I have in mind.
    There are some of us who like drinking cider with 15 per cent. alcohol in it, and who think that these particular ciders are an admirable drink. The effect of this Clause will, in fact, be precisely what the Financial Secretary intends. It is not a fiscal maneouvre at all but one of good morals and principle. I do not favour a Conservative Chancellor pursuing the path of good morals and principle at the expense of good drink. I think it is a bad principle to follow.
    What has happened? My right hon. Friend the Financial Secretary thought 'that there might be £400,000 for the Treasury, but he was very careful to point out that he would not guarantee that estimate, and I am quite sure that there is not a single person at the Treasury Box who has the slightest belief that it will bring in £400,000 next year or the year after. It will bring in nothing at all, for the one reason that those who make this type of cider at the moment will now make it with 14½ per cent. and not with 15 per cent. alcohol. They will, as my hon. Friend the Member for Wycombe (Mr. John Hall) said, seek to rely on their public relations campaign to profess to the public that they are still making the same product as they were making before, but the more observing members of the public will realise that they are not
    984
    getting the same good drink as before, and its manufacture will be killed.
    The big cider-growing firms with the well-known names are all in favour of this Clause. I wonder why? I say that they are in favour of it because they make their ciders with 8, 9 and 10 per cent. alcohol. The makers of British wines are in favour of it because they are making wines with just about 15 to 20 per cent. alcohol. British wines are not made from a British product at all but from must which comes mainly from the Commonwealth. They make those wines, and they want to compete with and to push out of the way the three companies which make the cider which comes under the provisions of Clause 2. So the plot is not a brewers' plot—but there is a plot.
    Mr. Ross: It is coming.
    Mr. Rees-Davies: It is an "ethyl" plot —a "Baby Cham ": it is the "Baby Cham" plot. Probably there is something to be said for my right hon. Friend's case from the point of view of morals, but from the point of view of drink there is nothing to be said for it at all. It will ruin and terminate this particular industry and this particular drink. It will stop the industry making the drink with over 15 per cent. alcohol, and there will, in fact, be less than 15 per cent. alcoholic content in it. I have for some years past been enjoying this stage in which we have been gradually getting back to stronger beer; and I was also very happy when I found I could buy this particular cider which I enjoy in the summer, and which, if a little gin is added to it, makes a most excellent drink.
    Therefore, if one finds that there is a demand in the country for this class of drink, is it really right—and this is the real point of these remarks, where I am saying something which for the moment is quite serious—for the Chancellor to use fiscal taxation to achieve a purpose which money does not lie at the root of at all? That is what I am asking the Financial Secretary to deal with. This Clause is not designed to bring in money, and I can assure him that it certainly is not going to assist British wines to get any more money through the removal of unfair competition.
    If these facts are correct, my right hon. Friend is using this Clause merely to get rid of a particular class of liquor to which

    985
    a wide number of the community take objection, and, in particular, to which the industry takes objection; that is to say, parts of the cider industry and parts of the British wine industry. To put it in another way, are we to be faced with the principle of lobbying by British wines and certain of the cider groups against the others, because, if that is to be the background, I would submit that it is taking far too much of the time of the Committee to discuss for two hours a question of this kind in our consideration of a Finance Bill which is heavily overloaded.
    The right hon. Member for Huyton (Mr. H. Wilson) referred to the 36 Clauses of this Bill and the time its consideration might take. It could take many days. I made the observation, which I still think is right, that four hours is too long to discuss a small matter about tobacco therefore, and I make the point against myself, it seems to me that to spend over two hours on a matter of this kind ma) very well also be too long. I ask the Financial Secretary, though not necessarily at this stage, to look carefully at this question of cider and consider whether he is not going into a matter of principle in respect of this tax without the closest consideration of that principle.
    Mr. H. Brooke: First, I will refer to the speech of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). He delivered himself of a statement, which I sincerely trust the Committee does not accept, to the effect that good morals and good drink never go together. Never have I heard such a shocking aphorism. What the Chancellor is interested in here primarily is good money, and I have to revert to that all the time, because we are not here seeking to warp the conditions of British agriculture or to pervert the means of manufacture of various attractive drinks.
    My right hon. Friend is simply doing one thing and one thing only, and that is to remove from the tax system what at present acts as an unfair discrimination against one product, and, conversely, a subsidy to another. It is entirely wrong that this Committee should approve of any Revenue duty which operates like that. It cannot be defended. My hon. Friend the Member for the Isle of Thanet sought to suggest at one time that this was a Civil Service Clause. I would not
    986
    say that it was any the worse for that, but I can assure him that it is the Chancellor of the Exchequer's Clause. It is the Government's decision and the Government take full responsibility for it.
    At another moment, and, I thought, cutting right across his former allegation that this was a Civil Service Clause, my hon. Friend said it was a cider producers' Clause. He made certain allegations that nobody would have thought of this if the manufacturers of ordinary cider and of British wines had not been frightened of competition and had not sought to see whether they could, somehow or other, get the Government to knock it on the head.
    We are knocking nothing on the head. If my hon. Friend says that these strengthened ciders and perries can no longer be sold. he must maintain that they could no longer be sold without a subsidy, because if they are good drinks, and I myself believe that they are, then they should be able to compete with those liquors of similar alcoholic strength and bear the equivalent taxation.
    My hon. Friend the Member for Wokingham (Mr. Remnant) raised an important point about the Brewster Sessions. He suggested to the Committee that, three months after Budget day, those who were selling by retail these strengthened ciders and perries would no longer be able to do so, and they would not have an opportunity, until the Brewster Sessions at the beginning of next year, to make an application for a licence.
    Mr. Remnant: I was referring to the holders of beer on- and beer off-licences, whose position is quite different from the position of those holding full licences for beer and wine, who would be able to continue.
    Mr. Brooke: Those who hold wine licences will have no difficulty. I appreciate the point that my hon. Friend is making. We did give this three months' grace because we thought it right that those who had, in good faith, acquired stocks and were free to sell them should not find themselves suddenly debarred, by not possessing a licence, from disposing of their stocks.
    I can assure my hon. Friend that we have had no representations from associations of either on-licence or off-licence holders on this matter. I appreciate the point which he has made —
    Mr. F. Blackburn: There is a problem, is there not?
    Mr. Brooke: I appreciate the point that my hon. Friend has made. That is what I am trying to say. Some hon. Gentlemen will appreciate another point, that this Committee should not lightly do anything which seems to interfere with the discretion of the licensing justices. If we were to do what I think my hon. Friend was suggesting—
    Mr. Blackburn: No.
    Mr. Brooke: I am just developing my point—it might be that we would be, as it were, granting licences, admittedly temporary licences, which the licensing justices might not themselves wish to see given.
    This is not just a Treasury point. It is a Home Office point. If my hon. Friend wishes it, I will certainly consult my right hon. and gallant Friend the Home Secretary and see whether this is a serious difficulty or not. I think it is fair to say that up to the present we have had no representations on behalf of the organised trades, who would, one would think, be the first to be affected by that.
    Mr. Ede: Surely the hon. Member for Wokingham (Mr. Remnant) is a good spokesman for the organised trade.
    Mr. Brooke: My hon. Friend is a good spokesman for all excellent causes in his constituency.
    The hon. and learned Member for Kettering (Mr. Mitchison) put several questions to me. He asked why we were treating this strong cider as wine and not as strong beer. The answer is that the manufacturers of these strong ciders and perries wish them to be regarded as wines and not as beers. They are quite definitely sold in competition with wine rather than with beer, and it is natural that that, therefore, should be the way in which we approached them.
    The hon. and learned Gentleman asked whether these beverages would pay less as strong ales than as sweets. The answer is that they would pay just about the same either way. There would be nothing in it to speak of.
    9.0 p.m.
    Mr. Mitchison: Surely, if it is just over 15 per cent., then it is just at that percentage that they would pay distinctly less as beer than they are being made to pay as sweets, would they not?
    Mr. Brooke: I am advised that is not so: The hon. and learned Gentleman puts this question to me, but he has given me very little opportunity to follow up what was a rather technical, and, I may say, an extremely successful speech. I will certainly examine his point further, but, in so far as I can give an answer across the Floor, it is that there would be very little in it.
    The hon. and learned Gentleman then asked me about "Miss Ethyl Alcohol."
    Mr. H. Wilson: Before the right hon. Gentleman comes to that very important and fascinating subject, are we to understand that one of the reasons why the Chancellor—because, as the right hon. Gentleman has told us, this is the Chancellor's Clause—has put the Clause into the Bill, and which has taken up the time of the Committee for about 1½ hours is that it suits the convenience of the manufacturers who want to sell this strengthened cider or strengthened perry under the guise of wine? Are we to understand from the right hon. Gentleman that there is really a certain amount of deception of the public by the manufacturers? If so, is it not the right hon. Gentleman's duty not only as a responsible Minister, but as a responsible member of this Committee, to inform his right hon. Friend the President of the Board of Trade accordingly so that proceedings can be taken against such manufacturers under the Merchandise Marks Act?
    Mr. Barnett Janner: Under the Food and Drugs Act.
    Mr. Wilson: My hon. Friend says, "Under the Food and Drugs Act." That would involve a different Government Department. If the facts are as stated by the right hon. Gentleman, would he not agree that there is a case for an examination rather than for easing the position by a Clause in the Finance Bill?
    Mr. Brooke: I do not think that the right hon. Gentleman has quite grasped the point which I made at the beginning of my speech. All this arises from the

    989
    fiscal necessity of taxing equally articles sold in competition with one another. These strengthened ciders and perms are sold in competition with British wines. They are not sold in competition with beer, and it is there that one needs to get the level of tax equal.
    Mr. Chapman: I have been agreeing with the right hon. Gentleman so far, but he is now taking away my basis of agreement. Is it not rather that the tax has to be equal to that of wine not because these liquors are sold in competition, but because they are alike in alcoholic strength?
    Mr. Brooke: I was not seeking to depart from that at all, but the hon. and learned Member for Kettering had been raising the question of equally strong beers, and it was that question which I was seeking to answer.
    Now, if we may, we will return to this young lady, "Ethyl Alcohol." I hoped that the hon. and learned Member was going to put his question in the form of asking me whether "Ethyl Alcohol" had a "sugar daddy." Ethyl alcohol has, in fact, or can have, varied percentage. She can be born of sugar or of apples, pears or malt. She is known familiarly as spirits or sometimes as "kick." That is what ethyl alcohol is and what she does when she gets into this liquid.
    I do not wish to challenge the hon. and learned Member on his obviously extensive technical knowledge of these matters, but my right hon. Friend the Chancellor and I have sought to ensure that subsection (1) of this Clause shall be meaningful for those concerned both with the manufacture of these products and with the administration of the law if the Clause becomes law. I hope that I have succeeded in answering the main questions that have been asked.
    Mr. Mitchison: May we have a little strip tease with "Miss Ethyl" for a minute? Can the cider maker put as much sugar as he likes into the cider before and during fermentation without incurring the risk of extra duty?
    Mr. Brooke: The cider maker can do anything he likes provided that he does not bring the strength up to 15 degrees of proof. If he brings the strength above that level then, if he wishes to escape duty, he will have to prove that
    990
    it has undergone no other process than a single process of fermentation and that it satisfies the other two conditions here.
    Mr. Mitchison: I am very sorry to ask again, but does fermentation include, or does it not include, adding sugar? I thought sugar had to be added often as part of the process of fermentation.
    Mr. Brooke: Yes, the sugar is often required for the process of fermentation, but the hon. and learned Gentleman is making this more difficult. The last statement I made was perfectly clear. [HON. MEMBERS: "No."] I explained that all this cider and perry was free from duty if it was under 15 degrees of proof. It was dutiable if it was over 15 degrees, unless the manufacturer could show that it satisfied the three conditions laid down here. Nothing could be clearer than that.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 3.-(CUSTOMS PREFERENCE ON EMPIRE GOODS CONSIGNED FROM BEIRA OR LOURENÇO MARQUES.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Bottomley: I have something to say on this Question because some new evidence has come to light which ought to enable the Chancellor to consider putting down an Amendment to the Clause to the effect that the granting of preferential rights for goods going through these two ports will be limited.
    The new evidence is, as the House will be aware, that Sir Harold Hartley, who is chairman of a committee of the Organisation for European Economic Cooperation, has said in his Report that Europe will require about 500 million tons of coal more by 1975. He said that it would be idle to think that our power requirements will be fully met by the atomic energy available, by oil or natural gas, or by any other substitute that can be brought to bridge the gap.
    The reason why I suggest that there ought to be a time limit to the preference given in this Clause is because, as the Financial Secretary will be aware, there is in Southern Rhodesia the rich coalfield of Wankie. That coalfield should be developed in the interests not only of our country but of Europe, which has been concerned with the Report, and of the dollar markets too.

    991
    If the Government will only give consideration to the development of a railroad from that colliery to the coast, it will be possible for us not only to send coal along that route, but also goods which are at the moment going to the ports of Lourenço Marques and Beira. It is possible to take them from the nearest town, which is Matetsi, by the Wankie coal mine, to Gobabis, which links with a railway going via Windhoek to Walvis Bay.
    I am assured that as the result of an investigation it has been shown that there are no major engineering difficulties. The bridging difficulties are nil and there are no physical or water problems. Therefore, it is a matter which could be looked at and dealt with at once, and it would enable us to avoid having to give for ever the same benefits in respect of ports in Portuguese territory that we give to goods passing through Commonwealth and colonial possessions.
    I read that unless we do something about this, the Portuguese will extend another railway, and then in a subsequent Finance Bill similar concessions will be sought so that goods going through Lourenço Marques and Beira can have the same facilities to go through a Portuguese port on the west side. We are reinforced in the view that the Government ought to give consideration to this matter now by someone known to many of us, a great British supporter, Sir Roy Walenski, who said that it is possible for this scheme to which I have referred to be undertaken provided that the British Government take the initiative and are prepared to show that they are in support of the scheme.
    I regret to say that there are no up-to-date trade figures in respect of the goods which go through Lourenço Marques and Beira. So far as I can ascertain, the last published figures in respect of exports going through Lourenço Marques —they come mainly from South Africa —showed that they totalled £13,674,081. I believe that that is about 4 per cent. of the total exports from South Africa. They go through Lourenço Marques, and we have to make the concession to them.
    I am more concerned about not only the Wankie coal mine but also the Federation of Rhodesia and Nyasaland as a whole and the whole of Central
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    Africa, which will, without doubt, be developed economically to the advantage of the Africans, the Europeans and the world as a whole. The exports from those territories which go mainly through Beira and not so much through LourenÇo Marques amount to roughly £130 million, representing 88·2 per cent. of the total exports from those territories.
    If the Government will make the new Clause temporary in application and give serious consideration to the spending of a certain sum—I do not know the latest estimate, but one which was given was £15 million—it would make it possible for us not to give these Imperial concessions for ever to goods which go through foreign territories and to develop the British Commonwealth and Colonies with advantage to them and this country. I hope that before the Report stage the Government will consider tabling an Amendment limiting the application of the concession to a given period in the hope that in the meantime we can proceed with the railway, which will be of great advantage to the British Commonwealth as a whole.
    Mr. Beswick: I am sure that the Committee generally will be pleased that the Government have given some consideration to the problem and have gone some way, if not as far as they might have done, to meet the situation which has been disclosed.
    What surprises me is that, having put in the Bill a Clause to give some assistance to the growers in the territories mentioned, the Chancellor or the Financial Secretary could not have given me some more information about the effect of the increased tobacco tax upon Empire tobacco. The preference now accorded to tobacco grown in Rhodesia, where it is one of the principal crops, is negligible —1s. 6½d. per lb. At one time in the history of the tax it represented a 25 per cent. preference.
    9.15 p.m.
    Due to the increasing level of the tax in this country, now £3 1s. 2d., 1s. 6½d. today works out at about 3 per cent. preference. I should have thought that as the Government have given some thought to the problems of the growers in Rhodesia, for example, as instanced by the fact that they have brought forward this Clause, they would have got on to the

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    subject of Empire Preference on tobaccos and the way in which its value has been whittled away.
    I appreciate that there is a very difficult problem here and that questions of G.A.T.T., and so on, come into it, but, nevertheless, as we are thinking about the welfare of these territories, as we want to encourage the growers in these areas and give them the Empire preference to which they are entitled, I should have thought that, as far as the tobacco tax is concerned, we should endeavour to see that the value of the preference is not whittled away by the increasing rate of taxation in this country.
    If the Minister cannot give us an answer to that aspect of the problem now, I hope he will say that the Government intend to go into the problem to see whether something cannot be worked out and a solution to the problem found later.
    The Minister of State, Board of Trade (Mr. A. R. W. Low): I think that I should be wholly out of order if I tried to give any answer to the interesting query which the hon. Member for Uxbridge (Mr. Beswick) has raised. The Clause has a simple object, which is really threefold. It puts the goods of the Federation of Rhodesia and Nyasaland, consigned through Lourenço Marques, on the same footing as goods consigned through Beira, and in doing that fulfils an undertaking which we have given to the Government of the Federation of Rhodesia and Nyasaland.
    The second thing it does is to put goods of Bechuanaland on the same footing as goods of the Federation of Rhodesia and Nyasaland, whether consigned through Beira or LourenÇo Marques. The third thing it does is to put the goods of the Union of South Africa and Swaziland on the same footing as the goods of the Federation of Rhodesia and Nyasaland, if consigned through Lourenço Marques.
    The right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) referred to the Walvis Bay proposed railroad, about which we have all read, and the coal proposition. The Clause deals with railroads that now exist and the Committee need not be too concerned about the coal proposition, because coal comes in duty-free from wherever it is consigned and Imperial Preference does not come into the matter.
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    We would be wise to accept the Clause as it is. It in no way prejudices the development of any new railroad to Walvis Bay, nor does it prejudice any coal scheme. It is of value to the trade of the territories mentioned and fulfils an undertaking which we have given and which will help to relieve the considerable pressure which there has been on Beira.
    Mr. Bottomley: I was suggesting only that this reinforces the need for the railway. I accept what the Minister has said about coal not attracting duty. The point is that we are not getting coal from Wankie Colliery, or other valuable goods which could be produced in Central Africa. The sooner we build that railway, the sooner we will be able to get those goods and avoid having to send them through Lourenço Marques or Beira.
    Mr. H. Wilson: We have not had a very full explanation from the right hon. Gentleman. I should like to add a few words to what my hon. Friend the Member for Uxbridge (Mr. Beswick) and my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) put to him, in the hope that we shall get a rather fuller answer. He seemed to think that if he ruled certain questions put by my hon. and right hon. Friends out of order he did not need to answer them. With the greatest respect to him —and we all have a very great regard for him—it is for the Chair to decide what is and what is not in order. I submit that some questions put by my hon. and right hon. Friends have a very real bearing upon the question whether it is right for the Committee to assent to the Clause.
    Upon reading the Bill and seeing the Clause, my first thought was, "This sounds a very good thing. After having the usual reasonable explanation from the Government, I am sure that we shall want not merely to assent to it but to support it with some enthusiasm." But the right hon. Gentleman's account was perfunctory, to say the least. This must be one of the very rare cases in the history of Finance Bills when a Clause has been commended to the Committee without any suggestion about the volume of trade or the amount of money involved.

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    The right hon. and gallant Member for Leicester, South-East (Captain Waterhouse) is usually very punctilious in wanting to know the exact details of the cost in any matter of Government expenditure. He is absolutely right, and it is in accordance with the traditions of the House that he should do so. But surely, when there is a question of a change in tax revenue, it is equally right that the Committee should be told how much money is involved.
    My hon. Friend the Member for Uxbridge raised the question of tobacco preference. I agree that we should all be in danger of getting out of order if we sought to argue the merits of the Imperial Preference system in general, or even the rates of preference. There may be an opportunity to do that after the President of the Board of Trade has made his statement about G.A.T.T. which, I understand, will be on 7th June, or so the right hon. Gentleman told us this afternoon. At any rate, it would be wrong for us to go into that matter in any detail this evening.
    But the question of Imperial Preference must have some bearing upon the volume of tobacco grown in the Federation and shipped through the two ports in question. It would be interesting if the right hon. Gentleman could give us some idea as to how much he thinks will be shipped through these two ports, and what will be the difference in terms of the loss of revenue to the Treasury through the application of the Imperial Preference system.
    We all welcome the fact that, since the war, tobacco imports from what is now the Federation have greatly increased. I think I may claim that during my period of office at the Board of Trade we did a great deal to increase the amount, partly by the very rigid restriction upon the imports of dollar tobacco. but also by insisting upon the bulk buying of tobacco through the Imperial Tobacco Company.
    The Temporary Chairman (Sir Austin Hudson): The right hon. Gentleman is going a little too far. I am in some difficulty in ruling a certain matter out of order because I do not know what the goods are, but I think that he is going a little too wide.
    Mr. Wilson: I shall endeavour to confine my remarks more narrowly to the Clause—but hon. Members are in the same difficulty as you are, Sir Austin, because, in the very short account which the right hon. Gentleman gave of the reasons for the introduction of the Clause, he gave us no impression as to the nature of the goods involved.
    Mr. Low: May I correct what I think is a misunderstanding on the part of the right hon. Gentleman? He must have forgotten some of the things that he used to know when he was President of the Board of Trade.
    This provision does not import any new principle. For a long time goods consigned from Beira have enjoyed this concession, and tobacco from Rhodesia comes mainly through that port. We are not changing anything in relation to the sale of tobacco from Rhodesia, nor are we introducing a new principle. In the case of goods made in Rhodesia and the other places I have mentioned, we are putting goods consigned from Beira in the same position as goods consigned from Lourenço Marques.
    Mr. Wilson: I hope that I have not forgotten any of the things I knew when I was at the Board of Trade—including some of the rather extraordinary remarks which hon. Gentlemen opposite used to make. But I should be out of order were I to tax my memory to any great extent upon those subjects.
    The Committee understood the point which the right hon. Gentleman made in his intervention. What we wish to know is how much of this tobacco the right hon. Gentleman expects will be going through Lourenço Marques in the future. Perhaps he will say that it is a matter for normal trade channels and that it is impossible for the Government to make an estimate of it.
    The hon. Member for Wokingham (Mr. Remnant) spent a long time trying to get me to talk about tobacco, and as soon as I begin hon. Gentlemen opposite get worried. But, turning from tobacco, I wish to remind the Committee that my right hon. Friend mentioned coal. I take the point at once that coal, being duty-free, is not directly involved in this Clause. But the Minister of State will recall—it certainly was the case some years ago, and I think it still is—that the

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    port of Beira in particular has been heavily congested; and that places a severe limitation on the amount of goods passing through the port. Of course, the amount of coal coming down from the Wankie Colliery, no matter by what route, either existing routes or future routes, will affect the congestion of the port and therefore will affect the volume of dutiable commodities going through it. I suggest, therefore, that my right hon. Friend was not wide of the mark. nor out of order, when he referred to coal.
    I hope that the Minister will, if possible, give us a little more information on the point. I think that we have the right to ask him how much revenue he considers will be involved. We consider this to be a serious and sensible proposition, and we shall be glad when it is no longer essential to rely on these Portuguese ports for the shipment of goods which must be regarded as of British origin. Anyone dealing with—as I did during the concluding stages of the war and in my period at the Board of Trade— the difficulties of coal shipment from that area will know how grave are those difficulties, and what a heavy cost this country is paying because of our dependence on these two ports. The sooner we have a British port in the area which may be used for the purpose, the better.
    Until that happy day, I am sure it is right that developments through ports other than Beira should be able to claim the advantages attaching to Imperial Preference. Apart from our wish that the right hon. Gentleman should be able to give a little more information on this point, I am sure that we wish to see this Clause pass into legislative effect.
    Captain Charles Waterhouse: I wish to endorse what has been said about the desirability of this Clause. It is true that it is a great misfortune in some ways that our great possesions in Central Africa should be bordered on either side by foreign territory. On the other hand, it is a great good fortune that the territory should be in the hands of the Portuguese, who have been our firm friends over generations.
    The two ports mentioned are both to the east. It has not been mentioned that there is another port, Lobito, to the west. It is reached by Angola, by the Benguela Railway, which has the peculiarity of being a privately-owned railway, owned
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    by British capital and built by British initiative. I have no financial interest in that railway, although I have a considerable interest in the area because I have a son who is farming there.
    I welcome this Clause. I hope that my right hon. Friend will, on a future occasion, remember that there is this other access from the west to our Central African possessions and that it may at some time be convenient for us to have an access to the west to avoid the possible difficulties, which we all have in mind, arising over the route to East Africa through the Mediterranean.
    9.30 p.m.
    Mr. Beswick: I do not propose to argue at any great length with the Minister of State whether or not I was in order in my previous intervention. I am prepared to leave that decision to you, Sir Austin. I am bound to say that it seemed quite unusual for Members of the Committee to welcome a Clause when the representative of the Government spent so much time belittling its importance and effect. At the end of what the Minister of State had to say I was left wondering why he had put the Clause into the Bill at all if the consequence was to be so small as he suggested.
    My question was about one of the important crops in this area, tobacco. As I understand, the reason for the Amendment is to grant to the tobacco which is being shipped from the port of Lourenço Marques the same amount of preference—
    Mr. Low: I would like to put the hon. Gentleman right—
    Mr. Beswick: Please let me complete my sentence—that it would enjoy if it otherwise were shipped to this country. I want to know whether it is worth while putting the Clause in the Bill if the effect of that preference is so small. If the effect is so small, with the present high rate of taxation, would the right hon. Gentleman assure us that this aspect of the matter is being looked into? That is all I want to know.
    Mr. Low: I wanted to interrupt the hon. Gentleman to remind the Committee that the concession does not apply to revenue duties and, therefore, it does not apply to tobacco. When I interrupted

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    the right hon. Member for Huyton (Mr. H. Wilson), earlier, I was not dealing with all the points, but only with the place at which the tobacco came out.
    Mr. Bottomley: I want to reinforce one point which I hope the Minister of State Will draw to the attention of the Chancellor of the Exchequer and his other colleagues in the Cabinet. He quite rightly says that Lourenço Marques is brought in and that the same concession is being made on goods going through it as to those that go through Beira. The reason that the right hon. Gentleman gives is that Lourenço Marques is to have an extended railroad put in by the Portuguese, who have said they will take the railroad to the West.
    The Minister of State, or a future Chancellor of the Exchequer, may come to the House and say, "Now that that has been done, we have to make the same concession". We ought not to be put in that position, so I ask the right hon. Gentleman to give an assurance that he will look into the question of building a British railroad to the West before the Portuguese finish their own and we have to put a similar Clause in another Finance Bill as we are having to do in the case of Lourenço Marques.
    Mr. Low: What we have done in the Clause does not commit us to do a similar thing anywhere else. My right hon. and gallant Friend the Member for Leicester, South-East (Captain Waterhouse) raised the question of the other existing railway out to Lobito Bay. It was considered whether the concession should be extended in that case, but it was thought unwise and unnecessary. At present, I understand that most, if not all, the produce that comes from the Federation along that railroad and comes to us, is duty-free produce. The obvious example is copper. Therefore, it was not necessary to extend it. We should certainly consider that case again if it became necessary to do so in the future.
    I would make it clear that this concession, this putting of Lourenço Marques in the same position as Beira is of importance to our trade with the Federation and with the other territories. I am sure that the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) appreciates that it is impossible to be quantitative in regard to
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    the money values. Indeed, it may well be that in greatest result of the concession is n administrative convenience. As the right hon. Member for Huyton (Mr. H. Wilson) may remember, it has always been possible to export from the Federation of Rhodesia through the port of Lourenço Marques and, indeed, through any other port and to gain the advantage of Imperial Preference before the Clause existed, provided that arrangement were made so that the goods were consigned direct from the Federation to here. That results in administrative problems.
    As the Committee will understand, arrangements had to be made at the port, in case the goods were held up, to store them in separate stores, and so on. Perhaps the greatest advantage in this concession will lie in the administrative easements and, therefore, it will help our trade. With that explanation, I commend the Clause to the Committee and hope that it will be accepted.
    Mr. H. Wilson: I do not know why the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) is so anxious that we should divide on the Clause. Although he has not spent a great deal of time in the Chamber today, I hope he will realise that the Opposition have been extremely co-operative in the speed in which they have helped to get the Bill through. We spent an hour and a half tonight on an issue raised by a Government back bencher. I understand that either tonight or. as one trusts, on Thursday, we shall be listening to discussion on Amendments moved by the noble Lord. I hope, therefore, he will not object if we spend a minute or two more in dealing with this important Clause.
    The noble Lord may remember that in October, on the last Finance Bill, it was five days before we got to the similar Motion on Clause 1. He should not, therefore, be impatient that we have only got to Clause 3 on the first day of this Bill in Committee, although I do not suggest that everything that happened in the autumn should be necessarily a precedent for our handling of this Bill.
    The Minister of State, Board of Trade, has answered, I am sure, as well as he is able the points which have been put to him from this side. One understands that it may be difficult to quantify. to use

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    the right hon. Gentleman's phrase, the amount of revenue that is involved. As he said, the strongest argument is a matter of convenience in the transmission of goods from the Federation.
    I was glad to see how the right hon. and gallant Gentleman for Leicester, South-East (Captain Waterhouse) endorsed what was being said from this side of the Committee on the Clause. It is quite a treat to see him supporting his own Front Bench. It is even more of a treat to see him supporting the Front Bench on this side. Having said how much we welcome it, however, perhaps the right hon. and gallant Gentleman will allow me to dissociate myself from one expression he used lest it may be thought that, since we were so close together in supporting the Clause, we are necessarily tied by every phrase he used.
    The right hon. and gallant Gentleman referred to the Federation as being one of our possessions. I know that he still clings to that old-fashioned mode of thought, which is not serious except when it affects his attitude to other questions, which is damaging for the country. When the right hon. and gallant Gentleman used the term "possessions ", it was not a phrase which we use.
    Captain Waterhouse: Rubbish.
    Mr. Wilson: The right hon. and gallant Gentleman may think it rubbish, but we must dissociate ourselves from that phrase, and so also, I am sure, will the Government Front Bench.
    Having said that, I shall call on my hon. Friends to agree to the Clause now going through without a Division and I hope that it will have the good results that the right hon. Gentleman has forecast for it.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 4.—(AMENDMENT OF VEHICLES (EXCISE) ACT, 1949.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Jay: I hope that we may have rather more information about this Clause than we had about the last one. I should like the Financial Secretary to explain what the Clause is really intended to do. Is it one of those which he calls
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    "Chancellor's Clauses "? He used that phrase just now about another Clause, and it rather seemed to imply that certain Clauses were backed by the Chancellor while others were not. If that is so, we would like to know into which category the Clause falls.
    We all know that Clause 9, which will cause us trouble later, was introduced into the Bill without the Chancellor really knowing what it meant and what it was intended to do. We should like to know whether that is also true of this Clause as it is of Clause 9, which we shall be discussing on Thursday or perhaps next week, or even, perhaps, next month.
    I notice that the Chancellor said nothing about this Clause in his Budget speech, but the Financial Secretary was good enough to make an extremely brief mention of it in his not so brief speech on the Second Reading of this Bill. Then, the Financial Secretary said:
    "Clause 4 removes anomalies in the Excise Duty chargeable on mobile concrete mixers and on tower wagons, which are the movable structures used in attending to street lights or lopping trees or repairing bridges, like the one in Parliament Square this afternoon."— [OFFICIAL REPORT, 9th May, 1956; Vol. 522, c. 1240.]
    I take it that he meant that there was a tower wagon in Parliament Square and not an anomaly that afternoon.
    Although many of us know what concrete mixers and tower wagons are, it is not at all clear to me what are these anomalies which the Financial Secretary is seeking to remove. Perhaps he would tell us what they are and what this Clause does about them. I should also like to ask him why we have such an extraordinarily long Clause, occupying about one and a third pages of this Bill, in order apparently to put right such a very small matter as the anomalous position of concrete mixers and tower wagons. It is one of the peculiarities of this Bill that although it does very little of substance in most of its Clauses, it takes an enormous amount of space in which to do it. Was it necessary to have over a page of the Bill and a vast amount of verbiage in order to put right this small matter? We should at least be told what the Financial Secretary is seeking to do.
    Dr. King: I want to anticipate the Minister and thank him for subsection (3) of this Clause. I am always pleased

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    when an anomaly or hardship is put right. It is about three years ago that I had the privilege of leading a deputation, with my hon. Friend the Member for Gates-head, East (Mr. Moody), to the Ministry of Transport. This deputation consisted of members of the trade of selling mixed concrete and manufacturers of concrete mixers in his constituency and mine.
    The grievance which they put before the Ministry of Transport at that time is, I believe, to some extent put right by subsection (3) of this Clause. Quite simply it is this. We are living in a time when more and more ready-mixed concrete is being sold and delivered on the site, and the manufacturers of this concrete carry it on a lorry on which is a machine which mixes the ingredients. If it were practicable for the lorry to carry the machine, the cement, the sand, the aggregate and the water quite separately to the site, then I think that the duty that the tradesman would have to pay would be merely on the weight of his unloaded lorry. But because the materials are put inside a concrete mixer and mixed as the lorry makes its way to the place where it is to be delivered, duty is charged not only on the weight of the lorry but also on the weight of the concrete mixing machine.
    So far as I understand the subsection, what it proposes to do is to charge duty on only one and a half tons of the weight of the machine. When I took the deputation to the Ministry, they wanted, I think, the whole of the machine exempted from duty. One would expect that. As I have heard no complaints from them over this subsection, I imagine that they think that they are receiving a fair compromise by this amendment of the law, and I am grateful to the Minister for having met at least half-way what I think was a real anomaly, and for having done something which will benefit a group of merchants in my constituency, a group of merchants in Gateshead and groups of merchants of a new method of supplying concrete which is widely expanding in the country.
    9.45 p.m.
    Mr. H. Brooke: I am greatly obliged to the hon. Member for Itchen (Dr. King) for what he said about subsection (3) and I will seek to respond to the invitation of the right hon. Member for Battersea,
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    North (Mr. Jay) to expound the Clause as a whole.
    The Clause seeks to make four separate changes in the Vehicles (Excise) Act, 1949. In subsection (2) to which I referred briefly in an earlier speech, we are removing what is surely an anomaly. There are certain preferential rates of duty for tower wagons, but these are confined under existing legislation to tower wagons used for the purposes of an electricity undertaking, a gas undertaking or an electric transport undertaking.
    It emerged that other tower vehicles of a similar character, used, for instance, by local authorities, did not enjoy these rates. There seemed to be no reason that they should not, and subsection (2) simply brings all wagons of a similar character into line for duty purposes.
    Mr. Jay: The right hon. Gentleman says that particular types of wagon enjoy a preferential rate. In comparison with what?
    Mr. Brooke: If the right hon. Gentleman refers to the Fourth Schedule of the 1949 Act he will see the various rates of duty listed. The rates of duty are preferential in the sense that wagons of this special character, if caught for the normal provisions of the Act, would suffer tax at an unfair rate. This is precisely what happened with the concrete mixers.
    The hon. Member for Itchen has largely explained subsection (3). He spoke of a deputation which he led to the Ministry of Transport and Civil Aviation. Not long after I became Financial Secretary to the Treasury, I had the pleasure of receiving a deputation from the users of mobile concrete mixers. We came to the conclusion that an unfairness existed here and that these mobile concrete mixers were caught unfairly by the existing provisions of the law and suffered tax at an unjust rate. That happened for technical reasons; I do not think it was ever intended in the first instance.
    As the hon. Member said, we are discounting the additional weight over 30 cwt. I am not suggesting that we have done everything which all those interested would have liked us to do, but I hope that we have found a fair solution to a problem which has caused a considerable feeling of injustice for some time.

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    Subsection (4) enables my right hon. Friend the Minister of Transport and Civil Aviation to revise the Road Vehicles Part-Year Licensing Order, 1939. The usual provision to give powers of revision was for some reason omitted from Section 11 of the Vehicles (Excise) Act, 1949, with the result that it is impossible to revise that Order. It is desired to reexamine the part-year licensing arrangements with a view to simplifying their administration, and the purpose of subsection (4) is to pave the way for that to be done.
    Subsection (5) deals with the fourth separate matter. It is to clarify the law relating to prosecutions for offences under the 1949 Act and under regulations made under that Act in view of certain doubts recently expressed as to the effect of the Customs and Excise Act, 1952, on the proceedings. It has been held by some courts that no proceedings under the 1949 Act or the regulations can be commenced unless authorised by the local authority and instituted in the name of an officer of that authority. There has also been some uncertainty as to how far the special time limit prescribed in the Customs and Excise Act for instituting the proceedings —that is a time limit of three years— applies. This is intended to clarify the position.
    The effect of subsection (5), which relates to England and Wales only, is that only proceedings arising under Section I3 and Section 15 (1) of the 1949 Act need be authorised by the local authorities, and such proceedings can be instituted by the police with the consent of the local authority. The time limit for instituting those proceedings will be three years. All other offences under the Act or the regulations may be prosecuted by the police in future and the normal time limit of six months will apply. Subsection (6) makes, shall I say, appropriate arrangements of a similar character for Scotland.
    I am not suggesting that there is any thread of continuity between these four separate purposes except that they are all Amendments, and I hope that I have convinced the Committee that they are wise Amendments, of the 1949 Act.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 5.—(EXEMPTIONS FROM CUSTOMS DUTIES OF FILMS PRODUCED BY THE UNITED NATIONS.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mrs. Eirene White: I am sure that hon. Members on both sides of the Committee will have sympathy with the general intentions of Clause 5. We all wish that there should be no penal taxation upon the products of the United Nations or any of its Specialised Agencies. I should like the Financial Secretary, however, to be good enough to explain one or two points later. I presume that the Specialised Agencies are primarily the World Health Organisation, the Food and Agriculture Organisation and U.N.E.S.C.O.; and the right hon. Gentleman may enlighten us as to whether there are any others which are responsible for making
    "…films, film-strips, micro-films or sound recordings …"
    We should also like to know just exactly what is meant by the word "produced" because, in relation to films, "production" is a technical term. I should have thought it unlikely that the United Nations would itself produce films. is the Financial Secretary perfectly satisfied that the drafting of this Clause is entirely accurate and completely fulfils the intentions of the Government? Might it not be wiser to make some proviso that these films may have been produced either by the United Nations—which, I repeat, I think is improbable—or to the order of one of the Specialised Agencies?
    It seems to me very likely that Specialised Agencies would not themselves embark on film production but would probably engage some specialist firm to make the film for them. It is because we are in general sympathy with the aims and objects of the Clause that we should like to be quite certain that those objects will be achieved by the Clause as at present drafted. Perhaps the right hon. Gentleman can assure us that this point has been taken fully into account.
    The remitting of any duties that might be chargeable under Part I of the Import Duties Act, 1932, seems to be in line with certain provisions already contained in that Act. I find on reference to that Act, which imposes a general ad valorem duty

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    of 10 per cent. on goods imported into this country, that it had a list of exceptions which included scientific films. Therefore, the additional exemption which we are proposing to grant in this Clause would be in line with the policy already adopted in these matters.
    Paragraph (b) of the Clause looks rather startling when read for the first time, and I confess that I read it two or three times before it was made clear how it was that
    "…silk or artificial silk or articles made wholly or in part of silk or artificial silk;"
    came into it. I even suspected a misprint. However, I am assured that the reason why that particular provision is made in the Clause is that the recording, the sound track accompanying a film, is in some cases made of magnetic tape consisting of a thin strip of cellophane coated with ferrous oxide, which is technically within the definition of artificial silk straw.
    I make no claim to scientific accuracy in this definition, but I obtained it on what I believe to be excellent authority. I understand that, because of that, we have to discuss the duties chargeable on silk or artificial silk, I hope we shall be strengthened in this view by the no doubt far wider scientific knowledge of the Financial Secretary on this matter, and perhaps he may be able to correct my definition at certain points.
    When I studied the Safeguarding of Industries Act, 1921, to see how far it applied, that also seemed to deal with the artificial silk aspect of this Clause, and it seemed to me that one phrase in that Act may perhaps be applicable, because it states
    "No duty shall be charged under this Section in respect of the compound article if the compound is of such a nature that the article liable to duty has lost its identity."
    That seems to be most appropriate to a Clause dealing with artificial silk and concerned with microfilms and sound recordings.
    Having made all these researches it appears, as far as my limited knowledge takes me, that this Clause is one which should be supported. Before we part with it, however, I should like to ask the Financial Secretary if he is perfectly satisfied, not only with the definition of production, but also that these films, etc
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    must be of an educational, scientific or cultural character.
    I want to mention here one of the points in which I happen to be interested; I have a private interest, not a financial one, I assure the right hon. Gentleman, in the making of films produced specially for children. There have been difficulties, I understand, with certain countries, including countries in the Commonwealth, as to the status, for the purpose of Customs Duties and the like, of films which are made for children, but which are, in fact, feature films. There have been disputes whether those films can be called educational—they are obviously not normal scientific films—or whether they can be strictly defined as cultural.
    This is a serious point. We have in this country the Children's Film Foundation. It has done pioneer work in films which are intended for children but which are quite definitely feature films, films which, nevertheless, may have a very important effect on the outlook of the children to whom they are shown. In fact, on another occasion, we had some discussion concerning the value of that particular type of film.
    I should be glad if the Financial Secretary would make quite certain that if, for example, U.N.E.S.C.O. decided that it was desirable to sponsor the production of a feature film intended for children, it would be covered by the definition in this Clause. I hope that, if that particular point has not been looked at, and quite possibly it may not have been, we may be certain, before passing this Clause, that such films would in fact be exempted from the duty, as are the other film materials which we are discussing tonight.
    10.0 p.m.
    Mr. H. Brooke: I am obliged to the hon. Lady the Member for Flint, East (Mrs. White) for her kindness in welcoming this Clause in general, and I will endeavour to reply to her questions.
    This Clause arises from an Agreement sponsored by U.N.E.S.C.O., which was signed by the Government, as she probably recollects, in November, 1950, and was ratified in March, 1954. I say, frankly, that at first we thought that no further legislation would be required to enable the United Kingdom to fulfil its obligations under the Agreement, but it was because we found that that was not

    1009
    so, and that it would be essential definitely to free these United Nations goods from certain Customs duties, that we are bringing forward this Clause. I hope that, when I have answered her questions, the hon. Lady will agree that it is not only desirable, but non-controversial.
    The hon. Lady questioned the words "produced by". I am not a technical man on any of these matters, but I would draw to her attention the fact that what the Customs will do, under this Clause, is to ask the importer for a certificate, issued by the United Nations or one of the Agencies, to the effect that the goods have been so produced. It will be for the United Nations or the Agency to give that certificate. We are acting here, so far as we can, in accordance with the Agreement, and we are seeking to do no less than the Agreement requires of us.
    Mrs. White: I am sure the right hon. Gentleman will understand that the point here is that this Clause might be improved by adding certain words, to make it clear that production might have been undertaken directly by the United Nations or by one of its Agencies, or to the order of, sponsored by or on behalf of the United Nations or one of its Agencies. I would suggest that, before we reach the Report stage, some such Amendment might be considered. Having the technical term, "to produce" a film, and no more, the Clause is not very clear as drafted.
    Mr. Brooke: I am not sure whether the hon. Lady has refreshed her memory of Command Paper 8171, and the terms of the Agreement itself. What we are seeking to do is to ensure that the Clause, as drafted, will fully enable us to carry out the purposes of that Agreement. I will certainly examine the point she has made, but I think I can assure her, in advance, that this provision will enable us to do everything which we, like the other nations which have ratified the Agreement, have undertaken to do.
    The hon. Lady spoke of the various duties mentioned under the headings (a), (b) and (c). Those are, in fact, the various types of Customs Duty which might otherwise be chargeable. There is no suggestion that any, or all, of them would be chargeable in a particular case.
    1010
    We are, in effect, freeing those imports from any of those duties.
    The hon. Lady asked, finally, which were the Agencies mentioned here. If the Committee will forgive my reading out the list, I will answer her question by saying that the Clause will cover the I.L.O., the Food and Agriculture Organisation, U.N.E.S.C.O., the International Civil Aviation Organisation, the International Bank, the International Monetary Fund, the World Health Organisation, the Universal Postal Union, the International Telecommunications Union, the World Meteorological Organisation, and the Inter-Governmental Maritime Consultative Organisation.
    Mr. H. Wilson: Does this mean that the right hon. Gentleman is excluding from this list the United Nations Children's Fund and the Economic and Social Council?
    Mr. Brooke: What I have read are the actual Agencies covered by this Agreement. This is not something of our own which we have thought up. What we are seeking to do is to attain legislative sanction from Parliament for carrying out our obligations under a United Nations Agreement.
    The hon. Lady asked whether certain films would be included. Again, I would refer her to the fact that this certificate is the test. if the United Nations or the Agency give the certificate that the goods have been so produced, and if they are of an educational, scientific or cultural character, then they will receive free admission. It will not be for the Commissioners of Customs, still less for the Financial Secretary to the Treasury, to reach a decision. It will be for the United Nations or for the Agency to decide that.
    Mr. J. T. Price: Can the right hon. Gentleman give me an assurance that the feature "Movie Museum," now being televised by the B.B.C., has not been granted one of these certificates? Many of us regard that feature as absolute rubbish on which good British pounds are expended.
    Mr. Elwyn Jones: I wish to ask one question about the Clause before we part with it. It receives the enthusiastic support of this side of the Committee, but I am concerned to know why it has not been introduced before

    1011
    now. This, apparently, is a Clause intended to give legislative effect to our obligations under an international Agreement into which the Government of this country entered, as I understood from the Financial Secretary, as long ago as March, 1950.
    Why has this not been done before? What has been done in the meantime? Does it mean that in the last five or six years the people of this country have been denied these films by reason of Government inaction? This is not the first time that this Government have been guilty of most disgraceful delay in giving legislative effect in the House of Commons to international conventions to which they have been signatories.
    I see sitting on the Front Bench opposite the hon. and learned Solicitor-General, to whom I have had occasion to complain about this reluctance of Her Majesty's Government to give legislative effect to international conventions such as, for instance, the prisoner-of-war convention. Here is another illustration of just that very kind of thing. This is an instance of the British Government becoming in March, 1950, parties to an Agreement which calls upon them to give to the United Nations the facilities now provided for in Clause 5. It takes six years to do it.
    When one thinks of the kind of things on which the time of this House has been occupied in the course of the last four or five years it is astounding that a valuable provision of this kind should have been sat upon by a mountain of ineptitude sitting on the Front Bench. Having singled out the hon. and learned Solicitor-General earlier, I ought to dissociate him from that purple passage because there are other larger mountains and more monumental personifications of ineptitude—
    The Deputy-Chairman: They are not in this Clause.
    Mr. Jones: With respect, Sir Rhys, although they are not in the Clause I think that if there had not been this quintessence of inaction during the last five years, the Committee would not now be troubled with this discussion on the Clause, but that we should have had it years ago. Subject to those observations,
    1012
    I welcome this Clause and only regret that it was not introduced much earlier.
    Dr. Barnett Stross: I accept your Ruling, Sir Rhys, that these mountains of ineptitude are not in the Clause. However, in the Clause we are dealing with the Commissioners of Customs and Excise and I want to point out that here I think for the first time indirectly they are disregarded and put aside. For they are to receive here apparently, without any power to criticise, a certificate issued by the United Nations or one of its Agencies to the effect that the goods which have been produced are of an educational, scientific or cultural character.
    Are we to assume that the Commissioners have no power to examine that certificate, or to see whether the goods that are sent are of a scientific, educational or cultural character? In all other respects we pay some tribute to the Commissioners of Customs and Excise. Indeed, we allow them to tell us whether a matter is even partly educational for, if it be so, they remit certain taxation connected with plays, to give an example.
    Why, in this case, are these experienced people not to have some oversight as to whether the goods which are to be introduced into this country have some merit or have no merit? I should be grateful to have from the right hon. Gentleman the reason why there is this remarkable change, which might well be thought by the Commissioners themselves to be something of an insult to them.
    Mr. H. Wilson: I hope that the right hon. Gentleman will answer my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), but I want to put one other point to him before he does so. When I intervened a few moments ago to ask why certain United Nations Agencies were not included in the fairly lengthy list he read out, the right hon. Gentleman said that it was not a matter within the sole control of Her Majesty's Government, but that the organisations represented the list agreed in the international convention to which he referred.
    What we should like to know is why that list is not wider. Is it because Her Majesty's Government acted as a drag on the proceedings of the convention? I mentioned two organisations which it would have seemed reasonable to have

    1013
    included in the list. The Economic and Social Council has a very important duty as a United Nations Agency. It has the duty, among other things, of supervising the work of all the Specialised Agencies on the economic side, including the I.L.O., the F.A.O., the W.H.O., and U.N.E.S.C.O., so I am surprised that it was not in the list read out by the right hon. Gentleman. It may be, however. that he would regard the Economic and Social Council as part of the United Nations organisation itself, and not as a Specialised Agency.
    I asked about U.N.I.C.E.F. rather specially because, as many hon. Members will be aware, it was under the aegis of that organisation that a most remarkable film was produced. It was produced by, commissioned by, directed by and starred Danny Kaye. It was called "Assignment Children". It showed the work of the Children's Fund all over the world and Danny Kaye, who, in addition to being a great entertainer, is also a man with a passionate social conscience, gave up a great deal of time to further the work of the fund in many of the underdeveloped areas of the world where the work of that fund was most needed.
    That film is already in this country, so it may not be involved in this Clause, but it has enormous propaganda value for bringing home to the people of the more advanced nations the needs of the less advanced nations, and what can be done under the agency of such organisations as U.N.I.C.E.F.
    I should be grateful if the right hon. Gentleman would agree to look at the point—I will not press him for an answer tonight—to ascertain why U.N.I.C.E.F. is not included in the list of organisations which he read out and whether on Report stage, even if it is not the subject of an international convention, it can be added to the list that he has in mind.
    10.15 p.m.
    Mr. H. Brooke: I am most anxious to help. I did not read out a list of organisations in the Bill. I read out a list of what I believe are the Specialised Agencies of the United Nations. What Clause 5 does is to repeat in that respect word for word a phrase from the Agreement. If other Specialised Agencies are set up or if other bodies become Specialised Agencies or fall to be treated as part of the United Nations, they will
    1014
    have the benefit of Clause 5. The power there rests with the United Nations. If we pass the Clause, we shall be saying that we shall be content for the United Nations or any of its Specialised Agencies or bodies which become Specialised Agencies to have the benefit of the Clause.
    I would say, in reply to the hon. and learned Member for West Ham, South (Mr. Elwyn Jones), that we are not really as bad as we are painted. It is true that the Agreement was signed in 1950. it was ratified in March, 1954, in the sincere belief that we had full legislative powers to implement it. It has been found in operation that, though our existing powers allowed of free entry for goods of this kind imported for scientific research or the advancement of any branch of learning or art, they did not extend to cover such goods if they were imported to be used for any purpose which was substantially a commercial one. Some of the United Nations goods coming in, particularly films, are often intended for commercial use, and it was to make sure that we were, as it were, playing perfectly fair by Parliament that we brought this provision forward.
    We have not been charging duty on these imports up to now. We have been making an extra-statutory concession in their favour, but the Select Committee on Public Accounts does not like extrastatutory concessions. Therefore, I should have thought that we were doing precisely what the Select Committee would have wished in seeking legislative approval for this action.
    Mr. H. Wilson: I should be glad if the right hon. Gentleman would agree to look at the point a little further. He has answered my question about U.N.I.C.E.F. by saying that the list which he read out was not necessarily exhaustive but was, as he understands it, the list of all the existing Specialised Agencies, and that if new Specialised Agencies are created, they will automatically be added to the list. For some reason, U.N.I.C.E.F. was not included in the list. It may be that U.N.I.C.E.F. is not technically regarded as a Specialised Agency, but is looked upon as just a humanitarian fund run under the aegis of the United Nations.
    I should be grateful if, between now and Report, the right hon. Gentleman would look at the matter to ascertain

    1015
    whether the film produced under the aegis of U.N.I.C.E.F. can take advantage of the Clause, and, if not, whether he can widen the Clause, even if he is going beyond the convention, so that such a valuable purpose might be served.
    Another closely related point is that the Clause is limited in its operation to films which are of an educational, scientific or cultural character. I am not sure whether the film "Assignment Children" would be regarded as necessarily educational or cultural or scientific. It might be regarded as more humanitarian or even propagandist for one of the great works done by the United Nations.
    Whether that can be regarded as educational may be debatable. Consequently, it would be useful if, between now and Report, the right hon. Gentleman would look at the matter again and ascertain whether a film of that kind is included both in relation to the Agency covered and in relation to the rather narrow definition which limits films to educational. scientific and cultural ones.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 6.—(CHARGE OF PURCHASE TAX ON CONVERSION OF GOODS VEHICLE TO PASSENGER VEHICLE OR THE LIKE.)
    Mr. H. Wilson: I beg to move, That the Chairman, do report Progress and ask leave to sit again.
    Can I make it clear that, in doing so, I do so principally in order to ask the Chancellor of the Exchequer if he will tell us his intentions about this sitting of the Committee? I am sure that he will agree that we have made really remarkable progress for the first day 'of the Committee stage of the Finance Bill. I do not know whether he can tell us if any other Finance Bill since the war has made so much progress in its first day in Committee. That shows the very constructive and co-operative attitude of the Opposition.
    This is a very long and technical Bill, and had we wished to hold the Chancellor up—and I understand that Oppositions in the past have sometimes done so on Finance Bills, although I cannot recall any recent case—it would, I am sure the Chancellor will agree, have been possible
    1016
    to have put down 200, 300 or 400 Amendments to the Clauses which we have so far discussed, none of a filibustering character, but to subject the Bill to a thorough and careful examination.
    We have not done that, but have limited ourselves very severely in the number of Amendments which we have put down. I am sure that the Chancellor will agree that the debates have been very valuable and the sort which he would welcome, even if he does not agree with all that we have said in them. He will also be aware that many more Amendments to the 36 Clauses of the Bill have been put down by his own side of the Committee than by ours, which shows very real restraint and austerity on our part. I am not complaining about hon. Members opposite for doing that. They have the same time-honoured duty as we have on all sides of the Committee to subject a Bill of this kind to very careful scrutiny.
    I am sure that the Chancellor will agree that both in respect of the number of Amendments which we have put down and the speed with which we have disposed of them, remarkable progress has been made today. But for debating a Tory Amendment on cider and perry, we should have made even speedier progress, although the arguments produced by the hon. Member for Rye (Mr. Godman Irvine) convinced my hon. Friends, against our previous view, that it was necessary to divide on it. We had not thought that that would be so, until we heard the argument deployed.
    That being so, I wonder whether the Chancellor will tell us how much further, if at all, he intends to go tonight. Hon. Gentlemen opposite are getting a little jaded, and I see signs of impatience, even in the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who is usually very patient on these matters, perhaps because he has a powerful speech on Surtax to make on an Amendment standing in his name. I am sure that the noble Lord will agree with me that so important a debate as he intends to initiate—with what prospect of success, none of us can forecast—it would be better to begin when Members are feeling more fresh in the early afternoon. I should therefore be grateful if the Chancellor could tell us what progress he expects to make tonight.
    Mr. H. Macmillan: I am very grateful to the Committee for the progress which has been made. We have dealt with some very important Clauses in a very agreeable atmosphere. I should have thought that it would have been for the general convenience of the Committee to have discussed Clause 6 tonight and perhaps also Clause 7. I think that Clause 8 is one to which the Opposition attach a good deal of importance, and I think that by the genial and friendly arrangements so often made between Governments and Oppositions it will now be possible to get in order a certain number of Amendments which would otherwise have been out of order and which would therefore have circumscribed debate. If it is possible to get that sort of Amendment in order and have a good debate, it is very much better to do so during the Committee stage. I hope, throughout the Bill, to consult the right hon. Gentleman upon those purely technical points which tend to curtail debate. in order to see how we can best assist the desire to debate these matters. I rather hoped that we might continue and see whether we could at least finish Clauses 6 and 7, with a view to making a start upon Clause 8 on Thursday.
    Viscount Hinchingbrooke: On my own behalf and that of certain of my hon. Friends I should like to say that we shall, of course, be prepared to continue the debate so far as the wishes of the Government extend, but there is a possibility that it might be more convenient to the Committee if the whole of Clause 7 were taken, and not simply the Amendments, leaving the Question, That the Clause stand part of the Bill, to be discussed on Thursday afternoon. We shall be prepared to sit for as long as the Government desire, upon the understanding that the whole of Clause 7 is taken.
    Mr. H. Wilson: I thank the Chancellor for what he said about the Amendments to Clause 8, and his general willingness to consult the Opposition if any further difficulties should arise. It may not be within the knowledge of all hon. Members that upon a narrow technical point certain Amendments to Clause 8 appeared to be out of order. The right hon. Gentleman has said that if similar points arise which are outside the fault or responsibility of any of us, he will be glad to be
    1018
    as helpful as he is going to be upon Clause 8.
    With regard to further progress being made this evening, I would point out that the noble Lord the hon. Member for Dorset, South (Viscount Hinchingbrooke) has put down a very important Amendment, and there is also a series of Amendments to Clause 6 which are of considerable importance. That Clause is a very lengthy one, consisting of three pages of the Bill. It is a steam hammer to crack a shooting brake.
    I appreciate that many of the Amendments may not be called, but I am quite sure that my hon. Friends who are responsible for them will wish to have some discussion upon them on the Question. "That the Clause stand part of the Bill." If the Chancellor wants to get Clause 6 tonight I submit that it is reasonable to suggest that we should do our best to co-operate with him—although I cannot give any undertaking on behalf of my hon. Friends, who feel very deeply moved on the subject of shooting brakes. Having said that, I hope that the Chancellor will not pursue the idea of going on with Clause 7. I would remind him —although I am sure he does not need reminding—that that Clause is an annual Income Tax Clause. For hundreds of years certain taxes have been voted annually, and the whole of our Constitution revolves round that fact. For over a century Income Tax has been the subject of an annual vote, and it would be constitutionally wrong to start a debate upon this important Clause at eleven or half-past eleven o'clock, when I am sure that hon. Members on both sides of the Committee want to approach the matter as objectively as possible and give it a full discussion.
    Since we spent one and a half hours upon a Conservative Amendment dealing with cider and perry I do not think that it is too much to ask that upon the Income Tax Clause—even apart from the noble Lord's interesting Amendment— we should spend considerably more than one and a half hours if we are to keep a proper sense of perspective. Although we shall decide this question as we go along, according to the progress made, I hope that the Chancellor will not press us to begin consideration of Clause 7 this evening. If he does so, it may take rather a long time before it comes to a conclusion.
    Mr. Rankin: The hon. Member for Dorset, South (Viscount Hinchingbrooke) has indicated that he is not prepared to accept the Chancellors' suggestion that we go on to the end of Clause 7 tonight.
    Viscount Hinchingbrooke indicated dissent.
    Mr. Rankin: I thought that the noble Lord made it clear that he did not want the Question, "That the Clause stand part of the Bill ", to be discussed tonight.
    Viscount Hinchingbrooke: The hon. Member is quite wrong. I suggested that it would be more convenient to the Committee if we either adjourned after disposing with Clause 6, or completed the whole of Clause 7. I thought that it would be a mistake to divide the Clause and take the Amendments now and debate the Question, "That the Clause stand part of the Bill," another day.
    10.30 p.m.
    Mr. Rankin: Does the Chancellor propose to accept the suggestion of the noble Lord?
    Mr. H. Macmillan: I am grateful for what has been said by the right hon. Member for Huyton (Mr. H. Wilson) and I suggest that we have a "crack" at the shooting brakes to see how quickly they go, and whether they get a good gear; and then see what happens to Clause 7.
    Mr. Jay: I agree with the noble Lord that it would be a great pity to split up the debate on Clause 7 into two parts. The inference I draw from that is that it would be unwise and inconvenient to embark on Clause 7 at all tonight. After all, it moves on to a totally different sphere, the discussion of direct taxation, which is quite separate from the considerations which we have been debating.
    I do not think that we want to debate so important an issue as the whole of Surtax and Income Tax at the tail end of a debate, when even the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) may be getting a little past his best. I hope that the Chancellor will consider the possibility of starting that quite separately.
    Mr. H. Wilson: I do not think we need discuss this matter much further. Perhaps we may now get back to Clause 6. I am in this difficulty, that if we feel that the debate is going too long it will be
    1020
    necessary to move what is sometimes called a dilatory Motion. Having exhausted my right to move to report Progress, I shall have no option, Sir Rhys, but to move, "That the Chairman do leave the Chair." I hope I shall not have to do that tonight, in view of the consequences which the Government have learned may follow from such a procedure. In view of what the Chancellor has said, I beg to ask leave to withdraw the Motion.
    Mr. Proctor: I believe that the Chancellor wanted to dispose of Clause 7 and my right hon. Friend the Member for Huyton (Mr. H. Wilson) wishes to end our discussion tonight after consideration of Clause 6. Would it be convenient for the Chancellor to indicate that he will accept the view of the Opposition and agree that we should end our proceedings tonight when we have discussed Clause 6?
    Question put and negatived.
    Mr. R. Gresham Cooke: I beg to move iu page 6, line 30, to leave out subsection (8).
    The object of this Clause is to remove a loophole in the law by which people are at present able to acquire a van, take out the sides and put in windows, and thereby turn the vehicle into an estate car and avoid the payment of Purchase Tax. We are all agreed that this loophole should be stopped, and the Customs and Excise officials are able to call on people to satisfy them that the law has been complied with. But subsection (8) provides that on the application form for a Road Fund licence a question may be put down relating to the enforcement of Purchase Tax. which is quite a new departure.
    The proposal contained in the subsection enables the form to be used for a purpose which is different from that for which it was originally created. The form is drawn up by the Ministry of Transport and Civil Aviation and is sent out by local authoritles for the collection of the licence money. A year or two ago the public were dissatisfied about a proposal to put a question on the form asking whether or not there was a radio on the vehicle and whether a licence had been issued for it. After certain discussions in this Chamber. that ques-

    1021
    tion was withdrawn from the form, because it was agreed that it was not a proper question to have on the form, and that there was probably no legal sanction for it.
    Therefore, I suggest that it is probably not right to have questions about Purchase Tax put on this form. We do not want any more questions than are necessary for the public to answer, and we do not want questions that are irrelevant to the Road Fund licence.
    Mr. Mitchison: I hope the Chancellor will not accede to this request. I am a little surprised that the hon. Member for Twickenham (Mr. Gresham Cooke) should move this Amendment, apparently wishing to have two forms, because one would not serve the purpose. It may be that there no statutory sanction exists. If that is so, that justifies the existence of the subsection which we are discussing. We are at present proposing to give statutory sanction. As for the merits of the matter, it seems to me a very proper matter to be considered, and for information to be given about on the form which is concerned with licensing and licence duty. It is quite true, of course, that there has not been any previous statutory sanction because there has not been any previous provision such as is sought to be introduced by means of this Clause.
    Speaking for myself and, I think, most of my right hon. and hon. Friends, I would say we see no reason whatever for the omission of this subsection, and we wonder what the fundamental purpose is in requesting its omission. Surely the hon. Member is as concerned as everybody else in seeing that proper and necessary information is given in cases where clearly there may be some difficulty in enforcing the provisions of the Clause if that information is not fully given.
    Mr. H. Brooke: I would certainly raise no such objection to the action of my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) in moving this Amendment and bringing the point before the Committee, though I must say to him frankly that I cannot hold out any hope to him that the Government could accept it. Subsection (8) appears to us to be essential for the administration of the scheme.
    What I have to do, I think, in making my case, is to assume that the general
    1022
    plan of the Clause is being accepted, because in subsection (8) we decide how we shall administer the new tax, if it is approved by the Committee. We considered this matter of administration and enforcement very carefully, we gave special thought to the position of the motorist, and we came to the conclusion that this was the simplest method of all, not only from the standpoint of the Customs and Excise authorities, who would enforce it, but from the standpoint of the ordinary car owner, too.
    One disadvantage in the situation hitherto as it has affected shooting brakes and so on has been the existence of a good deal of ignorance, or at any rate uncertainty, about whether the vehicle was liable to additional Purchase Tax or not. We are seeking to remove a flaw in the law. We want everybody to know exactly where he stands, and to have his eyes fully open to the various possibilities.
    I assure my hon. Friend that there is no intention of using the power given in subsection (8) to put upon the form difficult or confusing questions which will make the form harder to fill in or which may entrap the perfectly honest man who hates filling in forms, as most of us do. It will have the virtue of drawing the attention of everybody to the position as regards these vehicles, and may well save some people from unwittingly incurring liabilities. That is very much in the interests of all motorists.
    I hope that my hon. Friend will accept it from me that the new questions on the form will embarrass nobody except the man who may possess a vehicle on which he ought to have paid tax and has not paid tax. If everybody were scrupulously honest and fully cognisant of the law, we could save a good deal of trouble in many directions. If we could count upon everybody to know all the facts about Customs duties and to make truthful declarations to the Customs officers at the ports, it would never be necessary to open anybody's suitcase. In fact, as we know from experience, it is often necessary, because of the behaviour of a very small minority, to impose upon the vast majority some rather annoying little formality in tax matters.
    That is what is happening in this connection. It will be a very little formality, but I appreciate the desire of my hon.

    1023
    Friend to defend the honourable motorist from every additional nuisance and from additional form-filling. If he will examine the matter he will see that this provision is simply the easiest way in which the Clause can be enforced and the requirements of the law brought to everybody's attention.
    Mr. Reader Harris: If this is to be done—I do not agree with it being done—is it not desirable that a person shall not place himself unwittingly in the position of making a false statement on the form? Would it not be possible to provide a space in the log book to say whether or not Purchase Tax had been paid? If a man bought a van which was ten years old he could not possibly trace its history, because it would have gone through many hands. Would not the Minister consider an entry in the log book?
    Mr. Brook: I will examine that suggestion.
    Amendment negatived.
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. D. Howell: Some of my hon. Friends and I had a series of Amendments down to the Clause relating to the position of a small man who has his own garage, who builds a motorcar at the bottom of his garden, and then proceeds to use it in the races and trials in which motorists take part.
    We understand the Clause and support its principal intention, which is to catch the man who buys a van without paying tax and converts it into a shooting brake. No one thought, until we saw in print the implementation of the Budget proposal on this matter, that the Clause would be drawn so widely as to catch people who, because of their hobby, build themselves a motor car from scrap parts and race it for their own pleasure.
    Our Amendments were not called, for reasons best known to the Chair, but I appeal to the Chancellor to have regard to this matter and, if he is convinced by the arguments which we shall put forward, to produce a form of words on Report to eliminate from the effects of the Clause people who are just following their hobby.
    1024
    10.45 p.m.
    In the discussion on the Amendment which we had hoped would be called, we intended to say that anyone who built himself one of these cars from spare parts and later let it out for hire or for trade or business use should, of course, pay Purchase Tax upon it. We would all agree on that. It will be seen, therefore, that we are concerned with a specific point which could affect only a few hundred people but to whom the principle of whether they should be taxed upon their hobbies is nevertheless important.
    This is the first time, certainly within my memory, that any Government have proposed that Purchase Tax should be paid on the results of a man's hobby. The motoring organisations and periodicals which deal with motor racing have expressed themselves forcibly as being opposed to the Clause. Constituents of mine have written to me pointing out that in any event it would be almost impossible for the Customs to put the Clause into effect.
    One correspondent, who is a director, tells me that he bought the body of a car from a spare-parts dealer eight or nine years ago. He has been working on it in his spare hours ever since but he has kept no account of the time that he has devoted to the building of his special car. When modifications have occurred to him, he has added them. He has gone to expense in buying spare parts, while others he has made himself. In circumstances like that, when men have been working for years upon their cars, what genius from the Customs will fix the wholesale price of the vehicle, as must be done under the Bill? Surely it is an impossible task, even for the Customs to undertake
    There is the added complication that after years of building a car, having notified the Customs that he is taking it for trials or for racing, an enthusiast wants to modify it. People who go in for this sort of thing are fond of tinkering about and like to add bits or take pieces away from engines. The Customs people would be almost permanently in the garages whenever such cars were modified. Some interesting words on this aspect appear it the current issue of Autosport, which says:
    "The legal complications are endless, for who is to decide at what point the recon struction of an existing car becomes the making of a new one? Supposing one's Ford

    1025
    "Popular "suddenly sprouts a Lotus or Buckler frame, and then, in due course, appears with a Climax engine. At just what point does it become another vehicle?"
    Those are pertinent remarks in that periodical's leading article.
    This imposition is a tax upon the ingenuity of the people engaged in this hobby, and I think it is a wrong tax. Had it been in operation for some years, the Lotus firm, which is now one of our top-class firms in making racing and sports cars, probably would not now be in existence. The dollar-earning capacity of sports car firms has arisen from the ingenuity of men in a small way of business who have not been content to remain in the conventional mould but have gone out to do something better, and have done the thing which we in these Islands do perhaps better than anybody else, in using their ingenuity and skill to build a motor which no one else has produced.
    One would have thought that ingenuity was something that ought to be welcomed, especially by the present Chancellor, and that is one reason why I am very hopeful that the right hon. Gentleman will realise that he is putting a tax on hobbies. He is crushing incentive and initiative, and I trust that he will give some thought to dealing with the matter during the later stages of the Bill, if he has not done so already.
    My hon. Friend the Member for Lowestoft (Mr. Edward Evans), who is not here at the moment because he went to a dinner held downstairs in connection with trawling, but who thought that he would be back in time for this debate. has authorised me to say that his son has been busy building himself a sports car and a yacht. The same sort of initiative was needed in both cases. Apparently he will not be called upon to pay Purchase Tax on the yacht, but will have to do so on the motor car. That seems to be an anomaly. I put that forward not, of course, because I wish to suggest to the Treasury that Purchase Tax should be placed on the yacht, but to illustrate the anomaly.
    If we are to have Purchase Tax Clauses drawn so widely in order to catch everything—which is a new principle in the life of this country—where is it going to end? If this principle is extended, the man who does a bit of carpentry as a hobby and who buys a
    1026
    beautiful piece of oak with which to make himself a dining table will have the Customs coming along and assessing him for Purchase Tax on the table. The same will apply to the electrician who builds himself a radio or television set; and, to take an extreme case. even the housewife who buys two ounces of wool with which to knit a pair of socks would be evading Purchase Tax, if this principle were extended.
    I hope that the Committee will agree that it is quite wrong, in a legitimate Clause of this kind, designed to catch people who endeavour to evade the payment of Purchase Tax, to clamp down so widely as to affect a few hundred small men who, as a hobby, build, from spare parts, at the bottom of the garden, a vehicle which they intend to enter for races or rallies for their own pleasure. In that spirit I hope that the Chancellor will have a heart for these people who have contributed a great deal to the building up of the sports car industry in the country and who, I believe, want to play their part by using their initiative, and who certainly feel very strongly indeed about the action of the Chancellor in this connection.
    Sir Ian Clark Hutchison: Although I welcome intention of the Clause, I am worried about its effect on those who may build cars as a hobby. Only this morning I received a letter from a constituent of mine who is connected with the engineering industry. He states that in his spare time he has, during the past nine years, devoted himself to both designing and building a car which is now approaching completion. He is very upset to think that if this Clause is passed in its present form he may be liable for a considerable amount of Purchase Tax.
    It seems wrong that a man who is not wealthy, and who has over a period of years devoted his spare hours to useful creative purposes associated with his own industry, should be penalised in this way. Without at this late hour going into further details, I would ask the Chancellor of the Exchequer to see whether he cannot find some method whereby those who design and build cars for themselves in their spare time as a hobby could be exempted from the provisions of the Clause.
    Mrs. Jean Mann: At this late hour I feel some trepidation about entering into a discussion on the construction or adaptation of vehicles into motor cars, and especially in doing so in an assembly in which I am surrounded by male Members. I imagine that some of those hon. Members might think that scooters would be more in my line, but there are one or two points about the Clause which I should like to put to the Chancellor. They are, I suggest, important points and they come from a constituent of mine who is very enterprising, and who has made a great success of his business, which is not that of building motor cars.
    Building "specials" has been his hobby, and he tells me that this Bill will effectively stop "specials" building and, in the long run, will adversely affect our export trade in mass-produced cars. Hon. Members may think that that sounds somewhat far-fetched; but my constituent, in whom I have great faith, says that most real "specials" are built because production cars do not incorporate what the "specials" builder wants, and that when the "special" beats the production car in competition, the big makers take notice and incorporate the "special" ideas in their cars.
    My constituent has had a number of his ideas incorporated in Air Force equipment. He says that the number of "specials" made is comparatively insignificant and the revenue from tax on them is negligible. They are made by enthusiasts who have enough faith in their ideas not to be put off by the very considerable labour and "know-how" required.
    I think that hon. Members will all sympathise with the spirit which laboriously plods on in the pursuit of knowledge; an inquiring mind in the medical laboratory, or the scientific laboratory, or the engineering workshop, is very welcome, and especially do we welcome that inquiring mind which goes on after midnight when most of us are in bed. [Interruption.] I know that we are sometimes not in bed at midnight, but hon. Members do not stay here because they wish to do so.
    My constituent says that the big makers are too busy making money to do much that is original, to go in for the "off the
    1028
    beaten track" type of experiment. They, he says, will deny this, but it is true. Perhaps the Chancellor is going to kill those who lay the golden eggs. By way of example, my constituent tells me that no production car yet has what is known as a De Dion rear axle—and perhaps I should explain that, as I am acquainted only with scooters, I cannot say what that is; but during the last year or two, "specials" with De Dion rear axles have proved their great superiority so that, in one, or at most, two years, there will be production cars so fitted.
    The big makers will then be telling us how much better is that type of layout. There sounds to be some good sense about that, but what the big makers will not tell us is that they have "pinched" the idea from the "specials" builder after he had proved its worth and ironed out the snags from it by bitter experience.
    My constituent says:
    "If Purchase Tax is levied on specials. it will kill the craft stone dead."
    I do not think right hon. Gentlemen opposite would wish to contemplate that. He goes on:
    "…the car industry will lose its best source of worthwhile improvements which will be so necessary to meet competition in the export market."
    Then the following statement is made:
    "Very poor cars are good enough for the home market—sales prove that—but much better cars will be required to hold their place abroad …"
    11.0 p.m.
    I think it will be agreed that my constituent has made a very good case for the exploring, adventurous spirit of British men in this sphere. The Chancellor will know whether it is worth his while to kill this venturesome spirit, which may in its own way contribute very greatly to the quality and export value of our cars.
    Mr. Anthony Kershaw: I congratulate the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) upon the very excellent technical knowledge which she displayed of the motor industry. In the Army I learned just enough to know that the thing to do was not to open the bonnet of any motor vehicle.
    I also hope that my right hon. Friend will find an opportunity to reword the Clause in such a way as to make it

    1029
    possible for the amateur who wishes to pursue a hobby to do it without attracting Purchase Tax. The terrain in my constituency on the edge of the Cotswolds might be regarded by some as a most disagreeable place for driving, but a lot of young men and women like to drive up and down the hills in cars which they themselves make. I am certain that it cannot be the intention of my right hon. Friend to make that pastime more expensive than it is at the moment. Surely the amount of revenue which would be forgone by an alteration permitting individuals, without altering Purchase Tax, to make these cars in their own garages and play with them, would be very small indeed.
    I feel certain that there are very few hon. Members whose hearts do not throb a little at the sound of a very ancient Bentley. Even if my right hon. Friend is among such people, I shall think very little less of him than I do now. I hope that he will be able to alter the Clause in the way in which the hon. Member for Birmingham, All Saints (Mr. D. Howell) suggested.
    Sir Robert Boothby: I think it is extremely undesirable that anybody should build any experimental or special cars in their back gardens out of old parts with De Dion axles, which were all the rage in 1902 but. as far as I know, have been obsolete ever since.
    The whole of this project is fraught with danger. Our roads, which are in all conscience small enough in relation to the traffic which they have to carry, were never intended to be laboratorles for experiments—explosive experiments, according to the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) —of the kind that are now envisaged by hon. Members on both sides of the Committee.
    The whole question opens up a hideous prospect of danger to everybody concerned, and I hope that my right hon. Friend will stand absolutely firm in the interests of the safety of the public.
    Mr. T. L. Iremonger: I do not know whether I dissociate myself more vehemently from my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby) or the hon. Lady
    1030
    the Member for Coatbridge and Airdrie (Mrs. Mann). I think that my hon. Friend the Member for Aberdeenshire, East is absolutely wrong, but I should like a little more specifically to dissociate myself from what the hon. Lady said.
    The hon. Lady went too far. The case could not have been presented more admirably than by the hon. Member for Birmingham, All Saints (Mr. D. Howell). In what we are asking my right hon. Friend to do, we must not go as far as the hon. Lady suggested. The distinction which we must make is that she asked him to exempt people who will try to make money from their enterprise.
    Mrs. Mann: No. That is not the Amendment.
    Mr. Iremonger: The hon. Lady was asking in her speech that those people who made use of their contraptions commercially should be exempt.
    Mrs. Mann: No. Only for their own use.
    Mr. Iremonger: In that case, I am entirely with her, but I got the impression that these people were promoting some form of commercial enterprise. I am glad that she has had the opportunity of clearing up what she meant.
    I want to add my plea to that made from both sides of the Committee, with one notable exception, and to say that I hope that my right hon. Friend will bend his mind to this. Although we can see the virtue in the Clause and its general intention, it is surely not intended to penalise people who make their own cars. It would not be practical and it would be extremely difficult to catch them. They are making these things entirely for themselves and not to sell. In trying to put Purchase Tax on such enterprise we are introducing a new and quite wrong principle into the fiscal system.
    I should like my right hon. Friend to give an assurance that between now and Report he will try to find a way of amending the Clause, so that when we consider it on Report we will find that the Government have put forward an Amendment.
    Mr. Reader Harris: I should like to lend my support to what has been said from both sides

    1031
    of the Committee. I have in my constituency one or two young men who make up these cars in their back gardens and garages. Any one of them may be another Mr. Rolls, another Mr. Royce, or Captain Bentley. It would be a great pity if the Government did anything to stultify their initiative and enterprise. On more than one occasion in the last few weeks I have had to say that I deplore the way in which the Government appear to be playing into the hands of the big combines and the big concerns. I said on another Bill that we should do nothing which stops little men starting up in business.
    How many cars would be on the roads today if anybody who wanted to invent a car in the past had had to fork out £200 in Purchase Tax the moment he put four wheels on it? The Clause says:
    "Where a person, whether registered or required to be registered or not, makes a vehicle to which this section applies …purchase tax shall be charged on the wholesale value of the car unless he makes it in the course of a business which ordinarily includes the manufacture of cars."
    There must be many young men who start to knock up a car in their garages and do not know, when they begin, whether it will develop into a business or not. They try it out. They do not know whether it will become a commercial proposition. Perhaps it will not. If it does, it is only right and proper that the moment they sell cars Purchase Tax should be paid. I am anxious that young men should not be stopped from experimenting in these early stages. despite what my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby) has said.
    My hon. Friend deplored the increase in the number of cars. Somewhere in somebody's constituency is a young man inventing a car which goes along the road and which, when it gets to a busy crossroads, does not rely on a fly-over or tunnel, but shoots out helicopter blades and jumps over it. Is he to be stopped?
    Sir R. Boothby: Yes.
    Mr. Harris: I would hope that such a person was making a useful contribution. But if there is any such young man, inventing such a vehicle, I would lay a bet that the moment he gets it on the road there will be a chance that the then Chan-
    1032
    cellor of the Exchequer can whistle a Clause into his next Finance Bill putting a tax upon aeroplanes, so that the young man will be caught anyway. This seems to be a great pity. I therefore hope that the Chancellor will import some words into the Clause at a later stage to make sure that such persons are not penalised.
    The Clause provides that a shooting brake or van which has not had Purchase Tax paid upon it when bought will be subject to that tax if it is altered by having windows put into it. I should have thought that such a provision ought not to apply if the vehicle is, say, more than ten years old. I can appreciate that it is reasonable that a person buying a new van should pay tax immediately he puts some windows into it, but in the case of a van which is already old I should have thought it unfair to ask that tax should be paid.
    I must declare an interest in this matter, because I recently bought a van from the Post Office. It may not be generally known that Post Office vans are sold automatically after ten years. This van is old, and a good deal of money has been spent on getting it into running condition. It seems to me to be an imposition to ask for Purchase Tax to be paid in respect of such a vehicle if one puts windows into it.
    Mr. Jay: I think we should all want to impose tax upon a person who, simply to avoid tax, buys a van and converts it into a car, but I think that all hon. Members, apart from the hon. Member for Aberdeenshire, East (Sir R. Boothby)with whom I usually agree—want to exempt from tax cars made by people in their own back yards, out of parts which they have somehow assembled. I wonder whether it would be possible to grant exemption from tax if two conditions are fulfilled. I will put this proposal in common sense rather than legalistic terms.
    I suggest that a car should be exempt from tax when, first, it is converted or adapted from something which was not itself a vehicle before the adaptation process was begun and, secondly, when, having been made, it is used simply for the personal purposes of the maker, with the implication that if it were afterwards sold it would be eligible for tax. I wonder whether it would be possible to work out a solution upon those lines, which would get us out of our difficulty.
    Mr. H. Brooke: The Question under discussion is, "That the Clause stand part of the Bill." Until we came to the speech of my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris) I thought that very little would be said about the main purpose of the Clause. The hon. Member for Birmingham, All Saints (Mr. D. Howell) quite reasonably sought the opportunity to draw attention to thoughts which were in his mind when he put down certain Amendments which were not called. I can deal with the main question raised in the debate only if I go back and say a word about the original purpose of the Clause.
    As has been explained in earlier debates, at present there is a fault in the law, under which people who know its precise provisions can convert a commercial van type of vehicle into a private car type of vehicle without paying any Purchase Tax, provided that they carry out the work themselves, and that it is not done in the course of or for the purposes of a business. That results in identical cars being on the road, some of which have had to pay tax as commercial vehicles and some as private cars —the tax position depending entirely upon the question whether the owner has had the job done in a garage or has done it himself and, in the latter case, is able to establish that it is purely for private purposes and has no business purpose.
    This situation has given rise to a good deal of grievance. Local complaints have been made because people have found that they have incurred tax although their neighbours have managed to avoid it, either by luck or superior knowledge of the law. I have heard little criticism of the Government's decision to try to ensure that all conversions of commercial vehicles into private cars, or into the ordinary private car type of vehicle, shall be taxed in the same way. What hon. Members on both sides of the Committee have been raising is not whether that is right, but whether the Clause could be altered to exclude from liability to tax the man who builds, or remakes his car. It is interesting to see what happened under the law as it stood, when there was this flaw in it, this loophole.
    11.15 p.m.
    From being a loophole of which few people took private advantage it became commercially exploited. Firms which had
    1034
    understood the position made and sold conversion kits, with advice on the circumstances in which these kits could be used in a private garage or backyard so as to avoid liability to purchase tax. There was no moral obliquity in this. It has been suggested that there was evasion of the law, but everyone was acting honestly. There was a gap in the law, and they took advantage of it. There was no evil in it. There was confusion in people's minds. Now the Government, having closed one loophole, is being asked to leave open another. The main argument this evening has been in favour of the pure amateur who likes to play about with these things, to make experiments, and to produce a car of his own; but this very thing is followed up by some manufacturers, similarly to the manner in which the former loophole was used.
    Kits are sold by certain manufacturers for making into cars—kits of parts supplied by the manufacturers which can be 'bought ready for turning into cars. Anyone buying one of these kits who has been clever enough to produce a car has hitherto not been liable to purchase tax. I understand the sympathy which this case arouses, but I must point out the difficulties in what hon. Members have been asking the Government to agree to. These things soon become more than a hobby. Several hon. Members have suggested that a liability to tax should arise if the car were subsequently sold, or were used for anything but a private purpose. The latter case, however, is almost impossible to define. There is no question 'that if a car is sold it ought to be subject to Purchase Tax, because the secondhand car market is what is technically called, in the jargon we use, a tax-laden market. If you have a car which you can put up for sale which has not paid Purchase Tax you can get a price for it which is based on the assumption that it has paid the tax. You will thereby derive a 'profit which is roughly equivalent to the present value of the Purchase Tax which has been paid in other circumstances.
    I noticed that the hon. Member, in some of his Amendments, was seeking to introduce a further safeguard in suggesting that these motors should become liable to tax if no longer used for private purposes. If he will examine the matter further, he will see that it is extra-

    1035
    ordinarily difficult to decide where the words "personal purposes" end and the words "trade or business purposes" begin. Presumably, a person is using a car for personal purposes if he drives in it to his office, but if he decides to make a business call on the way he is using it for business purposes. To ask them to make such a decision would be putting an almost intolerable task on the people administering the law, whose sole purpose is to try to ensure that everyone is 'treated alike.
    That is just the same difficulty which gave rise to so many grievances over the old commercial van conversion. People sought to prove that it was their intention to use the vehicle entirely for private purposes, and it was hard for the Customs 'and Excise officials to catch people who were using these vehicles for business purposes, as undoubtedly some people were.
    There is another type of case which I have not mentioned, but I think was in the minds of some hon. Members; not that of the man who is buying a kit of parts and assembling them, or making his own car as a new vehicle, but the man who buys an old car, strips it down and then collects fresh parts from elsewhere and assembles a car which is very much better than the car he had previously. Let me make it clear that that man is not liable to Purchase Tax if he started originally with an old car on which Purchase Tax had been paid at some time. He can improve that vehicle in any way he likes and he will not render himself liable to Purchase Tax. I think that answers, in part, the question put to me by the right hon. Member for Battersea, North (Mr. Jay).
    Mr. G. B. Drayson: Can my right hon. Friend say whether this applies equally to a man who buys an old chassis which is dated before Purchase Tax on cars was introduced? Suppose a man bought a car made in the 'thirties.
    Mr. Brooke: I think that a man who bought a chassis of that age might very well fall foul of my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby). I can tell my hon. Friend the Member for Skipton (Mr. Drayson) that if he finds an old chassis on which Purchase Tax has been paid because it was part of a commercial vehicle and not
    1036
    a car, and if he turns it into a car, he will be liable to pay the extra tax representing the difference between what had been paid and the tax today. But he would not have to pay the old 30 per cent. Purchase Tax on the chassis over again. I hope that I shall not be led into discussing the intricacies of the Purchase Tax, as I am anxious to address myself to the main question.
    I must advise the Committee that my right hon. Friend does not see any way in which this Clause could be amended so as to meet the case of a man who builds a perfectly good car for himself out of bits he has picked up or a kit he has bought. As a House of Commons, we must seek to avoid giving to the Customs and Excise officials a task which cannot reasonably be performed. We should not re-create a situation in which there is a likelihood of unfairness between one person and another.
    Mr. D. Howell: The right hon. Gentleman says we must not put an impossible task on the Customs and Excise. It is my main objection to the proposal in the Clause that it does put an impossible task on the Customs and Excise. I believe it to be an entirely impossible task for any Customs and Excise man to decide at any stage the wholesale price of one of these specials built by a man in a back garden over a period, perhaps. of some years, and not clocking himself on or off the job. It is an impossible task to decide what is the wholesale price for the purpose of tax.
    Mr. Brooke: I do not think it is impossible to arrive at the wholesale price. We have to do that for an immense number of things in administering Purchase Tax. The Customs and Excise Department has solved this problem in every other case, and I do not think it will be defeated by this one. I thought the hon. Member was going to raise the question how the Customs and Excise Department would find out about the car in the first place. It would not be taxable until complete, but when complete and put on the road it would, presumably, need a licence, and there subsection (8), about which the Committee has come to a decision, would come into play.
    I hope the Committee will agree that I have tried to answer fully the ques-

    1037
    tions which have been put to me. If my reply is a negative one, it is not because of lack of understanding of the problem, but because it is the only one which can be made to the point.
    Mr. Blackburn: Would the right hon. Gentleman let the Committee into the secret of where those wonderful kits can be obtained?
    Mr. Drayson: I do not think my right hon. Friend quite understood the question I put to him. When he was speaking of somebody who buys an old car—I took down his words at the time— he said, "If he strips it and reassembles it he will not be liable to Purchase Tax." Then, I think, he went on to say, "provided that the original car had itself paid Purchase Tax."
    There are cars which were made in the 'thirties; there are many cars dating from 1935 and 1936 and onwards on the roads now, on which new bodies could be put. Purchase Tax was not paid on them because Purchase Tax did not exist when they were made. Would such an old car, with a new body, be reassesed at some figure for Purchase Tax? That was the question I put to my right hon. Friend.
    I have a case, as, judging by the debate, other hon. Members have cases in their constituencies, of a constituent of mine who works in a garage, and who thought he would not be able to have a car of his own, but who has managed to buy an old chassis, and in his spare time he has put a new body on it. He tells me it has cost him about £70. He said that if it were assessed for tax the amount might be £80, or some such figure, that being the value put on the car. He would be quite unable to pay that much. He is planning to use the car for his summer holidays, and if he had to pay that tax or abandon the car he would have to rearrange his holiday plans and his family would be extremely disappointed.
    I am under the impression the original chassis did not attract Purchase Tax because the tax was not in existence when it was made. I am sure the car will be perfectly roadworthy, and that if it should be driven to Aberdeen it would not cause my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby) any anxiety.
    Mr. Mitchison: I do not propose to take long, but as there have been several speeches from the other side of the Committee I should like to support what has been said by my hon. Friends on this side and what has been said, too, by practically every hon. Member who has spoken from the other side. Surely some attention must be paid to the amount of feeling that has been shown on this comparatively small point.
    11.30 p.m.
    The right hon. Gentleman was a little summary on the two points put to him by way of question by my right hon. Friend the Member for Battersea, North (Mr. Jay). The first was about private use of cars. The right hon. Gentleman said that it was impossible to draw the line between private use and what I may loosely term commercial use. May I draw his attention to the fact that the terms of the ordinary insurance policy are very similar to the words of the Amendment and that any person using a car beyond that use becomes liable not merely to a penalty but to obligatory disqualification for a considerable period? That may be a very heavy penalty indeed.
    If the distinction is as difficult to draw as the right hon. Gentleman has suggested, a radical amendment of the law is not only due but is long overdue. This law has been worked for a long time, and the number of difficult cases is not large. I believe that it is a practical distinction to draw.
    The next point is that in trying to stop a loophole we have, it was suggested, made another. I reply that in trying to stop a loophole the right hon. Gentleman has used a block much too big for the purpose and has actually obstructed quite a number of things he did not mean to obstruct. The difficulty lies in talking about making a car when the thing we are primarily aiming at is converting a non-Purchase-Tax vehicle into a car. I suggest that the right hon. Gentleman and the Chancellor ought to look at this matter again.
    I will make one other suggestion. I followed carefully what the right hon. Gentleman said, but the only instance he produced of literally making a car and which attracted me as a good instance for his purpose was the one about the

    1039
    kits. Earlier in the debate an hon. Member asked about someone who made a pair of socks out of wool; the practical answer is that wool is subject to Purchase Tax. which is rather heavier on wool than on socks. Surely exactly the same can be done with kits.
    I do not think that anyone wants to stop the man who does a bit of work in the backyard and builds up a vehicle out of something which was not a vehicle before. I cannot see any objection to allowing him to go on doing that. I deprecate the suggestion made by the hon. Member for Aberdeenshire, East (Sir R. Boothby)—if I understood him aright—that Purchase Tax should he used as a form of criminal penalty which will result in nobody having any cars at all. I agree with him that with many cars on the road it would be better, from many points of view, if there were fewer of them, but that ought not to be provided for by…
    Sir R. Boothby: I referred to these "phoney" cars built in backyards, not to the general run of cars.
    Mr. Mitchison: With all respect to the motor industry, not all "phoney" cars are built in backyards. Let us leave it at that for the moment.
    I beg the right hon. Gentleman to look again at the Clause and see whether he really wants to cut out this sort of thing. If he wants to accept it, that can be done, and will not impose substantially greater burdens on the Customs and Excise Department than this already difficult Clause is bound to impose.
    Mr. H. Brooke: I have made my speech and I do not intend to inflict a second speech on the Committee. I hope I have shown that I have appreciated the points that have been made, and I have said quite frankly and candidly that I do not think there is any way of meeting them without laying the administration of the law open to the same difficulties which we are seeking to remove.
    I am sorry that I did not give my hon. Friend the Member for Skipton (Mr. Drayson) a detailed reply on the first occasion. If his constituent or friend originally acquired an old car or chassis of pre-Purchase Tax vintage and can produce evidence acceptable to the Cus-
    1040
    toms that it is of pre-Purchase Tax vintage, he will not be at risk of Purchase Tax whatever he makes it into henceforward. He may, however, be at risk of his life.
    Mr. Jay: Can the Financial Secretary assure us that before the Report stage he will consider the suggestions which have been made this evening, and will let us know then whether he thinks they are practicable?
    Mr. Brooke: I will certainly go over everything that has been said tonight, and my right hon. Friend the Chancellor of the Exchequer has been sitting here and has heard the whole of the debate. If I were to say more than that, I would raise hopes which perhaps could not be fulfilled. What would be the use of debating here if we did not examine everything which was said? I am certain that my right hon. Friend will wish to consider everything which has been said tonight.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Mr. H. Macmillan: I beg to move. That the Chairman do report Progress and ask leave to sit again.
    As we have now completed Part I of the Bill, I think it would be the general wish of the Committee that we should now complete our labours for the night. The hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) observed favourably upon the inquiring minds that function after midnight, but perhaps on this first union of the Committee we need not follow her advice and might stop just before twenty minutes to twelve.
    Question put and agreed to.
    Committee report Progress; to sit again Tomorrow.

  RIVER TRENT, BURTON (CONDITION)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wills.]
  11.39 p.m.
  Mr. J. C. Jennings: I am grateful for this opportunity of drawing the attention of the House to the deplorable condition of the River Trent at Burton. I assure the House that in the Burton area there is widespread concern regarding the present state of the river. Just as a wife is houseproud and looks after her house very well, so in the same way are Burton people town-proud. Their river flows through the town.
  A river like the Trent should be a decided asset to a town from the aesthetic point of view, from the sporting aspect and from its pleasure-giving qualities, but this river is now a filthy river. It is no longer beautiful at Burton. Its sporting qualities are very limited and its pleasure-giving qualities are very few.
  The corporation has developed the river banks—for instance, at Stapenhill, where there are beautiful gardens—and the river has housed boating and sailing clubs, rowing clubs, swimming clubs, and organisations like the Sea Cadets. Now, however, the sailing club can no longer operate, boating is very little done, rowing—and Burton stages one of the premier regattas in the country—is not a very pleasant sport, and swimming is completely ruled out.
  Each year the medical officer—he has done it this year—has issued a warning that the river is dangerous and unsuitable for swimming. Sea cadets have their headquarters on the banks of the river, but, again, their operations are very limited. I received this morning a letter from the secretary of a Burton rowing club. Last Thursday, its senior eight were out rowing when members of the crew were seized with pains in the chest. This was caused by fumes rising from the river. This is not the first time that has happened and members of crews tell me that rowing on the river is now neither a healthy nor a pleasant sport.
  I visited the Burton regatta three weeks ago and there saw the condition of the
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  river. I actually saw gas bubbles rising in various parts of the river as a result of the contamination and pollution. The river contains vast areas of black mud, and I will explain in more detail later exactly what this black mud is and what it looks like. The river smells and what should be an amenity has now become a definite menace.
  I was in a difficulty over this debate because in dealing with this question of the Trent at Burton one should deal with the general question of pollution. found myself in difficulty because two Ministries were involved. The Ministry of Housing and Local Government was responsible for the problem of pollution and the Ministry of Agriculture, Fisheries and Food was responsible for the cleaning up of the river. Therefore, I had to decide whether I should deal tonight with the general problem of pollution, or with what should be a minimum alleviation of the dirty condition of the river by considering the question of the cleansing of the river. I decided to deal, first, with the narrower issue in order to try to get something done immediately about cleaning up the river on the stretches of the Burton reaches.
  However, I must say something about the general question of pollution because the second problem of the cleaning of the river is bound up with the first problem. It is obvious that a faster flowing river will deal more effectively with pollution. Therefore, one must look at the origin of the pollution in this stretch of the river at Burton. Obviously it comes from two sources, the Potteries and the Black Country.
  I give praise to the authorities that for years they have held back the pollution from the Potteries. They have kept it to the minimum. But the question of pollution from the Black Country coming into the Trent via the River Tame and joining the Trent at Alrewas has created a vast problem. For instance, on Friday last a sample of the water of the River Tame as it entered the Trent was taken for my benefit. I will not go into the technical figures—I am not a qualified techician for that purpose—but from a comparison of the figures for the last year it is clear that the degree of contamination at present is six times as great as it was between 1930 and 1939.

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  This is the condition of the Trent at Burton. It is absolutely impossible for any organism, vegetable or animal, to live in the water. For five or six miles between Alrewas—at the confluence of the Tame and the Trent—and the confluence of the Dove and the Trent, the river is a dead and barren stretch of water. The chemist who analysed the sample has submitted his report, which I had this morning. It states:
  "If the present trend is not checked, the Trent at Burton will soon become a positive nuisance in a sanitary sense."
  What is the connection between this general problem of pollution and the Burton reaches of the river? I will try to trace that connection, and the problem which the Parliamentary Secretary will, I hope, say that he is going to face. There are five points, and they are these. First, the industrial pollution of the Tame delays the bacterial decomposition of organic matter until a few miles above Burton—a few miles upstream. Secondly, considerable quantities of partially decomposed organic matter from sewage effluents is carried down as black mud. Thirdly, this black mud deposit is in what are known as the "deeps" and in the river at Burton; fourthly—and here a great danger arises —the mud becomes heavily infected with small bloodworms which, as they die off and decay, give rise to most offensive odours. The river is evil smelling. Fifthly, the mud itself, in decomposing, gives rise to marsh gas and more offensive smells. In the summer, the gases generated bring large lumps of evil smelling black mud to the surface.
  What should be a pleasant prospect for the people of Burton is, in the end, an ugly view; and an evil one. Now there is the problem of how to solve this bad nuisance. Four or five years ago river boards were set up, and I spent almost three hours yesterday reading the debates on the 1947–49 River Boards Act and the Rivers (Prevention of Pollution) Act of four years ago.
  The Trent River Board came into existence under that legislation, and for four years the people of Burton, through the Burton Corporation, have paid an annual quota of £4,184 or, in round figures, £16,000 in the last four years. The people, naturally, expect that something will be done about the cleansing
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  of the river; but, in those four years, as they known from their own visual experience, nothing or very little has been done. I have read through the accounts of the River Board for the year ended 31st March, 1955, and all that I can find to have been spent on the stretch from Alrewas to Burton is £222; or £192 for capital works, and £30 from the loan account labelled "regrading." The money spent on the Burton stretch in the last few years is infinitesimal.
  There are, I suggest, two solutions. One is the long-term plan for dealing with pollution at source; that is, in the Tame itself. I cannot deal with that subject tonight, but I would say that I shall endeavour, as soon as I can, to draw the attention of the Minister to the general question of pollution from the Black Country. Secondly, there is the short-term aspect, and here we ask for some immediate alleviation to this most objectionable problem.
  What leaps to mind immediately is the question of dredging and cleansing the river. The river at Burton has not been dredged for years. Burton submits that some of its £16,000 should be used for the purpose. Secondly, we ask that the Trent River Board should inspect the weirs, particularly the Drakelow weir. and ascertain what the best approach there is.
  There is a difference of opinion on the use of weirs in rivers. A weir holds up the flow so that sedimentation occurs and silt is formed. In Burton, this has built up, thereby further impeding the flow and tending to collect more. Dredging is the answer to this problem. On the other hand, weirs have a beneficial effect in aerating the water, which encourages normal non-offensive bacterial decomposition of organic matter.
  We have on the banks of the Trent. at Drakelow a large new power station which discharges water at a temperature 12°F. higher than the water of the Trent. and we get an average rise in temperature of the Trent of about 5°F. Reading through past debates, I note that time after time hon. Members who knew what they were talking about said that nothing kills animal and vegetable organisms in a river quicker than a rise in temperature as a result of water entering it.
  I ask my hon. Friend the Joint Parliamentary Secretary, who knows Burton

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  and its setting and how beautiful it can be, to look very carefully into the question, to give the people of Burton some satisfaction for the £16,000 which they have contributed during the past four years, and to ensure that once more Burton can have as its river a beautiful stream running through the town with all the amenities that a river should give.
  11.53 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent): I congratulate my hon. Friend the Member for Burton (Mr. Jennings) on securing the Adjournment tonight in order to ventilate the complaints of his constituents about the condition of the River Trent, at Burton. I know Burton-on-Trent, I have had the opportunity of visiting my hon. Friend there, and I know how very delightful the stretch of the river is as it flows through the town. I should be glad to see any measure taken that could improve its condition.
  I sympathise with the complaints of his constituents and realise that in the exceptional drought conditions that we have been experiencing in recent months, when, I do not doubt, the flow has been exceptionally low, the position has obviously been aggravated. I feel sure that my hon. Friend and the people of Burton will recognise and understand that the conditions that we have had in the last two months have been exceptional. and that, whatever conditions there may be at present, normally with a far greater flow of water the conditions would be by no means so bad.
  I would certainly agree that today the River Trent is by no means, when it reaches Burton, a crystal-clear mountain stream, and, more particularly, I should have to agree that its tributary, the River Tame, is very far from being a stream of pristine purity. As my hon. Friend observed, it is not for my Department to deal with the problem of pollution, but I can say, in passing, that there is a big scheme visualised for dealing with the noxious effluents in the River Tame.
  The scheme is being promoted by Birmingham and the Tame and Rae District Drainage Board. It is estimated to cost £9 million over the next six years. It will, I imagine, deal comprehensively with most of the noxious effluents. I
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  believe that it is to be shortly got under way by the first stage of a local inquiry. No doubt that, in the long run, is the greatest possible measure which can be taken to deal with the problems from which Burton is undoubtedly suffering.
  Meantime, my side of the problem is rather to deal with matters of the flow and navigation of the river and matters of land drainage. There is a problem of the actual flow of the river at Burton, particularly the complaint of the odiferous mud banks of the Burton district, especially those at Drakelow Weir. There are certainly mud banks there and they certainly smell in dry weather. I understand that that weir is in a semi-derelict condition and at times of low flow, because of its faulty condition, the water percolates through its lower parts with the result that the level of the river is low at that time and the mud banks are then exposed. If they are exposed for any period, in particular because of the unpleasant deposit which comes down and to which my hon. Friend referred, then, of course, the smell given off is offensive.
  On the other hand, when the river reaches either a medium or high flow, the obstruction of the weir in the river is sufficient to cause a very rapid rise in the river's level, with the result that the mud banks are then covered. The combined affect of those two factors is that the mud banks are never exposed for long enough for vegetation to grow over them. They are constantly being either dry or wet and the result is, of course, that they are in a condition of nuisance. If they were permanently dry, vegetation would grow over them and to a very large extent the problem would be overcome.
  I understand that the Trent River Board had plans to deal with this matter in the past. The plan was, of course, to remove the weir. I imagine the plan would be to remove the weir completely and then dredge the channel of the river and use the dredged material to fill in the mud banks and shape up the banks, so that the mud flats would be removed and there would be a deeper and narrower channel. The problem caused by the mud flats would then disappear.
  When the board tackled the problem, some years ago, it met the difficulty that the ownership of the weir was uncertain.

  1047
  After it had announced its intention of removing the weir, a local brewery company sought an injunction against it to prevent it removing the weir. On that, the river board—the catchment board as it then was—decided to desist and no action was taken.
  In the light of the local complaints, which my hon. Friend has expressed so forcibly this evening, I will certainly be very glad to have consultations with the board and discover its plans for dealing with this matter in the future; but I reiterate that, although accepting that there is a general condition here with which we should deal, I do not doubt that the exceptional conditions of drought from which we have been suffering nationally in the last two or three months have greatly worsened the normal condition.
  In fairness to the Trent River Board I would say that it really is a very good board. My Department regards it as one of the best in the country. It is a very efficient body, both from the engineering and administrative point of view. It spends about £500,000 a year upon the care and maintenance of its river and in judging how efficient it is I ask my hon. Friend to recognise—as I am. sure he does—that it has a very big length of river to deal with, taking into account all the tributaries. Its efficiency must be judged in the light of its work over the whole of its area. The recent big scheme it has completed at Nottingham—the Nottingham flood relief scheme—is an outstanding piece of work, for which it must be given very great credit. I am confident that in a general way it is doing all that can be done to look after a big and important river.
  As my hon. Friend has recognised, the board has an exceptionally difficult problem with these noxious industrial effluents which are being discharged in the upper parts of some of the tributaries of the Trent, and which will be very expensive to clean up, but the scheme which I have mentioned will go a long way towards doing so, and under the powers that Parliament provided to the 1951 Act I hope that it will gradually be able to move upstream and deal with these noxious effluents.
  I think that everybody recognised, at the time of the 1951 Act—in the debates
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  in which I took some part, although we were then on the other side of the House—that however much we might wish to see rivers like the Trent cleaned up and put into a decent condition, so that fish could live in them again, it was bound to take a good many years to do it, and that all the time we would be swimming against the tide, with the necessities of modern industry continually producing effluents which were more and more difficult to deal with if they were to be made safe and non-injurious. However, I feel quite confident that in the Trent River Board we have a board which is an exceptionally strong one, and will be able to deal with these extremely formidable problems. As and when it is possible to proceed with these major works I have no doubt that it will do so.
  For the consolation of my hon. Friend I would add that, although Burton-on-Trent, under the provisions of the 1948 River Boards Act, does not have a member on the board by right, we recognise that it is an extremely important town and, by an informal arrangement, by right hon. Friend has appointed one of the distinguished citizens of the town as a member of the board, as one of the nominated members with a particular interest in representing the lowland areas.
  This gives Burton-on-Trent a voice on the board. It is always difficult for any area to know whether it is getting good value for what it subscribes, but, taking into account the very great annual expenditure of about £500,000 which the board is making on the river, and the great and valuable work it is doing, I should have thought that the citizens of Burton-on-Trent—even though they have not seen work going on around their town—would recognise that their £4,000 per annum is making a useful contribution towards the care of the river as a whole, and is good value to them.
  These immediate remedial works to which I have referred can do something to improve the flow. I must make clear, however, that improvement of the actual condition of the river involves more fundamental works which are bound to take far longer to bring about. I do not doubt that with the combination of interests of the local authorities concerned and the river boards these will in due course be dealt with. As a result of my hon. Friend's eloquent representations

  1049
  tonight I am glad to give him an undertaking that I will ask the river board what its plans are to deal with the Drake-low weir; also, whether there is a prospect of dealing with this immediate problem so that we can at least see a prospect of reducing the exposed area of these mudbanks which, I imagine, are the problem at present.
  I conclude by thanking my hon. Friend for bringing to my attention tonight something which I realise has been troubling his constituents, and giving me an opportunity to make this reply. If we could expect to get a reasonable precipitation of rain in the next few weeks— which would be gratefully received by all the farmers in the country—I do not doubt that it would go further than anything else to alleviate the problems of his constituents. No doubt my hon. Friend and the rest of us will be praying for such a precipitation.
  12.8 a.m.
  Mr. Charles A. Howell: I hope that the Joint Parliamentary Secretary will ask the Trent River Board why the dredging which. in my younger days, and up to the war.
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  took place at Burton-upon-Trent, has not been resumed. I think that that is the case. I hope he will not be too optimistic about the £9 million scheme for the River Tame, which, in my opinion, is to get the water away from my constituency. Once that happens it will mean that the black mud coming down now will come to Alrewas and into Burton much more quickly than at present.
  Unless dredging takes place that will not help. If dredging is done now there is little industrial and residential area beyond Burton-upon-Trent—I think that Newton Olney would be the last point— and there is countryside in which the effluent could be dispersed before it reaches Nottingham. That is something which warrants immediate attention.
  The Question having been proposed after Ten o'clock upon Tuesday evening and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned accordingly at nine minutes past Twelve o'clock.