Lords Sitting of 8 July 1941

Preamble
The House met, The LORD CHANCELLOR on the Woolsack.
SCARISBRICK ESTATE BILL. [H.L.]
Judges' Report received; Bill presented, and read 1a.

CLEARING OFFICE (SPAIN) AMENDMENT ORDER, 1041.
Special Order, dated 30th June, 1941, made by the Treasury under Sections 1 and 3 of the Debts Clearing Offices and Import Restrictions Act, 1934:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

EAST WORCESTERSHIRE WATER BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

CENTRAL ELECTRICITY BOARD (INCREASE OF BORROWING POWERS) ORDER, 1941.
THE EARL OF LUCAN: My Lords, I beg to move that this Order be approved.
Moved, That the Special Order as reported from the Special Orders Committee on the 25th of June last, be approved.— (The Earl of Lucan.)
On Question, Motion agreed to.

LAND DRAINAGE GRANTS (FURTHER POSTPONEMENT OF PRESCRIBED DATE) ORDER, 1941.
THE JOINT PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE DUKE OF NORFOLK): My Lords, I beg to move that this Order be approved.
Moved, That the Special Order as reported from the Special Orders Committee on Tuesday last, be approved.—(The Duke of Norfolk.)
On Question, Motion agreed to.

FINANCE BILL.
The LORD CHANCELLOR The LORD CHANCELLOR acquainted the House that the Bill had been endorsed with the Certificate from the Speaker that it is a Money Bill within the meaning of the Parliament Act, 1911.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT SIMON): My Lords, I move the Second Reading of the Finance Bill. As Finance Bills go, this is not a very long Bill. It contains fifty-two clauses and five Schedules, but it will not be the wish of the House that I should attempt to explain the provisions of the Bill in any detail. In looking through the Standing Orders of this House to-day, I was interested to find that Standing Order No. XXVIII prohibits this House from "taxing speeches," but I apprehend that there the word is used in a different sense from that which we have to bear in mind in discussing the Finance Bill, and I am not entirely relieved from making a few remarks upon the Bill. It would seem to me that it may be of interest to the House if, quite briefly, I attempted in the light of this Finance Bill to make a short survey of our war finances.
This is the fourth Finance Bill of the war, embodying the fourth war Budget, and in order to get the correct perspective we have to look at the successive efforts as a whole. In brief retrospect I think the lines of our war finance from September, 1939, have been very plainly shown. In the first Budget, the emergency Budget which I had the honour to introduce in another place after some three weeks of war, we had an unmistakable warning that the financial demands of this war would be tremendous; but at the same time a recognition that there was need for some time to adjust private commitments and standards of life, all the the more so because even before the war the rate of taxation was exceedingly high. I remember that in the debate which took place in this House on that emergency Budget one or two prominent speakers inclined to the view that there had been too steep and too swift an increase in the rate of Income Tax, which went up to 7s. 6d. in the pound.
Well, my Lords, a severe operation looks very much less alarming in retrospect

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than when it is to take place in the immediate future. Though it may be that then the taxpayer was scourged with whips, there is no deubt that he now has to endure the assault of scorpions. The first Budget and the second must be read together because an announcement was made at once that the rate of Income Tax would be at 7s. 6d. in the pound for some time—indeed it was enacted for most of 1939. When you come to April, 1940, you complete a plan which involved the imposition and collection of new taxation, additional taxation, amounting to £300,000,000 a year. These figures sound quite puny and frivolous now, but £300,000,000 extra taxation is, in itself, a stupendous sum. By July, 1940, the face of the war had changed. The suddenly increased tempo of war production and expenditure required a correspondingly intensified sacrifice by our citizens, and higher taxation 111 the third Budget, to the amount of £239,000,000 a year, was enacted together with of course, increasing restrictions on the materials and services which were available to consumers.
Now we come to the fourth Budget contained in this Finance Bill. As war production reaches ever higher and higher stages of development, as the volume of war materials to feed it swells, and as the goods available for civilian consumption consequently shrink further, we get closer and closer to grips with what is the pinch of the whole problem—the; problem of avoiding inflation. Indeed I think you may say that the keynote of the Budget to-day is rot so much what amount of money we have to provide, but how we shall provide it, for whatever the amount may be, provided it must be. The real Budget problem is to raise the money in the manner best calculated to protect our economic and social life, now and in the near future, from the insidious and destructive malady of inflation.
Some of your Lordships may recall that in February last we had a debate on this aspect of the matter in which several noble Lords whom I see here took part and in which I endeavoured at some length to deal with the problem. As every well instructed person now understands, for war is a great schoolmaster, the danger occurs in the impact of rapidly increasing purchasing power upon a rapidly diminishing supply of goods and services, and the contribution which the Budget and the
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Finance Bill and the financial policy embodied in the Finance Bill must make towards averting this danger is—I think I am using the words used by the Chancellor of the Exchequer in his Budget Speech—to abate the torrent of purchasing power which would otherwise flow towards available supplies. In other words, the Budget task is to ensure that the vast and increasing total of Government expenditure, so far as it is laid out in this country, does not remain in the hands of citizens as increased purchasing power, and this is achieved when a compensating amount returns to the Exchequer either by way of taxation or by way of loan.
That being the principle that lies behind this enormously important financial policy, let me remind your Lordships of a White Paper, a most notable innovation in the Parliamentary exposition of finance, which was issued for the first time this year at the time of the Budget—it was "Command Paper No. 6261—which analyses the sources from which our vast expenditure was financed in the first eighteen months of war. It is a technical analysis and a complicated analysis, though I think most people would find it a very interesting document. It was on the basis of the material provided by this means that my right honourable friend the Chancellor of the Exchequer in his Budget Speech was able to say—it was a deliberate opinion which he then expressed—that the difference between total expenditure and Budget revenue had not, he considered, so far introduced inflationary dangers into our system. That is a very important proposition. If it is correct, it is a very comforting proposition. It does not in the least excuse any of us taking our eyes from the constant duty of watching any change in the elements which affect the rise of inflation, but it is particularly interesting to me and to others who took part in the debate last February when, not unnaturally, some prophecies as to the imminence of serious and very large inflation this year were brought to the attention of your Lordships' House.
That is the background and, while I would not dream of inflicting upon your Lordships many figures, possibly two or three figures may be interesting in order to remind your Lordships how these totals now stand—not indeed that any one of us can comprehend what any given total means, but we can at least compare the

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size of one total with the size of another. What is the total expenditure which it is estimated will have to be met in this current financial year? Using the roundest of round figures the answer is £4,200,000,000, which has to be raised somehow or other. Let us see what can be taken away from that formidable total before we approach the proceeds of taxation or a loan. This element must not be omitted. Some of this enormous expenditure will be covered by borrowing growing balances in this country which the Dominions and other overseas suppliers have accumulated in payment for the supplies which they have made to us. They have in this country credits for a certain amount. That amount need not be raised by domestic loan or taxation, it is available without burden to us, for the time being, and the amount so covered is estimated at about £500,000,000. Let us take away this £500,000,000 from the total, and that leaves us with £3,700,000,000, of what I may call "domestic expenditure"—rather a convenient short phrase that is coming into use to denote expenditure to be covered by domestic loans or domestic taxation.
Towards that £3,700,000,000 how much is going to be got by the yield of taxation? I take first taxation as it stood before the last Budget, when Income Tax stood at the modest figure of 8s. 6d. in the pound. Approximately, the taxation which was ruling in this country before the last Budget would have produced £1,600,000,000 and it was estimated that the rate of savings current at the time of the last Budget would result in Exchequer receipts, as it happens of the same amount—£1,600,000,000. Putting these two things together you had, therefore, £3,200,000,000 as it were in hand or in sight when the bill to be met was £3,700,000,000. Now it is the difference between these two figures—that is, the critical £500,000,000—which is the thing that matters to-day. If you do not meet that by effective means now, then indeed you are on the high road to inflation, and one of the great inconveniences of inflation is that it is like riding downhill on a bicycle without a brake. You may be able to control the machine for a certain distance, but if the slope is steep enough there comes a moment when you control it
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no longer, and it will run away with you. That is profoundly true of this danger of inflation. When I say savings were calculated to produce £1,600,000,000 I am including savings by public authorities ! and corporations and savings by private individuals. It is perhaps convenient here to say that probably something less than half of the £1,600,000,000 was estimated to be made up out of the private savings and investments of individuals.
Now I return to the £500,000,000 which is the key to the whole matter. I am quoting the language used by the Chancellor of the Exchequer when he described this £500,000,000 as a figure which, from the point of view of inflation, is "the potentially dangerous gap, to the closing of which we must bend all our energies." Manifestly, there are two resources to be examined. One is taxation—can we do better from taxation this year than we did last year? Then there is the amount to be raised by loans. The whole country owes an enormous debt to my noble friends Lord Kindersley and Lord Mottistone and others for the continuous work which they have done to bring the country to its sense of duty on this head. In view of the trend of savings figures, the Chancellor of the Exchequer judged that there was good ground for expecting in the new financial year, 1941–42, savings to produce £200,000,000 to £300,000,000 more than the previous figures, and substantially, if that increase is secured, it will be found out of the genuine savings of private individuals. The future will show whether that estimate is justified. I believe that I am right in saying that up to the present there is reason to think that it will be jusified, though of course no precise figures are, as yet, possible.
Therefore, facing this £500,000,000 which has to be obtained somehow or other, you have got £200,000,000 to £300,000,000, apart from what is to be obtained by the imposition of further taxation. As your Lordships well know, and as the country as a whole well knows, very stiff extra taxaton has been imposed as well. It seems, perhaps, a little extraordinary that such efforts have to be made to produce what is, as compared with the gross total, such a comparatively small fraction. The truth is that you cannot get out of our population, or out of any population, enormous increases of taxation without the most prodigious

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exactions. The Budget proposals are designed to produce in a full year £250,000,000 extra. That is the effect of running up the Income Tax to 10s. in the pound, of the increase in what is called the "reduced rate," of the reduction in the allowance for earned income, of the reduction in personal allowances and in the exemption limit, and of the alteration of the basis of assessment of farming profits. That is in a full year; but, of course, as everybody knows, in the first year in which the Income Tax is raised—and this is true of some other taxes also—there is not a full year's yield, and in the year of which we are speaking, the present year, the amount which is expected to be raised additionally out of the Budget taxation is about £151,000,000. If the fiscal year ended in midsummer instead of at the end of March, the figure would be a larger one. I do not know that very great importance is to be attached here to the minutiae; the broad proposition is that the bold proposals of the Chancellor of the Exchequer bid fair to meet this £500,000,000 of deficit which must be met in this year. I will not delay the House on the minor changes in taxation which are proposed.
There is an interesting proposal to credit to the taxpayer after the war the amounts now involved in the reduction of Income Tax allowances. In the same way, there is an interesting provision for making available after the war and on certain conditions twenty per cent. of the Excess Profits Tax which is paid. There is also a most ingenious and remarkable set of provisions, introduced into the Finance Bill not at the time of the Budget but later, which in effect provides that where anyone has by covenant or by bequest, made before the war, provided an annuity in the recipient's favour which is to be paid free of Income Tax, such pre-war annuities are to be understood as covenants or bequests to make the payment free of Income Tax at 5s. 6d. in the pound, and the balance is to fall on the recipient, notwithstanding that the language of the covenant spoke of the payment being made tax-free.
I have endeavoured in these few words to present to the House, in as clear a fashion as I can, a general view of the financial effects of the Bill, without going into details. There is, however, another side to war finance, another side to the
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Finance Bill, which is just as important as the taxation side. The operations of the Chancellor of the Exchequer, like the quality of mercy, are twice blessed; and, while we concentrate attention through the Finance Bill on taxation, do not let us forget the complementary effort that the taxpayer, in his other capacity as a saver and a lender, must make in what I may call the Battle of the Budget. If you were to have these enormous sums raised and spent in these islands—at the cost, of course, of tremendous fiscal burdens imposed upon the taxpayer—you would not really meet your problem at all unless at the same time you had adequate arrangements for securing that those who received increased remuneration under war conditions, and some who did not receive increased remuneration, joined in the battle against inflation and against the dangers which inflation holds not only for our social and economic life but consequentially, and it may be at no distant date, for the further intensification of our war effort. The Battle of the Budget, therefore, has to be fought on two fronts, and it will not be won unless the country's magnificent past achievements in saving and lending are not only sustained but improved.
I have been consulting my friends at the Treasury, and they tell me that the savings of private individuals in all forms and by all channels must in fact be increased by a third over those of the latter half of last year. On the average we must get by this means £4 instead of £3, and so on all along the line. It is too soon yet, of course, to say how far that goal will be achieved, but it does appear to me, from what I have seen of the spirit of the country in a great number of War Weapons Week meetings, from the reports which I have the good fortune to read from time to time from Lord Kindersley's Committee, and from the reaction as one observes it in the ordinary man or woman whom one meets, that there is every ground for believing that on this side too the Battle of the Budget can be fought and won. We are dealing in this Finance Bill with figures which are almost past human comprehension. This Finance Bill sets out to exact from the people of this country a far greater sum than they have ever found before in peace or in war. Is there one of us who has the smallest doubt in his mind that it will be done? It is part of the

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contribution that every one of us is willing to shoulder in order to help to produce victory for freedom not only for ourselves and for our own country but for the whole of the habitable world. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
LORD ARNOLD: My Lords, the noble and learned Viscount has, I am sure it will be agreed, moved the Second reading of the Finance Bill in a comprehensive speech. I have been told on good authority that the noble and learned Viscount is sick and tired of hearing his speeches described as "lucid," and therefore I shall not use that word, but will say that he has put the financial position before your Lordships with great clarity. I think that this Finance Bill may in general terms be described as a good and courageous effort to meet an unprecedented position, and in my view the Chancellor of the Exchequer is entitled to most of the bouquets which he has received, and he has received a great number. I am not sure, however, that he is entitled to them all. As I see it, the most notable feature of this Finance Bill is that it docs, according to the Chancellor of the Exchequer and according to what the noble and learned Viscount has said, present what may be called, taking everything into consideration, a balanced Budget.
There has been much discussion from time to time in your Lordships' House about what is called the "gap," the difference between the total war expenditure and other expenditure—the total expenditure of the Government—and the receipts of the Government from taxation, new savings and so forth. In his Budget speech the Chancellor of the Exchequer spoke very frankly about these matters. He estimated that he has bridged the gap, at any rate for the future. That means that he sees his way to meet what he calls, and what the noble and learned Viscount has called—it is a very fair description—a "domestic expenditure" of £3,700,000,000. That really is the figure with which we are mainly concerned. He sees his way to meet that by the yield of taxation, and by new savings and so forth. It may be so, but I must emphasize not once, but again and again,
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that the estimate of £3,700,000,000 for domestic expenditure is certainly not excessive. In fact, good fortune will be with the Chancellor if it is not exceeded. If it is exceeded, and in so far as it is exceeded, there is only too much reason to fear that some gap (will come into being. The trouble, as I see it, is that the Chancellor of the Exchequer has left himself very little margin.
I am not going to discuss in detail the taxes of the Budget. The noble and learned Viscount said that he found a rule in your Lordships' Standing Orders to the effect that "taxing speeches" are not permitted. I was under the impression that the phrase was "teasing speeches," but I have no doubt he is right, and that that does not apply to finance. Under the Parliament Act of 1911 power to reject the Finance Bill was taken away from your Lordships' House, but it was made quite clear that the function of discussion was left to your Lordships' House, and indeed it was expected that it would be employed. May I just say a very few words about the changes in the Income Tax, because some very striking figures emerge from that? The Chancellor of the Exchequer reduced some of the allowances which affect all Income Tax payers. He reduced the personal allowance for married people from £170 to £140 per annum; and for single persons from £100 to £80, and earned income allowance is reduced from one-sixth to one-tenth. Actually these three changes alone will bring the Chancellor £125,000,000. The increase in the standard rate of the Income Tax from 8s. 6d. to 10s. will bring him £88,000,000, but these other changes will bring in nearly one and a half times as much in a full year—namely, £125,000,000. I am not sure whether in existing circumstances some of these changes ought not to have been carried further. If that had been done it would have brought in a great deal of money without, in general, any undue hardship on the taxpayer, at any rate with less hardship than vast numbers of people are enduring. People in Germany, I am told, though I cannot confirm it, are paying Income Tax which begins on incomes of 25s. a week—that is, on a minimum of £65 a year as against £110 a year here. There is therefore a very wide difference there.

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Leaving the Income Tax, first let me say that the Chancellor has been very wise to reject various proposals made to him for what I may all fancy taxes. All taxation should be equitable, economically sound, and productive. The Chancellor wants money in big amounts, very big amounts. It really is not sound finance to impose taxes which, although very attractive in various ways, do not in fact bring in large revenue. In this Budget the Chancellor of the Exchequer has entirely confined his expectation of additional revenue to direct taxation, and a considerable proportion of it will come from persons who have incomes between £110 and £500. In these days that is as it should be, because many of these persons, owing to munitions work and so forth, arc making distinctly larger incomes than they used to do. Moreover, the Lord Chancellor told your Lordships some time ago—and it is a very remarkable figure—that about two-thirds of the consumption of the country is on the part of people who have incomes of less than £250 a year. If that is so—and it is probably right—the purchasing power of this class is enormous. The additional taxation on those with incomes below £500, and still more on those below £250— because there are so many of the latter—will be an important factor in the fight against inflation.
The noble and learned Viscount spoke at some length about inflation. On the general question of inflation it should be not only admitted but affirmed, and gratefully affirmed, that the Chancellor of the Exchequer was very frank with the country. Actually he has gone a long way to do what he can to ward off inflation. He has spoken with great candour about the gap—that is, as I say, the difference between "he total domestic expenditure and what the Government expect to receive from taxation, new savings, and so forth. As the noble and learned Viscount has said, the Chancellor of the Exchequer began by facing a gap in the current twelve months, as he saw it, of about £500,000,000. As regards new savings, he looks for an increase, as the Lord Chancellor has told us, of about £250,000,000—he said between £200,000,000 and £300,000,000. The changes in the Income Tax will, in a full year, also bring in £250,000,000 a year so, taking one thing with another, the
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Chancellor of the Exchequer estimates that the gap or deficiency of £500,000,000, will be filled. That may be so. Only time can show. All figures and estimates must have an element of doubt, especially in present circumstances, and not merely of doubt, but almost of speculation; but, taking the balance of things, it may prove that the Chancellor's estimates will not be very far out. To-day, as far as can be seen, he has been justified as far as new savings arc concerned in the prospect he held out. Therefore, if he is right the gap of £500,000,000 will be bridged.
But let me come back to the very important factor to which I have already referred, and that is that he has allowed the sum of £3,700,000,000 for domestic expenditure, and no more. That may prove to be too low. For one reason or another, the estimates of expenditure put forward by Chancellors of the Exchequer since the war began have generally been too low. If the figure of £3,700,000,000 should be too low, there will almost certainly be a deficiency or uncovered gap which must be, to some extent, inflationary. I want to make this point, and I do not think it was made by the noble and learned Viscount on the Woolsack. If there should be no gap at all, it should be emphasized that inflation is not fully guarded against. Even if the national accounts balance, there may still be inflation. Other causes may bring about, at any rate, some degree of inflation, particularly if increased purchasing power is demanding goods which are in scarce supply. The Government have done a good deal to stop inflation of this kind, but more measures will be needed if the position is to be safe. An important step forward in this direction was made only two or three weeks ago by the system of coupons for clothing. I cannot help thinking that it is a great pity that was not done twelve months ago. It was pressed on the Government. Why it was necessary to wait till the war had been going on nearly two years before this scheme was introduced I do not know. I think it ought to have been done earlier.
Another cause which does give rise to anxiety about the gap in the future is the continued absence of a national wages policy. The Budget is framed on the assumption that wages can be more or less

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stabilised round about the present figures. If that should not be so, and if wages should continue materially to rise, the Chancellor's calculations would be upset. He said so himself; he said in his Budget speech—these are his words:
"It is clear that persistence of the tendency towards rising wage rates, which necessarily increases the cost of production at every stage of the productive process, would compel abandonment of the stabilisation policy."
The fact is that despite the additional subsidies made by the Chancellor with a view to keeping down the cost of living, the wages problem has not been adequately grappled with, and it remains one of the outstanding dangers of the situation. No doubt there would be difficulties in the way of legislation for the purpose of dealing with or stabilising wages, but there is little evidence that the Government in other ways have been taking any effective part in evolving a national wages policy.
It is true the Government have done their best to keep the cost of living down. The cost-of-living index, on which these things are based, is criticised a good deal, and I dare say justly; anyhow, it is the only official criterion we have for the time being to work on, and it is only fair to say the Government have done a great deal to control the cost of living. I think these figures are broadly correct. It is estimated that out of the total of 100 of the cost-of-living index, 60 per cent. of the cost is spent on food, about 16 per cent. on rent, about 12 per cent. on clothing, and about 4 per cent. on fuel. I think these four items come to 92 per cent. of the total, added together, and the Government measures in regard to food and rent, and now clothing, and also with regard to fuel, have done and will do much to keep the cost of living down. But, if I may say so, the Government must not weary in well doing; they must be vigilant in watching these matters from many points of view.
Now as regards taxation, that can hardly be increased at the top, and the chief reservoir as far as the Income Tax is concerned is in the smaller incomes up to about £750 a year. It has to be recognised that many munition workers are getting higher wages than they used to do, some of them much higher wages, and though the Budget will levy its toll upon them it will still leave many of them better
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off—in a better position than they used to be before the war. It is difficult to understand why this anomaly (if I may so call it) should exist to the extent to which it does. Nearly everybody else in the country is no better off because of the war; many, at any rate, are worse off. Moreover, despite the overtime and so forth of many munition workers, the hardships which they are going through are, on balance, surely less than those of soldiers and sailors. I think the soldier gets somewhere about 2s. 6d. a day and his keep and an allowance for his family. He is separated from his family and he may be abroad undergoing the greatest hardships and dangers. I submit, therefore, it is not clear why munition workers, despite overtime, should be receiving so much higher pay than the soldiers and sailors.
Of course this whole question is bound up with that of a Wages Board, and if from the start there had been a strong Wages Board which had laid down the principles for the regulation of wages, it is very likely the present position would not have arisen. This matter has been pressed upon your Lordships' House more than once during the war, but nothing seems to be done. Also, if I may say so with respect, no adequate reply is given by the Government to the contentions advanced in this matter of a Wages Board or a national wages policy. Looking at it from another angle, I think it is a pity the Chancellor of the Exchequer did not take the opportunity of obtaining a bigger share of taxation from those whose incomes have been increased largely owing to the war. Pressure has been brought upon the Government to institute what is called an excess income tax, but the Chancellor declined to do it, and, if I may say so respectfully, I did not think his arguments against the proposal were very convincing.
In conclusion, may I just make two further points about this matter of the cost-of-living index? The first is that a few points in the rise of the cost of living since the war are due to the Purchase Tax, and surely those points are not to be taken into account if wages are adjusted to meet the increased cost of living. If that is done would it not mean that the Purchase Tax was not in effect being borne by those making the purchases? That would be contrary, as I understand it, to the intention of the tax. The other point

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I want to make is this: I do not think it should be assumed chat all workers can expect that their earnings should be adjusted to the increase in the cost of living. In short, they cannot all expect their wages to be made up to pre-war conditions. True—I would emphasize this—in the case of the poorly-paid wage earners, where there is no margin above the level o: subsistence, the adjustment should be made, keeping their wages at, so to speak, the pre-war level or its equivalent. But that cannot be expected to apply to some of the highly-paid wage-earners. A large proportion of the better-to-do classes are very much worse off than they were before the war, and I suggest that highly-paid wage-earners should bear, at any rate, some part of the burdens which have fallen upon the wealthier sections of the community. That is all I wish to say except this I hope the arguments which are advanced in these debates in your Lordships' House on the Finance Bill do receive, and will receive, careful consideration from those who are responsible for the country's economic and financial policy.
LORD MANCROFT: My Lords, I took down some words which fell from the lips of my noble and learned friend on the Woolsack. He spoke of the whips and scorpions of taxation as represented by the Income Tax and Surtax. But however bitter may be the blows inflicted upon the population by Income Tax and Surtax, it would be right, if I may say so without impertinence, to point out that there is a much crueller form of taxation, an infinitely crueller form of taxation than that; and it is called inflation. No taxation can do the mischief that inflation can do. Therefore, while I recognise in this Finance Bill that it is not founded on a Budget which is consistent with formal economic principles and axioms upon which most Budgets have been constructed, I feel that the main pivots on which it hinges are these: first to pay for the war, to have the financial weapon with which you can wage the war, and something which next only pays for the war, but which strikes against inflation by restriction of purchasing power against a restricted supply of necessary commodities and luxuries of life.
I would like here, if I may, to make this observation to my noble friend Lord Mottistone. I have helped to start a local
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war savings movement and have done some good, I hope, in getting savings into the National Exchequer, and in so working I have been struck over and over again by the fact that frequently people have come and asked me to explain what inflation means. People do not understand what the word inflation really means. They do not realise that if it goes beyond controlled limits it means, as my noble and learned friend on the Woolsack suggested, that when the brake: is gone from your cycle you go rushing downhill without any stop; the end is that your cycle crashes to disaster. It means famine, starvation and ruin. That is the ultimate result of inflation. I think my noble friend Lord Mottistone would add to his many services to the country if he took steps, in conjunction with Lord Kindersley, to explain to the public what inflation means. I think if he would do this it would also have the effect of reconciling many people to their troubles about rationing. Some people say, "I don't want to be bothered with coupons and with this rationing system." It ought to be explained to these people that one of the main reasons for rationing and for quotas and restriction of supplies is to protect their savings and their wages so that they may be able in future to buy with their currency money that which they need and at reasonable prices. If inflation were to come those savings and wages would vanish as purchasing power out of their hands. I think it should be made plain to the public now rationed that one of the main reasons for the rationing system and all it includes is the necessity to avoid the most cruel form of taxation on themselves which is called inflation. I do not know whether my suggestion appeals to my noble friend Lord Mottistone, but I beg to offer it. If we keep down inflation now, as we are doing, we are rendering the cost of war materials that we have now to buy less dear, besides at the same time protecting the purchasing power of men's wages and savings after the war.
The point which my noble friend Lord Arnold made was a valuable one. He talked about the stabilisation of wages. During the last war hands were thrown up in horror by people who said, "You must not touch wages, you must never touch the wages of people who are entitled to have them." Consequently we created the inflation which caused the high cost

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of living. I have noticed that, although the Chancellor of the Exchequer has said from time to time that he intends to take steps to stabilize wages, he has touched this thing with very long fingers. Only recently a trade board for the Midlands gave an increase of wages and two of the members of that board who were appointed by the Ministry of Labour as independent judges simply cocked a snook at the Government's policy and put up wages, evidently paying no attention whatever to the policy laid down by the Chancellor of the Exchequer. It would be all very well for the Minister of Labour to say, as he did not say in this particular case, but has said in another case, that he was nauseated. He may refuse to face nauseating facts in this case, but he will not be able to escape the nauseating results by refusing to face facts.
One of the things he has to face is this fact: that if wages are now put up that rise will increase the cost of production, which, in turn, will increase the index figure of the cost of living, which will, again, give rise to demands by people to have their wages increased, saying that their wages are based on the index figure of the cost of living. I had sent to me just before I came into the House a little cutting which I will venture to communicate to your Lordships, because I think it is extremely germane to the discussion which is taking place. This is a resolution passed by the principal association dealing with trade and industry, the Association of British. Chambers of Commerce. It contains 40,000 firms—not a few great firms like the Federation of British Industries, but 40,000 firms, large and small, representing home and export, wholesale, retail, shipping, banking and every other form of industry, commerce and trade all over the country. This is the resolution that this Association unanimously passed, and if I am not wearying your Lordships I hope you will forgive me for reading it. It is as follows:
"That the attention of the Government and of Parliament be drawn to the following four points:

(1) The cost of coal acts and reacts at every step upon the cost of all that we eat and use, and upon the cost of everything that needs any form of transport.

(2) Increased costs of coal and of transport defeat any policy designed to prevent
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increase in the cost of living, and to ward off inflation.

(3) Any increase in the cost of living, and the effects of inflation, inflict hardship on the whole community, of which miners and transport workers are themselves a large part.

(4) Until these inescapable facts are understood and acted upon it is folly to expect that rationings or quotas can prevent increases in the cost of living or ward off the cruel effects of inflation."

I ventured to offer that for consideration because I think it sums up the position truthfully and temperately. I hope that the Chancellor of the Exchequer will take his courage in his hands and say to the Ministry of Labour: "If you do not intend to carry out the Government's policy, which includes a proper, honourable and just rate of wages, by means of the stabilisation of wages, then the Government must find someone who will do that."
Taxation of the kind which we art-considering is not economically sound although it is necessary. I support it for war purposes, but it cannot go on too long for reasons which I will try now to explain. I do not think for a moment that this country will ever adopt State Socialism as opposed to honestly run private enterprise. It has seen enough of State control of trade and industry to make it very tired of it. You will never in any case get much fresh enterprise where there is State control. Penalising or excessively high taxation on employers and those engaged in industry discourages those willing to take those risks to their property, their health and their skill which follow enterprise just as a man's shadow follows a man on a sunny day. You will not get them to take those inevitable risks unless you allow them to take their wage in the form of profit. You must have a profit-wage that will encourage enterprise and you will not increase the pool from which taxation for social and other benefits is drawn unless you increase enterprise and increase wealth through enterprise.
It is true that during the war the majority of men, even among the miners, will work without any hope of making anything out of their war profits because of their patriotism. But there are some at the other end of the scale, just as among the miners, who say, "We are not going to work to get any more coal out of the pits if you are going to take

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some of our wages away from us by taxation." Human psychology has to be taken into consideration. If taxation is penal and discouraging and is not economically justified you will stop enterprise both by the employers and by the workers in the end. In that connetion I think some responsible speakers should go and address the miners and explain that Income Tax is a war weapon and should not be used as an excuse for absenteeism.
We must bear in mind that at the earliest moment the current burden of taxation must be reduced and resort must be made to stronger forms of attracting savings. About that I would say this. We hear people rebuking the Government because they do not reduce their payment to 1s. or half a crown per cent. per annum for loans. If people do not get something for their money they will say that they might as well spend the money as save it. For this reason I say that an inducement—although it seems to be a reversal of our cheap money policy—to greater saving would be to issue much longer term loans with a little better rate of interest in order to attract the savings of people for permanent holding.
My noble and learned friend on the Woolsack said that war is a great schoolmaster, and so it is. There are very many lessons to be learnt. I have heard my noble friend Lord Arnold, when we were together in another place—I forget which of the three Parties he belonged to then—advocate a capital levy. We see a capital levy silently in operation to-day. What man can live on his income without falling back on his capital, with taxation as it is now? Some taxation today is based on spite. You can read that in the speeches of certain members of political Parties. You hear them talking about millionaires, and about a tax of 19s. 6d. in the pound as if numerous persons were liable or that rate. There is nothing in the point. When I study the Inland Revenue Report which has always been very familiar to me—the Revenue Return for the latest year—I find that about 100,000 people are liable for Surtax—people with incomes of over £2,000 and more, and their total assessable income is about £500,000,000 or £550,000,000. The total amount of the incomes of the very rich men who pay 19s. 6d. in the pound—there are under
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200 of them—is about £25,000,000. If you took the whole, it would only pay for two days of the war.
The men who are really hurt are not the very rich men. The people who are hurt are those—there are about 65,000 of them out of the 100,000—whose incomes are between £2,000 and £4,000 a year. The £2,000 to £4,000 man is in a difficult position to-day when he has to pay Income Tax at 10s. 0d. and then Surtax. It is not a question of reducing his standard of life. It goes much further than that. It does not mean that he must dismiss a servant or give up a motor car or stop smoking cigarettes. It means upsetting his whole scheme of life and his life's liabilities. He has never lived upon only half his income. If he has been prudent he has perhaps lived on at least three-quarters of his income. If you take away half his income or more he cannot bring up his children as he would wish and he cannot engage in industrial undertakings as he would wish. You have paralysed him entirely. He is the man who is hurt and not the very rich, the wicked millionaires who are singled out in speeches. I therefore think that those who talk about a capital levy will have to learn from this schoolmaster of war that if this form of taxation goes on very long the £2,000 to £4,000 a year men—or, if you like, the £2,000 to £6,000 a year men, the majority of the Surtax payers—must sell, if they are not now selling, their capital.
The Government cannot go on paying an airman or a sailor or a soldier with a cottage or a picture, a diamond ring or a share certificate, or a piece of land. These things do not pay for a tank or a machine gun. All these things must be turned into liquid money. And as you turn them into money by sale, if there are a great number of things to be turned thus into money, so you depress prices, so you get by this system of trying to avoid inflation by a taxation so severe that it causes capital to be sold, what is known as deflation. If you get violent deflation you may get unemployment and riot in the industrial cities of the north. We know that deflation a few years back threw men out of work. The one thing we prayed for in the economic blizzard 15 or so years ago was for a rise in prices. Anything which is done by indirect means

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to bring about a capital levy of any magnitude brings misery on the people. The thing we must do is to take the middle course so as to avoid such taxation as will bring about deflation with all the misery which we experienced in unemployment and bad export trade after the last war owing to deflated prices. There are many things which the schoolmaster of war has taught us. The noble Viscount, Lord Samuel, will remember the controversy about the sugar beet subsidy. Imagine what would have happened if that subsidy had not been granted, and we had not obtained a great acreage of sugar beet.
VISCOUNT SAMUEL: We should have had other roots in place of it.
LORD MANCROFT: Never mind the other roots. The money has been well spent. We got sugar. We have got half a million tons of life-giving food and removed the war risk to our seamen in bringing that food in ships. That is one of the lessons which I hope fanatical free traders will have learnt from the schoolmaster of war. Another lesson to be learnt is this. We were told over and over again that we must have a war chest abroad by investing in foreign countries. Many millions were invested and have been lost in South America—in Argentina, in Brazil and Chile and in every country in South America, I believe, except Venezuela. With the exception of a few debentures in Argentine railroads not one of those investments is worth much to us now. It would have been very much better if we had not invested and lost that money for the benefit of bond-mongers. There should be after the war no unregulated investment of our savings in foreign countries—not sterling countries, but foreign countries. It would be very much better to leave these foreign countries to shift for themselves and use the money to develop agriculture here and irrigation and railways in our dependencies like India. In my opinion we must put an end to uncontrolled, unregulated foreign investment in the future which benefits no one except perhaps the issuing houses.
Finally, there is a point to which I think the Chancellor of the Exchequer might well direct his attention. Large numbers of undying, immortal, non-trading institutions hold, and have very properly taken
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up, large sums of war loans. That is all right, but as non-trading institutions they pay no Death Duties. Large sums of money are now passing into the hands of institutions which are non-trading, undying institutions, which are benefiting by the protection which the country has given them but in respect of which they pay no Death Duties. Those institutions should be made in some way to pay for the benefits of defence which they share with the rest of us. I support this Bill and I only have to say two minor things in conclusion. Do not squeeze and discourage the man who is likely to engage in enterprise after the war. He has had his machinery shaken to pieces, he has had the walls of his factories cracked by overworking, he has had to put in machinery and equipment of a kind which he cannot use after the war. He must have money to re-equip his factory and rehabilitate himself. If you take everything away in E.P.T. and Surtax you do not give him a chance of rehabilitating himself and of rehabilitating the country, for he is the country. I think that that is a matter that should not be overlooked. I am sure that we can bridge our gap troubles by instigating a stronger movement for private savings; that will be the solution of our difficulties. The case for saving should be put to the people not that it is as a punishment but particularly as a means of preventing inflation. "Inflation" should be explained to the public. You will also persuade people to put by their money if you offer some form of security of longer date and with a little more interest than is now given. I apologise to your Lordships for having detained you so long and I thank you for your attention.
LORD MOTTISTONE: My Lords, I had not intended to address your Lordships, but it has been pointed out to me that it would be of interest to you to know what is the prospect of obtaining this very largely increased sum from the people's savings through the movement for which I as Chairman and Lord Kindersley as President have been responsible for about fifteen years. What are the prospects of success? I have consulted those on whose judgment I have been accustomed to rely, and who have been proved to be good judges, and I can say that given the same measure of generous support which we have received from all classes—and notably

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from your Lordships in your capacities as Chairmen of county councils, Lord Lieutenants and in other ways—there are good prospects, in their judgment—and I think they are right—that we hall obtain this very great additional sum. It is a fact, as my noble and learned friend who sits on the Woolsack has pointed out, that this forms a very large part of the total of £500,000,000 which has to be found, and, of course, it would be a serious thing if we did not come up to the scratch—I cannot think of a simpler phrase at the moment.
I think this thing can be done. I had before me only this morning the final figures for the War Weapons Weeks. They were very impressive. The total amount raised by these weeks was £395,000,000, and it will be within your Lordships' knowledge that Greater London alone contributed some £120,000,000. It was apparent to us all, and especially to me, that there must be a falling off immediately after this tremendous effort, for a tremendous effort it was. There has been a reduction, but not so large a reduction as one might have expected. If you analyse the figures, you will find, when you look into statements relating to the Post Office Savings Bank and the trustee banks, that there are indications tending to show that people arc continuing to save in ever increasing degree. But, of course, we have to carry our work further, I am very grateful to the Lord Chancellor for the kind words which he has said about Lord Kindersley and myself and the multitudes of other people working in this cause., and I can assure him, and through him your Lordships, that if we do not succeed it will not be for the want of trying. For the moment we are endeavouring, and we shall continue to to do so during the next four, five, six or seven weeks, to perfect our machinery for this great effort. As autumn cames along, Lord Kindersley and I will be addressing your Lordships—those of you who are Lord Lieutenants or hold other official positions—begging for further support in an intensive drive to make sure that through the autumn and again in the beginning of next year we shall achieve the task which we have set before ourselves; that is to do what the Chancellor of the Exchequer asks: to bridge the gap and to make certain that
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our finances are sound enough to ensure for us final victory in the war.
My noble friend Lord Mancroft, who spoke just before me, will forgive me if I do not follow him into questions about Free Trade and Protection which he raised, or into the question of subsidies. So far as the question of making plain the dangers of inflation to the millions of people whom we can reach by propaganda is concerned, we, of course, realize that by ensuring that our finances are on a sound basis we may avoid inflation, which indeed might place us in some danger of starvation. I thank him for the suggestion, and we will consider how best to carry it out. Of course, how best to appeal to the 10,000,000 people to whom we are appealing is a highly delicate and difficult art. If you put forward anything in the way of a threat, such is the interesting nature of our countrymen, you may do more harm than good. We shall bear that in mind, for it is a truth which must be carefully considered in connection with any form of propaganda in this country. I thank all your Lordships who have helped us so much in this great cause, and I assure you that we will do our utmost to see that the work produces results which will be a prelude to victory.
LORD TEVIOT: My Lords, I propose to address your Lordships for a very short time only. I should like, if I may, to ask my noble and learned friend to pass on something of what I have to say to the Chancellor of the Exchequer. I do so with some trepidation as I know there are some very strict rules with regard to speeches on the subject of finance in your Lordships' House. There are, however, one or two appeals which I want to make through my noble and learned friend to the Chancellor of the Exchequer. I would say at the outset, that so far as this appeal is concerned, I have no financial interest whatever in what I am going to say.
The Chancellor of the Exchequer has made certain concessions to companies which are finding themselves in a very disadvantageous position by reason of the fact that they were just coming to maturity—and this particularly applies to some small metal-producing companies such as gold mines—which were just coming into the profit-making zone when the

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war started, and, in fact, in some cases, since the war began. Although the Chancellor of the Exchequer has made certain concessions with regard to these companies, there are some of them, particularly metal-producing companies, which have short lives, and which find themselves in this position, even after the concession has been made, that not only will they be unable to pay any dividends during their life of operation, but certainly, in one case of which I know, half the capital will not be returned to the shareholders when winding up takes place. I feel, and I hope, that I am in order when I ask the Chancellor of the Exchequer to think again, to go into some of the instances where this is going to happen, and, if he would, to permit a deputation to wait upon him with reference to this subject. That is all I have to say on that question.
My second appeal is this. I notice that there is to be given a concession to what are termed the weekly wage-earners who come under Income Tax regulations. I think it is in Clause 23 of the Bill. There are some people who are in exactly the same position as weekly wage-earners, although they may be paid monthly. Let me give an instance. There may be two individuals living in the same street, one a weekly wage-earner and the other being paid by the month, but both receiving exactly the same remuneration. Owing to the war, both their homes are bombed and they both, being friends, seek accommodation elsewhere and find it ten miles away. This means that instead of living near their work they have to incur extra expenditure for travelling to and fro. In the case of the weekly wage-earner, £10 a year of his remuneration is exempt from Income Tax because of this extra expense, but that is not the case with the skilled draughtsman, or whoever else it may be, who is paid monthly; he has to meet this extra expense without any kind of help. I cannot believe that that is really what the Chancellor of the Exchequer wants, because to have this spirit of discrimination between one worker and another in these days, when we want unity and good feeling among all, is bound to give rise to annoyance and to a sense of unfairness.
I have put these two points quite shortly, and I hope that as a result of my appeal this allowance of £10 will be given to all those who receive a certain salary,
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no matter what work they do or how they are paid. I also hope that the case of the companies which I have mentioned will be gone into further. Lastly, I hope that I have not transgressed in dealing with a Finance Bill, which I know is a touchy business. I trust that my noble and learned friend will put these matters before the Chancellor of the Exchequer.
THE LORD CHANCELLOR: My Lords, I should like to reply to two or three matters which have been raised in this short but interesting debate. First of all, with regard to what was last said by my noble friend Lord Teviot, I would assure him that I am myself a stout supporter of the Parliament Act, but there is nothing in it which prevents your Lordships making suggestions or raising complaints on any item of taxation; and it seems to me that your Lordships perform a very useful function in being able to make those criticisms and suggestions from the point of view of your own experience and reflection, while at the same time you can disclaim all responsibility for the consequences! I shall certainly not: fail to communicate to my right honourable friend the Chancellor of the Exchequer both the points raised by my noble friend Lord Teviot, the first connected with Excess Profits Tax and the second in relation to the clause which provides for an allowance of as much as £5 a half-year from the wages assessed in the case of weekly wage-earners. I thoroughly understand the force of my noble friend's observations, and I shall do my best to convey them faithfully to the Treasury.
My noble friend Lord Arnold, as we have become accustomed to expect, has made a thoughtful and interesting contribution on this occasion. I would almost call it a stimulating contribution, if, properly speaking, a stimulus is a goad. There has been a certain painful sharpness in some of his reflections, but his main object was to encourage us to go on as we are going on, only more so. It is in that spirit that I receive his speech and shall do my best to convey it to the Chancellor of the Exchequer. It is quite true, as my noble friend said, that you cannot, in examining the figures in this Budget, find a great deal of spare ground before you come close up against the actual presence

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of inflation. That may well be so, although I would observe that if, as he warns us may be the case, the expenditure is even larger than the estimated figure, such expenditure will very largely take the form of additional payments to various classes of people in this country, and will mean that they have increased incomes, which in turn will have its effect on the produce of taxation. I agree, however, that we are steering a narrow way between difficulties. The fact is that we are in the middle of a great war, a war of life or death, and we have to face all sorts of risks. The best that we can hope to do in this matter is so to plan our financial arrangements as to reduce this danger to a minimum. I do not think that we are living in times when we can keep the bogey of inflation at so great a distance that we need not think about it any more.
Not for the first time, my noble friend raised, in connection with the Budget debate, the subject of a wages policy. He will not expect me to deal with that vast, complicated and difficult subject now. I would only say—and here I also address myself to my noble friend Lord Mancroft—that the Chancellor of the Exchequer has before him the resolution which my noble friend quoted., and that the House may at any rate be quite sure that this very important aspect of the general financial problem is one which is being very vigilantly watched and considered by His Majesty's Government.
There is one other observation which I should like to make about Lord Arnold's speech. I do not think that he disapproved of the reductions made in this Budget in the allowances for Income Tax; I think he applauded them. Their effect is, of course, to produce a vastly increased sum of Income Tax from the wage-earring population, from those at the lower end of the scale. There is one thing, however, which I find is always omitted in considering these changes, and which I shall take leave to mention now. No doubt it is present in the noble Lord's mind, but it is not stated. Take for example the reduction which has, now been made for married persons, so that the personal allowance is now £140 instead of £170. That, of course, does not mean that somebody gives them or allows them in account either £140 or £170; it means
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that the figure named may be deducted from the assessment liable to tax. If the tax is comparatively low, the amount of actual relief in taxation from such allowances is small; if the tax is high, the actual relief from taxation afforded by such allowances is great.
For example, when the Income Tax is 10s. in the pound, but the married allowance is reduced to £140, what really happens is that the married taxpayer gets off £70 of tax (half of £140) because the tax is 10s. in the pound; but, if the tax was 5s. in the pound, then, even though the allowance made to him was £170, he would get off only one-fourth part of that £170. There is therefore a certain reason for revising these allowances in a downward direction when the rate of tax becomes very high. As any simple calculation will show, it really means a relief from a larger amount of taxation when the tax is high than it would be when the tax is low. That is only one consideration. It is a consideration which has often been in my mind in the years I was Chancellor of the Exchequer, and I do not find, as a rule, that it is allowed for in discussing these subjects.
I must not yield to the temptation, severe as it is, to discuss in the most friendly way with my noble friend Lord Mancroft some of the topics he touched on delicately in his interesting speech, for that would take a long time and I should be sorry to get into any controversy. With regard to his main point—the point that it is the danger of inflation which is the real peril always to be remembered and to be faced in our financial arrangements—I feel, if I may be allowed to say so, he is perfectly right. I do not think my noble friend Lord Mottistone and those who work with him by any means omit to emphasize that in their innumerable public meetings. Certainly on the occasions I have been there, I have explained it with penetrating clearness, though whether when I have finished I have increased the amount of contributions to the loans I do not know, for it is not an interesting subject to an ordinary audience. At the same time there is no question on which it is more important for us to direct all our energies in guiding and instructing our fellow citizens. I thank your Lordships for the kindness and patience with which you have received the Finance Bill, and I now put the Question to the House.
On Question, Bill read 2a; Committee negatived.

GOODS AND SERVICES (PRICE CONTROL) BILL.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Snell.)
On Question, Motion agreed to.
House in Committee accordingly:
[LORD STANMORE in the Chair.]
Clauses 1 to 20 agreed to.
Clause 21 [Application to Scotland]:
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved to insert after paragraph (a):
"(b) Subsection (1) of Section eleven shall not apply to Scotland."
The noble Lord said: There are two Amendments standing in my name. This is one of those tiresome occasions when any intelligent remarks can only be made in respect of the second one. Your Lordships, under these conditions, usually agree to take both Amendments together, and I trust that that may be your pleasure on this occasion. The Amendments deal solely with practice in Scotland. The object which I wish to secure is one which I am quite certain will have the sympathy both of the House and of the Government. It is to make prosecutions easier and speedier to institute.
The Amendments will affect procedure in Scotland which at present is laid down in Section 21 of the Prices of Goods Act, 1939. In order to make the matter as brief as possible, I shall only say to your Lordships that the relative section there provides that where it appears to a local price-regulation committee that there has been a contravention in their locality, they have to make a report, after making proper inquiry and giving the offender the chance to be heard, to the Central Price-Regulation Committee. If the Central Committee is of the same opinion, they report the matter to the Board of Trade. If the Board of Trade consider it a fit case in which to institute a prosecution, they pass it to the Lord Advocate. If the Lord Advocate agrees, he instructs the Procurator Fiscal in the area, and the prosecution may then take place. Your Lordships will not be surprised to hear that, with all these stages to be gone through,
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it sometimes happens that the limit of six months, which is elsewhere provided in the Act, has expired before the Procurator Fiscal has put the machinery of prosecution into operation. Consequently, a prosecution, however urgent and necessary it might have been in the public interest, cannot happen at all. It does seem to those who have had experience of the working of this process that that procedure is unnecessarily cumbrous and that it would be a very good thing if we cut out some of the stages.
The Amendments I have put down will have the effect of cutting out both the Central Price-Regulation Committee and the Board of Trade. This is only, of course, in so far as prosecutions in Scotland are concerned. The effect would be that the local committee, who are responsible people and know what they are about, if they are satisfied that a prosecution should take place, would be able to communicate direct with the Lord Advocate, who would put the machinery of the law in motion. Otherwise, the machinery remains unchanged. I venture to hope that the Government will accept this Amendment.
Amendment moved—
Page 15, line 27, at end insert the said paragraph.—(Lord Balfour of Burleigh.)
LORD SNELL: The effect of the Amendments would be, as the noble Lord has said, to cut out reference to the Central Price-Regulation Committee and to the Board of Trade in all cases of contravention in Scotland of the provisions of the Act. The noble Lord has no doubt in mind the complaints that the procedure dealing with prosecutions in Scotland is unduly cumbersome, and the intention of his Amendments is to seek to simplify it. It is true that there is one more step in the institution of prosecution in Scotland than there is in England. The local committee report a case in which they think prosecution is desirable to the Central Committee, and if they concur the Central Committee recommend the Board of Trade to take proceedings. The Board, if they think fit, then require the Lord Advocate to institute proceedings.
The proposal that the Scottish Committee should be enabled to send cases direct to the Procurator Fiscal to report to the Lord Advocate instead of submitting them through the Central Price Committee

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to the Board of Trade, was in fact considered when the Bill was being drafted. In subsection (4) of Section 8 of the principal Act it is expressly provided that "it shall be the duty of the Central Price-Regulation Committee to secure uniformity in the manner of the discharge of their functions by local price-regulation committees." This is a general provision which Parliament considered necessary in 1939, and there is no ground whatever, on the basis of our experience, for departing from it in 1941. Whether it is a prosecution under the old Act or under the new, this provision is essential in order to secure uniformity of practice and to preserve the safeguards for the trader against unfounded prosecutions. Likewise the Board of Trade must remain the prosecuting authority, but the Board are permitted to delegate their functions to anyone authorised by the President to perform them, and they do intend to authorise the Chairman of the local committee to request the Lord Advocate to institute prosecutions, on behalf of the Board. Cases in which the Central Committee recommend a prosecution would then normally be sent straight to the locality where they originated, for proceedings to be taken.
I hope that explanation on behalf of the Government will give some comfort to the noble Lord who has moved this Amendment. It will be seen that as the law now stands it is sufficiently flexible to deal with what the noble Lord has in mind so far as the Board of Trade is concerned, but hitherto it has not been thought necessary to modify the procedure. It is true that some cases have taken a considerable time to prepare, but this has not been due to the necessity of referring them to tile Central Committee and the Board of Trade, but to the complicated investigations that are often required before sufficient evidence of contravention of the Act could be obtained. I hope that after that explanation the noble Lord will feed that his point is in part met and that he will not press his Amendment further.
LORD BALFOUR OF BURLEIGH: My Lords, I must admit that there is force in the contention of the noble Lord that uniformity must be preserved, and I think that then; is, force in his argument that therefore the Central Committee's function ought not to be cut out. I do
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derive great comfort from the noble Lord's statement that the intention is to authorise the chairman of the local committee to request the Lord Advocate to institute prosecutions. That is an assurance which does take us a very considerable part of the distance which I had hoped the Government would go by accepting this Amendment. I think it would have been arguable that the function of the Central Committee was more important under the old Bill than under this, but I do recognise the force of the contention. I think perhaps it is a pity the Government did not discover this short cut which was in the original Bill and did not use it long ago, and if the submission of this Amendment has had any effect in stimulating their imagination I am very glad. But I do not want to appear ungracious; therefore I should like to thank the noble Lord very much for the statement he has made and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 21 agreed to.
Remaining clauses agreed to.
Schedules agreed to.
Bill reported without amendment.

FAMILY ALLOWANCES TO CHANNEL ISLANDERS IN HIS MAJESTY'S FORCES.
THE LORD BISHOP OF WINCHESTER THE LORD BISHOP OF WINCHESTER rose to draw attention to the discrepancy between the rates of family allowances paid to Channel Islanders serving in His Majesty's Armed Forces whose wives and children are still in the Channel Islands, and the family allowances paid to Channel Islanders serving in His Majesty's Armed Forces whose wives and children are in Great Britain; and to move for Papers.
The right reverend Prelate said: My Lords, I think it is perhaps somewhat unusual to raise from these Benches the question of Army pay, but the circumstances are exceptional. The Channel Islands are in my diocese, and I have a large number of friends both in the islands and among the islanders who are now in Great Britain, and, through correspondence and interviews, a difficulty has been brought before me repeatedly in connection with the allowances which are paid to families of men who are serving in the

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Forces. In the last war a large number of men from the Channel Islands served in His Majesty's Forces, and in this war also from all the islands there have come a large number of men. I do not know the numbers; if I knew them it would be unfitting to give them.
For the purpose of this question these men may be divided into two groups. There are those who have their families on the mainland, and there are those whose families are left in the islands. There are the men who were able to arrange for the evacuation of their families before the islands were occupied by the Germans. They are relieved from any pressing anxiety about the safety of their wives and children. They are able to see them from time to time. They can correspond with them freely and they know that they receive the ordinary maintenance payment which is made to all those who are serving in His Majesty's Forces in accordance with certain conditions. I take only the case of a private: a private pays 1s. a day, 7s. a week. He receives maintenance allowance for his wife of 18s.; 7s. 6d. for the first child, 5s. 6d. for the second child, and 4s. for each subsequent child. But there are many who had to leave their wives and families in the islands. Your Lordships remember the stress and strain and to a certain extent the confusion at the time when the Germans were about to occupy these islands. Many of the men came away understanding that their wives and families would follow them almost immediately. I have no doubt it was firmly believed that this was possible. It has not proved possible, and though they are serving in the Forces many of them are in this island, and their wives and children are still in Guernsey, Jersey and Sark, and it is impossible for them to see them. Communication with them is most difficult. I wish something could be done to expedite communication with the Channel Islands. It takes longer for an answer to be received from a letter addressed to the Channel Islands—far longer—than to receive an answer to a letter addressed to a prisoner of war. It is quite true that a number of brief answers have been pouring in during these last weeks. Most of them are in reply to letters which were written months ago.
In addition to all these anxieties which these men have about their families in the Channel Islands, there is the financial anxiety. At first they found it impossible to receive for them any kind of family allowance, but last January the Government made an important concession by which 13s. a week was to be put aside and paid into an account for the men whose families remained in the islands. But it is from this that there arises a very real sense of grievance. Take two men, both of them islanders serving perhaps in the same battalion, with exactly the same number of family dependent upon them. There is a man with his wife and two children, and he has them in Great Britain. He receives £111s., but the unhappy man who has his family in the Channel Islands receives 13s. I am told also—and I know this is a fact—that many of the Channel Islanders have large families. A family of five children is nothing unusual in the Channel Islands. A man with a wife and five children who are in England receives £2 3s., a man with this family in the Channel Islands receives to his credit 13s. I do not think it is surprising that there is a sense of grievance about this.
Perhaps I might read a letter which I have received, but of course I cannot give the name of the writer, although I know him very well and know that he is a man serving in the Forces. He says:
"Men contribute in all cases roughly half their pay. It therefore follows that soldiers whose wives and families are in this country derive far greater benefit from the same contribution than do their unfortunate comrades, who, through no fault of their own, are separated entirely from their wives and children. Is this fair?"
This does cause a great deal of distress and anxiety. The men are terribly anxious as to what is happening about the maintenance of their families and what will happen at the end of the war. Probably two things are happening. In some cases the wife is using all the savings. The Channel Islander is prudent and saves, and the wife of such a man is quite naturally drawing upon all the savings that they have. Or the difficulty is met in another way. It is possible—this is not certain, although I see it was stated rather definitely as the case in one of our daily newspapers—for the States to know what the maintenance payment is. If the States—that is the Parliament of the Islands—are making this payment the difficulty is, that they are making it according to

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Channel Island law—and I speak cautiously on this, and I think perhaps the Lord Chancellor might speak a little cautiously about Channel Island law. I understand that according to Channel Island law the money, if it has been paid by the States, will be demanded back from the man as soon as it is possible to make a demand, so that these men who are serving the Crown here are afraid that when they are able to go back to the islands they will find that all their savings have been spent and that the States are demanding repayment of the money which has been advanced to their dependents.
That is my case which I am putting before the War Office. I know there is another side, and that it is not quite so simple as I state it. There is not really discrimination especially against the Channel Islands. The War Office are applying a rule which applies to men who have their families anywhere in occupied territory or where they are outside the sterling group, and of course there is a very natural care that if you make an exception you will not know where to end making exceptions. Personally I am never afraid of making an exception to a rule, if it is an exception that does not start a dangerous precedent, and I venture to say that here is a case for an exception which does not start a dangerous precedent. I would say that the case is exceptional. Here you have men coming from islands which for nearly 900 years have shown unswerving loyalty and fidelity to the Crown, and therefore I think there is a case for having some exceptional treatment for him. It will also be said, I have no doubt quite correctly, that this allowance is paid to a man when he is maintaining his family and that it is impossible for the men who are separated from their families in this way to maintain them. But I would point out that they are separated from them through no fault of their own.
It will be said that it is impossible for money to reach them, that it is still quite uncertain what kind of treatment they are receiving, and what their actual financial position is, and that, as the money in any case could not reach them at the present time, it is very difficult for the War Office to lay down some new principle dealing with this particular case. Well, there may be great difficulties in dealing with the matter at the present
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moment, but what I would venture to urge is that the Government should make such a sympathetic reply as to show to the men who are serving, and all those who are concerned with the islands, that when the war is over this matter will be given the most sympathetic consideration. What I would ask for is this. If you cannot at once put the men who have their families in the islands on the same basis—I wish you would—as the men whose families are in Great Britain, at any rate cannot you make some promise to them, give some reassurance that when the war is over the men whose families are left in the islands will not be. in a worse financial position than men whose families have been in Great Britain all the time?
I would end with rather a general observation. I know that a large number of the islanders are feeling that we do not always quite sufficiently realise the tragedy of their position. Amidst the many cares and interests of the war, it is not possible for us to concentrate our attention all the time on one particular aspect of it, but there are large numbers of the islanders who feel that perhaps we are not showing to them all the sympathy which they have a right to expect. I am quite certain all of us are deeply concerned about the islanders and that the Government and all of us are eagerly looking forward to the day when the islands will have their freedom restored to them, when those who are exiles will be able to return. If the noble Lord who is to reply can give a sympathetic answer.—I am certain he himself is most sympathetic in this matter—it will reassure and encourage large numbers of islanders with whom we have every sympathy. I beg to move.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR WAR (LORD CROFT): My Lords, I am sure your Lordships will agree that we understand very easily the concern of the right reverend Prelate in regard to these most loyal members of the British Empire who happen also to live within his diocese. I can assure him that it is our desire in every respect to be sympathetic because it has been a tragedy to us to realize how many of the wives and children of men who are already in this country are still left in these islands under enemy

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occupation. I want, however, to stress, if I may, the particular principle on which we have to base our action. Family lodging allowance for officers and family allowance for soldiers are payments made to the personnel concerned by the State, towards the current cost of maintenance of the officer's or soldier's family. If, in fact, the officer or soldier is not maintaining his family, then the allowance is not paid. In the case of the Channel Islands and all the other cases where it is not possible to make remittances through normal channels because the family is in enemy or enemy-occupied territory, these allowances are not issuable. As a special concession, however, it has been agreed that a grant at a lower rate than the normal allowances may be given, which, together with allotments from the officer or soldier, shall be "banked" until such time as it is possible to release the accumulated sum—in the normal event after the war. This grant is in fact not a current maintenance payment but a grant made to meet special circumstances.
Finally, I want to make it quite clear that Channel Islanders whose families are still in the Channel Islands and all other British officers and soldiers whose families are in enemy-occupied territory are treated in exactly the same way as regards allowances. Even if it were possible to find some means whereby allowances could be paid to families in occupied territory, the payments would mean a loss of exchange to ourselves to the benefit of the enemy. I have seen in the papers a statement which suggests that where family allowances were in issue to soldiers' wives in the Channel Islands prior to the occupation by the enemy, payments equivalent to these allowances are being made. The source of the payment was not indicated, and I cannot confirm the statement. If payments are being made, and if any claim for recovery is eventually presented to the soldier, the War Office will take into account the fact that family allowance has been withheld. I will only say one thing further, and that is with regard to the point raised by the right reverend Prelate concerning the difference between two soldiers, one who has his family in the Channel Islands and the other who has his family in this country. One must take into account the fact that where the
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soldier's wife and children did escape to this country, he undoubtedly will have to incur very considerable expenditure, which probably may exceed the difference in the allowance. I do not say that in any unsympathetic way, but we must realise that.
THE LORD BISHOP OF WINCHESTER: My Lords, I am very grateful to the noble Lord for his reply, and especially for his statement that at the end of the war, if the local authorities in the Islands have been making these payments, the Government will take that circumstance into full consideration. I wish, of course, that he had been able to go further, but I am sure the Channel Islanders will appreciate his sympathetic reply. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

HOSPITAL RATIONS FOR MERCANTILE MARINE.
THE EARL OF CORK AND ORRERY THE EARL OF CORK AND ORRERY had given Notice that he would ask His Majesty's Government whether it is intended to class merchant seamen as "Service" casualties or sick when undergoing hospital treatment and thereby place them upon an equality, as regards rations, with naval ratings; if not, what are the reasons for differentiating between seamen of the Royal Navy and Merchant Navy in this respect; and move for Papers.
The noble Earl said: My Lords, I do not think it necessary to apologise to your Lordships for bringing up this subject again after an interval of only six weeks, because I judge from the sympathetic way in which you received my remarks on the previous occasion that you would not wish me to let the matter drop while the present state of things exists. On the previous occasion I connected with this question of the rations of merchant seamen under the Emergency Hospital Scheme their participation in the distribution of duty-free tobacco and cigarettes by the Red Cross and St. John organisations. On that particular point the Chancellor of the Exchequer and the noble Lord were both courteous enough to inform me that that had now been allowed; so that matter is happily ended. The same happy result, however, has not materialised as regards rations.
I wish to make it quite clear, if I did not do so previously, that I am not alluding to the medical treatment received by merchant seamen in hospitals. I am perfectly sure that they get: exactly the same treatment as every other patient gets—that is, the best that physicians and surgeons can give them. But even physicians and surgeons have to deal with the material they get, and it they get two patients, one of whom is well fed and nourished while the other is the reverse, then the one who is better fed and nourished will recover sooner than the one who is under-nourished. Before I go further, I should like to tell your Lordships what are the differences in the rations, because they are not trivial but are very large. As regards meat, the Royal Naval rating receives in a week 2⅝ lbs., whereas the merchant seaman only receives 1s. worth of meat, which is less than 1 lb. As regards butter, the naval rating gets 10½ 0z., and the merchant seaman only 6 0z. The naval rating gets 1 lb. 8 0z. of sugar, and the merchant seaman only ½ lb. In the matter of bacon, the naval rating's ration is 9 0z., and the merchant seaman's 4 0z.
The noble Lord, Lord Croft, when he replied on a previous occasion, said that the Government were satisfied that both classes of patient were getting the food that current supplies allowed and that their medical condition required. In view of the figures which I have given I think ore can only come to the conclusion that one class of man is getting much too much, or the other much too little. I take it that before that statement was made the Government got the opinion of their medical advisers on this particular subject, but I think it will be agreed that we ought to have a unanimous opinion by medical men as to whether the merchant seaman is getting enough. Medical opinion is not unanimous. If your Lordships will allow me, I will read a short extract from a letter from a physician who gives up his spare time to caring for sailors of the merchant service. This is what he says:
"It has, during the past year, become increasingly clear that extra food allowances are highly desirable in the Seamen's Hospital, since a considerable number of my patients are admitted in a debilitated state as a result of long voyages and, in a certain number of cases, prolonged exposure in open boats. Furthermore, it is my personal opinion that no small number of the conditions which we
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are called upon to treat are the outcome of faulty and deficient diet on board."
He also says:
"There is no doubt that the increased dietary offered by Service hospital rations would enable physicians and surgeons to get their sailor patients back into service more quickly."
It is a national need that these men should get well quickly. We are making a great drive through the country to get seamen, and it is a necessity that when these men are in hospital they should get back to work quickly. Merchant seamen have always been at a disadvantage in this respect. The merchant seaman's food has never compared well with that served to the man in the Royal Navy. The merchant seaman only gets just enough to satisfy the regulations, and it is badly cooked and not well served. In the Royal Navy the ratings get ample food, there is great variety, everything is of the first class. Officers are appointed to see that everything is first class, and cooks are trained to prepare and serve meals. I suggest that these men who are being stinted in this way are the men who have the hardest job of all in the war. Quite apart from the risks of war, their ordinary navigational risks are increased in such times as these.
Most people when they think of merchant seamen think of the men serving in some great liner in which they have had a joy ride. They never realise what life is like for men in the small ships. Just think of the conditions under which these men live. They spend practically the whole of their time on duty, and the only accommodation for them is in the forecastle, or in some cramped quarters. They cannot go home in the evening to their families. They cannot spend a couple of hours at the pictures. All they get by way of disturbance of their routine is some alarm which brings them up on deck whatever the weather. I suggest that whatever the danger may be of increasing these allowances for merchant seamen, even if it does set a precedent and lead other people to come forward with demands, we should put these men on a level with the ratings in the Royal Navy. Men who risk their lives to bring food to this country should not be stinted of that food when they become sick or are casualties as the result of the dangers to which they are exposed. The shores of the Seven Seas are now strewn with

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the wreckage of boats in which British sailors either starved to death or perished from thirst. I suggest that men such as these who become sick or casualties should not be treated as outcasts, and should not be less well treated in the matter of food than men of the Royal Navy.
LORD MARCHWOOD: My Lords, I feel sure that there are very few, if any, members of your Lordships' House who are not in entire sympathy with the Motion which has been moved so feelingly by the noble and gallant Earl who sits opposite. I hope it may be possible for the Minister of Food, when he replies, to tell us that he will do his utmost to ensure that in the future there will be no differentiation in the treatment, so far as rations in hospital are concerned, of the men of the two great Sea Services. From whatever angle it is viewed, it is unfortunate, to say the least, that there should be preferential treatment in any way, and I cannot but feel that the Minister of Food, who has done such wonderful work in his own Department under most severe strain and difficulties, must share this view with us. When we consider the type of work men of the Merchant Service are now doing, and the risks they are running in order to ensure that we get the food and munitions which we require, and in fact without which we could not live, it is inequitable that they should be treated less favourably than are naval ratings when they are sick.
As regards the difference in rations which the noble Lord quoted I have been at great trouble to find out whether or not that scale is correct, and I am informed that the difference in treatment is not great, that it is in respect of meat only, and that as regards other rations treatment is identical. With regard to meat, the naval rating is entitled to a ration of 2s. 4d. worth as against 1s. 2d. worth given to men of the Mercantile Marine. If my information is correct, one would imagine that the authorities of the hospitals could, by some system of pooling or averaging out, bring about an equality of rationing for both Services so that each of the seamen patients would receive the same. I hope that the Minister will take the necessary steps to see that this is done. At the same time, if a ration of 1s. 2d. worth of meat is sufficient
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for the merchant seaman patient, which, I suppose, can be determined by the doctors in charge, surely it must be a sufficient ration for the naval rating patient, whose ration should, accordingly, be reduced to that level. If, on the other hand, the ration is considered by the medical profession to be insufficient for the sick or injured merchant seaman there should be an increase, if necessary at the expense of the civil population, who, I am sure, would willingly accept and bear such a burden.
I do not wish so much to lay stress on this particular difference in meat rationing; it is the general and important point of principle which I wish to emphasize. Our merchant seamen have not in the past received, and are not yet receiving, that: generous consideration and treatment at the hands of the Government which they undoubtedly deserve in view not only of their loyal and devoted service to the country, but also of the arduous and dangerous nature of their work. It is impossible for us to do too much towards repaying the debt which we owe to the Merchant Navy, and it is more than gratifying to know that the Government, in several instances, have decided to treat officers and men of the Merchant Navy in the same way as officers and men of the Royal Navy are treated, a notable example of this being the Merchant Navy War Pensions Scheme. I trust that this equality of treatment will be extended. I hope also that any improvement in the status of merchant seamen that has been introduced during the war will not be abandoned immediately hostilities cease. Praise and lip service are often given and given quite easily, and are just as easily forgotten, so that the men are not helped materially. I ask the Government to see to it that our ships and our seamen, who are so prominently in their minds during the war, shall have a no less prominent place in their thoughts in times of peace.
LORD MOTTISTONE: My Lords, before a reply is given on behalf of the Government, may I just say a few words? I must apologise for addressing your Lordships twice in the same day, but my noble and gallant friend the Earl of Cork and Orrery begged me to support his Motion, and, knowing a great deal about him and about his past history, I gladly agreed to do so. It is indeed, as has been previously remarked, a wonderful thing

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to see an Admiral of the Fleet pleading the cause of the merchant seamen with so much vigour, and he must have touched every heart. During the time that he was Commander-in-Chief at Portsmouth he realized the importance of this question, and he went into it most thoroughly. If ever there was a case of a man knowing the subject of his speech from A to Z, we have it here to-day.
I support the noble Earl not only for that reason but also because I can, perhaps, put before the Minister of Food this thought: it is a mistake in a democratic country to fight a case which, as a Parliamentary case, is absolutely water-tight. As the noble Earl has said, there should not be this differentiation between these two classes of seamen, especially in time of war. I would suggest to the Minister of Food, who, if I may say so, is, I think, doing his job extraordinarily well, that he should at once say that there shall be no such differentiation, and that if there is any he will remove it. If he says that, the trouble will cease, but if he does not do so I can promise him that this is the kind of thing which will never be allowed to rest. I do not suppose that my noble and gallant friend who moved this Motion, having got his teeth into it, will ever let it go. If the Minister wants to sleep quietly in his bed, when he gets the chance to do so, as he deserves, let him accept this Motion. I know that it is wise and just and I would beg my noble friend opposite to accept it in principle and in fact.
THE MINISTER OF FOOD (LORD WOOLTON): My Lords, I am very grateful to the noble and gallant Earl who raised this question for giving me an opportunity of removing what is apparently a misunderstanding. I am also grateful to the noble Lord, Lord Mottistone, for the Parliamentary advice which he has given me, and of which I am constantly in need, although not in this instance, for I have no intention of fighting a battle on this subject, and in any case I do not think that I should be anxious to fight a losing battle on a matter which was not one of principle. Who is there in this country who has more reason for gratitude than I have to the men of the Merchant Service for the work which they have done? It would have been quite impossible to feed the people of this country if it had not been for the heroic and persistent continuance in well-doing shown by the Merchant. Service.
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The noble and gallant Earl, therefore, can have no doubt about whether he has my sympathy in the point of view which he has put forward. I hope, however, that he will acquit me of discourtesy when I say that he moved a little from the Motion which he put down when he spoke also about the feeding of the men when they are at sea and when they are well. I make that point merely because I have not, in view of the terms of the Motion, inquired into what are the conditions at present under which merchant seamen are working in the matter of food. All that I can say is that I have not heard of any complaints on the subject, and my Ministry is indeed one which has to have very wide open doors to complaints, and they have to be very large doors, because complaints pour in the whole time. If there are any complaints on that issue, I assure the noble and gallant Earl that I will very willingly and very speedily go into them.
Coming to the precise terms of the Motion, I am sorry to say that the noble and gallant Earl is a little behind the clock in the matter of the figures which he quoted. Until comparatively recently, there was a considerable difference between the rations of merchant seamen in hospital and those of naval ratings.
THE EARL OF CORK AND ORRERY: My Lords, those figures were handed to me by the secretary of the seamen's hospital this morning, as representing what he was allowed to do.
LORD WOOLTON: My Lords, I am sorry, but the truth is that with the consent of the First Lord of the Admiralty we altered the rations six weeks ago, when a large amount of publicity was given to the matter. The noble Lord, Lord Marchwood, was correct when he said that the only difference which exists at the present time concerns the meat ration; in the case of all the other commodities which are rationed, the two Services are treated in precisely the same way. But let us come down to a purely factual level on this matter. People who are ill in hospital do not have their rations brought to them as individual cases; the rations go into the common pool of the hospital and each man gets what is necessary for him to have from the point of view of his medical attendant. If there is any shortage of food for merchant seamen, or for any other class of seamen

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who are being treated in the hospitals of this country, I will without any hesitation secure that that is put right. I have had no such complaints.
I had one case brought to my notice by Mr. Cross when he was Minister of Shipping, when he asked me whether it would be possible to increase the rations at a certain hospital where people were being treated for fractures. In that case, as in all such cases, I secured medical advice from the most eminent body of medical opinion which is at the service of His Majesty's Government, the Medical Research Council, and they told me that there was no reason why people who were being treated for fractures should have any larger quantity of food than others who were being treated in hospital for other reasons; and on that account only I did not agree to the request which Mr. Cross made on behalf of that particular hospital.
The noble and gallant Earl has brought to our notice the opinion of one physician, whose view he respects, who says that these men are not getting enough to eat. If I thought that that was true I should indeed be very gravely concerned, but I have had no complaints or representations made to me from any of the hospital authorities on this subject. I have been assured that the rations are all right; but, if the noble and gallant Earl will permit me to say so, because he, with his very great reputation and the debt which we all owe to him, has brought this subject up in your Lordships' House, I have referred the whole question of the amount of food which is being used in hospitals which are treating merchant seamen once again to the Medical Research Council, and asked them to advise me whether it is sufficient. If in their opinion it is not sufficient, I will at once increase it. The noble Lord, Lord Mottistone, said he was sure that civilians would willingly give up whatever was necessary. It is not necessary for them to do that; the amount of extra food which these men would want is quite insignificant in comparison with the general consumption in this country, and, if it is necessary, I will most willingly see that they get it. But, if I am advised on such eminent authority that it is not necessary, I hope that the noble and gallant Earl who has raised this
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question will be satisfied that everything which ought to be done has been done for the people in whom he showed an interest which is so great, and an interest which I beg him to believe I share with him.
THE MARQUESS OF CREWE: My Lords, I have followed with much interest the reply which the noble Lord has given, but there is one point on which I am rather puzzled. I understand from what the noble Lord said that there is in practice no differentiation in hospital between the men in the Royal Navy and the merchant seamen as to what they get, if ordered by the doctor. I cannot understand, therefore, what is the purpose of keeping this nominal difference in rations, and why the men in the Royal Navy get—on paper—double the amount of meat that is given to the merchant seamen, who have precisely the same claims for consideration from the Government and from the whole country. Perhaps the noble Lord will say why this distinction is maintained.
LORD WOOLTON: My Lords, by leave of the House, may I say that the answer to the question is that we are not taking any notice of the fact that people are in hospital? When a man who is a member of the Navy comes in, the hospital gets certain allowances. When a man who is in the Merchant Navy comes in the hospital gets certain allowances. We have avoided one of the most difficult and contentious subjects that surely ever could be raised, and that is the distinction between civilian workers who may claim that their work is more arduous and their need is greater. I do not know whether that reply will satisfy the noble Marquess.
THE MARQUESS OF CREWE: I quite see that, but the effect of the regulation on public opinion is another matter.
THE EARL OF CORK AND ORRERY: My Lords, I wish to thank the noble Lord for his sympathetic reply, but I feel in justification to myself I cannot agree with him. I have been on the board and am now Vice-Chairman of the Seamen's Hospital Society, which deals almost exclusively with seamen, and I received these figures only this morning from the secretary. I asked for them this morning so that: I should not make any misstatement to your Lordships' House. We have five hospitals and two convalescent homes,

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and this information which the noble Lord says was widely advertised has not reached these hospitals. The opinion that I gave was by one of the members of the staff. It was endorsed by the senior physician, a very well-known physician who has for twenty-five years given up his time to look after seamen. With regard to feeding at sea, I merely introduced that in order to show that there was no chance of the merchant seaman being as fit as his brother in the Navy if he went into hospital. Our merchant seamen are not so well looked after at sea as they are in the Navy. We have in this group of hospitals two convalescent homes, and it makes a great difference whether we can get extra sugar and jam. The doctors maintain that if they could give better and more varied diet the men would be able to get back more quickly to their work. I thank the noble Lord for his reply and for the information on the particular point that now then: is going to be no discrimination in hospitals between Merchant Navy sailors and the Services. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

ALLIED NATIONAL ANTHEMS.
LORD STRABOLGI LORD STRABOLGI had the following Notice on the Paper: To ask His Majesty's Government, who decides which allied national anthems shall be played on Sunday evenings before the nine o'clock news; what is the reason why the Russian national anthem was no: played with the others on the evening of 29th June; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion which stands in my name. If I might just remind your Lordships of the fact, it has been the pleasant custom of the British Broadcasting Corporation to play the anthems of the nations fighting with us against Nazi tyranny before the nine o'clock news on Sunday evenings. On June 22, at dawn, our Nazi enemies made a wanton and murderous attack on the territories of the U.S.S.R., and that evening the Prime Minister made his great speech over the ether in which, I venture to say, he gave a lead not only to the peoples of the Empire but to the whole world, declaring our firm resolve to fight with Russia to victory and to give all possible aid. With reassuring promptitude a British Military, Naval, and Economic
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Mission was sent to Moscow, and I very much hope a Russian Mission is on its way here. It might be able to give us some badly-needed advice.
On June 29, the following Sunday, Herr Hitler having followed his usual practice of attacking a neighbour on a Sunday, the national anthems were played as usual, but the Russian national anthem was omitted. I happen to know that this created a great deal of surprise among a large number of people. Nor indeed was it played last Sunday. I submit that there are two hundred reasons for playing this anthem with the others, and they are the two hundred or so Russian divisions fighting at the present time against the enemies of mankind. I do not know what the official apologia is on this matter. I understand my noble friend Lord Snell will give the official reply, and he may argue that we have no formal alliance with Russia and therefore the Government of Russia is not an Ally. I have not heard of a formal alliance with the Government of Luxembourg, but I have been very glad to listen to the Luxembourg national anthem played over the ether. It may be argued that the national anthem of Russia, which is "The Internationale," is not a national anthem but an international song. It is perfectly true that some years ago it was fairly common for "The Internationale" to be sung at Labour Party gatherings in this country.
I have heard the present Home Secretary, Mr. Herbert Morrison, singing it with great gusto and evident enjoyment. I have even heard, more than once, my noble friend Lord Snell singing it with great efficiency. If my noble friend Lord Addison had been here, T should remind him that I have seen him going through the motions of singing it. Apart from that, those of your Lordships who visited Russia in the post-revolutionary days will have good cause to know that it is indeed the national anthem of that country. It is played there on every possible occasion, much more frequently than we play the British national anthem here. One important exception was when my right honourable friend the present Foreign Secretary, Mr. Anthony Eden, visited Moscow before the war, and "God Save the King" was played. I understand that after the speech on the Russian wireless by M. Stalin a few days ago, the playing of "God Save the King" followed.
There may be another argument, and that is that the words of the anthem are objectionable. You can take certain words from their context in "The Marseillaise," and if you sent them to certain quarters in this country they would say without hesitation that they were subversive. Lord Swinton's Committee, for instance, if some of the words of "The Marseillaise" were brought to their notice without explanation, would say, "Who dare utter these sentiments?" It is only a little more than a hundred years since Englishmen were deported or imprisoned for singing "The Marseillaise." Many of the national anthems we hear with pleasure on Sunday evenings, especially those of countries constituting the Succession States of the old Austrian Empire, were born in revolutionary times, and if you read their words literally they may be rather disturbing, but they have become the recognised anthems of these States. I do not think that that argument is at all a sound one.
If we recognise the full implications of alliance, with its symbolic aspects of which, of course, this is one, it does not mean that we embrace the principles of Communism here, as the Prime Minister in his magnificent speech on June 22, pointed out. Noble Lords in your Lordship's House before the present war used to advocate a closer understanding with the Nazi Government, but I never heard it said that they were advocating the principles of Nazism in this country. I therefore venture to put this Motion on the Paper, which I beg to move, in order to explore the situation. I would ask my noble friend Lord Snell, who is responsible in a case of this kind? The only light I have found on the matter is a cutting from the Sunday Despatch of the 29th June. According to this, the enterprising editor had got in touch with the Foreign Office authorities and with the B.B.C., and both declined any responsibility, the B.B.C. saying that it was a matter for the Foreign Office, and the Foreign Office saying that it was a matter for the B.B.C. If my noble friend tells me it is the Ministry of Information that is responsible, then I am very delighted to hear that the Ministry has been given some responsibility in at least one direction. Powever, it would be of interest to
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know whose responsibility it is, and if my noble friend could explain why this particular anthem is left out, I, for one, would be grateful. I beg to move for Papers.
LORD NEWTON: My Lords, I do not propose to comment upon what has fallen from the noble Lord opposite, partly because in this Chamber it was almost as difficult to hear what he said as it was to see across it. No doubt there will be many opportunities of discussing it later on. I therefore only desire to ask one question, and that question is: Has this question on the Paper been put down at the request of the Soviet Government? I can hardly think that that is the case. I am inclined to believe it is due to what I might call the sympathy of the noble Lord opposite with his Soviet friends. In any case, I venture to suggest with great respect that the answer should be very carefully considered and not lead to any difficulties. It seems to me that at the present moment of all others, in view of the fact that Hitler is now trying to agitate the world against Bolshevism, it is a most urgent matter that we should not identify ourselves with Bolshevist principles or action generally. I am quite aware that this view has already been expressed by the Prime Minister, and I think it ought to be repeated upon the present occasion. No doubt there will be plenty of other occasions when the opportunity will arise for discussing this particular question.
LORD SNELL: My Lords, the noble Lord asked the general question as to who decided the anthems that were to precede the nine o'clock news on Sunday evenings. I will try to explain as shortly as I can precisely how these anthems have been selected and the reasons why some, at the present time, are left out. The playing of the national anthems of the Allies before the Home Service news at nine o'clock on Sundays began in the spring of 1940, when the only Allies involved were France and Poland. The Norwegian national anthem was added in April, 1940, the Dutch and Belgian in May, and the Czech national anthem in July, 1940, the Greek in October, that of Luxembourg in December, the Yugoslav in April, 1941, and the Ethiopian in May, 1941. The various countries were added as and when their Government refused to subject themselves to German

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control. The Danish and Rumanian Governments have never fulfilled this condition, and consequently the national anthems of these countries have not been added to the list. The Czech national anthem began to be played as soon as the Government of Dr. Benes had been recognised by His Majesty's Government. In somewhat the same way the Ethiopian national anthem was not played, in spite of pressure to the contrary, until the Emperor actually re-entered Addis Ababa.
There have been other competitors for inclusion in the series. Those have included the "Star Spangled Banner," which I imagine all of us would welcome if we heard it, the national songs of the Dominions, and even those of England, such as "Rule Britannia," and those of Wales and of Ireland. The reasons why these have not been included are fairly obvious. There is first of all the time factor. The number of Allies has become so great that the time needed to play their anthems in full is considerable enough to run the risk of boring some listeners. Accordingly various suggestions have been considered, such as playing shortened versions of these anthems, a course which might give rise to some soreness on the part of the nationals concerned, and of playing only a few each week.
The responsibility, which the noble Lord asked about, the decision of policy in this matter, rests with the Ministry of Information, which, however, consults the Foreign Office where suitable, and feels obliged to follow its views, for example, as regards the playing of anthems of countries not officially allied to us. The question whether the playing of national anthems of a seemingly endless series of Allies, all the victims of Germany, exercises a depressing or a heartening effect, has been considered on several occasions by the Ministry, and on balance it has
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been decided to retain the feature, at any rate for the present. The anthem of the U.S.S.R. was not played because, as was indicated in the Prime Minister's speech on June 22, the U.S.S.R. is not at present in the accepted sense of the word an Ally of this nation. That fact was recognised by the noble Lord in his opening remarks. I have no feeling about it myself other than if it were played I do not doubt I should feel my usual thrill of satisfaction at hearing it.
LORD STRABOLGI: My Lords, I am very much obliged to my noble friend. Your Lordships will agree he has given us some very interesting information. I thank him and I am sure your Lordships would wish me to thank him on behalf of the House. I do hope that these national anthems, whatever the decision may be about Russia, will not be dropped, because I have reason to believe they are a very popular feature. The noble Lord, Lord Newton, I think was trying to enliven our rather hot proceedings this afternoon by a little joke when he suggested that this question had been inspired by the Russian Government. Of course it had nothing whatever to do with any outside source at all. The only person consulted when this question was put down was my noble friend Lord Addison, whom I always consult before putting down any Motion, and he immediately agreed. However, I dare say my noble friend Lord Newton did not seriously intend what he said. As for alliances, I hope the noble Lord, Lord Newton, and I before very long will be walking together in Unter den Linden, and we can then cheer Russian and British tanks going in procession down that great thoroughfare. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
House adjourned.