Sitting of 29 April 1925

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
North Metropolitan Electric Power Supply Company Bill [Lords] (by Order),
Consideration, as amended, deferred till Monday next.
Great Western Railway Bill [Lords] (by Order),
Second Reading deferred till Tomorrow.
London and North Eastern Railway (General Powers) Bill [Lords] (by Order),
Second Reading deferred till Friday.

LONDON COUNTY COUNCIL (TRAMWAYS AND IMPROVEMENTS) BILL.
Ordered, That the Bill be re-committed to the former Committee.
Ordered, That it be an Instruction to the Committee on the re-committed Bill that they have power to reconsider their decision on the Preamble of the Bill as reported by them to the House.—[Sir George Hume.]

LONDON COUNTY COUNCIL (MONEY) BILL,
"to regulate the expenditure on capital account and lending of money by the London County Council during the financial period from the first day of April, one thousand nine hundred and twenty-five, to the thirtieth day of September, one thousand nine hundred and twenty-six; and for other purposes," presented, and read the First time; and referred to the Examiners of Petitions for Private Bills.
Advocates Widows' Fund (Widowers'Provisions) Order Confirmation Bill,
Considered; to be read the Third time Tomorrow.
Land Drainage (Black Sluice) Provisional Order Bill,
Read a Second time, and committed.
Ministry of Health Provisional Order Confirmation (Keighley Water Charges) Bill [Lords],
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.

  COLOGNE (EVACUATION).
  Mr. TREVELYAN THOMSONasked the Secretary of State for Foreign Affairs if he can state, approximately, the date when the evacuation of Cologne will take place?
  The SECRETARY of STATE For FOREIGN AFFAIRS (Mr. Austen Chamberlain): The answer is in the negative.
  Mr. THOMSON: Can the right hon. Gentleman give me any indication of when he will be in a position to make a statement?
  Mr. CHAMBERLAIN: No, Sir.
  Captain WEDGWOOD BENN:Is not the right hon. Gentleman aware of the effect of this continued delay upon opinion in Germany, and upon peace prospects in Europe?
  Mr. CHAMBERLAIN: I do not think that question was put with a view to an answer.

  EGYPT.
  Mr. HARRISasked the Secretary of State for Foreign Affairs if he can make any statement with regard to the situation in Egypt?
  Mr. CHAMBERLAIN: I do not think that any statement which I could make at present would add materially to the knowledge already possessed by the House in regard to the situation in Egypt.

  BRITISH INVESTORS (DEFAULTING STATES).
  Sir HARRY BRITTAINasked the Secretary of State for Foreign Affairs whether he can give the House any information of any efforts which have been, or are being made, by American nationals

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  and others to obtain any payment from the various States of the Union which have defaulted on their debts?
  Mr. CHAMBERLAIN: As regards efforts made by United States and other foreign nationals, I have no information. As regards efforts made by British subjects, the Foreign Office has a certain amount of information which it would be impossible to compress within the limits of an answer to a Parliamentary question. Should the hon. Member desire it, how ever, I shall be happy to communicate to him privately a summary of our information on this point.
  Mr. WARDLAW-MILNEasked the Secretary of State for Foreign Affairs whether he is aware that the State of Bahia and the State of Para are in default in the payment of interest on loans raised in this country; whether the Province of Corrientes, in Argentina,:s also in default; and, if so, whether the Government will take steps to make the facts fully known in this country so that, if further proposals for similar loans are made, investors may be fully acquainted with the position?
  Mr. CHAMBERLAIN: The State of Bahia has made an arrangement with the bondholders, and is no longer in default; the City of Bahia is, however, in default, and also the State of Para and the Province of Corrientes. The fact that these States and municipalities are in default is already well known in financial circles in this country.
  Mr. WARDLAW-MILNE: Would the right hon. Gentleman consider the desirability of publishing these facts, for the benefit of people who are not members of financial circles in the City of London, and who may not be aware of them?
  Mr. CHAMBERLAIN: If my hon. Friend feels that that is desirable, perhaps he will feel that my answer to his question will serve the purpose.

  ROYAL NAVY.

    VOCATIONAL TRAINING.
    Major Sir BERTRAM FALLEasked the Parliamentary Secretary to the Admiralty whether, in view of the fact that a precedent has been established by granting leave to a chief petty officer
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    writer, when not required for duty, to understudy a collector of taxes, such work being regarded in the light of vocational training, he will extend such privilege to all naval ratings within three months of completing their time for pension who are desirous of undergoing vocational training; and whether he will authorise the payment of leave allowance or allowance in. lieu of provisions as is paid to the rating above mentioned?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Davidson): With regard to the first part of the question, the numbers borne on Vote A, which are based solely on manning requirements, would not admit of the general extension of this concession. As regards the second part, the Regulations already provide for men receiving provision or leave allowance when they cannot be victualled.
    Sir B. FALLE: Can the right hon. Gentleman tell me why a privilege was given to the petty officers which is not extended to the ratings?
    Mr. DAVIDSON:I must have notice of that question.

    OFFICERS' MARRIAGE ALLOWANCO.
    Major HORE-BELISHA (on behalf of Lieut. - Commander KENWORTHY)asked the First Lord of the Admiralty whether a decision has been arrived at with regard to the payment of marriage allowances to officers in the Royal Navy?
    Mr. DAVIDSON: The answer is in the negative.
    Major HORE-BELISHA: How can the hon. Gentleman explain the fact that while the money has already been granted by the House of Commons, the Admiralty withholds a decision on a subject upon which they may be presumed to have decided before asking for the money?
    Mr. DAVIDSON: The decision has to be made by the Government, and they have not arrived at one yet.

  UNEMPLOYMENT.

    WEST HAM.
    Mr.GROVESasked the Minister of Labour whether he is aware of the very large number of able-bodied young men and women in the county borough of West

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    Ham who, having exhausted their unemployment national insurance benefits are now receiving financial assistance from the Poor Law union; and whether he is preparing any special schemes of work for this area in order that these young people can be absorbed in the industrial market?
    The MINISTER of LABOUR (Sir Arthur Steel-Maitland): I am not aware that there is any considerable number of unemployed persons in this area not drawing unemployment benefit other than those whose claims have been rejected by the local employment committee. If the hon. Member has in mind the recent requirement of a minimum number of contributions, I may point out that the total number disqualified under this requirement was between 60 and 70 in the whole of the West Ham Union, which is a good deal larger than the Borough of West Ham. As pointed out in my reply to the hon. Member's question of 25th February, the Departments concerned will give every consideration to applications for grants towards the cost. of schemes of public utility to be undertaken for the relief of unemployment in the district, if the local authority will submit its proposals.

    EMPLOYERS' STATEMENTS.
    . Mr. GROVESasked the Minister of Labour the attitude of his Department to employers who, in reply to questions by his local officers in regard to reasons why claimants to unemployment insurance benefit have left the firm, state matters of opinion and not statement of facts; whether he will deal drastically with the cases where employers put in writing such statements about an employé as that he left the job preferring the dole to work; and whether his local officers receive such statements in writing without protest.?
    Sir A. STEEL-MAITLAND: I am now aware that employers in any appreciable number of cases give the sort of reply suggested in the question. In any event, the employer's reply, if it appears to disclose any ground of disqualification for benefit, is always made known to the claimant, and any counter-statement made by the claimant is submitted to the Chief Insurance Officer, together with the employer's reply. This procedure seems to me fully to safeguard the claimant's interests.
    Mr. GROVES: Is the right hon. Gentleman not aware that these statements about a person preferring the dole to work are not evidence; and may beg of him to take steps to call the attention of employers to the fact mat such invidious statements are not within the purview of the Unemployment Insurance Act?
    Sir STEEL-MAITLAND: I am not aware that that kind of general statement is at all frequently made and it is difficult to answer a more or less suppositious question of this kind. If the hon. Member can give me any instances which show me that these statements are made to any extent, I will consider action.
    Mr. NEIL MACLEAN: Would the right hon. Gentleman not consider the advisability, where employers alter the first statement they make to the officials, of calling those employers to appear before the Court of Referees, together with the man?
    Sir A. STEEL-MAITLAND: That has already been discussed in the House, and have given reasons in more detail why I do not think action is necessary—if it is of the kind to which I think the hon. Member refers. If it is of any other kind, perhaps he will put it down in a separate question.
    Mr. HANNON: Is it not the fact that the employers of the country have given the Department every help possible in the direction indicated in the question?
    Sir A. STEEL-MAITLAND: I am always asking for more help. I want to get the reasons, one way or the other, as fully as I can. The employers give reasons in a number of cases, I hope they will give reasons in more eases. What I am trying to do is to get fair information from both sides.

    BENEFIT (DISQUALIFICATIONS).
    Mr. T. THOMSONasked the Minister of Labour the total numbers disqualified to date from receiving unemployment benefit due to the operation of recent revised Regulations?
    Sir A. STEEL-MAITLAND: At 13th April the number of persons who had been disqualified for unemployment benefit, owing to the operation of the recent revised Regulations. was 11,219.
    Mr. THOMSON:Is not the right hon. Gentleman aware that a large number have had to seek relief from the rates, which have been thereby increased? What steps is he taking to prevent similar burdens being thrown on the rates in October if the present Act is not amended?
    Sir A.STEEL-MAITLAND:That is a question of future legislation, which I do not think can be properly put as a supplementary question. All I would state in this case is, that. the amount thrown on the rates, as generally put to me, is often grossly exaggerated, no doubt quite unintentionally.

    WOMEN CLERICS AND TYPISTS (BOROUGHAND CANTBERIVELL).
    Colonel DAYasked the Minister of Labour the number of lady clerks and typists registered as unemployed at the Borough and Camberwell employment exchanges, respectively, since 1st January, 1025; and how many applications were made by employers in these districts for such workers during the same period?
    Sir A. STEEL-MAITLAND: During the period 6th January to 6th April, 1925, the number of registrations of women and girl clerks and typists, including re registrations of the same individual, was 107 at the Borough Employment Exchange and 181 at Camberwell. The number of vacancies for such workers notified by employers during this period was 32 at Borough and 27 at Camberwell.

    MIDDLESBROUGH.
    Mr. T. THOMSONasked the Minister of Labour the numbers of unemployed at the present time in the Middlesbrough area; and the numbers a month ago and a year ago?
    Sir A. STEEL-MAITLAND:The number of persons on the registers of the Employment Exchanges in the. Middlesbrough area. was 11,675 at 20th April, 1925, compared with 11,452 a month ago, and 9.051 a year ago.
    Mr. THOMSON:Arising out of that. considerable increase, can the Minister say whether he is prepared to give any increased grants to areas so badly hit, which cannot go on with unemployment schemes unless they have further assistance?
    Sir A. STEEL-MAITLAND: That does not arise out of the question on the Paper.

    STATISTICS.
    Mr. HERBERT WILLIAMSasked the Minister of Labour the number of fresh individuals registered as employed in insured occupations since the last count in July, 1924, and the number of persons who, for all causes, have ceased to be so registered since the same date?
    Sir A. STEEL-MAITLAND:Between the beginning of July, 1924, and the end of March, 1925, the number of new issues of unemployment books (as distinct from exchange of old books) was about 748,000, of which 297,000 were issued to persons of the age of 18 or over. In spite of precautions taken by the Department, some proportion of the new issues consists of books asked for and obtained by persons who do not disclose that they previously held books. Accordingly, the figure of 748,000 is somewhat in excess of the number of fresh entries into insured occupations. The number who left the insured trades owing to death, emigration, etc., cannot be accurately estimated until some time after the end of the insurance year in June. The number for the insurance year 1923-24 is estimated at 761,000.
    Mr. HARRISasked the Minister of Labour the number of persons on the unemployment register for the latest available date, and for the same date lash year?
    Sir A. STEEL-MAITLAND: The number of persons on the registers of Employment Exchanges in Great Britain at 20th April was 1,202,700, compared with 1,050,546 at 21st April, 1924.
    Mr. HARRIS:How does the right hon. Gentleman account for the fact that there has been this increase as compared with last year? Is it due to special causes?
    Sir A. STEEL-MAITLAND:The figures relating to unemployment nearly every year go through a sort of cyclical variation. They go down in the spring and up in the autumn and there are other minor variations. The hon. Member who has asked this question has asked for the figures for the period just after Easter. The figures for the period just after public holidays, whether it be Easter, Christmas or any other holiday time, are Probably the most unreliable there are

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    for the purpose of comparison, but on the whole the general tendency of unemployment has been not to fall so quickly this year, and there has not been that improvement in trade that we hoped for.
    Mr. CLYNES: Is the right hon. Gentleman aware that that was not the explanation given by him last year when he was on this side of the House?
    Sir A. STEEL-MAITLAND: The promises made were different and the explanations were different.
    Mr. THOMAS SHAW: Is it not a fact that for every week this year the total is higher than it was for the corresponding week of last year?
    Sir A. STEEL-MAITLAND: I think that is true. At the same time, I do not think that the numbers are strictly comparable.
    Mr. SHAW: Is it not a fact that, if you take the comparable figures, the numbers for this year are still higher? [HON. MEMBERS: "Answer !"]
    Mr. W. THORNE: Is the right hon Gentleman aware that he said, in answer to a question two weeks ago, that he had a, solution for the unemployment problem, and when is he going to bring it forward?
    Sir A. STEEL-MAITLAND: Does the hon. Member say that I said I had a solution?
    Mr. THORNE: Yes.
    Sir A. STEEL-MAITLAND: My solution was that the different sides in industry should come together, and face the facts.

    EXCHANGES (PERSONNEL).
    Sir H. BRITTAINasked the Minister of Labour what is the number of Employment Exchanges throughout. the country and the number of personnel therein employed?
    Sir A. STEEL-MAITLAND: There are at present in Great Britain 401 Employment Exchanges, the staff of which—exclusive of cleaners—numbered 8,606 on 24th April last. Of this total, 4,588 consisted of temporary staff.
    Sir H. BRITTAIN: Can the right hon. Gentleman hold out any hope of helping
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    the Economy Committee by reducing expenditure during the current year?
    Sir A. STEEL-MAITLAND: I think the reductions have gone as far as is absolutely possible consistent with economy. I would like to point out that the proportion of expenditure to benefit is very small as compared with what obtains in any other insurance business in this or any other country.
    Mr. HARRIS: Does not the large percentage of temporary clerks make it difficult for them to get the experience necessary for them to find employment for the increasing number of people who are out of work'?
    Sir A. STEEL-MAITLAND:I think not. The fact that some of them are temporarily employed does not mean that they have not accumulated a large amount of definite experience. It means that if and when, as we all of us hope for, unemployment sinks to its normal average, then a certain number of the staff will no longer be wanted, and can be absorbed elsewhere. Consequently, it would obviously be foolish to place a larger number on a permanent basis inside the Civil Service.
    Mr. MACLEAN: What is the normal average of unemployment?
    Mr. SPEAKER: That does not arise.

    ALIENS (BENEFIT).
    Mr. HANNONasked the Minister of Labour whether he is prepared to issue an order to the local unemployment committees that, in future, a record must be kept of all aliens in receipt of ordinary and extended benefit; and whether he can state the number of aliens at present in receipt of such benefits?
    Sir A. STEEL-MAITLAND: I am arranging to obtain a monthly return over a certain period of the number of aliens in receipt of extended benefit. It would considerably increase the expense to include standard benefit also, and apart from the expense, I do not think I should be justified in making the inquiries which would be necessary for this purpose. As stated in a reply given to the han. and gallant Member for Luton on 25th March, the total number of aliens in receipt of benefit in November last is estimated at about 3,000.
    Mr. HANNON: Is the Ministry of Labour taking every possible care to prevent aliens occupying positions which ought to be occupied by British working men?
    Mr. MARCH: Can the right hon. Gentleman say how many aliens are receiving unemployment benefit who have not contributed to unemployment insurance?
    Sir A. STEEL-MAITLAND: In the first place, we are taking every care that employment, so far as possible, should be made available for our own people. As regards contributions to unemployment benefit, one of the reasons why I made a distinction in my answer was that, apart from the administrative difficulty, there was also the difficulty of this extended benefit.
    Mr. MARCH: That does not answer my question. I want to know if any aliens are receiving benefit who have not paid contributions?
    Sir A. STEEL-MAITLAND: I should imagine that there are, but the reason why I cannot answer the question with absolute certainty is that I had a very extended examination made of some 10,000 cases in November last, and judging by the sample which I found then
    one can expect that there will be a certain number of aliens in receipt of benefit. I want to get the exact figures and that is the reason for the answer which I have given to my hon. Friend.

    CONTRIBUTIONS, BENEFITS ANDE KPENSES.
    Mr. HANNONasked the Minister of Labour whether he can state the total contribution of the State employers and workers, respectively, under the unemployment insurance schemes for the last financial year; the cost of the total benefits paid and received; and the total working and administrative expenses under all heads for the same period?
    Sir A. STEEL-MAITLAND: During the last financial year, the contributions to the unemployment fund were approximately — Exchequer,£13,474,000 employers, £19,224,000; workpeople, £17,301,000; the total amount of unemployment benefit paid was about £40,982,000; and the estimated total cost
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    of administration under all heads was £4,328,000, or about 8.7 per cent. of the revenue.

    EX-SERVICE MEN (WORKSHOPS'GRANTS).
    Mr. ROBINSONasked the Minister of Labour how many workshops for disabled men are receiving a subsidy of £25 per head of the men employed; and where the workshops are situated?
    Sir A. STEEL-MAITLAND: Grants in aid of the employment of severely disabled ex-service men are bring paid to 17 workshops, situated in London, Bournemouth, Brookwood, Burnley, Col-chester, Enham, Lancaster, Liverpool, Langton, Newcastle, Dundee, Edinburgh, Glasgow and Inverness. The maximum rate of grant is £35 per annum in respect of each severely disabled ex-service man employed, and the total amount paid in any year is fixed so as not to exceed half the loss sustained by the institution on the previous year's trading.

    WASHINGTON HOURS CONVENTION.
    Mr. HANNONasked the Minister of Labour whether he can give the names of the States which have ratified the convention of the International Labour Conference at Washington in 1919 dealing with the 48-hour week; and whether he can give figures for the average hours worked per week in the iron and steel industries in France, Belgium, Italy, Germany, and the United Kingdom, respectively?
    Sir A. STEEL- MAITLAND: The Washington Hours Convention has been ratified by Austria, Bulgaria, Czechslovakia, Greece, India, Italy and Rumania. The ratifications of Austria and Italy are conditional upon ratification by other States, while in its application to India the convention itself provides for a normal working week of 60 hours. I regret that I have no information as to the average hours actually being worked at the present time in the iron and steel industries in the countries named by my hon. Friend.
    Mr. H. WILLIAMS: Does the right hon. Gentleman know of any country which has ratified the Convention and has put the scheme into operation?
    Sir A. STEEL-MAITLAND:I think I had better ask for notice of that question. I believe the scheme is working, at any rate, to a certain extent in Czechsloyakia.
    Mr. JOHNSTON:Is the right hon. Gentleman aware that it is the refusal of our Government to ratify this Convention that prevents other Governments in Europe from ratifying?
    Sir A. STEEL-MAITLAND: I am not aware of that—
    Mr. SPEAKER: That is a matter for debate on Friday next.

    BOMBING AEROPLANES.
    Colonel DAYasked the Secretary of State for Air what is the number of bombing aeroplanes at present under construction; what is the bomb-carrying capacity of these aeroplanes; and are these bombing aeroplanes intended for offensive or defensive action or both?
    Captain GEE: Before the hon. and gallant Gentleman answers that question, may I ask him if he has read the speech of the General Commanding the Troops at the landing in Gallopoli, in which certain disclosures were made, and will he take steps to prevent any such disclosures being made now, and thus prevent further loss of life in future operations?
    The UNDER-SECRETARY of STATE for AIR (Major Sir Philip Sassoon): It would not be in the public interest to give the information requested.

    IRAQ (FRONTIERS).
    Major HORE-BELISHA (on behalf of Lieut.-Commander KENWORTHY)asked the Secretary of State for Foreign Affairs what is the position with regard to the negotiations for the readjustment of the frontiers of Iraq?
    Mr. CHAMBERLAIN:The present position is that the Commission appointed by the Council of the League of Nations to investigate the question on the spot, has now returned from Iraq to Europe and is engaged in the preparation of its Report. I cannot say when this Report will be ready for consideration by the Council.

    PROPOSED PACT OF GUARANTEE.
    Mr.RUNCIMANasked the Secretary of State for Foreign Affairs what is the present position of the negotiations in connection with the proposed pact of guarantee?
    Mr. CHAMBERLAIN:Owing to the political situation in France, Belgium and Germany, it has not been possible to make much progress since my statement in this House on the 25th March, and there is nothing at the moment that I can usefully add to that statement.
    Captain BENN: Is the evacuation of Cologne being postponed until these negotiations are brought forward?
    Mr.CHAMBERLAIN: I have already answered that question several times, but I have no objection to repeating the answer. It is in the negative.

    RESIDENT JUSTICES. SOUTHWARKCENTRAL.
    Colonel DAYasked the Attorney-General whether he is aware of the inconvenience caused to the residents of Southwark Central by the fact that there are so few resident justices of the peace in that district; and will he consider if anything can be done to make fresh appointments?
    The ATTORNEY - GENERAL (Sir Douglas Hogg): The Lord Chancellor understands that there are about nine justices of the peace resident in or within about one mile of the district to which the hon. Member refers. of whom four have been appointed within the last year. If, however, the hon. Member will communicate with the Lord Chancellor with regard to the inconvenience which he states is caused to the inhabitants of Central Southwark. the, Lord Chancellor will bring the matter before the Advisory Committee.

    LITIGATION (DELAYS).
    Mr. H.WILLIAMSasked the Attorney-General whether any inquiries have been made as to the delays and additional expenditure in which litigants are involved through the fact that the number of Judges is not sufficient for

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    every case to be opened at a fixed time on a fixed date as soon as the parties are ready?
    The ATTORNEY-GENERAL: It would be quite impossible for every case to be opened at a fixed time on a fixed date as soon as the parties are ready, since it is impossible to forecast with accuracy the time which will be taken by the cases it, the list. No inquiries of the nature suggested by the hon. Member have been made.

    DRIED MILK.
    Mr. GROVESasked the Minister of Health whether his attention has been called to the continued reduction in the infantile death rate within the county borough of West Ham; whether he is aware that these reductions are side by side with the increased supply of dried milk and the general development of the health services of the borough; and whether his Department propose to make any recommendation to the local authorities of the country respecting the use of dried milk in preference to liquid milk?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): The answer to the first part of the question is in the affirmative. As regards the second part, I may point out that the reduction in recent years in the infantile death rate in West Ham is comparable with the reduction which has occurred in other similar areas, and my right hon. Friend is advised that it cannot be attributed exclusively to any particular measures which have been adopted in this area. The answer to the third part is in the negative. The question of the supply of dried or liquid milk is a, matter primarily for the decision of the local authorities, regard being paid to all the relevant circumstances of their districts.
    Mr. W. THORNE: Does not the hon Gentleman think it seems rather strange that the infantile mortality in West Ham was very much higher prior to the introduction of this dried milk?
    Sir K. WOOD: No, Sir; there are a large number of other factors.
    Mr. HARDIE: Can the hon. Gentleman give an assurance to the House that
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    none of the suppliers of milk in London are using boric acid?
    Sir K. WOOD: I must ask for notice of that question.

    GUNNERSBURY PARK.
    Sir H. BRITTAINasked the Minister of Health whether he can inform the House as to the present position of the negotiations for the acquisition of Gunnersbury Park as an open space and recreation ground for the people of Greater London?
    Sir K. WOOD: My right hon. Friend has now received applications for sanction for the necessary loans from the Ealing and Acton Councils, and a public inquiry will shortly be held into them. He understands that the Middlesex County Council are also to consider the question of making a contribution towards the cost of acquisition.
    Sir H. BRITTAIN: May we take it that the Ministry of Health will afford every help in its power?
    Sir K. WOOD: As my hon. Friend knows, the Ministry is anxious to help as far as it possibly can.

    TERRITORIAL ARMY (MARRIAGEALLOWANCE).
    Colonel Sir ARTHUR HOLBROOKasked the Secretary of State for War whether there is any Regulation as to age in connection with the grant of separation allowance to a married Territorial soldier when called up for training?
    The FINANCIAL SECRETARY to the WAR OFFICE (Captain Douglas King): The grant of marriage allowance, to which I presume the hon. and gallant Member refers, is subject to the condition that the soldier has attained the age of 26.

  INDIA.

    IMPERIAL BANK.
    Sir FREDRIC WISEasked the Under-Secretary of State for India the number of branches opened by the Imperial Bank of India?
    The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): Up to January last, the number was 78.

    RUPEE EXCHANGE.
    Sir F. WISEasked the Under-Secretary of State for India if the Government's policy is to place the exchange on the basis of ls. 4d. (gold) at an early date owing to the fictitious character of the existing official exchange ratio at 2s.?
    Earl WINTERTON: I would refer my hon. Friend to the reply given to the hon. Member for Peckham (Mr. Dalton) on the 9th March last.
    Sir F. WISE: Would the Noble Lord consider the setting up of a Royal Commission to go into this technical matter?
    Earl WINTERTON:Perhaps I might read the answer which I gave on the 9th March. It was as follows:
    " As announced by the Viceroy on the 20th January, the intention is to appoint an authoritative committee to consider the question of the rupee exchange as soon as world economic factors appear sufficiently stable to justify the formulation of a new policy."—[OFFICIAL -REPORT, 9th March, 1925;(01. 901; Vol. 181.]

    LONDON TELEPHONE DIRECTORY.
    Sir A. HOLBROOKasked the Postmaster-General what was the cost of printing the London telephone directory when it was put out for competition by private firms of printers; and what has been the yearly cost since it has been produced in the Government printing factory?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness): The cost of the last issue produced by a private firm was £34,180, the contract price being inclusive of paper. Since the printing contract was transferred to the Government printing works, the corresponding figures have varied between £26,518 and £39,637.
    Sir A. HOLBROOK: Can the right hon. Gentleman give the price of the last issue?
    Mr. GUINNESS: I regret that it would not be in the public interest to do so, because it would necessarily prejudice the interests of the Stationery Office, as compared with outside contractors.
    Sir A. HOLBROOK: Will the State ask for tenders from private firms in future?
    Mr. GUINNESS: Tenders are accepted in many cases. As my hon. and gallant Friend knows, an inquiry has taken place on the subject.
    Commander BELLAIRS: Does the cost of printing include a proper allowance for rates and other factors that enter into the calculations of private firms?
    Mr. GUINNESS: The Public Accounts Committee has on several occasions, as my hon. and gallant Friend is aware, taken steps to ensure that proper overhead charges are shown, and on that basis the accounts show a considerable profit.

    CHINA (BOXER INDEMNITY).
    Mr. OLIVERasked the Prime Minister whether any decision has yet been reached as to the use to which the Boxer Indemnity is to be put?
    Mr. CHAMBERLAIN: No decision will be taken until the Committee, which it is proposed to set up under the China Indemnity (Application) Bill, has reported.

    IRON, STEEL AND ENGINEERING TRADES.
    Mr. DIXEYasked the Prime Minister whether he is aware of the very grave position of the iron and steel trades and the engineering trade owing to foreign competition; and whether he will consider, in view of the apparent lack of any other remedy, the application either of a grant or subsidy to these industries or else of some other method of protection?
    The PRIME MINISTER (Mr. Baldwin): The position of the iron and steel and engineering trades is receiving the constant attention of the Government, who have considered and are considering.various proposals which have been made; but it would not be passible to deal with their merits and demerits within the limits of a question and answer.
    Mr. DIXEY: Has the right hon. Gentleman considered the scheme put forward by the right hon. Gentleman the Member for Carmarthen (Sir A. Mond), and does he not think that some application of that scheme would benefit the industry?
    The PRIME MINISTER: That scheme is being examined at present.
    Mr. W. THORNE: Is the right hon. Gentleman prepared to make inquiries into the fact that, after the Iron and Steel Trades Federation have supplied home consumption, they are supplying iron and steel products cheaper to foreigners than to this country?
    Mr. HANNON:Is it not the fact that the only real remedy for this deplorable state of affairs is an adequate measure of Protection?
    Mr. SPEAKER: That does not arise out of the question on the Paper.
    Mr. THORNE: Is the Prime Minister prepared to answer my question?
    The PRIME MINISTER: I think that may be an interesting point, but I do not believe that any answer given upon it would affect employment, which is the subject referred to in my hon. Friend's question.
    Mr. THORNE:Does the right hon. Gentleman think there is any truth in this statement that surplus iron and steel products are being sold cheaper to foreigners?
    The PRIME MINISTER: My hon. Friend said that it was a fact.
    Mr. T. THOMSON:Are the Government considering, or will they consider, the very heavy burden of local rates on these industries, and whether some relief cannot he given in this direction?
    The PRIME MINISTER: That will be considered.

    CONTRIBUTORY PENSIONS BILL.
    Mr. J. RAMSAY MacDONALD (by Private Notice)asked the Prime Minister when the Bill embodying his pension scheme is to be introduced, and when may the House have the papers, actuarial and otherwise, necessary for Members to study his scheme?
    The PRIME MINISTER:The Bill will be introduced this afternoon, and I hope that the text and explanatory papers will be available on Tuesday next. I propose, for the convenience of the House, to allow an interval of about a fortnight, after the reception of these documents, before the Second Reading of the Bill will be taken.

    BULGARIA.
    Colonel WEDGWOOD (by Private Notice)asked the Secretary of State for Foreign Affairs whether he is in a position to make any statement as to the situation in Bulgaria and particularly as to the increase in the army or police authorised, and any general reprisals that may be taking place under martial law?
    Mr. CHAMBERLAIN:The Inter-Allied Organ of Liquidation, acting on instructions, have authorised a temporary increase in the armed forces of Bulgaria of 10,000 men, but only on the specific conditions that such additional men are to be raised by voluntary enlistment and that they shall be disbanded at latest by the 31st of May, or earlier, at eight days' notice at the discretion of the Organ of Liquidation should the situation justify such earlier disbandment. In answer to the second part of the question His Majesty's Government have not ceased to warn the Bulgarian Government against any acts of indiscriminate reprisals or repression of constitutional opposition. We realise that such danger may well exist and the Bulgarian Government is fully aware of the views of His Majesty's Government and of the unfortunate effect any such policy of reprisals would have upon public, opinion in this country.
    Sir WILLIAM DAVISON:Is the House to understand that this force of 10,000 men is only to be raised for one month? Is it likely that such a force could be raised in such a short period in view of the emergency which has arisen?
    Mr. CHAMBERLAIN:It is to be raised subject to the limitations I have stated.
    Sir W. DAVISON:Would the Government think it desirable to press for a rather longer period for enrolment, in view of the emergency which recently occurred in Bulgaria, and which has shocked us all? How could it be possible for a force to be raised and trained in the time mentioned?
    Mr. CHAMBERLAIN:The limitations have been laid down by the Conference of Ambassadors after consultation with the Powers concerned, and I think it is desirable that the limitations should be strict. If there is a necessity for the continuation of such an additional force, no doubt the matter can be reconsidered, but I profoundly doubt the necessity myself for a large military force

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    to deal with a matter which, in this country, we should consider primarily one for the police.

  NOTICES OF MOTION.
    LOCAL AUTHORITIES (OVERLAPPING).
    Mr. A. V. ALEXANDER: On behalf of my right hon. Friend the Member for Seaham (Mr. Webb) I beg to give notice that, on this day four weeks, he will call attention to the expensive overlapping of provision and duplication of establishment,; due to the continued existence in nearly every place in England and wales of several rival local authorities dealing with the children, the sick and infirm, the aged and the able-bodied unemployed, respectively, and move a Resolution.
    POSTAL FACILITIES.
    Sir CHARLES OMAN: I beg to give notice that. on this day four weeks, I shall call attention to the great inconvenience caused to the smaller towns and rural districts of England by the non-resumption of the postal service prevailing in them before the War, and move a Resolution.
    HOIIE-GROWN FOOD.
    Lieut.-Colonel WINDSOR-CLIVE: I beg to give notice that, on this day four weeks, I shall call attention to the supply of home-grown food, and move n Resolution.
    RELATIONS WITH RUSSIA.
    Mr. W. ADAMSON:I beg to give notice that, on this day four weeks, I shall call attention to industrial and other relations with Russia, and move a Resolution.
BILLS PRESENTED.
  WINOWS,ORPHANS', AND OLD AGE CONTRIBUTORY PENSIONS BILL,
  " to make provision for pensions for widows, orphans, and persons between the ages of sixty-five and seventy, and for the payment of contributions in respect thereof; and to amend the enactments relating to health and unemployment insurance and old age pensions, presented by Mr. NEVILLE CHAMBERLAIN; supported by Sir John Gilmour, Mr. Attorney-General, Mr. Guinness, and Sir Kingsley Wood; to be read a second time upon Monday next, and to be printed. [Bill 164.]
  GOLD STANDARD BILL,
  to facilitate the return to a gold standard, and for purposes connected therewith." presented by Mr. CHANCELLOR OF THE EXCHEQUER; supported supported by Mr. Guinness; to be read a second time upon Monday next, and to he printed. [Bill 163.]

  BUSINESS OF THE HOUSE.
  Ordered,
  " That the Proceedings on the Motion standing in the name of the hon. Member for Bodmin do have precedence of all other Notices of Motions set down for 8.15 p.m. this day." quote>—[The Prime Minister.]

  MESSAGE FROM THE LORDS.
  That they have agreed to,—
  Army and Air Force (Annual) Bill, without Amendment.
  That they have passed a Bill, intituled, "An Act to confer on Lloyd's additional powers of making bye-laws and to amend Lloyd's Act, 1871." [Lloyd's Bill [Lords.]

  LLOYD'S BILL [Lords].
  Read the first time: and referred to the Examiners of Petitions for Private Bills.

  BRITISH EMPIRE EXHIBITION (GUARANTEE) BILL
  Reported, without amendment, from Standing Committee B.
  Report to lie upon the Table, and to lie printed.
  Minutes of the Proceedings of the Standing Committee to he printed.
  Bill, not amended (in the Standing Committee), to be taken into consideration To-morrow.

ORDERS OF THE DAY.

  WAYS AND MEANS
  Considered in Committee.—[Progress, 28th April.]
  [Mr. JAMES HOPE in the Chair.]

  AMENDMENT OF LAW.
  Question again proposed,
  " That it is expedient. to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise) and to make further provision in connection with Finance."
  Mr. SNOWDEN: Before examining in detail the proposals put forward yesterday by the Chancellor of Exchequer perhaps I may be pardoned if I make a few remarks upon the financial situation as it existed at the end of the last financial year, a matter in which the Committee will agree I have a special interest and had a special responsibility. The past financial year closed with the smallest surplus which had been accumulated in any year since the days before the War. I estimated for a surplus of about £4,000,000, and the actual realised surplus was within £500,000 of that figure. That is estimating, out of a total of £800,000,000 of revenue and of expenditure, to the fine degree of one-sixteenth per cent. I much appreciated the kind and generous references the Chancellor of Exchequer made yesterday to this financial achievement. He was kind enough to attribute it to some extent to my good fortune. It is true that although on balance the figures were remarkably close, there were certain discrepancies between the estimated revenue and the realised revenue under certain heads. But that is in no sense a discredit to those who made the estimates. When the business of estimating is understood, I think it will be agreed that such discrepancies are rather creditable than otherwise. The business of estimating is largely one of weighing possibilities and probabilities. Every Chancellor of the Exchequer knows that he cannot possibly hope to realise the exact estimate under each of the respective heads. Therefore, he makes allowances. He says, "I may lose on this, and I may gain on that." When the result proves that these possibilities and
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  probabilities have worked out, roughly, according to computation, the real purpose of estimating has been achieved.
  I was criticised last year—and to this the Chancellor of the Exchequer referred yesterday—for having over-estimated the revenue and under-estimated the expenditure. It was repeatedly said in the course of last year's Budget Debates that the amount I proposed to keep in hand would be quite insufficient to meet the demands which would be made upon the Exchequer during the financial year. I deliberately estimated to cut things fine, if I may so put it, because, above all things, I wanted to avoid the huge surpluses which had prevailed for three or four years. It has been said, and I have a great deal of sympathy with it, that any Chancellor of the Exchequer who has a surplus of more than half a crown, ought to be put in prison for obtaining money from the taxpayer by false pretences.
  A criticism has been repeated throughout the whole of the year, and I see that it has been repeated in some of the newspapers this morning, that I gave away, unreasonably, revenue last year which might have been devoted to a more useful purpose from the point of view of public need. [HoN. MEMBERS: "Hear, hear ! "] We hear those cheers to-day, but there were no such cheers when I sat down 12 months ago. The right hon. Gentleman the Member for Hillhead (Sir R. Horne), who was the official spokesman for the Opposition 12 months ago, said that the proposals which I had made for the reduction of taxation were just the proposals which the Conservative party had been yearning for years to carry into effect, and that. if they had had my opportunity last year they certainly would have done just what I did. Suppose I had not used the surplus last year. It would have meant that I should have kept on last year taxes to the extent of £40,000,000 which were not needed. That would have been in violation of every canon of sound finance and sound taxation. It is quite true that if I had not. done what I did there would have been a huge surplus at the end of this financial year of probably £40,000,000. That surplus would have gone to the Sinking Fund, and the taxes would have been there for the' Chancellor of the Exchequer to dispose of is this year's Budget.

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  I was criticised because I disposed of that surplus in one way and did not leave it to other parties to dispose of in some other way. We had an illustration in the proposals submitted yesterday, to use one of the Chancellor of the Exchequer's expressions, as to who would have been the objects of his compassion if he had had the disposal of the surplus which I had in hand last year. The Chancellor of the Exchequer was kind enough to say in his opening sentences yesterday, that those critics of mine a year ago who anticipated a huge deficit had been rebuked by the event. That is true. I remember one speech that was made from the Front Opposition Bench on the second day of the Budget Debate last year, when a right hon. Gentleman, who claims to be a great financial authority he is now a member of the Government, holding the responsible position of Secretary of State for War was almost prepared to tolerate the continuance in office of the Labour Government for 12 months in order to have the satisfaction of seeing my discomfiture when I stood at the Box to introduce the Budget this year. He estimated that I should have a deficit of £103,000,000. I believe that that right hon. Gentleman has ambitions and aspirations to occupy the position which the present Chancellor of the Exchequer honours and adorns to day. If ever the Prime Minister should think of appointing that right hon. Gentleman to that position, I hope he will not forget the speech he made in reply to my Budget 12 months ago.
  It has been repeatedly stated, and is stated again in some of the newspapers this morning, that the concessions I made last year have not gone to the benefit of the consumer. Nothing could be wider of the mark than that statement. Remissions have never been made which more fully attained their purpose than the tax reductions which were made last year. Two years ago the present Prime Minister, who was then Chancellor of the Exchequer, refused to apply part of the surplus which he had to a reduction of the Sugar Duty, as he doubted whether, if that were done, the reduction would reach the consumer. I took the risk a year ago with this result, that when I made the reduction a year ago the price of sugar was 7d. a pound and I am quoting the figures supplied by the Minister of Labour today the
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  price is 3¾. We took off l¾d. and the reduction is 3½d. Take now other things. [HON. MEMBERS: "What about tea?"]
  Sir W. LANE MITCHELL: That was not the fault of the tax. It has nothing to do with it.
  Mr. SNOWDEN: I am very glad to hear the interjection by the hon. Member, in answer to the interjections by hon. Members behind him who asked, "What about tea1!" The variation in the price of tea has nothing whatever to do with the tax. The price of currants last year was from 7d. to lOd. a pound. It is now from 6d. to 9d. The price of raisins was from 9d. to lid. a pound; it is now from 5d. to 9d. Sultanas were from Td. to Is.; they are now 6d. Take tea. The wholesale price of the commodity, as the hon. Member below the Gangway appears to know, is not a fixed thing. It is regulated by a thousand considerations and influences, apart from the question of any Excise or Customs duty. For a few months the actual price of tea reflected the reduction of duty. Then there was trade dislocation. There was an attempt to make a corner in tea. Fortunately, through the powerful influence of the cooperative wholesale societies, that was broken. [Laughter.] I suppose that that is the loud laugh which denotes the vacant mind. But, altogether apart from price, if the duty on tea had remained at 8d.. instead of being reduced to 4d., whatever the price of tea may be to-day it would have been 4d. more than it is if the duty had not been taken off.
  Now I turn to the interesting statement submitted by the Chancellor of Exchequer yesterday. First of all, I will deal very briefly with his estimates for the coming year. Unlike myself a year ago, he said that ho was not prepared to take an optimistic view of the yield of revenue for the coming year. He estimated a slight increase in Customs duties. I think that he is doing the right thing, because the examination of receipts of Customs duties over a number of years seems to lead to this conclusion, that the demand of the people for articles like tea, sugar and other articles that are subject to Customs duty has been satisfied, and that there is very little possibility of increased demand. Even if the price were reduced to a ridiculously low figure I do not think that the demand would be increased very much. I do not think that

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  any Chancellor of Exchequer can reasonably look forward in future to any considerable increase, except in so far as it may come from an increase in population, in the yield from Customs and Excise duties.
  The Chancellor of the Exchequer was justified when he referred yesterday to the remarkable increase in the yield of Estate Duties, Income Tax and Supertax. I believe that the right hon. Gentleman is estimating this year, on the basis of previous taxation, for an increased yield of about £25,000,000 from these taxes, Income Tax, Estate Duties and Super-tax. I think that my friends behind me will draw certain conclusions from this remarkable increase in the yield of Income Tax, Super-tax and Death Duties during a period of unparalleled depression. These figures, at any rate, show that the depression has not extended universally, and that there are still in the country very considerable numbers of people who are better off year by year.
  The Chancellor of the Exchequer has stated—this was to me the most surprising of the estimates he submitted yesterday—that he estimates for a sum of £30,000,000 from Special Receipts, that is, from War Disposal Stocks, etc. I do not know what has happened during the last six months, but I was advised last year by the Disposal Board that the stocks had practically all gone, and they advised me that last year was the last year in which any Chancellor of the Exchequer could hope to get any substantial sum from the sale of War Disposal Stocks. There must have been a discovery. Some hidden and forgotten dumps must have been found somewhere. The Chancellor of the Exchequer is estimating on this Paper for, in the present year, a larger sum than was actually realised during last year. hope that he may succeed. The balancing of his Budget depends very largely upon whether he is justified in making this estimate or not.
  I wonder to what extent the right hon. Gentleman, in estimating such a large increase in Income Tax and Super-tax, is expecting this year to recover a larger proportion of arrears? If he is going to put on the screw, I do not envy him. After all, there is very little in this question except this: Every taxpayer ought to be compelled to pay his Income Tax
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  and other taxes as soon as those taxes become due. If the Chancellor of the Exchequer gets in a large proportion of arrears this year, they will affect this year's Budget, but he cannot. have them twice over. The more he gets this year, thereby at the end of this year he is lessening or altering the normal outstanding arrears at the end of the year, and the more he is bound to dislocate his next Budget. He is hoping, as I hoped a year ago, that the possibility of getting something from the Excess Profits Duty need not altogether be abandoned. For that, perhaps, there is some justification, for I suppose that the Inland Revenue have now dealt with a great many claims for rebate. These claims have been weeded out, and, therefore, there may be in the arrears still outstanding a larger proportion of fairly substantial claims than was the case a year ago. But balancing the Budget this year depends almost wholly, I think, upon the extent to which his estimates of receipts from special war store sales and the arrears of Excess Profits Duty are realised. I do not for a moment criticise the very large. increase in the estimated yield of the Income Tax, the Super-tax and the Estate Duties. That, I think, the Chancellor of the Exchequer will realise.
  I turn for a moment to the question of expenditure. The Chancellor of the Exchequer yesterday regretted the increased expenditure. Indeed, I believe that in speaking of that increased expenditure he used the word "unsatisfactory." It is, indeed, most unsatisfactory that we should this year be estimating for an expenditure which is nearly £10,000,000 more than the estimated expenditure a year ago and nearly more than £4,000.000 more than the actual expenditure last year. There is no justification for it. If the Chancellor of the Exchequer regards the facts as unsatisfactory, I think that we are justified in regarding his explanation as being much more unsatisfactory. The right hon. Gentleman excused himself on the ground that he had not been in office very long. Yesterday he had been in office more than twice as long as I had been when I had to go through the ordeal through which lie emerged so triumphantly yesterday. The Estimates for last year had actually been submitted to the Government, many of them had been settled by the Government, and in one of the largest of them, the Navy

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  Vote, I made a reduction of between £6,000,000 and £7,000,000 from the figure at which it had been agreed when the Government which preceded the Labour Government left office. There is no reason why the present Chancellor of the Exchequer, with much longer time at his disposal. should not have been able to get some reduction of the Navy Vote. But instead of that he surrendered to the Department and agreed to submit to the House of Commons a Navy Vote showing an increase of about £5,000,000.
  But that is not all. The Prime Minister gave a reply yesterday to a question about some Cabinet Committee which is considering the question of a new Naval Construction Vote. That will cost money. I am quite sure that I do not do either the Chancellor of the Exchequer or the Prime Minister any injustice when I say that they will not be in the least objecting however long this Cabinet Committee takes to consider these matters, because the longer they take the less will be the call upon the Exchequer ',his year. But the Chancellor of the Exchequer told us yesterday that he was budgeting, not for a year nut for years. When this Cabinet Committee upon new Naval construction reports, and the Cabinet reviews the Report, the money will have to be found. There is no possibility in the Navy Vote, as now before this House, of any reduction for years. The Government are committed to an increase. It is the same thing with regard to the Air. "We shall have a Supplementary Estimate for the Navy probably, if the Cabinet Committee reports in time. It is practically stated in the Memorandum of the. Secretary of State for Air that we are to have a Supplementary Estimate for £500,000 for his Department during the current year.
  What has the Chancellor of the Exchequer done to curb this extravagance on the part of the fighting services? He has apparently done nothing. It is all very well for the right hon. Gentleman to come down to the House and to deplore increasing expenditure, to regret that the Government are not able to bring down the expenditure more rapidly. But we want to know what he is doing to bring about a reduction of expenditure. During the six months that. he has held office he has, in my opinion, been more subservient to the extravagant
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  demands which have been made upon him than any Chancellor of the Exchequer in my experience. The Government got through the House a few weeks ago a grant for Northern Ireland of £1,250,000. Northern Ireland asked for £1,000,000. The Government gave them £1,250,000. I could mention half a dozen other more or less—many of them more—heavy items of expenditure which had been resisted by the Chancellor of the Exchequer up to the time of the present Chancellor taking office, all of which he has conceded.
  4.0 P.M.
  What is to be the position next year? The Chancellor of the Exchequer hoped that we might be able, with the help of this Cabinet Committee which is going to overhaul national expenditure, to effect a progressive annual reduction of expenditure to the extent of £10,000,000. I doubt very much whether during the next four years the Chancellor of the Exchequer will be able to do that. There is one way in which he might be able to do it. It would not be so much a reduction of expenditure as a reduction of the calls upin the revenue—I mean by debt conversion.
  May I say with what pleasure and gratification I heard the Chancellor's impeccable and unimpeachable reference yesterday to the importance of maintaining the national credit? The Chancellor of the Exchequer has not been under Treasury influence for six months for nothing. It has been an education to him. His remarks were couched in the most orthodox Treasury phraseology. He has set at rest the fears that some of us had that he might not be quite orthodox on this important question. He has set our fears at rest. for the time being, but you never can be quite assured that you will remain in a restful condition where the Chancellor of the Exchequer is able to influence your state of mind.
  But I believe it is in this direction mainly, and in the expenditure on the fighting forces that there is any possibility of reduction, because I do not believe it is possible to effect much, if any, indeed, I do not believe it is possible to effect any reduction at all in the aggregate of the Civil Service expenditure. If the Chancellor of the Exchequer will remain the financial purist he appeared to be yesterday, there is a possibility that within the next four years he may be able to effect debt con

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  version schemes which will reduce his expenditure or the calls upon him by a very considerable amount. There is more than £2,000,000,000 of debt that has to be converted before 1929. if the Chancellor of the Exchequer succeeds in converting that debt at an average reduction of only 1 per cent. of interest, he will save -£20,000,000 per year, but I think, by pursuing a sound financial policy during the next two years, he could be able to convert the bulk of that debt by 1929 at a saving of more than 1 per cent.
  I now come to the actual proposals for the current year made by the right hon. Gentleman. I had intended to say something about the unexpected and rather sensational announcement which he made in the earlier part of his speech yesterday, namely, the announcement of the Government that from the moment he spoke this country had returned to a gold standard, but I gathered from the reply made by the Prime Minister to the Leader of the Opposition this afternoon that this matter is to be discussed on Monday and discussed on the Bill which the Chancellor of the Exchequer has introduced. In that ease, I think it would be unwise and hardly fair to waste the time of the Committee this afternoon by making any observations about it. I will therefore pass away from that question and reserve any observations which I have to make on it until the discussion on the Second Reading of that Bill.
  I now turn to the Chancellor's taxation proposals. From a quarter to one-third of the time that the right hon. Gentleman was on his feet yesterday he was dealing, not with financial proposals, not with the question of revenue and expenditure, but with a great scheme of social reform. I hope I shall not be regarded as offensive if I say that I do not know why the Chancellor of the Exchequer yesterday did more than make a passing reference to this question. I could suggest a reason, and the reason, if I were compelled to suggest it, would be this. The right hon. Gentleman's Budget, shorn of the scheme for widows' pensions, would have lost all its glamour, and it would have appeared to everybody what it really is, the worst rich man's Budget that was ever proposed. Why should the Chancellor of the Exchequer have spoken
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  three-quarters of an hour yesterday making a speech which the Minister of Health by all rights ought to have made to this House' If the Chancellor of the Exchequer, in order to finance such a scheme, had been called upon to levy taxation, he would have been justified in dealing with it, but this scheme is going to cost the Chancellor of the Exchequer nothing. Indeed, he took great credit to himself that it was going to cost him nothing. [Hon. MEMBERS:" This year! "] No. it is never going to cost him anything, except just a temporary grant which he may give for two or three years. The whole point of the right hon. Gentleman's speech yesterday was that just as the cost for War pensions fell, so the cost of the scheme for widows' pensions would increase. The House of Commons will never forget the wonderful rhetorical passage. I cannot repeat it; it would be sacrilege to spoil it. But the Committee will remember it. No, it is the saving in War pensions which is to finance his scheme for widows' pensions. That is why, under compulsion I suggest, the Chancellor of the Exchequer devoted one-third of his speech yesterday in dealing with a matter which had no relation whatever to his Budget.
  This Bill for widows' pensions has been introduced to-day. The Prime Minister says that he hopes to provide an opportunity for discussing it within the next fort night. I think it is well that the House of Commons should have fairly considerable time in which to discuss it. Although the Chancellor of the Exchequer yesterday was as lucid as anybody could he in explaining such a. complicated matter, I doubt if there is any Member of the Committee this afternoon who would like to get up and be subjected to an examination upon the details of this question. Therefore, I am not going to say much about it. The Chancellor of the Exchequer said that I had had submitted to me a Report by a certain Committee which had been considering this question. He did not say it, but the implication might have been that before I left office I had approved in general terms of this scheme. That is not the case. Moreover, the scheme which the right hon. Gentleman adumbrated yesterday is in many material and in most important points not the scheme recommended by that Committee.
  The CHANCELLOR of the EXCHEQUER (Mr. Churchill): Hear, hear!
  Mr. SNOWDEN: It does not give benefits which the scheme of that Committee recommended. The position of the Labour party on this question has often been stated—stated by Resolutions in this House, and by resolutions at its annual conferences. There are very few Members of the present House of Parliament who went through the long Debates upon the first Health Insurance Bill introduced by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), but those who are still here may perhaps remember—I am quite sure that the right hon. Gentleman himself would remember—that I was one of a very small number who opposed that Bill on account of its contributory character. I am vain enough to think that the arguments that I advanced against demanding contributions for such a purpose from the workpeople and from the employers were sound, and I think they apply with quite as much force to the proposal which is shortly to he put before the House -of Commons as they did to that Bill. That has always been the position of the Labour party.
  But, having said that, I will say no more than this now, that there are certain matters which will have to be very seriously considered when the proposal of the Government is under consideration, not merely the amounts of the contributions, but whether, when we have an unparalleled industrial depression, and our greatest industries are languishing and all complaining that it is the heavy burdens upon industry which are in the main responsible for the lack of employment, this is the time when an additional heavy burden of this character should be placed upon industry. The right hon. Gentleman admitted yesterday that this would be a very heavy burden upon industry, "But,"he said, "before I sit down I am going to give the employers compensation for this additional burden I am placing upon them." His Budget will put upon the industries of this country, in employers' contributions,a sum which I estimate at not less than £14,000,000 a year. "I am going to give them compensation," said the Chancellor of the Exchequer, and when the compensation was announced it took the form of a reduction of Income Tax. But we had
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  been given to understand that trade wanted a reduction of Income Tax in order that it might be stimulated and that the wheels of industry might be pushed along faster. What is the right hon. Gentleman doing? He is reducing Income Tax by £20,000,000 a year to stimulate industry, and he is going to take £14,000,000 of it back in contributions to this pensions scheme. These are matters which will have to be very carefully considered, therefore I express no further opinion upon them, but when the Bill is under discussion I am quite sure my hon. Friends behind me will give it their careful, their serious and, in view of the object of the Bill, their sympathetic consideration.
  If you eliminate this scheme of pensions from the Budget, what is there left? I repeat that the scheme for widows pensions has nothing to do with the Budget, and the Budget must be considered apart from its association with the question of widows pensions. The Chancellor has a surplus of £20,000,000. I think he will get that surplus, unless he fails upon the two items which I have mentioned. What could he have done with that surplus'? It was just sufficient to reduce the Income Tax by 6d. in the £. But that would not satisfy the Chancellor of the Exchequer. Why, even he could not have expanded an announcement of a reduction of 6d. in the Income Tax beyond ten minutes or a quarter of an hour. lie must do something much more spectacular and dramatic than reduce the Income Tax by 6d. The Chancellor of the Exchequer, as he told us yesterday, has objects of compassion and one of the objects of his compassion is the poor, overburdened, starving, unemployed Super-tax payer. At a time when 1,500,000 men are out of work existing upon a miserable dole, the Chancellor of the Exchequer selects this opportunity to relieve the Super-tax payers to the extent of £10,000,000 a year. He has adopted a novel procedure. He had an amount only sufficient to reduce Income Tax by 6d. in the £, but he was determined to do something for the Super-tax payer, therefore it was necessary that he should increase taxation. He has adopted a procedure which I believe is unique in financial matters associated with the Budget, that of taking out of one pocket in order to put into another, or, to use another simile, that of robbing Peter to pay

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  Paul—Peter in this case being the dead and Paul the living Super-tax payer.
  He has increased the Death Duties. I confess that I had a bad few minutes during the Chancellor's speech yesterday. When he was announcing this increase in the Death Duties I thought, "Well, this is rather bad. The Chancellor of the Exchequer is stealing our thunder with a vengeance." But I had not to wait very long to see that, after all, an increase in the Death Duties might be made with very different objects and for very different purposes from ours. The Chancellor of the Exchequer is increasing the Death Duties in order to reduce the Super-tax. What earthly need was there for the Chancellor of the Exchequer to interfere? Has there been any public expectation of a reduction in the rates of Super-tax? None. The Chancellor of the Exchequer will admit it. Nobody expected it. Why then could not the right hon. Gentleman have been content to keep that £10,000,000 in his pocket? I can assure him he will need it if he remains in office for the next two or three years. In increasing the rates of Estate Duties the Chancellor has still shown us where his sympathies lie, because it is the poorer of the rich people he has taxed most heavily and the millionaires he has left totally alone. He went. on—I suppose this was a sort of indication of what he may do in future Budgets—to express his view that the millionaire is already far too heavily taxed, and that if any alteration he made in the rates of duties applicable to millionaires it must be a. reduction, and not an increase.
  What is this revised scale which the Chancellor of the Exchequer proposes I The rates of increase are higher upon the estates of comparatively small amount. I use the word "comparatively" in relation to the comparison with millionaires' estates. An estate of about £50,000 is to be increased by about 4 per cent. There is to be a descending scale of increases on larger estates, and the more money a man leaves to his descendants or heirs—not the same thing—the less is the rate of duty to be paid upon it, and there is to be no increase at all in reference to the estates of the millionaires. They are taxed enough already according to the Chancellor of the Exchequer. What is the amount of tax they pay?They pay
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  30 per cent. There may be other duties, such as Legacy and Succession Duties, which are increased to a small amount, but these duties apply to estates of smaller amount as well, and do not apply merely to millionaires' estates. Yet there is to be an increased duty of 3 per cent. on an estate of £40,000, but nothing more on the estate of a millionaire. Thus the. Chancellor of the Exchequer shows his sympathy with those who inherited only a paltry £700,000 more, after paying only £300,000 duty. While increasing the duty upon estates of the smaller amount, he says these millionaires' estates are too sacred to be touched by the hand of the Chancellor.
  I agree whole-heartedly with what the right hon. Gentleman the Member for Carnarvon Boroughs said yesterday, that there is a vast amount of unappropriated revenue still in these Estate Duties, and it is one of the most legitimate and socially beneficial forms of taxation. I am, unfortunately, old enough to remember the Debates which took place upon Sir William Harcourt's Death Duties proposal, and those who remember that period will recall with what bitterness the proposal was assailed. The right hon. Gentleman the Member for Carnarvon Boroughs raised the Death Duties during his tenure of office as Chancellor of the Exchequer, but the opposition on that occasion was much less. The present Foreign Secretary raised them very considerably three or four years ago and the opposition then was stilled. What is the explanation I think there is a very sensible, reasonable and satisfactory explanation and it is that the public conscience is increasingly being outraged by the enormous sums of money which are being left to people who have done nothing whatever to earn that money and who, by these inheritances, are made parasites upon Society, living really, not upon an inheritance, but living by being able to extort an annual tribute from contemporary labour. This view is not confined to poor men and Socialists. I constantly meet with rich men—enormously rich men—who are horrified at the prospect of leaving to their sons enormous wealth which they know may not be to the good either of the sons or of the nation. Furthermore, apart from the financial assistance which increased Estate Duties would give to the Revenue, they could be used as a very potent instru

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  ment for effecting the most desirable and advantageous social reforms. Therefore, while I am all in favour of an increase in the Estate Duties, I criticise the right hon. Gentleman's scale, and I criticise still more the purposes to which he proposes to apply the increased duties.
  There is one other important proposal made by the Chancellor of the Exchequer to which I ventured yesterday:to give my hearty support. That is the concession which the Chancellor of the Exchequer is making to the small Income Tax payer. Last year I gave what practically amounted to a pledge that I would deal with that matter if I remained in office. I know that it is the practice of every Chancellor of the Exchequer to look up the pledges of his predecessors, and very probably the right hon. Gentleman has discovered this pledge that I gave, and I am quite sure that then he would say: "This will be a very popular thing to do." When the Finance Bill comes to be discussed, I can say that he will receive no opposition to this proposal from my hon. Friends behind me, but I wish that he had done something more I wish that he had increased the allowances for children. I think that there are few purposes to which he could have devoted any money he could spare more beneficially.
  Now I turn to the Customs duties—the Protectionist duties, as I see even certain Conservative newspapers describe them this morning. There is something—and I hope the right hon. Gentleman will excuse me using the word—really cynical in the right hon. Gentleman, with his political record on Free Trade, using the first opportunity he has in the House of Commons to institute a considerable measure of Protection. Of course, hon. Members on the benches opposite had not the advantage of seeing the right hon. Gentleman yesterday face to face, but I am quite sure that all the Members on this side will agree with me when I say that there was no part of the right hon. Gentleman's speech in which he was so hilariously and gleefully cynical as when he was proposing these duties, and in particular he directed his gleeful cynicism to his old Free Trade colleagues. The right hon. Gentleman stated yesterday that his proposals for a duty upon silk had only a very small protective value. I was unable to find in the OFFICIAL REPORT this morning, what I was under
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  the impression the right hon. Gentleman had said, that the amount of the protective duty was only one-eighth. I cannot find that in the OFFICIAL REPORT, but it is in the "Morning Post." The revision of the OFFICIAL REPORT after a speech has been made is not altogether without precedent. If I understand this Paper, there is a very high protective duty in favour of the home producer. "Artificial silk yarn, thread, straw, and waste, 3s. a lb."
  But the Excise Duty is only 2s. ed. Then there is a duty of 3s. 6d. upon tissue containing artificial silk, and no countervailing Excise duty at all. That may be capable of some explanation, but it certainly does riot appear upon the Paper.
  If anybody has any doubt about the protective character of these silk duties,. let him go into the Lobby and look at the tape there, and he will find, under the Stock Exchange news, "that textiles are strong on imported raw silk duty, and motors have been similarly affected by the reimposition of the McKenna Duties.". [HON. MEMBERS: "Hear, hear "] I have no doubt at all that this is a matter of very great interest to a number of hon. Members opposite. "Courtaulds opened strong at 105." They were 99 at closing time last night. [An HON. MEMBER: "Why not help British trade? "] Ah, why not help these struggling and starving industries—Courtaulds, which made £4,000,000 of profit last year? Why do not they come and apply for protection under the Safeguarding of Industries Act? There, again, the Chancellor of the Exchequer is living up to the reputation he established yesterday as the friend of the rich at the expense of the poor. He talks about imposing this as a luxury tax. If it be a luxury tax, why did he select silk? Artificial silk is no longer a luxury. Artificial silk has taken the place of cotton, common woollens, and the like, and I see in the newspapers this morning that the head of one of the great fashionable dressmaking establishments in London says that on the dresses they produce it will make practically no difference. [An HON. MEMBER: "Then why worry? "] I will tell the hon. Member why. It is because it is exempting the rich people again and putting a tax upon the poor. It is bound to be a tax upon a necessity so long as women must wear stockings and blouses. When much of the glamour of

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  the Chancellor's statement yesterday has passed away, I think he will be remembered in the future as the Chancellor who taxed women's stockings. I have spoken often in this House on the McKenna Duties, but may I add that I said yesterday, and I thought it necessary that I should make the announcement at the earliest possible moment, that if we come into office again shall at the first opportunity repeal these duties. It is not good for trade that you should have changes of this character with every change of Government. [An HON. MEMBER: "Why did you take them off? "]I Hon. Members are quite inquisitive this afternoon, and I am quite prepared to supply their lack of knowledge on these questions. I will tell the hon. Member why they came off. It was because Mr. Bonar Law and others had pledged themselves in the matter, and Mr. Bonny Law—and this for the satisfaction of the right hon. Gentleman—said once, in speaking upon these questions, that no Chancellor of the Exchequer would ever be so silly as to impose duties of this sort after the War. Evidently he had forgotten the possibility of the right hon. Gentleman becoming Chancellor of the Exchequer.
  Mr. CHURCHILL:I only want to say that if the right hon. Gentleman would read the quotation from Mr. Bonar Law to which he has referred, he would see that it is very different in character from what the Committee would imagine.
  Mr. SNOWDEN: I am quite sure that there is no Member of the Committee who thought I was giving the exact words, but Mr. Bonar Law said in substance exactly what I stated. He said that duties upon this scale would not he -imposed after the War. The right hon. Gentleman spoke of these taxes as luxury taxes. If that be the case, and he has not imposed them, as we know he has, purely for protective purposes, why did he not put a countervailing Excise Duty on motor-cars?[Interruption.]Impracticable? That is a very easy way of getting out of it. It is by no means impracticable to put an Excise duty upon motor-cars. "A luxury tax," he says, and yet these duties are not going to affect the luxury cars at all. Your Rolls-Boyce, your Lanchester, and your Daimler are quite independent of all
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  foreign competition, and they are not affected in the least by these taxes. I will tell you whom they are going to affect. These duties are going to be paid by people of very moderate means, because it is the cheap car, the two-seater car, the light-powered four-seater car, almost wholly, that are affected by these duties. [An HON. MEMBER: "They are all made on this side' "] The repeal of these taxes has been of immense benefit to the motor industry. It has increased the volume of employment, it has increased the export trade of British-made motor cars, it has increased the number of people employed, and it has brought down the price of cars. We all remember Mr. Morris, who figured ingloriously in the campaign last year. After the duties had been repealed, he paid for space in all the leading newspapers, and announced that he had brought down the price of his ears by what practically amounted to 25 per cent. So much for this example of Protection pure and simple by the greatest apostle and protagonist of Free Trade, now a Tory, Protectionist, Chancellor of the Exchequer.
  Now I come to the last item, and that is the 6d. off the Income Tax. Of course, the right hon. Gentleman had to do it. He had been told that to reduce the Income Tax would bring back prosperity to trade. I believe he said something of that sort in his peroration yesterday afternoon, but. of course, perorations are places where speakers say things they cannot prove. I have never heard more ridiculous nonsense talked about anything than about the effect of high taxation upon industry. The Chancellor of the Exchequer gave the best and the most conclusive answer yesterday, and what was that answer? During these years of heavy taxation incomes have been expanding at an unparalleled rate, savings have been bigger than ever, and the yield of your Estate Duties has been going up by millions a year, at a time when, according to those who are clamouring for a reduction of the Income Tax, industry and savings are being destroyed by this heavy taxation. Sixpence in the 2! Let us suppose that a reduction of taxation will benefit trade. What is 6d. going to do? It reminds me of a saying of Abraham Lincoln. Some ridiculously absurd proposal had been made for deal

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  ing with a great scheme, and Abraham Lincoln said:
  " You might just as well try to manure a ten-acre field with a spadeful of muck."
  That is just the effect a reduction of 6d. in the Income Tax will have in stimulating trade. Then, again, where is it going? £4,000,000 will go to three-quarters of the taxpayers, and £26,000,000 to the other quarter. You can find plenty of illustrations in the White Paper. You will find that the amount of relief given to people with small incomes is comparatively small, but to the richest Income Tax payers the proposal gives thousands a year. That is not the way to stimulate trade. There is only one way to stimulate trade, that is toj, increase the purchasing power of the^ working people, who are the main sup-: porters of the staple industries of the country.
  Let me give an illustration. We reduced the Sugar Duty last year. That put £20,000,000 more spending power into the pockets of the working people. I have some figures of the Co-operative Wholesale Society in regard to their sugar and jam sales. In nine months last year, after the repeal of the Duty, they increased their sales of sugar by 280,900 cwt.or1111 per cent. In jam,they increased their average for that period by 21-9 per cent. The average number of workpeople employed during that period over the corresponding period of the previous year was 219, and in the busy jam-making months 519 more. That is the way to stimulate trade. With the amount that the Chancellor of the f Exchequer is frittering away, to be spent I in frivolity and in luxury, he could have I abolished the Sugar Tax altogether, and I that would have been a far more beneficial thing.
  What is this Budget? The right hon. Gentleman has himself established a certain record. For the first time for many years he has imposed additional taxation. This is the first Budget for many years where the relief of taxation has gone entirely to the direct taxpayers. There is not a penny of relief for the wage-earning classes. The Chancellor of the Exchequer puts additional taxation upon them. Why? When the right hon. Member for Hillhead reduced the Income Tax by twice as much as the Chancellor of the Exchequer is doing this year, he
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  could not, for very shame, leave the in direct taxpayer out altogether. Therefore, he reduced the Tea Duty by 4d. a pound. When the present Prime Minister as Chancellor of the Exchequer, he reduced the Income Tax by 6d., but he did not leave the indirect taxpayer out. It is quite true he selected an article which I do not' patronise, but which, I regret to say, a good many of my friends both in the House of Commons and outside imbide very moderately.
  Mr. W. THORNE: Very moderately
  Mr. SN0WDEN: But, still, it was indirect taxation. Now the right hon. Gentleman is not taking off a single penny this year. Therefore, he can claim credit for having established a record in his Budget in regard to taxation. I have only one word more. The right hon. Gentleman has chosen to reduce the amount of taxation paid mainly by rich people by a very considerable sum, with the result that the Income Tax payers and Super-tax payers do not contribute a single penny to the cost of the SuppLy
  services and the general administration of the country. [HON. MEMBEES: Oh! "] Not one penny. He is expecting this year £325,000,000 from Income Tax and Super-tax. The National Debt services are £355,000,000, and £305,000,000of that is interest upon War Debt, and,
  very approximately, the people who receive that income from the State on War Debt are the same people who pay the Income Taxes and whom the right hon. Gentleman is assisting. Shorn of all the glamour of the right hon. Gentleman's
  eloquence, this is his Budget. No more of a rich man's Budget has ever been presented. I congratulated (he right hon. Gentleman yesterday upon the great success of his speech. I congratulate the right hon. Gentleman to-day upon his
  Budget. He has provided my friends here in the House of Commons and in the country—
  Mr. BLUNDELL: Is this a peroration?
  Mr. SN0WDEN: This is a peroration. It creates a precedent in perorations by introducing into a peroration a statement of fact about which there can be no dispute. I congratulate the right hon. Gentleman. It will not take long for the glamour to disappear, and then the great toiling masses of this country will realise the true character of this Budget,

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  and will realise, too, that the Tory party is still more than what Lord George Hamilton declared many years ago:
  A party that looks after its own friends whether it be in office or out of office."
  Sir ALFRED MOND: I have only had the privilege of hearing the last part of the speech that the right hon. Gentleman has just made. I gather from him that the general merit or demerit of the Budget is that it will once more supply his party, who are, apparently, very short. of material and finding their meetings very flat, with some more oratory of the character he has been using in Opposition (very different from what he used when he was in office) in order to obtain once, more, he thinks, some votes at a General Election a long time after. It is interesting always to hear rival experts. No doubt, the right hon. Gentleman's anger was somewhat stimulated by the fact that schemes which his party had adumbrated and he had not the financial skill to carry out, are now being introduced by the party on the other side. In spite of widows' pensions and old age pensions at 65, he will go about shouting, "The rich man's Budget!" Unfortunately for him and his poor man's Budget last year, when he came to the General Election, he and his party did not seem to have obtained that amount of recognition they expected. [Interruption and an HON. MEMBER: "A Daniel come to judgment' "] The right hon. Gentleman with his Budget met the fate common to Chancellors of the Exchequer, that remissions of duties are never very good vote-getters. I daresay, the right hon. Gentleman opposite will some day have the same experience.
  5.0 P.M.
  I would rather deal with what I may call the more serious aspect of the effect of the Budget on the financial situation. I understand that the question of the return to the gold standard, which the right hon. Gentleman elaborated at some
  length yesterday, is to be discussed at greater length on another occasion. I would, therefore, to-day only make a few preliminary observations on a subject of vital importance, the future of the trade of this country. The right hon. Gentleman and his colleagues have come to a decision,
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  and so far as it is possible to judge, that decision is not unaccompanied by criticism. There is opposed to that decision a considerable amount of informed opinion as to what the consequence of the decision will be—a reduction of money prices, and a consequent reduction of money for actual revenue. Whether it is wise, in the present difficult industrial position in which we are placed, to introduce into the field of industry, I will not call it a problem, but this argument, I beg leave to doubt. Personally I cannot see what are the real advantages which. we gain by this step compared with the great risk and difficulty which seems to me to be involved in the decision. We are tying to a much greater extent our monetary system to the monetary system of America. You are making your Bank Rate much more subservient to Wall Street than it has been in the past. You are doing all this in order to create what, to my mind, is a purely sentimental result.
  Already under licence, and by permission of the Government, the Bank of England can export gold if necessary. A licence, surely, would never have been refused under any reasonable condition, and we should have had control in case of exceptional circumstances. That control we are now giving up, at a time when it may be thought it can safely be done. But it is very difficult. to control the fluctuations of prices in this country, and still more the fluctuations of prices in a country everyone knows suffers such violent changes as the United States of America. If prices rise in America and the dollar depreciates, you may he able to maintain your gold position. If prices fall in America and the dollar appreciates, you may find it very difficult to do so, unless you take extreme steps which may be harmful to the trade and industry of this country, and so take a course which, once adopted, cannot possibly be again reversed. The fact that the right hon. Gentleman himself has had to create a kind of reserve, the character of which I dislike intensely, by further credits in America shows that his own mind is not altogether easy on the subject.
  Whereupon the Gentleman Usher of the Black Rod being come with a Message, the Chairman left the Chair.
  Mr. SPEAKER resumed the Chair.

Royal Assent.
Message to attend the Lords Commissioners.
The Rouse went, and, having, returned,
Mr. SPEAKER reported the Royal Assent to
Army and Air Force (Annual) Act, 1925.

WAYS AND MEANS.
Again considered in Committee.
[Mr. JAMES HOPE in the Chair.]

AMENDMENT OF LAW.
Question again proposed,
" That it is expedient to amend the Law relating to the National Debt, Customs, and Inland Revenue (including Excise) and to make further provision in connection with Finance."
Sir A. MOND:Before my remarks were interrupted, I was attempting to place before the Committee some reasons why, in the minds of myself and many others, it may be doubtful whether a return to the free export of gold, which is a truer definition of what is being done than to call it a return to the gold standard, is advisable at the present juncture. There is one question in relation to that upon which we should like to have some information, either in this Debate or in the discussion of the Bill itself, that. is, how far the exchange condition between this country and America is an artificial one and how far the appreciation of the pound in relation to the dollar has been a real one, based on internal prices, which is the real basis of exchange? The Chancellor of the Exchequer told us yesterday that the Treasury had been discreetly buying a large amount of dollars to make provision for the interest payments which have to be made. By taking this step he has, of course, in a sense, himself been a party to inflating the exchange in a sense favourable to ourselves, and thereby creating the appearance, perhaps, of a better state of the exchange between the two currencies than otherwise would have appeared. There is another factor to which my attention has been drawn recently by financial authorities on the subject, and that is that one of the consequences of the flight of capital from France has been indirectly to improve the sterling exchange in regard to the dollar.
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How far this is affecting also the rise we have seen is, of course, difficult to estimate; but there are factors of this kind, in connection with the idea that the free export of gold was going to be introduced, which naturally would tend to bring the pound back to parity which may have obscured the issue to this extent, that when those factors disappear exchange relations may occur which may put us in an embarrassing position. I have no doubt that the right hon. Gentleman and his expert advisers have taken all these factors into consideration and balanced carefully their advantages and disadvantages. He is, perhaps, in possession of more information, is bound to be, than any private individual can be but in view of the great importance of the problem T think it right to raise these questions, to give voice to these doubts, which are widely spread, to enable him on a future occasion to allay them, if he is able to do so.
Let me pass from this rather special question to a further point in the interesting and brilliant speech, if I may say so, which the right hon. Gentleman made yesterday. The right hon. Gentleman foreshadowed economies in our expenditure, and I know there is no one more anxious than he is to effect them if it is possible to do so. He mentioned the progressive figure of S10,000,000 saving on Supply Services as a possible reduction of public expenditure. I would like to ask, because it does not appear quite clearly from his speech, which I carefully read this morning. whether or not he includes the diminution of £5,000,000 a year resulting from debt operations in this £10,000,000, or whether the £10,000,000 is additional to the £5,000,000, which is more or less automatic.
Mr. CHURCHILL: I said we were hoping to effect. I said we should set it as an aim to effect progressive reductions of £10,000,000 a year on the Supply expenditure, and that excludes economies due to debt.
Sir A. MOND: I am glad the right hon. Gentleman has explained that, because the OFFICIAL REPORT, as sometimes happens, is not absolutely clear. The amount, as the right hon. Gentleman agreed, is not very large, but even if he achieves that he will, at any rate, have

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achieved something, because in earlier Debates in this House—and this is a point which I must confess seems obscure—the First Lord of the Admiralty foreshadowed that at a later stage of the financial year he was going to produce Supplementary Estimates which were really going to tell us what the increased expenditure on our armaments was going to be. There is no provision in the Budget for Supplementary Estimates. As a matter of fact, the right hon. Gentleman has estimated to a very narrow margin of surplus. What we would like to know is, has he succeeded in quelling the ambitions of the First Lord of the Admiralty in regard to Supplementary Estimates, or, if not, how those Supplementary Estimates are to he met when the time comes?
On the whole the right hon. Gentleman seems to have taken an optimistic view of the revenue he is likely to obtain There, again, is a position where no one can compare with him in the information at his disposal. There is one thing which disturbs one a little in all estimates of revenue, and that is that, although in some mysterious way the totals agree fairly well with the anticipations, when it comes to individual items there is such a wide variation between the estimates and the actual results that it seems to be more by a miracle of good luck than by prescience that any Budget conies out balanced at all. Last year the deficiency in the Excess Profits Duty receipts was offset by unforeseen increases in other directions. I notice that the right hon. Gentleman puts the revenue from Excess Profits Duty payments this year again at £4,000,000, although last year the sum actually realised was only £700,000 Last year those who advised the Chancellor were optimistic enough to imagine they were going to obtain a very much larger sum than even the 4,000,000, and if the actual sum obtained is so very small, is he quite sure that similar circumstances will not recur this year, and that his Estimate of £4,000,000, instead of proving an asset, may not prove a liability? Then there is a large increase in the amount estimated from Special Receipts. We rather gathered from the Chancellor of the Exchequer last year that the Special Receipts had practically come to an end, that there was no more revenue to he derived from them. Like the widow's cruse, they seem now suddenly
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to have restarted their inexhaustible flow in aid of the Treasury. Is this likely to continue, or are we to consider that this is the last windfall which will come to the Treasury under this head?
The right hon. Gentleman laid down the general lines of his Budget in the following words: The security of the home of the wage-earner against exceptional misfortune, the encouragement of enterprise and the relief of the burden resting upon industry. When I heard those words I thought the right hon. Gentleman was really going to deal with the industrial and financial situation of the country as it is. Put in a few words, what is it we are suffering from to-day? There is a grave depression of industry. in some directions almost unparalleled for many generations; an enormous volume of unemployment, stationary, obstinately refusing to diminish to anywhere near normality; a large amount of Poor Law expenditure; and a general feeling of uneasiness as to the future. That is the position as it presents itself to all who occupy themselves with this very anxious problem. When the right hon. Gentleman was unfolding his Budget I was waiting from minute to minute, I might almost say from hour to hour, to hear how he proposed to deal with these grave problems. At the end of his great oration I found, to my amazement, that he had not begun, to my mind even had not endeavoured to visualise, the position we are in, not in 1956, but in 1925. We heard eloquent, passages about a great scheme, what was going to happen when we shall all he mouldering in our graves, and the burdens 50 years hence, which I have no doubt those generations will be able to deal with without our assistance in a world which will be very, very different from the world we see to-day, and with on order of society probably profoundly different from what we know. We heard nothing and saw no provision for dealing with the present question of unemployment. I do not see one penny of money allocated: in this Budget, with its large anticipated surplus and its new taxation, there is not any scheme or proposal to deal with the unemployment problem. I do not see, either, and I shall deal with that a little later on, that stimulus to industry and trade on which the right hon. Gentleman based his survey.

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The general financial policy of this country since the War has been a policy resulting in depression of trade and increasing unemployment. Chancellors of the Exchequer can stand at that Box all the years they like and dilate upon our magnificent and grandiose reductions of debt and our superb ability to bear our burdens, but nothing will get away from the great fact that there is no country in the world which has industry so depressed and unemployment so rampant as the country in which we live. Not any of those grandiose statements about increasing the Sinking Fund can get away from the fact that this policy, and the continuance of this policy, is creating depression of trade, and creating the very unemployment which every party in the State is trying to solve. It is like a nation trying to empty the ocean with a bucket full of holes at the bottom, and wondering why it gets no water. The right hon. Gentleman, apparently, is mechanically going to follow other Chancellors. am sorry he has not had the courage to break away from the policy of a crushing debt reduction at the time of the nation's greatest industrial difficulties. All the little peddling things which he talked about in his long speech yesterday afternoon are not going to achieve much. The help he is giving to industry with one hand he is taking away with the other.
The right hon. Gentleman devoted a large amount of his speech to the launching of a great, and, if I may say so, an evidently carefully-studied 'scheme of pensions for widows and old people at 65. I think there is no section of the House which will. not say, which has not definitely said, that such a reform should be introduced, and if the right hon. Gentleman succeeds in placing such a scheme on the Statute Book he will be congratulated by those who wish to see such a measure of social amelioration carried out. On the other hand, I see no money provided for it. I take it no money will be necessary for the scheme in the present financial year. On a later occasion the right hon. Gentleman will perhaps tell us how exactly the finance of this scheme is to be worked. I do not understand when his first contribution of £5,500,000 is going to fall upon the Treasury, in which financial year it is to be paid. I notice that the benefit is to be given in
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January, 1926, but I would like to know if the first £5,500,000 will come in to the present financial year, and I presume when it comes in it will be dealt with in the Budget of that time.
There is one thing to which I must call the attention of the Chancellor of the Exchequer and which seems to me to be a defect in the scheme which requires serious consideration. We have been developing schemes of insurance in this country for some time and the burden of them has been placed mainly, and to a large extent, on the back of the industries of this country. We have had national insurance and unemployment insurance and these contributions are largely financed by industry. It is now proposed to add to these burdens under the new scheme put forward by the Chancellor of the Exchequer. I have been endeavouring to get some figures on this subject, because I do not think it is sufficiently realised, in fact, I do not think it is realised at all, how this growing burden on industry affects both employers and employed, and it is not realised how vitally such contributions as these are affecting the industrial position.
With the new charges these contributions amount to 3s. ld. per man on everybody engaged in industry. If you work that out in relation to a wage rate of 35s. or a week you will at once see what a heavy burden is entailed by these contributions. After all, these contributions have to come from somewhere, and they have to be paid by industries which in many cases are working without profit, and are having a very hard time in competition with other countries. Why is it now considered to be the function of industry to have to bear such a great proportion of what are recognised as common social services? I would like to ask in what way is industry responsible for widows or for old age. Why should the general body of taxpayers, such as landlords, stockbrokers, financiers, lawyers, and doctors who employ relatively very few people be always exempted, leaving the real burden on the people who have already a sufficiently hard struggle to continue in competition in the world's market? It is commonly assumed that industries play the role of the tax-collector by passing on burdens to the consumer, but surely it must be realised that it is impossible for industry
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to keep passing burdens of this kind on to the consumer. We must remember that we are still in competition with other countries, and the consumer is not a class of person who can afford to pay any price you like for the goods he requires.
In starting a new scheme of this kind, personally I want to see a very much larger proportion of the expenses put upon the common taxes of the country and borne by the general community for the common good. No doubt it is much more convenient for the Chancellor of the Exchequer, instead of having to put up the Income Tax, to let the people realise what their social needs are by adopting formula; of this kind. As one interested in the future of industry I know how even small increase of wages are frequently the subject of long discussion and much contention. It seems to me that those who frame such schemes as this pay insufficient regard to the increasing cumulative effect of their actions. The whole question of this scheme has been under discussion more than once, and great doubt has been expressed as to whether it is possible to add a new burden of this kind.
The unemployment contribution is necessarily placed at a high rate, and under the unemployment insurance scheme the charge has to be paid at the earliest possible moment. I hope the right hon. Gentleman will look into that matter, and see whether he cannot agree to spread the repayment of the loan for unemployment insurance over a longer period, and if he does this he will probably find that he can reduce the unemployment contributions by that means and thus ease very much the burden which the scheme in its present. form involves. I think that will be really a point of substance when the Bill dealing with this question comes before the House, and I hope it will receive a very careful scrutiny. Personally, I do not share the right hon. Gentleman's great enthusiasm about the present non-contributory pensions system becoming a contributory system. We have deliberately adopted a non-contributory system and we have succeeded In financing it out of our revenue. There seems to me to be no mandate for this new system, because, after all, the whole of the money comes out of the pockets of the people,
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only in a different form. Therefore, in adumbrating a scheme which foreshadows that all old age pensions will be placed on a contributory basis, the right hon. Gentleman is taking a reactionary step.
This subject will require a great deal more consideration, but, as far as I can gather from the short calculations I have been able to make of the total contributions of the employers and employed under the right hon. Gentleman's scheme, they will amount approximately to about £20,000,000 per annum, and he is going to begin the fund with £5,750,000. That seems to me to be a disproportionate amount, and I fail to follow in what way The liabilities are going to increase to such a large extent as is being provided for. I think we shall hear a great deaf more about that when we go further into the difficulties and the real points of this scheme. I would like to point out now that under the National Health Insurance scheme the industries contribute £28,000,000 and the Exchequer £6,000,000. Under Unemployment Insurance industries contribute £32,000,000 end the Exchequer £10,000,000. I think those figures emphasise my point in regard to the enormous burdens which these insurance schemes place on the industries of this country. In starting a new scheme of this kind, the functions of which have no real relation to industry, it is very much open to doubt that you should base such a scheme on this principle at all.
The Chancellor of the Exchequer may wonder why I question his claim that he is doing anything to stimulate industry. I am sure the right hon. Gentleman will not expect me to subscribe to the doctrine which he himself repudiates, that the reimposition of the McKenna Duties will be a stimulation to industry. This seems to me to be a kind of sop to the Protectionists in the party opposite. From what I can gather this proposal to reimpose the McKenna Duties has not met with a very warm reception. There is no necessity for the imposition of those duties, and the amount they will bring in is very trifling. I would also like to point out that the abolition of those duties has led to a more settled condition of trade. I agree with the Chancellor of the Exchequer that nothing can be worse for industry than to make such things as these the plaything of political

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controversy, by putting on a tax for 12 months and then taking it off. The right hon. Gentleman seems to think that the small light car is a luxury, but I would like to remind him that at the present moment the light motor car is an essential part of the industrial outfit of a large number of small manufacturers, and it is just this class of car which will be affected by the action which the right hon. Gentleman proposes to take.
Yesterday the right hon. Gentleman spoke about travelling in motor cars, but I would remind him that all motorists do not travel in a luxurious and costly limousine, but they use a light car, England to-day is producing a light car of such excellence and at such a low price that the manufacturers do not fear any foreign competition. As a matter of fact, since the duties have been removed British manufacturers have been producing a far superior light car which can defy all competition, and there is no necessity for the protection which is now being suggested. Then we have to consider musical instruments and the harmless gramophone which is the joy of so mary homes which have not yet got a listening-in set. What about the cottage piano which still ornaments the houses of many working-class people even if it is never played. I hope I shall once more have the pleasure which I had some years ago when those duties were under discussion of opposing them to the best of my ability.
Mr. CHURCHILL: The right hon. Gentleman supported them five years ago.
Sir A. MOND: I do not think the right hon. Gentleman ought to say I supported them. Perhaps he may say that I gave them a passive support, but I certainly objected to them, and I shall certainly oppose their re-establishment. I think the right hon. Gentleman is the last person in this House who ought to make any reference of that kind. He himself seems to have fallen among thieves on hops, and he makes the familiar excuse of the housemaid in regard to this duty—that it only a little one. There may be some justification for the imposition of duties of this kind during a war period, but after that the necessity disappears. The right hon. Gentleman does not seem to me to have done himself justice in regard to either of these subjects. He really is in a worse position when he gets to his silk duty. I do not know
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who advised him on the subject, but I cannot understand how a duty on the manufacture of artificial silk, which is becoming one of the most important textile industries of this country, is looked upon by him as likely to stimulate industry. I do not share the views of those who grudge a firm which has built up a great new industry in this country a legitimate profit if they can make it. Some hon. Members seem to think that it is only bankrupt concerns that are worthy of their support. To be successful is in their view the greatest crime any industry can commit. They are, however, making a great mistake, not in the interest merely of the capitalist, but in the interest of those engaged in the factories.
I am seriously afraid that this duty will be found to hamper and restrict a large and growing industry, which is not a luxury industry at all. [An HoN MEMBER: "Why did the shares go up?"] I think it was because they saw that there was going to be a duty. They saw an import duty, but they did not see an Excise duty. I should like to see what the shares stand at in a few days' time. I feel that there is a difficulty; I do not know whether the right hon. Gentleman's advisers kept it from him. Yesterday afternoon he announced that naturally, in the case of export business, there would be a rebate, cither on the import duty or on the Excise. But one of the difficulties that I foresee in that matter is that artificial silk is an article which is very largely used to-day in conjunction with all kinds of textiles, and woven in and out of many other kinds of goods. It is mixed with wool, it is sometimes mixed with cotton, it is sometimes interwoven. How is a rebate system going to be worked in connection with a complicated, composite subject of this kind? It is a very difficult problem, but it will have to be solved, because, otherwise, you are going to debar the textile trades of this country, which are already heavily hit, from a large amount of business, which will naturally pass to Italy—where the artificial silk industry is developing most rapidly—and to other countries. I am gravely apprehensive from that point of view. Again, it is going to raise the price of commodities which are not luxuries, but which are bought by very large classes of the women of this country. I understand that a pair of stockings, which to-day costs 3s., is going

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in future to cost 4s., and hon. Members will possibly have to answer questions put by female voters on this subject.
What is the object of the right hon. Gentleman in doing this? The amount of revenue which he expects to get from it is really not very large or very important, and I think there are plenty of other ways in which he could provide the money. He is departing in this matter from the great process of reduction and simplification of our tariffs and duties to which Mr. Gladstone devoted a great part of his life as Chancellor of the Exchequer. The right hon. Gentleman is deliberately going out of his way, with a large surplus in his hands and other sources of revenue which I have indicated, to introduce complicated new duties, every one of which means a further expenditure of public money in administration and in Government officials, and the hampering of industry. I must confess that I think it is a very grave blot on the Budget which the right hon. Gentleman has introduced, and I am wondering what kind of support it will receive in the future. The right hon. Gentleman juggled about with Death Duties and Super-tax rather like a conjurer throwing up balls and catching them with great ingenuity. Does he think it wise to raid relatively moderate fortunes, accumulated by years of saving, of £50,000 and upwards? I remember that a Labour leader, who was a Member of this House—Mr. Maden—left £35,000 and no one could say that a fortune of £50,000 is excessive in a country with the wealth of this country. It is an amount that may be saved by people of the middle class over a large number of years in order to provide for their wives and families.
Brigadier-General Sir HENRY CROFT: It is enough to endow a motor-car!
Sir A. MOND:It seems a very doubtful proposition to tax capital in order to relieve income. Certainly, it is opposed to the canons of finance that have formerly been looked upon as sound in this country. However, what the right hon. Gentleman gains on the roundabouts he loses on the swings, and, therefore, I do not know that any very fundamental question will arise upon it, but I cannot understand why he stops in the graduation of his Death Duties.It is muchsteeper in the lower parts of the scale 204
than in the higher, but finally it comes to an end short of the largest fortunes. That seems to be a new departure, and it seems to me to be an unsound one. if Death Duties have any justification—and I think they have a very great justification—surely they ought to progress and to go on progressing. I do not see why the right hon. Gentleman suddenly comes to a standstill. Yesterday he made the cryptic remark that he thought the high rate of advance should be reduced in the case of estates of over £1,000,000 7J.£2,000,000, or there abouts.I fail to follow the logic of that. If I were devising a scheme of graduation, I should do so right through, and should be mere inclined to put the burden at the top than in the middle.
The right hon. Gentleman says, "What is my salvation in the world of sin?" His salvation, his contribution to our depressed industrial conditions, finally resolved itself into 6d. off the Income Tax. I do not agree with the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) in the economic proposition which he laid down, that heavy taxation has no relation to industry. If that were so, there would be no reason why direct taxation should ever be limited or reduced. But, if there be one thing in connection with taxation which experience has proved, it is that over taxation reduces enterprise and light taxation stimulates it. The fact that, in spite of heavy taxation, there have been large increases of income, by no means proves that industry would not have been stimulated, that enterprise would not have been more marked, and that the stimulus to work would not have been greater if taxation had been lower than the high figure at which it stands to-day. From this point of view, the reductions which the right hon. Gentleman is proposing are some little step in the right direction, but they are insufficient to produce an actual effect. It has been argued with great force that a reduction of Income Tax does not. necessarily mean that the money will be returned to the industry from which it has been earned, but on the whole I think that, through devious channels, it probably will, though it cannot be always traced exactly.
I suggest to the right hon. Gentleman that one of the great difficulties and one of the great evils of our industrial position to-day is the existence to an undue

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extent of obsolete methods and obsolescent plant in our manufactures. Upon what principle is the Income Tax system of to-day devised? it is devised upon a principle which encourages the distribution of profits and discourages the retention of money in business in order to meet necessary changes entailed by our modern conditions. The depreciation scale of the Inland Revenue is entirely insufficient to meet the necessary expenditure of anyone who wishes to go on and develop his industry to-day. If I had had to deal with the matter, I would not have dealt with this 6d. by way of a general reduction, but should have preferred to concentrate upon that part of profits which is retained in industrial businesses and used in order to keep the business up to the mark and develop it. The problem has often been discussed in this House and out of it, and amendments have been moved to the Finance Bill in connection with it. I am well aware that technical questions arise which appear most important to the expert mind, but I am perfectly sure that the right hon. Gentleman, if he thinks the principle is right, will find the expert advice to show him how to carry it out, and that the technical difficulties will not be found to be insuperable, though the advantages, undoubtedly, will be very great.
Take the case of the mining industry. In that case, although we are dealing with a wasting capital asset which is being exhausted, we are not entitled to write depreciation off our assets for the purpose of Income Tax. What is happening to-day in South Africa There, if you sink a new shaft for a gold mine, you are entitled, under their Income Tax law, to charge depreciation against the income for the life of the mine, and not pay Income Tax on it at all. Surely, an industrial country like ours ought not to have to learn from South Africa what is the right and reasonable way of dealing with a proposition of this kind. It is really of vital importance to the industries of this country that that portion of the profits should be relieved which can be directly proved to be used for the benefit of the industry. I expect the right hon. Gentleman will enjoy the fruits of his office for a number of years, and I hope he will apply himself, not merely to these problems, but also to the problem of remodelling a tax which is
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nearly a century old, which is extremely antiquated in method, and of which a great reform is long overdue.
I have dealt with a number of serious and salient subjects which the complexity of the right hon. Gentleman's proposals naturally compels one to deal with at some length. I must confess that, in spite of the glamour which he threw over his Budget, and the words of eloquence of which he is so great a- master, his Budget, ingenious as it seems to me to lack any foundation of constructive idea of finance. It is not a building with any architecture. A bathroom has been added here, a conservatory has been put on to the house, a drawing-room has been redecorated, a new spare bedroom has been put up, the servants' hall has been made into a billiard room—and the resources by which a stately edifice could have been erected have been frittered away in a chaotic and formless building. That is the impression which the right hon. Gentleman's financial proposals leave on my mind. There are little sops to this or that section; there is a little bit off here, and a little bit on there. The right hon. Gentleman tries to placate in turn all sections, but never gets down to what I call the fundamental position in which we are. With one exception, which is not part of this year's Budget at. all, we expected to find something of a greater and more heroic mould. The right hon. Gentleman has brought home a bag of small ground game, and not a royal tiger from a great game expedition.
6.0 P.m.
Sir ROBERT HORNE:I should like, in the first place, to join with other speakers in congratulating my right hon. Friend on a remarkable achievement. He rose to the heights we all anticipated and I am certain he afforded the House demonstration of the fact that figures need not be dull and that a Budget need not be drab if it is only enlivened with a sufficiently picturesque fancy. The right hon. Gentleman who last addressed the- Committee, it seemed to me, was making a rather crabbing comment upon the Budget. It was only when he divagated into the realms of fancy and metaphor that he seemed to get anywhere near the truth because, as I listened to him describing the architecture which had been contrived by my right hon. Friend, it seemed to me that he was

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describing a very comfortable house in which one would much rather live than in the castellated structure which evidently the right hon. Gentleman would prefer. I thought also that his reference to the absence of any great scheme for dealing with unemployment was somewhat unfair. In fact, no one up to now has suggested a really practicable scheme, involving large expenditure, which has commended itself to the sense of the House of Commons. The scheme of the right hon. - Gentleman himself, which has many attractions and which I for one would be very anxious to try, in spite of its liability to many abuses, is recommended by him on the ground that it will not cost the country anything, and accordingly while it is being examined by the Cabinet, and as obviously no matter of extra expense arises in connection with it, it was not a subject which necessarily-fell within the purview of the Chancellor of the Exchequer's speech.
The right hon. Gentleman the Member for Colne Valley (Mr. Snowden), who was lately Chancellor of the Exchequer, was in a very amiable, agreeable mood yesterday, but he adopted a tone of acerbity to-day which had evidently been growing hotter as his reflections went on through the night. What he had discovered was that the Chancellor of the Exchequer had produced a great scheme of social insurance which made the prospects of the Labour party in the future comparatively negligible. They had talked about the abolition of the thrift restriction upon old age pensions, but had never done anything. They had talked about widows' pensions, but it had all ended in talk. They had proposed that old age pensions should begin at an earlier age, but they never did anything to bring it about. These proposals are now to become the law of the land, and that explains the hostility with which the Budget was viewed by the late Chancellor of the Exchequer. It also explains why it was necessary to invent, the comment that it is a "rich man's Budget." I should like, however, to felicitate the late Chancellor upon the near approximation which his estimates had to the actual results of the year's finance. It was a very remarkable feat of prophecy, and I hope he will not think I am detracting in any way from the compliment I have paid
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him when I say that the prognostications which I made as to its failure were very largely defeated by the fact that he never entered Upon the large schemes of expenditure with which he menaced us.
Mr. J.RAMSAY MacDONALD:May I remind the right hon. Gentleman that the prophecies were with regard to the income of that Budget, not to expenditure
Sir R. HORNE:The point, of attack which I certainly made was that this expenditure would be very largely exceeded by what the right hon. Gentleman had proposed with regard to getting rid of the restrictions upon old age pensions, and with regard to the elaborate scheme of housing which he had adumbrated. Those were the broad lines upon which I based my attack upon his estimate.
What we have now to look at is the question of the future. I am very glad my right hon. Friend has not based his estimates for the year upon any rapid revival of trade. What has just been said by the right hon. Baronet the Member for Carmarthen (Sir A. Mond), who speaks with great knowledge on these matters, is entirely endorsed by my own experience. No one who is dealing closely with the trade and industry of the country at present can look upon the situation with any other than the gravest possible anxiety. Accordingly, I am glad that, small as it is, a certain relief should be given to the traders of the country and a certain encouragement to industry by even the meagre deduction which has been made from the amount of the Income Tax. The late Chancellor of the Exchequer made the complaint that nothing is done to relieve the indirect taxpayer, but when he was affording a very great relief to the indirect taxpayer last year he did nothing at all for the direct taxpayer, unless he chooses to mention Inhabited House Duty. [An HON. MEMBER: "Corporation Profits Tax."] The Corporation Profits Tax only affected a limited number of direct tax payers. I am talking of direct taxpayers as a whole. The only relief the right hon. Gentleman gave was the comparative bagatelle of remission which he granted in respect. of Inhabited House Duty. I do not know why he says the indirect taxpayer is entitled to special consideration upon the present occasion. What is the relative proportion in which

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the direct and indirect taxpayers contribute to the revenue at present? It was always regarded as the recogniised foundation upon which our revenue was to he built up that the proportion should be half and half. Now, by reason of the late Chancellor's Budget, we have reached the position in which the direct taxpayer is contributing 66 per cent. of revenue as against 34 per cent. contributed by the indirect taxpayer. It is almost paralyzing to the imagination to remember that during the last seven years there has been contributed to the revenue by the Income Tax and Supertax payer no less a sum than 22,500,000,000. That vast sum has been contributed almost entirely by 2½ million inhabitants of the country. Was it not time that something should be done to relieve the enormous burden of this tax on the direct taxpayer, because after all that vast sum has been taken away from the profitable uses of industry, and put to the non-productive service of the State.
It is for that reason, amongst others, that I welcome this reduction of 6d. in the Income Tax. In the end reductions of Income Tax get right down to the humblest cottage because they come from the fund that provides employment. I quite agree with what the right hon. Gentleman said with regard to the burden of this tax on industry. It not only affects each single individual whose savings are taken away to the extent to which he is taxed, but it is a direct. burden upon that fund which every industrial capitalist puts to reserve if he is carrying on his business properly. The fact that, of the fund that the employer devotes to developing and keeping up the equipment of his works, 20 per cent. being taken, actually leads in some cases to the excessive distribution of the profits, and consequent disaster to the business, or else to the fund being greatly depleted to which we look for the progress of industry. I join with the right hon. Gentleman in urging the Chancellor of the Exchequer to take this point into serious consideration. If something could be done, either wholly or partially, to remit the amount of burden that is put upon these reserves, which are the funds of development in our industries, it would do far more than any ordinary remission to help industry.
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Probably one of the surprises of the Budget was that my right hon. Friend decided to make some remissions in Super-tax, and I admire his courage in doing so. For those who wish to encourage industry, is it not plain upon reflection that this remission is one of great value? Who, after all, are the people who pay Super-tax? They are, in the main, the people who have shown that they know how to make money. They are the people in whose hands money fructifies, and it is madness, in the interest of the development of industry in any country, to take away more than you are compelled from the people who use their money to the best advantage. It is just as if you were to take away part of the equipment from a workman who had shown that he was particularly skilled in using that equipment. Accordingly, I think, amongst other things which the Chancellor of the Exchequer has done, this will have, at least., some appreciable effect in helping to develop industry in this country.
Now I turn to what the Chancellor of the Exchequer has done in the imposition of new duties. I am amazed at the amount of time taken up this afternoon in talking about the duty on silk, as if that is going to be a matter of serious importance to this country. The only question as far as we are concerned is how much revenue we can get out of it. Undoubtedly, there is an appreciable amount to be obtained. As to all the arguments about the discomforts that are to be caused by the high price of stockings, the Committee may safely pass them by. I come now to what is a much more important matter, namely, the reimposition of the McKenna Duties. I am very glad that the Chancellor of the Exchequer has taken this opportunity of reimposing the McKenna Duties. There never was the slightest reason for taking them off. They were doing no harm to any single living creature, and there had been no complaint received from anybody that they were paying too high prices for their cars because there was a duty upon them. No evidence of that kind can he adduced from any Debate which we have had. The only result as far as one can discover from the taking off of the duties was to give a comfortable glow to the breasts of some of the more pedantic economists in this House. We obtained that happy

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result at a considerable cost, because what the late Chancellor of the Exchequer did was to throw away £3,000,000 of revenue which he could safely have had in the Treasury.
Yesterday afternoon the late Chancellor of the Exchequer laid down a challenge. He represented that I had said in the Budget Debates of last year that hundreds of thousands of people would be thrown out of employment by taking off the McKenna, Duties, and he asked me to justify that statement in the light of subsequent events. The fact is that I never said anything the least like what the late Chancellor of the Exchequer represented. His representation was a grotesque account of my speech. I have brought the report of it, not with the intention of making it again, but only in order that everybody may know that I have here the ipsissima verba which I used. I pointed out, in the first place, that there had been a great addition to the number of people employed in the trade since the McKenna Duties had been imposed, and I said that there were something like 200,000 people engaged in the motor industry and its subsidiary industries. I went on to say that the employers stated that the abolition of the McKenna Duties would involve the discharge of many of their men. [HON. MEMBERS: "Has that happened? "] I am coming- to that. I said, "They may be wrong in this statement or they may be right." My adjuration to the late Chancellor of the Exchequer was that he had no right to take the risk of putting a single man out of employment- by reason of the taking off of these duties.
Mr. MacDONALD: I think you said more than that.
Sir R. HORNE:The right hon. Gentleman can look up the speech, and he will see. It was made on the 30th April, 1924, and will he found in Col. 1692 of the OFFICIAL REPORT. I am certain that there was no deliberate misrepresentation of what I said. All I wish to state to the Committee to-day is That, even in the light of the experience of the past year, you had no right to take the risk by taking off these Duties. The late Chancellor of the Exchequer said yesterday that we are now proceeding to ruin these industries by putting the
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taxes on again, the repeal of which had been of great benefit to them. That is a somewhat startling statement. It reminds me of a tale that used to be told to me when I was a boy, for the good of my education. The story was that a certain commissioner was sent clown to investigate the silting up of the Goodwin Sands. lie addressed an ancient worthy in the district and asked him what lie regarded as the cause of the Goodwin Sands. The old worthy said, "I think it is Tenterden steeple." When he was asked, why he thought that, the old man replied, "Well, ever since I have been here there has always been the Goodwin Sands and there has always been Tenterden steeple, and I think, therefore, t hat Tenterden steeple must be the cause of the Goodwin Sands." That is the kind of fallacy which perverted the speech of the late Chancellor of the Exchequer yesterday.
He thinks that because there has been a comparatively good year in the motor car industry, that has been created by the taking off of the McKenna Duties. I ask him to survey the world and see whether in other countries where there are Duties, trade is being ruined. I have never been able to understand that insolent attitude of mind which suggests that every other country must be wrong and that we alone are right. It is reminiscent of the proud mother who, on surveying the march past of a regiment, discovered that of all the marchers everyone was out of step except her boy. That is the general attitude which the rigid Free Trader takes up towards this question. I beg the Committee to remember that this particular trade was steadily growing in this country during the time when these Duties were in force. I make the suggestion, fortified by experience later, that the strength of that trade was built up during the time that it had the shelter of these Duties. It was put into a position to meet the competition to which it was subjected last year. The year which has gone by was one in which there has been a greater demand for cars in the world than there has been of supply. We have been in the happy position of having a full demand for all the cars that we could make, but when the time of difficulty comes, as come it will, and as come it does in every trade, then you will really feel the benefit to be obtained from having these Duties in

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operation to protect you against the competition of cheaper labour from other countries.
I will now deal with a cognate topic, Imperial Preference. We are told that these Preferences are to be rigidly opposed by the party opposite when they come to discuss them in the House. I confess that it is very difficult to believe that this vendetta can be kept up against a preferential system which has been of such immense benefit to trade in this country. We can see from- events in South Africa what the result has been of our failing to give reciprocal terms to countries such as that. {Labour dissent.] Well, I can only read the newspapers, and I find that the Prime Minister of South Africa stated, in answer to a question the other day, that England could get the same terms as other countries if she would give them reciprocal terms. That statement was immediately met with the question, "Then is the situation going to be that other countries are going to be allowed to introduce their goods into South Africa at a cheaper rate than British goods are to come in?" He accepted that position as being correct. It is easy for people who are not trying to find markets to look with equanimity upon a position like that, but there is not a single man who is trying to sell goods in South Africa to-day against the competition of cheaper labour from the Continent who will not find that position very hard to maintain.
If you look at the figures of our trade of recent times, what do you see? As far as our foreign trade is concerned, our exports to foreign countries went down in 1924 by £4,000,000 as compared with 1923, and we were only saved by the fact that our exports to the Dominions and the British Empire went up in the same period by £32,000,000. How is it that we have succeeded in keeping our trade in the Empire? Is it simply upon our own merits? Anyone who studies the history of these Preferences will see that it is nothing of the kind. Time after time we have been defeated in competition in particular trades, and our position has only been restored by the imposition of a further Duty by one of our Dominions which has taken an interest in our trade. It is not merely upon any high Imperial sentiment that we should sanction these Imperial Preferences, and not merely for the consolidation of the interests of all
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our Dominions, but it is a vital necessity upon the mere grounds of sordid self-interest.
I am afraid that I have kept the Committee too long, and I will deal briefly with the boldest and the most courageous part of the speech of the Chancellor of the Exchequer yesterday. He unfolded a great scheme of social insurance which, if it achieves the objects which he has in view, will undoubtedly be a great panacea for many of the ills from which we suffer in this country at the present time, and will create not only a feeling of security among our wage-earning classes, but a feeling of greater contentment among all our people. It is impossible to speak on the scheme in the absence of any outline of its scope or of any of the details. We may have to comment critically upon their many arrangements when we see them; but I should like to say for myself that I entirely support the principle of this conception, and I would like to see something upon these lines carried into legislative effect in this country. I hope we shall be able to do that in the course of this Session.
I wish, however, that the Chancellor of the Exchequer had been able to introduce his plan under more auspicious circumstances. I view with great anxiety the prospect of any increased burden upon the industries of this country at the present time. Already industry in this country is bearing a charge of £36,000,000 a year for unemployment insurance. That is putting together the contributions of the men and of the employers, which together amount to £36,000,000 a year. As the right hon. Member for Carmarthen (Sir A. Mond) has stated, the contributions of the employer and the workman are really both burdens upon the industry. The employer must put the cost on to the price of his goods, and as far as the workman is concerned, his contribution, necessarily, has-an effect upon the wage which he is willing or able to take. Accordingly, the whole of that cost is a direct burden upon industry. In addition to the Unemployment Insurance Scheme, industry has to provide £26,000,000 a year for Health Insurance. Now, we are told that there will be imposed upon industry a new burden which is estimated variously by the late Chancellor of the Exchequer and by the right hon. Member for Carmarthen as likely to be £14,000,000

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or £20,000,000. A mere contribution of 4d. a week does not look a very big thing, but we are now at a time of strain when even straws will break the camel's back.
You get many illustrations at the present time of the difficulty that there is in meeting competition with our present costs. Take, for example, the instance which all know, when ships were to be built for the Anglo-Egyptian Oil Company, and the contract ultimately went to Amsterdam in Holland, because they were able to tender at £10,000 less per ship than any British shipbuilder. That was a case in which it was specified that in building the ships British steel should be used, and this eliminated the greatest element of disparity in the cost. Nevertheless the estimates of the lowest British tender were £10,000 more than those of the foreign firms. To my knowledge the British estimates were cut down not only to cost price, but below cost Price—to a price which really only yielded them a portion of their overhead charges. Speaking roughly, I should say that building a ship of that kind would employ something like 4,000 men, and if you begin to add, say, another £3,000 to the costs for the year of building a ship like that when everything is cut to the bone you will destroy the possibility of any attempt being made to get such an order.
I hope, accordingly, that the Chancellor of the Exchequer, in the consideration of his scheme, will take into account the very great difficulties under which industry is suffering. I think that it would be a very great pity if anything should be done which would tend in any way to crush the incentive of our business people. I do not venture to suggest any method by which the Chancellor may alleviate the position. The object of the scheme is one which we all endorse, hut I could not let the occasion pass without making known what my very definite impression is, from my knowledge of the business world, at the present time, of the difficulties which will be imposed upon the commercial community of this country by any scheme which brings about new burdens for which there can be no other alleviation.
I will not say anything to-day upon the question of the gold standard, which was such a prominent feature in the speech of the Chancellor of the Exchequer, because, as I understand, we are
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to have an opportunity of debating that on Monday; but, before I sit down, I may say that a return to the gold standard emphasises at the present time the vital necessity of recovering our export markets. The stability of our exchange must, in the end, depend upon our ability to export. Otherwise, we shall have constant increases in the bank rate which would make business very difficult in deed.
There is only one way of recovering our export market That is by being able to sell at prices in the export market which will compete with those of our rivals. In order to attain that end, all the elements of industry require to give their whole-hearted co-operation. In my belief, we are to-day in a situation which requires just as much energy and exertion upon the part of our people as was demanded from them in the War, and I am equally sure that, if the people of the country come to know and really understand the difficulties and dangers which beset us, we shall not fail to get an appropriate response.
Mr. BENNETT: I regret that I cannot claim the indulgence which is always accorded to a Member which he is making a maiden speech, for unfortunately I spoke in the 1923 Parliament. The first thing which I would like to do is to add my congratulations to those which have already been offered to the Chancellor of the Exchequer on his great speech of yesterday. So many compliments have been showered upon him that it is difficult to find words in which to express what I feel. Perhaps the greatest compliment which I can pay to him—and it is a perfectly sincere one—is that he fulfilled great expectations in a manner worthy of his most distinguished predecessors in the great office which he fills. A humble backbencher like myself will not be expected by the Committee critically to analyse some of the greater features of the Budget, such, for instance, as that which deals with the All-In Insurance Scheme, but perhaps it may not be amiss if we bring our minds from the dizzy heights to which they were raised by the eloquence of the Chancellor and consider for a few moments some of the more humdrum aspects of the Budget.
I listened with great admiration to many features of the Budget speech, but I think that what I admired most was

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the manner in which the Chancellor by his eloquence hypnotised us all into thinking that each one of us was getting what he wanted most in the way of a remission of taxation. The Income Tax payer got 3d., the Super-tax payer got a remission, the Imperialist got Imperial Preference, the Protectionist got a sop and the Free Trader got something to talk about. But I reserved my greatest admiration for the fact that the Chancellor did not even 'forget the Death Duty payer. He can now congratulate himself more than ever that he is dead, and all the time the Chancellor was ingeniously taking from our left pocket what he was putting into our right. I think that in many ways one of the most important features of the Chancellor's speech was the announcement of the decision of the Government in regard to the gold standard. I mean to refer to that only in passing. In common with all business men, I realise that it involves certain risks. It is unfortunate that the law imposing the embargo on gold should happen to lapse at the end of the year, but that fact forced a decision, and I think that the one which the Government have taken is the only possible one. The return to a gold standard in this country so few years after the War marks an epoch in our financial history, and it is something of which we, as a nation, have every reason to be proud. Before passing from this subject, I would like to mention the tremendous debt of gratitude which this country owes to successive Chancellors of the Exchequer who, by holding to sound financial principles, have made it possible to take this step.
I would like to congratulate the Chancellor on showing a certain amount of optimism in estimating his revenue for the ensuing financial year. No doubt he anticipates criticism on this point, but he can console himself with the fact that similar criticism has usually been disproved by the actual facts. Personally, I should not criticise any Chancellor if, as a result of close budgeting, he ended his financial year with a comparatively small deficit. What I do object to are the huge surpluses which have been so common a feature of Budgets during the last few years. If my memory serves me aright, those surpluses since 1920 have amounted to close on £480,000,000. It is true that
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those surpluses were provided largely by the sale of surplus War stores. It is also true that the proceeds of those surpluses were mostly employed to reduce debt, but they were not necessary to maintain our national credit, because during the same years £200,000,000 of our National Debt was paid out of revenue.
I agree entirely with the sound dictum of the Chancellor of the Exchequer in the late Labour Government who declared that the State had no right to tax anyone,. unless it could show that the taxation was likely to be used more beneficially and more economically. In passing, may I say that I hope that the party for which he speaks will never forget that. It requires. no stressing on my part to prove that at a time when our industries have been struggling for their very existence to take £480,000,000 unnecessarily from the taxpayers of the country was not beneficial, and it was certainly not economical. If you provide too much money to Government Departments or to individuals, it usually leads to extravagance. Large surpluses also have a bad general effect. Nationally they give an entirely fictitious idea of prosperity, while internationally I am sure that it does not help to induce our debtors to pay their debts. I also congratulate the Chancellor on having relieved the burden on Super-tax and Income Tax payers, especially those on the lower scales. It is true that we are getting only 6d. off the Income Tax, but I look upon it as an earnest of better things to come.
I would like to add a few figures to those which were quoted by the right hon. Member for Hillhead (Sir R. Horne) to show that a more equitable distribution between direct and indirect taxation is overdue. In 1913-14 the percentage was 47'9 direct and 521 indirect taxation. Last year the corresponding figures were 62'7 per cent. direct and 37'3 indirect. In other words, direct taxation increased by 14.8 per cent. The money figures are even more striking. Indirect taxation has increased by £172,000,000, and direct taxation bears a greater burden of £355,000,000. Last year my hon. Friend the Member for Ilford (Sir F. Wise) quoted from Gibbon to prove that the decline and fall of the Roman Empire was largely attributable to the abuse of direct taxation. Unfortunately, the then Chancellor of the Exchequer, true to

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his political principles, and no doubt with the desire of doing the more popular thing, proved adamant, despite that classical warning.
Whatever may be said with regard to the theory of taxation according to ability to pay, I am quite sure that it is out of the surplus income of that limited class which I might describe as the direct taxpayer that the money comes to provide for the development of just those industries that the country most requires at the present time—I mean new industries that involve a certain amount of speculative risk. It is quite true that the enormously larger class that is affected by indirect taxation save and their savings in the aggregate amount to a large sum, but most of those savings are invested, and rightly invested in my opinion, in gilt-edged securities. The point I want to emphasise is that when taxation reaches the figure it has reached in this country, far more permanent good can be done to the struggling masses of this country by not dipping too heavily into the surplus income of those who employ that income to develop industry than by reducing taxes even on necessary articles of consumption. In the one case you provide work. In the other you reduce, very slightly reduce, the cost of living and, as was illustrated by the reduction of the Tea Duty last year, even that is not always accomplished. It is of course far more popular to vote in this House for a reduction of indirect taxation than to take anything off the Income Tax, but, in view of the state of industry in this country, I am very glad indeed that the Chancellor of the Exchequer has taken the more courageous course.
While on the subject of revenue, and as I may not have another opportunity, may I very respectfully call the attention of the Chancellor of the Exchequer to two other points? They are of trivial consequence compared with some of the more important features of the Budget, but they are none the less important to business. The first is the question of double taxation. The Committee knows that this is a subject which bristles with difficulties, but those Members of the Committee who have studied it will agree with me that it is a matter of real importance to international trade. I -shall not repeat the arguments that I
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used in 1923 to prove my case, but I would quote to the House the answer which I received from the present Prime Minister, who was then Chancellor of the Exchequer. My right hon. Friend said:
" The hon. Member for Mansfield raised a point of great importance, and that was the question of double Income Tax, a question which has come very much to the front since the War, when an increase of Income Tax has been general in all countries where the Tax existed, and in a world in which seems likely that income Tax in every country will play a more and more important part. All I have to say at this moment is that the League of Nations appointed a Committee to investigate this very subject of double Income Tax, end that they recently published a very full and comprehensive Report on it. It is one of the most difficult and complicated questions that financial experts have to consider to-day, and there is a Committee of expert officials, including the Deputy-Chairman of our own Board of Inland Revenue, sitting at present at Geneva considering this Report. I doubt whether they will achieve any results until late in the winter, but we shall await with interest and eager anticipation the results of these investigations, and I have no doubt that before very long it may fall either to one lot of someone in my Government or someone in SOMC future Government to come face to face with this matter and to try and devise legislation to aid the taxpayers in industry in this country."—[OFFICIAL REPORT, 4th July, 1923; Cols. 572 and 573; Vol. 166.]
Two winters have gone by since then and two Chancellors of the Exchequer have assumed the reins of office and nothing has materialised. As the present Prime Minister rightly said, this matter was brought into prominence by the War. It is, to a certain extent, a War Baby., I have tried to discover what has happened to it since 1923. So far as I can make out it has had two mothers in the shape of International Committees, and at present I believe it is reposing, or perhaps sleeping peacefully, in the bosom of yet another. I would urge the Chancellor of the Exchequer, who is so conspicuous for his energy, to use some of it in trying to expedite a decision. That a satisfactory settlement of the main question of double taxation can be arrived at appears probable from what has already been accomplished in regard to the double taxation of shipping. The other matter to which I want to refer is the question of the Stamp Duty. The duty on transfers was increased from one-half per cent. to one per cent. in 1920. It is, in my opinion, obvious that it has had a hampering influence- on Stock

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Exchange transactions. My contention is that any tax which tends to hamper the free exchange of securities is a bad one, and I think the time has come to seriously consider whether a reduction is not possible. With regard to the Stamp Duty on Bearer Bonds, the objections are still more serious, because it directly affects the ability of our bankers to compete with foreign rivals for international loans. When the tax was 1 per cent. it was a sufficiently serious factor. Since it was increased to 2 per cent. in 1920, and we have had to face the new competition of the United States, it has become still more onerous. In fact, it has made competition impossible when the bidding is close.
Let me give an illustration.A£1,000,000 loan in the United States pays nothing in the United States. Here it pays £20,000. There is another feature of the matter. It is generally agreed that trade follows loans, and in any case it is a growing habit in foreign countries, when lending money, to stipulate that part of the money shall be expended in the lender's country. Therefore, both from a trade and a financial point of view, it is a mistake to handicap our hankers as they are being handicapped by this duty. What makes the tax even more inadvisable is the well-known fact that a great many of these foreign obligations that are sold to, say, the United States, eventually find their permanent home in this country. In such cases the United States gets whatever immediate trade benefit there may be, our hankers lose their flotation profit, the British revenue does not benefit, and the British investor finds the money. Further, I very much doubt whether a reduction of the tax would very seriously affect the revenue. As the Committee knows, the effect of such taxes when they are too high is often to defeat their own object.
The main object of my speech, however, was not to talk so much about revenue as about expenditure, which, in my opinion, is the far more important part of the Budget. If we have to raise a certain sum of money there will always be differences of opinion as to how that money can best he produced, according to one's particular school of economic thought; but there can be only one opinion as to the necessity of keeping that sum to the smallest figure that is
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compatible with the maintenance of our national credit, the efficiency of our fighting Services for defence purposes, and the provision of proper Government for the people of this country. I would go even further, and say that under no circumstances should we as a nation budget in any one year for a larger sum than the figure at which we prudently estimate the taxable capacity of the community. To keep within that limit I would, if necessary, ruthlessly cut down even essential services. I am quite sure that during the last few years we have spent far more than the country can afford, and that it is largely due to this cause that our industries are languishing, that we have over a million unemployed, and that the cost of living is over 70 per cent. higher than it was If this is not so, then all our great bankers, the members of chambers of commerce, our merchants and business men of all descriptions, must be wrong, because one cannot pick up a newspaper without finding it full of their warnings. Those warnings are well justified.
In regard to expenditure I frankly confess that I was disappointed with the Budget. I admit, of course, that the present. Chancellor of the Exchequer is not to blame, for he has not been long enough in office. I listened with great relief to what he said on the question of economy. If I may say so without offence —I mean it really as a compliment—there is no better gamekeeper than the poacher turned gamekeeper, especially when he has proved himself such an artist at the game as the right hon. Gentleman did when he was in charge of some of our spending Departments. I, therefore, have the greatest hope for the future. But there have been other Chancellors of the Exchequer who have also started with good intentions. Economy has been preached ever since the War, and being rather of a practical nature, I should like to give some figures to show the result. Our expenditure from 1922 to 1925—I take expenditure, for the revenue was larger by over £150,000,000—
averaged just under £1:900,000,000,. with the significant and ominous feature that last year, for the first time since the War, expenditure showed an actual increase over the preceding year. Add to this £160,000,000 spent by local authorities—a figure that has more than doubled since 1913—and

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we arrive at the conclusion that the privilege of being governed has for years cost the people of this country £960,000,000, equal to over £22 per head of the population. Pre-War the corresponding figures were £ 276,000,000 and £ 6⅓
7.0 P.M.
We are to-day, without exception, the most heavily taxed nation in the world, and, as I think the Chancellor rightly pointed out, it is not a mere coincidence that, with the exception of Russia where the whole economic structure has been destroyed by Socialism, our comparative volume of unemployment remains persistently higher than that of any other country. Nothing in this House strikes me as more remarkable than the time we devote and the eloquence which is displayed in trying to prove or disprove the principles and details of proposed legislation, and how comparatively little time is devoted to the very vital matter of the consequent expense. All the Bills which are brought forward by any Government at any rate can be fully justified on their merits. it is on those merits that they are discussed; it is on those merits that they are passed But how many could pass the equally necessary test of whether the good they will do the community as a whole justifies the extra drain they necessitate on the pockets of the taxpayer. Legislation involving enormous expense has been ground out of the Parliamentary machine year by year since the War. A financial statement of itemised comparative taxation per head of population in 1913-14 and 1923-24 recently issued by the Treasury has brought many of us up with a jolt. The right hon. Member for Spen Valley (Sir J. Simon), in a debate on unemployment, said a few weeks ago that it would be a calamity if the people of this country got into the habit of mind of considering 1,000,000 unemployed as a normal figure, or words to that effect. I think it would be a far greater tragedy for the people if this Committee continues in the habit of mind that we can afford to spend £960,000,000 a year in State and Local Government. I believe that every item in that statement merits the fullest debate.
It is sufficient, however, to my purpose to-day to point out a few salient facts. Excluding Old Age and War Pensions, our Civil Service cost 36£ millions in
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1913-14, and nearly 136 millions in 1923-24, or 3½ times as much, and our Revenue Departments 29 millions, as compared with 59 millions, or double as much. The staff of the Civil Service has increased since 1914 from 248,000 to 299,000, and its cost is about 55 million as compared with 23 millions, an increase of 20 per cent. in the number and no less than 143 per cent. in the cost. These are arresting and truly alarming figures. In view of these figures, does any Member believe we are getting full value for our money, and that we have really reached the limit of economy? That, in fact, we could not by reducing expenditure instead of by encroaching on Revenue have found at any rate part of the money to defray the State's share of the Government's notable scheme of all-in insurance? He must be an optimist indeed who, taking the. Post Office as a typical example, believes that the services rendered or that the work it entails justifies an increase in expenditure between 1914 and 1924 from 241 millions to 46½ millions. That is something we can judge by. We all know more or less what the Post Office did and what it does. The service is no better, and there is certainly nothing to justify this enormous increase. notice that many critics of Government finance, in making comparisons, at once add 80 per cent., or whatever the precise figure may be, to pre-War figures on account of the cost of living and start off on that basis. I think that is wrong. As I have pointed out before, the increase in the cost of living is largely attributable to excessive Government expenditure. To produce the cause and then to refer to it as a justification for increased expenditure strikes me as unfair. It is merely a plausible way of deceiving ourselves as to the magnitude of the real increase in expenditure.
It is very easy to criticise. After criticising, I think one should show sufficient courage to make a few constructive suggestions, and I will be bold enough to make one or two. I listened with great satisfaction to what the Chancellor said about the appointment of a Standing Committee of the Cabinet which I understand will annually review expenditure, presumably in relation to policy. After all, expenditure depends mainly upon policy, and only the Prime Minister and the Cabinet can settle that. I take it that it is by alterations in policy

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that the Chancellor hopes to save the £10,000,000 he referred to But, apart from policy, there remains in my opinion a very fruitful and vast field for economy in the administration of the various Civil Service and Revenue Departments. I am convinced that in certain grades of the Civil Service there is redundancy. I believe that members of the staff would themselves admit it. If this be so, then I think the excess of staff should be retired on some equitable basis. Many civil servants, I am told, would gladly retire before the pensionable period if equitable alterations were made in the Superannuation Act. I may say that I had some considerable experience of Government Offices during the War. I left them on the whole with a great admiration for the ability of the Civil Service, but I was absolutely amazed at the cumbrous and slow methods under which the work was carried out, methods that would not be tolerated a month in any competitive business. This is a matter that cannot possibly be looked into by the Cabinet—they have bigger things to attend to—and I do not believe that it is one of those things you can leave the Public Accounts Committee to deal with. My suggestion is that a small investigation committee of experts should be set up and that the terms of reference should be simply these: "To investigate Civil Service administration in all Departments, and to report to the Ministers on the best method of simplifying it without impairing its efficiency." If this Committee is set up, it should not include any member of the Civil Service. That, after all is asking too much of human nature. If this Committee is set up and does its work thoroughly, I think the Chancellor would he surprised at the economies that he could make without impairing the efficiency of the Service. I doubt whether the Government themselves appreciate the indignation, the almost passionate indignation, which exists in many parts of the country in regard to the swollen bureaucracy from which we are suffering.
There is one other suggestion I should like to make, and it is this: Even if a Committee, such as I have referred to, be appointed, it will fake time to report, and the matter of economy is urgent. I would like to ask the Chancellor of the 226
Exchequer whether it would not be possible for him to order, not suggest but order, a pro rata percentage reduction for next year of, say, 5 per cent. or 10 per cent in the total administrative expense of every Government Department. It may seem a rough-and-ready way of tackling the matter, but it has this advantage, that by treating all Departments equally you eliminate causes of grievances in any particular one, or, at any rate, you provide an unanswerable reason for not listening to them. I think something has to be done to try and reduce expenditure. We cannot go on finding £960,000,000 when our trade is in the condition it is to-day. During the last few years through various circumstances our Governments have had very short terms of office. It is probably due to that fact that they have never seemed to have had a definite financial policy in relation to the welfare of our trade. If we look back on the last few years, we realise that what has preoccupied the minds of all thinking men is the regaining for our trade of that prosperity that has been so imperilled by a post-War competition such as was never even contemplated before. The way to do it., I think, really permits of only one answer, and that is to reduce the cost of production. How have these successive Governments helped to effect this? Usually by waiting for the emergency to arise and then treating it by means of palliatives, palliatives which in some cases I consider to have been demoralising and in others economically unsound. To relieve distress by giving uncovenanted benefit is demoralising, and to try to help our trade by such means as the Trade Facilities Act and the Export Credits Act, while it may be justifiable at the time, is unsound economically. In my view it is not right for the Government to try to help exports by using their credit when banks or merchants have probably refused the particular business because they considered that it entailed too much risk. There may be real danger in that, and if there is no danger it means that the whole basis of the scheme ceases to exist With regard to the Trade Facilities Act, I consider it economically unsound to allow big institutions to borrow money at a cheaper rate than they otherwise could, by putting them under the shelter of the Trade Facilities Act. I am always struck by

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the consideration that much of the misery we see in this country could have been avoided if, instead of these palliatives, previous Governments had taken what I should have considered to be the much wiser course of helping industry to reduce costs by reducing Government expenditure, thereby lifting from industry the greatest burden which rests on it today, namely, crippling taxation.
We have now a new 4overnment in office to which much has been given and from which much is expected. Personally, I have every confidence that those expectations will be realised. They have an advantage which their predecessors did not enjoy and which I do not think their successors will enjoy, and that is security of tenure for a number of years. The Chancellor of the Exchequer is therefore in a fortunate position. If he means, as I a sure he does mean, to carry out a policy of rigid and even drastic economy, he can do so regardless of any outcry, for he has the certainty of knowing that, he will he in office long enough to see that policy justified by results. If the right hon. Gentleman carries out such a policy and if the Government back him up, I have not the slightest doubt they will retain the confidence of the country in ever-increasing measure, and what is more important they will blaze a trail which will lead to the return of prosperity to our industries. In this way, and in this way only, can the taxable wealth of the country be increased to an extent which will enable us to consider such schemes as all-in insurance, with, the certainty that the financial position of the country is strong enough to permanently stand their burden. That, after all, is what we are in doubt about to-day.
Mr. LEES-SMITH:I hope not to detain the Committee at great length, but I should like to do my best to answer the arguments used on behalf of this Budget by the hon. Member who has just resumed his seat and by the right hon. Gentleman the Member for Hillhead (Sir R. Home) and others. One fact has become evident already in this Debate, and it is that, although the Chancellor of the Exchequer occupied, it has been computed, about one-third of his speech in a discussion of social insurance, the Committee itself is not going to give anything like that pro
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portion of its attention to that particular topic. That fact in itself justifies the right hon. Gentleman the Member for Come Valley (Mr. Snowden) in his argument that this social insurance scheme is no part of the real finance of the year, and that if we are to discuss this Budget usefully we must confine ourselves to its purely financial provisions. Yet if the right hon. Gentleman the Chancellor of the Exchequer had not been able to weave into his Budget arguments with regard to the social insurance scheme I do not believe he would have ventured to introduce a Budget of this character. Take out the social insurance scheme, and what is the central fact left in the Budget? It is that in a full year it gives relief of taxation to the amount of about £40,000,000, and practically the whole of that deduction goes to the payers of Income Tax and Super-tax, while practically nothing has been left for the classes of the community who are too poor to come within the Income Tax scope. This is in fact the first Budget introduced since the close of the War which has devoted the whole of its relief to the more comfortable and wealthy classes and has left the workers and the poor outside its financial scope.
The right hon. Gentleman the Member for Hillhead defended this Budget, but he as a matter of fact did not follow the same course. He reduced the Income Tax by one shilling, but accompanied that concession by a reduction of four pence in the Tea Duty. The present Prime Minister when Chancellor of the Exchequer reduced the Income Tax by sixpence, but he also gave a reduction of one penny in the Beer Duty The right hon. Gentleman the Member for Hillhead referred to the Budget of the right hon. Gentleman the Member for Come Valley as having been one-sided in the opposite direction to this Budget, but that was not the case. The right hon. Gentleman the Member for Colne Valley reduced the sugar duties and the tea duties, but in addition he reduced direct taxation, through the abolition of the Corporation Profits Tax, by £12,500,000 in a full year. What is the explanation of a Budget which, on this point, I say, has no precedent since the close of the War? The explanation can be seen in what has been occurring during the last few weeks. For weeks interests representing finance and 'big business have been conducting an

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agitation for the reduction of the Income Tax. I have read accounts of the deputations which have visited the Chancellor of the Exchequer and I never found that any of those deputations spoke to the right hon. Gentleman with any sense of responsibility. I never read of any of these deputations attempting to put before him any facts or figures to show that the reductions they were demanding should be made. In spite of that fact the Chancellor of the Exchequer has given way to this rich man's ramp and has introduced what is the most one-sided and the most selfish Budget since the close of the War.
I should like to deal with some of the arguments urged by the right hon. Member for Hillhead in justification of this concentration of relief in the comfortable and wealthy classes of the community. Broadly, his argument was that by reducing Income Tax and Super-tax you indirectly increase the general production of the country, and so in the long run justify your action. Over and over again he explained that the reduction of Income Tax was a stimulus to enterprise and industry, and that men who otherwise would not work very hard or take great risks would do so more willingly if the Income Tax were reduced by, say, sixpence. I notice that is the argument which the deputations always used, yet I never could get. beyond generalisations on this point. I never could get a detailed statement—neither in this House nor in speeches outside—as to why these effects should follow. There are very good reasons which we can adduce to show that these effects will not follow, and that a reduction of sixpence in the Income Tax will not stimulate industry or enterprise in any appreciable degree. I will endeavour to explain some of the reasons. It is always assumed that if you reduce the Income Tax, practically all your assistance is going to men who will be stimulated thereby to greater exertions in business, but you find that is not the case if you examine the sources of the bulk of the income upon which the tax is paid.
For example, are those who derive income from rents going to be stimulated to exercise enterprise? Are those who derive income from mortgages going to he stimulated in this way? Are elderly ladies living in the suburbs on debentures going to be stimulated to industry and
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enterprise by such a reduction? To take another example, are the classes who derive their income from preference or ordinary shares in big limited liability companies going to be stimulated except to a minor extent? Are those who depend on fixed salaries from companies and corporations going to be stimulated?
The fact is, this argument only applies to that class of taxpayer who is in business for himself, the professional man or business man working for himself, who is in such a position that any increase in the profits of his business due to his enterprise will come directly back to his own pocket. That is the class to whom it applies, and properly applies, but, as a matter of fact, this whole calculation I may say it is not mine—has been worked out by Sir Josiah Stamp, the greatest Inland Revenue official, I venture to say, of the last generation, and he has pointed out that the class to whom what I may call the stimulus argument applies only represents about one-sixth of the taxpayers whose Income Tax is to be reduced. What the right hon. Gentleman has done, therefore, is to give a reduction of sixpence in order to produce a stimulus represented by about one penny. That is why I say it will not produce the effects on which he relies.
Now I come to the other main argument used by the right hon. Gentleman the Member for Hillhead, and also by the right hon. Gentleman the Member for Carmarthen (Sir A. Mond). It is that Income Tax and Super-tax represent a fund out of which business is developed; that the development of business in this country depends upon manufacturers and others having a certain fund to improve their plant, expand their businesses and keep-up with new requirements, and that if you increase Income 'fax and Super-tax you reduce the margin available for these purposes and therefore hinder industrial development and progress. I think that is quite a fair statement of the argument, and the argument is true to some extent, but it does not take into account the difference in the position today compared with what it was before the War. There is this distinction: If you take money from the Income Tax payer and spend it on the Army or the Navy or the Civil Services, it is true that for that extent it may to some degree diminish the amount of money available

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for savings and capital accumulation, but if you take money from the Income Tax paying classes and then give it directly back into the pockets of the same classes, it does not diminish by a halfpenny the margin for savings or capital accumulation. The essential feature of the financial situation now, as compared with that before the War, is that no less than 40 per cent. of the revenue raised each year is raised for the purpose of paying either interest or sinking fund on the National Debt, and, therefore, goes directly back, almost in its entirety, to the pockets of the very class on whom, it is argued, we depend for our safety. If you then take the 60 per cent. that is left, I say that, taking into account the increase of prices, that does not bear a strikingly greater proportion to our national income than it did before the War. Therefore, as a matter of fact, examination shows that the present rate of Income Tax and Super-tax cannot be having these devastating effects which the arguments in this Committee have assumed.
May I take a point which relates our party to the arguments which have been very forcibly used, both by the right hon. Member for Carmarthen and by the right hon. Member for Hillhead? I think that one fact which is broadly true is that Income Tax does not enter into the price which manufacturers charge. If a tax is part of the cost of production, it must eventually enter into the price, because business men will not eventually produce unless they can cover the cost, but Income Tax is paid after the costs of production have been met out of any profit that is left, and if there is no profit, it is not paid at all. Therefore, I have found that, whenever I have asked accountants on this point, they have none of them been willing to say that in their experience manufacturers habitually include Income Tax in their costs. But the employers' contributions for unemployment benefit and for health benefit do directly enter into the costs which the manufacturers have to meet and are directly included in their calculations of cost and in their prices. Therefore, if you were discussing how to spend this sum of nearly £40,000,000, one fact which I think becomes obvious is that, if you were going to spend it in a manner which would most help industry, you should
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have chosen the method which would have kept down expenditure, and that method would have been not a reduction of Income Tax but by the putting of your social insurance scheme on a non-contributory basis.
So far as the contributions of employers are concerned, I think the arguments from other benches in this Committee this afternoon, have shown that is would have been better to meet them than to diminish the Income Tax, and, so far as the contributions of the workers are concerned, I remember the argument which war used when the National Health Insurance scheme was introduced, and I remember that the argument was that, by compelling the worker to contribute, you stimulated his sense of thrift. I do not believe that anybody can use that argument to-day. It is perfectly obvious that thrift is a voluntary institution. Compulsory thrift is no thrift, it is mere taxation, and, so far as the workers' contribution is concerned, therefore, it merely becomes a poll tax of the old, obsolete kind which throughout the whole of the rest of the realm of taxation we have abandoned in the finances of this country. It seems to me, therefore, that the Debate to-day has shown that, both from the point of view of the employers' contributions and the point of view of the workers' contributions, this money would have been better spent in relieving both these classes than in reducing the Income Tax.
There is one further subject with which I should like to deal, and that is the alleviation of small Income Taxpayers, which is, at first sight, one of the most attractive features of the Budget. Naturally, we on these benches do not object to that alleviation, but I think it necessary that the country should understand the proper figures on this subject, in order to view it in its right proportions and to view it in comparison with the alleviation to the wealthier classes of taxpayers. Shortly, this Budget distributes about £34,000,000 between the Income Taxpayers and Super-taxpayers of this country. As the Committee is aware, the Income Taxpayers are divided into two classes. There are about a quarter of them, the more comfortable class, who pay at the full rate, and there are the remaining three-quarters, the less well-off Income Taxpayers, who pay at the lower rate.

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This Budget, so far as the three-quarters of the Income Taxpayers are concerned, is not a reduction of 6d. in the Income Tax. In every speech in the Committee we have been hearing references to a reduction of 6d. in the tax, but, so far as three-quarters of the Income Taxpayers are concerned, it is a reduction of only 3d. The result is this, that in spite of what has been done for the small Income Taxpayer, the White Paper shows that of the £34,000,000 which is being distributed to Income Taxpayers, only £6,000,000 goes to the poorer section, who represent the three-quarters who are at the bottom of the scale, and £28,000,000 goes to the quarter, who are the most wealthy and the most comfortable, at the top of the scale.
The results which emerge from certain questions which we have been putting in the House in preparation for this Budget during some weeks show that there are 90,000 Super-taxpayers in this country, and they will, on an average, receive from this Budget a relief of £150 a year each. There are 25,000 taxpayers with an income of over £5,000 a year, and they will receive from this Budget £300 a year relief of Income Tax and £200 a year relief of Super-tax, or a relief of £500 a year all told. Then, when we come to the small man, who is said to be receiving such benefits from this Budget, I find, if you work it out from the White Paper, that a family man with £500 a year and a wife and two children will receive from this Budget between £2 and £3 as a result of the reduction from the standard rate, and another £2 or £3 as a result of the unearned income relief, with the result that that man, the small man, will receive, all told, somewhere between £4 and £6 a year from this Budget. I think it is necessary that those figures should be realised when we are viewing these great benefits to the Income Tax payers in their proper proportion.
Broadly, then, my criticism of the Budget is a simple one. From the point of view of production, the argument that it is going to help the industry of the country cannot, I maintain, be sustained From the point of view of distribution, the main result of the Budget simply is that the small minority of the wealthier people of this country are going to be better off as a consequence of it than they were before, and that is why my right hon. Friend the Member for Colne Valley was
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perfectly justified in saying that this is a Budget introduced by rich men for rich men, and the most selfish since the close of the War.
Sir FRANK NELSON: I propose to detain the Committee for only a very few minutes, because the subject to which I wish to confine my remarks is the very bold and courageous statement made by the Chancellor of the Exchequer yesterday that England was to go back to a partial restoration of the gold standard. I know that this is a subject that is going to be discussed again on Monday, but I may not on that day have the same good fortune which has attended me this afternoon in catching your eye at long last, Mr. Chairman, and there are certain things that I wish most urgently to place before the Chancellor for his consideration. I want to make it perfectly clear at the outset that I am a wholehearted supporter of returning to a free gold market, if only I could be perfectly sure that this could be done without any undue risk, but, on the principle that no major operation is ever performed upon a patient, however, desirable and however necessary it may be, unless that patient is in a reasonably good state of general health, so I am not entirely convinced that this country is in a sufficiently good economic state of convalescence to enable this operation to be performed with a negligible risk of untoward consequences.
I want to ask the right hon. Gentleman, if I may, seriously to consider the doubts and perplexities of many of his very loyal supporters in various connections on this subject., one of which only will I put before him to-day. Others, I shall hope to put before him on Monday, if I am fortunate enough to catch the Chairman's eye, but it seems to me that his proposal in the main at the moment is that we should change over, or that we have changed over, virtually, from a very competent control of the issue of paper currency, which is controlled without any reference to other nations, to a system of currency with, for its basis, gold, a metal that is privately produced, privately sold, and privately owned; in other words, that we are changing over from a very competent system of a managed paper currency to a system of controlled exchange, controlled by means, as the report of the Committee on the Currency and Bank of England Note Issues most

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courageously says, of putting the bank rate either up or down. May I ask the Chancellor of the Exchequer to consider this, that most of the arguments that he will have to contend with on Monday or Tuesday will be the results to this country from too little gold? I submit with all deference, and also with a great deal of certitude, that there is just as great a risk of ill-effects coming to this country in the next few years from too much gold as too little gold.
That, I think, is a point the right hon. Gentleman might possibly think it worth while to consider, but, after all, what we have to consider at the moment is that if the balance of trade, which, most unfortunately, shows not the slightest signs of being less adverse than it has been—for instance, in January, February and March of this year, the adverse balance is nearly £40,000,000 more than the figures covering a similar period in 1924—results in a flow of gold going out of this country, the natural question which presents itself to the man in the street, who, after all, is ultimately most concerned in this very difficult subject, is, where are we going to get this gold if, by any chance, we find it necessary to make heavy purchases? The Federal Reserve Bank of New York has, at the moment, no less than £305,000,000 over and above the necessary statutory minimum amount necessary under United States law. The world output of gold, at a very moderate estimate, taken at par, is about £80,000,000, and even in 1924, the country in which I have worked exchange for nearly 20 years, namely, India, imported £30,000,000 alone of gold, that is, more than one-third of the total world output.
Those are one or two minor points that might be considered when the subject comes to be debated in full on Monday. I freely admit the advantages in so far as the restoration of the gold standard means the free negotiability of bills of exchange drawn upon London, but the disadvantage of changing over from an excellently managed system of controlled currency to that of an exchange controlled by means of the bank rate and dollar credits can hardly be over-estimated. It is one which, I think, might very well be examined, and I hope the Chancellor on Monday will dispel some of the doubts and perplexities of his supporters as to
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what he proposes to do if things do not go quite as I understand the Government must, obviously, expect them to go. I have only one other remark to make in this connection, and it is that I hope when the Chancellor does consider this question, he will realise what a very big bearing it has on India. We are at the moment in India in a very awkward position as regards Indian exchange. The two positions, I think, are not altogether without analogy. We endeavoured in 1919, as a result of the recommendations of the Babington Smith Committee, to retain the fetish of convertibility. We were then placed upon a gold basis, which India has been totally unable to maintain, and now that we have here in England established a partial return to the gold standard, I think, as soon as it is reasonably possible, a Royal Commission should be appointed to investigate the whole question of Indian exchange.
In conclusion, perhaps I might ask the indulgence of the Committee to quote a text-book definition of the gold standard, because there seems to be a very considerable amount of confusion of thought on the part of the man-in-the-street as to what is exactly meant by a partial restoration of the gold standard. The gold standard, in a text-book definition, might be described as a standard of currency with gold for its basis, having as mediums of internal circulation silver and paper substitutes, both of them legal tender to an unlimited amount, and both of them interchangeable with gold at a fixed ratio. I apologise for being pedantic, but as I say it is a text-hook definition, and we are very considerably removed from a gold standard in terms of that fixed ratio, at any rate as visualised in the announcement of the Chancellor yesterday, that restoration of the gold standard took place from the time he made that announcement.
Mr. TREVELYAN THOMSON: The hon. Member for Central Nottingham (Mr. Bennett) speaking recently, contrasted the stupendous degree of our national taxation and the tremendous burden of unemployment, and, if I understood him aright, he suggested that the burden of taxation was the greater of the two. I differ fundamentally from that opinion. I submit that, attached to the one and a quarter million unemployed, is the most serious problem we have to face,

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and, in view of that, I think it is unfortunate there is so little in the Budget which, apparently, will give relief to the unemployed, or will stimulate trade. The figures which the right hon. Gentleman has submitted show a decrease of £1,250,000 in the amount of provision he is making for the Ministry of Labour, unemployment benefit, and work for the unemployed. That at a time when unemployment is increasing in a somewhat significant and disastrous figure. Before the House separated for the Easter Adjournment, there was a discussion on the general question of our national staple trades, particularly with regard to shipbuilding and iron and steel, and appeals were made from all parts of the House that the Government should do something in order to relieve the terrible depression which was prevalent in these staple industries. At that time the shipbuilding question was largely to the front, on account of the unfortunate order lost to this country. But that is emphasised by the more recent shipbuilding returns, which show that there is a big fall in construction for this quarter, as compared with a year ago, and a much larger fall compared with 1913, and the tragic fact is that, whereas before the War we were builders of from 60 per cent. to 70 per cent. of the world's tonnage, we are to-day building less than one-half, and, as our ratio is falling, naturally the foreign ratio is increasing, and surely at the present time something more might be done of a more hopeful nature in this Budget to stimulate trade and help employment. I cannot see, as a result of the Budget and the magic sixpence he has given to the Income Tax payer or to the relief of the Super-tax payer, the shipyards reviving in activity, or the stagnant. coal mines being restarted.
I submit that it is disastrous and unfortunate that so little should be done for the direct relief of unemployment. It has been suggested—and the last hon. Member dealt with the question very ably—that the relief to the Income Tax payer will stimulate trade, but while it is possible to conceive that where profits are being made, a reduction of the tax on those profits may be of some encouragement. what possible help can it be to those industries where no profit is being made, but which are being carried on at a loss? It is no stimulus to them to think that
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when they make profits there. will be so much less taken away, when their standing charges are so heavy that they, cannot possibly carry on except at a loss. It is not a question of stimulating languishing trade on small profits, but of dealing with trade and industry carried on at an absolute loss. There is no shortage of capital. You have only to watch the Stock Exchange or public Press, and when any company requires a new flotation, provided it is sufficiently attractive, there is any amount of capital forthcoming. The difficulty is to find profitable returns in our own industries, and you find chairmen after chairmen of public companies, while deploring the increase of taxation, to a. greater extent deploring the increase of rates, which is crippling and burdening industry.
The point I want to put to the right hon. Gentleman is whether, with the millions he has to distribute, it would not have given greater releif if he could have managed in some way to give relief to the overburdening charge of rates? Whether Income Tax or rates, it is a public charge on industry, but whereas Income Tax is a levy on profits, rates are a burden on industry, whether there are profits or losses, and it is a first charge on industry which is crippling and throttling the revival of trade. May I, in support of this contention, quote a previous Chancellor of the Exchequer, who is now the Minister of Health? Speaking on the 1st August, 1923, on the question of the heavy burden of rates with regard to the throttling of industry, he used these words, and they are so significant that I venture to trouble the House with the quotation. He said:
" I think it is generally understood that in some of these areas the burden of rates upon local industries—a burden which is not, like Income Tax, dependent upon profits made, but which has to be borne by the industries, whether they make profits or not—at present is so heavy that it really forms a serious handicap to industries, and prevents them even from getting upon their legs and regaining the prosperity which would enable them in time even to bear the heavy burdens they do now."—[OFFICIAL REPORT, 1st August, 1923; Col. 1651, Vol. 167.]
That, I submit, is a very definite pronouncement by the Minister of Health when he was Chancellor of the Exchequer, and I submit that it is a very sound distinction, that where as Income Tax is a grievous tax on profits made, rates are an
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infinitely more grievous tax on industry, because they are a standing charge to he faced whether there are profits or not, and before you can get industry going, you must do something to relieve it of this heavy burden. Income Tax bears some relation to ability to pay, but rates do not necessarily bear any such relation. The Income Tax falls equally on all the community, but rates fall most unequally, and, in fact, most heavily on those particular districts which are least able to bear them. Consequently, we find in the heavy iron and steel industries, where unemployment is so rife, and trade is so bad, the burden of these rates is infinitely greater than in the rest of the country. In the constituency which I have the honour to represent, Middlesbrough, our rates are 18s. 8d., and they are up to 24s. 4d. in Merthyr Tydvil, whereas in non-industrial areas, where they have not this unemployment, the rates vary from 8s. to 9s. in the pound.
8.0 P.M.
Therefore, I do appeal to the right hon. Gentleman, if he is really anxious, as we know he is, to stimulate trade and enable our industries to regain their activity, to spare some of the millions he has for more direct relief to industry, through some grant from the Treasury to these overburdened districts where the rates are crippling industry. May I quote from one or two leading business men who have recently addressed their various companies on this question? A shipbuilding chairman, speaking not long ago, compared the charges of the local rates, and pointed out that in 1914 what was 12s. 6d. per man employed, had risen in 1924 to 48s. per man. The chairman of a local company in the district which I represent, comparing the rates of 1913 and the present time, showed that in the one case they added one shilling per ton to the cost of steel, while to-day that addition was 6s. 3d. May I just weary the House with one other quotation—the figures are very significant? They relate to two North-country shipbuilding yards, and show how the shipbuilding industry in particular is being crippled and throttled, and prevented from competing successfully with our competitors abroad.
In one yard to which I refer the rates in 1913 amounted to £1,931. In 1923 they
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had risen to £8,215. In the other yard, in 1915, the rates amounted to £2,748. Six vessels were launched in that particular year and the burden per vessel was £458. Last year those rates had increased to £9,680. Only three vessels were launched, which meant a burden per vessel of £3,227. These are figures which show it is not a question of protecting the industry from foreign steel; it is rather a question of protecting the industry from the heavy burden of the rates, which practically kill it. Then we are told there is going to be this extra fourpence per man put on to the industry to secure the very desirable widows' and orphans' pensions, and pensions at 65. A preceding speaker has already stated that this is an added burden on industry, and that it is wrong at the present time to add to the burdens which are already so heavy. I submit that some of the money given to the Super-taxpayer would have been much more profitably devoted to meeting this charge for pensions rather than by putting it on to industry, which is already crippled and overburdened. In conclusion, I do hope that the Chancellor of the Exchequer will not completely turn down this appeal which is made by all parties and all sections of the community, by employers and employed, by the local authorities, that this question of the incidence of the burdens of rating, as compared with taxes, should be reconsidered to see whether some relief cannot be made and a stimulus given to industry by some grant to industry in view of these particular burdens.
Mr.PETHICK-LAWRENCE:Like the hon. Member for the Stroud Division of Gloucestershire (Sir F. Nelson), I view with considerable concern the precipitate decision to reimpose the gold standard upon this country. I asked the Chancellor of the Exchequer yesterday a question with regard to the purchasing power of the sovereign in this country in comparison with the purchasing power of gold in the United States. I was quite prepared for the evasive answer which I received, an answer which not only failed to deal with the second part of my question, but failed to express any opinion upon the facts which I had asked in the first part. I had been so prepared for that that I had fortified myself by asking an innocuous question of the President of

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the Board of Trade immediately preceding the one to which I refer. From that answer I got the information which the Financial Secretary to the Treasury, speaking on behalf of the Chancellor of the Exchequer, did not propose to give me.
It is this question, this aspect of the question, that looks to me to be one of very great gravity for trade and employment in this country at the present time. According to the figures with which I was supplied by the President of the Board of Trade prices in this country at the present time are 71 per cent. above pre-War level. In the United States they are 62 per cent. above pre-War level. That means that, whereas before the War prices in the two countries, exchanging on a full gold basis, were on an equality, to-day prices in this country are 51- per cent. above exchange ratio. That was so before the Chancellor of the Exchequer decided to put on the finishing touch by restoring the gold standard. By doing that he brings the pound sterling up to its full nominal equivalent and stereotypes for the present this wide discrepancy between the purchasing power of gold in this country and its purchasing power in the United States. That means that the purchasing power of the pound sterling in this country is lower than its purchasing power abroad. I venture to illustrate the very serious effect that that has upon our trade.
In the first place, may I point out that this is exactly the reverse of the situation in Germany a few years ago when the internal purchasing power of the mark was very much greater than its external purchasing power. At that time, and in consequence of that fact, the German manufacturer had a very great advantage He was able to produce very much more cheaply in terms of world prices. He was able, very seriously, to undercut production in this country. Our position, as I have already said, is the exact reverse of the position in Germany at that time. In consequence there is exactly the reverse situation in regard to the condition of the British manufacturer. The British manufacturer, owing to the purchasing power of the sovereign at home being less than it is abroad, is placed at a disadvantage in comparison with our rivals in other countries. Let me put it in a perfectly concrete form Suppose the manufacturer in this country is able to
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turn out an article and sell it with a minimum margin profit at one pound sterling. The exchange price of that in America at the present time would be about 4 dollars 60 cents. If it had not been for the manipulation of the Bank of England that British manufacturer would be able to place that article on the American market at 4 dollars 60 cents. Owing to the manipulations which have been taking place in the last few months with a view to the restoration of the gold standard —I am taking the actual restoration which the Chancellor of the Exchequer announced yesterday—he is not able to take that course; instead of that his sovereign in this country is the equivalent of 4 dollars 87 cents, and that is the price which he has to charge to the American potential purchaser. In other words, he loses, through this raising artificially of the exchange, 27 cents. I put it to the Committee that that may very likely be sufficient to turn the scale against him and lose him the contract.
That has been going on during the last few months. When the Chancellor of the Exchequer came into office the purchasing power of the sovereign had a certain ratio on a gold basis to the United States dollar. To-day we have this discrepancy. It is noteworthy that, during the months while this discrepancy has been increasing, unemployment in this country has also been increasing. I think it is not unfair to say that it is a natural and, to some extent, a necessary consequence of what I have been describing. We had the announcement made yesterday that the pound sterling is definitely to come on the gold basis. That means that this tendency which has been going on is to continue. What is going to be the consequence of it? I think there is no doubt that it means that the bad trade and unemployment in this country will be continued, and will increase—unless one of two things takes place. Either there may be a rise in world prices, in the United States, and other countries. If that were to take place then, without any change of prices in this country, it will be possible for us to get back to parity between the rate of exchange, and the purchasing power, so that the British manufacturer will no longer be at the disadvantage he is under at the present time. But supposing, on the other hand, that prices in the United

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States and elsewhere do not rise to this extent, what then would be the result? The result will be that, in order to get ourselves back again on to a normal footing in trade, we shall have to make a further cut in British prices. If the figures which I have already given, largely based on the answer given to me by the President of the Board of Trade, are correct, that cut in prices cannot be less than 5½ per cent; this cut of 5 per cent. will mean a demand on the part of the employers of this country for a further reduction in wages, and that that demand will have disastrous effects, which will be a repetition of the disastrous effects which we have seen in this country in recent times.
I suggest that the restoration of the gold standard in this way is, to a large extent, a gamble. If world prices go up then the consequences will not be serious. If world prices do not go up then we shall be faced with a very serious continuation of our very serious bad trade. We shall also be faced with the necessity of making a further cut in prices in this country to the extent of 5 per cent. We shall be faced with, probably, a demand on the part of employers for a reduction in wages, which, again, will have disastrous consequences for the industrial situation in this country. I do feel, and I put it to the Chancellor of the Exchequer, that this is a very serious situation to have brought about. It seems to me the responsibility will rest with him for what takes place, and' that it will be up to him to try to devise means for meeting the situation. I do not suggest that it will not be possible for us to retain the gold standard, having imposed it, but I do suggest very seriously that the consequences in bad trade will be most noteworthy, and that the right hon. Gentleman will find that continuing unemployment and the increasing possibility of industrial unrest have, by the proposal, been seriously affected.
I turn now to some other considerations in the Budget, which touches upon many fields. The first, and foremost, and most important point in the Budget statement which we heard yesterday was the pronouncement in regard to the new pensions scheme. Now I should like to say
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It being a Quarter-past Eight of the Clock, further Proceeding was postponed, without Question put, pursuant to Standing Order No. 4.

FISHING INDUSTRY.
Mr. G. J. C. HARRISON: I beg to move,
" That this House views with grave concern the present state of the fishing industry of Great Britain, and that, in the interests of the Navy, the Merchant Service, and the food supply of this country, this industry should receive every possible assistance from the Government."
In the first place, I should like to thank the House for the great measure of kindness it has shown to me to-night in allowing me to move this Motion, and to say that I feel sure that members of my party and of other parties who wish to take part in this Debate, as well as those engaged in the fishing industry, are extremely grateful for the large measure of courtesy which has been shown to us by the House to-night. The present state of the fishing industry warrants cur earnest consideration and our help. I wish sincerely that it had been otherwise, for then this Motion could have been couched in an optimistic rather than a pessimistic vein. I do not propose to dwell upon the state of depression in the industry or too urgently to press the claims which those engaged in it have upon the administration. While it is difficult to estimate, it is easy to appreciate, the very valuable services which this section of the community has for generations rendered to the country as a whole. It has played a most important part in the foundation and in the growth of our vast Empire. The men of the fishing industry played a part second to none during the Great War, when their deeds of heroism and of sacrifice were the pride of their fellow-countrymen and the envy of other nations. But the fact, apart from other considerations, that the numbers engaged in the industry are 6,000 short of the pre-war figure, and that our total landings of wet fish are about 71 per cent. of what they were in 1913, does not stimulate us to paeans of praise about the prosperity of the industry.
The geographic and economic situation of this country demand that we should foster the sources of the supply of men born with the real sea-sense, who are so essential for maintaining the vast imports

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of sea-borne food and raw materials upon which the country depends, and for providing a great recruiting ground for our first line of defence, our Navy. It is true that there has been a slight improvement in the numbers engaged in the industry during the past 12 months, but I contend that such improvement as there may be is due mainly to that inherent spirit of sturdy independence, and the qualities of skill, industry and thrift, for which those engaged in the fishing industry of this country are justly famous. It is paradoxical that this industry, and the other great food-supplying industry, agriculture, should provide but a meagre living for those engaged in it, indeed, out of all proportion to the courage and skill displayed, and the value of the services actually rendered, directly or indirectly, to the State. We have to face the fact that the use of fish as a national diet is steadily decreasing, although I venture to suggest that the general concensus of medical opinion supports the view that if this nourishing food were consumed in excess over meat, it would improve the physical well-being of the nation. While we are concerned with increasing the numbers who are engaged in the industry and the difficult and even hazardous task of catching fish, as also in the equally difficult and complicated task of its distribution, what is needed by the country is a steadily increasing supply of fish, at a price competitive with beef, and within the means of the industrial masses. That is not so much a matter of good ethics as of sound business, and I feel it is an end which could be attained if we could reduce the cost of production and of distribution.
While methods have been found whereby harbour authorities have been able to get assistance, many harbour authorities have difficulty in maintaining their harbours in repair and, in undertaking improvements, in some cases long overdue, and there is also the great problem of entirely new construction. It is most important that new construction should be proceeded with, in order that we may attract more to the industry, and thereby increase the volume of food it can supply. As an illustration, I would point to the case of a small port in North Cornwall known as PortIsaac. For 10. years the fishing community there have been making strenuous efforts to find the means to complete a harbour. They have been
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carrying on their work as fishermen practically at the will, and essentially at the mercy, of the elements. There are many other places in and around the coast where new construction would be a great advantage to the nation. The value of practical research cannot he overestimated. We want research on a practical commercial basis. I feel sure, as in agriculture, the success of this industry depends upon the progress made on these lines in the future. Then there is the question of gear, which is a very urgent one at the present moment. I hope practical experiments will be made until we evolve a type of gear which will cost less, and be cheaper to maintain, and will also nave less destructive effect upon immature fish. This kind of destruction is a very urgent problem. In these days when motors are developing, it is essential that the temptation to trawl on inshore grounds, now that. they are free from wind or tide, should be closely watched in order that the small immature fish should he safeguarded.
But whilst destruction and waste in production are to be deprecated, we should also deprecate strongly any waste in regard to distribution. We have to consider the problem of the facilities offered by the railways, because it is well known that frequently, on account of rates having to be prepaid, large quantities of fish have to be consigned to the manure heap, because they are denied markets which they would otherwise have at certain ports if proper railway facilities existed. I know the difficulties which railways have, but I do not think they are insurmountable, and if our friends north of the Tweed have been able to carry on their railways in pre-War style, I am sure they are being run with that due sense of economy which their native shrewdness demands.
I also ask my right hon. Friend to use his influence to induce retail trade to be more enterprising and reduce their overhead charges, and do all they can to increase the demand for fish. If they will only do these things, I am sure they will not regret it. Once more I would like to emphasise the claim of the inshore fishermen. There are some people in the fishing industry who are at times rather given to think that the inshore fishermen will gradually disappear, but I do not agree with them, and I feel sure that

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my right hon. Friend will do all he can to protect them. I might also invite the attention of the House to the serious inroads made into our industry by various competitors, especially the Germans, and I briefly refer to this point because I know other speakers will take it up. I think we ought to ask the Government if they can see their way to request the Germans to pay British trawler wages to their men so that our men may compete with them on a fairer basis than is the case at the present time.
In this country we are proud of our standard of living and there is no one in this House who wishes to see the standard of living in this country reduced. Whilst to-night my right hon. Friend may hear many powerful arguments from hon. Members representing the East Coast, I hope he will also give sympathetic consideration to the case which has been made out for the West Country fishermen. Our difficulties are very great, and they are every bit as great as those on the North Sea ports. The enterprise of the fishermen of the West Country is well known—for it was they who founded the great port of Grimsby—and I earnestly ask the House to consider our claims and difficulties, which are not even exceeded by the natural picturesqueness of our harbours on the West Coast.
Commander WILLIAMS: I beg to second the Motion.
In doing so, I would like to render my tribute of thanks to those hon. Members who sit on the other side of the House for the kindness they have shown, and the facilities they have afforded us for bringing forward this Resolution to-night. After all we are speaking for the fishing industry, and we are all familiar with the danger which threatens it in all its aspects. Naturally it was easy for us when the occasion arose the other day to sympathise with and realise the difficulties of the position of hon. Members opposite on that occasion when faced with a great national tragedy, which they wished to discuss. The industry for which I am speaking to-night is one in which the men engaged in it are always, when at sea, carrying their lives in their hands. In the first place, I would like to say how much I appreciate the fact that the connection between the various branches of the fishing industry is very
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close indeed. The Mover of this Resolution referred to the fact that some time ago one of our great railway companies came to the then comparatively small fishing port of Brixham. It went there and arranged with certain of the men who were known as first-class fishermen that they should put the whole of their goods into their boats and take them right round the coast to the port of Grimsby. That turned out to be the foundation of a very great fishing industry in that port and harbour. That was done by means of the closest possible co-operation of the capital of the railway company with the fishing industry, and the highly-skilled men coming from that district.
Now I want to deal with the question of Brixham itself. We are faced with a very difficult position, as was stated in the House only the other day. The losses incurred by Brixham fishermen last year was over £5,000. These losses were incurred not through any fault of the fishermen, and not in any way by carelessness or negligence, but they were directly due to the fact that during the War vast quantities of merchant ships were sunk on their fishing ground. During the War the Admiralty deviated and ordered the shipping, instead of using mid-channel, to sail closer to the shore for safety, with the result that when these vessels were sunk they were almost entirely sunk on the fishing grounds of these people. I say quite frankly that I think these men have had their industry taken away from them exactly in the same way as in France or Belgium when a farmer had his land destroyed by the War and received compensation. I do not see why these fishermen should not have some help out of the reparations for the great trouble and distress they are suffering to-day on account of the War. We must remember that these men are not only having their means of livelihood taken away, but that also, during the War, they suffered immense losses of vessels, for which they have never been fully and properly compensated.
The other day I asked the Minister of Agriculture if he could help us in this matter. He was very sympathetic indeed, and said that other Governments and other Members had brought this matter forward, and he asked what suggestions we had to make. We are used to facing difficulties in the West of

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England, and we are appointing a committee to lay a scheme before my right hon. Friend, but I am not certain that, in matters of this kind, it would not give the Minister a rather higher standing in dealing with them if he himself would propose a scheme, because he has very much greater experience than we have in the locality. He has a much greater knowledge of how these things can be worked, backed up by his very efficient Department. However, we have formed a committee, and they will lay a scheme before him, and I should like to ask him to view this scheme with every possible sympathy. It will be an insurance scheme, under which the men themselves would contribute a considerable portion, although these losses that they are suffering are due to no fault of their own in any way.
I now pass to wider questions, and I apologise for having troubled the House with a purely local question, which, however, is a very burning one in our locality, and is causing distress over a wider area than is sometimes recognised. My hon. Friend who preceded me referred to the fact that there is a depreciation in the number of men engaged in the industry, and I would like to point out that that depreciation is much heavier in Scotland, in proportion, than it is in England, owing, undoubtedly, to Scotsmen being rather less hardy in race than the English people are[Hon.MEMBERS: "Oh! "] I have no doubt that anyone will bear me out in that, unless they may happen to be Scotsmen. At any rate, the proportion is higher in Scotland than it is here, and I can draw no other conclusion. The fact remains that from 1913 to 1920 there was roughly a depreciation in numbers of 7,000, while from 1920 to 1923, long after the War was over and after the men had come back, there was still a further depreciation of 7,000 in that very much shorter period. I know and realise that the position is rather better again to-day, but I would like to point out that the position is very serious when you get actually a greater diminution of numbers in post-War days than during the period of the War and in the first or second year after the War.
That leads me quite naturally to the methods whereby this industry can be helped. The first point that I would like to raise very clearly and definitely is that
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at the present time there is a certain supervision of the fishing industry by Government patrol boats, and I would like to ask the Minister to urge upon his friends at the Admiralty that these Government patrol boats spend very much more of their time in looking after infractions of the law by the foreigner than in looking after English people. The English people are At home and comparatively easy to catch, but the foreigner is always coming in whenever there is a chance, and fishing on our grounds to our detriment. No doubt there are cases in which the law is broken by our own people, though, of course, we know that, as far as Scotland is concerned, they would never break the law in any circumstances. At any rate, I would ask the Minister to be careful that as much supervision is given to the foreigner as possible, particularly at some of our West Coast places, and not too much to the English or Scottish or even to Welsh fishermen, if there be any.
Passing from that, I would ask the Minister if it is not possible for his Department to do a great deal more at the present time to help various methods of co-operative buying and selling. They arc being started at the present time in some of our ports in the West, with comparative success, and I am certain that, if the problem of getting cheap fish is to be dealt with, and if the small man is to be kept going, the small men must combine in buying and selling—they must combine in some way or other in placing their goods on the market. I would ask the Minister to give his word very clearly to-night that he and his Department will urge on and encourage co-operative buying and selling in every way that they possibly can. The next matter that I want to raise is that of trade facilities. I believe that at the present time very little has been done, if anything at all, in using the loans which may be obtained under the Trade Facilities Act for helping forward this industry. The Minister will know very much more about it than I do, and perhaps he might give us some advice to-night which would be of real help in encouraging this industry to develop in every possible way. Again, I cannot see why, with a Minister such as we have to-day, and the large Department which he has behind him, he cannot start some system of financing this

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industry which might be of very great and real help, on the lines of the present Swedish banks, for the purpose of helping their fishing industry. If a State can help big industries by means of trade facilities, surely it might be worth while at the present time to help some of these little industries as well.
Another point that I would like to emphasise, as far as the Minister is concerned, is the very important one of harbours. We had just now Port Isaac given as an instance. I do not know if many hon. Members of the House will realise that that is an open harbour on the north coast of Cornwall, where the men, in order to secure their boats, have to use a special form of hawser, which is specially thick and only lasts about three years. I only mention that as a simple instance of the difficulties. I know also that in every part of the country to-day there are harbours in very grave financial difficulties, and I would like to point out to the Minister, from some figures that I obtained in the House the other day, that the Scottish people are rather more efficient in extracting money from the Chancellor of the Exchequer for harbours than we are. I would suggest that, at any rate, we have a sufficient amount in the same proportion as Scotland now has, because we can give instances of people in very difficult circumstances who have immense burdens on their harbours at the present time. I realise, as fully as any Scotsman, the gallantry which the Scottish fishermen showed during the War, but I say that, in a matter of finance of this kind, what funds may be available should be evenly distributed throughout the whole industry, in whichever part of the country it may happen to be.
I now come to the matter of research The other day I asked the right hon. Gentleman a question on a rather interesting matter on a question of the Salp. I was very shocked when he referred me to the Secretary of State for Scotland. I am an optimist, but I never expect to get more information out of a Scotsman than I could out of an Englishman, and I was not very far wrong. I merely got inaccurate information. His Department had even written a vast volume on this question of fishery and he did not even quite know what was in it. He said it was a barrel-shaped insect. It is nothing of the sort. If he had described
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it as something like a bagpipe I should have concluded that it was only poetic licence. At any rate I have shown him now exactly what it was and where he was wrong. He now knows that it is rather different. I should like to urge on the Minister to take every possible power to encourage research in every way and not to rely, when he wants information on this subject, on any other Department at all. But I would very much more urge him to develop, by any practical means that he has, real industrial research which will help to bring profit to the industry itself. My hon. Friend who proposed the Motion referred to the matter of a better system of nets. He also referred to the fact that if you could have a better system of refrigerating on our trawlers possibly, but at any rate in some of our fishing ports, it might save the great gluts that happen at present.
I should like to ask if it would not be possible to work on a system such as this, to have, for the sake of argument—I am only giving this as an instance—a vessel placed on the West coast which would be fully fitted with wireless, which would have among its duties that of making very considerable research into better methods of netting and better methods of curing and preserving fish and also that it might spend its time trying to find out new and better fishing grounds. This would be of practical use and of real help to the industry. I should also like to ask the right hon. Gentleman, now that I am on this question of research, whether it would not be possible to do something as far as wireless is concerned. Would it not be possible to have wireless at any rate attached to one or two members of some of our bigger fishing fleets or to the patrol boats so that information might be given as to the state of the markets and when it is right to send fish in and as to the state of the weather, and also as to where they are most likely at any particular time to find fish? These are all suggestions which I am told are practical and would be helpful to the industry in every way. May I ask the house, in considering this Resolution, to remember that this industry is very scattered? There are only about 40,000 men engaged in it, and wherever you go you will find these men scattered in big or little fishing towns on every part of the coast. They are the men who are doing their best to give a cheap and sufficient food supply

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to the people, they are the men from whom you are recruiting for your Navy and they are the men who, whenever there is trouble or danger on the seas, man your lifeboats. I ask you, with all these considerations, whether it is not possible for the House and the Government, which has made a very definite pledge with regard to the fishing industry to give it full consideration in every possible way.
Major Sir ARCHIBALD SINCLAIR: I am sure the whole House is grateful to the hon. Members for the admirable and interesting speeches in which they have moved and seconded their Motion, and fishermen throughout the country, even the Scottish fishermen, as to whom the hon. and gallant Gentleman the Member for Torquay (Commander Williams) made some rather slighting remarks, will be grateful for the opportunity they have afforded for ventilating these important matters. There is, I think, no district in the country in which the fishing industry plays a more important part than the Highlands of Scotland, and the herring fishing there in particular, with regard to which I wish to make most of my remarks, has suffered very severely since the War. The principle evils which have afflicted it have been, in the first place, the loss of foreign markets. Eighty per cent. of the herrings which are caught, are cured and exported to foreign markets, and ever since the War we have had great difficulty in getting back into those markets. We had a very much better season last year, but now very bad reports are appearing in the newspapers. I see that a large part of the herrings cured last year are still not disposed of, and we are facing the coming summer fishing with a glut still on the market. Then fishermen, particularly the poorer men, have had great difficulty in replacing their lost and damaged gear. Much of it has been used for six and eight years without replacement at all, and every year it is getting more and more difficult even for those actually in employment to replace it, and even more difficult for those who have been out of employment. The next question is harbour finance, and that is very important, because the whole fishing industry is based upon the efficiency of the harbours. One of the greatest difficulties, and one of the hardest to deal with, is the high cost of coal and oil.
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These difficulties are cumulative and they act and re-act upon each other, and the effect is that each difficulty makes it harder to deal with the others What can the Government do to relieve these difficulties? The first thing they ought to do is to extend the export credit scheme to Russia. That is of immense importance in the interest of the fishing industry. I see on the Front Opposition Bench the right hon. Gentleman who was Secretary for Scotland a year ago, and I then entreated him to use his influence with the Government to take this necessary step in the interest of the industry. I warned him against being led away into grandiose plans for the restoration of political and commercial relations with Russia, and not to allow this humbler but far more important task from the point of view of the fishing industry to be pushed on one side. I appeal to the Government now, when they have the chance, not to go in for these large schemes of guaranteed loans, but to take up this much smaller thing, the question of Export Credits, which is more economically sound—I realise that this is a controversial point—and is not open to the objections which can be alleged, whether they are sound or unsound objections, against guaranteed loans. I there fore entreat the Secretary for Scotland to use his influence with the Government to get the Export Credits Scheme extended to Russia.
With regard to the replacing of lost and damaged gear, I would ask the Secretary for Scotland, if it is not too late, to reconsider the decision which the Government have taken to scrap entirely the scheme of the right hon. Member for West Fife (Mr. W. Adamson) for providing nets and gear for the fishermen. I know the scheme as it stood was not a success, and I warned the right hon. Member for West Fife when he introduced it that it could not be a success, hedged about as it was with so many hampering conditions. The conditions were that the men had to pay 5 per cent. on their loans, to repay them in three years, and also to find 50 per cent. of the money in cash, straight away. That killed the scheme, because the poorest fishermen, the men who wanted the help most, could not afford to find the 50 per cent. in cash. Every credit is due to the right hon. Member for West Fife, for he must have had a difficult task to convince the

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Treasury of the necessity of help being given to these men. Every credit is due to him for the active sympathy showed to these fishermen in their time of stress. Instead of scrapping the scheme, which I admit is not sound, for the reasons I have given, I wish the Secretary for Scotland would consider whether some improved scheme could not be introduced, in which the features which have spoiled the scheme could be left out and a better scheme devised.
In regard to barbour finances, I would urge the Secretary for Scotland to see what he can do to get a more generous measure of assistance for the small harbours. If the House knew the whole story, they would admire the strenuous and determined efforts that the little harbour authorities have made to clear off the burden of debt which is weighing upon them, and to stand up to all the difficulties which they have had to face during the War and since the War to place their harbours on a satisfactory financial basis. Take the harbour of Wick, which I know best. The whole harbour was closed during the War. No fishing was allowed to be done from the port because of its proximity to Scapa Flow. After the War the harbour authorities started with a great accumulation of arrears of interest and principal on their harbour loan3. They have made tremendous efforts since then to pay off the loans. They have been successful in paying off £35,000 to the Government, in spite of the difficulties against which the harbour trustees and the whole fishing industry 9.0 P.M. have had to contend during the War and since. With £130,000 of debt still weighing upon them, the Harbour Trust have made an application for a £4,000 loan for absolutely necessary work upon the harbour, and the paltry condition has been stipulated that they shall contribute out of the rates of this town, impoverished by all the difficulties that the fishing towns have had to contend with during and since the War, a sum of £750. What a sum, compared with £130,000 of debt which this community is now tackling, that they should have to contribute £750 towards this new loan.
Now another Department of the Treasury has weighed in. Here I hope that I may get the support of the Secre-
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tary for Scotland, because when legislation is required a private Member is not able to do much unless he gets the support of a member of the Government. The Wick Harbour has had no profit to show, no credit balance, since the War until last year. Last year the herring fishing industry was successful, and the harbour had a record credit balance. Now the Income Tax people have come down on the Harbour Trust and are assessing the harbour for Income Tax on that one year, without taking into account the three years' average. Supposing the harbour makes a loss of £500 one year, and £500 the next year and a profit of £500 in the third year, instead of being assessed on the average they are assessed on the profit alone. A demand has been made upon the Harbour Trust for £1,000 Income Tax. I ask the Secretary for Scotland to consider this point. I understand that clocks, gas companies, and a few other concerns are not allowed to take a three years' average into consideration, but are assessed on the profits of the previous year. I ask the right hon. Gentleman to take into consideration whether these small harbours can be allowed to be assessed on a three years' average to include two bad years as well as the good year, instead of being met with a sudden demand for £1,000 when they have made a profit. The trustees of these little harbours are the mainstay upon which the whole of the herring fishing in Scotland rests. They have been buffeted by the storms of the War, and the great slump in international trade, and now they are harried by the officials of every Department of the Treasury, the Public Works Loan Board, the Development Commission, and the Board of Inland Revenue.
With respect to the white fishing industry, the important thing is to provide marketing arrangements by means of cooperation, and to secure lower freight charges. In the north of Scotland freight charges are a tremendous burden upon the fishing industry. I ask the Secretary for Scotland what is his policy on the trawling question, and whether he is determined to put into operation, without, exception, the recommendations of Lord Mackenzie's Trawling Inquiry Committee. If there are any of these recommendations to which he takes exception, which are those recommendations, and what are the

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reasons why he finds himself unable to put them into operation? In particular I would stress the closing of the Moray Firth to foreign. trawlers as well as to home trawlers. This is a matter of the greatest importance. I know that it can only be done by international consent, but more than a year ago the Secretary for Scotland promised that the matter would be taken into consideration and that the other nations would be asked to give their consent. The Secretary for Scotland announced that it would be referred to an international council. What has come of that? Is any action going to be taken Is the Moray Firth going to be closed not only to trawlers but to seive-net fishers who do a great deal of fishing there? Then there is the question of the small harbours which are the nursery of the Royal Naval Volunteer Reserve. They are the best training ground for fishermen. I know from men in the deep sea ports that they regard these small fishing harbours as providing the finest training in the world, and they say that these men make the boldest and finest seamen. Going along in the train you can see that these harbours are falling into ruin all along the coast of Scotland.
I asked a question on this some time ago, and the Secretary for Scotland referred Me to the local authorities. The local authorities have every kind of burden placed upon them at the present time, such as road rates and education rates, and it is absurd to suppose that the local authorities, especially in these large counties which I represent, with their scattered population and their low rateable value, can undertake to put these harbours into an adequate state of repair. I would suggest that the Fishery Board of Scotland should be instructed to draw up a list of these harbours, so that the necessary work should be done, taking the most important first and putting them into a proper state of repair. There are some fine harbours which will fall into complete ruin unless something is done soon. I appeal to the Secretary for Scotland to take these points into careful and sympathetic consideration. For any expenditure in these directions he will get a splendid return, a return in the shape of cheap fish for the consumers in the big cities, and he will make a contribution to the solution of the unemployment problem in this industry, in which not only large numbers of men and women are
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employed, but which provides a considerable amount of employment in a wide range of ancillary industries.
Mr. WOMERSLEY: I understand that several Members desire to speak on this Motion, therefore I will put my points in a tabloid speech of headlines, so as not to occupy too much time. I would first like, on behalf of the deep sea industry which I represent, to offer our thanks to the Admiralty—in doing this I have the concurrence of my hon. Friend the Member who represents South West Hull (Mr. Grotrian)—to Captain Evans and the officers and men of His Majesty's ships "Harebell" and "Godetia" for the very gallant efforts which they put forward to try to rescue the two Hull trawlers who went out to the far north to bring food to this country, and unfortunately were lost. Captain Evans and his men took a chance in a thousand at a time of the year when there was most deplorable weather, and it was indeed plucky action on their part to take this chance. They took it, but unfortunately they were not successful. We of the trade wish to offer our sincerest thanks to them for their very gallant effort.
Speaking of the fishing industry, the importance of it is not generally realised. Probably, it is not widely known that it is the sixth largest industry in the country to-day. It employs directly and indirectly 264,000 people, and one-fortieth of the population of Great Britain depend on fishing for a livelihood. Again, it is of great importance to the mining industry. The coal consumed by the steam trawlers and drifters provides full-time employment for 9,000 miners all the year round. To those Members who represent mining constituencies I think T can appeal for sympathetic support of this Resolution. I represent Grimsby, the largest fishing part in the world, and, probably. I represent a different side of the industry from that represented by the there' hon. Members preceding me, but I do wish to pay my tribute to the fishermen from the small ports around the coast. We in Grimsby, Hull and all the large ports realise the value of these men when they come forward to help to man our trawlers and our large boats, but I would point out that 80 per cent. of the fish consumed in this country is caught by the deep-sea fishermen, the steam trawlers and the sea-net boats, so the deep-sea

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fishermen really represent the major part of the industry, and we have some little matters which we wish the Minister of Agriculture and Fisheries to bear in mind.
We ask that representations should be made to the Government of Iceland for an alteration in the law which says that gear must be stowed on any vessel in the territorial waters, that is, within three miles of the shore. Difficulty arises in this way. In times of storm and stress when these men have to make a rush for shelter in the harbours, it is not possible for them to stow away their gear. We do not inflict this on the Iceland boats which visit our ports, and we think that they ought to extend to us the same treatment as that which we extend to them. I know from practical experience that, when a storm suddenly springs up, the skipper of the vessel in his wheelhouse has to send all his men down below, because if he kept them on board, in order to try and store away the gear, it would probably result in sacrificing their lives when they are running against the heavy seas which they get in winter time in these waters. I would ask that representations should be made to the Icelandic authorities on these matters.
Then the harbour dues are very excessive. They are very much in excess of what we charge their vessels which visit our ports. Again, if a max is taken sick and we want to land him in an Icelandic harbour we are charged heavily for doing so. These are little matters, I admit, but they are very irritating matters, and attention ought to be drawn to them. Then we want the Government to insist upon an international agreement for the three-mile limit. We do not care whether it is Russia, Iceland, Faroe, or any other part of the world where fishing is done. We are prepared to observe the three-mile limit and they ought to do the same. All we ask is that the same treatment should be meted out to our men as we mete out to the foreigner. We ask for nothing more and nothing less.
Research work is of importance to the side of the industry which I represent We were told a few weeks ago that a sum of 227,000 was spent by the Government last year on research work, and this work has been of such a nature that it has probably been of some benefit to the industry in being able to trace the
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migration of fish, but the industry is followed by men of a practical turn of mind, and they say that research work would be better carried on in the direction of exploration. That is, in the finding of new fishing grounds, because though our operations range to the far north to Faroe and Iceland around the North Cape into the White Sea, and along the Murmansk coast, and south to the Bay of Biscay and the coast of Morocco, those who are engaged practically in the industry know that far away to the north, particularly to the West of Scotland, there are valuable fishing grounds, and that it is only necessary to go and find them out and this will be for the benefit of all fishing, whether from Grimsby or Hull or any other port. It may be said, "Why does not the trade do this'?" If a man ventures and finds a new ground, naturally the other people get to know about it, and his work is in vain; he spends his money and the other people follow along. We say that it would be in the best interests of the trade concerned if the Government would provide another vessel for research work, a vessel fitted out specially for exploration work. Probably there are valuable fishing grounds yet to be discovered.

There has been some talk about harbour difficulties and local difficulties. I shall not apologise for introducing our own local difficulties in Grimsby. Grimsby's position is that at the moment we have not accommodation for the fleets of vessels that wish to use the port. Our geographical position has given us a certain advantage, as we are the nearest fishing port to the great Dogger Bank, where the finest fish in the world are caught. Before the War the railway company was prepared to build an extension dock and tenders were prepared. That dock would have been built had the War not intervened. The company was not allowed to go on with the work, and the position is that work which would have cost £500,000 before the War would cost £1,250,000 to-day. The company is prepared to take unemployed men on to the work, provided that the Government will treat the company in the same way as they treat other harbour authorities, namely, by making a grant towards the work. The railway company is prepared to spend £1,050,000 on the work, but a subsidy is required to make up the dif-

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ference in the efficiency of the men obtained from the Employment Exchange and to help the company over the difficulty of the great increase in the cost of the work.
We say that this would be a splendid scheme for the relief of unemployment on work of national importance. It would be an undertaking which would find continuing work for many, for the, permanent men on the staff, for fishermen, for men ashore who unload and load the ships, and for merchants and their assistants, and it would indeed be a great boon to the district. I ask the Government seriously to consider the question, seeing that there is a scheme under which public utility concerns can receive assistance towards docks and harbours. I would like to see the benefits of that scheme extended to the railway company. The great handicap to the fishing industry is the fact that during the War and after the War, when our men were engaged in sweeping up mines instead of sweeping up fish, we lost seven years of efficiency. I believe that the industry is slowly but surely coming back to its own again, and that it will become once again a paying proposition, if given a reasonable chance. We are not asking for subsidies for the industry itself. What we do ask for is that assistance shall be given by providing a vessel for exploration work and as regards certain harbour and dock work. We ask also that representations shall be made to the railway companies to abolish the absurd prepayment of carriage on fish by passenger train. This prepayment is one of the reasons why the working classes of the country are not now getting the cheap fish that they had in pre-War days. At the week-ends when we had gluts of fish at a port like Grimsby in the old days, men would send it away to the large inland markets absolutely "on spec" to be sold for what it would fetch, knowing that the commission man at the other end would be sure to get sufficient to pay the carriage because he would have to pay it before he got the fish. Now a man may buy, on the day of gluts, cheap fish, but the carriage will be a large amount, and when it arrives at the other end it may not realise half the cost of the carriage. That has happened time and time again. Consequently, you cannot get what we call the speculative
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merchant to buy this cheap fish and send it to the inland markets.
This prepayment of carriage of fish by passenger train excludes a large number of small merchants who in the past provided cheap fish for the people by dealing directly with them. These men probably have to give credit for the fish to the people to whom they send it. They themselves have to pay cash at the end of the week, and that requires capital. On the top of that they have to pay to the railway company cash for the carriage before the goods are sent. All this means that a man with very small capital cannot carry on the business. It would be a boon to the trade and a benefit to the consumer if the companies could be induced to go back to the pre-War system of carriage, either prepaid or payment at the other end. Another small matter is the question of the minimum charge for cwts of fish. There is a minimum charge, whether it is a cwt. or less that is carried. That question ought to be taken up with the companies by the Minister of Transport, and I hope that the Minister, of Agriculture will make representations to him on the point. In the fishing industry we are prepared to fight our own battles, provided that we are given fairplay. We want the same treatment meted out to our men as has been meted out to the foreigner, and then we shall pull through and once more make the trade successful.
Mr. HAWKE:I am grateful for the opportunity of intervening in this Debate. I claim to do so because I represent a coast line which in extent must rival even that of the hon. Baronet who represents Caithness and Sutherland (Sir A. Sinclair). It is a, coastline on which men are dotted about in small fishing ports, many of them several miles from railway communication of any kind, as I dare say is the case also in the North of Scotland. They are a self-reliant race of men, because they have no one but themselves on whom they can rely, and they are frugal and temperate. Those virtues, if they did not practise them for their own sake, would be forced upon them by the conditions under which they live. But it is not for that reason that I appeal on their behalf. It is because of their value to us as contributors to the food supply of the country. Something has been said of their value in supplying the personnel

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of our Navy. I do not want to repeat what has been said, but I would like to state that four days before the late War began, on a Sunday afternoon, with my own eyes I saw no fewer than 97 men go from one small fishing town in the County of Cornwall to join His Majesty's ships. These were men of the type who from all the villages from the West of Cornwall went to serve their country, not only in the ships that fought at Gallipoli, but in the drifters which watched our coasts for us. We could not do without them and we cannot afford to lose them, and it is because I feel there is the possibility of the loss which has been taking place in that fishing population continuing and increasing that I want to make an earnest appeal to the right hon. Gentleman the Minister of Agriculture and Fisheries to-night on their behalf. Their employment is precarious. The more precarious employment is, the more it needs capital to assist it. These men have none, and if they can get no assistance from the State, I little know where they can look for it.
Before the last General Election the Prime Minister, in his election address, expressed his intention to make some inquiry as to whether further provision should not be made for further and extended facilities in the interests of the fishing industry. Some weeks after that I ventured to put a question to the right hon. Gentleman as to what form this inquiry should take, and the answer came from the right hon. Gentleman the Minister for Agriculture. The answer was this:
" I do not propose at present to institute any formal investigation into the condition of the fishing industry in England and Wales, as conditions have latterly shown signs of improvement, but I will engage in an examination of various directions in which it may be possible to take action in order to assist the expansion of our fisheries."
I heard that answer with some gratification and with some regret—gratification, because I saw in the words "I do not propose at present" some hope for the future, regret because I fear that the source from which the right hon. Gentleman got his information as to the recent signs of improvement in the industry are sources which are not known to myself. The fishing industry in this country is
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one with a long history, with great variations, with great ups and downs, and I hope that if there be some slight improvement since last October the right hon. Gentleman will not think that is any guarantee that the improvement is likely to continue. I am unaware of the sources of the right hon. Gentleman's information. I fear he may have got it from the great capitalists in the fishing world, some of whom are represented by the last speaker and some by my hon. Friend the Member for Lowestoft (Mr. Rentoul). Many of the men whom I represent are capitalists, although they would be surprised if told that they were. Their capital consists probably of some little boat, perhaps only a share in a net Hon. Members opposite will realise that makes them capitalists, but it is small capital; it is little to fall back upon. Has their condition improved 4 I have had the opportunity of reading the report made to the Cornwall County Council for the past year by their fishery inspector as to the importance of that small industry. The conditions throughout the year have been very bad indeed. Some fishermen have losses every year. Pilchards, the great West country fish—
" quantity bad but price has been good Herring catches have not been so large as the herring last year New buyers came who had not been in here before and prices have improved at times and places, but many of the boats are hundreds of pounds in debt Long lining not worthy of mention."
That is a condition of affairs which says Little in the way of improvement in conditions, and I hope the right hon. Gentleman will not close the door against an inquiry as to the improvement in fisheries. I want to deal with that point for this reason. Some 10 years ago those of whom I have spoken of as the capitalists of the fishing world on the East coast of this country came to our part of the West, and I suppose that the Cornish fishing industry would have come to an end but for the fact that the Board of Agriculture and Fisheries came to their rescue and granted them loans to put motors into their boats. That saved the industry. Not only is it a policy which I want to impress upon the Ministry now, but I think I am more justified in impressing it upon them when I point out that those loans have been practically repaid already. It now they have run out, new credits

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are wanted for new boats, new gears—new motors, sometimes. I hope that the right hon. Gentleman will not close his eyes to the advantage of making some inquiry as to whether or not such credits should be given to the fishing population in the future. Now I think there was an honourable understanding among many of us this evening that our observations this evening should be, to use the words of the hon. Member for Grimsby (Mr. Womersley), put in tabloid form, because there are so many of us who feel so strongly for these men we represent that we all wish for an opportunity of addressing the House on this subject, therefore, I wish to bring my observations to an end merely by saying that I note with interest and with great satisfaction, apart from what I have endeavoured to say myself about credits, what has been said this evening about the desirability of providing harbour authorities with assistance which would not be only assistance to them, but would help us to employ a large number of people now unemployed in this country. I have heard with satisfaction the suggestion of co-operation for the purposes of distribution and marketing. I hope that the Ministry w ill endeavour to obtain powers for the removal of wrecks. Wrecks may not be removed from the fairway of the Channel. Why not, if they are in the fairway of the employment of these men who rely so much upon a precarious livelihood? There are other things which I should desire to say, but I feel that my time has gone by. Therefore, thanking you, Mr. Speaker, again for the opportunity you have given me, I hope to make way for some other speaker.
Mr. T. WILLIAMS:I want to add my support to the Motion that has been moved and seconded by hon. Gentlemen opposite. I do so chiefly for the reason that the predecessor of the right hon. Gentleman, could he have been in his place, would have given what support he could to this particular Motion. Unfortunately he is ill, and for that reason I want to state my sympathy with the Motion. I should like to say to the right hon. Gentleman that I regret, and I think most Members of the House will regret, his reply to the question put by the hon. Gentleman who last spoke with regard to the credit facilities with regard for the small fishermen. We are advised that in many
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instances the smaller men who are suffering from lack of capital have been driven into the hands of certain merchants from whom they are compelled to hire their motors and as a part of the bargain they are also compelled to purchase from the owners of the motors both petrol and oil on terms so onerous that it is quite impossible for the smaller fishermen to do themselves justice and eke out a reasonable existence. If the House can agree to a grant of credit facilities to the agricultural industry for the purpose of ensuring to that industry proper equipment and the best kind of organisation, I see no reason why the same thing should not apply to the fishing industry. If such credit facilities were granted to the fishing industry, on the same basis or even on a more suitable basis the fishermen would to a large extent be freed from exploiting merchants who render no real service whatever.
If the same terms were granted as those granted to agriculture, that is to say if no repayments were expected in the first two years, and if a fairly long period—say 10 years—were allowed for the full repayment of loans made through a cooperative organisation, I have no doubt the small fishermen would be able to carry on their good work and supply quantities of fish such as we enjoyed prior to the War. If such credit facilities were granted, not only for the purchasing of equipment but for the setting up of central markets on a co-operative basis, it would remove the useless middleman and the smaller fishermen would be in a much better economic position than they are in to-day and there would be few such pleas as this submitted in the future to this House. I hope the right hon. Gentleman will look into the question of granting credit facilities to the fishing industry similar to those operating at present in the agricultural industry.
The working fishermen in many of the smaller ports find themselves in this position. During periods of bad weather owners of boats may refuse to let the fishermen go out unless they are certain of a good catch, and some of the men are suffering from very low wages. In certain cases they receive as little as 18s. per week, and as they are not in an insurable trade they are suffering hardships which those engaged in this very dangerous trade should not be called upon to

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undergo. It seems to me that by such facilities as I suggest many of these men could be removed from their present perilous plight. Finally, I draw the attention of the right hon. Gentleman to one other point. On the coast of Norfolk, at Blakeney Point, I understand the fishing grounds have been almost destroyed as a result of sea vermin. No steps have been taken by the State or the local authority or anybody else to deal with this matter, and I ask the right hon. Gentleman if something could not be done to remove the pest from which this district is now suffering and to make these grounds again available for fishing as they were formerly. I do not wish to take up more time and I conclude by emphasising the necessity for helping these smaller people to help themselves, and I feel the nation as a whole will benefit by a grant of facilities such as I have indicated.
Mr. RENTOUL: I had the privilege a year ago, having been fortunate in the Ballot, to move a Resolution calling attention to the condition of the fishing industry—the first substantive Motion of that kind on that subject, so I am informed, debated in this House for about 20 years. It is naturally gratifying to those who represent the fishing industry that we should have been afforded another opportunity so soon of discussing this important matter, especially as many of the problems and difficulties to which attention was directed a year ago have not become less acute in the meantime. Unfortunately, the condition of the industry as a whole has not undergone any substantial improvement. This Motion suggests that the present condition of the industry is one which the House ought to view with grave concern, and no one familiar with the circumstances will regard that statement as an exaggeration. I have been trying to ascertain from those connected with the fishing industry some of the root causes for this long-continued depression. On every hand one hears the same tale—that it is utterly impossible for owners to continue to run their boats much longer unless there is a radical change in the situation. Nor indeed is this to be wondered at when;one remembers that practically everything in connection with the industry, from the first cost of boat construction to the ball of twine required to mend broken nets,
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stands something like 200 per cent. above pre-War cost while substantially speaking the earnings of the boats have remained more or less stationary.
There is little doubt that the cause of the present situation is two-fold. First, there are the high running costs, especially in regard to such essentials as coal, ice, ropes, twine, and so forth. Secondly, there is the loss of some of our great pre-War foreign markets, coupled with severe and ever-increasing foreign competition, in regard to certain aspects of which our fishermen to-day are largely fighting with their hands tied behind their backs. The Motion suggests that assistance should be given to the industry by the Government. When this subject was last before the House the Debate took place, like to-night's Debate, in a sympathetic atmosphere. The then Minister of Agriculture and Fisheries made a sympathetic but highly official reply—which no doubt was intended to be stimulating, but had all the depressing effects of a cold douche—in which he said the Government would do everything they possibly could. I can quite understand that the present Minister may well say: "It is all very well to point out all these difficulties, but what is it that you really suggest that the Government should do 7 What is it that you propose?" I would reply to that question that there are many steps which the Government might take. Some of them have been emphasised already, and I want to mention two points which may possibly strike the House at first glance as matters of comparatively trivial import, and also as matters in which Government action is hardly possible.
The first is with regard to the question of coal. I think most people are aware that coal is by far the heaviest item in the running of a steam trawler. Many Fast Coast ports, such as Grimsby, Hull, Boston, King's Lynn, and, I believe, one or two others, have what is known as a shipping rate for coal, by which they receive a very substantial concession from the railway companies, a concession which amounts to something like 4s. to 5s. a ton of coal, and as will be easily understood, that makes the difference in many cases between prosperity and bankruptcy, so far as running the boats is concerned. In other words, it amounts to this, that it costs £400 or £500 a year

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more to run a trawler at a port that is not on the shipping rate, than at a port that is on that rate. The railway companies have been pressed literally for years to treat all the ports alike in this respect, in order to give this much-needed assistance to the industry, but up till now they have resolutely declined to do so, and I submit that this is one matter, at any rate, where the Government might use its influence.
The second point that I want to emphasise is the one that has already been dealt with by the hon. Member for Grimsby (Mr. Womersley), the question of the prepayment of carriage on fish That again, it may be said, is a trivial and comparatively unimportant matter, but I can assure the Minister that it is regarded in my constituency, at any rate, as a matter of the most vital importance. It is a question that affects largely the prosperity of the industry to-day, and there seems to be no logical reason on earth why we should not in this country revert to the pre-war system of fish being sent carriage forward, more especially as this has already been done in Scotland. To-day we have the situation of the railways running their joint lines up the East coasts of England and Scotland and up the West Coasts, too, and in England carriage has to be paid in advance, but directly it gets across the border the fish is sent carriage forward. I have never heard any justification or defence: From the railway companies that one can understand as to why that state of affairs should continue.
The hon. Member for the Don Valley (Mr. T. Williams) said that the late Minister of Agriculture and Fisheries would have liked to be here in order to give his support to this Motion. I should have heard that statement with a little more satisfaction if I had not remembered what the right hon. Gentleman said in the course of his speech last year. These particular points were then emphasised, and, in his reply, he made a statement, and gave what I and, I think, many others understood to be a promise, on behalf of his Department whet, he used these words:
" We shall only be too glad to put before the Ministry of Transport, and before the railway companies any grievances which are felt deeply." — [OFFICIAL REPORT, 11th March, 1924; col. 2278, Vol. 170.]
These were the grievances in regard to the prepayment- of carriage and the ques- 270
tion of a shipping rate for coal. I should like to ask the present Minister whether any and what steps have been taken to implement that promise, whether representations have been made in fact by the Ministry during the past 12 months in regard to these matters, and, if so, with what result. There are many other questions upon which one would like to touch, if time permitted. There is, for instance, the question of foreign competition. I quite realise that that raises an enormously controversial issue, but, at the same time, our hopes were raised some little while ago by the suggestion that there might be an inquiry into the state of the shipping industry generally, and I would like to ask the Minister whether there is any reason why some general inquiry should not be held, if not on the broadest lines, at any rate on some lines, one might say, analogous to those inquiries that arc being held under the Safeguarding of Industries Act, with regard to the effect of foreign competition on our fishing industry. We have a situation in which practically every country in the world to-day has high protective duties, and in some cases prohibitive duties, against- British-caught fish, and we have, on the other hand, enormous quantities of foreign-caught fish being dumped here and seriously affecting the livelihood and prosperity of the men of our own race. Surely, under those circumstances, something might be done by the Government to achieve a certain measure of reciprocity with regard to these other countries.
I want, to ask, in conclusion, whether some steps might not be taken under the Merchandise Marks Act or by some other means to ensure that foreign-caught fish fish, for instance, which comes in in large quantities from Norway and other places, is marked in some way in order that the consumers, purchasers or retailers might know that it is foreign-caught fish. This fish comes in barrels and boxes, and there would be no practical difficulty in steps of that kind being taken. The question with regard to the removal of wrecks in particular is a matter of very great importance to the shipping industry, but as other hon. Members desire to take part in the Debate, I do not want to deal with other questions now. There is a disposition, I think, not unnaturally, to regard discussions of this kind as being more or less academic, and as unlikely and, indeed,

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hardly expected to lead to any definite and practical results, but I can assure the Minister, from my own knowledge of the conditions prevailing in the fishing industry to-day, that any crumbs of comfort that he is able to drop will be seized with avidity by the industry, and that if only something can be done to lighten a few even of these minor burdens that press so hardly on an industry which, in the words of the Motion, vitally affects "the Navy, the merchant service, and the food supply of this country," then, I venture to think, this Debate may well prove to have been, from a national point of view, not one of the least useful and important that has taken place during the lifetime of this Parliament.
The MINISTER of AGRICULTURE (Mr. Edward Wood): I realise that there are several other hon. Members who still wish to address the House, and I can assure them I have no wish to occupy more than a very few moments at this stage. I think that the House as a whole has welcomed the opportunity that has been afforded to it by hon. Friends of mine who have been responsible for bringing forward this Motion about the fishing industry this evening, and I think also that all who have taken part in this Debate have presented their case to the House, not only with a brevity, but with a lucidity and a force that have carried great weight in all quarters of the House. The fishing industry, of course, shares with the other industry for which I have the honour to be in part responsible, the pride of antiquity and importance, and I have often supposed, in my failure to discover any more convincing reason, that that must be the explanation why they should both be under the responsibility of the same Minister. I was very glad to notice the emphasis that was laid by more than one speaker—my hon. Friend the Member for Bodmin (Mr. Harrison), who moved the Motion, was the first to do so—upon the old, revered, and intimate acquaintance that has always existed between the fishing industry and the Royal Navy. Time does not permit me to remind hon. Members of any of the history, with which I think they may well be more familiar than I am But I may remind them that it was primarily out of regard to the interests of the then infant Navy that, in the days of Edward VI, Parliament ordained a law
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under which people were condemned to eat fish for two or three days a week. That was not thought sufficient by Queen Elizabeth, and another day was subsequently added. Even that compulsory statutory self-denial, however, was not sufficient to remove all adversity from the fishing industry.
The reason I mention that to-night is because I do want to add my testimony to that which was given by my hon. Friend the Member for Grimsby (Mr. Womersley) to the work of the Auxiliary Patrol in their recent search for those unhappy trawlers in February and March. To anybody who had to follow the day-today history of the business, and the telegrams in detail, it really revealed an epic of effort, adventure and chivalry. The first of those rescue ships was off within 24 hours after the receipt of the request for assistance, and the other followed almost immediately. They were searching for something like a fortnight in the most violent weather, encountering great peril for themselves, covering thousands of miles, and only abandoning their search when they had, perforce, also to abandon hope of finding the trawlers; and I think we do well in this House on behalf of the fishing industry to record our most sincere appreciation of that, which is only one example of the efforts which the Auxiliary Patrol are always ready to make whenever called upon for assistance.
10.0 P.M.
A great deal has been said to-night about the position in which the fishing industry finds itself to-day. Although some have spoken from somewhat different angles, I hope all who have spoken will feel able to agree that, treating the matter broadly, the industry is to-day slowly recovering from the depression of the War period. The War, of course, threw everything completely, and, as it seemed at the time, hopelessly out of gear, and it is, I think, satisfactory to know that last year, although it was still below 1913, a bumper year, a very large catch of wet fish, amounting to 13j million cwt.,was taken, which is a very substantial advance indeed on the figures of preceding years. noticed that my hon. and learned Friend the Member for St. Ives (Mr. Hawke) criticised my hon. Friend the Member for Lowestoft (Mr. Rentoul) as a representative largely of capitalists. I do not enter

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into these internal domestic amenities, but I was interested the other day to read a report that came to me from the Inspector of the Eastern Area, which my hon. Friend who spoke last represents, which L must say gave to me a somewhat more favourable view than he, I think felt able to take. The picture that was painted to me—and I believe it to be an accurate picture—was that in Lowestoft, the average share that the fisherman was reaping had advanced to about double that in 1923, and debts were being paid off. Various tests of recovering prosperity revealed themselves. More bicycles were being bought by various members of the fishing families, and more toys were being bought, and, perhaps the best test of all, more weddings were being celebrated.
I was also cheered to observe the other day, in an article in the "Fishing News" of a week or two ago, very much the same signs of greater buoyancy, which I was glad to see was not confined to the capitalistic class, but went down to the recesses of the West Country which my hon. and learned Friend so ably represents. I have not the knowledge, and it would be wrong for me to exaggerate these signs and to put my opinion in opposition to theirs as necessarily more intimate or more complete. I only mention those things in order to preserve, as may, perhaps, be necessary, a proper perspective of the elements in this problem; but it is no doubt true, as my hon. Friend who introduced the Motion said, that the ultimate question is one, and is bound to be one, of consumption, and it is in relation to that question of the amount of consumption that the various suggestions that have been made in this Debate have their particular importance.
A great deal of stress has been laid upon the question of railway administration in more than one direction. I hesitate to say that I appreciate the importance of the question, for fear of bringing myself under the condemnation extended to my predecessor, and therefore I am at a loss to express my own feeling about it, but I will simply say that I confess that before I came in to this Debate, and before I had heard the case made by my hon. Friends, I had been inclined to take the view that it was a matter entirely between the fishermen, the traders and the railway companies, and that it was
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not one in which the Government ought properly to be concerned. I still adhere to the view, as I understand it, that it is a matter of trade interests between the different parties concerned and the railway companies, but, in view of what my hon. Friends have said, I am bound to admit they have convinced me that it is a matter of sufficient importance if the Government can use its offices to bring the parties on to a new angle of discussion and view with regard to it. So that whatever my predecessor may or may not have been able to do, I shall certainly undertake to renew what efforts he made in the sense that the observations suggest. Then the hon. and gallant Member for Torquay (Commander Williams) touched upon the possible development of co-operation in the, matter of bringing the consumer and the producer into closer touch. That is, I think, after all, one, and only one, of the directions in which modern society is trying to meet the difficulty, and the new problem of endeavouring to marry the producer and the consumer in order, as far as possible, to make a happy and continuing match for both of them.
I come now to some of the more particular points that have been raised in debate. The hon. and gallant Member for Torquay may rest quite assured that I am fuly alive to the difficulties experienced by his friends at Brixham, which has a very peculiar claim upon the sympathies of us all. It is a historic port, famous, as every historian knows, for the landing of William III—and for some ether more historical people recently! In Brixham, the interest of my hon. and gallant Friend is more immediate and more practical than that attaching to William It is quite true, as he says, that Brixham is suffering from the unfortunate effect of War wrecks. The problem is a very familiar one. I was interested to hear my hon. and gallant Friend say that Brixham had proposed to submit a scheme to the Ministry for the alleviation of the difficulty. He was good enough to state that I might find a better scheme. I am not so sanguine. I am not sure, either, that Brixham will be able to find a scheme—if I may be quite frank with my hon. and gallant- Friend—that will be satisfactory. I would certainly, however, undertake to examine any scheme that Brixham ad

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vances with a very open and sympathetic mind There are many wrecks we are told, and I am afraid the blowing of them up would increase the danger. Then again, there is the question of compensation which is a very difficult one to administer fairly, and to guard against evasion or against improper use. Moreover, I am bound to remind my hon. and gallant Friend that Brixham is not the only place that suffers. For example, Lowestoft, which has not made this claim, has had no less than 40 losses of gear in the first three months of this year, whilst Brixham's losses were 115 in the whole of 1924. However, any suggestions that are made shall. be examined with an open and a sympathetic mind.
I am fully alive to the question of improving the harbours, to which I have had my attention more particularly directed, in the first place to Brixham, and in the second place to Port Isaac. We have now reached the stage in which we are considering the expenditure involved in the proposals put forward, and the money at our disposal. In each case the Department is perfectly ready, subject to the necessary amount of local aid being forthcoming, to have the matter put forward for discussion between my hon. Friends and my Department, or, if they wish it, myself. Subject to that, the Government is perfectly ready to assist in the necessary developments or the construction of harbour works. I hope, therefore, before very much time elapses that these various matters may be placed on a more satisfactory footing.
A great deal has been said about the importance of research. I subscribe to every word of it. In 1920, I think it was, the Development Commissioners of that day recognised the need for more deep-sea research, and would, I think, had they not been prevented by financial difficulties, have proceeded to supply an additional vessel for the purpose. I have resumed the task of exploring the possibilities of the case, and of securing an additional vessel, and I hope—though I am not in a position to speak of an accomplished fact—that I may be successful in the effort. I believe that form of assistance will be most valuable to the deep-sea fishing industry. I hope, as I say, to obtain that vessel, and to use it to assist in the many objects to which
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attention has been drawn in the Debate. I refer to the exploration of the trawling grounds, the examination of improved methods of fish cultivation and preservation, and other matters. If I am fortunate enough to get a vessel I think it is only right and reasonable that it should be largely placed, or for a large part of its time, upon the West Coast.
Sir FREDRIC WISE: Can the right hon. Gentleman say what the cost would be?
Mr. WOOD: No, I cannot give my hon. Friend any figure with accuracy. I should hope the cost would be shared between my Department and another Department, but I imagine it will not be excessive; and I really think we may rest quite assured that the outlay would be more than compensated for by the advantage to the fishing industry.
Lastly, the question has been raised of protection in various forms—I do not mean economic protection—but protection of the rights of British fishermen in their relation to foreign fishermen. As hon. Members in all parts of the House are aware, for the last few months we have been engaged in negotiations with Norway upon the question of the three-mile limit, as it affects the general problem. Those negotiations are still proceeding, and it is not possible for me to give details of them at this stage; but I can assure those who are interested in the matter that before any definite arrangement is made with Norway an opportunity will be given to the fishing industry of expressing any views they may have upon the suggested agreement.
The hon. Member for Grimsby drew attention to various administrative proceedings by, I think, a number of Icelandic authorities which in his view, and the view of others of his friends, press hardly upon our fishermen. He knows, and I may tell others who may not know, that the Foreign Office is always ready and prompt to take up with the proper foreign authorities any cases of harsh administration, and where cases are harsh and such as to justify complaint we have been successful in those representations in achieving very considerable results. I spoke just now of the search for lost trawlers, and I am not without hope that the fact that in that search there were associated with our fishery-patrol

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boats Icelandic boats, which went through common risks and dangers with them, may have considerable effect and importance in easing those hard corners in administration to which the hon. Gentleman quite properly drew attention.
I have only one other thing to say. Since I have been at the Ministry of Agriculture and Fisheries I have asked myself in what way the Government can best hope to help the fishing industry, which has been built up by the resource and enterprise of generations of British fishermen. A great deal more has been done by the State than is always or commonly realised. If I had time I could give the House fuller details of what I have in mind. We have to face a situation, as I said just now, in which the industry has passed through and has not yet emerged from an unprecedented depression. It will be within the recollection of the House, as it was within the recollection of my hon. Friend the Member for St. Ives and the hon. Member for Don Valley (Mr. T. Williams)—who reminded us of it—that the question of credits for the fishing industry was included in the election address of my right hon. Friend the Prime Minister at the last election. When I became Minister of Agriculture I had my attention drawn, of course, to the words of my right hon. Friend, but simultaneously my attention was drawn to the fact that the conditions of the industry were changing, and that it was not so certain that the industry as a whole wanted that particular form of credit help to which my right hon. Friend had referred more than any other help. Therefore, on my own responsibility, and I think the House will feel that I was right, I decided to await this Debate in order to have the opportunity of hearing the free expression of Members representing fishing constituencies—to hear what, on he whole, they would suggest for the benefit of the industry. I confess I have learned a great deal from this Debate, and if it is so desired, and if arrangements could conveniently be made to do so, I should be very glad if I might have an opportunity of meeting and discussing these problems, including the problem of credit, with hon. Members, or those they represent, and who themselves speak with authority for the various branches of the
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fishing industry. There are obvious limits to what this or any other Government can usefully, rightly or properly do, but I shall certainly do all in my power to assist an industry which holds such a very prominent place in the economy of this country as a source of food, as A nursery of mariners, and ultimately as a source of supply of men for the Navy, and a source from which our first line of defence is largely drawn. There are other points to which I have not had time to refer, and I hope my hon. Friends who made those points will not think I have forgotten them, because they will all be carefully considered. I have not referred to them, because I wish to keep my observations within a reasonable length.
Mr. WILLIAM DAMSON:The House is much indebted to the hon. Member for Bodmin (Mr. Harrison) for giving us An opportunity of discussing the development of the fishing industry and its importance to the nation. The question of the production of the greatest amount of food from the harvest of the land or the harvest of the sea is one of the greatest importance to every man, woman and child in the country. When discussing land settlement a few days ago, I pointed out that, for many years past we have devoted the major part of our energies to industrial development, thereby earning the money necessary to purchase food from every source. We have now reached a stage when we shall require to reconsider that position.
I think most hon. Members will agree with me when I say that we cannot hope to continue to be the workshop of the world, and, therefore, we shall have to consider the question of providing a much larger proportion of our food from our own resources and at the same time providing a larger amount of work for our people by such development. One of the ways in which this can be done is by developing to the fullest extent our fisheries. By doing this not only shall we provide our own people with a greater amount of food from our own resources, but at the same time we shall be providing an additional amount of work to that which is available and it will also enable us to develop the export part of our fishing industry to a greater extent, and thus secure money whereby we can purchase the necessary imports.

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The hon. Member for Bodmin drew our attention to the depressed condition in which the fishing industry has been for a few years past. Every one of us who has had any acquaintance at all with the conditions obtaining in that industry during the whole of the period of the War, and since the War, knows that the hon. Member has not overstated the amount of depression that has existed in that industry. That was due, as the Minister of Agriculture has stated, largely to the War practically destroying the export market; but fortunately, as the right hon. Gentleman stated, last year there was an improvement in the industry. There was a considerable improvement with regard to the amount of herring that was caught and disposed of to our former customers. Evidently our former customers are coming back again, including Germany and Russia Russia, for the first time since the War, was a purchaser in our markets last year, and I understand, from certain figures that have been placed at my disposal, that they purchased from us almost half the amount that pre-War Russia used to purchase, as far as herring was concerned. I think that that of itself should be a lesson to us, and not only with regard to the fishing industry, because I think it shows clearly that, if we are prepared to take the necessary steps to develop trade with Russia, we can get a considerable amount of relief for our unemployed people by dealing to a greater extent with that country, if we are prepared to provide the necessary credits for the purpose. I think it ought to encourage us to strike out in other directions as well as in that of disposing of our fish to Russia. I think we have a market there which every one of us should be prepared to do our best to develop.
If we are to develop the fishing industry as some of us would like to see it developed, there are a number of matters that must. receive our serious attention, some of which have already been mentioned. For example, I agree with those who have mentioned the development of co-operation, which I think would largely stimulate the fishing industry. There is also, as others have already pointed out, the question of railway facilities and the easing of railway rates, which in some parts of the country, such as the more
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remote parts represented by my hon. and gallant Friend the Member for Caithness and Sunderland (Sir A. Sinclair), are a serious matter so far as the fishing industry is concerned, and well deserve the attention of the Minister of Agriculture arid the Secretary for Scotland. There is another thing which I think ought particularly to have the attention of the Secretary for Scotland, and that is the development, as far as possible, of a line of swift steamers that could bring the fish caught in the extreme North of Scotland more rapidly to market than present facilities permit. These are matters which ought to receive consideration both from the Minister of Agriculture and from the Secretary for Scotland.
Another matter upon which I should like to say a word is that of harbours Not only do harbours in England require to be specially looked into, and to have money spent on them, in order to put them in proper condition for the purpose of giving our fishing population the greatest facilities, but we also require. even more attention, if possible, given to harbours in Scotland. Some of the harbours in Scotland require money to be spent on them in order to put them in a condition which will give our fishing population the necessary facilities. I was quite glad to hear the sympathetic manner in which the Minister for Agriculture spoke of the various matters which have been put forward, and I hope the same sympathetic consideration will he exhibited by the Secretary or Scotland. The development of the fishing industry is as important for the scottish people as it is for the people of England and Wales, if not more so. Reverting to the question of harbours, I can assure the Secretary for Scotland that when I filled the post he fills to-day, I was looking very closely into the question and took the opportunity of examining some of the harbours and ascertaining the difficulties that our fishing population had with regard to them, and had I had the good fortune to remain much longer in the office he now adorns I would have taken every opportunity that lay within my power to put these harbours, in a number of instances, into a better state of repair.
Sir CHARLES WILSON:I wish to point out how this House can rid itself of a gross inconsistency and do some

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thing to support not merely the British fishing industry, but the British canning industry. I have listened to some speeches of a patriotic order, but when I come to try to make the actions of hon. Members fit I am totally at a loss to do so. I wish to refer to on of the smallest fish, technically known by the name of sardine, which is not a sardine at all. There is no such thing. What we know as the sardine is the common British sprat or, as the Norwegians would say, bristling. It does not matter what brand may be utilised or by what name they may be known, but it does matter to me that instead of supporting the British canning industry, the only one in the Kingdom, which is situated at Leeds—the rest of the towns and cities lack the necessary force to develop these things, but having developed them in Leeds and found work for hundreds of people I suggest to hon. Members that they should demand British canned fish, instead of which they are content to eat sprats which are caught abroad and canned abroad, notably in Norway, in France and in Portugal. Some of you may say, "Why not go to the Kitchen Committee" but I have my answer. I have already been, but they are a hard-hearted lot. I am going to attack the Kitchen Committee, and the House too. The Kitchen Committee take no notice of the fact that we are being supplied—a/I of you who have made these patriotic speeches—with foreign fish, when fish equally good, caught by our own fishermen and canned by our own people in Leeds, are not used in the Houses of Parliament. There is a celebrated and much advertised sauce known as H.P. I do not know whether it is good, bad or indifferent, but it is used in the Houses of Parliament and is known all over the world. If hon. Members will demand from the Kitchen Committee in the dining rooms of this House British canned fish, and the people who produce it and cure it can say, "As used in the House of Commons." it will be worth a fortune to them. You might as well talk to a stone wall as to the Kitchen Committee. I am not here to mince matters. I want to sell British fish.
What happens to these fish? They travel slowly round the coast, coming from the north-east of Scotland right down here and up again northwards at a very slow pace, and our fishing boats follow them
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and capture them in millions. When they are dealt with from the fishing boats there is great revenue to the railway companies, because they have to be sent to the canning factory from the nearest port. When they arrive at the factory, they go through a certain process. I have seen the process and I will describe it. The fish are put into a splendid fountain of water and their scales taken off. Then they are put on long steel bars and their heads are shaved off by machinery. The next process is to place them in specially prepared tins, but before they are sealed up, the necessary olive oil or tomato mixture is dropped on to them. They are then sealed up and placed under high steam pressure. Nothing could be finer.
The process is absolutely perfect, yet here we are content to support French industries. I have great sympathy with France. I am a French Consular agent. I am not here to attack France, but I am here to speak for British industries. We also support Norway and Portugal. It is ridiculous. After hearing the speeches that have been made tonight, I suggest that we put our words into action and demand from the Kitchen Committee that they shall stock British canned fish, thereby making a very great contribution to the welfare of the fishing industry and the British canning industry.
Mr. BOOTHBY:I will endeavour to put before hon. Members the position of the herring fishermen in Scotland as I have seen it during the last six months. I do not think it is necessary for me to emphasise their merits. Hon. Members will agree with me that there is no finer class of men in the Kingdom than the men who man the drifters which work round the coast of Scotland year in and year out. Before the War, these men managed to make ends meet. During the War the Admiralty took over practically the whole of the harbours around the north and the north-east coasts of Scotland for war purposes. Harbours were closed up and revenue ceased to come in. The drifters and the men passed into the naval service, the men becoming members of the Royal Naval Reserve. It is not necessary for me to say what great service they rendered during the War. If the Government want testimony to the services that these men rendered, they have only to ask for tributes from the

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two commanders-in-chief of the Grand Fleet. The men rendered invaluable service at Scapa Flow and elsewhere.
After the War, the men returned to their boats, which were in a much further used condition, and endeavoured to make their living once more. By the end of 1923 their position was absolutely desperate. They should never have been allowed to get into that position, and it reflects no credit upon the Governments concerned that they were allowed to reach such a desperate position. The Labour Government last year made a loan to these fishermen, but that loan, as everybody knows, was no use for its purpose. It has not been taken advantage of, practically speaking. The terms were perfectly fantastic as far as the fishermen were concerned. During last year there did come a temporary revival in the fishing industry the extent of which had been greatly exaggerated. It was due primarily to a Russian and German demand. The German demand has fallen off and the Russian demand I believe to be a very uncertain factor. The fishermen disposed of the herrings to the curers. About October the demand suddenly ceased and the curers found themselves with a very large amount of stocks on hand. The position was so grave that the curers combined, in conjunction with curers on the opposite side of the North Sea, to dispose of their surplus stock at controlled prices. The stock has not yet been disposed of, and the fishermen face this season with the Russian demand completely uncertain, and a great deal of the surplus stock from last year still not disposed of by the curers. The position is a very precarious one indeed.
To-day nets cost £5 17s. each. The men are simply unable to pay that sum at present. This net business is really the crux of the problem. At any given moment in a storm the whole of the nets may he swept away, and they must replace them to carry on. They cannot pay £5 17s. for a fully rigged net. Whether the Secretary for Scotland can suggest any means of assisting them to buy new nets or not, I do not know, but I hope that he will give the matter his very earnest attention, because I believe that the fishing industry in this country is still in a very precarious condition. They have not all cleared their debts as
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a result of last year's good fishing, and I believe that the cost of the nets is at the root of the whole problem, though coal and oil are also factors which have to be considered.
I cannot think that this country, with its great sea-going traditions, which is absolutely depending on the sea, can allow these men, who rendered such imperative and essential service in the War, to continue to live in this precarious position for very much longer. They were asked for their assistance in the most critical sphere of all, to protect the Grand Fleet on which we depended. Now, when they ask us for our assistance, I think that this very great powerful seafaring country ought to grant assistance in some form to these fishermen, who must not be allowed to die out. They are a small but absolutely essential and hardly set of men who have a place in our community.
I join with the hon. Member for Caithness and Sutherland (Sir A. Sinclair) in appealing to the Secretary for Scotland to help us in our struggle with the Treasury on. behalf of the harbour Boards of these harbours. The hon. Member has Wick, and I have Fraserburgh and Peterhead, which, as the Secretary for Scotland knows, are a more formidable proposition. But at any rate we are trying to get favourable terms from the Treasury. These harbours are struggling with a hopeless load of debt, which was incurred on behalf of the country during the War, and I would ask the Secretary for Scotland to help us, it he can, by using his influence to get good terms from the Treasury for these harbours, and also to endeavour to devise some scheme of assistance for the fishermen to enable them to buy nets. I am prepared to leave it to the Secretary for Scotland to work out the details of the scheme himself, but I would ask him to devise some scheme in order to assist them.
Mr. JAMES BROWN:I should not have intervened had my part of the country been mentioned in this Debate. When I have finished my short speech, I think we shall have circumnavigated the whole of the island.
Sir WILFRID SUDDEN: Except for the Hartlepools.
Mr. BROWN: I want hon. Members to remember that there is a part of our sea

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board known as the Firth of Clyde and that it is no less in need of assistance than other parts of Scotland and of Eng land that have been mentioned. The last speaker reminded the House that he had one harbour to consider, and that the hon. Member for Caithness and Sutherland had another. I want to remind House that I have five or six harbours, among them Ballantrae, Girvan, Maidens and Dunure. These places are important. and we need all the assistance that we can get to develop the fishing there. Our men, like other men, went to the War quite freely, and I am sure that every hon. Member recognises the fact that all fishermen, from Lands End to John o' Groats, whether from the East or from the West, did noble service dering the War, and are now worthy of all the recognition that we can give them. I want to put in a plea also for better carrying facilities for fish. It is a matter for wonder that one can live almost within sight of our fishing harbours and yet be unable to get fish at a reasonable price. If we had better and cheaper transport facilities the villages would be supplied with fish at more reasonable prices and in a condition fit for consumption. I would urge the Minister of Agriculture and the Secretary for Scotland to do everything they can to help us and to insist that our Scottish harbours and fishermen are as well taken care of as are the fishermen in other places. Research has been mentioned. If either of the right hon. Gentlemen mentioned would make an investigation as to the kinds of nets that are used, he would be doing a useful service to the country. I believe that many immature fish are taken and destroyed, and that if some attention were given to the nets—not the production of nets, though that is necessary—so that these immature fish would not be taken, a very useful service would be performed. I ask the Secretary for Scotland to get all the assistance possible for the maintenance of harbours, for better facilities in the carrying of fish, and for research work.
Major PRICE: I intervene at this late hour because I represent the biggest. and the most important fishing harbour on the West Coast, namely, the harbour of Milford Haven. We have about 100 trawlers, and there is a population of 2,000 people dependent on the fishing
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industry. I am exceedingly glad that the Minister of Agriculture and Fisheries has to-day given us hope that within a reasonable time a research vessel will be devoted to the service on the West Coast, because up to the present hardly a single penny has been spent upon the deep sea fisheries, except in the way of preventive work against poaching, and that can hardly be called an assistance to them. One other matter that I would mention that relates to the limit within which our trawlers can fish off the Irish Coast. There was a regulation made which means in practice that in some places off the Irish Coast, although you are out of sight of land, you are within the limit within which fishing is prohibited. Many trawlers have been fined during their absence very heavily, and proceedings in the Irish Court have been taken against them, but process has not yet been issued in the English Courts to try to get the fines that have been levied. What we feel is that it is unfair that foreign vessels should go miles within the limit in which our own trawlers are allowed to go and that we should be put upon the same footing as the foreign trawlers that fish off the coast of Ireland surely that is a reasonable request.
There is only one other matter I should like to mention, that is regarding popularising the use of fish. Very little has been done by the Government to put before the people of this country the benefit to be. derived from a fish diet. We have by the Board of Education some means of educating people in regard to this. There are cooking classes and I think if the children were taught how best to cook fish, how best to buy fish and what sort of fish is the best to provide the cheapest meal with they would be doing something to enable a greater extension of our fish markets. If these two things are kept in mind, first of all the research necessary as to where we could get the best fish from and then the best way of using it, the Government would be doing some real good work for the benefit of the fishing industry. The only other matter is this. It is highly important that the railways should be pot back into the position of pro-War days when we could send fish for cash on delivery, because it, is a very great burden and a very great loss to the fishing industry at the present moment that they
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should have to pay cash before they send fish off. These may seem minor matters, but they are of the greatest importance to this industry. Although it is not comparable in extent with the great industry of agriculture, yet it is under the guidance of the same Ministry, and I do think that the importance of the fishery question should not be lost sight of in that greater question of agriculture.
Sir W. SUGDEN: As the representative of a fishing port which had the greatest reputation during the War, and especially in certain times of the War, I feel that to-night I should be lacking in my duty did not I say a word from the standpoint of the fishermen of Hartle-pools. During the bombardment they took a part which was not equalled by any other port in this country, and which added to the renown of their country as well as the magnificent bravery of fishermen as a class. In these later times those people who served their country sometimes are forgotten. So in this in stance there is not the clamour of the public that these folk, whose example of thrift and frugality is simply remarkable, there is the fact that they almost unaided are struggling first with competition, German and Dutch, which is neither equitable nor fair, and they believe and they accept the position that, although in their straitened circumstances there should be no taxation of food in respect to their own industry, they do ask this: that my right hon. Friend the Minister for Fisheries should see that in respect of dues, protective rights and regulations which are put upon the fishermen of the Hartlepools in respect of the products that:hey take into foreign ports, the same rules should obtain in respect of the foreigner coming into their ports. Something has been said on the matter of carriage, but no speaker to-night has informed the House that, not only is there an improper differentiation between the carriage paid system which obtains in Scotland and that which obtains in the Hartlepools, but that in some cases where carriage is called for on consignments delivered in London or elsewhere, even if part of the consignment is lost or stolen in transit, no rebate on the carriage is permitted to the sender. For example, if on the one hand 20 boxes of fish are sent
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to London which would realise £20, and if the carriage paid thereon at the Hartle-pools is £2 13s. 4d., and, on the other hand, if only 17 boxes arrive and realise only £17 the same amount of carriage is required, namely, £2 13s. 4d., and no repayment is made. It is essential that there should be first some kind of protection in respect to foreign competition and there are many means of same. It need not be of a tariff type, although there are some of us who think that system helpful and useful but having regard to what the Prime Minister has said, and which we fully accept, we leave that method out of our considerations. Secondly, there is the question of carriage, and, thirdly, the question of harbour considerations? I have examined the report on the Port Facilities of Great Britain prepared by the Chamber of Shipping of the United Kingdom, and I find they make special reference to the Hartlepools and suggest that if monies could be granted in connection with harbour works it would be helpful not only as regards general trading facilities but as regards the fishing industry in the matters of quay haulage and accommodation. I was interested to hear the comment of the Minister as to the improvement of sea fisheries in this country, but when I read his report I do not exactly follow how it reads helpfully as to the North Sea. I find he says among other things:
" The rapidity with which the average catch has fallen to below the pre-War standard is remarkable. If we except motor trawlers, of which before the War there were few, the average catch per day was actually less in 1923 than in 1913. This decline is the more serious since the North Sea remains the most Important of all the waters fished from British ports, and contributes 52 per cent. to the wet fish landed."
That means to say that unless we are prepared to give serious and special attention to the North Sea, the food of the people will cost more than it does at present. I hope the Minister will assist us and especially the fishers in the North Sea in respect of our duty and in respect of our craft.
Question put, and agreed to.
Resolved,
" That this House views with grave concern the present state of the fishing industry of Great Britain, and that., in the interests of the Navy, the Merchant Service, and the food supply of this country. this industry should receive every possible assistance from the Government."

IMPROVEMENT OF LAND ACT (1999)AMENDMENT BILL.
Read a Second time, and committed to a Standing Committee.
THEATRICAL EMPLOYERS REGISTRATION BILL.
As amended (in the Standing Committee),considered; read the Third time, and passed.

WAYS AND MEANS.
Again considered in Committee.
[Mr. JAMES HOPE in the Chair.]

WAYS AND MEANS.

  AMENDMENT OF LAW.
  Postponed Proceeding resumed on Question,
  " That it is expedient to amend the Law relating to the National Debt, Customs.
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  and Inland Revenue (including Excise) and to make further provision in connection with Finance."
  Question again proposed.
  Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to. —[Commander Eyres Monsell. ]
  Committee report Progress; to sit again To-morrow.
  The remaining Orders were read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adjourn."—[Commander Eyres Monsell.]
  Adjourned accordingly at Five Minutes after Eleven o'clock.

NAVAL AND MILITARY PENSIONSAND GRANTS.
  APPEALS (FINAL AWARDS).
  APPEALS (FINAL AWARDS).
  COMMUTATION(MR.W. WESTERSIDE)
  COMMUTATION(MR.W. WESTERSIDE)
ROYAL AIR FORCE
  BOY RECRUITS.
  BOY RECRUITS.
  TRAINING SCHOOL, WALES.
  TRAINING SCHOOL, WALES.
  NEW AIRSHIPS.
  NEW AIRSHIPS.
  MUSEUMS (PROVINCES).
  MUSEUMS (PROVINCES).
  GREAT BRITAIN AND UNITEDSTATES (DISARMAMENT).
  GREAT BRITAIN AND UNITEDSTATES (DISARMAMENT).
  EMPLOYMENT EXCHANGES(DOMESTIC SERVICE).
  EMPLOYMENT EXCHANGES(DOMESTIC SERVICE).
  FIGHTING SERVICES(EXPENDITURE).
  FIGHTING SERVICES(EXPENDITURE).
  EAST AFRICAN COMMISSION(REPORT).
  EAST AFRICAN COMMISSION(REPORT).
TRANSPORT.
  OMNIBUSES, LONDON.
  OMNIBUSES, LONDON.
  MOTOR VEHICLES (TIEAD LIGHTS).
  MOTOR VEHICLES (TIEAD LIGHTS).
  EMPLOYERS' LIABILITY INSURANCE.
  EMPLOYERS' LIABILITY INSURANCE.

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
His Royal Highness the Duke of York—Took the Oath.

LEEDS CORPORATION BILL.
Read 2a.
IPSWICH CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
HOYLAKE AND WEST KIRBY URBAN DISTRICT COUNCIL BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
SCARBOROUGHH CORPORATION BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
KINGSTON-UPON-HULL CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
LONDON, MIDLAND AND SCOTTISH RAILWAY BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

BRITISH FILM INDUSTRY.
LORD NEWTON LORD NEWTON had given Notice to call attention to the present position of the British film industry; and to ask if His Majesty's Government will consent to appoint a Departmental Committee to inquire into the causes of the present depression of the industry and to make recommendations as to the best means of
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re-establishing this industry having regard to the industrial, commercial, educational, and Imperial interests involved.
The noble Lord said: My Lords, this Notice has been on the Paper for a long time. The proposal is one of a very simple character, but I understand that the responsible Department has not had time to consider the question properly, and that my noble friend Viscount Peel is going to ask me to postpone it. If so, I shall be ready to oblige him. At the same time, I hope he will not postpone it for long, because in that case it is possible that the industry will have disappeared altogether.
THE FIRST COMMISSIONER OF WORKS (VISCOUNT PEEL): My Lords, I will do my best not to anticipate the decease of the industry, but, as the noble Lord suggests, I am going to ask him to postpone the Question because the Board of Trade are engaged at the moment in searching investigations which will not be concluded for a fortnight or so. I assure him that the Government are well aware of the importance of the Question. They attach considerable interest to it from the educational and also from the Imperial point of view. All I wish to say at the moment is that I am not quite sure whether the suggestion of having a Committee to enquire into the circumstances of this trade is the best way of dealing with the matter. I understand that at the Board of Trade the view is held that they have all the information that could be obtained about the present condition of the film industry, but if the noble Lord will be good enough to put his Question down at a later date, I will give him as full an answer as possible.

CHARTERED ASSOCIATIONS (PROTECTION OF NAMES AND UNIFORMS BILL. [H.L.]
Amendments reported (according to Order).

VALUATION (METROPOLIS) BILL.
Order of the Day for the Second Reading read.
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, this is a small Bill, which it is my duty to ask your Lordships to read a second time this

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afternoon. I hardly dare invite you to read it, for I do not think I ever had the honour of reading a Bill which was more difficult to follow unless one was provided with the technical knowledge possessed by the noble and learned Lord opposite, which will enable him to understand it without difficulty. To the ordinary layman, however, the actual drafting of the Bill is hard to follow. But, though the drafting is difficult to follow, the actual proposals of the Bill are simple enough. It is a purely temporary Bill. It is to operate for one year, and one year only; that is to say, in respect of one valuation only. The valuation, of course, takes place in one year, but it extends over a period of five years, and this measure is submitted to Parliament in order to deal with this particular valuation only because it is to be followed by a permanent Act, which, as your Lordships know, the Government have given notice they intend to introduce, to deal with the whole question of rating valuation over the whole country. Notwithstanding that fact, it is necessary to bring forward this Bill for the approval of Parliament, as the quinquennial valuation is upon us and we must deal with it immediately. We cannot afford to wait until the permanent measure is passed into law. It is for these reasons, therefore, that this temporary Bill is proposed.
There is the further limitation that the Bill refers to the Metropolis only. The Metropolis stands in a different position from all other areas, because here, and here alone, the valuation for national purposes and for local purposes is the same. There is but one gross valuation for national and local purposes in the Metropolis, which, therefore, stands in a somewhat singular position. There is, however, this peculiarity, that though the gross valuation is the same, the valuation upon which the subject is taxed for national or local purposes is a net valuation, and that net valuation is arrived at in the two cases under different Acts of Parliament and by different sets of considerations. Though the gross valuation is the same for national and local purposes, the net valuation is different. There is this further circumstance to bear in mind. It is important, indeed vital, from the point of view of the national Exchequer to maintain the gross value at its full figure; otherwise the revenue will be the loser. On the other hand, in the case of local valuations it is important
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that the deductions should be sufficient; otherwise the ratepayer will be taxed at an unjustifiable standard. These considerations have to be borne in mind.
Upon this complicated set of circumstances the Rent Restrictions Act was imposed, and that Act permitted rent to be raised 40 per cent. In the great majority of cases the rent has been raised 40 per cent. But that raising of the rent would, of course, carry with it necessarily the raising of the rateable value. It would, no doubt, occur to your Lordships that there would be a corresponding allowance in arriving at the net valuation. But that is not so, because under the law as it stands, under the Act of 1869, a definite amount of deductions is allowed, and no more than a definite amount. Though the Rent Restrictions Act allowed rent to be raised 40 per cent. it did not provide that the proportion of the deductions to arrive at the rateable value should be varied accordingly. The effect of this omission is that now, when the quinquennial valuation has come round again, the assessment authority will be aware that if they raise the gross value, as they ought to raise it, 40 per cent., then there will not be sufficient deductions allowed under the law to produce a just rateable value upon which the ratepayer can be assessed.
After all, the assessment authorities are very human and the temptation, which will be at once thrown upon them, is to underrate the gross value in order to save the ratepayer from this inequitable result. But if they underrate the gross value what happens is that the revenue will lose its just sum of taxation. Accordingly, we are presented with this dilemma. If the assessment authorities, yielding to temptation, see that the ratepayer is justly treated, the result will be that upon the other side of the account—namely, that of national taxation—the revenue will lose its just due. It is to meet that difficulty that this Bill is submitted for your Lordships' approval.
We propose that, in order to avoid the difficulty which I have tried to explain to your Lordships, an increased scale of deductions should be allowed. In the first place, it is proposed that the same deductions should be allowed in the case of local taxation as are, by law, permitted in the case of national taxation. The deductions in the case of national

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taxation are, as the law stands, larger than the deductions allowed in the case of local taxation, and we propose that the higher scale of deductions belonging to national taxation should apply in the normal case instead of the lower scale of deductions which has hitherto been allowed in respect of local taxation.
I am sorry to say, however, that although that might be sufficient when the normal conditions of housing are re-stored, yet in the present state of things it will not be sufficient. We shall not yet have done justice to the ratepayers and the deductions will not be sufficient. Accordingly, these normal deductions, which are contained in Part I of the Schedule, have to be supplemented by the special deductions contained in Part II of the Schedule. What is provided, in effect, is that where the deductions in Part II, calculated according to the principles of Part II, are larger than the deductions calculated according to the principles of Part I, the deductions of Part II shall prevail, and the benefit of the difference will be given to the ratepayer. That is, broadly, the general effect of the Bill.
The only other point to which I shall call attention is this. It will be seen that the scale of deductions allowed in the case of the poorer class of property is larger than the scale of deductions in the ease of the richer class of property. There is nothing new in this. It has always been a principle of deductions for rating purposes, and for the very good reason that the cost of repairs in the case of the smaller property is higher than in the case of the larger property. Your Lordships, therefore, need not be detained by this point, because it is merely carrying out the principles which already obtain. There is a very elaborate provision in paragraph (3) of Part II of the Schedule, upon which I need not dwell. It is designed to meet a special class of cases—cases, for example, of property which is outside the Rent Restrictions Act and where the rent has gone up a great deal more than is permitted by that Act. It is clear that a different scale of deductions is here called for, and in order to meet these special cases a general discretionary power is given to the authority to allow an equitable deduction.
I do not think that I need call attention to any other provisions of the Bill. I will merely repeat that your Lordships
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have to deal only with a temporary Bill, which is rendered necessary by the effect of the Rent Restrictions Acts upon the very peculiar conditions of valuation which obtain in the Metropolis, and in the Metropolis alone. In order to meet that difficulty, I submit for Second Reading this Bill, which will be superseded by the permanent Bill as soon as it passes into law.
Moved, That the Bill be now read 2a.—(The Marquess of Salisbury.)
LORD PARMOOR: My Lords, the noble Marquess, in the very lucid explanation that he has given of this complicated Bill, suggests that the drafting of it would be easily comprehended by an expert who has had to deal constantly with rating questions and rating Statutes. He really overrates the mental capacity of experts. I am bound to admit that I have never read a Bill which has taken me so much time in my attempt to understand it as the Bill which is now before your Lordships, and I am not quite sure that I understand it even at the present moment. I do not want to underrate the importance of the question. The noble Marquess has pointed out—and I will state in a moment my own view upon that point—that this is a temporary Bill and that a permanent Bill is going to be introduced. I do not know whether it has been already introduced in another place.
THE MARQUESS OF SALISBURY: Not yet. It will be introduced very shortly.
LORD PARMOOR: I am anxious to take the opportunity of this temporary Bill to express my hope that it will not be inconsistent with what I consider are the essential principles to be observed when this rating question is finally settled. The burden and the incidence of rates have become extraordinarily important as regards the whole of the industries of this country. As was pointed out in another place, Income Tax may be very hard, but it is at any rate supposed to be taken out of income, whereas the extraordinarily heavy burden of rates may be extracted from industries which are actually being carried on at a loss, and, therefore, in the rating question, you really have a matter of more importance in some respects even than that of Imperial taxation itself.

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I have not before me the actual figures, but a few years ago, when I addressed your Lordships somewhat on the same point, the amount raised by rates in this country was, approximately, £200,000,000 a year. Whether that figure is more or less at the present time I am not certain, but the amount is enormous. The point that I am anxious about in regard to this Bill is this. It is of great importance that there should be one valuation for all purposes—local and Imperial or central—and I doubt whether that principle has been observed in the Bill that is now before your Lordships. I admit that the Bill is a temporary settlement, as the noble Marquess has pointed out, rendered necessary by what is called the forty per cent. addition to rents allowed under the Rent Restrictions Acts.
As regards the extent of this Bill, it is quite true that it refers only to what is called the quinquennial valuation which takes effect on April 6 of next year, but, in addition to that, it will be operative for the succeeding four years, because it is not only effective as regards original valuations but also effective, if I may quote from the terms of the proposed Bill itself, for the purpose of the revision of that list. Your Lordships are aware that in the country at large we have annual valuations for rating purposes. I am one of those who think that that is much too constant and gives rise both to unnecessary expense and also to unnecessary litigation, but if you have a period of five years, as we have under the Valuation (Metropolis) Act at the present time, it is necessary to allow opportunity of revision each year in order to alter, according to changing conditions, the rate or assesment fixed. The principle which the noble Marquess has enunciated will, therefore, not only operate as regards the quinquennial valuation which comes into operation next year but also as regards the four succeeding years.
Now a question upon the principle of the Bill. It is too often thought that you can discuss rates by reference to the landlord and the tenant. That really is a fundamental mistake as regards the principles of rating in this country. The rate is fixed upon the occupier. He may be the owner or he may be the tenant. He does not pay in respect of the tenancy, but in respect of his occupation. I emphasise that point because in this Bill
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as it stands you do not apply the principle of occupation but you apply a distinction as between the landlord and the tenant, and when you come to a question of assessment—that is, what the premises are worth; either the annual value or the net rateable value—it ought to be wholly independent of whether you are looking to the tenant or to the landlord. Of course, it is a matter of agreement between them as to whether one party or the other shall pay the rates in any particular case, but it is a fundamental error to suppose that there ought to be a different incidence of assessment in the two cases. The property should be assessed in the same way, whether you are having regard to the one interest or to the other.
The noble Marquess also said, quite accurately, that in the Metropolis what is called the gross annual value is conclusive both for local and Imperial purposes, but in the country at large what we call the gross rateable value in the Metropolis is called the annual value or net annual value, and the difference which has arisen as regards the Metropolis is that, although the gross rateable value is the same both for local and Imperial purposes, yet the deductions made in order to get at the net value for Income Tax, or for the purpose of assessment, or for the purpose of rating, has been arrived at in a different way by different deductions. That is wholly unjust in principle. Whether you are assessing property in order to see what you may get out of it in Income Tax, or whether you are assessing it in order to see what burden may be put upon the owner in the nature of rates, the assessment should be the same in each case. I stress that for this reason: that when the Permanent Bill comes to be framed I sincerely hope that. For all purposes not only will the gross rateable value be the same but the net rateable value will be the same as that which is called the annual value for Income Tax purposes. There is no possible reason why there should be a distinction between the two, except this: that if you have distinctions of this kind you give ground for an infinite variety of discussions and, very often, to heavy matters of legal cost.
As to the next matter to which the noble Marquess referred, I go the whole way in the direction which he has indicated. He has pointed out that the

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deductions now made under Section 28 of the. Finance Act, 1923, are more favourable than the deductions allowed for arriving at rateable value under the Valuation (Metropolis) Act, 1369, and the first purpose of Part I of the Schedule of this Bill, if I understand it aright, is to substitute for the existing deductions which could be made under the Valuation (Metropolis) Act, 1869, those which could be made now under the Finance Act, 1923, for Income Tax purposes. I regard that as a very important principle and also as a perfectly just and right one. You ought to arrive at the same result and therefore you should allow the same deductions, whether you are arriving at the income which a man is getting from his property or whether you are arriving at the rateable value on which the rating assessment should be made. That, I think, involves a fundamental principle of a very important character, and I stress it now because I hope that that principle will not be lost sight of when the permanent Bill comes to be considered.
I cannot say the same, of course, as regards Part II of the Schedule. Part I of the Schedule having introduced the right principle of uniformity, Part II upsets it. Part II introduces in this case more favourable deductions for rating purposes than are allowed under the 1923 Act for Income Tax purposes, and to a very considerable extent, and I should like in a word or two to show what the anomaly may be. I will take the case, if I may, of an owner who is in occupation—what we call an occupying owner—because that eliminates the factors which come into operation if we distinguish between tenant and landlord. If you look at the Schedule, Part I—and I will take the case of a house of which the gross value is £40—under Part I the deduction for Income Tax purposes would be £10; that is to say, the annual value for Income Tax purposes would he £30 a year, and the assessment would be made on that basis.
Now, if we look at Part II, which is to succeed during the temporary period Part I, you see there under Class 1 (b)—I also take the case of a house of which the gross value does not exceed £40—the deductions in that ease will be £8, plus one third of £20, and therefore, although the assessment ought to be the same, in one case it will be £30 and in the
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other only about £25. In principle it seems to me that that cannot be justified. If it is right that the assessment should be £25 for rating purposes, it should also be £25 for Income Tax purposes. I am assuming that a man is in occupation of the house. Why it should be worth more when it comes to be a matter of Income Tax than it is when it comes to be a matter of rates, I do not know. It appears to me that the annual value and the net rateable value ought to be the same.
I understand that the noble Marquess says that there is a special difficulty about the Rent Restrictions Act. I am not going to raise an objection to that at the present moment, but what I want to point out is the principle. We have always failed in ill proposed measures of rating reform by going into a lot of detailed cases instead of confining ourselves to the wide principles which ought to be generally accepted. The result seems to be equitable on the face of the Act of Parliament, but practically it is most inequitable in the sense that it puts everyone to enormous expenditure The only people who profit by it are people who are interested in rating, not from the point of view of paying, because they want simplicity, but from the point of view of having the most complicated questions as to what the rate of payment is really to be.
I quite agree with what the noble Marquess said as regards the paragraph relating to Class 1 (b). He will find a similar paragraph, I think, in all rating measures. He certainly will find it in the Valuation (Metropolis) Act, 1869, dealing with a class of buildings to which general principles will not apply, and you have to deal with them in what is called an equitable way. That is quite right. I think the noble Marquess is fully justified in what he said on that point.
I do not raise any objection to the Second Reading of the Bill, which has already passed another place. I read very carefully what was said on that occasion and I think there must be a mistake in the figures in the OFFICIAL REPORT because, after reading it most carefully, the figures are to me quite incomprehensible. he had made a most

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lucid explanation. I accept that, but it shows that the figures cannot possibly have been accurately reported. We shall all sympathise with the attempt which has been made in this Bill to tide over a special period in a special locality—for the Bill does not apply outside the Metropolis—but I sincerely hope that, when it is superseded by a permanent Bill, that permanent Bill will accept what I think is a fundamental and the only true principle—namely, that when you assess property, whether for rating or Income Tax, or anything else, there ought to be one assessment, and one only for all purposes.
LORD BANBURY OF SOUTHAM: My Lords, I have often heard objections raised to Bills because they deal with matters by reference, and if ever there was a Bill which dealt with questions by reference it is this Bill. I do not know how many Acts of Parliament you would have to study in order to understand what Clause 1 means, or, indeed, if you got all the Acts of Parliament, whether you would understand it.
But I rise to draw the attention of the House to Part II of the Schedule, the last paragraph of which says this:
"Class 3 (b).—Houses and buildings without land other than gardens where the increased gross value exceeds £150 … £40."
If you look at paragraph (b) in the provisions to subsection (1) of Clause 1, to which my noble friend did not allude at very great length, you will see that it begins by saying
"in the case of a hereditament which was not included in the said valuation list or the gross value of which as shown in the said valuation list has been increased by reason of structural alterations or has been increased by more than forty per cent."
The effect of that, as I understand it, is this. There is a large house at the present moment, say, in the City of London, with a gross value of £1,200. The net value would be £1,000; that is to say, you could deduct £200. But the house has been added to, other storeys have been put on, and the value has been increased from £1,200 to £2,000. Under this Bill, instead of being able to deduct a sixth part of £2,000, or even the £200 which you could have deducted before the structural alterations were made, all that you can deduct is £40.
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I pointed that out to Mr. Neville Chamberlain, and he informed me that the matter was dealt with in paragraph (b), and that when he put in the Bill "£40" he meant to put "or a larger amount as provided for in paragraph (b)." I cannot, however, see anything in paragraph (b) which would provide for that, and I propose on the Committee stage to put down an Amendment, which would enact that, if there is a greater amount allowed under paragraph (b), that greater amount should be included, and I have been given to understand that the Government are prepared to accept that Amendment. I hope that that is so. I will, therefore, not elaborate the point further, but I have the Amendment in my pocket, and I will put it down after the Bill has been read a second time.
THE MARQUESS OF SALISBURY: My Lords, I should like to be allowed, first of all, to thank the noble and learned Lord for his extremely helpful speech, and to say in reply to my noble friend behind me (Lord Banbury), that the attention of the Government has been drawn to the point to which he referred. Whether we can accept the Amendment I would not like to say quite positively straight off, but, if my noble friend will put it down on the Order Paper, we will consider it.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

GAS REGULATION ACT, 1920, SPECIAL ORDERS.
THE EARL OF CLARENDON: My Lords, on behalf of my noble friend Lord Peel I beg to move the Motions standing on the Paper in his name.
Moved, That the Draft Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the East Grinstead Gas and Water Company, which was presented on the 31st March and published, be approved.—(The Earl of Clarendon.)
On Question, Motion agreed to.
Moved, That the Draft Special Order proposed to be made by the Board of Trade under Section 10 of the Gas

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Regulation Act, 1920, on the application of the Monmouth Gas and Water Works Company, Limited, which was presented on the 24th March and published, be approved.—(The Earl of Clarendon.)
On Question, Motion agreed to.
Moved, That the Draft Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Slough Gas and Coke Company, which was presented on the 31st March and published, be approved.—(The Earl of Clarendon.)
On Question, Motion agreed to.

MONEYLENDERS BILL. [H.L.]
THE EARL OF CLARENDON: My Lords, I beg to move the Motion which stands in my name on the Paper.
Moved, That a Committee of three Lords be appointed to join with a Committee of the House of Commons to consider the said Bill.
That the Lords following be named of the Committee:—

L. Gorell.

L. Clwyd.

L. Darling.

That such Committee have power to agree with the Committee of the House of Commons in the appointment of a Chairman.—(The Earl of Clarendon.)
On Question, Motion agreed to.
Ordered, That a Message be sent to the House of Commons to acquaint them therewith, and to request them to appoint three members of that House to join with the said Committee.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The Royal Assent was given to the following Bill—
Army and Air Force (Annual).
House adjourned during pleasure.
House resumed.
House adjourned at a quarter past five o'clock.

LEICESTER CORPORATION BILL.
Report from the Committee, of Selection, That the five Lords appointed a Select Committee on the Leek Urban District Council Water Bill [H.L.] and other Bills do form the Select Committee for the consideration of the Leicester Corporation Bill; read, and agreed to: All petitions referred to the Committee, with leave to the petitioners praying to be heard by counsel against the Bill to be heard as desired, as also counsel for the Bill.
LEEDS CORPORATION BILL.
Committed: The Committee to be proposed by the Committee of Selection.

BOLTON CORPORATION BILL.
BARROW-IN-FURNESS CORPORATION BILL.
BIDEFORD HARBOUR BILL
BURGESS HILL WATER BILL.
GAS LIGHT AND COKE COMPANY BILL.
OAKENGATES URBAN DISTRICT COUNCIL BILL.
OXFORD CORPORATION BILL
STOCKTON-ON-TEES CORPORATION BILL.
Brought from the Commons: read 1a; and referred to the Examiners.

VALUATION (METROPOLIS) AMENDMENT BILL
House to be in Committee on Wednesday next.
CHARTERED ASSOCIATIONS (PROTECTION OF NAMES AND UNIFORMS) BILL. [H.L.]
To be read 3a on Tuesday next.