Sitting of 15 April 1930

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

BROADMOOR COMMON, HEREFORD SHIRE (ENCLOSURE).
Mr. FRANK OWEN: I beg to present the following Petition:
"To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled:
The humble Petition of the residents of Broadmoor, in Herefordshire, showeth that they protest against the preparations being made by Government officials to enclose the Common Acre or Poor Acre which is adjacent to Broadmoor Common, fearing that the enclosing of the said Common Acre or Poor Acre will deprive them of their ancient right to go and collect fuel thereon, which has been exercised by residents of Broadmoor Common, without question from any person or authority, for 150 years; and they appeal against the validity of the transaction by which Government officials claim to have bought the Common Acre or Poor Acre: Wherefore your Petitioners pray that, as many of them, employed as farm and forest workers, fear that the loss of their right, what with scanty wages, short time and the difficulty and high cost of hauling coal long distances and up steep, bad roads, will leave their homes fireless, the Commons in Parliament assembled will order that the Common Acre or Poor Acre be not enclosed.
And your Petitioners, as in duty bound, will forever pray, etc."
This petition is presented on behalf of 70 residents of the Poor Acre, in Herefordshire.

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders
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not previously inquired into, which are applicable thereto, have been complied with, namely:
Epsom Rural District Council Bill [Lords].
Guildford Rural District Council Bill [Lords].
Mid Kent Water Bill [Lords] (Certified Bill).
Scottish Central Electric Power Bill [Lords].
Malvern Hills Bill [Lords].
Milford Docks Bill [Lords].
Leicester Corporation Bill [Lords].
Bills to be read a Second time.
Provisional Order Bills (No Standing Orders applicable),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, no Standing Orders are applicable, namely:
Ministry of Health Provisional Orders (Fylde Water Board, Oldham and Rochdale) Bill.
Bill to be read a Second time Tomorrow.
Liverpool Corporation (No. 2) Bill,
To he read the Third time To-morrow.
London and North Eastern Railway (No. 2) Bill,
Read the Third time, and passed.
Southern Railway Bill (King's Consent signified),
Bill read the Third time, and passed.

ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE.

    PATENTS.
    Mr. DAYasked the President of the Board of Trade whether he will state the surplus of income derived from the fees and charges made for patents for the 12 months ended to the last convenient date; and whether the work of the Patent Office is at present in arrear and the average length of time that elapses for applicants of original patents to receive official notification of the result of examination and search?
    The PRESIDENT of the BOARD of TRADE (Mr. William. Graham): As regards the first part of the question, the surplus of receipts over expenditure for the Patent Office as a whole amounted to £147,840 in the year 1928; there are, however, no figures available showing the surplus of income derived from patent fees and charges apart from fees and charges for trade marks, designs and other industrial property. As regards the second part of the question, I would refer my hon. Friend to the answers which were given on 4th February to the hon. Member for Farnham (Mr. A. M. Samuel) regarding the steps taken to cope with the arrears of work of the Patent Office due to the increase in the number of applications for patents, and on 18th February to the hon. Member for Torquay (Mr. C. Williams) respecting the time taken to deal with such applications.
    Mr. ARTHUR MICHAEL SAMUEL: Has there been an improvement since I put the question in the first instance?
    Mr. GRAHAM: Yes, Sir, but the addition to staff proceeds by examination.
    Mr. SAMUEL: Can the right hon. Gentleman say whether he has been able to increase the technical staff?
    Mr. GRAHAM: We are taking steps to get it at the earliest possible moment.

    IRON AND STEEL AND COTTON INDUSTRIES (INQUIRY).
    Major NATHANasked the Prime Minister (1) if he is now in a position to state when the report will be published of the committee of inquiry into the iron and steel industry; and whether the Government is taking or countenancing any steps for the reorganisation of that industry pending the completion of the report;
    (2) when the report will be published of the committee of inquiry into the cotton industry; and whether the Government is taking or countenancing any steps for the reorganisation of that industry pending the completion of the report?
    The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): The question of publication cannot be con-
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    sidered until His Majesty's Government receive the reports, the drafts of which are, I understand, now in course of preparation. As regards the last part of the questions, my right hon. Friends the Lord Privy Seal and the President of the Board of Trade are exploring the ground in consultation with leaders of the industries concerned pending completion of the reports.
    Major NATHAN: Is it understood that His Majesty's Government will take no steps in reference to the reorganisation of those industries unless and until the report has been received and published?
    Mr. SNOWDEN: I am sure the hon. and gallant Member, who has taken an interest in this matter, is aware that steps are being taken every day outside what the recommendations of this inquiry may be.
    Mr. MACQUISTEN: Does the right hon. Gentleman not agree that any steps to reorganise the iron and steel trade will be perfectly futile and useless—[Interruption.]

    COMPANIES ACT.
    Mr. DAYasked the President of the Board of Trade whether, in view of the several anomalies which have been brought to his notice in the workings of the Companies Act as far as they specially affect companies registered in Scotland but carrying on business in England, he proposes to introduce amending legislation so that these particular companies shall not continue to be placed at a disadvantage?
    Mr. W. GRAHAM: The only difficulty under the Companies Act in connection with Scottish companies carrying on business in England to which my attention has been drawn relates to the registration by such companies of charges on property in England. As my hon. Friend is aware, I have taken the best legal advice available to me in England and Scotland, and as a result the English Registrar has been instructed to register the charges in these cases. There is no opportunity for legislation on this subject at present.
    Mr. DAY: Is the right hon. Gentleman aware that these companies are suffering under a very serious dis-

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    advantage, and, as it is a matter under the Companies Bill as originally introduced, does he not think that the Scottish companies should be given some opportunity of having the same rights as the English companies?
    Mr. GRAHAM: I recognise the point raised by the hon. Member, but it is only one of many put up to me under the Companies Act. While I should like to see them covered, I cannot for the moment promise legislation.
    Mr. MACLEAN: Is it not the case that English companies registered in England can have any rules made by them in Scotland registered in Scotland?
    Mr. GRAHAM: Perhaps the hon. Member will put that question down on the Order Paper. It is a very complicated subject.

    CINEMATOGRAPH FILMS (BRITISH QUOTA).
    Sir BASIL PETOasked the President of the Board of Trade whether he is aware that a quota of domestic production of films of 33⅓ per cent. is enforced in France and 50 per cent. in Germany; and whether he proposes to increase the quota of British films under the Films Act, with a view to increasing the percentage and quality of British films exhibited in British cinemas?
    Mr. W. GRAHAM: I am aware that both in France and in Germany there are restrictions upon the importation of foreign films which are based upon the domestic production of films, but my information as to the precise nature of these restrictions is not entirely in agreement with that given in the first part of the question. As regards the second part of the question, as last stated in reply to the hon. Member for East Wolverhampton (Mr. Mander) on the 18th March last, there is no prospect of fresh legislation on this subject in the near future.
    Mr. DAY: Is the right hon. Gentleman aware that it is impossible at the present time for the British film producers even to supply the amount set down by the Act?

  SAFEGUARDING AND IMPORT DUTIES.

    WRAPPING PAPER.
    Sir GEORGE HAMILTONasked the President of the Board of Trade whether he has examined the petition purporting to be sent by 176 British manufacturers and merchants, urging the repeal of the Wrapping-paper Duty; whether he can state how many of these 176 signatures represent actual British manufacturers of wrapping paper and how many merchants; and, in the latter case, can he state how many of these merchants deal chiefly in foreign-manufactured wrapping paper?
    Mr. W. GRAHAM: Of the 176 signatories to this petition, 74 describe themselves as merchants, 36 as manufacturers of articles whose raw material is wrapping paper, 18 as both merchants and manufacturers, and 44 others as users of wrapping paper. None are described as manufacturers of wrapping paper. As regards the last part of the question I am not in a position to give the information desired.
    Brigadier-General Sir HENRY CROFT: Has the right hon. Gentleman received a petition from practically the whole of the workers engaged in the wrapping paper industry, begging him to continue the duty?
    Mr. GRAHAM: So many petitions of all kinds reach me that I should like my hon. and gallant Friend to give me notice of the question. I have received numerous petitions, but, whether I have received a petition exactly of the kind suggested by the hon. and gallant Member, I cannot say without notice.
    Lieut.-Commander KENWORTHY: Does this not show that piecemeal tariffs injure iudastry?
    Sir H. CROFTasked the President of the Board of Trade whether any new mills have been started or old mills restarted; whether new machinery has been supplied in the wrapping paper industry since the duties were imposed; and whether the price of wrapping paper has increased or fallen in the same period?
    Mr. GRAHAM: I have received information to the effect stated in the first two parts of the question. As regards

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    the third part of the question, the information would go to show that the price of wrapping paper has fallen in common,witch wholesale prices in general.
    Sir G. HAMILTON: May I ask whether this does not satisfy the right hon. Gentleman that the duty is entirely in the interests of this trade?
    Mr. GRAHAM: To reply to that on a supplementary would raise the whole controversy. I can only reply on the facts about which I have been asked.
    Mr. MACQUISTEN: Is not this a simple sum in arithmetic?
    Sir H. CROFT: May I ask whether it is not the fact that the actual price has fallen to such an extent that imported paper is even cheaper than before the duty was imposed?
    Mr. GRAHAM: I should like the hon. and gallant Member to put that question on the Order Paper. It is a point of detail.

    IMPORTS AND EXPORTS.
    Mr. RAMSBOTHAMasked the President of the Board of Trade why he has not yet been able to publish the information relating to the imports and exports and re-imports of articles liable to the silk, artificial silk, McKenna and safeguarding duties during the year 1929, in yew of the fact that similar figures up to the end of 1928 were published in the OFFICIAL REPORT in February, 1929?
    Mr. W. GRAHAM: The desired information, the preparation of which has involved considerable labour, will appear in the OFFICIAL REPORT in a day or two.

    CONSUMERS' COUNCIL.
    Sir KINGSLEY WOODasked the President of the Board of Trade when the terms of reference and powers of the proposed Consumers' Council will be communicated to the House?
    Mr. W. GRAHAM: I hope to introduce the necessary Measure shortly.
    Sir K. WOOD: Does it mean that the right hon. Gentleman is going to get this Bill passed before the end of the present Session?
    Mr. GRAHAM: Without banding the Government in any way, I hope to introduce the Bill very soon after Easter. The progress made will depend upon the House of Commons and upon the reception which the Bill receives from the right hon. Gentleman and his friends. We hope to get it through as soon 163 possible.
    Sir K. WOOD: I hope that it will not be elbowed out by the Land Values Bill, or anything of that kind.
    Mr. A. M. SAMUEL: will powers be given to the Council for the purpose of keeping down the cost of living?
    Mr. GRAHAM: I must ask my hon. Friend to await the text of tie Bill. I have already indicated that the new Council will have power to review prices at all stages, from the raw material so the retail point.
    Mr. SAMUEL: Will the right hon. Gentleman draw the attention of the new Council to the report of the speech made yesterday by Sir Auckland Geddes, which gave the reasons for the high cost of living?
    Mr. McSHANEasked the President of the Board of Trade whether, in connection with the proposed establishment of a Consumers' Council, since prices of commodities frequently vary in different regions, he will consider the advisability of appointing also consumers' regional committees to inquire into prices within their areas and report to the Central Consumers' Council?
    Mr. GRAHAM: My hon. Friend's suggestion has been noted.

    AUSTRALIA (WHEAT MARKETING BILL).
    Lieut.-Commander KENWORTHYasked the President of the Board of Trade whether he has official information regarding the Wheat Marketing Bill introduced into the Australian Parliament by the Federal Minister of Markets and Transport; and, if so, whether he is prepared to make any statement on the subject?
    Mr. W. GRAHAM: My information is that the Australian Wheat Marketing Bill, which has been read a second time, provides for an Australian Wheat Board, whose establishment will be conditional

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    on the establishment of separate State Boards in each of at least three States of the Commonwealth, and that, this Central Board shall control supplies and transfers between States as well as export and distribution and sale after export. It is intended that the Central Board shall operate under the terms of an agreement to be entered into with the States, and the draft of such an agreement provides for a guaranteed price to the grower of 4s. per bushel at country siding, equivalent to 4s. 8d. at the port, the guarantee being limited to next season with a proviso that some guarantee for the following seasons may be arranged. The expense or loss sustained is to be borne by the Commonwealth and the States. I understand that growers have been promised that they will have an opportunity of approving the proposals by referendum before the Act is put into force.
    Lieut.-Commander KENWORTHY: Is the right hon. Gentleman watching this interesting development with a view to our having a corresponding organisation in this country?
    Mr. GRAHAM: I cannot say anything about the corresponding organisation, but I can say that I am interested in the matter and I have studied it, as shown in the very detailed reply which I have given.

    MERCANTLE MARINE (PULVERISING FUEL PLANT).
    Mr. FRANK OWENasked the President of the Board of Trade whether any rules or orders have been laid down by the Department on the use of pulverising fuel plant at sea, or whether any are considered advisable in the experience of the surveyors of the mercantile branch?
    Mr. W. GRAHAM: No special regulations have been issued by the Board of Trade with regard to the use of pulverising plant at sea, and I am advised that it is unnecessary at present to issue special regulations. Under existing regulations it is possible for the surveyors to deal with each case on its merits.
    Mr. OWEN: Can the right hon. Gentleman say whether a committee has been set up to go into this question of the use of pulverising fuel plant at sea?
    Mr. GRAHAM: I cannot say off-hand, but I will inquire and inform my hon. Friend.
    Mr. OWEN: Will the right hon. Gentle man inquire of the "Daily Herald"?

  BRITISH ARMY.

    SUBVERSIVE PAMPHLETS AND LEAFLETS.
    Captain CAZALETasked the Secretary of State for War, with regard to the private of the Royal Dental Corps who was found circulating seditious literature amongst the troops at Shorncliffe Camp, if he will say on whose behalf the literature was being circulated; whether any other recent instances of the circulation of such literature amongst the Forces have come to his notice; and what disciplinary action has been taken in the matter?
    The SECRETARY of STATE for WAR (Mr. T. Shaw): The literature referred to was published by the Communist Party of Great Britain. As regards the second part of the question, there have been some cases in which pamphlets and leaflets containing matter subversive of military discipline have been distributed to soldiers. As regards the last part of the question, the private of the Army Dental Corps has been discharged from the Army under the King's Regulations.
    Captain CAZALET: May I ask whether this literature was printed in England or abroad?
    Mr. SHAW: I could not give an answer to that question at the moment.
    Lieut. - Colonel Sir FREDERICK HALL: Will not the printers and publishers be held responsible, and punished according to law?
    Mr. SHAW: There is a question on the Paper of a rather wider nature on which I should prefer to answer that question.
    Mr. BECKETT: Have not the troops the same right to read what they like as other grown up people?
    Commander BELLAIRS: May I ask whether the disciplinary punishment of discharging men from the Army is an adequate punishment, considering—
    HON. MEMBERS: Order, order!

    CADET CORPS
    Mr. ANNESLEY SOMERVILLEasked the Secretary of State for War whether he will sanction the loan of camp equipment and other stores by Territorial units to cadet corps affiliated to them?
    Mr. SHAW: The answer is in the negative. Cadet corps will not be affiliated after October to Territorial units.
    Mr. SOMERVILLE: I beg to give notice that I shall raise this question on Thursday on the Motion for the Adjournment.

    ROTHERWAS FACTORY, HEREFORD.
    Sir JOHN WITHERSasked the Secretary of State for War the number, of persons employed at Rotherwas Factory, Hereford (civilians and military); the annual cost since the War; why the factory is kept in commission; and how much longer is it proposed to keep it in commission?
    Mr. SHAW: The factory is not kept in commission as a filling factory in peace, but is retained as a reserve factory. In peace it is utilised for the storage of Army stocks and for repair and maintenance work on them. I am having the figures for which the hon. Member asks prepared and will send them to him as soon as they are ready.

    BOY SCOUTS.
    Colonel HOWARD-BURYasked the Secretary of State for War whether Government ground, which is not being used at the time, will be permitted to be used by boy scouts, or whether the same prohibition applies as is the case with cadets?
    Mr. SHAW: Under existing regulations, General Officers Commanding have discretionary power to allow the use of small areas of War Department land by Boy Scouts for short periods not exceeding a month, subject to certain conditions. No alteration will be made in these regulations.
    Colonel HOWARD-BURY: Can the General Officer Commanding also give permission for cadets to make use of this ground when it is not being otherwise used?
    Mr. SHAW: So long as the intention of the Government to cut the connec-
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    tion between the Cadet Corps and the Territorial Forces is observed the Cadet Corps will be treated exactly as other boys' organisations.
    Mr. THURTLE: May I ask whether Commanding Officers have the same discretion, if they think fit, to allow this ground to be used for camping purposes by the Labour League of Youth?

    WOOLWICH ARSENAL (EXPLOSION).
    Sir NICHOLAS GRATTAN - DOYLEasked the Secretary of State for War whether his attention has been called to the observations of the Comptroller and Auditor-General with reference to an explosion at Woolwich Arsenal on 4th March, 1929, and to the statement that a letter addressed by him to the War Office on 31st January, 1930, had not been answered; whether a reply has now been despatched; and, if so, of what nature?
    Mr. SHAW: The answer to the first and second parts of the question is in the affirmative. As regards the remainder of the question, this matter will come shortly before the Committee of Public Accounts, and I would suggest that the hon. Member should await their report regarding it.
    Sir N. GRATTAN-DOYLE: Does that mean that up to the moment no reply has been sent?
    Mr. SHAW: It means that when platters are before the Committee of Public Accounts it is generally considered courteous to them not to prejudice the question even by answers in the House.

    WHITE HORSE, WESTBUFY.
    Sir N. GRATTAN-DOYLEasked the Secretary of State for War whether his attention has been called to the disfigurement of the white horse on War Department land on the Downs at Westbury, Wiltshire; and whether, in view of the historic character of thin landmark, he will cause steps to be taken with a view to the prevention of further damage and to the improvement of its present condition?
    Mr. SHAW: This matter is at present under consideration and I will inform the hon. Member of the result as soon as a decision is reached.
    Sir F. HALL: But why the hon. Member? Why should not every hon. Member in the House have the information considering the historic character of this landmark?
    Mr. SHAW: I will send the hon. and gallant Member a copy of the answer.
    Sir F. HALL: But does not the right hon. Gentleman realise—
    Mr. SPEAKER: It would be much better if the hon. and gallant Member would put a question down himself.

    PAYMENT RECORDS.
    Mr. R. A. TAYLORasked the Financial Secretary to the War Office what is the statutory time following discharge during which records of payment are kept in the case of men who have served in the Army?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Shinwell): The period prescribed in the Schedule submitted to Parliament in February, 1923. in accordance with the Public Record Office Act, 1877, for the retention of this class of document is three years.
    Mr. TAYLOR: Are any of these documents kept, or are all the records destroyed?
    Mr. SHINWELL: I understand that documents of this class are destroyed after the stipulated period.

  SCOTLAND.

    DEPUTY-LIEUTENANT, STIRLINGSHIRE (APPOINTMENT).
    Mr. McKINLAYasked the Secretary of State for War under what regulation the appointment of Mr. James McKechnie as deputy-lieutenant of the county of Stirling was rejected; if such appointment was approved by the lord lieutenant of the county and the Secretary of State for Scotland; and what steps he proposes to take to alter the procedure?
    Mr. SHAW: Deputy-lieutenants are appointed under the Militia Act, 1882, and the Deputy Lieutenants Act, 1918. Under the latter Act, a candidate must be shown to the satisfaction of a Secre
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    tary of State to have rendered worthy service as a, member of, or in a civil capacity in connection with, His Majesty's Naval, Military or Air Forces. As the appointment is a military one, approval is naturally given through the Secretary of State for War. As regards Mr. McKechnie's case, Mr. McKechnie has given no service in a civil capacity in connection with His Majesty's Forces and his military service fell far short of the period which is regarded as qualifying on that ground. I very much regret that I was therefore unable to regard Mr. McKechnie as qualified for appointment. As regards the last part of the question I see no grounds for altering the existing procedure.
    Mr. MACQUISTEN: Has he ever been a member of a Cadet Corps?
    Mr. McKINLAY: Is it not the case that similar appointments have been made purely on political grounds in the past? [HON. MEMBERS: "Never!"] In view of the seriousness of this question, so far as the working classes are concerned, I beg to give notice that I shall raise the matter on the Adjournment.
    Sir N. GRATTAN-DOYLE: Is it not the fact that the appointment of deputy-lieutenants is a prerogative of the Crown?
    Mr. SHAW: A prerogative of the Crown exercised through the Secretary of State for War.
    Mr. MACPHERSON: As the hon. Member who introduced the Bill in 1918, may I ask whether it is not the fact that if a candidate for a deputy-lieutenancy has rendered any military service at all it lies within the discretion of the Secretary of State for War to appoint him or not?
    Mr. SHAW: When this matter was before me, I naturally, this man being a working man, took a very lively interest in the case. [HON. MEMBERS: "Why?"] Because I want to see working men represented throughout. The facts are that a consistent policy has been followed. A list of names was shown me of people who had not been appointed with much longer service, and I could not in common decency make an appointment which was contrary to practice.

    SCHOOL-LEAVING AGE.
    Mr. MACQUISTENasked the Secretary of State for Scotland whether his attention has been called to a resolution of the Argyll Education Authority, passed by 17 votes in favour to 5 votes against, at a meeting held in Glasgow on the 26th March, protesting against the proposal to raise the compulsory age for school children to 15; and whether he will take steps to give effect to this resolution in the County of Argyll and in any event refrain from proceeding to raise the age until the views of the parents have been ascertained by a postal plebiscite?
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Johnston): The answer to the first part of the question is in the affirmative; to the second and third parts in the negative. I would, however, remind the hon. and learned Member that when compulsory education was instituted protests from certain backward bodies were received. Fortunately, however, in the interests of the nation, these protests were overruled.
    Mr. MACQUISTEN: Does the hon. Gentleman not realise the right of parents to protest against the conscription of their children for this very foolish extension of a very inferior type of education; and is it not the case that the parents consider that the children would be much better educated by being out in the open country of Argyll?
    Duchess of ATHOLLasked the Secretary of State for Scotland if he has received resolutions against the raising of the school-leaving age in 1931 passed by the education authorities of Perthshire and Argyllshire; what other authorities, if any, have published resolutions unfavourable to the Government proposals on this subject; and how many have indicated that they expect to have the necessary arrangements made by the date proposed by the Government?
    Mr. JOHNSTON: The answer to the first part of the question is in the affirmative. My right hon. Friend has also received similar resolutions from Peebles-shire and Kincardine Education Authorities. On the other hand, he has received representations from a large number of bodies interested in education in favour of the proposed change. None of the education authorities have suggested to
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    the Department that they will be unable to make adequate arrangements by the date proposed.
    Duchess of ATHOLL: Will the hon. Gentleman answer the last part of my question? How many authorities have indicated that they expect to be able to make arrangements within the time fixed?
    Mr. JOHNSTON: No authority has so far indicated to us that they will be unable to make adequate arrangements.
    Duchess of ATHOLL: How many have indicated that they will be able to make these arrangements?
    Viscountess ASTOR: Answer—how many have?

    HOUSING (LAND ACQUISITION).
    Mr. HARDIEasked the Secretary of State for Scotland whether seeing that the Ministry of Health has been able to provide information that since 1016 local authorities in England and Wales have acquired for housing purposes 73,033 acres of land at a total capital test of, approximately, £15,200,000, he will take steps to procure the corresponding facts as to land acquired, and the price paid, by Scottish local authorities for housing purposes?
    Mr. JOHNSTON: There is wide difference between the practice in the two countries. In Scotland, for example, we have considerable feuing as apart from purchase of land and the statutory powers of Scottish local authorities for borrowing do not require them—unless in exceptional cases—to secure the consent of the Department. I am, however, considering the question of requesting a special return on the subject, and I will communicate later with the hon. Gentleman.

    EDUCATION (MAINTENANCE ALLOWANCES).
    Duchess of ATHOLLasked the Secretary of State for Scotland if he is aware that the present Scottish education grant makes no provision for assisting education authorities wish any maintenance allowances they may make to children attending school; that the Association of Education Authorities has recorded its opinion than assistance should be given to local authorities in meeting the cost of the maintenance allowances proposed to be given in connection with the raising of the school

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    age; and what action he proposes to take in the matter?
    Mr. JOHNSTON: The additional grant to be paid in England and Wales in respect of maintenance allowances which it is proposed to give in connection with the raising of the school age will cause an automatic increase in the Exchequer contribution to the Education (Scotland) Fund, and this additional money will be distributed to the Scottish education authorities in accordance with minutes of the Scottish Education Department which will, in due course, be laid before Parliament. No decision will he made regarding the method of distribution to be embodied in these minutes before the views of the authorities have been elicited.
    Mr. MATHERSasked the Secretary of State for Scotland what progress has been made with the consultation of Scottish education authorities regarding the award of maintenance allowances for children remaining at school after the age of 14 years; and whether he is now in a position to make any statement on the conclusions reached?
    The SECRETARY of STATE for SCOTLAND (Mr. William Adamson): I have had an interview with two of the principal of the present education authorities. In view, however, of the change in Scottish local government which will take place a month from now, it is not desirable to press forward with this matter until I am able to consult the new education authorities. In these circumstances, I am not in a position to make any statement at present.
    Mr. MATHERS: Do I understand from the right hon. Gentleman's answer that these new education bodies will be consulted, and that Scottish opinion on this matter will not merely follow in the wake of English opinion?
    Mr. MACPHERSON: To what two authorities does the right hon. Gentleman refer?
    Mr. ADAMSON: The two authorities which asked an interview regarding this matter were the Glasgow and Edinburgh authorities. With regard to the supplementary question of the hon. Member for West Edinburgh (Mr. Mathers), it is my intention to consult the new education authorities.
    Mr. MACQUISTEN: Is the right hon. Gentleman aware that the people of Argyllshire object to these maintenance grants, and that the parents would prefer to bring up their own children and not to have them brought up at the expense of the community?

    STEPPPS SCHOOL, GLASGOW.
    Mr. FREEMANasked the Secretary of State for Scotland whether his attention has been called to the case of Roy Duguid, aged 11, who was given six strokes with a leather strap on 4th December, 1929, at Stepps Public School, Glasgow, for running about a classroom, as a result of which the child was found sick and feverish and removed on 19th December to the Royal Infirmary suffering from infantile paralysis; whether the child was medically examined; whether an independent authority inquired into the case before the punishment was inflicted; and what steps does he propose to take to prevent such punishment in future?
    Mr. W. ADAMSON: From a report regarding this case which I have received from the education authority, I learn that court proceedings followed a complaint by the parent, and that at the Glasgow Sheriff Court, on Thursday, the 3rd instant, the headmaster was found not guilty of the charge libelled. The boy had undergone routine medical examination in his appropriate age group in 1923 and again in 1927. The answer to the third part of the question is in the negative. As to the fourth part, the regulation of punishments is for the administration of the education authority.
    Mr. FREEMAN: Will the right hon. Gentleman consider the desirability of safeguarding children against these violent punishments, by medical examination in exactly the same way as the lowest type of criminal is protected at the present time?
    Mr. ADAMSON: I have. already explained that this boy was twice examined in his group. He was examined in 1923 and in 1927, and during those examinations nothing of a serious character was discovered, nor, indeed, was anything discovered wrong with him other than a slight enlargement of the tonsils.
    Mr. FREEMAN: Was there a medical examination before the punishment was given?

    GREYHOUND RACING GROUNDS (TOTALISATORS).
    Mr. FOOTasked the Secretary of State far Scotland if his attention has been called to the action of the directors of the Albion Greyhound Racing Ground, Ibrox, Glasgow, in installing totalisators on their greyhound racing track; and if he is prepared to take any action in the matter, seeing that the Racecourse Betting Act applies only to horse races on approved racecourses?
    Mr. SCRYMGEOURasked the Secretary of State for Scotland whether he is aware that certain greyhound racing companies in Scotland have illegally set up and operated totalisators in all parts of their grounds; and what steps will be taken in the matter?
    Mr. JOHNSTON: In the stated case, the Procurator-Fiscal of Glasgow versus the Scottish Greyhound Racing Company and Fred Taylor (13th March, 1930), it has been decided that. the owners of a dog-racing course operating a totalisator on that course, are not guilty of an offence against Section 1 of the Betting Act, 1853, as extended to Scotland by the Betting Act, 1874. Apart from legislation, it would not appear that there are any further steps my right hon. Friend could take in the matter.
    Mr. FOOT: Do I understand that, following upon that case, the totalisator can now be set up at every greyhound racing track throughout the country?
    Mr. JOHNSTON: I should not care expound a difficult legal decision in answer to a supplementary question.
    Mr. MACQUISTEN: In view of the cordial relations between the Labour party and the bookmakers—
    HON. MEMBERS: Order!
    Mr. SCRYMGEOUR: Does not the hon. Gentleman consider that this is a logical development of the Act which we passed?
    Mr. MACLEAN: Is it not a fact that the stated case referred to by the hon. Gentleman was taken under the Acts of 1853 and 1874, wherein there is no mention of the totalisator; and that the
    2712
    Crown ought to have taken the case against these individuals under the Act of 1928?
    Mr. SPEAKER: The hon. Member is now giving a legal opinion.

    BREWING AND DISTILLING (FOREIGN CEREALS).
    Mr. McKINLAYasked the Secretary of State for Scotland whether he is aware that Scottish brewers and distillers are brewing and distilling beer and whisky from foreign cereals whether he is aware that the product is marketed as Scotch whisky and beer; and what steps. if any, he proposes to take to prevent this misleading trade description?
    Mr. W. ADAMSON: No information is available as to the quantities of imported cereals used for malting, or distilling purposes, and I cannot therefore say to what extent whisky and beer marketed as Scottish is manufactured from imported grain. I am advised that a trade description of whisky or beer as "Scotch" does not necessarily imply that the cereals from which the alcoholic distillations are made are grown in Scotland. Should, however, the agricultural interests concerned have any special information on the subject perhaps they will supply particulars to the Empire Marketing Board
    Mr. CHARLES WILLIAMS: Does that answer apply equally to red biddy?
    Mr. BOOTHBY: Is the right hon. Gentleman aware that the agricultural interests concerned have for long been demanding an import duty upon foreign-grown barley imported for this purpose?

    FISHING INDUSTRY (LOAN FUND).
    Mr. DUNCAN MILLARasked the Secretary of State for Scotland if he can state the amounts of the £50,000 loan fund which has now been allocated to fishermen who lost their nets during the gale on armistice day; and whether, after all the applications for loans to meet the losses then sustained have been dealt with, he will be prepared to apply any balance of the fund remaining towards meeting losses sustained on other occasions?
    Mr. W. ADAMSON: Applications have been definitely approved to the amount of £868. As the hon. and learned Member is aware, applications may be

    2713
    received up to the end of this month, and 365 applications have been received up to date. The loans fund is not available for any purpose other than that for which it was sanctioned by Parliament.
    Mr. MILLAR: Will the right hon. Gentleman not consider making any balance available for other losses, seeing that that amount at any rate ought to be expended among the fishermen?
    Mr. ADAMSON: Before such cases could be dealt with, as I have already pointed out, the sanction of Parliament would be required.
    Mr. BOOTHBY: In the event of there being a surplus, to what purpose does the right hon. Gentleman propose to apply it?
    Mr. MILLARasked the Secretary of State for Scotland whether his attention has been directed to the proposal of the Convention of Royal Burghs that a loan fund of £500,000 should be provided by the Government for the purpose of assisting Scottish fishermen to replace their worn-out gear and boats; and whether he is prepared to consider this proposal and to provide a replacement fund for such purposes?
    Mr. ADAMSON: The answer to the first part of the question is in the affirmative. As regards the second part, I would refer the hon. and learned Member to my replies to questions on this subject on the 18th February. I understand that the matter will be considered by the Economic Advisory Council's Committee on the Fishing Industry who propose to take evidence on the subject.

    ST. MONANCE AND PITTENWEEM HARBOURS.
    Mr. MILLARasked the Secretary of State for Scotland what progress has now been made in considering the applications of the St. Monance and Pittenweem Harbour Commissioners for the repair and improvement of their harbours; and when the necessary operations will be put in hand?
    Mr. W. ADAMSON: Decisions in respect of these applications will be intimated at an early date.
    Mr. MILLAR: Can the right hon. Gentleman give us any idea of what "an early date" means?

  UNEMPLOYMENT.

    WALSALL.
    Mr. McSHANEasked the Lord Privy Seal how many schemes for the relief of unemployment have been submitted for approval by the Walsall Town Council; what is the total amount of such schemes; how many have been approved; what is the total sum of money involved; and how many men he estimates will be employed as a result?
    The LORD PRIVY SEAL (Mr. J. H. Thomas): The Unemployment Grants Committee have approved schemes in Walsall estimated to cost £48,000 and the Ministry of Transport schemes estimated to cost £39,000. I will, with my hon. Friend's permission, circulate the details in the OFFICIAL REPORT.
    Viscountess ASTOR: Can the right hon. Gentleman say if any of those schemes include the employment of women?
    Mr. THOMAS: I have no knowledge of the details.
    Following are the details:
    Since the 1st June, 1929, the Unemployment Grants Committee have approved for grant seven schemes of work submitted by Walsall Town Council, estimated to cost about £48,000 and calculated to provide direct work equivalent to the employment of 110 men for a year.
    In addition, one scheme has been refused by the Committee and two schemes estimated to cost £3,600 and calculated to provide direct employment for 10 men for a year are under consideration.
    The Committee are also in communication with the Council in regard to a scheme under contemplation estimated to cost £15,500.
    The Ministry of Transport have received from the Walsall Town Council a programme of 28 road and bridge schemes proposed to be carried out during the next five years. The total estimated cost of these schemes is £82,558. Approval in principle for grants from the Road Fund has been intimated to the Council in the case of six of these schemes, the total estimated cost of which is £38,480. Grants have been made to two of the remaining schemes, the estimated cost of which is £463. It is estimated that these

    2715
    eight schemes will provide direct work equivalent to the employment of 80 men for a year.

    EXPORT TRADE.
    Mr. R. A. TAYLORasked the Lord Privy Seal whether he is prepared to assist the development of British export trades by a system of Government guarantees available in cases where the Treasury are satisfied that the proceeds of any loan for capital expenditure abroad will promote employment or will he applied for the purchase of goods manufactured or produced in Great Britain?
    Mr. THOMAS: I am not prepared to adopt this suggestion. The assistance which in the view of the Government can properly be afforded to the export trade by the use of State credit is already-available under the Export Credits (Guarantees) Scheme, a Bill to extend the duration of which is now before this House.
    Mr. TAYLOR: Is the right hon. Gentleman aware that that Bill deals with short-term credits only, and is it not a fact that the Government in their election manifesto promised that some steps of this kind would be taken? Will my right hon. Friend ask the Government to consider this matter?
    Mr. THOMAS: The answer that I gave is a Cabinet decision. I never answer for myself.

    TAMAR BRIDGE SCHEME.
    Mr. FOOTasked the Lord Privy Seal if he is now in a position to make any further statement upon the proposed scheme for constructing a bridge across the Tamar?
    Mr. THOMAS: We are awaiting the report of the engineering inquiry to which I referred in the reply given on the 1st April to the hon. Member for Devon-port (Mr. Hore-Belisha).
    Mr. FOOT: Can the right hon. Gentleman say how long the inquiry is likely to last?
    Mr. THOMAS: The hon. Member will remember that I attach so much importance to something being done in this connection that we sent an engineer, and it would be unfair to prejudge the
    2716
    case until we have had his report. It is only fair to say that we are speeding it up.
    Viscountess ASTOR: Will the right hon. Gentleman bear in mind that unemployment is increasing in Plymouth and Devonport?
    Mr. THOMAS: Yes, and it is because of that fact that we are for the first time attaching importance to a useful scheme for Devonport.

    DISTRESSED AREAS (NEW INDUSTRIES).
    Sir K. WOODasked the Lord Privy Seal whether any progress has been made with the scheme to reduce unemployment by giving inducements to industries to establish themselves in the distressed areas?
    Mr. THOMAS: I am continuing to bring to the notice of industrialists the advantages afforded by these areas for the establishment of new factories.
    Sir K. WOOD: Does the right hon. Gentleman remember his project to give financial inducement to industries to go to the distressed areas?
    Mr. THOMAS: I looked up this morning to see if the right hon. Gentleman was correct. What I said was that if there were any factories that could he established, it would be worth the while of local authorities continuing to do what they have done in the past, and to give inducements for works to go there; and I still think that it would be worth while.
    Mr. A. M. SAMUEL: Is the right hon. Gentleman forgetting that he told the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan) that silk and chocolate factories would be taken down to his district?
    Mr. THOMAS: I not only suggested that to the hon. and gallant Member for East Rhondda, but I went beyond it, and consulted certain industries with a view to trying to induce them to go there.
    Sir K. WOOD: When is it going to be done?
    Mr. LEES: Is the Minister aware that inducements could be got if Tory Members of Parliament did not send their money to Canada?

    LEEDS.
    Major MILNERasked the Lord Privy Seal whether a decision may now be given on the scheme for the relief of unemployment submitted four months ago by the Leeds City Council, involving an expenditure of £360,000 on useful work?
    Mr. DENMANasked the Lord Privy Seal if he is aware that last autumn the Leeds City Council submitted a scheme for undertaking and accelerating the construction of certain public buildings: and whether he will expedite a decision thereon?
    Mr. THOMAS: This scheme, which is for the construction of municipal buildings, is still under consideration. I hope to be able to announce a decision at an early date.
    Mr. DENMAN: Does the right hon. Gentleman recollect that the authority took great pains to be ready in three months to tart this work, and will he encourage virtue of that sort?
    Mr. THOMAS: Yes, but, equally, I will not budge from the position which I have taken of refusing to give public money to any local authority for work which they ought. legitimately to undertake themselves; and, in the case of municipal buildings, I do not propose to sanction Government money for marble staircases and that kind of thing. Consideration will be given, however, to any legitimate expenses for real public offices.

    CARDIFF.
    Mr. EDMUNDSasked the Lord Privy Seal what schemes have been approved for the provision of employment in the city of Cardiff; and whether these schemes are to be proceeded with immediately?
    Mr. THOMAS: Under the Development Act, approval for grant has been given to seven schemes in Cardiff, five of which have already been started. With my hon. Friend's permission, I will circulate details in the OFFICIAL REPORT.
    Mr. EDMUNDS: Is the right hon. Gentleman aware that the Cardiff City Council yesterday decided to postpone indefinitely the construction of the eastern section of the orbital road scheme, and
    2718
    will he use his good offices in order to get the City Council to reconsider their decision?
    Mr. THOMAS: They arrived at their decision only yesterday, so that it is hardly possible that I should have re-received it; when I receive ft, I will give every consideration to it.
    Following are the details:
    Under Part I of the Development (Loan Guarantees and Grants) Act, 1929, four schemes submitted by the Great Western Railway Company which involve expenditure in Cardiff have been approved. Two of these schemes have already been put in hand and work is expected to start on a third scheme next month.
    Under Part II of the Act the Unemployment Grants Committee have approved for grant three schemes estimated to cost £40,551 submitted by the Cardiff City Council in respect of works for the relief of unemployment. Ali three schemes have been commenced.
    As regards roads, the Cardiff City Council have not yet submitted a Five Year Programme. Application has, however, been made for a grant to the con struction of an orbital road at Cardiff estimated to cost £436,000. The Council has been offered a grant from the Road Fund at the rate of 75 per cent. in this ease, but the offer has not been accepted

    RELIEF SCHEMES.
    Major NATHANasked the Lord Privy Seal his estimate of the number of unemployed for whom employment has been found and, separately, the number of those employed who have been kept from unemployment by reason of schemes for the relief of unemployment initiated by His Majesty's present Government; which are such,schemes; and the cost thereof to the taxpayer and/or ratepayer?
    Mr. THOMAS: I am not in a position to add anything to the information given in the White Paper recently issued.
    Major NATHAN: In view of the fact that the White Paper referred to matters in futuro, and that this question refers to matters from the date when the present Government came into existence to the present time, is the right hon. Gentleman unable to give the House any test

    2719
    whereby they may judge the result of the labours of the Government in this direction?
    Mr. THOMAS: If a test of the labours of the Government were the only point under consideration, the hon. and gallant Member has only to see how hard I work. The real difficulty is that there are certain schemes that directly give employment, and other schemes that indirectly give employment. There are no means by which, without tremendous cost and expense, one can definitely say what is the actual number of schemes in operation on a given day, and it would only mislead the House to give figures.
    Sir F. HALL: But have not so very few schemes been put into operation by the right hon. Gentleman, that he could easily issue a report?
    Mr. THOMAS: The hon. arid gallant Gentleman will appreciate that in the last three years of the late Government £10,000,000 was sanctioned, but in our short period of office, we have sanctioned over £80,000,000 of work.

    BANKERS INDUSTRIAL DEVELOPMENT COMPANY, LIMITED.
    Lieut. - Commander KENWORTHYasked the Lord Privy Seal whether he is in a position to make any further statement regarding the formation of the proposed £6,000,000 company for the purpose of rationalising British industry: and what steps will be taken to safeguard the position of displaced work-people?
    Mr. THOMAS: With Mr. Speaker's permission, I will make a statement at the end of questions on this subject.
    Mr. SPEAKER: I think that, in the case of an unusually long answer, that is the best thing to do.
    Later—
    Lieut. - Commander KENWORTHY: May I now ask Question 42?
    Mr. THOMAS: I am glad to be able to announce that a company is to-day being registered at Somerset House, under the name of the Bankers Industrial Development Company, Limited, with a
    2720
    nominal capital of £6,000,000 divided into 45 "A" shares and 15 "B" shares of £100,000 each.
    The company has the support of a very considerable proportion of the most influential banking and financial institutions of the country by whom the "A" shares have been subscribed. The "B" shares of the company have been subscribed by the Securities Management Trust, Limited.
    The directorate of the new company is honorary, and is as follows:
    The right hon. Montagu Norman (Chairman).
    Sir Guy Granet, who will also act as alternate to Mr. Norman.
    Baron Bruno Schroder with Major Albert Pam as alternate.
    Mr. A. R. Wagg with Mr. Nigel Campbell as alternate.
    Mr. E. R. Peacock.
    Mr. C. Bruce Gardner—managing director of the Securities Management Trust, Limited.
    In addition to the board of directors, the company will have the services of an advisory council upon which a number of influential persons engaged in financial business will be invited to serve.
    The advisory council will have no executive duties to perform, but their services, either collectively or individually, will be available to the board of directors in a consultative capacity.
    The object of the company is to receive and consider schemes submitted by the basic industries of this country for the purpose of their rationalisation, either by industries or by regions. In the case of schemes which may be approved, arrangements will he made for the provision in one way or another and through existing agencies of such moneys as may seem to be essential.
    As regards the last part of the question, I would refer my hon. Friend to the reply given by my right hon. Friend the Prime Minister on the 5th February to the hon. Member for Dumbarton Burghs (Mr. Kirkwood).
    Lieut. - Commander KENWORTHY: While thanking my right hen. Friend for the answer, may I ask him, when he talks about money "through agencies," whether that means that if this company

    2721
    approves of schemes of rationalisation he will be consulted with a view to guaranteeing loans by the State?
    Mr. THOMAS: No. So far as the State's money is concerned, it is not intended that it should be involved, and I hope it will not be involved.
    Lieut.-Commander KENWORTHY: In that case, where do the Government come in with regard to this company?
    Mr. THOMAS: So far as money is concerned, the Government do not come in. I announced in a speech at Manchester, in reply to much criticism about the action of the banks, that money could and would be found for reorganisation and rationalisation. In a, number of questions in this House I was asked what I meant by "the City"—I was asked to define it—and there were many other questions. I have now given the answer to those supplementary questions and to my Manchester speech.
    Mr. HAMMERSLEY: Are we to take it that what is intended is that the reorganisation of basic industries is only to take place with the approval of this Bankers' Industrial Company?
    Mr. THOMAS: On the contrary I hope —in fact I know—there are a number of schemes of reorganisation being considered to-day; I am consulted, and I have given help towards them. I announce this as another stage in that reorganisation on the financial side which I had announced previously.
    Mr. BECKETT: Has the right hon. Gentleman supplied to all the directors a copy of "Labour and the Nation"?
    Mr. MOND: Will the actual subscribers to the "A" shares be known to the public through the usual channels?
    Mr. THOMAS: That is hardly a question which I could answer. The hon. Member will know what steps to take to get that information.
    Viscountess ASTOR: Do we understand that the Government have definitely gone back now on all Socialistic schemes for dealing with unemployment?
    Mr. MACQUISTEN rose—
    Mr. SPEAKER: Further supplementary questions ought to be put on the Paper.

    CHANNEL TUNNEL.
    Mr. LOUIS SMITHasked the Prime Minister (1) if be can now make any statement as to the result of the consideration of the Report of the Channel Tunnel Committee by the Committee of Imperial Defence;
    (2) whether he will endeavour to expedite a decision on the Channel Tunnel issue by the Committee of Imperial Defence, with the object of enabling this project, if approved, to be taken in hand at once, especially in view of the eventual necessity of legislation on the subject?
    Mr. P. SNOWDEN: The Committee of Imperial Defence are not in a position to consider this question until they receive the technical reports which have been called for. I can only repeat what my right hon. Friend the Prime Minister stated yesterday, that there will be no unnecessary delay, but time must be given for a very thorough final examination of a project of such importance.

    HADRIAN'S WALL.
    Mr. DENMANasked the Prime Minister whether his attention has been called to the proposed quarrying operations to the south of the Roman Wall; and whether he will cause a Select Committee to be appointed to advise the House as to the desirability of taking immediate steps to preserve the land between the wall and the vallum from destruction?
    Mr. P. SNOWDEN: At the moment I have nothing to add to the reply made yesterday to the right hon. Gentleman the Member for Woolwich West (Sir K. Wood) and the hon. and gallant Member for Central Cardiff (Captain E. N. Bennett) by my right hon. Friend the First Commissioner of Works, who, I understand, proposes to take an early opportunity of visiting the site.
    Mr. DENMAN: Is my right hon. Friend not aware that the First Commissioner of Works has no legal power to deal with this matter, and would not a Select Committee perhaps provide him with authority that would give him the power?
    Mr. SNOWDEN: I am not aware of what the legal powers of my right hon. Friend are, and my hon. Friend surely cannot expect me, on the spur of the moment, to give a reply in regard to a Select Committee.
    Sir N. GRATTAN-DOYLE: Is the right hon. Gentleman aware that the work of demolition is now going on, and that sacrilege and vandalism at what I might call this holy place are endangering it?
    Mr. SNOWDEN: I am not aware of anything at all about this question beyond what appears on the Paper and in my reply.
    Mr. A. M. SAMUEL: Will the right hon. Gentleman issue to the local authorities in Northumberland an intimation that any interference with this national monument will be regarded with grave disfavour by this House?

    LIQUOR CONTROL BOARD (INCOME TAX).
    Mr. MACQUISTENasked the Chancellor of the Exchequer whether the Liquor Control Board, owning and operating licensed premises in the Carlisle area and elsewhere, were and are assessed to and have paid and are paying Income Tax; if they were so assessed, what was the amount thereof; and if they were not so assessed, what was the amount of income on which tax could have been assessed and the sum of Income Tax foregone?
    Mr. P. SNOWDEN: No, Sir. The whole of the profits of these schemes accrued to the State, including such sums as would have represented Income Tax. I cannot say what the -Income Tax assessments would have been.

    OLD AGE PENSIONERS, LONGSTONE.
    Mr. FOOTasked the Financial Secretary to the Treasury if he can make arrangements enabling the pensions of old age pensioners over the age of 70, living at Longstone, near Bodmin, to be delivered by the visiting postman, having
    2724
    regard to the distance these aged people have to walk to take up their pensions from the local post office?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick Lawrence): Such arrangements can only Le made in very exceptional circumstances. I am making inquiry regarding the case of Longstone and will write to the hon. Member.

    DEVELOPMENT COMMISSION (REPORT).
    Sir N. GRATTAN-DOYLEasked the Financial Secretary to the Treasury whether his attention has been called to the delay in the publication of the report of the Development Commission for the year ended 31st March, 1929, which was ordered to be printed or 22nd July, 1929, but not published until Jan nary of this year; and whether he proposes to take any steps to accelerate the issue of reports ordered to be printed by Parliament?
    Mr. PETHICK - LAWRENCE: In accordance with the usual practice the order for printing was given before the House rose, although the report was not ready at the time. This was done in order that the necessary authority for printing might be available during the Recess. The annual report of the Development Commission is usually issued in November, but in the present instance it was delayed by pressure of more urgent Government business.

    LOCAL AUTHORITIES (LOAN INTEREST).
    Sir ALFRED LAWasked the Financial Secretary to the Treasury if the rate of interest charged by the Public Works Loan Board on loans to local authorities for housing purposes is likely to be re (laced from £5 per centum per annum within the next one or two months?
    Mr. PETHICK-LAWRENCE: This rate depends on the market price of gilt-edged stocks. I regret that I have no means of forecasting for the hon. Member the future trend of prices on the Stock Exchange, which no doubt many persons would be glad to know.

  COAL INDUSTRY.

    BOYS (EMPLOYMENT UNDERGROUND).
    Mr. FREEMANasked the Secretary for Mines how many boys under 16 are working down mines at the present day; and does he contemplate taking any action in the matter?
    The SECRETARY for MINES (Mr. Ben Turner): The number of boys under 16 years of age employed belowground in coal mines in December, 1929, was about 29,000. With regard to the second part of the question, there is no present intention of introducing legislation on this subject.
    Mr. FREEMAN: Will the hon. Gentleman consider introducing legislation to prevent young boys working down the mines, in view of the difficulties and dangers involved?
    Viscountess ASTOR: Will the hon. Gentleman also consider that many people in all parts of the House do not want to see young children under 16 working underground?

    GAS DETECTION.
    Mr. T. WILLIAMSasked the Secretary for Mines whether his attention has been called to the statement made by the coroner who conducted the inquest on the victims of the Wath Main Colliery disaster, to the effect that the impression left on his mind by the evidence was that the tests made for the detection of gas by colliers and deputies might be improved upon and that testing for gas by flame lamps might be supplemented by the use of mechanical devices; and, if so, will he state what steps he has taken or proposes to take to deal with the matter?
    Mr. TURNER: The answer to the first part of the question is in the affirmative. With regard to the second part, I do not feel at liberty to comment on the recent explosion at Wath Main Colliery pending the statutory public inquiry which is to be held by the Chief Inspector of Mines. But, speaking generally, I may say that all tests for gas by colliery deputies are by law required to be made with a flame safety lamp; I am advised that this is by far the best available instrument for the purpose because it is intrinsically more reliable and has a wider range and variety of functions than any of the other
    2726
    gas-testing instruments as yet devised; and none of these instruments is at all likely to displace the flame safety lamp. Nevertheless, I am anxious to explore fully the question of their practical utility and reliability, more particularly in connection with the position of workmen using electric lamps, which in themselves are useless for detecting mine gases; and I am, therefore, as my hon. Friend is aware, making arrangements with the object of securing more extensive and practical underground trials of electric safety lamps fitted with a device for detecting firedamp. I am glad to say that these arrangements are making progress, and I will see that my hon. Friend is kept in touch with developments.
    Mr. WILLIAMS: Is my hon. Friend aware that the observations of the coroner are highly important, in view of the fact that at least one Government Department is using a certain gas alarm, that another Department recommends it, and that 50 important local authorities are using it, and does the hon. Gentleman not think that the Mines Department might make much better use of it?
    Mr. TURNER: All the points raised by my hon. Friend are having attention by the Mines Department and the specialists concerned.
    Mr. WILLIAMS: Will the Department consider the advisability of attempting to get a practical test in one of the mines which are closed down?
    Mr. TURNER: About 12 mines are already testing the special gas detector to which the hon. Gentleman alludes.
    Mr. DAVID GRENFELL: Does not the hon. Gentleman agree that the repeated mine disasters of the last few months prove that a great deal of gas escapes detection in many of the mines in this country?
    Mr. TURNER: I am aware of the point raised by my bon. Friend, and the Department is using all its endeavours and energies towards overcoming the problem.

    OVERTIME.
    Mr. GORDON MACDONALDasked the Secretary for Mines the number of cases of overtime worked in the coal mines of Great Britain reported to the Mines Department by the divisional in-

    2727
    spectors of mines; the nature of such oases, specifying the districts from which the cases come; and whether he is prepared to issue instructions to each divisional inspector to forward a list of all the cases of overtime reported?
    Mr. TURNER: No figures that I could give of the number of reports made by the inspectors concerning the working of overtime would be of any value as au indication how far the law on this subject is being infringed or even of the number of cases in which it is alleged to have been infringed. His Majesty's inspectors are fully alive to the necessity of reporting to my. Department all cases in which the question of prosecution may arise, and my hon. Friend may rest assured that, through them, I am giving this matter my close attention.

  POST OFFICE.

    TRANSATLANTIC TELEPHONE CHARGES.
    Mr. DAYasked the Postmaster-General whether any negotiations are proceeding for the purpose of making a further reduction in the charges for the Transatlantic telephone service?
    The POSTMASTER-GENERAL (Mr. Lees-Smith): The question of reducing the charge in the Transatlantic telephone service is under consideration, but I am not at present in a position to make a definite pronouncement on the subject.
    Mr. DAY: Can my hon. Friend say whether he will be able to give an answer soon after the Easter recess?
    Mr. LEES-SMITH: No, I cannot say that.
    Captain CAZALET: Can the hon. Gentleman tell us how these charges compare with the charges for similar services in France and other European countries?
    Mr. LEES-SMITH: There are no similar services; there is no comparable service in the world.

    OUTER LONDON TELEPHONE SERVICE.
    Mr. SMITHERSasked the Postmaster-General whether, when reorganising the telephone service for Outer London, he will take steps to ensure that
    2728
    the existing arrangements of regular subscribers should not be diminished or made more expensive?
    Mr. LEES-SMITH: Ever effort is made to avoid disturbing existing arrangements, but when such disturbance is unavoidable, I am compelled to maintain the principle that all subscribers on the same Exchange roust be treated on the same basis.
    Mr. SMITHERS: Is the hon. Gentleman aware that certain subscribers in my district of Kent are being asked to pay —24 a year more for the mere privilege of continuing existing arrangements?
    Mr. LEES-SMITH: The subscribers referred to have hitherto beer, in a. very privileged position. They hate been outside the 10–mile radius, and yet they have paid for calls on the same scale of charges as those inside. They are now asked to go on to an exchange where they will lose that privilege. They must pay the proper sum.
    Mr. SMITHERS: Would it not be cheaper to continue the existing arrangements in their case and only put new subscribers on to the exchange outside the area?
    Mr. LEES-SMITH: That would put a small group of subscribers in a position superior to all other subscribers in the United Kingdom.

    RAILWAY PASSENGERS (TELEGRAMS).
    Dr. MORRIS-JONESasked the Postmaster-General whether telegrams addressed to a person in a train stationary at a railway station are delivered; and whether, in the event of their non-delivery, notification to that effect is sent to the sender?
    Mr. LEES-SMITH: The practice of the Post Office is to hand any such telegrams to the stationmaster for disposal. In the event of non-delivery the sender is normally advised, provided that his name and address are known.
    Dr. MORRIS-JONES: Is the hon. Gentleman aware that a telegram which I sent to another hon. Member of this House, addressed to him ire r train which waited 20 minutes at a station, has not been delivered although it vas sent three weeks ago, and that I have received no notification of non-delivery?
    Mr. LEES-SMITH: Probably the hon. Member did not put on his address.
    Mr. R. A. TAYLOR: Was this telegram addressed in Welsh?
    Mr. OWEN: As the hon. Member concerned, may I ask the hon. Gentleman if he is aware that many hundreds of people were very nearly deprived of hearing the true gospel of Liberalism on this occasion, because the telegram was not delivered?

BUSINESS OF THE HOUSE.
Mr. CHURCHILL: Can the Chancellor of the Exchequer tell us what the business of the House is likely to be when we resume after the Easter holidays?
Mr. P. SNOWDEN: The House will resume on Tuesday, 29th April, and we propose that that date shall be the Fourth Allotted Supply Day. I understand that the Ministry of Health Vote will be put down for that date. [HON. MEMBERS: "Speak up!"] I understand that it is the wish of the Opposition to raise the question of the administration of National Health Insurance.
Sir K. WOOD: Will the right hon. Gentleman kindly see that the White Paper, promised by the Minister of Health, is published in good time?
Mr. SNOWDEN: Yes.

MERCHANT SHIPPING ACT (1894) AMENDMENT,
Mr. FOOT: I beg to move,
"That leave be given to bring in a Bill to enable the Board of Trade to suspend or cancel the certificate of any master, mate, or engineer engaging in the illicit importation of intoxicating liquor into the territory of the United States of America."
This Measure, which I have the honour to introduce, is supported by Members of all parties in this House. [HON. MEMBERS: "No!"] At any rate, hon. Members will have an opportunity of expressing their opinion. I do not ask them to say whether prohibition is a wise or an unwise policy.[Interruption.] I do ask hon. Members above the Gangway to give their attention to this Measure. A Bill with a somewhat similar purpose has already been passed
2730
by the Canadian Parliament, and a Measure which commands the approval of a large Dominion Parliament should certainly commend itself to the British Parliament. This is a question which has been debated by the American people for a period of 10 years, and unfortunately, in the attempt to defeat the prohibition of the importation of intoxicating liquors into the United States of America, many British vessels have been seized, and formidable difficulties have arisen. I would like to give a quotation from the "Times" of 29th October, 1923, which shows what was said by an American authority at that date:
"Great fleets of British ships, loaded at British ports, and flying the British flag, hovered insolently along the entire coast, and, in open flagrant conspiracy with avowed smugglers, landed their illicit cargoes upon American soil."
That was the condition of things which was removed by a Treaty approved by this House. That traffic has since been considerably reduced, but it still continues. There is no doubt whatever as to the official policy of this country in relation to this traffic. I have heard the representatives of a Conservative Government as well as the representatives of a Labour Government declare upon the Floor of the House the policy of this country in regard to this particular matter. It is not only a question which affects America, but it also affects ourselves. [Hon. MEMBERS: "Why?"] I remember Lord Cushendun, when a Member of this House and representing the Conservative party, declaring that the British Government was desirous of breaking down this illicit smuggling of intoxicating liquors, and that declaration was also made by the Prime Minister of the Labour Government. Certain British subjects have been acting in defiance of our national policy in this matter, and they could not have succeeded at all except for the fact that they enjoy the protection of the British flag. That simply amounts to this, that the British flag is being used for the defeat of the British policy. There can be no doubt whatever as to the danger to our international relations in regard to this matter. On this point, I would like to give a further quotation from the "Times" newspaper, which I suppose will be accepted by hon. Members above

2731
the Gangway. [Interruption.] The "Times" newspaper, in its leading article of 29th October, 1923, says:
"The complicity of these shippers in breaking the American law is flagrant. It does not enhance the credit of the British flag in the Western Atlantic; it irritates the most respectable citizens of America, and clearly does not help the good understanding between the two countries which recent events have done much to consolidate."
If at any time it was necessary to put an end to this smuggling, surely we could not have a more appropriate time than just after the conclusion of a Treaty with the American people in regard to our naval policy? May I also draw attention to the following words written by Mr. Garvin only a few days ago in the "Observer":
"Everything that might impair Anglo-American concord must be eliminated or avoided with the most drastic decision."
There are two sections in the Merchant Shipping Act of 1894 which give powers to the Board of Trade to deal with this matter. The Bill I am introducing proposes to extend that power so that the Board of Trade can withdraw or suspend the certificate of any master, mate, or engineer who knowingly engages in this traffic. It is not intended to make the action of the Board of Trade dependent upon the conviction of any foreign court. The certificate of these officers is a most precious possession, and should not be used in pursuance of a policy which is contrary to the declaration of the present Government. The Canadian Parliament a few weeks ago passed a Bill, the object of which was
"To refuse clearances for liquor destined for delivery to any country into which the importation of such liquor is prohibited by law."
That Bill was introduced by the Prime Minister, Mr. Mackenzie King. It was supported by the Opposition in the Canadian Parliament, and the Third Reading was carried by 173 votes to 11. For these reasons, I ask that this Measure should receive the careful consideration of hon. Members. It is a Measure intended to vindicate the integrity of an ancient and honourable calling, and to check and defeat the purposes and devices of lawless men who are lowering the British name, and the reputation of this country. It is a Bill intended to prevent the base misuse of the British flag, and to strengthen the
2732
friendly relations between two great peoples, whose highest service to the world has been the establishment of the supremacy of the law.
Mr. MACQUISTEN: I have listened very attentively to the speech of the hon. Member for Bodmin (Mr. Foot), and I cannot see that there is any recessity at all for the introduction of this Bill. There are no British masters and mates engaged in this traffic.
Mr. SCRYMGEOUR rose—[Interruption.]
Mr. SPEAKER: We cannot have more than two speakers on this occasion.
Mr. SCRYMGEOUR rose—[Interruption.]
Mr. SPEAKER: Does the hon. Member rise to a point of Order?
Mr. SCRYMGEOUR: My point of Order is that on a former occasion when a former Tory Member of this House was involved in a law suit, I endeavoured to bring it before this House, and found that it was impossible to do so.
Mr. MACQUISTEN: I know of no case where a British master or a British mate has been involved. It is an entirely different position in Canada, where a very lucrative trade has been done on the Canadian border, but the people who are breaking the law are American citizens. They have nothing to do with us. I remember speaking to a man who told me that he supplied a lot of very sound material compared with the industrial alcohol, which was manufactured in America, and which was taken out of the power alcohol distilleries there which supplied the American people. This gentleman told me that he was the Government importer, that the people to whom he sold it. had their sloops accompanied to the shore by a couple of American gunboats, and that he had been much better able to carry on his trade since the establishment of the 12–mile limit. Everybody in the United States knows that the whole thing is a gigantic imposture, and that only a few hysterical males and females believe in it. Why should we manufacture crime which is not a crime? If any British captain or seaman chooses to break the law of the United States, the United States will deal with it. But are we going to im-

2733
pinge on the freedom of the seas? [Interruption.] My hon. Friend the Member for the Sutton Division of Plymouth (Viscountess Astor) says that that is why I did not win my election, but I would remind her, that in spite of the enormous financial resources provided in the distant past from New York, she very nearly lost her own seat. I prophesy with absolute certainty that she will lose it the next time. I shall be very sorry to lose her, because she is the one bright spot of colour in a very drab institution. I say that without involving any back-handed compliment on the other Members of the same sex who also decorate and adorn this House.
It is preposterous that we in this great Parliament should bother our heads about a minor point of this kind. While the manufacture in the United States of anything in the nature of alcohol is forbidden, everybody can make it for himself, and everybody does. In the great State of California vast fortunes are made by the sale of grape juice in every part of America, and Italians skilled in the art make the juice into alcohol in the homes of the legion. They are engaged in a home industry. Would that there were a similar liberty here! If everybody in this country were allowed to make his own dope, it would very largely solve the unemployment question. Considering the inordinately cheap price to which sugar has been forced down by our Free Trade policy, it would be quite
easy for the unemployed themselves at the absolute minimum of cost to make much more than is necessary for their own consumption, and to supply it at the minimum of cost to those who are still engaged in industry, and who, under the present Government, are likely to be in a substantial minority. Therefore, it is preposterous for us to manufacture this crime which does not exist among British captains and mates, and it is on behalf of that body of honourable men that I regard this Bill as something in the nature of an insult. The only result will be that the men who sail the ships will not hold captains' or mates' certificates. A certificate is not needed to make dope in the United States. At the present moment I defy the hon. Member who has asked leave to introduce this Bill to tell rue of any British captain or mate holding the certificate of a. captain or mate—or, at most, more than one or two out of the tens of thousands—who en gages in this industry, and I oppose this Bill because I think it is a piece of nonsense that we should have been asked to waste our time upon it.
Question put,
"That leave be given to bring in a Bill to enable the Board of Trade to suspend or cancel the certificate of any master, mate, or engineer engaging in the illicit importation of intoxicating liquor into the territory of the United States of America."
The House divided: Ayes, 215; Noes, 142.

Division No. 258.]

AYES.

[4.11 p.m.

Adamson, Rt. Hon. W. (Fife, West)

Cowan, D. M.

Hall, F. (York, W.R., Normanton)

Adamson. W. M. (Staff., Cannock)

Daggar, George

Hall, Capt. W. P. (Portsmouth, C.)

Aitchison, Rt. Hon. Cralgie M.

Dallas, George

Hamilton, Slr R. (Orkney & Zetlandl

Alpass, J. H

Davies, Rhys John (Westhoughton)

Haroord, A.

Astor, Viscountess

Denman, Hon. R, D.

Hardie, George D.

Ayies, Walter

Dickson, T.

Haycock, A. W.

Baker, John (Wolverhampton, Bilston)

Dudgeon, Major C. R.

Hayes. John Henry

Bellamy, Albert

Duncan, Charles

Henderson, Thomas (Glasgow)

Benn, Rt. Hon. Wedgwood

Ede, James Chuter

Henderson, W. W. (Middx., En

Bennett, Capt. E. N. (Cardiff,Central)

Edmunds, J. E.

Herriotts, J.

Benson, G.

Edwards, C. (Monmouth, Bedwellty)

Hirst, G. H. (York W. R. Wentworth)

Bilndell, James

Edwards, E. (Morpeth)

Hirst, W. (Bradford, South)

Bondfield, Rt. Hon. Margaret

Egan, W. H.

Hoffman, P. C.

Brockway, A. Fenner

Elmley, Viscount

Hollins. A.

Bromfield. William

Forgan, Dr. Robert

Horrabin, J. F.

Brooke, W.

Freeman, Peter

Hudson, James H. (Huddersfield)

Brothers, M.

George, Rt. Hon. D. Lloyd (Car'vn)

Hutchison, Maj-Gen. Sir N.

Brown, C. W. E. (Notts. Mansfield)

George, Megan Lloyd (Anglesea)

Isaacs, George

Brown, Rt. Hon. J. (South Ayrshire)

Gibson, H. M. (Lance, Moseley)

Jenkins, W. (Glamorgan, Neath)

Burgess, F. G.

Gill, T. H.

John, William (Rhondda, West)

Buxton, C. R. (Yorks. W. R. Elland)

Glassey, A. E.

Johnston, Thomas

Buxton, Rt. Hon. Noel (Norfolk, N.)

Gossling, A. G.

Jones, F. Llewellyn (Flint)

Cameron, A. G.

Gould, F.

Jones, Henry Haydn (Merioneth)

Cape, Thomas

Graham, D. M. (Lanark, Hamilton)

Janes, Rt. Hon. Leif (Camborne)

Carter, W. (St. Pancras, S.W.)

Granville, E.

Jones, Morgan (Caerphilly)

Charleion. H. C.

Gray, Milner

Jowett, Rt. Hon. F. W.

Chafer, Daniel

Grenfell, D. R. (Glamorgan)

Kedward, R. M. (Kent, Ashford)

Cocks, Frederick Seymour

Griffith, F. Kingsley (MIddlesbro. W.)

Kelly, W. T.

Collins, Sir Godfrey (Greenock)

Grundy, Thomas W.

Kenworthy, Lt.-Co. Hon. Joseph N.

Kinley, J.

Newman, Sir R. H. S. D.L. (Exeter)

Smith, Ben (Bermondse Rotherhithe)

Lambert, Rt. Hon. George (S. Moiton)

Noel Baker, P. J.

Smith, Frank (Nuneaton)

Lang, Gordon

Oliver, P. M. (Man., Blackley)

Smith, H. B. Lees-Kaighley)

Lansbury, Rt. Hon. George

Owen, Major G. (Carnarvon)

Smith, Rennie (Penlstene)

Lathan, G.

Owen, H. F. (Hereford)

Smith, Tom (Pontefract)

Law, A. (Rossendale)

Palln, John Henry

Snell, Harry

Lawrence, Susan

Paling, Wilfrid

Snowden, Rt. Hon. Philip

Lawrie, Hugh Hartley (Stalybrldge)

Palmer, E. T.

Snowden, Thomas (AiitrIngton)

Lawther, W. (Barnard Castle)

Parkinson, John Alle (Wigan)

Sorensen, R.

Leach, W.

Perry, S. F.

Stamford, Thomas W.

Lee, Frank (Derby, N.E.)

Peters, Dr. Sidney John

Stewart, J. (St. Rollin)

Lee, Jennie (Lanark, Northern)

Pethick-Lawrence, F. W.

Sullivan, J.

Lees, J.

Phillips, Dr. Marlon

Sutton, J. E.

Lindley, Fred W.

Picton-Turbervill, Edith

Taylor, R. A. (Lincoln)

Longden, F.

Pole, Major D. G.

Taylor, W. B. (Norfolk, S.W.)

Lovat-Fraser, J. A.

Potts, John S.

Thurtle, Ernest

Lowth, Thomas

Price, M. P.

Tinker, John Joseph

Lunn, William

Pybus, Percy John

Townend, A. E.

Macdonald, Gordon (Ince)

Ramsay, T. B. Wilson

Trevelyan, Rt. Hon. Sir Charles

McEntee, V. L.

Rathbone, Eleanor

Turner,B.

McKinlay, A.

Raynes, W. R.

Vaughan, D. J.

McShane, John James

Richards, R.

Vlant, S. P.

Mender, Geoffrey le M.

Richardson, R. (Houghton-le-Spring)

Walkden, A. G.

Mansfield, W.

Riley, Ben (Dewsbury)

Walters, Rt. Hon. Sir J. Tudor

March, S.

Riley, F. F. (Stockton-on-Tees)

Watson, W. M. (Dunfermline).

Marcus, M.

Romeril, H. G.

Wedgwood, Rt. Hon. Josiah

Markham, S. F.

Rosbotham, D. S. T.

Weliock, Wilfred

Marshall, Fred

Rothschild, J. de

Welsh, James (Paislr)

Mathers, George

Rowson, Guy

Welsh, James C. (Coatbridge)

Matters, L. W.

Salter, Dr. Alfred

West, F. R.

Manton, James

Samuel, Rt. Hon. Sir H. (Darwen)

Wheatley, Rt. Hon. J.

Messer, Fred

Sanders, W. S.

White, H. G.

Millar, J. D.

Sawyer, G. F.

Whiteley, Wilfrid (Birn., Ladywood)

Mills, J. E.

Scrymgeour, E.

Whiteley, William Slaydon)

Milner, Major J.

Sexton, James

Wilkinson, Ellen C.

Morris, Rhys Hopkins

Sherwood, G. H.

Williams, David (Swansea, East)

Morris-Jones, Dr. J. H. (Denbigh)

Shield, George William

Williams, T. (York, Don Valley)

Morrison, Herbert (Hackney, South)

Shiels, Dr. Drummond

Wilson R. J. Jarrow)

Morrison, Robert C. (Tottenham, N.)

Shlnwell, E.

WInterton, G. E. (Leicester, Loughbgh)

Mort, D. L.

Simmons, C. J.

Wood, Major McKerzle (Banff)

Moses, J. J. H.

Simon, E. D. (Manch'ter, Withington)

Mosley, Lady C. (Stoke-on-Trent)

Sinclair, Slr A. (Caithness)

TELLERS FOR THE AYES.—

Mosley, Sir Oswald (Smethwick)

Sinklnson, George

Mr. Foot and Mr. Holford Knight.

Muff, G.

Smith, Alfred (Sunderland)

NOES.

Acland-Troyte, Lieut.-Colonel

Day, Harry

Locker-Lamoson, Rt Hon. Godfrey

Alien. Sir J. Sandeman (LIverpl., W.)

Duckworth, G. A. V.

Logan, David Glitter:

Allen, W. E. D. (Belfast, W.)

Dugdale, Capt. T. L.

Long, Major Eric

Atkinson, C.

Eden, Captain Anthony

McConnell, Sir Joseph

Baill e-Hamilton, Hon. Charles W.

England, Colonel A.

Maitland, A. (Kent, Faversham)

Beamish, Rear-Admiral T. P. H.

Erskine. Lord (Somerset,Westons,-M.)

Makins, Brigadler-General E.

Bellairs, Commander Canyon

Falle, Sir Bertram G.

Marjoribanks. E. C

Berry, Sir George

Ferguson. Sir John

Meller, R. J.

Bird, Ernest Roy

Fermoy, Lord

Mitchell, Sir W. Lane (Streatham)

Bourne, Captain Robert Croft

Fielden, E. B.

Mond, Hon. Henry

Bowater, Col. Sir T. Vanslttart

Ford, Sir P. J.

Monsen, Eyres, Com. Rt. Hon. Sir B.

Bowerman, Rt. Hon. Charles W.

Forestler-Walker, Slr L.

Montague, Frederick

Boyce, H. L.

Fremantle, Lieut.-Colonel Francis E.

Morrison, W. S. (Gos., Cirencester)

Brown, Brig.-Gen.H.C.(Berks,Newb'y)

Ganzoni, Sir John

Morrison-Bell, Sir Arthur Clive

Buchan. John

Glyn, Major R. G. C.

Muirhead, A. J.

Buckingham, Sir H.

Graham, Fergus (Cumberland, N.)

Naylor, T. E.

Butler, R. A.

Grattan-Doyle. Sir N.

Ormsby-Gore, Rt. Hon. William

Carver, Major W. H.

Grenfeil, Edward C. (City of London)

Peake, Capt. Osbert

Cautley, Sir Henry S.

Gretton, Colonel Rt. Hon. John

Penny, Sir George

Cayzer, Slr C. (Chester, City)

Hall, Lieut.-Col. Sir F. (Dulwich)

Peto. Sir Base E. (Devon, Barnstaple)

Cazalet, Captain Victor A.

Hamilton, Sir George (Ilford)

Pilditch, Sir Philip

Chapman, Sir S.

Hammersley, S. S.

Power, Sir John Cecil

Church, Major A. G.

Hanbury, C.

Preston, Sir Walter Rueben.

Churchill, Rt. Hon. Winston Spencer

Hannon, Patrick Joseph Henry

Ramsbotham, H.

Cohen. Malor J. Brunel

Harvey, Major S. E. (Devon, Totnes)

Rawson. Sir Cooper

Colville, Major D. J.

Henoage, Lieut.-Colonel Arthur P.

Rantoul, Sir Gervais S.

Conway, Sir W. Martin

Hennessy, Major Sir G. R. J.

Reynolds, Col. Sir James

Courtauld, Major J. S.

Hills Major Rt. Hon. John Waller

Ross, Major Ronald D.

Courthope, Colonel Sir G. L.

Howard-Bury, Colonel C. K.

Ruggles-Brise, Lieut.-Colonel E. A.

Cranbourne, Viscount

Hudson, Capt. A. U. M. (Hackney, N.)

Russell, Alexander Pest (Tynernouth)

Croft, Brigadier-General Sir H.

Hurd, Percy A.

Salmon, Major I.

Crookshank, Capt. H. C.

Iveagh, Countess of

Samuel, A. M. (Surrey, Farnham)

Croom-Johnson, R. P.

James, Lleut-Colonel Hon. Cuthbert

Shennerson, Sir Ernest Whittome

Dalkeith Earl of

Kennedy, Thomas

Shillaker, J. F.

Dalrymple-White, Lt.-Col. Sir Godfrey

King, Commodore Rt. Hon. Henry D.

Skelton, A. N.

Davidson, Rt. Hon. J. (Hertford)

Knox, Sir Alfred

Smith, Louis W. (Sheffield, Hallam)

Davies, Dr. Vernon

Lamb, Sir J. Q.

Smith, R. W. (Aberd'n & Klnc'dine,C.)

Davies, Maj. Geo. F. (Somerset,Yeovil)

Law, Sir Alfred (Derby, High Peak)

Smith-Carington, Neville W.

Davison, Sir W. H. (Kensington, S.)

Leighton, Major B. E. P.

Smlthers, Waldron

2736

2737

Somerset, Thomas

Tryon, Rt. hon. George Clement

Winterton, Rt. Hon. Earl

Somerville, A. A. (Windsor)

Vaughan-Morgan, Sir Kenyon

Womersley, W. J.

Stewart, W. J. (Belfast South)

Wallace, Capt. D. E. (Hornsey)

Wood, Rt. Hon. Sir Kingsley

Sueter, Rear-Admiral M. F.

Wardlaw-Milne, J. S.

Worthington-Evans, Rt. Hon. Sir L.

Thomas, Major L. B. (King's Norton)

Warrender, Sir Victor

Wright, W. (Ruthergien)

Thomson, Sir F.

Watts-Morgan, Lt.-Col. D. (Rhondda)

Young, Rt. Hon. Sir Hilton

Tinne, J. A.

Wayland, Sir William A.

Titchfleld, Major the Marquess of

Wells, Sydney R.

TELLERS FOR THE NOES.

Todd, Capt. A. J.

Williams, Charles (Devon, Torquay)

Mr. F. A. Macquisten and Commander Southby.

Train, J.

Windsor-Clive, Lieut.-Colonel George

Resolution agreed to.

Bill ordered to be brought in by Mr. Foot, Sir William Allen, Viscountess Astor, Mr, Barr, Mr. Birkett, Dr. Burgin, Mr. Holford Knight, Mr. Leif Jones, Mr. Moses, Sir Robert Newman, Colonel Wedgwood, and Mr. Graham White.

MERCHANT SHIPPING ACT (1894) AMENDMENT BILL,
"to enable the Board of Trade to suspend or cancel the certificate of any master, mate, or engineer engaging in the illicit importation of intoxicating liquor into the territory of the United States of America," presented accordingly, and read the First time; to be read a Second time upon Monday, 12th May, and to be printed [Bill 169].

ADOPTION OF CHILDREN (SCOTLAND).
Mr. MATHERS: I beg to move,
"That leave be given to bring in a Bill to make provision for the adoption of children in Scotland."
What has just passed in this House made me think of the sequence of things in a biblical sense. After the fire and the tempest comes the still small voice, pleading for the children. The Bill which I am asking leave to bring in is identical with the English Act of 1926, except, of course, that, where necessary, provision has had to be made for the difference in legal machinery and practice in Scotland. I regret the necessity for bringing in this Bill, because it indicates that Scotland has lost the lead that she had over England at the beginning of the 18th century in respect of beneficent legislation. This Bill is for the legalisation, registration, and establishment in a definite way of the adoption of children in Scotland. It might be described as the adopted child's birthright and the foster-parent's charter of right and responsibility.
I only want to take time to indicate to the House the genesis of my bringing forward this Bill. In my constituency found that there had been a childless
2738
couple who had adopted a baby girl two years of age. Within four months of that adoption, the husband in that family died. Four months is a short time, but it was sufficient for that child to have woven herself very closely into the heartstrings of that home. Now the widow would not give up that child, and what I seek to do by this Measure is to enable that widow to have the provision of the extra allowance that is given to widows on this side of the Border in respect of adopted children as well as of children of wedlock. Since this Bill was drafted, I have found that other sections in the House have been 'working towards the same object, and I am hoping that, when the time comes for the Bill to go to Committee, I shall have their cordial co-operation in passing the Bill into law at the earliest possible moment. With the optimism of a new Member, I have stated in the Bill that it shall come into operation on the 1st July of this year. It is in that spirit of optimism that I ask leave to bring in the Bill.
Bill ordered to be brought in by Mr. Mathers, Duchess of Atholl, Mr. Brooke, Mr. James Brown, Sir Samuel Chapman, Mr. Dickson, Sir Robert Hamilton, Mr. Hardie, Mr. Marcus, Mr. Duncan Millar, Mr. Sinkinson, and Mr. Westwood.

ADOPTION OF CHILDREN (SCOTLAND) BILL.
"to make provision for the adoption of children in Scotland," presented accordingly, and read the Frst time; to be read a Second time upon Thursday 1st May, and to be printed. [Bill 170.]
BILLS REPORTED.

  NOTTINGHAM CORPORATION BILL (CERTIFIED BILL).
  Reported with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
  Bill, as amended, to be considered tomorrow, pursuant to the Order of the House of 11th December.

  SELSEY WATER BILL [Lords].
  Reported, without amendment; Report to lie upon the Table, and to be printed.
  Bill to be read the Third time.

  WAKEFIELD CORPORATION BILL [Lords].
  Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
  BURNLEY CORPORATION BILL.
  Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.

  CROYDON CORPORATION BILL (CERTIFIED BILL).
  Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
  Bill, as amended, to be considered upon Tuesday 29th April, pursuant to the Order of the House of 11th December.

  SEA FISHERIES PROVISIONAL ORDER BILL.
  Reported, without Amendment [Provi sional Order confirmed]; Report to lie upon the Table.
  Bill to be read the Third time tomorrow.

  KINGSTON-UPON-HULL CORPORATION BILL.
  Reported, with Amendments [Title amended], from the Local Legislation Committee (Section B); Report to lie upon the Table, and to be printed.
  LONDON MIDLAND AND SCOTTISH RAILWAY (NUMBER 1) BILL (CERTIFIED BILL).
  Reported, with Amendments; Report to lie upon the Table, and to be printed.

  KITCHEN AND REFRESHMENT ROOMS (HOUSE OF COMMONS).
  Special Report from the Select Committee brought up, and read.
  Report to lie upon the Table, and to be printed.

  CHAIRMEN'S PANEL.
  Mr. Frederick Hall reported from the Chairmen's Panel: That they had appointed Mr. Scurr to act as Chairman of Standing Committee A (in respect of the Housing (Number 2) Bill).
  Report to lie upon the Table.

SELECOTION (STANDING COMMITTEES).
  STANDING COMMITTEE A.
  Mr. Frederick Hall reported from the Committee of Selection; That they had added the following Thirty; Members to Standing Committee A (in respect of the Housing (No. 2) Bill): The Attorney-General, Sir John Birchall, Captain Cazalet, Mr. Chamberlain, Mr. Chater, Major Colfox, Mr. Compton, Dr. Vernon Davies, Mr. Egan, Lieut.-Colonel Fremantle, Miss Megan Lloyd George, Mr. Gould, Mr. Greenwood. Mr. Hammersley, Miss Lawrence, Mr. Logan, Mr. McShane, Major Milner, Sir Herbert Nield, Mr. Oldfield, Dr. Marion Phillips, Mr. Rarnsbotham, Miss Itathbone, Mr. E. D. Simon, Captain Todd, Sir Kenyon Vaughan-Morgan, Sir To (lc r Walters, Miss Wilkinson, Mr. Worners'ey and Sir Kingsley Wood.

  STANDING COMMITTEE B.
  Mr. Frederick Hall further reported from the Committee; That they had discharged the following Member from Standing Committee B: Mr. Glassey; and had appointed in substitution: Mr. Frank Owen.
  Mr. Frederick Hall further reported from the Committee of Selewion; That they had discharged the following Member from Standing Committe B (added in respect of the Mock Amnions Bill): Mr. Frank Owen; and had [pointed in substitution: Mr. Foot.

  SCOTTISH STANDING COMMITTEE.
  Mr. Frederick Hall further reported from the Committee; That they had added the following Ten Members to the Standing Committee on Scottesh Bills in respect of the Housing (Scot and) Bill): Commander Bellairs, Mr. Butler, Mr. Cameron, Brigadier-Cenerd Clifton Brown, Mr. Kedward, Mr. Oswald Lewis, Mr. Lovat-Fraser, Mr. Malcolm MacDonald, Mr. MacLaren, Ind Major Graham Pole.
  Reports to lie upon the Table.

  STANDING ORDERS.
  Resolution reported from the Select Committee:
  "That, in the case of the Great Western Railway (Docks), Petition for

  2741
  Bill, the Standing Orders ought to be dispensed with; that the parties be permitted to proceed with their Bill."

  MESSAGE FROM THE LORDS.
  That they have agreed to:
  Unemployment Insurance (No. 3) Bill,
  Ministry of Health Provisional Orders (Barry and Scarborough) Bill, without Amendment.
  Army and Air Force (Annual) Bill,
  East Surrey Water Bill, with Amendments.
  Amendrnent to:
  Children (Employment Abroad) Bill [Lords], without amendment.
  That they have passed a Bill, intituled, "An Act for authorising the East Kent District Water Company to construct new waterworks; for extending their limits for the supply of water; for conferring further powers upon the Company; and for other purposes." [East Kent District Water Bill [Lords].]
  Also a Bill, intituled, "An Act to provide for the abandonment of the railways authorised by the Barnsley and District Light Railway Order, 1900; and for other purposes." [Barnsley and District Traction Bill [Lords].]
  Also a Bill, intituled, "An Act to extend the boundaries of the borough of Sutton Coldfield; to make further and better provision for the improvement, health, and local government of the borough; and for other purposes." [Sutton Coldfield Corporation Bill [Lords].]
  Also a Bill, intituled, "An Act to change the name of the borough of Portsmouth Waterworks Company; to extend tiheir limits for the supply of water; to consolidate and convert their ordinary capital; to authorise them to raise additional capital; and for other purposes." [Portsmouth Water Bill [Lords].]
  Also a Bill, intituled, "An Act to empower the Corporation of Birkenhead to execute street improvements; to confer further powers upon them with respect to their tramway and electricity undertakings; to make better provision for the health, local government, and finance of
  2742
  the borough; and for other purposes." [Birkenhead Corporation Bill [Lords].]
  And also, a Bill, intituled, "An Act to make further provision with respect to the water, electricity, and omnibus undertakings of the Mayor, Aldermen, and Burgesses of the borough of Lancaster: and for other purposes." [Lancaster Corporation Bill [Lords].]

  ARMY AND AIR FORCE (ANNUAL) BILL.
  Lords Amendments to be considered To-morrow, and to be printed. [Bill 171.]
  EAST KENT DISTRICT WATER BILL [Lords] (Certified Bill),
  BARNSLEY AND DISTRICT TRACTION BILL [Lords],
  SUTTON COLDFIELD CORPORATION BILL [Lords],
  PORTSMOUTH WATER BILL [Lords] (Certified Bill),
  BIRKENHEAD CORPORATION BILL [Lords].
  LANCASTER CORPORATION BILL [Lords],
  Read the First time; and referred to the Examiners of Petitions for Private Bills.

ORDERS OF THE DAY.

  WAYS AND MEANS.
  Considered in Committee. [Progress, 14th April.]
  [Mr. ROBERT YOUNG 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. P. Snowden.]
  Mr. CHURCHILL: It would obviously be impossible for any speaker to deal, even cursorily, with the far-reaching proposals and with all the aspects of the Budget which was opened to us yesterday by the Chancellor of the Exchequer, and I only propose this afternoon, in the brief demand that I shall make on the time of the Committee, to endeavour to place before the Committee the broad outlines of the main differences which, as I conceive them, exist between the Government and the Opposition. I acknowledge that the Chancellor of the Exchequer, in his speech yesterday, avoided the whole appearance of recrimination, and conveyed any reflection that he had to make upon his predecessor under the guise of impersonal form. I welcome and applaud this step towards a better line of conduct, and I also note in it that prudence which, from the very beginning of the lengthy discussions which will ensue upon finance, has realised that some caution and good temper should be shown in dealing with opponents. Nevertheless, I feel bound to attempt to disentangle our respective responsibilities for the present state of affairs, and also to contrast the different, and even opposite, policies for which the right hon. Gentleman and I stand respectively.
  There are two views which can be taken about taxation. There is the view of the right hon. Gentleman, put forward on many occasions, but most forcefully in his publication "Wealth and Commonwealth." According to the Chancellor of the Exchequer, the wealth appro-
  2764
  priated by the idle rich is a deduction from the just share which should go to the remuneration of industry in all its forms; national revenue can be used to secure a juster distribution of th national wealth; taxation can divert the national income into more useful channels; the expenditure of national taxation can be used to stimulate trade and industry; and, lastly, taxation, instead of discouraging individual effort, tends to stimulate it.
  That view, whether you think it right or whether you think it wrong, is a clear and intelligible view. If you adopt it, you would naturally seek occasions, and even pretexts, for imposing heavy taxation upon the public. If you were to argue for a largely increased Sinking Fund and for lavish expenditure upon social services, you would do this on the grounds, first, of repairing social injustices, and, secondly, of diverting the money from those whom the right hon. Gentleman calls the idle rich into far more useful channels. But there is another view which has equally been stated by the Chancellor of the Exchequer for the purpose of expressing his entire opposition to it. This is the other view, which I quote again, practically in his own words:
  "That national taxation is a regrettable necessity, that it is a burden upon industry, that it discourages enterprise, that Governments best study the interests of the whole nation and of all classes by allowing money, to quote the famous Treasury phrase, to fructify in the pockets of the people."
  This is the opposite view from that which the Chancellor of the Excheouer holds. Practically every word is taken from his statement in "Wealth and Commonwealth"—not the phrase about fructifying in the pockets of the people. [Interruption.] Fancy being ashamed of that phrase! As I say, both points of view have been stated fairly. I take the second view, which has received a great reinforcement in the present situation of this country, actual and relative. We are the heaviest taxed nation in the world. We are incomparably the most heavily, directly-taxed nation. Our three great competitors, the United States, Germany, and France, are reducing by scores of millions a year their demands upon the direct taxpayer, with the avowed object

  2765
  of increasing their world-financial and world-competitive power. These countries take the view that direct and indirect taxation, particularly direct, are a clog upon trade and a damper upon enterprise, and, if the nation wishes to realise for its own people the immense possibilities of modern scientific production, every possible encouragement should be given to the accumulation of wealth in private hands and the fruitful use of that wealth by active individual effort.
  I belong to the school that holds that taxation has reached a point where it has become a grievous impediment in the production of new wealth. High as I rank the Sinking Fund and the Social Services, I am convinced that, under the present circumstances, the emphasis and the main intention of any Chancellor of the Exchequer should be in the direction of an alleviation of the public burden. Therefore, it was my continuous endeavour to reduce taxation, and especially onerous taxation, and even to lean in the direction of reducing taxation in preference, if need be, to austere and drastic repayment of the National Debt.
  I hold that we require far less of the State and less of the taxgatherer, not more, in our national affairs, and that those affairs will come round much quicker in so far as we allow a measure of free play to the saving and creative effort of the commonwealth. Therefore, when I was confronted with the disaster and outrage of the General Strike—[Interruption]. All the laughter of the Socialist party will not efface those facts from their record. None of their weariness to hear them repeated will prevent me from bringing them forward from time to time. Therefore, when I was confronted with these events, with their endless, evil repercussions on trade and finance, I sought to the best of my ability to spare the taxpayer and to nurse industry through the difficult and harassing period that followed. That is the whole explanation of the policy for which I was responsible during the last four years, and it is the only explanation which I think it necessary to offer for the half suppressed sneers and criticisms and disparagements which the right hon. Gentleman passed on my financial record. [An HON. MEMBER: "You deserved it."] That is begging the ques-
  2766
  tion. [Interruption.] I do not in the least mind being interrupted. I am glad to know that permission has been given.
  The results of the general election placed the party opposite in power, and various political developments since that date seem to have entrenched them there. The right hon. Gentleman has largely increased expenditure. Apart from the de-rating relief, for which the money is this year provided, he has added, as I make it, £26,000,000 to our national load, and he now asks us to impose new taxation upon wealth of £46,500,000, of which about £34,000,000 arises in this current year. In fact, we are asked to return to the full severities of war-time taxation, and to do this at the same time that our rivals in other parts of the world are universally reducing their already reduced taxation.
  I will deal later on with the effects of this taxation, but the first point I submit to the Committee is upon the question of whether it is necessary to have new taxation this year at all. I declare that it is not necessary and that it would not be necessary unless the Government had changed. That is my first main submission. I hold that no new taxes this year would have been needed. Let us look into that. First of all, there is the deficit on last year's Budget—a deficit of £14,500,000. £9,000,000 of that was traceable to the decisions of the present Government as to new expenditure passed through the House during the winter. Therefore, the deficit did not exceed £5,500,000. Considering Wall Street, considering the Hatry scandals, considering the inevitable want of confidence attendant upon the arrival of a Socialist Government, as well as the general depression throughout the world, that £5,500,000 deficit, the bulk of it accounted for by the failure of stamps, is not a bad result in all the circumstances. Of course, it must always be remembered that the present Chancellor had no interest in presenting a deficit on the finance of last year; in fact, his threat to the sugar trade alone cost the revenue £1,000,000, and I certainly notice that, in the first week of the new financial year, the balance of revenue and expenditure was £4,000,000 more favourable than in the corresponding first week of the year that has closed. At any rate, I

  2767
  say that nothing in the realised deficit of 1929–30 affords any justification for an increase of taxation.
  Apart from the deficit, is there anything in the forecast of 1930 which the right hon. Gentleman laid before us yesterday that justifies new taxation? The right hon. Gentleman's estimate of revenue on the existing basis shows an advance of £5,600,000 above the yield of 1929, and I believe that is, as he said, a conservative estimate. I had arrived, without the advantages which he now enjoys, at almost exactly the same conclusion myself, that it would be a fair basis to work upon to take the yield of last year and to add £4,000,000 or £5,000,000 to the normal increase. Derating is fully provided for for this year and £4,000,000 is left over for next year. There is nothing whatever in this forecast which would have justified an increase in taxation if the Government had not changed.
  I come to the Debt. I say there is nothing in the position which justifies a fresh burden. I rather anticipated that the right hon. Gentleman would have attacked the whole principle of the Fixed Debt charge, but apparently, on learning the facts about it, and studying it at close quarters, with the fullest possible information, he accepted and adopted virtually intact all my arrangements for dealing with the National Debt. The Fixed Debt charge of £305,000,000 a year will, as he reminded us yesterday, on a 4 per cent. basis extinguish the Debt in 50 years if it is maintained. That is a prodigious effort. It is foolish and vain even to under-rate the magnitude of that effort of Debt repayment. There is no country in the world where the institution of this scheme was not received with wonder and admiration. You cannot judge the working of the Fixed Debt charge upon the fortunes of a single year. It is premature altogether to judge, still less to condemn, such a system, because the second year or the first two years of its operation are poor compared with what was expected. But look at the current year, with which we have now to deal. The yield of the Fixed Debt charge for Sinking Fund and Savings Certificates in 1930 which was forecasted by me two years ago was £69,000,000 on a 4 per cent basis. The right hon. Gen-
  2768
  tleman is budgeting for a far lower rate than 4 per cent. for his Floating Debt. He did not tell us what the Hite was. Is there any objection to telling the Committee?
  The CHANCELLOR of the EXCHEQUER (Mr. Philip Snonder): It is easy to calculate. Calculate it yourself.
  Mr. CHURCHILL: I find it difficult. The right hon. Gentleman did not state it in his speech, and I imagine that there is no secret about it, and perhaps he will have the courtesy at some time or other to inform the CommittEe upon it At any rate, I have always been told that a rough calculation of one per cent, fall in the money rate is a saving on our present volume of Floating Debt of something like £6,000,000 a year. But the right hon. Gentleman has said that he is budgeting for £11,500,000 reduction in the cost of the Floating Debt. Therefore, it seems to me, not knowing the exact rate on which these estimates are based, that between £75,000,000 and £80,000,000 will be available in the present year for the service of the Savings Certificates and the Sinking Fund, £23,000,000 of which, he told us, would be devoted to the Savings Certificates. I do not suppose that there is any difference between us on the figures. The sum of £5,000,000 or £80,000,000 is an immense one to be devoted to the service of Debt end Savings Certificates.
  When the right hon. Gentleman was last Chancellor of the Exchequer five years ago, the comparable figure devoted to these two purposes was £57,000,000. They are strictly comparable figures. They were calculated for me when I was at the Treasury and annowiced to the House two years ago. So that in far worse times, and when we are far weaker, we are making a contribution at the present time to the service of Debt and the Savings Certificates, which are inextricably interwoven with the results of the Sinking Fund, which is nearly £20,000,000 greater than that which was thought necessary by the right hon. Gentleman five years ago before the great industrial troubles had brought such misfortune upon our affairs. I say that next year an even larger repayment will be effected. The fore lasted figure rises to £72,000,000 for next year, and, if the cheap money rates continue, there

  2769
  is no reason why the repayment of Debt and Savings Certificates should not exceed £80,000,000. I am not complaining; I am rejoicing in this, but I say why is it necessary to do more? In my judgment, it is not necessary to do more.
  The right hon. Gentleman has taken two steps which he announced to us yesterday. The first is the Clause which we now see on the Paper making it statutory to repay deficits occurring in any year in the finance of the next year. That, of course, is very harmless and very well-meaning. No one can object to it. It is purely illusory. Nobody knows better than the right hon. Gentleman that nothing can abrogate the sovereign power of Parliament, and the Finance Bill of every year is its statutory authority for everything that is done, and for the repeal of every other Statute. There is nothing in that. It is, no doubt, a pious sentiment which may just as well find a permanent resting place upon the Statute Book.
  The second step which the right hon. Gentleman proposes to take is to make good the deficit of last year, mainly because it is not additional expenditure, by payments of £5,000,000 this year, £5,000,000 next year, and £4,500,000 the year after. It is an excellent proposal if you can afford it. If the circumstances are so favourable, if you can get the money without doing more harm than good in the process, it is an excellent proposal. But it is a question to be carefully weighed, whether in all the circumstances the right hon. Gentleman would really add to the public wealth and economy by this addition to the burdens which he had already to bear and some of which were of his own creation. Anyhow, I repeat my second conclusion, that, just as there was nothing in the finances of last year—the return of last year or the forecast for this year—to justify taxing us, there is absolutely nothing in the Debt position to justify it. I will come to the reason which leads us into this present unhappy situation in a moment.
  Is there any justification for an increase of taxation on account of the outlook for 1931? Still I ask, need we now take measures for 1931? Our finance is annual finance. That is the principle on which everything is based. I think that whether you should take measures
  2770
  for 1931 now or not should entirely depend upon the public convenience and upon your general view of what is most required of the national resources for national interests. I will answer the tacit complaint that £15,000,000 of de-rating relief will come to the Exchequer for payment in 1931 against which there will only be £4,000,000 left in the Suspensory Fund. I feel bound to repeat what solution the late Government would have applied to that problem if they had remained responsible. We had looked to an expansion of trade and revenue. It was not then so ludicrous as it may seem now.
  The Income Tax is suffering from a kind of cramp. The Exchequer is not getting its natural, normal and true expansion—the true expansion proportionate to the wealth and accumulated capital of the country and of the growth of population and of the development of industry. Many hundred thousands more people are employed, and many more people are alive here in this Island. There are the annual aggregations of the capital savings of the State. But the Income Tax is not expanding. We are not getting that result. The right hon. Gentleman should ask to see, if he has not already seen them, the returns which were shown to me two years ago of the details of the Income Tax of the great productive trades. I was astounded to find these vast trades, largely the basic trades,, coal, iron and steel—all these great trades, which were the foundation of revenue not so long ago contain an enormous number of firms which, though they are carrying on their business, are making no profits or very little profit, and where there are no profits, of course, there is no tax.
  Look at it for a moment from the Treasury point of view. We would like them to make profits and to pay tax on the profits. A very little, it seems to me, may lift these trades on to a healthy level. The President of the Board of Trade has borne witness himself to the fact that our measures of de-rating relief had already made a considerable improvement in the profitability of the coal trade. Let the tide of depression ebb ever so little, let the burdens be lightened ever so little, and whole areas of taxable assets which are now submerged will come again into review and will come again

  2771
  into use. That I am certain is the truth of the present situation in the Income Tax sphere. Very, very little, and you be getting a much retarded expansion of revenue because of a great number of firms and businesses resuming profit-making as well as merely carrying on their work. It was to this that I was looking. It might well have been achieved in 1931. It is not only a question of increasing the volume of trade. It is a question of increasing the volume of profitable trade, for it is on the volume of profitable trade that this important part of the Inland Revenue depends for its expansion. If the recovery had been delayed beyond the year 1931, I quite agree that £15,000,000 more would have had to be found for the de-rating scheme by new taxation.
  As everyone knows, I do not accept the Protectionist hypothesis, but I am bound to say, that, confronted with such a need of raising £12,000,000 or £15,000,000 more, I believe it could have been done with far less injury or discouragement to the productive energies of the people at this time if it had been raised by an import duty on foreign manufactured articles, either of a finished or semi-finished character. I observe that Holland, which professes and practices a Free Trade policy, has a general revenue tariff of 8 per cent. ad valorem on all manufactured imported goods, but even if in this country you applied it only to finished or nearly finished goods, a very substantial yield could be gained by the Exchequer without any discouragement, but rather, on the contrary, with encouragement to the general trade of the country.
  Therefore, I conclude this portion of my argument that there is no justification for new taxes in the past year's deficit, nor in the Debt position, nor in the outlook for 1930, and that it is premature and improvident to decide at this moment upon the task of 1931, and that by so doing you may only cripple the prospects of trade revival in this year, which is already so heavily laden. No, the only cause of all this new taxation is now plainly and mercilessly exposed. It is the additional expenditure of the Socialist Government. There alone lies the reason for the Budget presented yesterday.
  2772
  I will speak about the character of these additions to our burdens and of the causes which have led to this expenditure later on, but first let me examine for a few moments the new taxation. Nearly £47,000,000 of new taxes are to be imposed. They are all direct taxes, or virtually direct taxes; Lone are to be passed on to the consumes. They are to be levied upon a very restricted class, already the most heavily tayed but still the most loyally responsive it the whole world. [Interruption.] It is not denied. The Chancellor of the Exchequer will not deny it. It is levied 11 years after the War is over. It may be necessary because of the new expenditure to which the Government have committed themselves, but do not lit them or their followers behind underrate or be blind to the gravity of their proposals or to the consequences which will follow from them. The right hon. Gie itleman the Member for Carnarvon Boroughs (Mr. Lloyd George) spoke of the;e proposals and likened them to a six-inch shell. They indeed may be a six-inch shell bursting with a shattering detonation in every board room and business house throughout the country.
  First let me take the Income Tax. The long battle that I have waged over this 6d. off the Income Tax is ever. For four years I successfully defended that remission. I defended it against the assaults of the General Strike—I beg 5.0 p.m. pardon, the assaults of the difficult events of 1926. But at last I am beaten. The Chancellor of the Exchequer and his party have had their way. They have won their victory, and the standard rate goes back, in a time of full and assured pirate, to the 4s. 6d. level which had been reduced nearly five years ago. The popularity of the measure is assured by reducing the number of taxpayers involved to limits where the voting power of those who are left may be considered negligible. It is a thumping blow at every form of enterprise and saving, and it will be deeply felt and resented. The Chancellor of the Exchequer himself, in a passage remarkable for him, inconsistent with almost everything he had previously said, made a most valuable and important admission at the close of his speech yesterday, when he said:

  2773
  "Though I am imposing no new direct burdens on industry, I am fully aware of the psychological effect on trade and commerce of increased taxation even when no material burden is imposed."—[OFFICIAL REPORT, 14th April, 1930; col. 2681, Vol. 237.]
  But what is the difference between a psychological and a direct effect? What matters to practical men is what happens. Psychological reasons are just as real as any other reasons. The right hon. Gentleman feels deeply the danger of the discouragement of trade. He told us some months ago in a speech in the country that all the business community needed was more pluck, or something like that. Here is his remedy. But at the same time that he is encouraging himself to apply this drastic remedy as a stimulus to greater efforts, he has his own misgivings, which he imparted to us yesterday, and he knows that the step he is taking is one which will discourage trade and will dishearten productive enterprise. A substantial portion of this addition to the standard rate of Income Tax, which causes so much hilarity among the party opposite now, will fall upon company reserves; that is to say, it will fall upon what the Colwyn Committee called money at the very point of becoming fruitful to industry. [Interruption.] It is only a proportion, but still a substantial proportion—one-fifth of the total of £5,000,000. Is that so? I am so glad that the Chancellor and I are in agreement. I cannot guarantee to answer every question on the spur of the moment.
  There is another way in which, I am told, the increased taxation as proposed tends to deplete companies' resources. Shareholders will want dividends to give them the same income as before the tax was raised. It is a tendency the most evil and undesirable. The right hon. Gentleman told the Labour Congress a few years ago that no one need fear a Labour Budget except the idle rich. Does he pretend that 6d. on the standard rate of Income Tax, apart from these other imposts, affects no one but the idle rich? Is he really making his task easier by stigmatising the class who will pay him as if they were the worthless wastrels of society?
  I come now to Super-tax and Death Duties. I am not going to waste much time or any tears upon the personal sufferings of the millionaires. Where
  2774
  direct taxation uproots families from the homes in which they have lived for centuries it does inflict a great sentimental injury upon them. [Interruption.] There is no real gain to British democracy when some family leaves the home of its ancestors and hands it over to a trans-Atlantic millionaire or wartime profiteer. [Interruption.] If the hon Gentleman who interrupts has a keen and poignant feeling about it he will perhaps realise that it is not confined to his party alone. But as far as new wealth is concerned I think that the Chancellor of the Exchequer is probably right in saying that his new taxation will not, in his own words, mean any deprivation of the necessaries of life, or of reasonable luxuries. That may be true, but it has nothing whatever to do with the issues that we have to settle here.
  The main part of this new levy will not, I believe, be drawn from personal expenditure; it will be drawn from funds which otherwise would have been devoted to investments. The modern productive millionaire is a highly economic animal. He saves far more than he can consume. He is, although he does not always realise it, the potent ally of the Chancellor of the Exchequer. It is upon the continuous multiplication of these great fortunes that virtually all modern systems of progressive taxation depend for their revenue. It is easy and popular to lead the multitude against such a class, but the question now is whether a point has not been reached when the increased taxation may not begin to defeat its own object, namely, an easily obtained revenue.
  Everyone knows the right hon. Gentleman's motto, that in these matters of taxation—I reminded him of it some years ago and he repeated it with gusto only two years ago—you must not look at what is taken away but at what. is left. Let us look at what is left. The Treasury calculated for me a year ago that the largest taxpayer who provided annual insurance for his Death Duties would pay in Super-tax, Income Tax and Death Duties, something between 14s. and 15s. in the £ annually to the Exchequer. The present Budget adds 6d. to the Income Tax, ls. 6d. to the Sur-tax, and 1s. 3d. I suppose, for the insurance of the increased Death Duties. I have not the facilities of calculation that the Chancellor of the Exchequer has, but it is

  2775
  something in the nature of 3s. 9d. in the £. I hope that the Committee will follow these figures. On that basis, the 14s. or 15s. becomes 17s. or 18s., and what is left becomes 2s. or 3s. in the £. I think that that is a very striking result of the taxation which has now been imposed. One wonders whether, when the Chancellor of the Exchequer or his agents arrive to collect the 17s. or 18s. in the £, they will always find the fortune there. It may have been divided, and if it has been divided it falls into a far lower scale of taxation not comparable in its remunerative character to the Exchequer. Et may not even be reposing on our hospitable soil; it may have become so fenced about with legal barbed wire that a siege of years may be necessary to obtain it.
  Certainly the incentive to run the grave risks of modern business, the incentive for creating new wealth or for accumulating money for reinvestment, seems to be very seriously impaired when, as the right hon. Gentleman says, it is no longer a question of looking at what is taken away, but of looking at what is left, and when what is left does not in these cases appear to exceed 2s. or 3s. or 4s. in the £. If the great incentive to saving and reinvestment on the part of the very rich is impaired, injury will follow to the whole community. It is by this guidance of business and industry by capital that is massed in the hands of individuals who have the power of land planning and of creating the large-scale enterprises which are needed now—the creation of these enterprises on a solid basis by substantial people who are not in a hurry to make their fortunes—it is this process which has been found in every country, and particularly in the United States of America, to be the most swift and powerful means of rationalising industry, of discovering and gaining and commanding markets, and thus creating new wealth and employment.
  It may even be true—I have not made the calculation—that the standards of life of the wage earners in all the principal modern communities of the present day vary in proportion to the number of very wealthy citizens in their midst. It is very remarkable. Certainly, it would seem to give food for thought, indeed to all of those who are anxious to obtain the maximum contribution from capital to
  2776
  the well-being of the general community. Certainly, every effort will be made in many businesses to pass on the burden of extra taxation wherever possible. It does not follow that it is always possible, but I firmly believe that there are many cases, when whole classes of competitors are equally taxed, where something will be recovered from the con rimer in the form of an increased cost of production and an increased price; and where such articles, showing an increased price, reach the area of foreign competition, our competitive power wilt be pro tanto reduced.
  There is a burden which falls, through this taxation, very heavily upon the highly-paid brain worker and the skilled technician, who are absolte,ely essential in our modern life. To ask the surgeon or the engineer or the scientist or the professional man to pay these very heavy charges at this time is indeed to ask much of him when he kncws that this additional burden is cast upon him partly for the purpose of providing out-of-work benefit to persons who need not even be asked to prove that they are genuinely seeking work. Therefore, the Chancellor of the Exchequer seems to me to be running a great risk in what he is doing, and he may be going too far by prejudicing the basis of his existing di rect revenue, while hampering the production of new wealth. All these tendencies that I have traced upon the super-rich will operate in a lesser degree upon every grade of taxpayer over whom the Chancellor of the Exchequer is wielding what he has, I believe, called the weapon of taxation. If once the loyal co-operation of the mass of direct taxpayers, for which this country is renowned, were to be shaken, irreparable injury n fight be done to the whole structure of our taxation system. The right hon. Gentleman is making proposals for preventing legal avoidance. In that, he will get full assistance from all parties in this House, but no legal avoidance provisions, however elaborate, however complicated—as they become complicated they may be found to impinge upon many other legitimate aspects of our nitional life—can possibly be any compem ation for the alienation of the general good will of the main body of Income Tax payers.
  We are asked to pay an immense price. The Government are clemanding from the nation an immense price. What have

  2777
  they to show for it? What have they to show for all this new expenditure, which I claim that I have proved—I would like to see the argument upset, if it can be—is the sole cause of the heavy additional taxation this year. What have they to show? Here, I have no doubt that the right hon. Member for Carnarvon Boroughs will agree with me in what I am about to say. I cannot see the right hon. Gentleman as well as I did; the Gangway has grown so much broader. It is becoming too blurred and mixed up with the Chancellor of the Exchequer, until one can almost hear the echo of the psalms they chant in common. The right hon. Member for Carnarvon Boroughs will agree with me in asking the question, "What have the Government to show for the £40,000,000 of new taxation which they are imposing upon the country?"
  There was the question of the solvency of the Unemployment Insurance Fund. We have heard a lot about that. Its bankruptcy had to be prevented. Large sums of money were voted from the Exchequer for that purpose, but before three months were out the Government came down here and did the very thing which they had sought to avoid. They reopened borrowing and they compromised again that Fund which, at great expense, they said it was so indispensable to rescue. That is all about the solvency of the Unemployment Insurance Fund. It was achieved for three months and afterwards lost again owing to the great expansion of unemployment and unemployment benefit. There have been better benefits paid to more persons out of work, but there has been, as I have said, a demoralisation of the administration of the Fund.
  Then we have a handful of oddments and scraps, a few oddments of hard cases in connection with the great scheme of widows' pensions. [HON. MEMBERS: "Oddments!"] Well, it was a scheme which dealt with 12,000,000 widows, whereas the hard cases dealt with, I believe, only half-a-million. All this is mixed up with some complicated tale which the Chancellor of the Exchequer has told about wishing to avoid the step up in 1935, when the existing scale of Exchequer contributions, as originally planned, comes to an end. Well, we have that. The Lord Privy Seal has
  2778
  been given about £2 per head for every extra unemployed man added to the live register during his tenure of office—£1,100,000 or £1,200,000 altogether in order to cure the problems of unemployment.
  In effect, the taxpayer has been exposed to the worst of both worlds; at one end, we have had the right hon. Gentleman in the capacity of financial purist and pedant, professing to practise principles of financial orthodoxy, and, on the other hand, we have bad the Socialist agitator handing out lush doles with both hands to great crowds, and both are sending in their accounts to the taxpayer. That is all there is. I beg pardon, I forgot one recipient of the Chancellor of the Exchequer's bounty —the bookmaker. The right hon. Gentleman may leave a name execrated by every industrialist, but sometimes it may be remembered with expressions of good will among that confraternity who raise their voices so loudly on the race courses, because of his benevolent action in freeing them from the grinding licence duty of £10 a head. I address myself particularly to the representatives from the Clyde. This is the whole programme. Here is the whole shop window. This is all that we are being given for the £45,000,000 of additional burden which are going to strike a blow at the reviving trade of the country. More than that, it is all that there is going to be, because the right hon. Gentleman, losing confidence in his policy of stimulating industry by taxes, and with grave misgivings, gave us an undertaking that:
  "In the absence of unforeseeable calamities or of heavy increases of expenditure no further increases of taxation will need be imposed next year."—[OFFICIAL REPORT, 14th April, 1930; col. 2681, Vol. 237.]
  There is the end, if those words stand, of the programme of the embattled proletariat of "Labour and the Nation." It is worked out. They have come to an end. I wonder whether the hon. Member for Bridgeton (Mr. Maxton) is going to countersign that assurance of the Chancellor of the Exchequer. Nobody disputes the courage of the Chancellor of the Exchequer or his power of standing against opponents in every quarter, but, nevertheless, he may not be able to stand against the pressure that will be put upon him. We know perfectly well

  2779
  that pledges have been given by the party opposite to delude and bribe their voters, that shoals of schemes of expenditure are moving towards this House and that long queues of Bills, all involving further charges, are standing at the turnstile. I can only say that we were told on the Widows' Pensions Debates and on the Unemployment Insurance Debates that these were only instalments. I must say to hon. and right hon. Members opposite, if all your contributions towards the social life of this country is summed up in these foolish, these expensive items that I have read out, if that is all that you have to say to it, then the pain and irritation felt by the Income Taxpayers at the larger burdens that you are going to impose upon them will only be equalled by the pain and irritation felt by the gentlemen from the Clyde at what they are never going to get.
  What help will this Budget be to trade I Unemployment is the central feature of our life at the present time. It can only be removed by a trade revival. Is not this taxing Budget the very worst and the most inopportune policy which could possibly be applied to our affairs at this moment? Will it not aggravate the very causes which made the new taxes necessary? Will it not chill enterprise, discourage saving, promote the expatriation of capital, delay the recovery of trade and, indeed, the operation of some great conversion scheme from which we all had hoped so much? All this will be done at the very moment when the opposite processes are at work in all our chief competing countries. Would it not—I ask this not only as an indictment of the right hon. Gentleman but in my own defence—be worth while, I will not say by strict economy but by keeping the expenditure rigidly at a fixed level, even by some mitigation in the process of repaying Debt to the extent of not adding this additional,£5,000,0100, to try to bring our country round the corner of depression in which it is languishing and open again the high roads to better trade, to buoyant enterprise, to expanding revenues, and to the profits on which those revenues are based? These are all questions which the nation must weigh in the months that lie before us and upon their answer depends in a very large measures the immediate strength and prosperity of Britain.
  Mr. MAXTON: I rise to continue the discussion on the Budget with that amount of humility which one who has never been in the ranks of the Chancellors of the Exchequer must feel in treading their sacred ground. While I have never been a Chancellor of the Exchequer, I have been a Socialist for a considerable number of years, and when the right hon. Member for Epping (Mr. Churchill) asks me if I propose to countersign the Chancel or of the Exchequer's Budget, I answer most emphatically, "No!" As an ex-Chancellor of the Exchequer, I imagine that the right hon. Gentleman ought to countersign it as a very businesslike handling of the ordinary finances of the country, according to tie orthodox methods established by the Treasury. If the Budget is countersigned by the right hon. Member for Epping and approved in advance by the right hon. Gentleman opposite—
  Mr. LLOYD GEORGE indicated dissent.
  Mr. MAXTON: Well, perhaps we assumed too much. As a very capable politician he knows how people read the signs and symbols, and that a man-in-the-street like myself, hearing about the dining and the harmony would imagine that there is also some harmony of thought and a certain amount of mutual understanding. But the point is that if it has had the counter signature of the right hon. Member for Epping, and I hope a reasonably favourable acceptance from the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) it will not suffer very serimiely if it does not receive the heartiest approval of a back bencher like myself. I am quite sure that hon. and right hon. Members opposite, whatever their spokesman may say, are really cheering inwardly that they have got off far snore easily than any of them ever believed that they would, and far more easily than they are entitled to get off.
  The parties went to the country at the General Election and anpealed for the support of the electors. This party received an overwhelming mandate from the electors. The three policies, roughly, were these. The right hon. Member for Carnarvon Boroughs proposed to put £250,000,000 of revenue in.o road-making and public development schemes. [An

  2781
  HON. MEMBER: "Borrowed!"] That is quibbling. He proposed to remove £250,000,000 out of the ordinary commercial life of this country and put it into public enterprises, roads, bridges, docks, and so on, and whether he proposed to borrow or get it by taxation is not material. The point is that it was coming out of the ordinary development purposes of industry. The right hon. Member for Epping, in criticising that policy, said "Leave it in the hands of its present owners." He has repeated that doctrine to-day. He says, "Leave that surplus wealth in the hands of its present owners to fructify in their pockets." I thought of the 10s. in the widow's pocket, and the 17s. in the pocket of the unemployed man. Presumably, the right hon. Member for Epping was not thinking of them. He was thinking of the Super-taxpayers of this country. He says, "Leave this surplus wealth in the hands of its present owners to fructify in their pockets and to find its way into industry through the ordinary channels."
  The party of which I have been a Member went to the country and argued that the surplus wealth that was in the hands of the few should be transferred into the pockets of the suffering poor—(An HON. MEMBER: "At one go! "]—I will deal with that in a moment—and from there to pass over the counters into the shops of this country and so stimulate and develop trade. I put it to the right hon. Member for Epping that the Budget that was presented to them yesterday is more in keeping with the views which the Conservative party put before the electors than either the views of the right hon. Member for Carnarvon Boroughs or of hon. Members on this side of the House. It aims at the restoration of trade and industry, of capitalist trade and industry. I am sorry the Chancellor of the Exchequer has left the House, but I see the Financial Secretary to the Treasury present, and I am glad of the substitute. I hope he casts his mind back to the days when he was the foremost prophet of the Capital Levy, which was going to do it in one bite, or two at the most. Yesterday the Chancellor of the Exchequer said:
  "Though, as I have said, I am imposing no new direct burdens on industry, I am fully aware of the psychological effect on trade and commerce of increased taxa-
  2782
  tion even when no material burden is imposed. Recognising this, I am convinced that whatever my views as to the equity of the present distribution of the national wealth, in existing circumstances an essential factor in ameliorating unemployment is a restoration of a spirit of confidence and enterprise among those now responsible for conducting industry and commerce. And to encourage that spirit of confidence and enterprise it is right that, so far as is humanly possible they should know the probable full extent of their tax burden in immediately ensuing years."—FOFFiciai. REPORT, 14th April, 1930; col. 2681, Vol. 237.]
  And there he made the promise that, in so far as he could, there would be no further taxation. That is an indication, indeed, the whole statement is an indication, that the Socialist Chancellor of the Exchequer and his Financial Secretary are pursuing the capitalist view of restoring capitalist industry and finance, encouraging private enterprise, by imposing upon it the minimum of taxation. As a Socialist, I am bound to criticise that policy. The right hon. Member for Epping, in his criticism, tried to terrify my right hon. Friend about his extra 6d. on the Income Tax, and the small imposition on the Super-Tax by the threat that capital would leave the country. I have a quotation here from one of the friends of the right hon. Member for Epping. It is taken from the report of the annual meeting of the Yorkshire Branch of the Landowners' Association held at York on Saturday:
  "It was worth considering whether it was not a wise move to take advantage of the Agricultural Credits Act in putting two-thirds of the value of rural property on loan for 60 years,"
  and Sir George Courthope-the chairman of the Central Association—
  "said that he had himself taken up £50,000 and tucked it away in Canada."
  He is one of the gentlemen of England—
  Lieut. - Commander KENWORTHY: Cheer that.
  Earl WINTERTON: Is it an offence to put money in Canada?
  Mr. MAXTON: I know that the Noble Earl defends all sorts of things—
  Earl WINTERTON: I am defending Canada.
  Mr. MAXTON: It is not where the money is going to but where it is going

  2783
  from, and the purpose of its going. I do not think the Noble Lord really approves of this sort of thing:
  "Sir George Courthope"
  who is the hon. and gallant Member for the Rye Division—
  "said that he had taken up £50,000 and tucked it away in Canada. If there was any scheme of land nationalisation, or anything of that sort, they would find all his property belonging to mortgagees."
  It is very clever, sound, conservative tactics, presumably, to desert Great Britain as soon as they do not get their own way in Great Britain. And the right hon. Member for Epping holds that up as a threat to my right hon. Friend! I wish that the Chancellor of the Exchequer had made a frontal attack on the large aggregations of capital in this country. A small handful of people, about 90,000 Super-tax payers, took something like £600,000,000 last year—[An HON. MEMBER: "And paid how much in taxes?"] I do not know how much they paid in taxes, but I know that when you add the Income Tax product and the Super-tax product together it only pays the interest on the National Debt. I know that much. I know also that Supertax payers and Income Tax payers pay to provide themselves with the interest on the National Debt, and I know, further, that all other Civil Services—National Health Insurance, Widows' and Orphans' Pensions, Unemployment Insurance—are more than paid for by the Beer and Tobacco Duties of the working-classes.
  Ninety thousand people in this country every year during our worst years have taken £600,000,000 and put it in their pockets, and the Super-tax payer groans about it. The one thing I admire about hon. Members opposite is that they always know how to squeal before they are hit. The total Super-tax that went into the Exchequer was £56,000,000, and they are groaning about a tremendous burden, which is roughly only 2s. in the £, which went back into the Exchequer. I say that the £600,000,000 was produced by the toil of the cotton workers and the miners, by the toil of the agricultural workers, by the toil of engineers, shipbuilders, and the woollen operatives, who are locked out to-day against a 12½ per cent. reduction in wages. They are down on the rock bottom of life already, but we have hon. Members opposite approv-
  2784
  ingof their being turned out and approving of a reduction in mimics' wages. We have hon. Members opposite basing their policy on low wages—[HoN. MEM - BEES: "No!"]—fighting tooth and nail against a few more widows being paid 10s. a week, fighting against the unemployed man's youngster getting 5s. a week, and screaming like the very devil over 6d. being put on what they are already getting out of the country.
  I am a very distressed and worried man. My hon. Friend who interrupted me suggested that it was too much for me to expect Socialism on the plate with my breakfast in the morning. I am not disputing the accuracy of t rat remark. I am not even so stupid as to expect all the promises of "Labour aid the Nation" to be fulfilled in tire period of one Parliament; but I have asked for one thing and one thing only,steadily and consistently, on every important occasion. in this House. It is that Wrile big constructive schemes are being put through—and mark you I am not saying that I see them here—while the statesmen are thinking and planning, we should remember that we have a duty, as an honourable body of men and women, to see that no person in this land suffers from starvation or the fear of starvation. It is not true to say that no person is suffering to-day. There is the widow with 10s. a week, where she gets a pension; the aged person with 10s. a week, where he or she gets an old age pension; the unemployed man with 17s. a. week.
  I see that a £10,000,000 profit is antics gated from the Post Office. In the Post Office which is producing tint profit there are, to-day, temporary wcrkers getting from 25s. to 30s. a week. Periodically one appears in Court charged with dishonesty, and it is then brought out frat this public servant, doing responsible work and handling valuable documents, is being paid 25s. a week—and we hre calculating on the profit which we are going to make out of his labour next yew. Throughout the whole of the working-class, from one end of Britain to the other, among the industrial workers, the rural workers, the miners, the factory operatives, there ig deep, real, genuine suffering. And not one suggestion yet of a)ractical kind. from any one of the stai,esmen, to see this nation through its d Acuities. We see the old quarrels abo It Free Trade and Protection being fomented once

  2785
  more, although the partisans engaged on the two sides know that there is nothing in it whatever. But there is not a single statesman with a plan to show us the way through and not one penny of relief is produced in this Budget to make the lot of the workers easier while the thinking and the planning is going on.
  A Socialist Chancellor of the Exchequer could quite easily have come forward with a 12 months' plan for carrying on, and a Socialist Cabinet should have come forward with a plan, covering a period of years, showing how they were going to extend the area of public ownership and control in industry, in banking, in land, in coal, and in transport. They should have shown how they were going to rehabilitate the industry of the country and equip it in the most up-to-date fashion. They should have shown, in addition, how every year we were going to proceed from a poverty basis of life for the workers on to a basis of plenty; how the unfortunate, the unemployed, the aged, the sick, the widows, the people with dependent children, should have the full support of the State behind them and how the workers actually engaged in industry should be assured of a definite living income. Those plans should have been produced, should have been tabled, should have been worked on from week to week, fearlessly, and the political consequence faced, confronted, fought out.
  To-day we find ourselves confronted with this—that we are producing a purely opportunist Budget, its guiding principle the stabilisation of the capitalist system of society and its object to provide' the capitalist glass with the opportunity of becoming richer and more powerful. I enter my strongest dissent, and I hope that in the course of these discussions many of my colleagues will express themselves, to the same effect. in more detail and in stronger language.
  Brigadier-General Sir HENRY CROFT: I am sure the Committee has listened to the speech of the hon. Member for Bridgeton (Mr. Maxton) with a great deal of interest. We are quite certain that he is speaking sincerely of tho Government's policy. In fact his speech is that which nine out of every 10 hon. Members opposite would have delivered on the platforms during the General
  2786
  Election. I think most hon. Gentlemen on this side have a considerable amount of sympathy with the hon. Member, believing that he has been betrayed by those who sit on his own Front Bench. They made promises which raised great hopes among hon. Members opposite, and one can understand the disastrous state of depression in which the hon. Member for Bridgeton now finds himself.
  Before dealing with some points in the Budget statement, I wish to refer to the hon. Member's indictment regarding the removal of capital to Canada. Knowing the hon. Gentleman's extreme fairness in debate, I put this point to him. It may he that by your economic system you will drive a large number of people to endeavour to move their capital to foreign countries or to countries in the British Empire. Personally, I should like to see everything possible done to stop that proceeding, but does the hon. Member consider that it was immoral on the part of hundreds of thousands of workers to migrate from this country, to the British Empire overseas or to the United States, in order to improve their condition? Of course it was not. The truth of the matter was that they were in despair. The back of the camel was being broken, and though they loved their country they said, "We are going to move our capital, which is our labour, to other countries and save our homes. Nobody could condemn them; but it 2s no more true to say of those who try to shelter their worldly possessions in the British Empire that they are engaging in an immoral transaction.
  Mr. WALLHEAD rose—
  Sir H. CROFT: I do not wish to be interrupted. I only ask that that fact should be borne in mind. There may come a point in the life of any country at which taxation becomes so vicious, and conditions so hard, that people of all classes, however much they may hate to do so, will be driven to leave the shores of that country; and that, as I see it, is the great danger involved in the Budget statement. The Chancellor of the Exchequer has informed us that the McKenna Duties and the Silk Duties are to stay for the year. From a party point of view, I suppose, some may deplore that decision, but from a national point of view I think we must

  2787
  all feel a great sense of relief. I think that the vast majority, even of the party opposite, were already beginning to realise the disastrous effects to many of their countrymen which would follow the removal of those Duties. I regret, however, that the Chancellor of the Exchequer announced the decision in such vague language that the uncertainty which has been prevailing in those industries will continue. Everybody knows the serious effects of that uncertainty during the past year and the Chancellor of the Exchequer is continuing it for another year. The sword of Damocles is still hanging over those industries. The right hon. Gentleman overlooks the fact that the motor industry is already planning its sales for 1931 and by leaving them in this state of uncertainty, he is prolonging the difficulties with which that industry has had to contend during the past year.
  The second point to which I wish to refer is that the Chancellor of the Exchequer, while allowing the McKenna. Duties to remain, proposes that all Safeguarding Duties should lapse at the end of their time. It is remarkable that the right hon. Gentleman should allow the McKenna Duties to stay—because some of those industries might he able to carry on without the Duties although not so successfully as at present—while he is singling out for the removal of Duties the very industries which were specially proved to be suffering from such severe competition that they could not live without Safeguarding and which, in many cases, would have perished but for the advent of Safeguarding. It is to be remembered that each of these safeguarded industries had to prove its case and go through a very elaborate sifting procedure, and yet the Chancellor of the Exchequer, for months past, has ignored the appeals made both by employers and workers in this connection. Only last week a Socialist Member of Parliament presented to the Prime Minister a petition signed by 12,861 workers in the lace trade and in addition to that, some 380 embroidery workers and 800 lace workers in the Tiverton area signed similar petitions. These petitions represent the vast majority of the workers in the lace industry and they implored the Government to save the industry from disaster.
  2788
  No notice has been taken of three appeals coming from those who supported hon. Gentlemen opposite and assisted them to obtain so many seats at the last Election. In the petition of these woi kers, they state:
  "We feel that the industry is drifting to a position front which recovery is impossible."
  Here we have 14 trade unions, all urging the Prime Minister, at least, to stay this action and urging the Chancellor of the Exchequer to put their case to a committee before subjecting them once more to a flood of competition from countries in which they declance the wages are only from 60 per cent. to 50 per cent. of those paid in this country. When I mentioned the extraordinary success of the Nottingham lace industry in overcoming its difficulties, and increashing its production during the last 1. ve years, I said that it was astonishing that the Chancellor of the Exchequer should have given no reason whatever—unless it be his recent friendship with the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George)—for abandoning this Duty ant subjecting this large number of workers, their wives and dependents to all the miseries which must inevitably follow. I am sorry that the Liberal party, who appear to be considering the situation again, are not here. I wonder what the leader of the Liberal party thieks about this matter. I understand that there is going to be a new organisation shortly and that he is going to write a slogan which is to attract, or to lure numbers of weak-kneed Members of the party opposite into the same fold as himself. I wonder if the slogan could not be somewhat prolonged, so as to read as follows:
  "If production is to be maintained at the highest limit at home, socuriv must be given against the unfair competition to which our industries may he subjected by the dumping of goods produced abroad and sold in our markets below the actual cost of production."
  That was from the speech of the right hon. Member for Carnarvon Boroughs to the electors in 1918, and if that does not exactly fo, the situation 6.0 p.m. for the lace workers and the lace trade of ibis country, I am surprised. I recommend that some such foundation as that would prove very effective for the building up of the new organisation.

  2789
  As the Chancellor is not present now—and we all realise the fatigue to which he has been subjected, and do not complain of his temporary absence—I wonder if the Financial Secretary to the Treasury will answer a few questions. In taking this course of allowing the Safeguarding Duties to lapse, can he tell me if there is any reason for it? Is it a question of price? If so, is he aware that in every single safeguarded industry, except one, and that the least important, the price of the products has actually gone down? Is it a question of production? If so, does he not realise that production in every case shows a very marked increase, and in several cases actually an increase of 100 per cent. in five years? Is it a question of efficiency? Can he claim that there is a single one of these industries which has not increased its efficiency, which has not modernised its machinery, which has not extended its plant? Is it a question of employment? Can he deny that taking it all round, there has been an enormous increase in employment in the industries concerned?
  Is it because there is an effect on any other industry? There is only one case I have ever heard quoted, and that was the case of wrapping paper, and it was said that Mr. Cadbury and Mr. Rowntree would have to wrap their chocolates in more expensive paper than before. But the answer given to me at Question Time to-day is conclusive. The President of the Board of Trade informed me that the price of wrapping paper had gone down. Not only so, but that it had gone down very considerably in home prices, and that even the foreign competitors had reduced the price by £2 per ton and were paying a large proportion of this duty before entering our markets. I make these requests seriously. The livelihood of thousands of our countrymen is at stake, and I want the hon. Gentleman to give an answer to all or any of these questions.
  Finally, is it a question of exports? I know the hon. Gentleman has often been very much concerned with this question, and I think I have heard him make speeches, saying that if you give security to your home industries, you will be decreasing your exports. I wonder if this fact is known to him, that since the duties were reimposed in these various safe-
  2790
  guarded trades there has been a complete change in the picture with regard to the balance of trade in these safeguarded articles. It is a very astounding fact that, taking 1925 as being the first year when the duties were imposed, compared with 1929, we find that taking all the Safeguarding and McKenna and Silk Duties—
  The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): Ah!
  Sir H. CROFT: The hon. Gentleman laughs.
  Mr. PETHICK-LAWRENCE: Certainly.
  Sir H. CROFT: That is the way in which hon. Members opposite treat this question, but if he denies for one moment that the Chancellor of the Exchequer has stated that the McKenna Duties and the Silk Duties have a protective effect—
  Mr. PETHICK-LAWRENCE: No.
  Sir H. CROFT: Then I cannot see the sense of his interruption. In these few years we find that the imports of goods which are now safeguarded in this country have decreased by 38.9 per cent., and in the same time the exports of these goods have increased by 18 per cent. The hon. Gentleman smiles again, and I am very glad to see him so happy over the position. We, on this side, are extremely happy, too. If you take non-safeguarded goods, those which have not some form of protection, you find that their imports into this country have increased by 19.5 per cent—these are manufactures—in the same period, and that their exports have actually gone down. I am sorry to weary the Committee with these facts, but if you take the results of safeguarding, the Adverse balance on safeguarded goods was £4,119,000 for the first two months of 1925, and that has been converted into a favourable balance of £643,000 for the first two months of 1930—a very remarkable fact, showing that our exports of safeguarded goods have gone up just as our imports of safeguarded goods have gone down.
  Yesterday's speech by the Chancellor of the Exchequer disclosed a prolonged attack, intentionally or not, upon British industry, because whatever the right hon. Gentleman may like to say, these taxes must all fall inevitably upon industrial

  2791
  produce in this country. He made a remarkable wireless speech to the United States of America, when he told that country of the colossal burden of taxation on this country. He told them that it was far higher than in any other country in the world, but he has greatly increased this burden, and there will be an immediate reaction on every industry. I am old enough to remember the great fight over the so-called People's Budget of 1909–10. Nobody knew quite why it was called that at the time, but it was discovered afterwards that the reason was that all the people suffered from it. At any rate, at that time the Chancellor of the Exchequer made a remarkable speech, in which he said that all taxation ultimately falls upon the shoulders of the working class. I do not know whether he has forgotten that, and I am afraid that those who sit behind him apparently do not appreciate the importance of that fact. We have recently read a very remarkable document in the form of a report by a sub-committee of the General Federation of Trade Unions on the effect of taxes and prices, and there were some very remarkable passages in that Report. I would remind the Committee of this one:
  "However desirable it may be to secure fairer distributions of wealth, it is fatal to national prosperity to eat up that capital which is necessary to finance present and future production."
  Who can deny that under this Budget we are going further
  "to eat up that capital which is necessary to finance present and future production?"
  Then again the Chancellor of the Exchequer, speaking at Keighley last year, said:
  "Trade revival is vitally dependent on capital saving and capital development …Lack of savings was greatly hindering the trade recovery of Great Britain."
  That, I think, was as clear as anyone on these Benches would desire, but hon. Members opposite, who seem to laugh at the subject, ask, What is 6d. on the Income Tax? What is an extra ls. on the Super-tax? It is well known, or it ought to be, to everyone who has made a study of conditions in this country, that at the present time there is a very large number of persons who are living upon the narrowest margin that you can imagine. I am speaking of the direct taxpayer. I know that hon. Members
  2792
  opposite will have very little sympathy with what I am saying, but in my constituency alone I can think of thousands of persons who can just afford two or three employes in their service. Does anyone deny that this Budget is going to make all the difference, ane that many of them will undoubtedly havi to do with one employe less than before, and that that is going to have a very serious effect and reaction again on the whole of the employment question in this country? Reading from this same trade un on Report, I find this statement:
  "Resentment engendered by the taxes not only induces extravagance at home, but leads many of these, attracted also by prospects of greater personal liberties and cheaper pleasures, to spend Heir holidays and their money abroad, in this way adding to the prosperity and capital itoeumulations of competitive countries."
  That is perfectly true, and everybody who is aware of these facts at all knows that there are very large numbers of the population at present who are saying, "Can I manage to continue Jiving at all in the same set of circumstances as before, and shall I not be driven to seek residence in some cheaper part of the world, where there is not this high taxation and where I can just get on with my income?" That is an absolute fact. We do not want to see that happening, but it is happening, and we want to stay it.
  I was glad to hear the speech of my right hon. Friend the Member for Epping (Mr. Churchill), which I thought was a speech of great courage, which told the absolute truth on this question; and I want to say a word about. the case of the very rich man. I know it is not popular to get up on a platform in this country and, I will not say to defend the very rich man, but to resist this fcrm of taxation, but I have no hesitation in saying that what this country needs is a far greater number of those who have great accumulated wealth. If you could persuade 2,000 millionaires to come and live in this country from the United States of America on your basis of t ixation and Death Duties of last year, you would wipe off your National Dobs before all of us had passed. away. Es it not realised that the man of great wealth is contributing far more of has share of wealth in taxation than those who are less fortunately situated? When hon.

  2793
  Members get up and cheer words like "the idle rich," I would like them to Quote to me the idle rich who amass these great fortunes. Who are the men who have made them?
  Mr. MacLAREN: The Duke of Westmmster.
  Sir H. CROFT: The hon. Member speaks of one individual. I dare say he is not aware of the extraordinary development work which the Duke of Westminster has carried out in South Africa. He probably knows nothing about it, or he would not have made that remark. Tie does not know of the Duke's great gallantry in many circumstances of warfare, and that he has risked his life in the most gallant, acts and has won the admiration of all who know him.
  Mr. MacLAREN: He makes a million out of Westminster ground rents for nothing.
  Sir H. CROFT: Is that a crime? When the hon. Member attacks his Grace or anyone else., he forge,ts that that money is undoubtedly to a very large extent invested in productive industry here, and that the moment you dry up such sources, that moment your country must inevitably decline. What about Lord Cowdray, the Cadburys, the Rowntrees, the Leverhulmes? All these names are those of men who have built up great constructive businesses and have given employment to thousands of their fellow countrymen, and when people talk about the idle rich, I say it is idle nonsense. We should get rid of that kind of talk and get down to realities with regard to what wealth means in relation to employment.
  I know it is considered bad taste ever to talk about your own affairs here, but in America you can travel in a railway train, and before you have gone a quarter of an hour you find that the man beside you and the man in the corner have told you what they are worth. I sometimes think that, owing to the modesty of the Englishman, people do not realise the effects of taxation or how wealth is used. I am only a minor individual compared with the great men whose names I have mentioned, but I suppose that hon. Gentlemen opposite might say that a large proportion of
  2794
  what I possess was inherited. It was; it was made by my grandfather and my father, and was augmented by my brother and myself, but during these three generations we have paid £1,000,000 in wages to workers. I have never employed fewer than 150 to 200 individuals. I am not a. rich man; I have never drawn out of my business more than 5 per cent. as an average. I have done something also, I hope, to develop certain waste places of the British Empire, and I am bringing products into this country.
  My case is not unusual. If you average the invested money of the average individual in this country, and work out the interest after allowing for the passing of dividends and the liquidation of certain concerns in which he may be interested, it works out at not more than 6 per cent. A rich man who has done wonderful things in developing institutions in this country spoke to me the other day, and I asked him if he were putting a large sum of money into a certain concern. He said, "I amgetting old. If it fails, I shall lose everything, and if it succeeds, the Government will take 15s. in the of what I make out of it. What is the inducement for me to venture my money into industry, as long as taxation is on that level? Would it not be better to make a certain 6 or 7 per cent. in foreign bonds?" Once you turn the peak of taxation, you defeat patriotism and drive people to say, "If my Government are going to put this burden on me, I am going to invest my money in foreign countries."
  The right hon. Member for Epping boldly told us that the Government could have raised a considerable amount of revenue if they had extended the duties which were so successfully experimented with during the last Parliament. There is no doubt that a Chancellor with the courage could have avoided any increased taxation this year, and could have reduced Income Tax by 1s. next year, 1s. the following year and 6d. the year after, if only he would have had the determination not to go on taxing his fellow countrymen, but to make the foreigner pay a fair market toll for the right of entry into this country. The intellectuals of the Free Trade movement are now confronted with only one difficulty. They see the great start that

  2795
  Britain had in the struggle for world supremacy, and they point the moral with figures. The right hon. Gentleman the Member for Carnarvon Boroughs and the Chancellor of the Exchequer, and even the right hon. Gentleman the Member for Epping a year or two ago, were impressed with the same argument. They said, "Free Trade must be best because we still have the greatest exports per head of the population." It was true a few years ago.
  I want the Committee to consider these remarkable facts. If you take the percentage increase of exports of manufactures per head of the population in 1913, as compared with 1929, you find that the United Kingdom increased her exports per head of the population by 26.7 per cent.; France, by 46.5 per cent.; Germany, by 54.2 per cent.; and the United States, by 115.8 per cent. These are truly remarkable figures, but I am sure that the right hon. Gentleman will say, "Yes, but what does that actually represent in figures? We Free Traders never like percentages." The actual increase per head of the population for the United Kingdom was £2 8s. 9d.; Germany, £2 12s. 11d.; and the United States, £2 19s. 3d. These remarkable facts show that the argument based on the figures per head of the population falls to the ground. The right hon. Gentleman, however, may say, "What were the total figures?" It is no use taking a short period of years, so I take the period from 1880 to the present time In 1880, we exported £42,000,000 worth more manufactured goods than France and Germany combined. In 1929 France and Germany exported £171,000,000 worth more manufactured goods than the United Kingdom. That is a remarkable
  transition. It is unfair to take the earlier year for the United States, which is a new country, so I take the year 1913. In that year she exported £171,000,000 less manufactured goods than the United Kingdom, while in 1929 she exported £107,000,000 more than the United Kingdom, showing a complete reversal in that short period.
  This surely gives the answer to our difficulties. We rely on our export trade; we have to get our export trade going. We have nothing to fear from improving the conditions of production in this
  2796
  country and allowing our manufacturers to produce more cheaply. It is a remarkable fact that not a single word in the whole of the Chancellor's speech referred to any measure for improving inter-Imperial trade. On the contrary, the right hon. Gentleman announced that he was going to get rid, if he could, of all the preferential duties in existence. Is it realised that the British Empire last year had double the foreign trade of the United States of America? Is it realised that the overseas trade of the Empire last year was bigger than that of the whole of Europe? When we have this vast unit to think of, how strange it is that there is not one single proposal to extend our export trade to the Dominions overseas. It would be out of place to go into a discussion of policy, but if we could transfer a large part of the £1,300,000,000 worth of goods and produce which the British Empire is at present buying from the foreigner to our own soil and factories, and to the soil and factories of the Dominions, we would at one blow get rid of unemployment in this country and in the cities of the Empire; and we would restore our national finances to that state in which all parties desire to see the state which brings confidence to the industries and people of the land.
  Mr. STEPHEN: I do not intend to follow the hon. and gallant Baronet the Member for Bournemouth (Sir H. Croft), except to say that one admires the perseverance with which he presses his view in regard to the development of protective duties; but, perhaps, when he has been able to persuade the right hon. Member for Hastings (Lord E. Percy) and others to accept his views, some of us may be inclined to follow him.
  Sir H. CROFT: The Noble Lord supports the policy of his leader.
  Mr. STEPHEN: I have had a good deal of experience in the propaganda of the Independent Labour Party in the country, and I find that ore of the pleasures that one gets is to meet with enthusiastic Socialists in every part of the country and to hear them say how they have waited for the coning of the day when "Philip" would introduce his Budget. When you ten them that it would not be his first Budget, and that he introduced one in 1924, they say,

  2797
  "Yes, but he came in at the beginning of the year, and he had to take so much that was left over; so many of the Estimates had been made up." This year, however, we came into power after the election in May, and consequently these veterans of the party felt that their expectations would be realised. Some of us came into conflict with the Government on the question of the development of the pension system and unemployment insurance. As propagandists, one found a certain amount of impatience with the position which we were taking up, because it was felt that we ought to wait until "Philip's Budget," when everything would be all right.
  Now we have had "Philip's Budget," and I do not know whether these veterans in the Socialist movement will be in a position to utter their Nunc Dimittis. I am extremely disappointed with it. I was not as sanguine as some of the veterans in our movement, but I am disappointed, because it is more inadequate than I conceived to be possible. The Chancellor of the Exchequer has said that the Budget may be used as an instrument of social reform. I cannot see, however, that this Budget is in any way such an instrument. The Chancellor of the Exchequer made a speech in Plymouth, which was reported in the "Western Morning News" of 28th January, 1928. In this he pointed out with regard to the Income Tax:
  "To-day you Income Tax payers, remember, every penny raised by Income Tax, Super-tax and Death Duties is taken for the service of the National Debt, and all the other expenses of tlhe Army, Navy and Air Force, education, old age pensions, public health and the cost of Civil Services has to be met out of indirect taxation, and four-fifths of indirect taxation is paid by the wage-earning classes of the country."
  All the five-fifths of this indirect taxation goes for the maintenance of the Navy, Army and Air Force, educational services, old age pensions, etc., and I want to ask what the working class, who contribute so much of the cost of the upkeep of all these Services, get out of it. What are the people in the industrial districts getting out of this great expenditure for which they have to find the money? For instance, in the woollen industry the workers who are locked out because they will not accept a reduction in their wages, have this comfort, that
  2798
  they have this great Army and Navy and Air Force to protect them, but if they were to call upon those Services to protect them against the reduction of wages there would be nothing for them. It is an extraordinary position of things.
  I would like the Committee to allow me to put some facts before them regarding the condition of the two nations in this country, as they were described by the great apostle of the Conservative party, the rich nation and the poor nation. If one turns to the Abstract of Labour Statistics one finds that wage rates during 1925 showed a weekly reduction of £78,000 on the average. In 1926, a most extraordinary thing, there was an increase in the wage rates of the workers—a small weekly sum of £49,000. I, myself, have wondered whether in that year 1926 the rich nation were afraid that the poor nation would sweep them away, and therefore did not press wage reductions in industries, other than the coal industry, in a way that they otherwise might have done. But in 1927 the possessing classes had evidently taken courage, and again there is a wage reduction amounting to an average of £375,000 per week. In 1928—taking other figures which I have been able to get—I find that the weekly average of the reduction of wages is £142,000. In 1929 there is a weekly average reduction of £79,500. Since the Labour Government were in office in 1924, with the exception of that year which seems to the former Chancellor of the Exchequer to have been so disastrous a year for industry, there bas been a reduction of wages every year, and consequently a reduction of the purchasing power of the working class. [An HON. MEMBER: "The cost of living came down."] I will deal with that matter.
  I turn to the report of the Commissioners of Inland Revenue, and find that the wage earnings which came under review by them in 1924 amounted to £371,000,000, but in 1928 the figure was down to £335,000,000, a reduction of £36,000,000 in the income enjoyed by those wage earners who are sufficiently fortunate to come under review by the Commissioners of Inland Revenue. If one were to take the unemployment figure of 1924 as 100, in 1929 we should have a corresponding figure of 107.6. Therefore, during those years we have had a reduction in the wages of the working class

  2799
  and also an increase in unemployment. The figures with regard to Poor Law relief are also worth putting before the Committee. According to the Statistical Abstract the number of persons relieved on one day in January, 1925, was 1,418,402, and in 1929 there was a rise to 1,461,722. From whatever aspect we regard the life of the working class we find this constant reduction in their standard of life, increasing poverty and increasing difficulties.
  As against that I wish to put the position of many people who are more directly affected by the Budget. Take the gross income, excluding weekly wage earnings, reviewed by the Commissioners of Inland Revenue—taking the figures from the 72nd Report. In 1924 the gross income reviewed amounted to £2,599,000,000, and in 1928 to £2,765,000,000, an increase of more than £160,000,000. While the one nation has been getting poorer the other nation has been getting richer. [Interruption.] The cost of living was referred to by an hon. Member opposite, and an hon. Friend behind me reminds me that the cost of living went down for these people also. But I will deal with that later in connection with some other figures.
  In the matter of taxation we ought to see what is the condition of the people and exactly where the burden should fall. I look again at the industrial classes, to try to see if one can find an improvement in their condition from any other source. According to the Statistical Abstract, we are told that the deposits in the Post Office Savings Bank at 31st December, 1924,, amounted to £280,373,433. At the same date in 1928 the figure was £288,619,186. One might he inclined to feel a certain amount of hope, seeing that the deposits in the Savings Bank had increased, but from the annual report of the Savings Bank Trustee I find that the deposits in the former year amounted to £82,284,550, but in 1928 had gone down to £79,331,252.
  Mr. ARTHUR MICHAEL SAMUEL: They have gone into building societies.
  Mr. STEPHEN: As regards savings certificates, the figure in 1924 was £366,138,685, but in 1928 it had gone down to £361,238,312. Taking all those figures,
  2800
  I find that, comparing 1924 with 1928,, there was a total in the am case of £728,796,668 and in the other of £729,188,650. Therefore, those savings are practically stationary, and would show that the working people were as badly off in 1928. A former Financial Secretary to the Treasury asked me to consider the figures of building societies. I have not got those figures, but I have no doubt they would show a similar state of affairs to those I have described.
  Mr. SAMUEL: They show as astounding increase.
  Mr. STEPHEN: That may be quite true. I will look into the ftgeres to see if the working class are depositing money in building societies instead of in the Savings Bank. A right hon. Gentleman has suggested that much better off people put their money into building societies to-day, and I think that is very probable. Every financial disaster, such as the Hatay scandal, tends to send a certain number of more conservative and more timid investors into building society securities.
  Here I have some figures showing the other side of the picture. I think they are really important. I take them from the "Economist." I find that the monthly average of new capital raised in London in 1924 was about?£17,500,000, whereas in the first three months of this year it was £31,000,000. Then there are the figures of the London clearing, banks, which I take from the Statistical Abstract and from the accounts. I find that the amount in current, deposit and other accounts in the fourth quarter of 1924 amounted to £1,678.9 millions, and in December, 1929, the figure had gone up to £1,810.7 millions, again a tremendous increase. An hon. Member spoke about the fall of prices. This big increase in these deposit and other accounts, taking the wholesale prices into account, would really he about 25 per cent. more, if there were a strict comparison. I take one other illustration showing the development of the motor industry, and my figures are taken from the Statistical Abstract. Dealing with the number of motor cars and she number of licences, I find that on 31st March, 1924, the total was 473,528. On 31st August, 1929, the total had more than doubled, being 980,886.
  Major BEAUMONT THOMAS: Does not the buying of motor cars provide employment?
  Mr. STEPHEN: The hon. Member asks me if the buying of motor cars does not provide employment. If you set fire to this building, and you had to put another one in its place, it would provide employment. I do not know whether the hon. and gallant Member would seek to have a bonfire here in order to carry out his policy. I have shown that, as far as the working classes are concerned, there has been a reduction in the standard of life, and that as far as the richer section of the community are concerned, their progress has been just as great for a number of years past, and their wealth has continued to increase. During the years that the Conservative Government were in office they set themselves to improve the conditions of the people for whom they have always shown the most interest. The Conservative Government reduced the Income Tax and gave reductions in the Income Tax to 4,500,000 people, which meant a relief of £41,000,000 per annum. In the case of Supertax payers 95,000 persons were relieved to the extent of £10,000,000 per annum, and those two reductions amounted to £51,000,000 per annum in reduced taxation.
  The former Chancellor of the Exchequer believes that that is the best way to benefit the people generally, and be claims that this money, being kept in the possession of those people, has a tendency to increase employment. I remember that when the former Chancellor of the Exchequer introduced one of his Budgets he referred to the reduction of the Super-tax and how he looked to that additional money being placed at the disposal of the Super-tax payer to find its way into investments in industry that would employ a larger number of people. That is a definite point of view, but it is a view that many millions of people would not have at the General Election. That was the point of view put forward by the Conservative party at the last election, but quite the opposite point of view was put forward by the Labour party. The Labour party at the last election said that the. Tories had been giving public money to benefit their rich friends, and that if Labour came into office they would see that, in the future,
  2802
  the great mass of the working classes would get the benefit.
  That point of view was put before the country. [Interruption.] If hon. Members will allow me to proceed, they will find that they are in agreement with me. I am simply stating the facts. If hon. Members question my figures or my state ment then it is quite a different matter. I am putting forward the Conservative view at the last election which was that the burden of taxation in this country, pressing upon the richer taxpayers, had the effect of hindering the development of industry, and was bad for employment generally; whereas the Labour party said in the country that what was specifically wrong was that there was far too much wealth in the possession of a comparatively small section of people, and that what was more necessary than anything else was to increase the purchasing power of the masses of the people. The Labour party are in office to-day as the result of millions of people in this country accepting that thesis.
  Mr. LOUIS SMITH: More people voted for the Conservative party at the last election than voted for the Labour party.
  Mr. STEPHEN: I am not aware of that. I am aware that more people voted for the combined Conservative and Liberal parties. [HON. MEMBERS: "No!"] I am not concerned with that. I know that there was a sufficient number of people on the present basis of representation to return a sufficient number of Members to this House to put a Labour Government in office. The point with which I am dealing is whether the Labour Government are carrying out the policy which they were elected to carry out. There are a number of liabilities relating to additional expenditure which the present Government have accepted. A few millions are required in connection with the widows' and orphans' pensions scheme, and about £14,000,000 is required under the Unemployment Insurance Act. The larger part of that £14,000,000 is required to pay off a debt which was allowed to accrue under the transitional periods by the former Government, and this has added to the burden of the debt. So far as the people of this country are concerned, the amount of benefit to the working classes

  2803
  represented in this Budget is that which relates to widows' pensions, and that is simply a transference from the Poor Law to this particular charge. I admit that there is a certain amount of benefit to a section of the unemployed, but that is a comparatively small amount of the total. That is my quarrel with the Chancellor of the Exchequer so far as this Budget is concerned.
  Whereupon, the GENTLEMAN USHER OF 1HE BLACK Ron being come with a Message, the. CHAIRMAN left the Chair.
  Mr. SPEAKER resumed the Chair.

  ROYAL ASSENT.
  Message to attend the Lords Commissi oners.
  The House went; and, having returned,
  Mr. SPEAKER reported the Royal Assent to—
  1. Unemployment Insurance (No. 3) Act, 1930.
  2. Land Drainage (Scotland) Act, 1930.
  3. Children (Employment Abroad) Act, 1930.
  4. Edinburgh Corporaition Order Confirmation Act, 1930.
  5. Renfrewshire Upper District (Eastwood and Mearns) Water Order Confirmation Act, 1930.
  6. London, Midland and Scottish Railway (Hotel Water) Order Confirmation Act, 1930.
  7. Ministry of Health Provisional Orders Confirmation (Barry and Scarborough) Act, 1930.
  8. United Kingdom Temperance and General Provident Institution Act, 1930.
  9. Portsmouth Corporation Act, 1930.
  10. South Staffordshire Mond Gas Act, 1930.
  11. Liverpool Corporation (Works) Act, 1930.
  12. London and North Eastern Railway (Works) Act, 1930.
  13. Rochdale Corporation Water Act, 1930.
  14. Chester Waterworks Act, 1930.
  15. Milford Haven Urban District Council Act, 1930.
  16. Shakespeare Birthplace, etc., Trust (Amendment) Act, 1930.
  17. Bromborough Dock Act, 1930.
  And to the following Measures passed under the provisions of the Church of England Assembly (Powers) Act, 1919:—
  1. Ecclesiastical Commissioners (Pensions of Church Estates Commissioners) Measure, 1930.
  2. Ecclesiastical Commissioners (Sodor and Man) Measure, 1930

  WAYS AND MEANS.
  Again considered in Committee.
  [Mr. DUNNICO in the Chair.]
  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. STEPHEN>: I have attempted to make a study of the two nations, the poor and the rich, in this country. I pointed out that the Tory Government sought to reduce the taxation on the large incomes, on the theory that in this way they would put more money at the disposal of industry and so 7.0 p.m. would make things better for trade generally. We took the view, on the other hand, that what was more necessary than anything else was an increase in the purchasing power of the working classes. There is practically nothing in this Budget, however, to suggest that we accept that thecry to-day. I want to draw attention to that sentence in the Chancellor's speech in which he said that the change in connection with the Income Tax will not affect three-quarters of the whole number of Income Tax payers, so that only ormquarter will be affected by the increase. Since the wealthy members of the community have enjoyed during the years of the Conservative Government those reductions in taxation, the present increase does not compensate the other section of the community for the relief that was given to the rich by the Tory Government. We are wrong in respect of the Income Tax in that it is utterly inadecuate. There is a greater need than ever for the development of many of the social services. There was so much we could not do in connection with unemployment insurance. There was no money for the reduction of the waiting period from six days to three days; there was no money

  2805
  for the increase of the scales of benefit of the unemployed. There is no money in this Budget for those other Measures which we are told were to be introduced.
  The words of the Chancellor of the Exchequer towards the end of his speech would seem to show that he is visualising no great changes in the Budget next year and that this Budget is going to be practically the same as next year's. He said:
  "I abate not one jot or tittle in my lifelong advocacy of great schemes of social reform and national reconstruction, but our immediate concern is to make these things ultimately possible out of revived and prosperous industry. To that we must first direct our efforts and devote what resources we can afford to that remunerative purpose."—[OFFICIAL REPORT, 14th April, 1930; col. 2681, Vol. 237.]
  So that evidently the policy of the Government is that there can be no schemes of social reform until we have been able to see a revived and prosperous industry. How are we to get a revived and prosperous industry?What is to be the line that is to be taken in order to achieve that revival and prosperity of industry? No one suggests that there is a, reconstruction of those industries along Socialist lines; there is no such suggestion on the part of the Government. Quite evidently the Labour Government are looking for a revival of this capitalist industry in this country, with a national prosperity somehow or other in the future. I have been long enough in this House now to know how one year after another we have been promised that we were just about to reach the turn and that there was coming the revival and development of industry. I do not believe any such revival is possible. The Socialist criticism has been that so far from there coming improvement in capitalist industry in the future, the contradictions of capitalisms would increase and industry would go from bad to worse.
  That has been the Socialist position, and now we are told that we have got to wait until this capitalist industry improves. It is inherent in the capitalist system in the stage at which it is to-day that there can be no such revival. In his speech at Plymouth the Chancellor of the Exchequer, replying to the estimate of the right hon. Gentleman opposite as to the cost of the social reforms advocated by the Labour party, said:
  2806
  "But even accepting Sir Herbert's figures of the ultimate cost of social reform schemes of £220,000,000, if I were compelled to find the money, I should be able to do it. When I profess to prophesy I always do so on the side of strict moderation. I am quite certain that all the younger men and women who are in this hall to-night will look to see the time when the State will be spending far more than an additional £200,000,000 a year upon social services and national development."
  Does the Chancellor of the Exchequer mean that we are going to have an additional £200,000,000 of taxation of capitalist industry at some time in the future? Is a revival to come about in some mysterious way, when the Chancellor of the Exchequer will be able to get so much more out of it? I do not believe that any sane observer can hold any such view. The former Chancellor of the Exchequer pointed to the year 1931, in which he visualised, owing to possible developments of industry and commerce, an increase in revenue of about £10,000,000 or £15,000,000, but to contemplate an additional £200,000,000 due to expanding trade and industry seems to me to be utterly unsound. I would bring the Committee back to the point from which I started, that the working class are paying four-fifths of the indirect taxation of this country, for the cost of the Army, the Navy, the Air Force, and other services—
  Mr. A. M. SAMUEL: The hon. Member, I think made that remark before, but I could not catch what he said. If he will turn to page 22 of the Financial Statement issued by the Financial Secretary to the Treasury, he will see that Customs and Excise bring in £252,000,000. It is true that part of that money is paid by people of poor means, but it is also paid in part by those of higher means. The hon. Member says that the working men who pay get nothing from it, but if he will look at the other side of the statement he will see that those who contribute to indirect taxation get back not only the Army, the Navy, and the Air Force costs and values, but they get £55,000,000 for education, none of which is taken by the well-to-do. I do not grudge it, but let us have the facts correctly. Then they get back, in respect of health, labour and insurance (including old age and widows' pensions), £96,000,000, and there is also £54,000,000 for War Pensions and Civil Pensions, while Exchequer contributions to local

  2807
  revenues amount to £44,000,000. As has often been stated in the House, the main portion of the amount contributed by indirect taxation goes back to the people who provided it.
  Mr. STEPHEN: I am indebted to the hon. Gentleman for his statement, but perhaps he will allow me to say that I was quoting from the speech of the present Chancellor of the Exchequer. The quotation that I made was this:
  "To-day, you Income Tax-payers, remember, every penny raised by Income Tax, Super-tax and Death Duties is taken for the service of the National Debt, and all the other expenses of the Army, Navy and Air Force, education, old age pensions, public health and cost of Civil Services has to be met out of indirect taxation, and four-fifths of the indirect taxation is paid by the wage-earning classes of the country."
  Mr. SAMUEL: The amount of money from direct taxation—Income Tax, Surtax, Estate Duties, Stamps, Excess Profits Duty, Corporation Profits Tax, Land Tax, etc.—is £437,000,000. The amount required for interest and management of National Debt, Consolidated Fund services, and National Debt Sinking Fund is roughly £308,000,000. Therefore, nearly £70,000,000 more is produced by direct taxation and is devoted to purposes enjoyed by the wage-earning classes than is stated in the speech which the hon. Member is quoting.
  Mr. STEPHEN: I was quoting from the present Chancellor of the Exchequer, and I was willing to accept his statement. There is this great Army, there is this Navy, there is this Air Force—[Interruption.] I am not calling it the Contemptible Army, or anything like that, though possibly it would have suited the hon. Member opposite better if I had. I say that there is this Army, there is this Navy, end there is this Air Force, and the working class have to pay four-fifths of the indirect taxation which maintains them. The working class who do that are in the slums; they are faced by reductions of wages; they are faced by one difficulty after another; and I say that the burden of taxation upon the poor people of this country is far too heavy, for they are not getting from it the return that they ought to have, and that is what is wrong with this Budget.
  2808
  There is in this Budget very little hope for the future. It involves the stabilisation of capitalism. It promises very little for many years to come in the way of great schemes of social reform, and those schemes of social reform will only come in the future, on the basis of the speech of the Chancellor of the Exchequer, if there is an expanding revenue due to a great revival of trade and commerce. I believe that that point of view is entirely wrong. I believe that it is alien to the point of view of the Chancellor of the Exchequer himself h previous days. I think that this Budge; will bring very little hope to those who took to the Socialist Budget as the first stage on the way to freedom for the great mass of the working class. It is a Budget that is fundamentally in favour of the well-to-do. It is making light, or leaving light, the burden upon the rich people of this country, and I am surprised that, such a Budget should come from the present Chancellor of the Exchequer. One may congratulate him on the lucidity of his statement; one may congratulate him on the form in which it is presented; but I think that it is contrary to the interests of the mass of the working class. It may please the City, but I do not think it will please the working class. It is a Budget which may show that the Chancellor of the Exchequer was well worthy of the honour that the City bestowed upon him when it offered him it freedom, but I do not think it will bring great hope to the mass of the workers of this country.
  Sir HENRY BETTERTON: I rise for one purpose, and one purpose only, and that is to take this, the first opportunity in my power, of bringing before the Committee the result that will undoubtedly follow from a part of the statement that we heard yesterday. I refer to the decision of the Chancellor of the. Exchequer to allow the Safeguarding Duty on lace to lapse at the end of June. It is not too much to say—in fact, it is strictly accurate to say—that that decision has been ieceived with consternation and despair by the people engaged in the trade, because they realise that in all probabllity it will mean the ruin of an at cient industry, and that those now employed in it will be rendered workless. Theirs is a small industry, and that is, perhaps, why they feel so strongly in the matter, as, I

  2809
  think, justifiably. They feel that, had their industry been a large and powerful one, like, for instance, the coal industry, they would not have been treated in the way that they have.
  I suppose that the three constituencies in the Nottingham district in which there are more lace makers than in any other are my own constituency, that of West Nottingham, and that of South Derbyshire, and it happens that in each of these constituencies there is a large coal-mining population. These people, therefore, have this spectacle before them. They see that, whereas this large and powerful industry has just been accorded perhaps the greatest measure of Protection that has ever been given to any trade, they, because they are weak and few in number, are to be deprived of that measure of Safeguarding on which their whole industry depends. Is it surprising that they think, and, in my opinion, with justice, that they have been sacrificed to the prejudices of the Chancellor of the Exchequer? It will not surprise anyone, I think, in this Committee, to know that in consequence the name of the Chancellor of the Exchequer will be execrated in many a humble home in Nottinghamshire, for to him and to the Government of which he is a member will be attributed, and rightly attributed, the suffering and unemployment which will follow.
  I desire to repeat just one or two statements of fact, in order that the Cornmittee may draw their own conclusions from them. The first is that for about four years prior to 1924 there was a most serious slump in the lace-making industry of this country, and that slump continued, certainly for four years, and I think for rather longer. During that period, something like 140 firms, many of them old-established firms, went out of business altogether, some in consequence of bankruptcy, some because they had to make a composition with their creditors, but all because they found that their industry was declining and they could not continue. The result was that many hundreds of men and women engaged in the industry were thrown out of employment. Moreover, to those actually engaged in the work of making lace must be added those engaged in subsidiary and necessary occupations connected with lace, such as designers and finishers.
  As a result of this situation, an appeal was made to the Board of Trade in 1924,
  2810
  and a full inquiry was held, the Report of which I hold in my hand. The Chairman of the Committee of Inquiry was Sir George Barnes, and another and most respected member of it was Mr. Arthur Pugh. The Committee decided emphatically that, if this industry was to be saved, it must have a Safeguarding Duty in order to protect it.
  "We have pointed out that unemployment in the lace industry is due to the combination of a number of causes. Any one of these would be serious alone. The cumulative effect appears to be producing a psydhological reaction in the Nottingham lace industry which renders the sense of depression still more acute and the consequences may be nothing short of disastrous. We feel that the industry is drifting into a position from which recovery will be impossible."
  The Report also contains various suggestions which the Committee think would improve the condition of the industry and enable it better to compete in the markets of the world. Every one of those suggestions has been carried into effect. The duty was put on and the result of the duty, combined with the efforts of the trade itself, has even surpassed expectations. From that day to this the situation of the trade has risen from extreme depression and despair to a position in which they are full of confidence and the trade is really in a prosperous condition. It is not necessary to point out what that means to those who are actually engaged in the trade. In wages, in this small trade, it means an increase of something like £30,000 a year. It means also that the sales in the home market have increased since the duty was put on by from 23 per cent. in the first year to 90 per cent. in the second year, 125 per cent. in the third year, and 162 per cent. in the fourth year over the last pre-Duty year. Those figures speak for themselves. If you take the total sales, not limiting it to the home market, the increase is 62.6 per cent. It is particularly fatal at this time to remove these duties. A short time ago information was received from America that it was the intention of the American Government to increase the duties on imports of lace from 90 per cent. to, in some qualities, 250 per cent., and I believe up to 300 per cent. That means that, so far as English lace is concerned, the American market is closed.
  The DEPUTY-CHAIRMAN: I am not quite sure that the hon. Baronet is en

  2811
  titled to enter into a detailed discussion. I do not think that this is the appropriate occasion for going into the details of any specific trade.
  Sir H. BETTERTON: I will not do it. I am pointing out that this is a particularly unfortunate moment to take this duty off, because the effect will be that lace that formerly went to America will now come here. The effect of this combination of circumstances has produced a situation of consternation and despair among those engaged in the industry. I know it is probably hopeless to ask the right hon. Gentleman to reconsider his decision, but it is, at any rate, right that the Committee should know what the result of that decision will be. I am reminded of a precept once uttered by the greatest of the right hon. Gentleman's predecessors that a man who adheres to his opinion when the circumstances under which he formed it have entirely changed, is a slave to his prejudices. The right hon. Gentleman must not be surprised that those who are engaged in this trade think that they have been the victims of his prejudices.
  Colonel WEDGWOOD: The hon. Baronet is an example of the vices of protective tariffs. The speech to which we have just listened is one to which we are listening with increasing frequency in the House. As in other countries, people come here representing special interests and speaking for them. I wish the hon. Baronet would remember the principle laid down by Edmund Burke, that he came here in the interests of the whole country and not only in the interests of a local industry. When he is complaining of the removal of the Safeguarding Duty, his complaint is against his own Government, which fixed the period during which it should endure. It expires automatically. As well might the beet sugar people—and I have no doubt they will through some representatives in the House—complain when the subsidy comes to an end automatically. The vice of Protection is that no sooner do you start protecting an industry than it thinks it has to go on with Protection for ever, although a protective tariff has been introduced over and over again simply in order to put some industry on its feet to enable it during a certain period to establish itself under new world conditions.
  2812
  I did not get up to discuss the Lace Duty. We heard yesterday from this bench Mr. Gladstone, austere aad orthodox as ever. We have had from the Front Bench opposite to-day Mr. Disraeli, facile, vivid and witty as ever. I do not know that I agree with either of them. Mr. Mantalini, balancing his accounts up to the last farthing, honestly paying his way, in the good early Victorian manner, was excellently done. I am not quite certain that the "Rake's Progress" opposite was equally good. As far as I could make out, the right hon. Gentlen.an's chief complaint was that the Chancellor of the Exchequer had paid his debts instead of allowing them to accumulate and increase.
  The one central fact about the right hon. Gentleman opposite was that he established the gold standard on dollar parity when the pound was not worth it, and, ever since, the Chancellor of the Exchequer on our side, and I think honest financiers throughout the House, have been endeavouring to keep that gold standard good. We think that when he established the gold standard, he appreciated the currency and deflated too rapidly. That had a terrifically bad effect throughout industry. Now the same gentleman comes along and begs the Chancellor of the Exchequer not to put on additional taxation but to increase the Debt. What is that hut infla ion, exactly the reverse of the policy which he inflicted on the country five years ago. Whoever else is entitled to lecture the Chancellor of the Exchequer on financial probity and paying his debts and not incurring any additional expenditure, the right hon. Gentleman is not.
  My complaint against the Chancellor of the Exchequer is by no means on the grounds submitted by hon. Members opposite. I do not think it is the business of the Chancellor of the Exchequer to attract millionaires to this country, or to get people into the country in order that they may employ in parasitic employment people who otherwise might be engaged in useful productive work. We do not want rich people, and I do not mind if they leave this country. What we want is cheap capital, and, if I had any complaint to make upon the form of taxation that has been adopted in this Budget, it would he that it must tend to restrict the creation of new capital and thereby push up the price and lead to dearer capital when our industry

  2813
  wants the cheapest capital possible. I believe that is sound whether it is the Treasury view or not. We want cheap capital.
  I have a far more serious charge to make. We had a chance also of making land cheaper, and it was not taken. Cheap capital, cheap land, and cheap raw materials coming from abroad are essential to any revival of industry, and we have not the tax on land values which was promised. Naturally, everyone will realise how tragically disappointing the land taxers, not only in the House but throughout the country, are at what has happened. We have had promises galore for the last five years. We have been told that a tax on land values would be in the next Budget. We have now the Budget, and it is not there. The taxation of land values to which we looked to benefit trade, to cheapen land, and to enable people to get work has been postponed, and, from a promise, it has become a mere item in "Labour and the Nation," like so many other items. This year, next year, some time, never. I do not suppose now that I shall ever see a tax on land values—[Interruption.]
  I cheer myself up in a different way, I reflect that I am also a landlord, and I see in this final dissolution of our hopes some consolation. I shall no longer fear to see my land going down in value. I shall no longer have to throw it on the market, or see my neighbours throwing land on the market and depreciating the value of my land. There are always compensations. When I reflect that last year we had from the right hon. Gentleman the gift of all the rates on our agricultural land, sending up its value so, pleasantly, I thought perhaps we might have to pay for it, or some part of it, this year. But no. We always come out on top. So that, so far as the landlords of the country are concerned, I can see some benefit from what has happened. What worries me is the landless proletariat in this country, They have just closed down another pit in my constituency. Another 1,000 families smashed! Another 1,000 families deprived of the right to obtain a living, barred off the land! Unfortunately, very few of them continue now to ask for justice. Most of the landless proletariat are content with the dole. But here in this Budget was a chance of giving them some beginnings of justice, of the right to work for
  2814
  themselves on the land of their own country.
  There is to be a Valuation Bill. I think that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) must know what will be the fate of any Bill to value the land in this country. When he introduced his rather ill-advised Land Value Duties in 1909, he did not have a separate Valuation Bill. He put the valuation Clauses into the Finance Act. Why? He put them in because he knew perfectly well that the Finance Bill had to pass the House of Commons and could not be amended in the House of Lords, whereas if he had put them into a Valuation Bill it would have taken him months and months to get such a Bill through the House of Commons, and it would have never had a chance of getting through the House of Lords. This new policy which is followed to-day seems to be fatal to any chance of getting a Valuation Bill through. The time of this House is limited, and the time of the other House, unfortunately, is unlimited. There might have been an excuse in 1909 for having a separate Valuation Bill. Valuation was new. There was no machinery in order to get the valuation. Now, at any rate, we have the machinery. We have, thanks to this old device, the ground work on which any valuation must be based.
  Mr. LLOYD GEORGE: We have the valuation.
  Colonel WEDGWOOD: We have the valuation, but unfortunately it is not brought up to date. It can easily be brought up to date. There is no great difficulty in the way of getting this new valuation actually done. The difficulty that has been devised—I do not know by whom—if it has been specially devised for this occasion, is that we cannot get the Bill through, and not that we cannot get the valuation through. What will the valuation be? Unfortunately, in those bygone days we had four different valuations, and nobody except the then Chancellor of the Exchequer understood one from the other. We want on this occasion to have one valuation and no varieties. We want to have one valuation of the land and the minerals exclusive of all improvements in the land. Unfortunately, I fear that the same forces which have turned out of the Budget the

  2815
  tax on land values may emasculate the Valuation Bill as well, and, when we get it introduced into this House, it may be one of those valuations which will be extremely difficult for any valuer to carry out, and which, when carried out, will be of little service whether for taxation, for rating, or for purchase.
  The Chancellor of the Exchequer was good enough to say that there wan a committee dealing with this question. The committee, if I recollect aright, consists of himself, the Financial Secretary, the President of the Board of Education, and the Treasury officials. I do not suppose that the Chancellor of the Exchequer will have much time to give to that committee. The Financial Secretary to the Treasury—well, his heart has never been in the taxation of land values. The President of the Board of Education, we cannot forget, is also the largest landowner in the Labour party. [Interruption.] Perhaps even one of the biggest in this country. We hope for the best. We shall want to watch that Valuation Bill when it comes in and see whether it reflects the opinions which have been put forward by all those who ask for the taxation or rating of land values, or whether it reflects the opinions of those who wish to make any sort of rate or tax impossible.
  I want to make it clear that we are very grateful to the Chancellor of the Exchequer for his promises. We hope that these promises may some day mature, but, speaking for myself, I am a little doubtful, after having heard his speech yesterday. In his statement as to the importance he attached to the taxation of land values, he quoted Mr. Asquith. But Mr. Asquith was not what I would call one of the "first flight land taxers." He quoted Mr. Asquith as saying that the taxation of land values was "a potent instrument of social reform." I hate social reform. The very sound of it makes me ill. When I hear somebody advocating the taxation of land values as a potent instrument of social reform, I know perfectly well that he is only thinking how much money it will bring in. I do not care twopence what money it brings in. The Chancellor of the Exchequer, naturally, must look at that side. I would not be in this House if it was only to devise some fresh means of getting money for the Exchequer.
  2816
  We want the taxation of land values because it will make land cheaper. The whole virtue of the movement is that it shall be more difficult for run in this country to keep the working class unemployed. All the useful productive work you can imagine must begin by the application of labour to land. It cannot begin in any other way. If you make it difficult for the primary trades to get access to their raw material, you are not merely throwing them out of work, but you are throwing everybody else out of work. If we want more useful productive work in this country, and if that work must depend upon the application of labour to land, there is one perfectly simple way of increasing that sort of work, and that is to make A a little easier for labour to apply itself to land. I cannot see how you can get away from it. The work we want der ends upon labour having access to land and you allow the landlords of this country—
  The DEPUTY-CHAIRMAN: I think that the right hon. and gallaat Gentleman is getting too far afield. He can, of course, discuss, in a broad general way, these things, but we cannot have long detailed speeches upon things not in the Budget. While the right hon. and gallant Gentleman was perfeetly in order in making reference to the absence from the Budget of the taxation of and values. he is not entitled to enter into a long disquisition upon the merits of something not included in the Budget.
  Colonel WEDGWOOD: I certainly do not wish to make long orations. We have had long orations enough. I will stick to generalities. My point is, that here is the first opportunity for the Chancellor of the Exchequer really to do something for the unemployed in this country, to give them a chance of getting to work in their own country, and that he has not taken that chance. It seems to me that we cannot do bel ter in this Committee or in this How e than see what it is that is causing unemployment. It is not the abolition of tariffs on lace. It is not the exportation of rich men to America. It is the locking up of the land of this country. Until we can make it both expensive and uncomfortable to own land and not to use it, we shall be doing nothing to put an end to the present state of unemployment from which we suffer.

  2817
  The Chancellor of the Exchequer has been seeking taxes which would not burden industry and strangle the revival of trade. I do not think that he has found those taxes. I believe that many of the existing taxes will make capital dearer and the revival of trade more difficult. He had here to hand a tax which he could have levied and which would not have been passed on to the consumer, which would have made land and raw materials cheaper, and which would thereby have helped industry instead of burdening it. He has thrown away this chance. He is giving us a Valuation Bill in place of it. A valuation Bill, unless he says what is to come of the taxation and rating of land values, will never get through this House either this Session or next Session. I would beg of the right hon. Gentleman the President of the Board of Trade, in the absence of the Chancellor of the Exchequer, to express to him the bitter disappointment of the overwhelming majority of the Labour party in this House, of the Liberal party in this House, and of our joint parties in the country at the absence from his Budget of the promised taxation of land values and the substitution of a Valuation Bill which will hardly get through this House and which much in evitably, unconnected as it is with the Finance Bill, be thrown out by the House of Lords, and make it impossible for us to get any step forward in the direction of dealing with land monopoly in this Parliament.
  Mr. MOND: I have listened to the greater part of this Debate and one or two things appear very clearly from it. We have heard a number of speeches on the Budget, but we have not had a single speech, except the speech of the right hon. Gentleman the Chancellor of the Exchequer, in favour of it. Every speech from every side of the House has been full of complaints at what is in or what is not in the Budget. Nobody seems satisfied. It is not, so we are assured by the Members who come from the Clyde, a poor man's Budget, and it is not, for fairly obvious reasons, a rich man's Budget. It is not a national Budget, for it will bring no prosperity to the nation. I do not think that it suits anybody except perhaps the Chancellor of the Exchequer himself. I am not so certain that by the time that he has had an
  2818
  opportunity of considering it a little more closely and of considering some of the criticisms which have been and will be levelled against it he will be as satisfied with it as he is now.
  I think that some of the critics of the Budget have been rather ungrateful to the Chancellor of the Exchequer for what he has given to them. The right hon. Member who has just spoken has got his Valuation Bill, if he has not 8.0 p.m. got his taxes. At any rate he has the promise of a Bill, and that is more than he has had for five years or longer! Hon. Members from the Clyde have seen the basis of taxation narrowed to a point which is quite unprecedented and quite against all the sound canons of finance. The Chancellor of the Exchequer, instead of broadening the basis of taxation, has narrowed it to a point where practically the whole of the impositions are to fall upon a small group. Surely as a first step that should satisfy hon. Members opposite. They have every reason to be disappointed with the remarks with which the Chancellor of the Exchequer finished his speech. The right hon. Gentleman ended with one or two observations which might be re-echoed from this side of the House. At the same time, although the right hon. Gentleman paid lip service to those ideals and canons of finance he has, we believe, made not the slightest attempt to carry them out. On the contrary, he has gone in precisely the opposite direction.
  One can say that the Budget is unimaginative, that it is dreary and unquestionably damaging. The Chan cellor of the Exchequer said that the additional burden of taxation would not be severely felt by the people who have to pay. That is unquestionably true; it will not be severely felt by those who in the first place have to pay. But it is as well for him to remember that when he imposes taxation he is not only taxing people but money, and that taxes have various effects quite apart from the persons by whom the money is owned. The Chancellor is taxing capital. He is proposing to spend money that would this year have been used for capital purposes in order to refurnish and rehabilitate industry. He is taking that money at the exact point at which the greater part of it would probably be used for

  2819
  investment. He is taking, not the income of the country, but what would have been capital accumulations and savings to the tune of some £40,000,000.
  At the present time all our competitors in every country are reducing their taxation. Those of us who are responsible for the carrying on of industry—presumably in order to keep this country going, so that Chancellors of the Exchequer and politicians can always play about with it and spoil the work that is done—those of us who, according to the Chancellor of the Exchequer, have to be encouraged, because our task is made so hard and burdensome by the unhappy finance from which this country continually suffers—we shall not view with any pleasure the results of the bungling in this particular Budget. The probable results of it are very clear. Industry will become more stagnant, unemployment will increase, our competitors will be better equipped relatively than we are, and the reserves of industry will be mulcted just at the point of becoming fruitful.
  I would make a special appeal to the Chancellor of the Exchequer and the President of the Board of Trade to relieve the reserves of industry not only from this new imposition but from the payment of Income Tax. Those reserves represent money just at the point at which it is about to be most fruitful, both in the production of new revenues which the Ohancellor can tax, and in the creation of employment. Quite a substantial amount, £5,000,000, of the money which is to be raised will come directly from the reserves of industry. The Chancellor of the Exchequer had far better leave the money in industry, where it will give some work to the unemployed and provide him with some revenue in future. That is a point which has been raised over and over again, but has been disregarded by one Chancellor of the Exchequer after another who has had no experience of industrial affairs. There is another aspect of the Budget which is perhaps even more remarkable than the imposition of taxes. That is its bearing on the tariff question. The right hon. Gentleman is going to allow the duties on lace, cutlery, gloves and gas mantles to lapse, he has given notice of repeal of the McKenna Duties. There is no reason at all for doing this.
  Colonel WEDGWOOD: Cheaper gas mantles.
  Mr. MOND: Not necessarily. The right hon. Gentleman's great desire is to follow what he considers to be a Free Trade principle. It opens up a long vista. The right hon. Gentleman who has interrupted referred to cheaper gas mantles, but I see trade depression, unemployment, distress for ti e worker and the despondency of the country.
  Major McKENZIE WOOD: How long have you thought this?
  Mr. MOND: For years. One of the reasons why I left the very pleasant association of the hon. and gallant Gentleman and his party, and why other industrialists have left them, is that we cannot talk lightly of these things, that our daily lives consist, not of talking of these things from these benches, but of having to carry them out in practice, and to bear the brunt of the effects cf Acts passed by this House. We have considered and reconsidered the old Free Trade arguments which are adhered to so gallantly, and, if I may say so, so unimaginatively, by some Members of this House. All this distress which we shall witness to the glory of Cobdenism is based on an entirely out'corn theory regarding Free Trade and Protection. It is based upon considerations that no longer apply. In spite cf that, the Victorian politicians return to it with a curious avidity. They know all the arguments on both sides and they feel safe when engaged in the good old discussions which they know. Some of us of the younger generation are not quite so interested in the rattling skeletons of defunct statesmen. From what the right hon. Gentleman the Member for Epping (Mr. Churchill) said this afternoon about Duties, he is not prepared to be frightened by the Chancellor of the Exchequer pretending that the worms which flourish on the late lamented political economists are really dangerous serpents. They are not; they are just ordinary worms to be dealt with in the ordinary way.
  We have to remember that years ago this country abandoned the balance between agriculture and industry. There was a time when the woaker displaced from industrial employment could easily get back to the agrieultur al work from

  2821
  which he came. That time has long since passed. To-day you have a great industrial population that has no prospect of getting back to any sort of agricultural existence. We are one of the only countries in the world faced with that position. There are works which I know well, where within the memory of living men they used to stop the machinery in harvest time in order that men and horses might be used for the harvest. Those days have gone. The population has grown, and grown to such an extent that it can be employed only by industry. Yet we have thrown over the only possible method of maintaining an economic balance which will keep our men at work, and that is by means of a tariff system. Nearly every country in the world employs it. The whole of our Dominions employ it; Australia employs it and so does South Africa., and America, and nearly all the great manufacturing countries. They are not having less of it; they are having more of it, and in larger units. The Empire is large enough, larger than any unit in the world, and it could easily devise such a system, if there were a will to carry it out in this country. I am not talking now of absolute Empire Free Trade, because those things are very difficult to work out, but. of a, method of the freest trade, which is essential and could be carried out easily.
  The pedantry of the cheers we had just now are clearly indicative of the lack of desire on the part of hon. Members opposite to embark on any new line of thought in order to solve the problems of the country. They prefer to go back to the very antique teachings of Socialism, which have been disproved and discredited in every civilised country in the world. As a matter of fact, the moment you admit the principle of anti-dumping, which is admitted by all the economists of this country, the moment you start thinking on different lines, of the fitness for citizenship, of husbanding the resources of the nation and of a desire, not for cheap labour but for a high standard of living, the whole Free Trade theory becomes absurd and unworkable.
  Mr. BROCKWAY: Hear, hear!
  Mr. MOND: I am glad that I am succeeding in getting some converts.
  Mr. BROCKWAY: Let me correct the hon. Gentleman. Many of us on these benches are not Free Traders, but we are not Protectionists. We believe in the organisation of international trade.
  Mr. MOND: A most interesting statement. I have always wondered what the people who sit upon the mountains, the hon. Members who sit on the seats opposite, really are. They are not Free Traders and they are not Protectionists. They seem to be neither Communists nor Socialists. They have a sort of ardent faith of their own, which they keep to themselves and do not disclose to the rest of us poor mortals, because we might be unable to comprehend it. The Chancellor of the Exchequer has tried to claim financial soundness for his Budget, but it is not a claim that he can fairly make. His Budget was wrecked by the policy of his Government long before the Budget was brought in; it was wrecked by the incurring of further expenditure for which he had made no plans. So he has had to put himself into a position for which he himself really apologised towards the end of his Budget speech. He admits that high taxation is not a good thing, and yet he imposes it. It is essential, if this country is to recover, that the whole policy of high taxation and extravagant expenditure should cease, and thai we should have a series of real Gladstonian Budgets, based upon low expenditure and low taxation. Quite a different line of policy has been pursued by the right hon. Gentleman this year, whereas the right hon. Member for Epping made a great and gallant attempt to pursue it during his stewardship as custodian of the national finances. The only economy that has been effected this year has been in the Fighting Services, and even there the Chancellor of the Exchequer seems to think it necessary, if I may use the expression, without offence, to bleat about the War.
  It seems strange that, although it is only 12 years since the country had to depend for its very existence upon the Fighting Services,there should be this demand for cutting them down to far below the point of reasonable efficiency. The Government have cut the Fighting Services down to the lowest point to which they can be cut. While I do not want great military or naval expenditure I do say that we ought to be very chary about

  2823
  cutting the Fighting Services down below a point where they can be reasonably and properly carried on. The right hon. Gentleman can console himself with the fact that thousands of patriotic cadet boys have been deprived of their summer camp as a result of his economy, and in the name of pacifism and Socialism. While basking in the sun at Eden Lodge, perhaps he may give some little thought to those cadets who might also have been basking in the sun had not the Secretary of State for War thought that he spied a menace to the peace of the world in the cadet corps of this country. The cadet boys can console themselves on the fact that they have contributed towards the relief of the bookmakers.
  There is only one sure road to prosperity, and that road the Chancellor of the Exchequer refuses to walk. It will take a long time to rebuild the capital of this country, which was impaired and dispersed and, in some ways, destroyed by the War. The revenue of this capital is the true purchasing power and the true taxable revenue of the country. The Chancellor of the Exchequer has intimated that these are his views, but he has not had the courage to pursue them. I know that it creates laughter among hon. Members opposite when we talk about the recovery of finance and the long time that it takes to rebuild your financial position. If we take the trouble to study the financial history of this country and of the world we find that there is no short cut. To be able to spend money wisely, the only way is to have it as income, and not try to spend the capital. A great many people in all walks of life have tried it. They have spent their capital and have been greatly surprised when they suddenly came to the end of it. That is what this country is doing in this Budget. That is what has been done in past Budgets, and it must come to an end. We must get back to a period of retrenchment, economy, and lower taxation, And back to the point where we consider the profits of industry rather than the largesse of the politician.
  Mr. DENMAN: I think the Committee will feel that we deserve a little cheerfulness, after the hon. Member's speech. He asserted that what we needed in this
  2824
  Budget was some new idea. So far as I could understand his speech, the only positive idea that he offered to us was the idea of tariffs, which I have heard discussed by his father in great detail many years ago. Tariffs, whatever may be their merit, have nothing to do with this Budget. We do not propose tariffs as an immediate method of raising large sums of money. There has to be inquiry and long processes before we can obtain money in that direction. What the Committee has to consider is the obtaining of the money which we have declared by our Estimates we need in this current year. The hon. Member seems to suggest that he would advocate an increased expenditure upon armaments, or, at any rate, upon cadets. The object of our discussion must be to suggest how the money can be raised, and I want to confine myself rather strictly to the question of raising money in view of the immediate needs of the situation. Those of us who represent important commercia. and business constituencies are bound, in courtesy to our own consti;aents, to make comments on the Budget as it is, and the possibilities of the financial position as we see it.
  The Budget seems to have come triumphantly through any practical criticism that has been offered against it. There has been no practical alternative suggested. From hon. Friends behind me on this side of the House we have had the suggestion that the Budget ought to have heralded a new creation of the power of our social State. That, however, must be a matter of a great many different Statutes, and a large alteration of our old social order. It is r at a proposition that you can expect in I he, Budget. Do they really suggest that this year, on the Estimates before us, aid with the Statutes which have been passed and are in prospect in the current year, we ought to have raised a much larger sum of money, and if so, how? It is a little hard on the Chancellor of the Exchequer to ask from him on this occasion a great increase of taxation, which is, I presume, what they have in mind.
  I want to make two positive suggestions as to what I think should be the broad outlook of our Labour finance My first point is a very small one, and I would ask the President of the Board of

  2825
  Trade to convey it to the Chancellor of the Exchequer. It is that, in the Finance Act, we should once for all, by one Clause, put an end to a very old, I will not say scandal, but a very old offence in. our finance, and that is the existence of perpetual pensions. Before the War there were several of these pensions, but in the course of the War they dropped out, and there is now only one left, a perpetual pension of 25,000 a year, which has been going on for 120 years. This pension will go on indefinitely unless we end it. Unless we put an end to it, it will go on for as long as this particular family exists. I do not want the demise of that family, nor do I want that pension to be stopped this year, but I do want a term set to it. I want the Finance Bill to state that after a certain date that pension shall stop.
  The other suggestion is of more substance. I suggest that the real function of Labour in finance is to build up the assets of the State. That is a thing with which this Budget has nothing to do. It is an undertaking which no Chancellor of the Exchequer has attempted; and I propose to indicate how very barren are the assets of the State. Take India as an example. That country has a debt of about £800,000,000, and the assets are well over £600,000,000, but if you look at oar figures you will find that the assets of the State are extremely small, in fact, the only substantial one is the Suez Canal shares. [An HON. MEMBER: "The Post Office!") Yes, but the capital value of the Post Office has never been stated. It brings an enormous income to the State, but we have no statement anywhere as to its capital value.
  This Budget carries on the normal procedure of transferring income from one set of persons to another. That is a process which was first started on a considerable scale by the Liberal party, and in the technique of it there is not much more to be done. There are not many ways left untried by which income can be taken from the wealthy and the poor. We can perhaps get a little more or a great deal more, but the process has reached about as high a pitch of perfection, technically, as it can attain. I am pleased that the Chancellor of the Exchequer has depended more on Income Tax than on Surtax and Death Duties. It is extremely doubtful whether a great deal more money can be obtained from
  2826
  either the Surtax or Death Duties for the simple reason that both of them are in some measure voluntary, and when a tax is voluntary there is always a danger that less will be claimed from it than one would like. In the case of Income Tax you can be fairly sure that the amount of avoidance will be small, but in the case of Surtax the individual has the one simple device of avoiding aggregating to himself the fragments of income which have already paid Income Tax, and need not be aggregated if he does not wish to do so. He can leave portions abroad, or distribute portions amongst members of his family. There are many ways in which it can be avoided.
  Still worse is the position of Death Duties. There is always the danger that the old Conservative and Labour doctrine about wealth may prevail and that we may really convince the people that to amass a great horde of wealth not only makes entry into Heaven unnecessarily difficult but is also essentially vulgar. Whenever public opinion begins to think on those lines Death Duties will yield enormously less than they do now. At present there is an average of one estate of £500,000 and upwards per week and nine estates between £100,000 and £500,000 per week. If it became the correct thing not to bequeath large sums of money—no one need bequeath large sums unless he wants—you may get a dangerous shrinkage of revenue from Death Duties, and I suggest to the Labour party that what we really ought to be doing is not to go on indefinitely with this process of transferring income but to begin and raise up a solid structure of assets of the State. I would suggest that the direct way of doing that is by enabling a portion of the Death Duties, when the time is favourable, to be payable in kind. If they are paid in kind, as they can be in the ease of land, the land can be immediately gold and the money realised taken for the national revenue and used for the expenditure of the year. Death Duties are, of course, a levy on the year's capital for the purpose of the year's revenue, and I suggest that we should take a portion of this capital sum and keep it in the hands of the State in kind.
  Our assets are extremely small. We have no complete list of the assets of the State. It must strike many business men in this House as an odd fact that we have

  2827
  no national balance-sheet. Every small company at its annual meeting has its balance sheet, but the State has no statement whatever of assets and liabilities. You can extract from the financial returns great masses of our assets, but they are not complete, nor are they very illuminating. You find amongst our assets the figure of £39,000,000 for the Unemployment Insurance Fund owners. That is not a very brilliant asset for the State. There is the Post Office, the Army possessions, the Naval possessions, but nowhere do they occur in our list of assets. In fact, the State is an extremely poor organisation. There are positive advantages in allowing Death Duties to be paid in kind, but there are several difficulties in the way, especially if you try to get too much out of them. One difficulty is that by suddenly putting securities on the market which have to be sold you may depress the share value of a great number of companies and also the value of our own national loans. It is much better that less of that money should come on to the market. If the single owner of a business has died and a great mass of his shares in the company have to be sold, you might injure the credit of the company. Difficulties of that kind arise. But if you transfer them in kind, and they are kept in kind, these things do not happen and the State is gradually enriched and enjoys increasing interest from the assets.
  I have referred to the ease of the avoidance of Death Duties. Business men art an extremely sentimental race and I have found a real objection on their part when they feel that out of the structure which they have built up during their lives they have suddenly to hand over to the State a quarter of all that they have collected and that that quarter is to be dissipated in a single year's expenditure. If, on the other hand, a man who has built up that structure felt that that quarter was going to remain a possession of the State, to be permanently fruitful and, ultimately the means of lessening other kinds of taxation, I think you might arouse a real feeling amongst certain kinds of patriotic business men which would encourage the possession by the State of assets which they themselves have built up.
  2828
  We have had one or two romarkable examples of people handing over sums of money to be allowed to accumulate in relief of the National Debt. These people do not want that money to be spent in the State expenditure of a single year, but if they know that it will accumulate and ultimately form a considerable sum in the capital resources of the State then they are content. We had the very remarkable example of Colonel Hall Walker who gave his whole racing stud to the nation. It now provides one of our most profitable Socialist activities. It gives us some £17,000 a year of profit which, in itself, is a very fine achievement. I am sure that donor would have objected to the stud being sold and the proceeds being used in the annual finance of the country, but he was content that it should remain the possession of the State to be of value, both in producing revenue and in producing very fine horses.
  I suppose that all of us in this House have our dreams of different kinds. I have sometimes dreamt of a time when the State would be able to produce a balance-sheet as glorious as the balance-sheet of the Prudential Insurance Company. The Prudential Company at present is wealthier than the State in its assets, but, of course, its liabilities are very much less. If I do not live to see, in my time, a State balance-sheet as fine as the Prudential Companys balance-sheet, it is an event which may be possible in the lifetime of my children; and I should like to think that our Labour Chancellor of the Exchequer had started erecting a great structure of State assets which would, not only permanently increase the wealth of the State, but would also give hopes of a reduction of taxation.
  Sir JOHN FERGUSON: I shall not detain the Committee long, because we have had many speeches, and I am sure that many hon. Members are suffering from exhaustion. Hitherto my interest in the Budget has been more or less confined to points touching the City of London. An hon. Member ofposite said that it was a Budget that would appeal to the City, but, had that hon. Member been in the City this forenoon, he would have heard something dire qtly contradictory of that statement. Yesterday I listened to the Budget statement as one who was interested in the trade of the

  2829
  country more than anything else, and in the possibility of some diminution of unemployment following upon an increase in the trade of the country. It is in the furtherance of that idea and in the hope of being able to do something to alleviate prevailing distress that I have given 10 years' voluntary service.
  We learned yesterday for the first time that new taxation would reach the alarming total of about £35,000,000 this year and about £45,000,000 next year. We also heard of some undefined taxes which are being left over, apparently more as a menace than anything else. The McKenna Duties are left in a very unsatisfactory state—if the trade of the country is the Chancellor's first consideration—and I am not sure that that evil result will not be aggravated by the remark which I distinctly heard him make at the Table: "I may change my mind yet on this matter." It is a deliberate blow, a personal blow, struck at the Empire by the adherent of a theory which, I hope, is quite dead even now and will be pronounced dead in the years to come.
  An examination of the figures shows that last year's deficit is primarily the fault of the Socialist Government. I think that that fact must be acknowledged because, of the deficit of £14,500,000, nearly £10,000,000 is due to extra unemployment benefit. The country to-day is paying for post-War extravagance on social services. Social services now cost about £380,000,000 or nearly twice the total of the pre-War Budget, and seven times the amount spent on social services before the War; but these facts do not appear to act in any way as a deterrent to the prodigality which it is proposed to carry on at the expense of the country. I think the statement will be generally accepted that more taxation means less saving, and less saving means less money for investment in industrial enterprise.
  We hear a great deal about the right to work or maintenance. Those of us who have gone through the mill know that there is an obligation to work. The dole, as at present administered, seems to reverse that principle, but the fact remains that we have primarily to rely on industry, which means, in ordinary terms, an increase in our export trade.
  2830
  We must maintain our industrial efficiency at its highest point and our producing costs at as low a figure as is possible consistent with efficiency. What is the position to-day? Our basic industries have not been able to equip themselves with up-to-date machinery. Their overhead expenses, even to-day, stand at a figure at which it is impossible to run business profitably. If some of our companies to-day were able to obtain the money necessary to instal new plant in their works an entirely different condition of affairs would be found at the end of a year.
  I know of one company which was working with old machinery and found it impossible to obtain new capital from the public. Capital was obtained from a private source and inside 15 months the company was paying a comparatively large profit, representing a yield of almost 14 per cent. on the money which had been put into the business. Had that money not been put in, the business would have headed straight for liquidation. To the mind of anyone who is watching the course of the expenditure of money this rushing mighty river of additional social expenditure is alarming. I wish to see every man as happy, as comfortable, as well fed, as well clad as I am myself. That has been my principle all my life and I stand by that principle as a, Mean-her of the House of Commons to-day. This treatment of industry has been, and is, a crushing blow, because it has destroyed to a very great extent any chance of new capital being put. into industry.
  There is another point. The amount spent last year on redeeming stock was £28,000,000 only, while the sum taken in Death Duties was just on £80,000,000. Every endeavour should be made that the Sinking Fund should never be less than the yield of the Death Duties. When all is said and done, it is simply a tax on capital, and it is essential to maintain this level in order to reduce the cost of the Debt and to enable the Chancellor of the Exchequer to make a good bargain when the question of conversion comes along. Conversion up to date has been exceedingly disappointing, and very little saving has been effected. The service of Debt in this country, as hon. Members know, is almost £1,000,000 a day. How can the Debt be successfully refunded at lower rates when our national expendi-

  2831
  ture keeps on increasing at such an abnormal rate? All the advantages accruing to successful conversion are lessened and in fact made impossible by such generous, to put it no stronger than that, expenditure.
  The expenditure of local authorities must have appealed to anyone who studies these figures. It is now £520,000,000 a year, against £170,000,000 before the War, and the national expenditure is £860,000,000 roughly, against about £195,000,000 before the War; and if you add the two together, you will find that the expenditure is £1,385,000,000, as compared with £367,000,000 in 1914; that is to say, £1,000,000,000 of difference. The result is high prices and this curse of unemployment, which has such a deteriorating effect, mentally, morally and physically, on the people of this country.
  When the Chancellor of the Exchequer said yesterday that he had not thought it necessary this year to provide for the expenses of a General Election, there echoed through this House the crack of the Socialist whip on certain Members on the benches below the Gangway on this side, and the Toying look with which he said it was an indication to us on these benches that it was all done by kindness. In the opinion of many thinking people who have the best interests of this country very closely at heart, and after many years' study of this question, this Budget will go down to posterity As one of the most vindictive and most destructive Budgets that has ever been introduced in this House—vindictive because it is mainly directed against one class of the people whom the Chancellor evidently does not love, and destructive because of the disastrous effect which it will have on the trade and the industries of this country and on the employment of its people, to which not one single sympathetic reference was made by the right hon. Gentleman yesterday. If further proof were required that this is a spendthrift Budget, you have it in the entire absence throughout the whole of the right hon. Gentleman's speech of the one word "economy."
  Mr. PERRY: I am sure the Committee has listened with interest to the speech of the hon. Member for Twickenham (Sir J. Ferguson). Some of us, however, have been rather amazed by the point of view
  2832
  expressed. His policy and his criticism with regard to Debt reduction, and particularly the use of the Sinking Fund, might have been much more rightly directed to the right hon. Member for Epping (Mr. Churchill) and the present Leader of the Opposition, for certainly within recent years no statesman has fallen so far short of the fulfilment of the Sinking Fund in regard to the payment of the National Debt. The hon. Member for Twickenham also made a point. with regard to our social services, hut I have yet to hear from him or from any Member of his party, any constructive alternative for the expenditure on our social services to-day. Let him look at the present acute position in the United States, where, despite their policy of high Protection, unemployment has reached a total of between 4,000,000 and 5,000,000 people, and, largely on account of the lack of social insurance and expenditure on social services, they are having to apply huge sums in order to relieve the distress caused by unemployment. As long as this or any other Government fails to deal adequately with the problem of unemployment, it must not be allowed to shirk its responsibility by providing for the men and women who suffer from unemployment.
  Despite the criticism that has been levelled against the provision of another £10,000,000 for the Unemployment Insurance Fund, it must not be forgotten that on the ordinary principles of insurance that is bound to be a charge on the Fund and will ultimately come back either in the maintenance of the present contributions on a high level when employment has improved, or in a continuance of an increased contribution perhaps in later years. I would suggest to the hon. Member for Twickenham, as one who had a very great enthusiasm for the Empire Crusade in its early stages and who very quickly got out of it—
  Sir J. FERGUSON: No, that is quite in error.
  Mr. PERRY: The hon. Member can settle that point for himself. I would point out to him that in one of his own pet Dominions, one of the most highly protected Dominions within the Empire, which has lately adopted a policy of prohibition in regard to many imports, their position, as revealed to me within the last 24 hours by a distinguished states-

  2833
  man of that Dominion, is that their policy of high tariffs has so created the demand for higher wages and has so increased the cost of living, that that in itself has led to a vicious circle, and the Arbitration Courts in that Dominion are largely breaking down because of the operation of that vicious circle in Australia. I would suggest, despite what the hon. Member has tried to make us believe, that the way out. of the difficulty, even in the Dominion of Australia, is not in the direction which he has now advocated.
  I would like to put before the Committee one or two views on this Budget, particularly as it appeals to the majority of Members on this side of the House. This would not be the time, I suppose, unduly to criticise the expenditure in detail. I am not going to complain of the expenditure on the Social Services. It must be the duty of any Government to provide for those who suffer from unemployment so long as it fails to settle that very disastrous problem. Let us look at it from another point of view. The hon. Member for Twickenham and the hon. Member for East Toxteth (Mr. Mond) were pouring testimonials upon the right hon. Gentleman the Member for Epping for his last Budget. I believe, however, that three out of five of the last Budgets, all of which were compiled by the right hon. Gentleman, showed a deficit. Many of us on this side of the Committee complained strongly two years ago that the Supertax and Income Taxpayers were then being relieved by the right hon. Gentleman. I do not contend for a moment that the Super-tax or Income Taxpayers have not some claim for consideration, but I submit that there are other sections of the community who have far stronger claims for redress. We on this side welcome the steps which have been taken by the Chancellor to meet the present situation. Many of us would have liked to see many more provisions in the Budget. We would have liked to see perpetual pensions swept away, the means limit for old age pensions abolished, and an extension of the old age pensions scheme.
  We recognise, however, that the Chancellor has had to deal with a difficult situation, and, in fixing his new taxation as he has, he has acted on right
  2834
  lines. The principle of taxation should be not so much what a man pays in taxation, as what he has left when he has been taxed. The basis of taxation should be ability to pay, and in the efforts which he has put forward to raise the money necessary for his Budget, the Chancellor of the Exchequer has placed the burden upon the shoulders of those who are best able to bear it. A great fuss was made in the Conservative newspapers this morning about the increase of 6d. in the standard rate of Income Tax. Now that the relief, instead of being 2s. 3d. in the on the first £225 of earned income, is to be 2s. 6d. in the on the first £250, three-quarters of the people who pay Income Tax will not be affected by the alteration in the Budget. It is an amazing reflection on the unequal distribution of wealth that so much Income Tax is paid by only a small section of the community. The burden of the man of moderate means with a family, with the rebates which he will get under the new scale drawn up by the Chancellor, will be eased very considerably.
  I am glad that the Chancellor is taking steps to prevent an avoidance of Death Duties by the transfer of estates into small private companies. We heard a lot in days gone by about wealthy people, who have claimed on occasions to be the only patriots, repeatedly forming their estates into small private companies in order to avoid their fair share of taxation. Many of us rejoice that the first steps are being taken in this Budget to bring to the community a share of that increased wealth which is created by the community in land improvement.
  Mr. FOOT: Do we understand that steps are being taken in the Budget?
  Mr. PERRY: I should like to have seen it part of the Budget. I should have said that the Chancellor has promised that legislation is to be intro-9.0 p.m. duced to carry out this much needed reform, and that I should be glad to hear the reason why it is not included in the Budget—
  Mr. WOMERSLEY: There is no money in it.
  Mr. PERRY: They will have to go to Grimsby for it. I am glad that this

  2835
  legislation is to be introduced, and that a much needed reform will be carried into law.
  Mr. BOOTHBY: The Committee will have listened with interest and a certain amount of astonishment to the first speech in favour of the Budget which has been delivered. I do not remember a debate on the Budget Resolutions in which a Budget has been so castigated and assailed from every quarter of the Committee as the present Budget. The speech of the hon. Member for Kettering (Mr. Perry) was the first speech which contained even a modified approval of the main proposals of the Budget. This Budget is not popular in any point, and I am not surprised. We started off with a trenchant denunciation by my right hon. Friend the Member for Epping (Mr. Churchill). Then we had a wail of sheer despair from the hon. Member for Bridgeton (Mr. Maxton). Later, the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) was heard in full cry and in bitter complaint about the betrayal of all the things for which he has stood in British politics for the last 30 or 40 years. The right hon. and gallant Gentleman knows as well as we know, and as well as the hon. Member for Kettering knows, that the method which has been adopted by the right hon. Gentleman, with regard to the taxation of land values, despite all the speeches which he has made, and all the articles which he bas written, is the one method of securing that the question shall not become actively or practically embarrassing in the near future, because he knows very well that the chances of getting through a separate Bill for the valuation of land are absolutely negligible.
  The Chancellor of the Exchequer yesterday estimated his deficit for the year that is to come at £26,264,000, and some of us on this side ask ourselves why the deficit reaches so formidable a figure. We find from the speech of the right hon. Gentleman that the Civil Estimates have gone up by £27,000,000. There, therefore, is to be found the cause of the deficit. According to the right hon. Gentleman, £14,000,000 more is required for the Unemployment Fund, £5,000,000 more for the new Widows Pensions' Act; and, in
  2836
  addition, there are automatic increase in old age pensions of —1,000,000 in education grants of £2,500,000, and in Housing and Health Insurance grants of over £1,000,000. Without wishing to be in any way harsh, there are some of us on this side of the House who quite genuinely believe that this wholly unproductive expenditure upon what are called the social services has not only gone far enough but too far at the present time.
  Mr. MUGGERIDGE: What would you cut? Help us.
  Mr. BOOTHBY: if the hon. Member will wait for a moment will try to show how I would have done it. In the first place, at this very critical juncture in our national affairs I would not have passed the Unemployment Insurance (No. 2) Bill nor would I have given the additional widows' and orphans' pensions.
  Mr. MUGGERIDGE: Will the hon. Member allow me to ask him what he would do with the unemployed?
  Mr. BOOTHBY: If the hon. Member will give me a chance he will see that I am just coming to that point. What I was saying was that during the last 10 months the Chancellor of tie Exchequer had assented to an addition of £9,000,000 to the purely unproductive expenditure on social services, a sum which we cannot possibly afford at the present, time. The hon Member has asked what I would have done. My answer is that I would not have put upon the Statute Book either of the two Acts, which involved that additional expenditure. I do not think they were necessary, nor do I think we could afford it. We are very much poorer than before the War, and our rate of expenditure is enormously higher, even allowing for the difference in the value of money. Our national income has gone down, but our taxation is the highest of any country in the world. The alarming thing in the Budget statement of the Chancellor of the Exchequer was that he held out no hope whatsoever of any de crease in this unproductive expenditure. On the contrary, he apparently contemplated, and, indeed, he to some extent budgeted for, a steady increase of expenditure upon the purely social services in the years that are ahead. How did he meet the actual problem, and nobody denies that it was

  2837
  a difficult one, with which he was confronted? He made no serious attempt to carry out economy. As my hon. Friend the Member for Twickenham (Sir J. Ferguson) pointed out, the word "economy" figured at no point in the course of the speech yesterday. On the contrary, he has already agreed to an increase of £9,000,000 expenditure on the social services, and is shortly adding a further increase by the raising of the school age.
  The hon. Member who interrupted just now asked what I would do about the unemployed. It has always been a source of amazement to me that the Government have never made any attempt to deal with the problem of the unemployed. At the present moment it is perfectly right to describe unemployment benefit as it is given to a very large number of the unemployed as a "dole." It is a dole, it is nothing more or less; and it is a dole which is clawed every week off the wages which are paid to the vast majority of the workers in this country, who are more or less permanently employed. That is the viciousness of the present system. So much is docked every week from the wages of the steadily employed and that money goes to the Unemployment Insurance Fund. Those men, and they are in a vast majority, who are in more or less permanent employ, never get any benefit from the contributions they pay. Their contributions are handed over to the growing army of permanently unemployed, who do nothing from one day to another but hang about the streets smoking cigarettes and go to the cinemas in the evening. I am not saying that they themselves are necessarily to blame, but I do say that they are the victims of a system which is not only unjust but extremely unsound from every point of view. Over and over again Ion. Members on this side of the House, both in the last Parliament and in the present Parliament, have urged that the only way to deal with this problem is to separate the two categories of the unemployed; to have on the one hand a proper insurance scheme so that those who contribute regularly week by week shall be entitled to draw the benefits for which they have contributed—and full benefits, on a generous scale: while those who are, though perhaps through no fault of their own, more or less permanently unem-
  2838
  ployed ought to be dealt with in a separate category and by a separate authority.
  Mr. MUGGERIDGE: Would not that cost money?
  Mr. BOOTHBY: I do not think it would cost anything like the amount of money the present system is costing. Look what the Government have been compelled to do. Twice they have had to come to the House and do what the Minister of Labour herself has described as a dishonest thing, ask for an increase of borrowing powers. Despite the fact that the Chancellor of the Exchequer estimates that for this year the cost of the Floating Debt will be £11,500,000 less than the cost of the Floating Debt last year, he still proposes to allocate the whole of the Suspensory Fund for the de-rating scheme to the purposes of Debt repayment. [Interruption.] Yes, the £16,000,000 of the Suspensory Fund is to be allocated during the next three years to repayment of debt. This year he is applying £5,000,000 of that Suspensory Fund to fortify still further the Sinking Fund; next year it will be another £5,000,000 and in the following year £4,500,000. All I would say is that many of us on this side of the House consider that the Fixed Debt charge of £355,000,000 a year is in itself ample for the purposes of repayment of debt, and that there was no necessity, at this critical juncture, for the right hen. Gentleman still further to increase his estimated deficit to over £31,000,000 by applying yet another £5,000,000 to debt reduction, simply because there was a deficit upon the Budget of last year.
  I do not think we can possibly judge the operation of this fixed debt charge of £355,000,000 a year after two years. We have had two of what we must all regard as the most difficult years this country has ever experienced, and just because in neither of those two years has the full limit of £50,000,000 a year been paid into the Sinking Fund there is no reason to suppose that in the long run, and taking an average over several years, the Fixed Debt charge of £355,000,000 a year will not prove ample for all practical purposes. We are paying off debt in this country on a scale that has not been attempted by any other country in the world, and that I should not think would be attempted by any

  2839
  other country, and according to the Chancellor of the Exchequer himself, the reduction in the dead weight of National Debt last year alone amounted to no less than £31,000,000.
  No one on this side advocates reducing the figure of the Fixed Debt charge below the statutory sum of £355,000,000 fixed by my right hon. Friend the ex-Chancellor of the Exchequer, but at the same time I think we ought all to realise that in so far as that enormous transference is concerned—I admit it is a transference; we collect the money from the taxpayers on the one hand and distribute it among the holders of War Loans and so forth on the other—it tends to take money from productive industry and to put it into the hands of the rentier class. In other words, the whole tendency of this enormous debt redemption which goes on year after year is to take money out of active hands and to put it into more inactive hands. What we on this side of the House say is that under those conditions, and especially looking to the enormous reduction which has been effected in the cost of the Floating Debt, there was no reason for the right hon. Gentleman to put still another £5,000,000 this year and to promise another £5,000,000 next year towards debt repayment. It is financial pedantry of the very worst kind.
  In order to provide for this enormous Debt repayment and to pay for his own extravagance and additional expenditure upon the social services, the Chancellor of the Exchequer has had resort to direct taxation. He has imposed direct taxation amounting to £31,500,000 this year and to £43,500,000 in a full year. It is a tremendous sum, and I think hon. Members on every side must agree that it is a most formidable addition to the burdens upon industry; but one of the features that alarms me is that hon. Members opposite have stressed so much the fact that by far the bulk of this additional burden falls upon a very small minority in this country; and, indeed, by the further modifications and reliefs in the lowest scales of the Income Tax, the Chancellor of the Exchequer has, on the whole, tended to accentuate this effect. The whole burden of this taxation falls upon a small minority of the people of this country. We are gradually getting
  2840
  into the position that nearly the whole burden of taxation is going to be borne by a very small minority of the community, and the rest of the community are practically going to have no stake in the country, and will not care whether the taxes go up or down, or anything else. By this method, you are introducing a sense of irresponsibility among the mass of electors which, although it may tend to increase the voting support of hon. Members opposite in the constituencies—I imagine the financial Clauses were primarily designed for that purpose—although it may have that effect, at the same time constitutes a direct threat to the whole system of democracy, because you are creating a system under which a majority of the people will have no interest in taxation, and no sense of civic responsibility.
  Hon. and right hon. Gentlemen opposite cannot really maintain that this additional burden on the direct taxpayers, through the increase of the standard rate of the Income Tax, does not ultimately fall upon industry. Of course it does. The Chancellor of the Exchequer admitted that in the concluding passage of his Budget statement. [HoN. MEMBERS: "No"] There is no doubt that direct taxation, through the increase in the Income Tax, must ultimately be reflected in wage reductions and the increase of prices in the industrial sphere.
  Hon. Members opposite are always talking about the purchasing power of the people, but may I point out that nothing diminishes purchasing power and slackens demand so much as excessive, injurious and oppressive taxation, which finds its way right through the community as a whole, aril ultimately penalises the workers, and diminishes wages in every part of the country. Direct taxation of this kind stifles enterprise, because nobody will invest money in any enterprise in which there is no prospect of getting an adequate return on the capital invested. Another thing which is so dangerous in regard to direct taxation—a danger which shows itself far more in this country than. in any other country—is that it will tend to accentuate that disastrous process of the drift of capital out of this country into the very industries in foreign countres which are in such fierce competition with our own. Heavy direct taxation is bound to drive capital out of this country.

  2841
  Hon. Members opposite are quite aware that the one cry of the Stock Exchange is that you cannot persuade investors to put one shilling into British industries, and the reason for that is lack of confidence—in my opinion, it is to some extent a correct belief—and that they are likely to get a higher rate of interest in Germany or the United States of America. The Chancellor of the Exchequer has often admitted in this House that never was capital more required by industry than at the present time, because industry requires to be reconstructed and rationalised from top to bottom, and, unless ample supplies of capital are available, that process of rationalisation can never be carried out.
  We have to face the psychological fact that this additional increase of direct taxation comes at a very critical moment in our present economic situation. The Chancellor of the Exchequer has said all that needs to be said on that point, and, after what has been said by the hon. Member for Bridgeton, there is no need for me to say any more. A substantial addition to direct taxation must mean the imposition of a very considerable burden, and nobody knows that better than the Chancellor of the Exchequer. This section of the Budget dealing with direct taxation comes as a message to industry, not of hope, but of something very like despair.
  I cannot imagine what the Chancellor of the Exchequer thinks that he has achieved in this particular Budget. As I have already said, the right hon. Gentleman has disappointed everybody. He has certainly abandoned Socialism. The concluding passages of the right hon. Gentleman's statement made it clear that, although he recognises his action in increasing direct taxation, will make it difficult for him to improve the capitalistic system, or to get it into working order—[An HON. MEMBER: "Why complain?"] I am not complaining. Even hon. Members opposite admit that the right hon. Gentleman has abandoned all hope of Socialism, and we have not heard one word about Socialism in this House for the last 10 months. Having abandoned Socialism, the Chancellor of the Exchequer has also abandoned all hope of adopting a national development policy.
  While I have always condemned the unproductive expenditure to which the
  2842
  present Government has committed us, I am not at all opposed to sound productive expenditure. The Chancellor of the Exchequer ought to have resisted the demands for further expenditure on doles and pensions, and he should have raised more money for the purpose of national development such as the improvement of roads, docks, and harbours to improve the industrial equipment of this country, because that is a form of expenditure for which you would ultimately get some return. As a true representative of an Aberdeenshire constituency, I hate to see money thrown down the drain, without any prospect of a return upon it. That is what the present Government has done. The Chancellor of the Exchequer has abandoned all hope of a national development policy, with the exception of a pathetic little item of £1,185,000 required for the development of the schemes promoted by the Lord Privy Seal. Out of a total gross expenditure of over £850,000,000 there is only this paltry little item of £1,185,000 for the great schemes for national development designed by the Lord Privy Seal.
  The Chancellor of the Exchequer has abandoned all hope of obtaining a favourable conversion upon a large scale. Quite recently the right hon. Gentleman had a more favourable chance than has offered itself since the War. Money is much cheaper now than it has ever been since the War, and there seemed to be a likelihood that it would become cheaper still. I regret that the Chancellor of the Exchequer has quite clearly abandoned all hope of adopting a favourable conversion, on a substantial scale, in the near future. As the Financial Secretary knows, the chief hope of a favourable conversion scheme lies in the net yield that you get from such an issue, and that must be substantially diminished by the increase in the standard rate. The policy involves very little chance of a still further cheapening of money, and probably means that foreign exchanges will move against us.
  Therefore, the whole policy of deflation pursued by the right hon. Gentleman with such grim determination during last year, and his absolute determination not to borrow for the purposes of national development, and the reduction of the floating debt, have been chucked away. Any fruits which might have been

  2843
  derived have been sacrificed by the raising of the Income Tax. A vigorous policy based on productive expenditure and involving possibly a loan for development purposes; or an absolutely orthodox policy designed to assist favourable conversion in the near future, might have done some good, but now the Chancellor of the Exchequer has fallen between two stools. He has neither satisfied the demand of the Chancellor of the Duchy of Lancaster for a substantial development loan, on the one hand, nor is he very likely, as a result of the raising of Income Tax, to obtain favourable conversions upon a very large scale in the near future. No one is pleased—no loans and no conversions; only the wretched British taxpayer has to pay for the unproductive expenditure to which the right hon. Gentleman has assented.
  It seems to me that industry requires at the moment very careful nursing. Looking at the matter from the broadest possible point of view, what have we given industry during the last five, six or 10 years? We have given it the icy blast of complete Free Trade, and the right hon. Gentleman by his Budget has only opened the last window to that icy blast by removing the Safeguarding Duties, exposing industry to the full effects of world competition, under conditions which differ fundamentally from those which prevailed before the War when demand and purchasing power outran productive capacity. For some reason, which is not easy to understand, there is no doubt that to-day world capacity for production exceeds demand and purchasing power. in these conditions, the right hon. Gentleman has chosen to open the markets and industry of this country to the full blast of world. competition. On the top of that we have given to industry a most rigorous deflationary policy, lasting from 1919 and continuing in full force to-day, accompanied by a steady fall in commodity prices which has never stopped since the spring of 1920. On the top of that we impose on industry a burden of direct taxation twice as great as the burden imposed on industry in any other country in the world. Having done these three things, we hear it said that it is because of the failure of the capitalist system
  2844
  to function that we are suffering from our difficulties. The marvel of it is that capitalism in this country has survived up to the present as it has. It says a lot for capitalism that it has managed to stand up against the treatment it has received.
  From the very first words of his Budget speech to the last, the right hon. Gentleman never produced a single constructive or helpful idea or scheile—not one. There was no sign of any imagination or constructiveness—except possibly in the remission of the Licence Duty to bookmakers. There was no serious attempt made to come to the assistance of industry at a very crucial time. As somebody outside the House remarked immediately after the Budget speech, when the figures were available, the Chancellor of the Exchequer might quite easily have concocted the whole of his Budget in 10 minutes. There was no evidence of any constructive thought applied to the general economic problem. There is no doubt that at the present time great age is an advantage for suceess—crtainly in politics and probably throughout a great part of industry in this country. but I do not honestly think it is very desirable that we should have at the present time people in charge of our economic affairs with mediaeval minds.
  Speaking not merely as a member of the Unionist party, but as one of the younger generation, I firmly believe that the right hon. Gentleman has not progressed further in his economic ideas than about the year 1830. and that is putting it moderately. There is no sign in this Budget, at any stage, of any attempt to grapple with modern economic movements in a realistic spirit, and that is why there is no satisfaction in regard to this Budget in any quarter of the House. Until the hon. Member who sits behind the Chancellor spoke, not a speech in favour of the Budget, had been made in the Committee to-day. In my judgment, this Budget has dealt, and will deal in the years to come, a savage blow at industry from which recovery will be long and painful.
  Mr. PETHICK-LAWRENCE: It has been my pleasure to listen to nearly the whole Debate this afternoon and this evening, and perhaps I may be forgiven if I say that the greater part of it has been almost wholly irrelevant to the sub-

  2845
  ject of the Budget which we are supposed to be discussing, except one or two speeches, including that of the hon. Member for East Aberdeen (Mr. Boothby). Although I think he made a great many statements that were both mischievous and misleading, he did address himself to the subject of the day. We have had the hon. and gallant Member for Bournemouth (Sir H. Croft), expanding himself, as we always expect, upon his favourite theme, and he scarcely condescended to put himself in order by dealing with those Safeguarding Duties which are to lapse during the current year. He dealt, as he always does, with Protection in a large and airy way, and he was somewhat aggrieved when I pulled him up for including the McKenna and Silk Duties in Safeguarding. "Why," he said innocently, "they are all Protectionist"—as though all Protectionist proposals come under Safeguarding.
  The Safeguarding Duties were put on in cases where industries were supposed to be suffering badly from foreign competition.
  Sir JOSEPH LAMB: Proved to be—not supposed to be!
  Mr. PETHICK-LAWRENCE: Hon. Gentlemen can make their own speeches; I prefer to make my own in my own way. Those Duties were put on in cases where industries were supposed to be suffering from severe foreign competition, and as being needed in order to save them from disaster. No one could possibly speak in those terms of the motor industry and the silk industry. The right hon. Gentleman the Member for Epping (Mr. Churchill), when he imposed the taxes on foreign motor cars and silk, did not pretend that this was the case. Of course, the motor car industry and the silk industry were growing industries, and, as everyone knew, whether they were protected or not, they were certain to make immense strides during the last few years. The right hon. Gentleman the Member for Epping was quite aware of that, and, when he put on the Silk Duty, he said quite definitely that he was doing so because he knew that. there was a large source of revenue to be obtained thereby, and the industry was increasing so much that the natural fall of prices would be intercepted by the tariff which he was
  2846
  putting on. When hon. Members opposite, like the hon. and gallant Member for Bournemouth, attempt to prove their case of an increase in industry by lumping in the motor car trade and the silk trade, which have absolutely nothing to do with Safeguarding, it shows that they know the weakness of their own argument, and that they cannot prove their case by dealing with matters which really belong to the Safeguarding Duties.
  The hon. Baronet the Member for Rushcliffe (Sir H. Betterton) did confine himself to one of several businesses which will cease to come under the Safeguarding scheme, and he quoted figures, but the trouble with him is the same as it is with all those who attempt to argue in favour of Safeguarding. They select figures very carefully, but give no grounds on which they are based, and no means of checking them, and those of us who do not share their opinions can neither find their figures nor find any which hear out those which they give. I will only put one point. The hon. Baronet was careful to say very little about the export trade in lace. I have taken the trouble to look up the figures for exports of lace, and I find that the export trade has fallen, during these years of Safeguarding,, from 32,000,000 square yards in 1924 to 25,000,000 square yards in 1929. That, of course, is the effect. of these tariffs—they tend to kill the export trade. [Interruption.] That has certainly been so in this particular case at any rate, which the hon. Baronet desired to bring to my attention. I could take the other figures if necessary, but I do not want to take up time, showing that that is a general result of these tariffs. Certainly that is the result in the lace trade. I would remind hon. Members that the figures I have given relate to the domestic exports. I purposely excluded re-exports, where different considerations might operate.
  Sir H. BETTERTON: It is the fact, is it not, that the figures with regard to re-exports are not in the least comparable with those before the duty, because now re-exports go into bond, and are not included in the figures at all, whereas formerly they went out on a through bill of lading and were included in the figures?
  Mr. PETHICK-LAWRENCE: I do not in the least understand what the hon.

  2847
  Baronet has said. I was not referring to re-exports, but was referring to domestic exports, which are the only ones relevant to the point I was making. I now come to matters which really form part of the Budget itself. The hon. Member for Bridgeton (Mr. Maxton) and the hon. Member for Camlachie (Mr. Stephen) oppose the Budget because it does not give greater reform at the expense of placing heavier burdens upon a certain section of the community. The right hon. Gentleman the Member for Epping opposed the Budget because he objected that the expenditure on social reform was too great. In his usual picturesque language, he described the expenditure of the Budget in this direction as "lush doles to eager recipients." When I think of the people who will obtain benefits from the social expenditure of the Government—some of the widows who have lived in great poverty all these years, and some of the working men in the North of England who struggle hard to get a living and are unable to do so—I think that the expression "lush doles to eager recipients" is not exactly in the best traditions of the House. The point, however, that I want to make is that both of these lines of attack on the Budget are really irrelevant. The Budget is not a scheme of social reform—
  Mr. W. J. BROWN: Why not?
  Mr. PETHICK-LAWRENCE: My hon. Friend who asks that question has not been very long in the House—
  Mr. BROWN: No, but I am learning rapidly.
  Mr. PETHICK - LAWRENCE: The Budget is not a scheme of social re-form—
  Mr. ALBERY: The Chancellor of the Exchequer said that it was.
  Mr. PETHICK-LAWRENCE: It is a Resolution introduced in a Committee of Ways and Means, with the intention of finding how to raise the revenue which the other Acts of the Session have seen fit to decide should be raised. The Chancellor of the Exchequer who introduced into the Finance Bill all kinds of social reforms would be exceedingly illogical—[Interruption]. Hon. Members, when they have been here a little longer, will realise that, through the Estimates and
  2848
  through the Bills which become Acts of Parliament, we agree to certain expenditure, and the Budget is the opportunity of finding how to foot the bill, and nothing else. [Interruption.] That applies equally to the irrelevancies that came from behind me and those to the right hon. Gentleman the Member for Epping, who was Chancellor of the Exchequer in the late Government.
  Sir BASIL PETO: Will the hon. Gentleman kindly bear in mind the statement of his chief yesterday with regard to the taxation of land, that:
  "It will be, to use s phrase of Mr. Asquith's, a potent instrument of social re-form."—[OFFICIAL REPORT, 14th April, 1930; col. 2680, Vol. 237.]
  The CHAIRMAN: Really, that is an observation in reference to suggested legislation other than on the Budget.
  Sir B. PETO: It was in the Budget speech.
  Mr. PETHICK-LAWRENCE: My right hon. Friend mentioned the new valuation which would be available for financial purposes later on, and any ether form of taxation or impost can be mentioned, perfectly properly, in the Budget speech, but that is something entirely different from the question of expanding or reducing the actual expenditure on sccial reform, which forms the subject of the irrelevancies which have come from behind me and also from those in front of me. Whether we have too much or too little of such expenditure is a quesjon which is outside the Budget.
  The right hon. Gentlemar the Member for Epping, having very little to find fault with in the Budget itself, proceeded to attack some opinions whit it the Chancellor of the Exchequer had had before this Session began. He explained how he would raise revenue, if necessary, not in this year, but in the year after. I was very much interested to see that he produced a new version of Protection. There are in the party opposite adherents of Safeguarding and of the McKenna Duties, and there are certain Members who are faithful to the ideal of Empire Free Trade, but the right hon. Gentleman produced a new nostrum, an 8 per cent. revenue tax. He said, though he was still thoroughly opposed to Protection, that he was prepared to see, if it were necessary,

  2849
  an 8 per cent. revenue tax on all imported manufactured goods, finished and unfinished.
  Mr. CHURCHILL: I never suggested the percentage. I said that in Holland there was an 8 per cent. tax.
  Mr. PETHICK-LAWRENCE: The right Gentleman expressed approval of what he said was being done in another country, which had an 8 per cent. tax. I imagine he would not commend an Excise tax of the same amount, and I am, therefore, rather at a loss to understand how that differs from full-blooded Protection. If we are to have a revenue tax imposed on foreign imports, as distinct from any tax on home manufactures, that seems to me quite definitely Protection. I commend that as another variant of the Protection proposals which we hear on all sides from hon. Members opposite. Warming to his job, the right hon. Gentleman attacked the Chancellor for his proposals with regard to Income Tax and Surtax. I have always noticed hitherto that, when there is any proposal to raise Income Tax, a fairly safe way of taking cover is for hon. Members opposite to say it is not for themselves that they are worried, but for the widow and orphan. They are thinking of the widow with £200 or £300 a year and the orphans with perhaps a similar amount. The Chancellor of the Exchequer has cut away all the ground from those who would take shelter behind the widow and the orphan by the additional exemptions which he has given to the lower incomes. Up to nearly £500 a year for a single person, and nearly £900 for a married man with three children, and with an earned income, the addition to the ordinary rate of tax will produce no addition to the taxation which they will bear.
  Deprived of that means of putting their case, hon. Members opposite have based their claim on the alleged injury to industry. The right hon. Gentleman gave two grounds for thinking that we ought not to put a higher tax on big incomes because of the danger to industry. In the first place, he said that there are a great many fairly well-to-do people who have saved a certain amount of their income, and that which they saved they put into industry. It seems to me to be a rather big assumption that, because people of means may put aside a certain
  2850
  amount and save it, therefore what they spend on themselves is to be exempt from additional taxation.
  The right hon. Gentleman went further and developed another argument. He said it was necessary to help the extremely rich, because the extremely rich were those who were able to command large resources and practically start and run and develop big businesses. The quarrel which we have with that theory is that during the last few years it has failed to function. Let me give two illustrations. During the War no one will deny that both coal and cotton industries were highly prosperous. Enormous sums were made, running into tens and even hundreds of millions. We all know owners of cotton factories who made enormous profits and retired. They did not keep the money that they had made and reinvest it in them when these industries came on bad times. If they had done that, the industries would not be in the position that they are in at present. What they did was to skim off the whole of the enormous profit. In many cases they sold out to other people, who came in at inflated prices, and that is the reason why those two industries are in their present parlous condition. It is not a good argument for reducing taxation that very large profits may be used in certain cases to help industry when it needs capital.
  The hon. Member for East Aberdeen went back to a still older argument to support his claim. He said that it stands to reason, if you increase taxation, that you reduce purchasing power and, therefore, strike a smashing blow at the industries of the country. I expected the hon. Member to have a little more perspicacity. It is true that, if you take a certain sum of money in taxation and sink it in the sea, you would thereby be reducing purchasing power, but, when taxation is used either for expenditure by the State or in the case of Social Services, in so far as it is used beneficially and wisely—I perfectly agree that it must be used wisely by the State or in the Social Services—it gives not only equal purchasing power, but an equal stimulus to industry with the luxurious expenditure which it displaces. If it is used wisely, it is more beneficial to the community, because it encourages staple trades instead of luxury trades.
  Mr. BOOTHBY: Will the hon. Gentleman explain how the £5,000,000 for the further reduction of the Sinking Fund increases purchasing power?
  Mr. PETHICK-LAWRENCE: I will deal faithfully with that point, but I am at present on the other aspect of the question. I wish to make it perfectly clear that I am not advocating taxation for the sake of taxation. That is the mistake of some of my hon. Friends behind. The business of the Chancellor of the Exchequer is to find just as much taxation as is really required to meet expenditure and not a penny more. That is what my right hon. Friend has done.
  Finally, I would remind hon. Members opposite that it was the declared view of the Colwyn Committee that money raised by way of direct taxation did not enter into the cost of industry. The right hon. Gentleman the Member for Epping made a remark that when they made no profits there was no tax. That really seems to be the whole matter. I want, however, to look at this question of the higher taxation of incomes from a slightly different aspect. We on these benches, when we sat over on the other side during the last Parliament, always took the view that the then Chancellor of the Exchequer was wrong in taking 6d. off the Income Tax in 1925, and in reducing the Super-tax as it was then called. We took the view that that action was not justified, and we maintained that view during the last Parliament. Why did we do that? Not because we had any love for taxation, but because we considered that the right hon. Gentleman improperly curtailed necessary expenditure in consequence of that action, and also brought the finances of this country into discredit by the various devices and subterfuges to which he resorted. We always took that view, and I do not know at what point the Chancellor of the Exchequer began to realise that we were right, but certainly towards the end of the last Parliament he had to admit that if he had seen in the year 1925 what was coming—[Interruption.] I meant the Chancellor of the Exchequer in the last Parliament. I made it perfectly clear to whom I was referring. The right hon. Gentleman who was the Chancellor of the Exchequer in the last Government realised, before Parliament
  2852
  was out, the mistake he had trade. Of course, he said it was not his fault.
  Mr. CHURCHILL: I said that if I could have foreseen the General Strike and the coal stoppage, I should not have felt justified in making an addition to taxation.
  Mr. PETHICK-LAWRENCE: I do not deny that. The right hon. Gentleman, like a bad bridge player, blames his cards.
  Mr. CHURCHILL: I blame the crooked deal.
  Mr. PETHICK - LAWRENCE: The right hon. Gentleman never realised that a great deal of his troubles was of his own making, but had he not pursued the policy which he did, an entirely different result would have taken place. The fact was that the right. hon. Gentleman, before the end of the last Parliament, recognised quite clearly that, making into account the facts of 1926, it would have been better had he left the taxes as they were before he made his remissions in 1925. He went on to say that he considered the reversal now would be a mistake. That has not been our view because we think the devices Lad subterfuges to which the Chancellor of the Exchequer in the late Government was put, and the false economies which he was called upon to make, were injurious to the well-being of the State. Therefore, my right hon. Friend the Chancellor of the Exchequer felt obliged, when he was bringing in his Budget, to put back some of the burden which the right hon. Gentleman the Member for Epping had, in our opinion, improperly removed.
  10.0 p.m.
  I want to compare the position. When the right hon. Gentleman says industry will be crippled, the State will be ruined by this heavy burden of taxation, going back to War-time burdens, I 10.0 p.m. want to give a few figures to the Committee to show that that statement is entirely incorrect. We have had reductions of Income Tax on-ward from 1921, and the state of trade did not improve and has not improved as a result of those reductions. What are the actual facts? My right hon. Friend the Chancellor of the Exchequer in presenting this Budget compared the position of Income Tax payers to-day, as

  2853
  they will be after his new proposals, to the position during the last year when the proposals of the Income Tax and Super-tax were in force. I am making a different comparison. I want to compare the position of the Income Tax payer and the Surtax payer after my right hon. Friend's proposals with the position they occupied when the right hon. Gentleman the Member for Epping came into office. In 1924 a man with a wife and three children and £1,000 of earned income paid £106 in Income Tax—I am omitting the shillings and pence. Under the proposals of my right hon. Friend, he will pay £69. A man with £5,000, of which earned income formed the larger part, paid £1,396. Under the proposal of my right hon. Friend he will pay £1,257, nearly £100 less. A man of £10,000—[hiterruptiart.] There are so many interruptions. While I am reading figures I hope that hon. Members will be quiet, and then they will hear them instead of saying they are wrong. I am comparing the Income Tax falling upon the man with a wife and three children in the year 1924–25 before the right hon. Gentleman the Member for Epping took off the 6d. on Income Tax, with the Income Tax and Surtax under the proposals of my right hon. Friend. I say that a man with £1,000 paid in 1924–25 £106 odd. Next year he will pay £69 odd; that is a reduction of some £37.
  Mr. CHURCHILL: Is that the result of the proposals of the Chancellor of the Exchequer in this Budget?
  Mr. PETHICK-LAWRENCE: I have said so.
  Mr. REID rose—
  The CHAIRMAN: Mr. Pethick Lawrence!
  Major ROSS: When the hon. Gentleman has given way, is he entitled to get up again when another hon. Member has taken advantage of his giving way?
  The CHAIRMAN: Mr. Pethick Lawrence!
  Mr. REID: Will the hon. Gentleman give us the figures for last year so that we can compare 1924, which was the first year of a Labour Government, with the results of the Conservative administration and the results of the new Socialist Ministry?
  Mr. PETHICK-LAWRENCE: I am giving figures to show certain results. I will be perfectly fair and straight. Hon. Members can obtain all the figures they want. [HON. MEmBERs: "Give them to us."] All the figures they want have been given in the White Paper, but I am giving the Committee something in addition in order to illustrate a certain point. The point I am illustrating iq this: I am comparing the taxation for the year 1930–31 with that of the year before the 6d. was taken off the Income Tax. The late Chancellor of the Exchequer argued that we were putting on industry some monstrous burden and were going back to the burdens of war time. We say that that is all nonsense, and that we are doing nothing of the kind. Over a certain range of incomes the tax days. is less than the tax was in those day?
  Mr. CHURCHILL: Is the Financial Secretary attributing these reductions to the Budget that was introduced yesterday?
  Mr. PETHICK-LAWRENCE: I never suggested anything of the kind. I am not trying to mislead the Committee. I am perfectly straight. The Committee knows well that the Chancellor of the Exchequer is imposing additional taxation. There is no attempt to disguise the fact. What I said was that my right hon. Friend has put back part of the burden which the late Chancellor of the Exchequer took off, and that although he has put on that burden, he has not put on a monstrous burden but only part of the taxation which ought never to have been taken off. That is my point. Let me illustrate it with figures. In 1924 an income of £1,000 paid £106 in taxation. Next year it will pay £69. On £5,000 the tax was 21,346; under this Budget it will be £1,257. On an income of £10,000 the tax was £3,571; under this Budget it will be £3,457. In the two latter cases there will be a difference of about £100. It is not until you get practically to an income of £15,000 that you find a rise in the tax. It was £5,946, and it will be £5,957. So that the total war burden that we are putting on is, for practically all persons with less than £15,000, smaller than the burden of 1924.
  The Committee must remember also that during the past few years there has

  2855
  been a very great drop in prices. Wholesale prices have dropped something like 25 per cent. Therefore the incomes of these people, right through the scale to the point named, will really enable them to purchase more after this Budget has passed than they were able to purchase before the 6d. was taken off the Income Tax.
  The other attack that the late Chancellor of the Exchequer made on the Budget was with regard to the Sinking Fund. That brings in the point about which the hon. Member for Eastern Aberdeen was so anxious to hear. The late Chancellor of the Exchequer said in effect that it was better not to trouble about the Sinking Fund so much, that what was really important was to reduce taxation. Before I discuss that question, I would like to discover what really is the policy of the late Chancellor of the Exchequer. He decided to institute a new procedure, to fix a. sum of £355,000,000 to cover all the service of the debt. Of course that admirably suited his own purpose, because in the two years that came into his own province he got off very lightly in regard to the Sinking Fund, and in the following years there was a very much larger amount to be found. It was a most convenient proposal to the late Chancellor of the Exchequer, and I commend the sagacity of the unjust steward.
  I am not now very clear whether the late Chancellor of the Exchequer blames the present Chancellor of the Exchequer for that. If my right hon. Friend had taken no account of the deficit for last year, there would have been quite legitimate complaints on that score. After all, it has always been the policy—even the late Chancellor of the Exchequer gave it lip service—that where there was a deficit in one year, you could not afford entirely to disregard it, but had to meet it in subsequent years. Let the Committee consider the position. A Chancellor of the Exchequer decides to take another course. He introduces a Budget. He entirely overestimates revenue and underestimates expenditure. He is quite reckless in bringing in Supplementary Estimates. At the end of the year he comes to the Committee and says, "Yes, we have a deficit of 10, 20, 30, 40, 50 millions, and we are
  2856
  going to take no account of it as all. We are going on again in the following year as if nothing had happened." Surely the Committee would have a very serious complaint to make against the right hon. Gentleman. Hon. Members opposite would be the first to make that complaint. Therefore, I think that my right hon. Friend, the present Chancellor of the Exchequer, was perfectly justified and correct in saying that this £14,510,000 had to be found, and that he had to put it on the expenditure of the following years. It has nothing to do, as the hon. Member for East Aberdeen seemed to think, with the surplus available for de-rating.
  Mr. CHURCHILL: Would the hon. Gentleman answer the question that I put, as to the rate at which the cost of the present Debt is calculated this year?
  Mr. PETHICK-LAWRENCE: I think it is 3 per cent. As I said when interrupted, I would like to know whether what I have described really represents the policy of the late Chancellor of the Exchequer and of the Conservative party. I think the hon. Member for the City of London and the hon. Member for Twickenham (Sir J. Ferguson) would look very much askance at the policy which the late Chancellor professes, and I should be very surprised if the right hon. Gentleman's views really found an echo in the Conservative party as a whole. I noticed in the "Times" this morning an article representing exactly the opposite. The "Times" said:
  "The Death Duties are a direct raid on capital. Yet the Chancellor of the Exchequer proposes to increase the yield of these taxes, which are already far too high, by no less than £12,500,000 a year, for the purpose of providing himself this current revenue."
  The £12,500,000 is a myth which the leader writer of the "Times" has invented for himself. The facts are £3,000,000 in the current year and £7,000,000 in a full year. But in any case it is not correct to say that these figures represent an additional frittering away of capital resources on expenditure which ought to be met out of income. The exact contrary is the ease when all the facts are taken into consideration. When we go back to the Budgets of the late Chancellor of the Exchequer—not the year which was partly his and partly that of my right hon. Friend hut for the

  2857
  four years for which he was solely responsible—we find that he applied nominally £182,000,000 for the Sinking Fund as against the £200,000,000 which would have been devoted to that purpose on the basis of £50,000,000 a year. That was £18,000,000 short, on paper, over the four years. Those who remember the Budgets of the right hon. Member for Epping know that his paper figures were often very different from the figures that would pass a chartered accountant.
  I take into account also £13,500,000 which were pure book-keeping transactions. That brought up the total figure to over £30,000,000. In addition to that, he took the actual amount expended on Saving Certificates interest instead of the amount of the accrued interest, income, thereby allowing the interest to increase during his period of office by £30,000,000, so that against the provision of £50,000,000 a year the debt increased for these reasons by no less than £60,000,000 in the course of four years and the real average of his reduction of debt through the Sinking Fund instead of being £50,000,000 was only £35,000,000. The Chancellor of the Exchequer this year is proposing to devote £55,000,000 to this purpose, so that he is £20,000,000 better in that respect than his predecessor. If £3,000,000 in the current year and £7,000,000 in a full year are considered to be a frittering away of money which ought to form part of capital, there has to be set against that then the £20,000,000 better debt provision that is being made this year.
  Mr. CHURCHILL: An absolute travesty of the facts.
  Mr. A. M. SAMUEL: I deny that the £13,500,000 was a book-keeping transaction.
  Mr. PETHICK-LAWRENCE: I remember the Debates on this question, and the right hon. Member for Epping admitted that it was a book-keeping transaction.
  Mr. SAMUEL: I do not admit it.
  Mr. PETHICK-LAWRENCE: It was a pure book-keeping transaction, and anyone who knows anything about accounts knows that it was. What has been the result? I have alluded to one result
  2858
  already, namely, that of the Economy Act, by means of which the right hon. Gentleman tried to make ends meet. What has been the result upon the credit of the country? It is the habit of hon. Members opposite to say that under a Conservative Government the credit of the country stands high and that under a miserable Labour Government, who do not understand industry, the national credit falls. [Hox. MEMBERS: "Hear, hear! "] I am glad to hear hon. Members opposite cheer. Will they cheer when they hear the figures? What are the facts? When my right hon. Friend ceased to be Chancellor of the Exchequer in 1924 and the Labour Government went out of office and the right hon. Member for Bewdley (Mr. S. Baldwin) became Prime Minister, Consols stood at 58½. When the right hon. Member for Epping had done his fell work, and the Dissolution took place, Consols had fallen to 55.
  Mr. A. M. SAMUEL: Money was pouring into America.
  Mr. PETHICK-LAWRENCE: When the Labour Government took office, Consols had fallen to 54½. To-day, after 10 months of my right hon. Friend, they stand at 561/. Take the Funding Loan. What are the facts? When the right hon. Member for Bewdley took office the 4 per cent. Funding Loan stood at 91, and when he went out of office it stood at 88. To-day, it has gone back to 91. That is the difference between the right hon. Member for Epping and my right hon. Friend. Under the right hon. Member for Epping the credit of this country went steadily down but under the honest finance of my right hon. Friend it has gone steadily up.
  Sir HILTON YOUNG: The Financial Secretary to the Treasury is entitled to the sympathy of the Committee in the performance of a very difficult task. He has met with active criticism from this side of the Committee and with even more active criticism from the other side of the Committee; and we know that these domestic difficulties and interruptions afford him the most embarrassment. At any rate, he has done his best to meet the want described by my hon. Friend behind me, and to supply the one speech in support of the Budget. He has done his best in a sense of loyalty, and in parts no doubt he has succeeded, but

  2859
  not perhaps so well in the final passage of his speech in which he referred to the price of gilt-edged securities as an evidence of the credit of the Government. Has it occurred to him that there is perhaps another explanation why gilt-edged securities have recently risen in price? Is it not sometimes the case that gilt-edged securities rise in price when confidence in industry is so little that people are not ready to entrust their funds to industry and find a more secure form of investment in other ways? One feels inclined to say:
  "Oh sacred simplicity"
  but we really must not attribute simplicity on this matter to the Financial Secretary after so long a term at the Treasury. What we admire most about the Financial Secretary is his positiveness. He is positive when he is right, and he is positive when he is wrong. He is sometimes even more positive when he is wrong than when he is right; so much so that those of us who are humble students and admirers of his methods have come to look upon his positiveness as the measure of his error. And in connection with his observation on Safeguarding surely this was the case?
  Other Members of the Committee are more qualified than myself to speak of those Duties such as lace and cutlery which are to be actually repealed this year. Let me do, what other Members may not be entitled to do, and give one brief piece of personal testimony upon one of those Duties of which I have had long experience; a Duty which is not to end this year but which is warned for abolition next year—the Wrapping Paper Duty. I am acquainted with an undertaking where a large investment of money has been made on the basis of this industry, bringing a large increase of employment on the Medway without any increase in the price to the industry. What Free Trader objects to that? What is there in the Free Trade theory to object to in that?
  As one who comes to our modern fiscal controversies brought up as a Free Trader, let me say that I am fully conscious that it would be ignoring the facts of the day if one did not see this Budget as a step in a direction which will make a revenue tariff impossible of avoidance in the future, and, with such judgment
  2860
  as one can bring to bear upon these topics, I do not see how anybody who understands the bases of the free Trade and Protection controversy can hesitate to pass his judgment that, on balance of considerations, the raising of the revenue which the Government require by a revenue tariff would be more advantageous in the interests of the economics of the country as a whole than to raise it in the way proposed in the present Budget.
  There is another reason for criticism in the arguments advanced by the Financial Secretary. He contended that the direct taxes in the Budget would, in the main, be taxes upon luxuty expenditure and that the distribution of the proceeds in the form of State assistance, maintenance and so on, would he beneficial, by increasing the spending power of the nation. We are familiar with the argument. Put in that way, there would seem to be a basis for the argument, but the premise is wrong. Direet, taxes of the sort imposed by the present Budget. are not taxes upon luxury expenditure. They are in their very character taxes upon the most beneficial of all the activities of the industrious part of the community and that is the activity of saving. If it were possible to distinguish between luxury expenditure and other expenditure, there would be some basis for the contention which has been advanced, hut, as it is, the hammer of this Budget falls with undiscriminating shock upon the most beneficial of all the activities of the well-to-do part of the community as well as upon luxury expenditure. The Financial Secretary challenges us on the subject of the deficit. That is a matter which surely ought to be above the bitterness of party strife. It is surely a matter for a scientific decision as to what is the true policy of the State in dealing with deficits. If I may venture a personal view it is this—that there can be no hard and fast, cast-iron rule for dealing with this matter but that the circumstances of every year should be dealt with in accordance with what those circumstances are.
  There is no magic or spell about the fact that failure to redeem debt accrues in deficits of past years added to the obligation to redeem debt in the ensuing year. The matter should he viewed

  2861
  solely in the light of what the circumstances are in the new year, and you ought to redeem just as much as you think you can redeem. One might take a humorous view of the sacrifice which the Chancellor of the Exchequer is making, in this respect, of what those who understand his psychology know so well to be his preconceived opinions—which are of the most high and dry conventional orthodoxy. I confess, however, that the spectacle of the right hon. Gentleman voluntarily sacrificing himself, in the role of the Ancient Mariner, with the corpse of a deficit tied round his neck, is not necessarily convincing as something which is beneficial to the finances of the State. In fact I wonder whether the right hon. Gentleman would be so keen to take this sacrifice upon himself, and to keep this deficit so conspicuously before the eyes of the public, if the albatross had been a, bird of his own slaying and not of the slaying of the right hon. Gentleman the Member for Epping (Mr. Churchill).
  When we come to his statutory provision for making it a binding rule that the Chancellor of the Exchequer is always to deal with the debt of the year before, it is impossible not to doubt the wisdom of that proposal. After all, it is the obligation of the Chancellor of the Exchequer not to incur a deficit, and if he does incur a deficit, if he is not tied by that obligation, any more than by an obligation to redeem it next year, you cannot make things more certain by the accumulation of obligations. It is better, on the whole, to leave the matter to common sense. In dealing with what is in the Budget, and what is not in it, one may express a passing word of regret that almost the highest hope that could be formed on this occasion had been dashed by the impossibility, which the Chancellor of the Exchequer finds, of dealing at this time with the matter of conversion.
  Conversion of the Debt is the best hope, in fact the only good hope, of saving to the taxpayer under a Socialist Government, and at the present time circumstances are on the whole very adverse. We have a great slump, due in part, no doubt, to a tidal wave of depression which goes round the world at irregular intervals, but accentuated as regards this country by local conditions and by a lack
  2862
  of confidence, coupled with uncertainty about the future, under a Socialist Administration. We have a slump, but that particular cloud brings with it normally the silver lining of cheap money, which the Financial Secretary looks upon as a testimony to the credit of the country.
  We might have been able to take advantage of that cheap money, but I am afraid it is to be recognised that we are not in the dark why the Chancellor of the Exchequer has not been able to take advantage of it on this occasion. I know not what other reasons he might give, hut to an onlooker who regards all the conditions of the case it must be apparent that conversion of the Debt is not favourable at the present time because it is not favourable to go to the investors as a whole and ask them to subscribe for fresh loans by way of conversion at a time when you are piling upon the Income Tax payers of the country burdens of whose fairness and necessity the country is not convinced.
  I have not found in the speech of the Financial Secretary any very acute understanding of the deep-seated disquiet which the Budget has given and which has been expressed from these benches with good temper and with moderation. Let me, before the Debate comes to its close, seek to impress upon the Committee the circumstance that there are many minds in the country who do not doubt that this Budget is a crisis in the economic history of the nation, and who maintain the thesis that taxes of the sort which are imposed this year are indeed a heavy burden upon industry, that they impose upon industry a destruction and a waste of the essential raw material of industry, namely, capital, and that they impose upon those who are responsible for the conduct of industry sacrifice and disorganisation, which are contrary to the best interests of the country. Destruction, waste, sacrifice, and disorganisation.
  I have been looking for words to describe the effects of the Budget, and I failed to find adequate words until I looked up a great master of descriptive rhetoric to supply me with appropriate words. Needless to say, it was the Chancellor of the Exchequer himself. Being at a loss to put sufficiently clearly to bring home to this Committee my profound conviction of the mischief which high taxation does to industry, I was

  2863
  fortunate enough to find an utterance that may have passed from the Chancellor's mind, although it was quite recently made, when, forgetful for the moment of his cares as a prominent leader of the Socialist party, he was discharging his more persuasive part as a champion of the nation in the face of the whole world when broadcasting to the United States of America. So let me appeal as the ancient Macedonian did. The ancient Macedonian appealed from Philip drunk to Philip sober. Let me appeal from the right lion. Gentleman as a leader of the Socialist party to the right hon. Gentleman as a leader of the United Kingdom. He said:
  "Our people are the most heavily taxed in the world. The average amount of national and local taxation works out at about £100 per family. We have an Income Tax of 4s. in the £"—
  and he spoke these words as a Chancellor of the Exchequer who was in a few weeks to raise it to 4s. 6d. in the £
  "a Super-tax running up to 6s. in the £"—"
  so soon to be raised on the basic rate from 6d. to ls.higher—
  "and, in addition, duties on estates passing at death ranging as high as 40 per cent"—
  so soon to be raised to 50 per cent. Then, after this most feeling description of the burdens of the country, he proceeds to draw the moral—the moral, that is, for the people of the United States:
  "With such a burden as this upon our shoulders, with all the destruction and the waste and the sacrifice and the disorganisation of industry and society that it implies, is it any wonder that we have suffered industrial depression? Nay, the wonder is that we have been able at all to maintain our position."
  A Daniel come to judgment! How grateful we, with our imperfect talents, feel that our case should be put for us by an opponent better than we can put it ourselves. Having no qualms when he came to the peroration at the end of his Budget speech—if I may say so, the conventional peroration in which the maker of a Budget speech recites his confidence in the industries and the future of the country—had the right hon. Gentleman no doubts about the extraordinary discontinuity of argument and logic between the substance of his speech and his pious aspirations about our trade at the end?
  2864
  There are two great features in the Budget of this year which will signalise it in the history of Budgets. The first is that, more than in any scheme for raising expenditure that has ever been presented to a responsible tribunal, it piles the accumulated burden arbitrarily and in a penal manner upon a particular class in the country. That is vicious for two reasons, which should be stated as clearly as may be. The argument advanced to-day by the Financial Secretary to the Treasury has ignored the circumstance that, when the right hon. Gentleman the Member for Epping reduced the Super-tax, it was compensated at the time by an increase of Death Duties, which made the balance equal for that particular class of taxpayer. It seemed to me one of those misstatements at the time that scarcely needed correction, because anybody with tire smallest acquaintance with the fiscal system of the country could correct it for themselves.
  Mr. PETHICK - LAWRENCE: I thought that I made it clear that I was talking about Super-tax and Income Tax. With regard to Death Duties, I thought that I made it clear that I set the increase of these against the Debt redemption.
  Sir H. YOUNG: I am afraid it is rather late in the day to try to maintain that in our scheme of taxation death duties are required only for the redemption of debt. What I was saying was that the first inherent vice of this new scheme of taxation is this accumulation of burdens on a small class. That is vicious first of all because of the interests of the community as a whole. It is the saving class, the class which provides the capital, which provides the leadership, which provides the energy which provides the enterprise. [Interruption.] There is no reason to be mealy-mouthed about it. It does not provide it all, but it provides most of it. It does not provide it because of any natural superiority on its part, but partly because of the advantage of circumstances; but it does provide the greater part of the energy, enterprise, initiative, capital and leader ship which a nation cannot do without. Certainly it is vicious in the interests of the State to accumulate the burdens upon a small class, because the only way of bringing to bear an effective body of criticism as

  2865
  a check and control upon fresh expenditure is to make the expenditure felt by all taxpayers equally. That is not done in the Budget. It might have been done. By one of those rather cruel jests at which the Chancellor of the Exchequer is a specialist, he led those of us who have an affection for statecraft to think for a moment that he really was going to increase indirect taxation and to bring a sense of responsibility to the wage earners as much as to the taxpaying class. I confess he took me in for that sad moment, and he has what satisfaction he may derive from that little deceit. But he could have done it. He could have got the money from beer, if he had been willing to enforce that primary principle of statecraft that you should spread the responsibility for taxation, the sense of expenditure having to be met, over the whole body of taxpayers.
  The burden does not go on to the indirect taxpayers, it does not even go on to the large number of the lower range of incomes subject to Income Tax. It is obviously a point of which the Chancellor of the Exchequer is particularly proud—that he has been sufficiently adroit in his politics to avoid sacrificing votes by attacking the lower ranges of income; but there speaks the politician and not the statesman. The real statecraft would have been to make the whole range of Income Tax payers feel it. As a matter of fact, I do not think it is going to do the Chancellor of the Exchequer any good in the long run, and for this reason, that I do not think anyone will be taken in by the gesture he has made in saying there is to be no increase of taxation next year. No increase of taxation next year unless there are large schemes of expenditure—and then starts the chorus from the Clyde! After what we have heard to-day, has the Chancellor of the Exchequer any right to hope that he is going to avoid fresh large schemes of expenditure in the course of the year? It is a very fragile hope, and Income Tax payers as a body know it. They know that there will be a fresh bill to be met next year, and that the exemption which they secure this year from these fresh burdens will be a very fleeting and temporary advantage.
  So much for the interests of the State. But, indeed, I do not see why, in the
  2866
  great council of the nation, no voice should be raised for a class of taxpayers, however small, however unpopular, even a class so small and so unpopular economically as the class of big Income Tax payers. They are a minority, a particularly defenceless minority. [Interruption.] Yes, the advantages which they derive from this taxation is nil. Their power to resist it is absolutely nil, in modern democracy; they are, as a matter of fact, the most defenceless class in the State under existing conditions, but I have no reason for supposing that they are an unuseful and unhelpful class. They provided those ingredients in a healthy and prosperous nation, but they are particularly defenceless in a modern democracy.
  You are giving to the whole nation, and to all the nations of the world, an example of injustice. It is injustice that you should attempt to raise your taxation on one class of the community. You are inflicting on that class a sense that the State is asking too much from them. There is one serious consequence. You risk losing the co-operation of the taxpayer in the collection of the Income Tax. That is not a thing to be laughed at. I Ihave had some experience of the Income Tax in countries where there has never been the willing assent of the taxpayer in regard to the collection, and it is in those countries that the Income Tax is useless as a revenue-producing tax. The Income Tax is only useful in this country, because up to now it commands the moral assent of the payers of Income Tax, and it would he an act of political folly so to overburden its usefulness as to risk the loss of that invaluable asset to the revenue of the State.
  Lastly, I think this Budget Debate comes, as I say, at a crisis. It marks, we hope not a turning point, but what may be a turning point unless the country pulls its economic common sense together, and starts upon a new life. One cannot but be conscious that, through all the difficulties which the country has had to face since the War, what has kept us going was the hope on the part of those who were the real steel behind the industrial machinery of the country—the hope of a return to normality, and, among other forms of normality, in particular, a return to a reasonable burden of taxa-

  2867
  tion. The actual circumstances of the day have been bad enough, but hope has kept us going, and we have not lost hope. The country has become conscious how a certain course of government, and a certain course of extravagance and fresh taxation may deprive it of hope, and it is the task of all of us to try and prevent that disaster happening to the country. We shall try to do what we can to prevent the passage of such mischievous proposals as those in this Budget, and we encourage ourselves, even though we feel that this blow is dealt to hope, in the belief and trust that the undying courage and strength of the country will not allow hope to die just for one thing, but that it will be maintained to be revived when the country returns to more prudent courses in the future.
  Dr. BURGIN: I suppose it is true to say that there is no one who hears a Budget speech who does not gasp with thankfulness that something else was not included in it. It is a long time since anyone spoke from the Liberal benches, and I should like to have made some corn-meta from the point of view of those of my colleagues on these benches. There is much in the Budget which we very naturally and whole-heartedly applaud. We have thought of some adjectives with regard to the Budget proposals as a whole, amongst them being "stern," "severe," and "unimaginative," but there is a certain asceticism about this Budget which is, perhaps, rather in line with the needs of the country to-day. The country, perhaps, needs some stern sort of call such as the Chancellor has presented in the Budget. The hon. Member for East Aberdeen (Mr. Boothby) described its architecture as mediteval, but I should prefer to say it was Gothic in its simplicity.
  Perhaps a criticism—it is rather made by me in the nature of comment than of criticism—is that the increases in Income Tax, Surtax And Death Duties may in practice be found to fall all on the same individual. I do not say that the Chancellor of the Exchequer has not succeeded in finding the very large amount of money which was required by means that, at least, have the merit, of being within a very narrow compass and not involving a dozen and one duties on a number of
  2868
  different articles. Those of us who are Free Traders and know the dislocation of business involved by the imposition of any taxes, whether revenue or protective, must at least be thankful for the fact that the ambit of the taxes in the Budget is narrow and restricted.
  It is not so much my business to speak of the Budget as a whole as to direct a specialised line of inquiry to certain of the legislative proposals foreshadowed. There are in the Budget speech and Budget proposals references to certain amendments in the law dealing with such matters as the taxation of for signers who trade here through agents, and the taxation of companies, shares in which are held by owners of land, and other proposals of that kind. It might, perhaps, assist the deliberations of this Committee if I were to put certain questions to the Chancellor of the Exchequer which arise out of the consideratim of these provisions. I want to put this thought before the Committee. It is a very natural desire that we in this country with a high taxation should desire to see that foreigners who take advantage of the privileges which we offer should at least bear their proper shore of taxation in respect of the trade they do within the area of these islands.
  It has always been a sore point that your dressmaker's traveller from Paris should arrive here, hire a room in a West-end hotel, show a collection of articles, book a large number of orders and return to Paris and never pay a halfpennyworth of Income Tax. [An HON. MEMBER: "That is Free Trade!"] It has nothing to do with Free Trade. It is a question of whether there are at present loopholes in our fiscal law which permit of something of an unfair competitive character from the point of view of taxation. That is nothing to do with the question of prices. I am merely referring to people who are able to do this and pay a different rate of taxation from other people. I wish to follow the subject out in practice. An attempt has been made—and the Chancellor and his advisers are, of course, familiar with it—to tax the resident agent here on behalf of the foreign principal abroad. I noted with great care the words that the Chancellor of the Exchequer used in his speech in dealing with this subject. I observe

  2869
  he said it was proposed to endeavour to make reciprocal arrangements with foreign countries so as to provide that there should only be liability to taxation
  "where the agent either sells from stock or is empowered to conclude contracts on his principal's behalf and does, in fact, habitually exercise that power."—[OFFICIAL REPORT, 14th April, 1930; col. 2675, Vol. 237.]
  Unless the Chancellor of the Exchequer proposes to go considerably beyond that, he will be making no change in the law whatever. It is the law to-day that, if an agent keeps a consignment stock here, and sells from stock, the foreign principal becomes chargeable to Income Tax. It is also the law that, if an agent has power to conclude contracts here, his foreign principal is trading here, and is, again, liable to tax. If, therefore, those words are merely general words, no doubt we shall see, when the Finance Bill is introduced, the details which the Chancellor of the Exchequer has in mind for attempting to tax foreign principals; but, if they are nothing more than saying that, wherever there is consignment stock and the agent concludes the contract, the principal is liable to tax, we have not advanced one whit beyond the law as it is administered to-day.
  In a day when we are all suffering painfully and consciously from the effects of unemployment, I wish to stress this point of view. In the Luton Division of Bedfordshire, which I have the honour to represent, where a large trade is done with foreign countries in straw plait and straw hats generally, there is an increasing tendency for the agent of the foreign principal to be completely frozen out of business. As soon as the local inspector of taxes sends in his form, and makes it known that, in some circumstances, the agent for the foreign principal may be taxed on behalf of his principal, there is a tendency for the principal to endeavour to deal with the whole of his business on mail order lines from his foreign city, and thus for the local agent in Luton to be entirely excluded from his employment as agent.
  I could furnish the Chancellor of the Exchequer and his Department with a dozen such instances from Luton in recent times, in which the only effect of
  2870
  the endeavour of the local inspector of taxes to tax the foreign principal has been that the local agent and his staff have been put out of employment. That is not, of course, the object, intention or desire of the Chancellor of the Exchequer, and I am only putting in a word of warning that, wherever under a high rate of taxation you endeavour to include the foreigner, you may in practice put out your local Britisher from his job as buying or selling agent. Exactly the same effect has been shown very widely in regard to companies. I do not wish to go at large into the subject of foreign companies, but I do want to say that sometimes, where it has been held that a company trading here is in some circumstances liable to English Income Tax, we have found that company removing its whole centre and place of business to Sweden, Brazil, Egypt or some other country, and, as a result, the whole of the trade connected with that company has escaped from these Islands. I am not opposed to the idea of making the foreigner pay the tax, but I am asking that, where the amount of tax payable is high, we should be very careful, in framing our Inland Revenue laws, that we do nothing to interfere with the wide international character of our trade, and that we do not penalise the foreigner to our own disadvantage. We must think of our own folks first in a matter of this kind, and I call attention to this matter from that point of view.
  There is only one other point upon which, at this hour, I will venture to raise a question, and that is with regard to companies. I am most anxious to know what the meaning of the word "company" is in the Resolutions which deal with this subject. The Resolution dealing with Estate Duty in cases where the deceased person had transferred property to a company refers in every other line to "a company," and I would ask the Chancellor of the Exchequer whether that means an English company incorporated under our Companies Acts, or does it include—
  it being Eleven of the Clock, the CHAIRMAN left the Chair to make his Report to the House.
  Committee report Progress; to sit again To-morrow.

  GAS UNDERTAKINGS ACTS, 1920 AND 1929.
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Bideford Gas and Coke Company, Limited, which was presented on the 19th day of March and published. he approved."
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Oxford Gaslight and Coke Company, which was presented on the 19th day of March and published, be approved."—[Mr. W. R. Smith.]

  ROYAL AIRCRAFT ESTABLISH MENT, FARNBOROUGH (HOLIDAYS).
  Motion made, and Question proposed. "That this Rouse do now adjourn."—[Mr. T. Kennedy.]
  Viscount WOLMER: I want to raise a matter on which I questioned the Under-Secretary of State for Air on Thursday.
  2872
  In my constituency the Royal Aircraft Establishment has for the first time in the history of that factory been asked to work on Good Friday and the King's Birthday—not the staff but the industrial workers. The Under-Secretary gave an answer that would lead anyone who did not know the facts to suppose that these men's holidays were not being curtailed. I want to point out to the House that until now all the industrial workers at the Royal Aircraft Establishment at Farnborough have always hail one week's leave, plus all the usual national holidays. This year this Government are cutting down the annual holidays from seven days to five days, and they are not 3utting them down in the case of the higher staff. The higher staff are to be allowed off on Good Friday and on the King's birthday, and the ordinary workmen have to work—
  Notice taken,, that 40 Members were not present, House counted, and 40 Members not being present—
  The House was adjourned at Eight minutes after Eleven o'Clock until To-morrow.

TRANSPORT.
  ROAD SURVEYORS.
  ROAD SURVEYORS.
  HIGHWAY ACCOUNTS (AUDIT).
  HIGHWAY ACCOUNTS (AUDIT).
  BY-PASS ROAD SCHEME, STAMFORD.
  BY-PASS ROAD SCHEME, STAMFORD.
  LEVEL CROSSINGS.
  LEVEL CROSSINGS.
  ELECTRICITY SUPPLY.
  ELECTRICITY SUPPLY.
POST OFFICE
  ADVERTISEMENTS (REVESUE).
  ADVERTISEMENTS (REVESUE).
  TELEPHONE CALL OFFICES, HOLLAND DIVISION.
  TELEPHONE CALL OFFICES, HOLLAND DIVISION.
  TELEPHONE FACILITIES, NORTHERN IRELAND.
  TELEPHONE FACILITIES, NORTHERN IRELAND.
  AUTOMATIC TELEPHONE EXCHANGES (RURAL DISTRICTS).
  AUTOMATIC TELEPHONE EXCHANGES (RURAL DISTRICTS).
  WOOLLEN INDUSTRY (DISPUTE).
  WOOLLEN INDUSTRY (DISPUTE).
  PLAIN NET AND LACE TRADE (WAGES).
  PLAIN NET AND LACE TRADE (WAGES).
UNEMPLOYMENT.
  CONTRIBUTIONS (POSTING, LEDGERS).
  CONTRIBUTIONS (POSTING, LEDGERS).
  TRANSFER OF WORKERS, EAST ANGLIA.
  TRANSFER OF WORKERS, EAST ANGLIA.
  NAVY, ARMY AND AIR FORCE CANTEENS.
  NAVY, ARMY AND AIR FORCE CANTEENS.
  RELIEF SCHEMES.
  RELIEF SCHEMES.
  WOMEN, WALKER-ON-TYNE.
  WOMEN, WALKER-ON-TYNE.
  INSURANCE (COST).
  INSURANCE (COST).
  UNITED STATES
  UNITED STATES
  DOMESTIC SERVICE.
  DOMESTIC SERVICE.
  SHOP HOURS (COMMITTEE).
  SHOP HOURS (COMMITTEE).
  NON-INFLAMMABLE FILMS.
  NON-INFLAMMABLE FILMS.
  PRISON CHAPLAIN'S (HOLIDAYS).
  PRISON CHAPLAIN'S (HOLIDAYS).
  SPIRITUALISTS (PROSECUTIONS).
  SPIRITUALISTS (PROSECUTIONS).
COAL INDUSTRY.
  SAFETY IN MINES (EXPERIMENTS).
  SAFETY IN MINES (EXPERIMENTS).
  HORSES AND PONIES.
  HORSES AND PONIES.
HOUSE OF COMMONS.
  REFRESHMENT DEPARTMENT.
  REFRESHMENT DEPARTMENT.
  MEETINGS (INDICATOR).
  MEETINGS (INDICATOR).
ROYAL NAVY.
  DOCKYARDS (RETIREMENT).
  DOCKYARDS (RETIREMENT).
  MEDICAL SCHOOL, GREENWICH.
  MEDICAL SCHOOL, GREENWICH.
  AIR FORCES (INTERNATIONAL COMPARISONS).
  AIR FORCES (INTERNATIONAL COMPARISONS).
  INSURANCE AND PENSIONS (INQUIRY).
  INSURANCE AND PENSIONS (INQUIRY).
PUBLIC HEALTH.
  HOUSING SCHEMES (HOSPITAL ACCOMMODATION).
  HOUSING SCHEMES (HOSPITAL ACCOMMODATION).
  HOP-PICKING (SANITARY CONDITIONS).
  HOP-PICKING (SANITARY CONDITIONS).
  POST-GRADUATE HOSPITAL AND MEDICAL SCHOOL.
  POST-GRADUATE HOSPITAL AND MEDICAL SCHOOL.
  SPIRITS (EXPORT).
  SPIRITS (EXPORT).
  CURRENCY AND BAKING COMMITTEE.
  CURRENCY AND BAKING COMMITTEE.
  MR. GIALDINI.
  MR. GIALDINI.
  LIGHTHOUSE SERVICE, IRISH FREE STATE.
  LIGHTHOUSE SERVICE, IRISH FREE STATE.
TRADE AND COMMERCE.
  TARIFF TRUCE CONFERENCE.
  TARIFF TRUCE CONFERENCE.
  COPPER.
  COPPER.
  PATENTS AND DESIGNS ACTS.
  PATENTS AND DESIGNS ACTS.
BRITISH ARMY.
  AGE OF RECRUITS (MISSTATEMENTS).
  AGE OF RECRUITS (MISSTATEMENTS).
  RATION ALLOWANCE.
  RATION ALLOWANCE.
  SUBVERSIVE PAMPHLETS AND LEAFLETS.
  SUBVERSIVE PAMPHLETS AND LEAFLETS.
  CADET CORPS.
  CADET CORPS.
  INDIA (PILGRIM TRAFFIC).
  INDIA (PILGRIM TRAFFIC).
  SCHOOL-LEAVING AGE.
  SCHOOL-LEAVING AGE.
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
THIRD PARTIES (RIGHTS AGAINST INSURERS) BILL.
Brought from the Commons; read 1a; and to be printed.
EAST SURREY WATER BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.
EAST KENT DISTRICT WATER BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
BARNSLEY AND DISTRICT TRACTION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
SUTTON GOLDFIELD CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
PORTSMOUTH WATER BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
BIRKENHEAD CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
LANCASTER CORPORATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

BUSINESS OF THE HOUSE.
THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR): My Lords, I beg to move the Motion of which I gave Notice, that Standing Order No. XXXIX be considered in order to its being suspended, so that we may, if possible, get through all our business to-night.
Moved, That Standing Order No. XXXIX be considered in order to its being suspended for this day's sitting.—(Lord Parmoor.)
On Question, Motion agreed to, and ordered accordingly.

SEVERN FISHERIES PROVISIONAL ORDER BILL.
Read 2a (according to Order).
MINISTRY OF HEALTH PROVISIONAL ORDERS (BARRY AND SCARBOROUGH) BILL.
Read 3a (according to Order), and passed.

CHILDREN (EMPLOYMENT ABROAD) BILL. [H.L.]
Order of the day read for the consideration of Commons Amendment.
LORD PARMOOR: My Lords, this is almost a formal matter. This Bill was before your Lordships last October and November, and I think met with general assent. It is practically a Bill which was left over by the last Government. The only Amendment which the House of Commons have inserted is one made at the express wish of the Government of Northern Ireland, proposing that the Bill should apply to Northern Ireland. There is no Amendment in the ordinary sense, and I move that the Commons Amendment be now considered.
Moved, That the Commons Amendment be now considered.—(Lord Parmoor.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
[The reference is to Bill No. 34.]
Clause 2 page 1, line 18, leave out ("This Act shall not extend") and insert ("It is hereby declared that this Act extends").
LORD PARMOOR: My Lords, I beg now to move that this House agrees with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.
On Question, Motion agreed to.

UNEMPLOYMENT INSURANCE (No. 3) BILL.
Order of the Day for the Second Reading read.
THE UNDER-SECRETARY OF STATE FOR INDIA (EARL RUSSELL): My Lords, this is certified as a Money Bill. It deals with the position of the Unemployment Insurance Fund, which is financially in rather a deplorable condition. I am not sure that that is matter for congratulation to any of us. The Bill now before your Lordships provides for further borrowing powers of £10,000,000. The history of the previous borrowings is that £10,000,000 were authorised in March, 1921, a further £10,000,000 in July, 1921, a further £10,000,000 in April, 1922, and a further £10,000,000 in November, 1928. The last, I think, was a Bill of which the noble Marquess, Lord Londonderry, was in charge. On that occasion I addressed some observations to the Bill and to him, and I must say that I have no desire to depart from what I said then. I agree entirely with what was said by the Minister of Labour in moving the Second Reading of this Bill in another place, that it is not a desirable way to finance the Fund by borrowing—the Fund ought, of course, to be self-supporting—and it is in a sense merely putting off the evil day. But, as the Minister of Labour said and as all your Lordships will realise, this is a question really of necessity and of having no other alternative.
It is not reasonable to suppose that at this moment you can raise either the contribution of the workman or of the employer, or, for that matter, of the State; although, as I shall be able to show your Lordships in a moment, the contributions of the State are on this occasion considerably increased. Therefore one endeavours to tide over the period by borrowing. I remember that I asked the noble Marquess last time how long it was expected to last. It was expected
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to last, I think, until the end of this year, but of course it has not lasted till then. If any noble Lord asks me how long the present sum of £10,000,000 is expected to last, I can only say that no one can tell; it must depend upon the unemployment figures. The unemployment figures are sufficiently well known, I think, but one interesting figure that your Lordships ought to know is the number at which income and expenditure will balance. That figure is now the very large total of 1,240,000 persons. That is due to the additions to this Fund which have been made by the new Government contributions.
The new Government contributions consist of £3,500,000 by the Act of 1929, which raised the Exchequer contribution to an equal third—that is to say from 6d. to 7½d.—and a further £10,500,000 by the Act of 1930, which placed upon the Exchequer the entire cost of transitional benefit; that means, benefit to those who draw upon the Fund without having thirty weeks' insurance stamps on their cards for the previous two years. That is a total contribution to the Fund of £14,000,000 and in consequence of that the figure at which it now balances is 1,240,000. The figure on the third Monday in March was, I think, 1,621,000. As your Lordships know, a very considerable increase in that figure is due to the unfortunate unemployment in the cotton industry in Lancashire, and the figure has this year done what is most unusual, it has increased from January to March instead of, as has been the custom in previous years, decreasing during those three months. I think we can all only hope that these figures will decrease in the future; but when that will happen it is very difficult for anybody to say. The Bill simply provides for borrowing powers for the additional £10,000,000 which is required to make the Fund solvent and to enable it to pay benefit. I understand the present powers are exhausted to such an extent that the Fund will be exhausted by the end of this week; therefore your Lordships will see that the matter is urgent. I do not know that there is anything further in connection with it that I need explain to your Lordships, unless any questions are put to me. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.— (Earl Russell.)
EARL PEEL: My Lords, perhaps you will allow me to make one or two brief observations on this matter before the other grave question in connection with the Army and Air Force (Annual) Bill is discussed. It is quite true, as the noble Earl says, that this is a financial matter and that this is a certified Bill. He might also have added that it is absolutely within the right of your Lordships to discuss these questions, and I think that in anything so grave as this matter of unemployment you are not only justified, but it is your duty to discuss the matter. I thought the noble Earl was a little jejune in the facts and figures he supplied about the Bill. I quite understand that he has no doubt been busily engaged in watching the movements and machinations of that very worldly saint Mr. Ghandi manufacturing some very inferior salt for the advantage of those who like to consume it; but I should like to make this observation, that it is only a year or two since my noble friend Lord Londonderry was moving an addition to the borrowing powers of another £10,000,000. On that occasion he was overwhelmed almost, or at any rate he was vigorously and violently attacked, by a noble Lord on that side of the House who, singularly enough, is not present at this moment, the noble Lord, Lord Arnold, who seemed to think borrowing for the Fund and not making the Fund pay its way was an iniquity of the first order. I suppose for that reason my noble friend (Earl Russell), with that self-surrender which he always displays, has taken upon himself this arduous burden, and the other noble Lord is discreetly absent.
I wish to call attention to the seriousness of the matter which has been raised by the noble Earl. He treated it rather lightly, I thought. Previously £10,000,000 had been raised to £20,000,000, and then to £30,000,000, and to £40,000,000, and he omitted, I think, certain relevant facts which bear very closely on the question of whether it is wise or unwise at this' period to raise that £40,000,000 to £50,000,000. I do not wish to attack the consistency of Ministers in their statements made six months ago, because, to tell the truth, I am not very keenly interested as to whether the Minister of
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Labour or even whether the Chancellor of the Exchequer denounced most vigorously six months ago that which they are advocating to-day. It is a kind of inconsistency I rather expect to find in noble Lords opposite. I am much more interested in this—whether it be wise or unwise, what likelihood is there of this large amount of £50,000,000 being paid back within any very reasonable time? Until that £50,000,000 is paid back the Fund is declared not to be solvent, and I should like to read from this Government White Paper, which discusses the deficiency period and describes it as:—
"the period between the passing of that Act [the No. 2 Act of 1921] and the date when the Treasury certify that the Unemployment Fund is solvent. Such certificate may not be given while any advances to the Fund are outstanding."
I submit that this really is not very honest, because if you look at the circumstances of the case and at the large and mounting figures of unemployment, I think you will come to the conclusion that a large portion of this £50,000,000 far more resembles a definite grant than it does a loan—that is to say, a sum which has some prospect in any immediate future of being repaid. The Government, I suppose, hoped that this question would be settled some six months ago. After all, the borrowing of £10,000,000 now is a far more serious matter than the borrowing of £10,000,000 six months ago because, as your Lordships may remember, the Government grant was increased by no less than £14,000,000, and, as the noble Earl said, that made the balancing point a number of 1,240,000 unemployed. They have made their grant, and they attempted to make the Fund in that way more solvent, and yet six months after having made that great addition to the amount the taxpayers have to pay, they come forward and say: "We must now borrow another £10,000,000."
I should like to point out that the question is becoming more serious. The noble Earl was very careful to say that how long that £10,000,000 would last he could not tell; it depends upon the numbers of the unemployed. Unfortunately, even since the figures and facts were given in the House of Commons, those figures have been mounting up. The sum of £10,000,000 was based upon the amount

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which was to come out of that Fund to supplement the deficit on the Insurance Fund on an issue calculated on the basis of the figures when the Bill passed through another place. I should be very glad therefore if the noble Earl is able to tell us what is the present figure of issue out of that £10,000,000 to make up the deficiency, and how far that bears upon the period when that Fund will be exhausted. I am very much afraid that at the rate at which the numbers of unemployed are mounting up that £10,000,000 will very soon be exhausted, and I submit that it would be more honest if the Government had come forward and taken powers to raise another £20,000,000 rather than the £10,060,000, which must, I am afraid, so very soon be exhausted.
I cannot help criticising the attitude of the noble Earl in this respect. He seemed to take it almost as a necessary thing that this borrowing must take place. He says, in effect: "You cannot at this time diminish benefits. You cannot lay any burden on the employers or upon the employed, and therefore your only resort is to increase the borrowing powers of the Fund in order that in that form the Fund may be made provisionally solvent." The matter is even more serious than that. When it was discussed in another place we were told that the large number of the unemployed was not due to the operation of the last Unemployment Insurance Act, and that may be true, because I believe that Act only came into operation in the month of March last. I would point out to your Lordships, however, that apparently in that borrowing they really have not taken into account the larger number of persons who may be thrown upon the Unemployment Fund and the further deficiencies in that Fund that may result from the operation of that Act.
Your Lordships will remember that the benefits were considerably increased in many respects and that the transitional period was lengthened; and I should like also to remind your Lordships of that extreme alteration in the provision relating to seeking work by which the whole system of management and administration of the Act has been grievously altered. Instead of any obligation being thrown on the unemployed man to show that he is seeking work, the obligation
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is thrown almost entirely on the labour exchanges, and the officials are given an extraordinarily difficult task. It is quite true that they may give directions as to what an unemployed person should do, but may I read an extract from the White Paper to show how those directions are to be carried out? The White Paper says:
"It should be noted that when directions have been given no disqualification can follow unless it is proved that the directions have not been carried out. The claimant cannot be required to prove that he has carried them out."
So that the whole burden not only of giving directions but of showing that those directions have not been carried out is put upon the exchanges. As far as I can understand, the claimant may refuse even to answer any question if he is asked by the employment exchange, because he cannot be required to prove that he has carried out the directions.
It is quite evident from that that there must be a considerable increase in the number of those coming on the unemployed list simply by reason of that provision. If you add to that the increased benefits that have been promised by that Act, you will see that as soon as this Act comes into full operation there must be not only a great addition to the number of unemployed but also a great addition to the amount that has to be paid out of the Fund itself. I therefore submit again that this really is not an honest measure for borrowing 10,000,000, because it does not take into account all these other factors which should be in the minds of the Government and which will make a vast difference to the number of the unemployed and the charge to be borne under that Act.
There is another criticism I should like to make, and that is that it really obliterates the whole distinction between an Insurance Act and an Act of Public Assistance or a mere grant of money. It is extremely difficult now for any of those persons who are insured under the Act to know whether they are really getting what they are actuarially entitled to because of the amount they have contributed, or whether they are merely getting some grant, as it were, out of the bounty of the Government and the taxpayer. It is equally unfair to persons who are insured and who perhaps are in fairly continuous work, because they

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might be enjoying greater benefits if it were not for the fact that persons who are not really entitled to these benefits under an insurance scheme are getting benefits and thus reducing those available for others. I submit that this confusion between an Insurance Act and a mere grant of bounty is extremely demoralising to those who are insured under this scheme.
There is only one further point I wish to raise and that is that in what the noble Earl said he made no allusion at all to any efforts the Government have made to reduce unemployment in this country. It is said that a great deal of unemployment is due to causes over which the Government have no control—general and world causes. Of course there are difficulties in the world now which must affect the state of unemployment even in this country, but what I submit is that the Government not only make no effort but are contributing to the operation of those causes. We even had a statement the other day from no less a person than the Chancellor of the Exchequer that there was some sort of conspiracy among employers to reduce the amount of employment, and minor persons in the Government and supporters of the Government are going about the country attacking capital and capitalists on every platform and at every street corner. It is hardly likely that there will be any greater security for capital or any greater desire to invest capital in remunerative enterprises in view of this attitude of the supporters of the Government, and we know the effect that the action of only a few supporters of the Government may have on the policy followed by Ministers.
I feel that the whole subject is complicated by the situation of the Socialist Government itself, which produces throughout the country a feeling of general insecurity which is so bad for trade. It is not for me to discuss at this moment recent financial proposals, but we all know that trade and business can hardly be assisted by the enormous burdens that have recently been placed upon industry—which, indeed, will be a great consolation to all those supporters of the Government who- hope to injure, modify and ultimately destroy what they call the capitalist system of industry in this country. I therefore submit to
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your Lordships that though we must, of course, pass this Bill, it is not really an honest Bill and really does not give anything like a true picture of the serious state of unemployment in this country.
Loan BANBURY OF SOUTHAM: My Lords, the noble Earl was careful to tell us that he could not answer the question if it were put to him how long this £10,000,000 will last. I think it is quite clear he was afraid that that question would be put to him, and as he was unable to answer it he would take care to be first in the field and endeavour to prevent the question being asked by saying he could not answer it. However, I am going to put a question to him upon that point and I ask: Does he think it will last until Whitsuntide?
EARL RUSSELL: My Lords, I am glad that I have given the noble Earl opposite the opportunity of making a political speech on this measure.
EARL PEEL: My speech was a business speech.
EARL RUSSELL: Not altogether, I should have said. He said I did not deal with what the Government are doing to relieve unemployment. It hardly seemed to me a proper occasion for dealing with that totally different and very large question. If I had dealt in detail with what the Government are doing in that respect I should have had to speak for an hour or an hour and a half. It is really not the question now before your Lordships. Then the noble Earl also spoke about the provision, which he says affects the register, relating to a man not genuinely seeking work. We had two quite lively discussions in this House on that provision and ultimately your Lordships passed it in the form in which it appears in the Act to-day. That again, I think, is not a matter we need discuss on this Bill.
In the earlier part of the noble Earl's speech I was very much struck, and very much interested, to notice that apparently the speech that is made on these Bills to borrow £10,000,000 depends entirely on which side of the House you are sitting, for the noble Earl made almost the same speech that I made when the noble Marquess, Lord Londonderry, proposed the borrowing of the last £10,000,000. I also put a question asking

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how long the money would last, and I also said, as the noble Earl has said, that I did not think it was the right way to finance an insurance scheme. I said in moving the Second Reading that I still did not think so, and Miss Bondfield, the Minister of Labour, said so in another place. I think we may all agree that it is not the right way to finance an insurance scheme and that the method should not be adopted if there were any other method to adopt. I said this was a stopgap policy, and so it is. The noble Earl may remember that in another place his own supporters said that they did not think that borrowing to the extent of the annual income of a Fund was an unreasonable thing to do.
EARL PEEL: They did not say that. They said they did not think it a dishonest thing to do. As a financial transaction I do not think it is dishonest, but I think it is wrong.
EARL RUSSELL: The noble Earl thought it was dishonest, and there again I would point out that it is the same word that Miss Bondfield used about the last proposal.
EARL PEEL: Is the noble Earl saying that I said it was dishonest?
EARL RUSSELL: I said the noble Earl told us that this proposal was not an honest proposal.
EARL PEEL: I did not say it was dishonest. I do not think there is necessarily anything wrong in borrowing on a Fund. If I said this proposal was dishonest, it was because I did not think it took into account certain factors which would have made it more honest to come forward and borrow, let us say, £20,000,000 instead of £10,000,000, because the £10,000,000 will be disbursed so quickly.
EARL RUSSELL: It still seems to me that the noble Earl and Miss Bondfield are in very considerable agreement, and I thought it interesting to call attention to that fact. In answer to the specific question that the noble Earl put to me when he asked how quickly this £10,000,000 will be used up, in the present state of the unemployment register the £10,000,000 will have to contribute £375,000 every week, and a simple arithmetical
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sum will show how long that will last if the present rate of unemployment goes on.
EARL PEEL: Does that include interest?
EARL RUSSELL: I suppose so, but I am not sure. In this matter the Government hope, as I am sure every one of your Lordships hopes, that the position will alter. We hope that these terrible unemployment figures will not continue but will shortly fall. If I recollect aright, the noble Marquess opposite, when he made his Motion regarding the last £10,000,000, expressed exactly the same hope. That hope has not been fulfilled. We hope that in our case it may be, but obviously no one can say what the figures on the live register will be for the next half year, and it would depend upon that whether the Fund is solvent or not.
There is, however, one material difference. When the last £10,000,000 was borrowed, the Fund balanced with unemployment at 1,000,000, but now, thanks to the Government contribution, it will balance with unemployment at 1,240,000. The noble Earl seems to think that this made the proposal less honest. It seems to me to make it much more honest, because the Fund is surely, to that extent, more solvent. It would be inappropriate now to discuss the scale on which benefits are given, though a great deal could be said on that point. All that this Bill really does is to borrow £10,000,000. It is a stop-gap, a necessarily temporary measure, though a regrettable one, and it seems to me that we should be doing well to follow what has been done in the past by previous Governments. I cannot see any real distinction between one and the other.
On Question, Bill read 2a: Committee negatived.
Then (Standing Order No. XXXIX having been suspended) Bill read 3a, and passed.

ARMY AND AIR FORCE (ANNUAL) BILL.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Thomson.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DONOUGHMORE in the Chair.]
Clauses 1 to 4 agreed to.
Clause 5:
Abolition of death penalty in certain cases.
5. For the purpose of abolishing death as a penalty for certain offences, the following amendments shall be made in the Army Act,—
(1) In Section four, paragraph (7) (including the word "or" immediately preceding that paragraph) shall be omitted, and in Section five after paragraph (6) the following paragraph shall be inserted:—
"or
"(7) Misbehaves or induces others to misbehave before the enemy in such manner as to show cowardice."
(2) In subsection (1) of Section six, paragraphs (b), (h) and (k) (including the word "or" immediately preceding the last mentioned paragraph) shall be omitted, and in subsection (2) of the said section after paragraph (e) the following paragraphs shall be inserted:—
"or
"(f) Without orders from his superior officer, leaves his guard, piquet, patrol or post; or
"(g) By discharging firearms, drawing swords, beating drums, making signals, using words, or by any means whatever, intentionally occasions false alarms in action, on the march, in the field, or elsewhere; or
"(h) Being a soldier acting as sentinel, leaves his post before he is regularly relieved,"
(3) In subsection (1) of Section twelve, for the word "death" there shall be substituted the words "penal servitude."
VISCOUNT FITZALAN OF DERWENT VISCOUNT FITZALAN OF DERWENT moved to leave out Clause 5. The noble Viscount said: I should not have taken the responsibility of moving this Amendment had I not known that it was strongly desired that I should do so by noble Lords of the highest military rank and (what is much more important than rank) of the greatest military experience, who have had from day to day the grave responsibility of giving decisions on these matters of life and death. I must enter a protest against the action of the Government in compelling us to consider this question at this peculiarly inconvenient season. I do not for a moment suggest that their action in this respect is in the least intentional. I know well the difficulties of arranging public business and of dealing with Bills that have
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to be passed by a certain date, especially when the Parliamentary situation is further complicated by the imminence of a Recess; but I do say, and I feel strongly, that if, in an Annual Bill of this character, the Government choose to insert momentous changes, it would be only fair to this House and to the Army that they should give adequate time so that those changes could be properly and fully considered.
If your Lordships will turn to page 4 of the Bill, you will see that Clause 5 occupies practically the whole of it, and the points that we have to consider are limited to that one page. You will see that there are three subsections in this clause, of which the first two were in the Bill as originally introduced by the Government. The third subsection was added to the Bill during its passage through another place. It will be convenient, I think, to limit our discussion in the first place to the first two subsections before touching the third subsection, which was put in, so to speak, as an afterthought. The first subsection lays down that anybody subject to military law who
"misbehaves or induces others to misbehave before the enemy in such manner as to show cowardice—"
shall, under the present proposals of the Government, no longer be liable to the death penalty. The death penalty is, of course, a terrible thing. There is no doubt that in the late War, owing to its appalling horrors, there were many cases of men who were quite irresponsible for their actions and who lost their nerve power and will power, but I very gravely doubt whether any of those men suffered the death penalty.
With regard to these two subsections, I should like to point out that the Secretary of State, in the course of his speech in Another place, stated very frankly and, if I may say so with all respect, very properly, that in taking the action that he took he was acting contrary to the opinion and the advice of his Army Council. They had tried to instil into him that the death penalty for cowardice acted as A great deterrent, and that in their opinion the mere fact of the death penalty being applicable would not only save men from becoming cowards, but would also save other men from losing their lives owing to the action which they might take. If

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they had only imprisonment in front of them instead of the death penalty, the temptation to perform an act of cowardice would in many cases be almost irresistible. I do not mean for a moment to suggest that the Secretary of State is not quite entitled to go against the opinion of his Army Council, but I cannot help saying in passing that I wish he had been mindful of his predecessor, the late Mr. Stephen Walsh. Those of us whose privilege it was to be in the House of Commons with that gentleman, and to be, as I was, on terms of friendship with him—and he was a staunch Party man, and an upholder and adherent of the principles and policy of the Labour Party—will remember that he was adamant in refusing, when Secretary of State for War, to allow any change in the death penalty with regard to the subjects which we are now considering.
It is the fashion in some quarters to disparage the Army Council. I do not know why. They are human. They may make mistakes and probably do, like the rest of us, but anyhow they are men of experience, and I think in matters of this kind you want men of experience. I have heard it suggested in some quarters that they are prejudiced. I do not doubt that in time of war they may be prejudiced in favour of killing the enemy, but it is folly, and it is unworthy, to suggest that they are in favour of killing their own men. In the late War there were 282 men shot for desertion and cowardice, and of that number eighteen only were shot for cowardice. I submit that when we consider the enormous number of men employed in that terrible War, these eighteen cases are almost certain to have been very grave and serious cases, and I think we need not trouble ourselves about any grave risk of injustice in the infliction of the death penalty in cases of cowardice proved to be very grave cases indeed. There is no doubt a mass of evidence which shows that if the death penalty is abolished for these offences there will probably be a great increase in acts of cowardice. With the death penalty before a man he nerves himself to resist, but if imprisonment only is before him, the temptation to give way is very great.
There is one other point in connection with this which is not pleasant to talk about, but which I ought to mention. Cowardice, happily, is not popular in the Army. So long as the possibility of
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the death penalty exists, those who may be endangered by an act of cowardice, knowing that a fair trial is in front of the individual, will probably leave him alone, but cases have been known where men have taken the law into their own hands. Lynch law is a possibility, and I submit that it is a thing to avoid which every precaution should be taken.
But let me hurry on, because we can come back to the general subject later. Let me come to the next offence which it is proposed to exempt from the death penalty:—
"Without orders from his superior officer, leaves his guard, piquet, patrol or post."
I should like to ask your Lordships to picture to yourselves the position of an officer whose duty it is to post a man in a particular place of danger, and for the man to say that he prefers imprisonment to stopping there. What can be the effect on discipline of action of that kind? Yet it is very tempting, if a man knows he is free from the penalty of death, for him to take such action. Then the next offence is—
"By discharging fire-arms, drawing swords, beating drums, making signals, using words, or by any means whatever, intentionally occasions false alarms in action, on the march, in the field, or elsewhere."
I do not attach much importance to that because I do not think it is ever likely to happen. Making signals is common enough no doubt by spies, but by men serving in the Army it is very rare, if not almost unknown. That being so, I do not see that it matters about this penalty of death remaining, because if such a thing should occur, if a man should give signals to the enemy and thus jeopardise his own comrades and his own Army, surely the death penalty cannot be considered as too great.
I come now to the insertion made in the Bill in the House of Commons. Subsection (3) says—
"In subsection (1) of Section twelve, for the word 'death' there shall be substituted the words penal servitude'."
Section 12, subsection (1), of the Army Act is as follows:—
"Every person subject to military law who commits any of the following offences; that is to say,

(a) Deserts or attempts to desert His Majesty's Service; or

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(b) Persuades, endeavours to persuade, procures or attempts to procure, any person subject to military law to desert from His Majesty's Service, shall on conviction by Court-Martial—

if he committed such offence when on active service or under orders for active service, be liable to suffer death…"
This Amendment moved in another place has had the effect of abolishing the death penalty for that offence, and I submit to your Lordships that we ought to be very careful before we allow the abolition of that penalty to remain. Desertion may be of various kinds, but no matter how grave a case, if this Amendment made in another place is allowed to remain the highest penalty possible for such a crime is a period of penal servitude.
Assume the case of a man who has received, or who knows he is going to receive, an order to go over the top and be exposed to the gravest possible danger. He says to himself: "Well, if I do not obey this order I can but get a period of imprisonment and I will not only refuse to go myself—I will try to get away, I will try to persuade others to go with me." And in persuading them to go he will remind them that all they can get is a period of imprisonment, with the absolute certainty that when the war is over there will be an amnesty, and they will be left scot free. I suggest that action of that kind is so dangerous—so dangerous for the good of the troops fighting, so dangerous for the loyal and brave comrades remaining at their duty—that it ought to meet with the severest punishment.
I remind your Lordships that the insertion of this Amendment was not intended by the Government. It was an Amendment, moved by Mr. Thurtle, a member of the Labour Party in another place—a gentleman, it is only fair to say, who, I understand, did his bit in the War with credit and distinction. It was left to a free vote of the House—a very proper decision, with which I am sure we all agree, for none of us want to regard this grave matter in any sense from a Party point of view. It was carried by a majority of 84, but only in a comparatively small House, 354 voting out of a possible 615. And it is very significant—I call your Lordships' attention to this—that the Secretary of State himself voted against that Amendment. I remember in that debate reading how
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a valued friend of mine, a man of many years' standing in the House of Commons, one who took his full share of the dangers and the horrors of the late War, said that though he knew it was a very unpopular thing to say, he had sometimes observed in his experience of the House of Commons that that Assembly was occasionally moved by sentiment. I do not think there need be any surprise that after a great and horrible war like the last sentiment should have considerable play. Personally, I value sentiment in its proper place. I believe there is much good in the world due to sentiment; but I suggest that, while the influence of sentiment may be good, it must not be allowed to govern our actions.
There is another point to consider with reference to these questions. Public opinion at the present time is satisfied that there is going to be no more war. We all hope that that is going to be true; but the very fact that it is generally believed makes people callous, and prevents them from giving real, deep consideration to the grave matter which we are discussing this afternoon. If we are dealing with a question of this kind we have got to assume that there will be war. We all hope there will not, but we have to assume that there will be, otherwise the whole thing is a farce, and there is no use talking about it. And in connection with desertion I should like to call your attention to the fact that the number of men executed during the. War was only 264, out of, I think, close on 9,000,000 men enlisted for the Service. That does not sound a very large number—though quite enough indeed. But I would ask your Lordships to remember that the death penalty can only be awarded, first by a General Court Martial, and then only with the con currence of at least two-thirds of the members of that Court; or, it can also be awarded by a Field General Court Martial, but then the opinion of the Court must be unanimous. And, further, the final decision rests with the revising and confirming officer, and I submit that the figures I have quoted show that there was no abuse in the fixing of the penalty in the recent War.
I want to call your Lordships attention to the Report of the Committee set up by the Government opposite when they were last in office. They appointed a

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Committee to consider the very questions I have enumerated to you this afternoon. That Committee was set up in 1924. It is true the Government went out before the Report was signed, but I think they had a last meeting within a very few days of the signing of the Report. The terms of reference included what we are discussing this afternoon, that is to say, every one of these offences enumerated in subsections (1), (2) and (3) was considered by that Committee. That Committee examined 'witnesses, and the witnesses were not only officers but civilians, lawyers, and private soldiers. The Committee to a man turned down the proposal that any change be made in the death penalty for the crimes we are considering now. That Committee finished its labours just five years ago. It seems to me a strange thing that in face of that decision come to by a Committee appointed by the same Party as the present. Government, they should now bring in these proposals so soon, and not give proper and full time for the discussion of them.
I should have thought it might be possible, considering the circumstances of the moment, for the Government to withdraw these proposals. It would do no harm. We all hope there will be no war at all again at any time. But surely we may hope with considerable confidence that there will be no war during the next year, and that would give ample time for further consideration of this terrific problem upon which so much may depend. I hope the Government will kindly give consideration to this possibility. If they do not, if they do not feel that they can, then I can only say that I see nothing for it but for us to put them to inconvenience. I hope every member of your Lordships' House who is here to-day, quite irrespective of Party will ask himself whether it is not his duty to throw out Clause 5 rather than let it come to be the law of the land without further consideration. I beg to move.
Amendment moved—
Page 4, leave out Clause 5.—(Viscount FitzAlan of Derwent.)
VISCOUNT PLUMER: As one of the senior officers of the Army as well as one who has had a certain amount of experience in the maintenance of discipline under active service conditions, I wish to
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endorse whole-heartedly the Amendment that has been moved by the noble Viscount, Lord FitzAlan. I entirely endorse what he has said; but I should like, if I can do so without wearying your Lordships, to put the matter before you from a soldier's point of view. When any Government sends its Army, or part of it, into the field on active service operations it is responsible to the nation that that Army is furnished with the best possible armaments and equipment, that there is a system of supply which will ensure the maintenance of that Army—using the expression in the most comprehensive sense —throughout the campaign, that there are adequate measures for the care and treatment of the sick and wounded, that all possible measures are taken to safeguard the health of the troops, and last, but by no means least, that everything is done to keep up morale.
The morale of an Army must be sustained by the maintenance of a very high standard of discipline. That is generally recognised. Indeed, in the Preamble to the Army Act it is distinctly explained that in order to preserve—the term is rather a peculiar one—exact discipline, it is necessary to prescribe certain severe penalties and punishments many of which are only of real gravity when committed on active service. The commander in the field is responsible for seeing that the operations entrusted to him are carried out in such a way as to give the best possible chance of success and, moreover, with the least possible loss to his own troops. He is fully aware that the success or failure of his operations depends, for the most part, on the morale of his troops, and he is very careful not to do anything himself or to allow anything to be done on his behalf which would lower the morale or the standard of discipline.
It is recognised that in order to support him in his efforts he must be provided with special powers both of a protective and a punitive character. It is essential at the outset that it should be impressd upon all those who serve under the commander in the field that they are for the time being entrusted with the honour of their unit, of their Army and of their country. The honour of the unit means a good deal to soldiers. It should be impressed on them that the success of the operations depends on unity of action and

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that that unity depends, in turn, on the way in which each man performs the task allotted to him. He should be made to realise that while, on the one hand, gallantry and meritorious service will be duly recognised and rewarded, on the other hand severe penalties are provided for any dereliction of duty, and the severest for those derelictions which either prejudice the success of the operations or endanger the lives of his comrades.
There is general agreement on all those points. Where there is a difference of opinion is, firstly, what are the offences which may prejudice the success of the operations or endanger the lives of comrades, and, secondly, is it necessary as a deterrent to have the death penalty for those crimes and will not penal servitude suffice? My answer to the first question is that in addition to those for which the death penalty already stands, all those offences enumerated or referred to in Clause 5 come under this category. As regards the second question, I say most emphatically that in my opinion penal servitude is not a deterrent. It means safety. The only deterrent for the man who will wilfully behave in such a way as to endanger the lives of his own comrades in order to avoid the risk to his own life is the knowledge that, while his comrades may possibly incur death at the hands of the enemy, which will be a glorious and honourable death, he, if convicted of one of these offences by a Court-Martial and executed, will die a death that is dishonourable and shameful.
May I illustrate what I mean by a picture? Take the case, first of all, of a post or line of posts held by a body of men to which it is generally known that the commander attaches great importance. That post or line of posts is seriously attacked. Casualties begin to occur and two or three men slink away into safety. The others remain at their posts and successfully defend them, but some of them lose their lives. Or, in the case of an attack, when the order to advance is given, the majority go forward. Again, two or three slink away into safety. The others go forward, and the attack is successful, but there are, as there must be, a certain number of casualties. The effect is that those who went forward and did their duty well and gallantly have lost their lives; the
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shirkers, the men who deserted their comrades in danger, are placed in safety for the remainder of the campaign. What is the reasoning of the rank and file in that kind of situation? They may say truly: "We know that in all campaigns there must be hardships and privations, and we are prepared to undergo them. We know that in all campaigns there must be risk to life and we are prepared to risk it; but what we are not prepared to see is the men who desert us in time of danger because they will not risk their own lives given, certainly penal servitude with all its rigours, but a punishment which gives them safety for the whole campaign. Surely it is almost a premium on misbehaviour, and would it be surprising if, upon such an occasion, the men took the law into their own hands and shot those who were endeavouring to leave them? Happily, cases in which officers and men have had to shoot their comrades in such circumstances are very rare, and it would be lamentable if owing to a mistaken leniency they became common.
In supporting this Amendment I will put before your Lordships three special points. The first is that the measures that provide for the death penalty in the cases to which we are referring are far more protective for the good soldier than punitive to the offender. Secondly, in all those cases, it is only a case of being liable to the death penalty, and taking the most common and, I think, the most important of them, desertion, there are a very great variety of cases in which no Court-Martial would give an award of the death penalty except in cases of extreme gravity. I believe that of the number of cases in the last War for desertion only one per cent. were executed. Thirdly I would point out to you that in any case where the death penalty has been awarded by a Court-Martial the whole proceedings are subjected to a meticulous scrutiny and every possible consideration is given to extenuating circumstances. I can tell your Lordships from personal experience that there is no more painful duty a commander has to carry out, none which he would more gladly avoid, than signing the death warrant for the execution of one of his own men. I would ask you to support this Amendment for the reasons I have given and for those expressed by the noble Viscount, Lord

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FitzAlan. If the Bill stands as it is now I am quite confident that in the future, far distant as that future may he, the effect will be to prejudice the morale and also the high standard of discipline which hitherto has been a proud tradition of the British Army.
VISCOUNT ALLENBY: I entirely endorse every word that my noble friend Lord Plumer has uttered. I should like to suggest to your Lordships that the behaviour of a soldier in war very largely is the result of his peace training and the moral atmosphere created during his peace training. He will behave well in war—with the exception of the few black sheep which there are in every fold. When a young man enters the Army, whether as a commissioned officer or a private soldier, he is well aware that he is joining a Service in which discipline is strict, even to severity. He always knows that, and he has due reverence for that discipline. When he joins he is well aware of the fact that certain offences in war are liable to the penalty of death. That does not trouble him at all: it causes no alarm in him, because he is young and he does not contemplate the possibility of his committing any of those crimes which would render him liable to that punishment. But the severity of the penalty indicates the enormity of the offence, and it creates a moral atmosphere which causes him to abhor that crime and anything that would affect his honour and duty as a soldier. The moral influence thus created would, I think, be very much lessened if the penalty of death were abolished.
The knowledge that such offences may be visited by the extreme penalty of death very much influences the gravity with which such crimes are regarded, and those crimes are extremely grave, as has been already pointed out. The committal of these offences may endanger the lives of many men, may cause the failure of military operations, and so bring about possibly a national disaster. I hope your Lordships will agree that any action tending to lower in any respect the abhorrence with which those offences have hitherto been regarded will have a very serious effect on discipline. The soldier has been accustomed to look on these provisions as indicating the majesty and the awe of the law,
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which can enforce these penalties, and the effect on his young mind of any alteration would be that now these offences are to be regarded as less grave than they used to be. That will surely, to my mind, and I hope your Lordships will agree, strike at the foundations of discipline.
VISCOUNT MERSEY: It is with great diffidence that I venture to address your Lordships, for I am a newcomer to this House, and I cannot speak with any authority or experience comparable to that of the noble and gallant Lords who have already spoken. But I have had the privilege for some twenty years of occasionally hearing your Lordships' debates from the steps of the Throne, and I know your Lordships will always lend a considerate ear to anyone who endeavours to express his opinions, however lamely, if he says what he believes to be in the public interest. I am only speaking as one who has been an ordinary soldier, and I think, perhaps, that point of view may be of a little value. I have naturally a most profound respect, and a proper respect, for any decision that is arrived at in another place, especially when it is arrived at in the manner in which this decision was reached. But it seems to me that the protection which it was evidently the intention of this change in the law to devise is in fact no protection at all, but is calculated to defeat its own ends. I had hoped the noble and gallant Field-Marshal beside me would have said something and spared me from making this difficult effort, but as it is I feel that somebody on these Benches ought to say a word.
My task, however, is rendered very much easier by what the noble Viscount has already said. He has said in far better words than I could use nearly everything I wished to bring forward, though there is one point which I think is not sufficiently present to the mind of laymen. In battle fear, a most unpleasant emotion, is so strong, so human, so natural, that every possible adventitious aid ought to be employed to resist it. Many of your Lordships must know quite well what it is to be lying down without having any head cover, and with nothing to do, and to be shot at. It is extremely unpleasant, and one needs to be able to draw upon

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every resource that one has—training, discipline, sense of responsibility and, probably, in the last resort an intelligent anticipation of what will be the result if you do not do what you ought to do. One must have these resources to draw upon, and to take away the deterrent of the death penalty is, I think, a fatal mistake. It is a lowering of the standard. By so much as you diminish the penalty you diminish the stigma upon cowardice, until one arrives at the stage of—what shall I say?—of the older Roman Empire when the poet Horace, no doubt an excellent man, could write an Ode about his running away from the battle of Philippi, which was probably read at all the dinner parties he attended.
No one who knows anything about a Court-Martial can imagine that it ever does anything except exercise the greatest consideration and clemency and careful thought. I was Provost Marshal of the Army at the Dardanelles and I had a good deal to do with Courts-Martial. There is no more human or humane tribunal in the world. Who are the accused? They are the soldiers of the officers sitting on the Court-Martial. They are almost their children. They are the men alongside wham the officers have been fighting and alongside whom they are hoping to fight for the rest of the campaign. Behind them is the confirming authority and in what used to be called a drumhead Court-Martial —a Field General Court-Martial—the necessity of unanimity. Every consideration, as the noble Viscounts upon the Cross Benches have already said, is given.
Those are the only points I wish to put before your Lordships which have not already been advanced in a very much better manner. I believe that you are not going to protect the soldier at all. You are going to jeopardise the lives of his comrades. I could mention, though I will not weary your Lordships with details, several cases from my own experience. I will only give two examples. I remember a case in China many years ago. We were fighting alongside several Allies—the incident does not relate to British soldiers. I remember in an entrenched camp which had been taken at night a piquet being put forward with a couple of sentries. The sentries went to sleep. They wore killed, and the whole piquet was massacred. That is the sort of thing that
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may happen. I remember a case in the Dardanelles when a line, after a very hard and miserable two days and nights, began to break, leaving the troops on either side in the air. There were two Second Lieutenants just come out from school. They were the only remaining officers. They took the law into their own hands, because it was the only thing they could do. They saved not only their own troops but the troops on either side. You must have these penalties in the last resort. I say again I do not know how this decision has been arrived at, but I do believe that it will defeat its own object and will not in any way promote that policy of peace which it is the wish of every Party in this House to preserve.
THE SECRETARY OF STATE FOR AIR (Loan THOMSON): The noble Viscount, Lord FitzAlan, in a speech of great force and moderation put the case for restoring to the Army Act certain provisions which were taken out in another place. He urged the Government to reconsider their attitude in this matter. I am afraid that I must make it clear from the very beginning that that is quite impossible. No one has more respect than I have for the views of the noble Viscount or for the way in which he expresses them. I have no complaint of that, but it is quite impossible to follow his suggestion. The noble Viscount made certain references to the conduct and procedure of my right hon. friend the Secretary of State for War. If the House will bear with me I should like to explain my own position. I also acted against the advice of the Air Council. I very seldom do so, and I do so with the very greatest reluctance and with misgivings, because I find they are nearly always right. But I claim that it is part of one's responsibility to follow one's own policy and I agree with the Secretary of State for War in the line which he took with regard to the first three offences for which the death penalty was deleted. In regard to desertion I will say a few words later.
My attitude was not based on any speeches I had made in the country or on any Amendments I had moved in another place in the days of Opposition. Nor was it based on sentiment, nor do I in any way impugn the great authority of the Army Council and the Air Council.

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None of these feelings moved me. Having been on many Courts-Martial myself, having served for twenty-six years in the Regular Army, I should be the very last man in the world to suggest that those tribunals are not the fairest in the world. My attitude with regard to the first three offences—cowardice and those allied to it—was based upon what I conceive to be the very great difference between a modern army, and especially a modern volunteer army such as our own, and those armies for which this dreadful code of punishments was drawn up, a code of punishments which has been mitigated through the centuries. It was drawn up either for mercenary troops or for men who so nearly bordered on the criminal classes that the most stringent measures had to be employed to maintain even a semblance of order. But I submit that the difference between the class of man who sacked Badajos and the young men in our Army to-day is so great that you cannot apply the same code of laws to those two types.
I would say, I think without exaggeration, that the ordinary private soldier in the Army to-day is ten times as sensitive a human being as those soldiers were. I think I may claim that there are many aircraftsmen in the Air Force who are better educated to-day than the majority of officers were at the time of Waterloo, and I think that many of them are just as well educated as young officers were when I was a young officer. In fact I am certain that I could not pass the examinations that are being passed by aircraftsmen to-day, nor could I have done so at any time of my life. We are dealing with a totally different set of human beings. I submit that it would be impossible, unwise and, I am inclined to think, impracticable, especially if you enrol these men as a nation in arms, as conscripts in your citizen Army, to expose them to a code of laws totally different from that to which they are accustomed in private life and punish them for offences that are not really crimes of violence, just as you would mulish them for murder in a civilian State.
I propose now to deal with some of the points raised by the noble Viscount, Lord FitzAlan, and by other noble Lords who have spoken. I yield to no one in my desire to maintain a high morale in the Services and to protect soldiers from
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cowardly comrades, from treacherous comrades and from bad comrades. We are all agreed on that. It is an essential thing and it has to be done in one way or another. How does the situation stand with regard to these particular crimes? The noble Viscount himself drew a distinction between several of the crimes in this category. He said that there were many cases where, though technically speaking a man had been guilty of cowardice or of one crime or another, he was not really punishable with death. It was only the bad crimes that were punished with death. I hope I am quoting the noble Viscount correctly, but I am doing so entirely from memory. I think that was the sense of what he said.
VISCOUNT FITZALAN OF DERWENT: My point was that in the milder cases they were not sentenced. Only the very severe cases were met with the penalty of death.
LORD THOMSON: The noble Viscount says that there are mild cases and serious cases. He draws that distinction. Let me deal with the first category of crime in terms of the Army Act. That Act is a very full document. Even after we have deleted the death penalty for the crimes mentioned by the noble Viscount, there remain at the disposal of the Commander-in-Chief and the officers of his department other sections which enable very severe punishment to be dealt out to people who commit the more serious crimes in the categories mentioned. Section 7 (2) of the Army Act says that any man who—
"endeavours to seduce any person in any of His Majesty's military, naval, or air Forces from allegiance to His Majesty, or to persuade any person in any of His Majesty's military, naval, or air Forces to join in any mutiny or sedition"
—I am dealing with the first part of the section only—is still liable to the sentence of death. That covers, if I am not mistaken, the crimes mentioned in the first category and some of the more serious crimes for which generally the punishment of death used to be awarded.
I submit that, if one can catch the perpetrator of a very serious crime in any one of these cases, under any clause in the Act, it is far preferable to leave the matter there and not to enact anything under cover of which it might be possible

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to mete out this dreadful punishment to some poor feckless creature who had lost his head in terror but who, technically speaking, had been covered by one of the clauses that have been deleted. The noble Viscount and the noble and gallant Viscount, Lord Plumer, both spoke of the extreme leniency of Courts-Martial. I quite agree that Courts-Martial are lenient as a rule but, if I may with all respect correct the noble and gallant Viscount, if I heard him aright, I think he said that only 1 per cent. of the total sentences passed by Courts-Martial were carried out.
VISCOUNT PLUMER: I said that I believed—I may not be quite correct—that in the cases of desertion that were tried by Court-Martial only 1 per cent. mere executed.
LORD THOMSON: I did not understand that. As a matter of fact, 11 per cent. of the death sentences were carried out. Then I think it was the noble and gallant Viscount, Lord Plumer, who said that penal servitude means safety to the coward. I think he must have overlooked to some extent the Act that was passed during the War, the Army (Suspension of Sentences) Act. Men did not get back to safety because they had been sentenced to penal servitude for any of the crimes mentioned by Lord FitzAlan. On the contrary, some of the men who had been sentenced to death had their sentences commuted to penal servitude and were sent up to the front again. Cases occurred of men going back two and three times. They did not get back to safety because they were cowards and abandoned their comrades. They did not get back to safety if they were sentenced to penal servitude for any of the crimes mentioned by the noble Viscount. That is not what happened to them after the Army (Suspension of Sentences) Act was passed during the late War. Accordingly the deterrent existed.
THE EARL OF MIDLETON: Would the noble Lord say whether that Act is now in operation?
LORD THOMSON: That is certainly a matter for consideration, and I will find out. Yes, I am told that the Act is still in operation. It puts a distinctly different complexion on the whole matter. I confess candidly that if, by merely committing one of these crimes, a man
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could get back to safety, I should take a very different view of the matter, but in point of fact he does not. As regards the deterrent effect of fear, I think it was the noble Viscount, Lord Mersey, who said that you had to do everything you could to get rid of fear on bile part of soldiers. I imagine that the noble Viscount is of opinion that fear casts out fear, because we put fear of death upon them in order that they shall not be fearful in the presence of the enemy. I do not know that I quite agree that this is a very considerable deterrent. I submit that, as regards the first three categories of offences that were deleted by the Government's own action as offences punishable by death, the morale of the Army is protected. The soldier is shielded from cowardly or treacherous comrades by the laws which you will find still remaining in the Army Act. The real effect of what was done the other day by the Government was merely to safeguard, as far as possible, the poor feckless creature, the terrified boy who behaved like a coward because he did not know what he was doing. Your real offender or bad man will be caught today in the vast majority of cases under the Army Act as it stands.
Now I come to the last offence, that of desertion. The history of the Amendment made in another place was described to us by the noble Viscount—namely, that the abolition of the death penalty for desertion was moved by a private Member and voted upon by a free vote of the House. He also pointed out that my right hon. friend the. Secretary of State for War voted for the retention of the death penalty for this offence. My right hon. friend behaved with his customary loyalty to his advisers, and I confess that in the circumstances, had been placed as he was, I should have done so too. I ask your Lordships to analyse that free vote in another place. The noble Viscount gave us the figures. Ayes, 219; Noes, 135. There were a large number of political deserters on that occasion. I do not know what penalty they should be exposed to from the Party machine, but it is certainly significant that in a free vote of the House only 135 Members of Parliament out of 615 voted for the retention of the death penalty. I admit that that has changed my view of the matter very considerably, because I submit that we

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cannot disregard a vote like that in this House—a free vote—no Whips put on—a very remarkable manifestation of, I will not say mawky sentiment, but a free expression of widespread feeling. Only 135 voted against the Amendment. I am not talking Party politics, because it is not a party question, but there are more than 235 Conservatives in the other House.
I am the first to admit that the offence of desertion can in certain circumstances be one of the meanest. It often is due to a man being selfish or opinionated — without that honour which should exist even among thieves — and without the spirit of comradeship he leaves his friends in the lurch. He is certainly the most contemptible of human beings, but whether that sort of moral obliquity should be punished with death seems to be an open question. I admit that soldiers ought to be protected against that, but are they entirely without protection when you remove Section 12, subsection (1), from the Army Act? I do not think so. If I may refer your Lordships again to the Army Act, I would refer you to Section 4, paragraph (6), where you will find that a man who acts like that—the really bad case, the cool, calculating, selfish person, who of malice aforethought deserts his comrades for his own advantage—is still liable to the death penalty.
The case which I have in mind is the case of a man who sat up all night playing cards, won a great deal of money, and cleared out in the morning in order to enjoy it. It is a matter of legal opinion, but I believe I am safe in saying that in the vast majority of serious, bad cases—the case of the cool, calculating, selfish man—you would get the offender under Section 4, which says that:—
"Every person subject to military law who commits any of the following offences; that is to say,
(6) Knowingly does when on active service any act calculated to imperil the success of His Majesty's forces or any part thereof,"
is liable to the death penalty, if convicted. You have your deterrent there, and I fail to see why it should be so important to insist upon Section 12, subsection 1, which may cause very severe punishment, the supreme punishment, to be inflicted on a foolish person, when
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your really bad man is caught already under a section of the Army Act which still remains.
I have spoken at some length for the Committee stage, but I feel strongly on this subject. I know it will not have the least influence upon your Lordships if I have not reached you by any sort of argument—I have done my best to argue the case—but Lord FitzAlan knows that if he goes to a Division he will not only put the Government to inconvenience—that may be a small matter—but he might imperil the Bill, and he knows the consequences of that. I have tried to make a case to show that really the heart of the question is preserved—the vital thing that no man shall suffer because of the infamy of his comrades, if that can be avoided; it cannot always be avoided—and I have got to assure your Lordships of this, that if there is anything certain in this world it is that if your Lordships' House send the Bill back to another place this evening it will come back to you on Thursday with all these peccant sections reinserted. The noble Viscount's purpose will not have been achieved, but great inconvenience will have been caused, and if we persist in our obstinacy here we may lose the Bill, and by the 1st of next month there will be, legally speaking, no Army or Air Force in existence. It is for these reasons that I appeal to your Lordships not to vote for the Amendment.
LORD HANWORTH: The noble and gallant Lord who has just spoken was very anxious to put a correct picture before you of how the matter stands, and I venture to trespass upon your time for a few moments. At the outset of his speech he told us that the death penalty was a relic of the past, when soldiers were drawn, under very different circumstances, from a body politic very differently educated from that of the present day. The Army and Air Force (Annual) Act has not its roots far back in the past. It does not belong to the Napoleonic period; it does not belong to the time of the press gang. I have good authority for telling your Lordships that up to the year 1879 what was then called the Mutiny Act was passed annually, and therefore received the consideration of both Houses of Parliament year by year; and if the death penalty was preserved it was preserved because time and again,

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year by year, decade by decade, it was considered necessary to maintain it. It was not until 1879 that an Army Discipline (Regulation) Act was passed, and the present Act, which is brought into force by the Army and Air Force (Annual) Act each year, is the Act of 1881.
LORD THOMSON: I did not say these Army Acts existed in the Napoleonic war period. What I did say was that these punishments existed. They were codified later on.
LORD HANWORTH: I quite agree with the noble Lord; it is exactly that which I have got up to refute. The point he made was that these punishments were started and have been maintained from a long distant past and that they have been a survival during a long period of years. My point is that year by year—each year and every year—these punishments have been reconsidered by both Houses of Parliament, and each year enforced; and the difference between the noble Lord and myself is plain. He regards this punishment as archaic and long-standing—one that may and ought now to be removed because the circumstances are so completely different from those At the time when it was originally imposed, and apparently by inadvertence left standing. My object is to explain that both Houses of Parliament have in successive years reconsidered this penalty and left it standing, and that as recently as 1881 the Army Act was passed, which is brought into force year by year by the passing of the Army and Air Force (Annual) Act.
There is one more point I want to make plain. The noble Lord said your Lordships might rely upon Section 4 (6), relating to a person subject to military law who
"knowingly does when on active service any act calculated to imperil the success of His Majesty's Forces or any part thereof."
If I remember rightly he gave us a picture of a mean contemptible man on whom the death penalty might be deservedly imposed—a man who sat up late at night taking by his skill money from his associates, and desiring to have an opportunity of spending it for his own enjoyment, while the others went forward at a subsequent command—let us say given in the early morning of the next day—to fight for their country and offer their lives to the enemy. Let us see
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whether that mean and contemptible man would be a man who "knowingly does on active service an act calculated to imperil the success of His Majesty's Forces or any part thereof." I feel myself that if any one appeared as the prisoner's friend he would have very little difficulty indeed in showing that the mere absence of this one man bent on self-enjoyment did not in any way imperil the success of His Majesty's Forces who might be asked to advance over a long line against the enemy. Your Lordships may do what you like with your eyes open, but I feel bound to advise you that if you rely on paragraph (6) you are relying upon a paragraph which is valuable no doubt when there has been a word of command given, and when you can bring home to a soldier that he has done something which will imperil the success of His Majesty's Forces, but it is a very difficult thing to bring that home to an individual unit in the circumstances suggested.
The noble Lord appealed, not once, nor twice, to your Lordships' feelings when he asked you to consider the case of a poor boy who, not being a hardened soldier, has perhaps shown some cowardice when his common sense and stability have hardly had time to mature. Are we not to accept the advice of the Field-Marshals who have spoken to your Lordships to-day? Is it in a case of that sort that the extreme penalty is imposed and carried out? I had thought we had had from the noble Viscount, Lord Plumer, a statement that in every Court-Marshal mercy was not absent, that there was the greatest reluctance, first of all, to convict, and finally, by those who have the responsibility, the greatest reluctance to carry out the sentence; and that it was not in the case of some unripe, ill-conditioned boy who had failed to exercise the highest qualities of a soldier that the death penalty was imposed. It was only in those cases where the revising officer felt it impossible to find an excuse. In that case, and that case only, was the death penalty actually carried into effect.
THE MARQUESS OF SALISBURY: I am quite certain that every one of your Lordships approaches this subject under a great feeling of responsibility. The infliction of death is horrible. Every one of us must feel that. And yet those

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of us who have lived through the Great War must realise that any Ministers who advise a great war, or indeed any war, have contemplated that there must be, and are, reasons which justify the infliction of death, otherwise war would be impossible. Therefore although, as I say, we must all of us feel reluctant to vote in favour in any circumstances of the infliction of the punishment of death, yet we must steel ourselves not to be misled by any feeling of sentiment which is not justified.
I confess I was not very much struck by the arguments used by the noble Lord the Secretary of State for Air. As I understood him, he did not contest the fact that there were certain offences for which the penalty of death ought to be inflicted. On the contrary, what he sought to show was that, notwithstanding the existence of Clause 5 in the Bill, for all offences for which the death penalty ought to be inflicted it could still be inflicted under the Army Act. I do not know whether that point of view was brought prominently before the House of Commons. I certainly had not gathered that they had passed the Bill in the belief that for all justifiable reasons the punishment of death in respect of these offences was still maintained. Really it is better not to be misled, if I may use the phrase, by such refinements. We have a simple issue. Certain offences are recited in the clauses of the Army Act. Are we to say that they are still to be punishable by death or are we not? The fact that the obvious intention can be got round by calling in aid some other clauses of the Army Act appears to me not to be a reasonable argument to use.
Let us approach the thing quite straight and direct. Do we want it or do we not want it? Do we think it ought to be or do we think it ought not to be? The fact that it can be manœuvred by some other clause in the Army Act is not one which ought, I think, to detain your Lordships. Then the issue is simple. We have it from my noble friend who moved this Amendment, and that, of course, was confirmed by others of great authority, that in point of fact the penalty of death is not inflicted except in heinous cases. We may rely upon that, surely. Why should we doubt it? The noble Lord the Secretary
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of State for Air seemed to think that there was some point in making the thing verbally impossible. That is not the way. We trust those who carry out great authority as servants of this country, and when we are told by officers in high command that this terrible penalty is not inflicted except in heinous cases we believe them, and we ask your Lordships to act accordingly. I have said "authority," and that really is the greatest argument to submit to your Lordships.
Many of us have no technical opinion upon this subject worthy of the name; but we have the great advantage in your Lordships' House, an advantage not possessed in another place, of having to advise us officers of the greatest distinction, who have all the experience of the Great War and of high command in the Great War and have been put into your Lordships' House, if I may say so, for the essential purpose of advising us upon these particular questions. It would be indeed a very strong measure if, upon a matter of this kind, Parliament were to ignore the authority of the Army Council and of the Air Council too, as I understand. But I do not think that the reasons of the Army Council were given in another place. They have no audience in Parliament. But we are different. The great commanders are actually members of our House. We can hear them and see them, and hear the conviction with which they tell us that without these particular provisions of the law the maintenance of the morale and the discipline of the Army would be impossible. Without treating this as a Party question for a moment, I would ask your Lordships how we can refuse to accept the authority of these distinguished officers. The noble Lord says: "Just think what the House of Commons say"—
LORD THOMSON: I did not say that.
THE MARQUESS OF SALISBURY: No. To be quite frank he said how striking it was that the House of Commons by a large majority had inserted subsection (3) in the clause. Yes, but the House of Commons had not the opportunity that we have had of hearing these officers in high command, and speaking almost judicially, if I may venture to assume such a rôle for a moment, I do not see how we can refuse to accept the

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weight of authority which is put before us. Therefore, though not in any Party sense or with any intention of making a Party point or asking for a Party Division, I must say for my part that I can do nothing else but advise your Lordships to accept the advice which has been tendered by those who are qualified by great authority and great experience to pronounce an opinion.
LORD PARMOOR: I am sure we all feel the great responsibility to which the noble Marquess has referred. I only rise to say a word or two because I think that the noble and learned Lord, Lord Hanworth, and the noble Marquess have really not understood the weight and importance of the arguments addressed to your Lordships by the Secretary of State for Air. First of all, with regard to what was said by Lord Han worth, I will not argue in this House a mere legal question as to how far the other provisions of the Army (Annual) Bill may extend to matters which are wilful desertion, though I think they go very far in that direction. I think the noble and learned Lord entirely misunderstood the argument of my noble friend Lord Thomson. What the noble Lord said was that punishments which were fairly applicable in the old days of a 'standing Army—I think he went back to Napoleonic times—could not properly be administered in a citizen conscript Army, having regard to the different character of the soldier in the two cases. There is no doubt that the punishments we are dealing with to-day are a survival of the punishments of old times. It is not a matter as to whether you have an Army Act or not, although I hope from time to time that, as we are doing to-day, the question may be considered. That is not the question. These punishments are, in truth and in fact, a survival of the punishments applicable to the old-time soldier to whom my noble friend has referred, and are quite inapplicable to the modern volunteer or conscript, such as took a great part in the late War and are likely to take the greatest part in any future war.
With regard to what the noble Marquess said, I should like to say that I really cannot understand the logic of his argument. If we are to have the death penalty—and there is no question that for certain purposes
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the death penalty is preserved—surely the condition should be that the times and occasions on which that death penalty could be imposed should be very clearly defined, and his argument comes to this, that because in some cases the death penalty may be the right penalty, therefore let us preserve it in the case of what is called here and was called in the House of Commons simple desertion. It is not a question as to whether, under the conditions to which the noble Lord referred, the offender should be tried or not, but whether having regard to modern conditions, in the case of what has been called a feckless youth he ought not to be subject to the possibility of being charged with such an offence. It is a monstrous thing to my mind that such a penalty should be asked for in such cases. It may be quite true—I am not questioning that—that such a person as the noble and gallant Viscount, Lord Allenby, may be presiding over a Court-Martial, but I contend that such a case ought not to be before the Court-Martial at all on the question of a death penalty. I want the noble Marquess to consider this. With the great responsibility of the death penalty for an offence, surely the nature of that offence ought to be clearly defined, and if the noble Marquess thinks, as I understood he did, or at any rate partially so, that the death penalty for desertion is not a penalty which, under what I call these modern conditions, should be employed, then the only way in which you can make certain of that view being carried out is by introducing the Amendments which are at present in the Army Bill.
THE MARQUESS OF SALISBURY: I do not know whether the noble and learned Lord thinks I said so, but I did not say desertion was one of the offences for which the death penalty ought not to be inflicted. On the contrary it may be of such a heinous character that it ought to be inflicted.
LORD PARMOOR: That surely is the difference between us and is the very point which the noble Lord, Lord Thom son, argued with so much ability. Certainly in heinous offences I do not deny that, but what you are doing in this Amendment is to preserve the death penalty in all cases of simple desertion

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and to make the deserter subject to be condemned to it by a particular Court-Martial. As to the other point which my noble friend Lord Thomson made, it is quite clear that for a number of offences the death penalty will remain in the Army Act. I should think that it covers all the cases which the noble Marquess had in his mind. It is retained for offences under the head of treachery or assisting the enemy; offences calculated to imperil the success of His Majesty's Forces; mutiny or incitement to mutiny, whether on active service or not. Those matters were all discussed in the other House. I do not want to get into a legal discussion because, after all, each case depends upon its particular facts, but so long as you have some desertion which may come from nervousness or fecklessness, or ether motive of that kind, which is in
Resolved in the negative and Amendment agreed to accordingly. Remaining clauses agreed to.
First Schedule agreed to.
Second Schedule:

SECOND SCHEDULE.
Special Modifications to be made in Part II of this Act for the Purposes of its Application to the Air Force Act.
The paragraph which is directed to be inserted in Section five of the Army Act after paragraph (6) of the said section shall, in the case of the Air Force Act, be inserted after paragraph (8) and be numbered "(9)" instead of "(7)."
itself not an offence, I say that the death penalty in such a case ought not to be preserved, and that the Bill as it stands, so far as this is concerned, ought not to be altered by this House. As the noble Lord, Lord Thomson, expressly stated, these are not offences in themselves. They are not offences of violence. They are not offences known to any civil court. They are not such offences as should make a man liable to the death penalty. I do not in the least want to shirk the responsibility, but I urgently hope your Lordships will not delete this clause. If it is deleted the matter will have to go back to the other House.
On Question, Whether Clause 5 shall stand part of the Bill?
Their Lordships divided: Contents, 12; Not-Contents, 45.

CONTENTS.

Sankey, L. (L. Chancellor.)

Arnold, L.

Passfield, L.

Gainford, L.

Ponsonby of Shulbrede, I,.

Parmoor, L. (L. President.)

Kinnaird, L.

Stanmore, L.

Marks, L. [Teller.]

Thomson, L.

De La Warr, E.

Marley, L. [Teller.]

NOT-CONTENTS.

Salisbury, M.

Brentford, V.

Clinton, L.

Burnham, V.

Cottesloe, L.

Clarendon, E.

Elibank, V.

Danesfort, L.

Cranbrook, E.

FitzAlan of Derwent, V.

Daryngton, L.

Hare wood, E.

Hereford, V.

Fairfax of Cameron, L. [Teller.]

Lindsey, E.

Mersey, V.

Lucan, E.

Novar, V.

Fairhaven, L.

Midleton, E.

Plumer, V.

Gage, L. (V. Gage.)

Peel, E.

Hanworth, L.

Plymouth, E.

Alvingham, L.

Harris, L.

Sondes, E.

Annaly, L.

Jessel, L.

Stanhope, E.

Auckland, L.

Kenmare, L. (E. Kenmare.)

Vane, E. (M. Londonderry.)

Banbury of Southam, L.

Lamington, L.

Biddulph, L.

Leigh, L.

Allenby of Megiddo, V.

Clanwilliam, L. (E. Clanwilliam.)

Methuen, L.

Bertie of Thame, V. [Teller.]

Redesdale, L.

Clifford of Chudleigh, L.

Sandys, L.

From the second of the paragraphs which are directed to he inserted in subsection (2) of Section six of the Army Act, there shall, in the case of the Air Force Act, be omitted the words "drawing swords, beating drums," and the words "in action, on the march, in the field, or elsewhere."
Any reference to Section fourteen of the Army (Annual) Act, 1904, shall, in the case of the Air Force Act, be read as a reference to Section twenty-seven of the Army and Air Force (Annual) Act, 1920.
VISCOUNT FITZALAN OF DERWENT: I beg to move the consequential Amendment in my name, to omit the first two paragraphs of the Schedule.
Amendment moved—
Page 8, leave out from end of line 33 to end of line 5 on page 9.—(Viscount FitzAlan of Dement.)
On Question, Amendment agreed to.
Second Schedule, as amended, agreed to.
Then, Standing Order No. XXXIX having been suspended, Bill reported with Amendments; Bill read 3a, with the Amendments, and pas and returned to the Commons.

LAND DRAINAGE (SCOTLAND) BILL.
Returned from the Commons, with the Amendments agreed to.
MILFORD HAVEN URBAN DISTRICT COUNCIL (WATER) BILL.
Returned from the Commons, with the Amendments agreed to.
ROCHDALE CORPORATION (No. 1) BILL.
Returned from the Commons, with the Amendments agreed to.
CHESTER WATER BILL.
Returned from the Commons, with the Amendments agreed to.

BUSINESS OF THE HOUSE.
LORD PARMOOR: My Lords, the adoption of Amendments to the Army and Air Force (Annual) Bill necessitates our meeting on Thursday. There is no business for to-morrow. The question of the time of meeting on Thursday is one on which I should like to consult the convenience of your Lordships. We are getting near Easter and perhaps it would be convenient to your Lordships to meet early in the day. As far as we on this side of the House are concerned we are prepared to be here at eleven o'clock. I do not know whether that will meet the general convenience of your Lordships?
THE MARQUESS OF SALISBURY: My Lords, I do not quite know why the noble and learned Lord thinks it necessary to ask us to come here on Thursday. There
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are two things which might happen. The Government in another place might be good enough to agree with the Lords, and then it would not be necessary to have anything but a formal sitting. But if they are not willing to agree I am wondering why the noble and learned Lord does not consider dealing with this Bill on April 29. That would be before the Army Act expires and your Lordships would then be in ordinary Session. But if the noble and ed Lord thinks we must meet on Thursday I would venture to suggest that twelve o'clock would be a suitable time.
LORD PARMOOR: Would it suit the convenience of the noble Marquess if we met at eleven o'clock? That would be more convenient to us.
THE MARQUESS OF SALISBURY: I do not want to say anything of a polemical nature but, of course, your Lordships have been put in the usual very difficult position by this Bill being sent to us at a time when it is almost impossible to consider it. Noble Lords in the week before Easter have the habit of going into the country and if they have to do in their places on Thursday they will have to come up from the country. A number of noble Lords will not be able to get here at eleven o'clock. That is why I suggested twelve o'clock.
LORD PARMOOR: Then we will make it twelve o'clock.
House adjourned during pleasure. House resumed.

ROYAL COMMISSION.
The following Bills, and Measures passed according to the provisions of Section four of the Church of England Assembly (Powers) Act, 1919, received the Royal Assent:—

Unemployment Insurance (No. 2),

Land Drainage (Scotland),

Children (Employment Abroad),

Edinburgh Corporation Order Confirmation,

Renfrewshire Upper District:(Eastwood and Mearns) Water Order Confirmation,

155

London Midland and Scottish Railway (Hotel Water) Order Confirmation,

Ministry of Health Provisional Orders Confirmation (Barry and Scarborough),

United Kingdom Temperance and General Provident Institution,

Portsmouth Corporation,

South Staffordshire Mond Gas,

Liverpool Corporation (Works),

London and North Eastern Railway (Works),

Rochdale Corporation Water,

Chester Waterworks,

Milford Haven Urban District Council,

156

Shakespeare Birthplace, &c., Trust (Amendment),

Bromborough Dock,

Ecclesiastical Commissioners (Pensions of Church Estates Commissioners) Measure, 1930.

Ecclesiastical Commissioners (Sodor and Man) Measure, 1930.

House adjourned during pleasure.
House resumed.
House adjourned at five minutes past seven o'clock till Thursday next at noon.

TEES (NEWPORT) BRIDGE BILL.
Brought from the Commons; read 1a. and referred to the Examiners.
The LORD CHANCELLOR The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the Standing Orders applicable to the following Bill have been complied with:
Ministry of Health Provisional Order (Blandford Forum Extension).
Also the Certificates that the further Standing Orders applicable to the following Bills have been complied with:

Borough Market (Southwark),

Brighton and Hove Gas.

The same were ordered to lie on the Table.

ST. HELEN'S ELECTRICITY (EXTENSION) ORDER, 1930.
Special Order in respect of the township of Bold in the rural district of Whiston and part of the township of Burtonwood in the rural district of Warrington, in the County Palatine of Lancaster:
Laid before the House (pursuant to Act) and referred to the Special Orders Committee.