Sitting of 23 September 1931

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

  CHINA (SITUATION).
  Mr. DAYasked the Under-Secretary of State for Foreign Affairs particulars of the most recent report he has received on the conditions in China?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Captain Eden): Full reports on conditions in China are reaching my Noble Friend daily. The salient points are as follow: Cantonese forces have advanced northwards towards the positions held by the National Government's troops, but no actual hostilities have occurred, and a report received to-day indicates that there has been a partial withdrawal of Cantonese forces. The floods in the Yangtse Valley and elsewhere are reported to be subsiding, but some weeks are expected to elapse before the inundated districts are clear of water. On the 18th and 19th of September Japanese troops guarding the South Manchurian Railway occupied Mukden and other towns on or near this railway line. The circumstances in which this action was taken have not yet been definitely established.
  Mr. DAY: Can the hon. and gallant Gentleman say where- the National Government are now situated?
  Mr. MARLEY: Will the hon. and gallant Gentleman tell us whether these events have affected Southwark?
  Mr. ARTHUR MICHAEL SAMUEL: Will the hon. and gallant Gentleman he able to make a statement as to the position of Mukden?
  Captain EDEN: I understand that the Chinese Government have brought the
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  matter before the Council of the League of Nations and that it is being discussed there to-day.

  LEAGUE OF NATIONS.

    COVENANT (AMENDMENTS).
    Mr. DALTONasked the Under-Secretary of State for Foreign Affairs whether instructions have been given to the United Kingdom delegation to the League of Nations Assembly to support the proposed amendments of the covenant of the League, which were unanimously approved by the last Imperial Conference?
    Captain EDEN: This question was discussed with the chief representative of His Majesty's Government in the United Kingdom at Geneva before his departure for the meeting of the Assembly, and it was decided that, as His Majesty's Government had not had an opportunity of considering the matter, the British representative should avoid committing them, especially as over 30 States have not yet submitted their observations. The best solution therefore appeared to be an adjournment, until next year, and I understand that this course has been adopted by the First Committee of the Assembly.
    Mr. DALTON: Was the consent of the Dominion Governments obtained before this departure was made by His Majesty's Government in this country?
    Captain EDEN: Yes, Sir. As soon as our delegation reached Geneva, a communication was at once held with the Dominion representatives explaining our position, and they expressed sympathy with it.
    Mr. DALTON: Is it not the case that at least one Dominion representative in the Committee discussion supported these amendments?
    Captain EDEN: The hon. Gentleman asked me if the Dominions had been informed, and I told him that they were informed before any discussion, took place.

    EXPENDITURE.
    Colonel HOWARD-BURYasked the Under-Secretary of State for Foreign Affairs whether, in view of the financial situation in all countries, it is proposed

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    to cut down the expenditure and salaries of the secretariat of the League of Nations; and, if so, by how much?
    Captain EDEN: The Fourth Committee of the Assembly of the League of Nations have given their attention to the whole question of economies, and have agreed upon a resolution to be submitted to the Assembly. This resolution requests the competent officials of the three organisations of the League to limit to the utmost possible extent the expenditure incurred between now and the end of the year.
    Colonel HOWARD-BURY: Can the hon. and gallant Gentleman say how much we shall gain by it?
    Captain EDEN: No, I cannot. The resolution has yet to be approved by the Assembly.
    Mr. KIRKWOOD: Have the Government had under review the question of reducing the salaries of our Ambassadors at the foreign. Courts?
    Captain EDEN: That is another question.
    Sir BEN TURNER: Is it the opinion of the hon. and gallant Gentleman that the expenditure in connection with the League of Nations is the best safeguard for peace and for getting peace machinery?
    Lieut.-Colonel HENEAGE: Has the question of the foreign nations who do not pay their subscriptions been gone into?
    Mr. SPEAKER: That is another question.

    ARMAMENTS (PROPOSED TRUCE).
    Mr. THURTLEasked the Prime Minister whether His Majesty's Government have instructed the British delegation to Geneva to support Signor Grandi's proposal for a truce in armaments and to put forward practical suggestions for an international agreement not to lay down new ships of war, not to construct new squadrons of aircraft, or to embark on expenditure on additional land material of war?
    The LORD PRESIDENT of the COUNCIL (Mr. Stanley Baldwin): His Majesty's Government are following with care the developments in the Third Committee of the Assembly of the
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    Italian proposals for an armament truce. Instructions were sent to Lord Cecil yesterday to the effect that he could agree to the naval proposals, subject to their acceptance by all the other Powers, and that he could give an undertaking that his Majesty's Government will not increase their military or air Estimates for the year 1932–1933 above their present low level, unless unforeseen conditions or emergencies arise. I understand that Lord Cecil has not yet spoken in the committee, and his action will necessarily be governed to a great extent by the views and proposals put forward by other delegates; but His Majesty's Government are in cordial sympathy with the motives which prompted the suggestion of the Italian delegation, which was to create a favourable atmosphere for the Conference, and will do all they can to further that object.
    Commander OLIVER LOCKERLAMPSON: Will my right hon. Friend not agree to any reduction in armaments until the Russian Soviet has agreed?

    AGRICULTURAL CREDIT CONVENTION.
    Mr. TURTONasked the Under-Secretary of State for Foreign Affairs whether the Government proposes to proceed with the guarantee of £120,000 per annum to the International Agricultural Credits Company?
    Captain EDEN: For the present it is not proposed to proceed with the ratification of the Agricultural Credit Convention.
    Lieut.-Commander KENWORTHY: Were these credits ever available for our farmers?
    Captain EDEN: No, they were for the benefit of Central European farmers.
    Lieut.-Commander KENWORTHY: Is there not some need for credits for our farmers?

  ROYAL NAVY,

    FLAG LIST.
    Lieut.-Commander KENWORTHYasked the First Lord of the Admiralty whether any reductions in the flag list of

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    admirals, vice-admirals and rear-admirals are contemplated in view of the financial situation?
    The FIRST LORD of the ADMIRALTY (Sir Austen Chamberlain): Since January, 1930, the flag list has been reduced by eight, and in view of the present requirements of the Fleet no further reduction is in contemplation. The hon. and gallant Member is no doubt aware that the placing of officers on the retired list effects no immediate economy, but the reverse, since the additional charges incurred for retired pay exceed the saving on half-pay by about £200 a year for each officer.
    Lieut.-Commander KENWORTHY: Will the First Lord look into the question of some of the redundant commands in view of the largely reduced Fleet?
    Sir A. CHAMBERLAIN: We shall consider every possible economy and we shall be hard pressed to find the additional money required to make good our share of the savings.
    Mr. COCKS: Is it not a fact that a very large number of these flag officers are always unemployed?

    HIS MAJESTY'S SHIP "FOWEY"
    Sir ROBERT YOUNGasked the First Lord of the Admiralty if he can explain the reason for the defects in His Majesty's Ship "Fowey" which were discovered during its trials, when the temperature in the engine room rose to 140 degrees and every effort to reduce it failed; whether this class of ship is being built for service in tropical regions; and what will be the cost of altering this ship and the sloops "Bideford," "Rochester," and "Shoreham," now being built at Devonport and Chatham?
    Sir A. CHAMBERLAIN: The ventilation of the engine room of "Fowey" was found on trial to be entirely satisfactory; no temperature of 140 degrees was recorded therein. A high temperature was reached in the forward boiler room, but this has been remedied by minor modifications at a cost of about £90 and the conditions as found on further trial are now satisfactory. "Fowey" class are intended for service in the tropics.
    Sir R. YOUNG: Are similar alterations being made in the other ships of the "Fowey" class?
    Sir A. CHAMBERLAIN: I think so; if they were subject to the same defects, no doubt they will be subject to the same alterations.
    Mr. KIRKWOOD: Is the right hon. Gentleman aware that the conditions that appertain here make it utterly impossible for the engineers to stand their watch?
    Sir A. CHAMBERLAIN: No, that is not in accordance with the information which I have.

    ATLANTIC FLEET.
    Lieut.-Commander KENWORTHYasked the First Lord of the Admiralty what saving has been effected in the Navy Estimates by the abandonment of the summer exercises and training of the Atlantic Fleet?
    Sir A. CHAMBERLAIN: I cannot at present say what saving will be effected as no decision has yet been taken regarding the future movements and exercises of the Atlantic Fleet.

    RUBBER INDUSTRY.
    Mr. WARDLAW-MILNEasked the Secretary of State for the Colonies whether the Government intend to take any steps, either by way of restriction of production, limitation of shipments, export duty, or otherwise to assist the rubber industry; and whether they will negotiate with other Governments concerned to secure common action?
    The SECRETARY of STATE for the COLONIES (Mr. J. H. Thomas): I would refer the hon. Member to the reply given by the late Under-Secretary of State for the Colonies to the hon. Member for Bromley (Mr. Campbell) on the 6th March last. The matter will continue to receive my close attention; but, as at present advised, I do not think that I could usefully add anything to the statement made on behalf of my predecessor.
    Mr. WARDLAW-MILNE: Is it not a fact that the reply to which the right hon. Gentleman refers did not indicate any action?
    Mr. THOMAS: Yes, but it pre-supposed no attempt at restriction.
    Mr. WARDLAW-MILNEasked the Secretary of State for the Colonies whether he can give any particulars as to the number of rubber estates, with acreage, in the Federated Malay States and Ceylon which have either ceased tapping or restricted their operations owing to the fall in the price of rubber?
    Mr. THOMAS: I am afraid that the particulars asked for are not available.
    Mr. WARDLAW-MILNEasked the Secretary of State for the Colonies whether the Government have now had any communications or conversations with the Dutch authorities as to measures which might be taken to assist the rubber industry; and whether he can make a statement as to the views of the Governments of the Malay States and Ceylon upon this question?
    Mr. THOMAS: The answer to the first part of the question is in the negative. With regard to the second part of the question, I do not think that I could usefully make any statement at this stage.
    Mr. WARDLAW-MILNE: Is the right hon. Gentleman prepared to consider sympathetically any proposals which may be 'submitted?
    Mr. THOMAS: If I were to say that I would consider them sympathetically, it might lead to considerable misunderstanding. I am prepared to consider any proposals on their merits.

  KENYA.

    EDUCATION OFFICERS.
    Mr. OSWALD LEWISasked the Secretary of State for the Colonies how many officials in the education service in Kenya, in addition to the Director of Education, are not required by the conditions of their appointment to be able to speak Swahili?
    Mr. THOMAS: I am sending my hon. Friend a copy of the regulations which specify the requirements as to language examinations in the case of officers of the Education Department of Kenya.

    NATIVE LABOUR (LOCUST RELIEF GRANTS).
    Mr. O. LEWISasked the Secretary of State for the Colonies what effect the grant of £25,000 for locust relief in the
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    Kavirondo country is having upon the number of natives who come forward from that district for work in Kenya generally?
    Mr. THOMAS: I have no information to show what effect the grants made for locust relief which have been applied in the Kavirondo country are having upon the supply of native labour from that area, beyond a recent statement from the Governor that in the South Kavirondo district a large number of natives require relief, one reason being that they were unable to find sufficient employment as labourers.
    Mr. LEWIS: Is there no record of the movement of labour from this district to Kenya?
    Mr. THOMAS: If the hon. Member will put down that question, I will ascertain. I could not say off-hand.

    ROAD AND RAIL TRAFFIC.
    Sir PHILIP RICHARDSONasked the Secretary of State for the Colonies whether, in view of the growing importance of road traffic relatively to railroad traffic, he will take steps to appoint a committee to consider the question of road and rail traffic in East Africa, with a view to ensuring that all expenditures of money shall be made in the most economic proportions?
    Mr. THOMAS: The question of road and railway traffic in East Africa is engaging the constant attention of myself and of the local Governments interested. I do not think that the present time is opportune for the appointment of a special committee.

    TANGANYIKA (LIGHTERAGE).
    Sir P. RICHARDSONasked the Secretary of State for the Colonies if he will ask the Government of Tanganyika to forward to him a copy of the agreement governing lighterage rates at Tanga concluded between the Government of Tanganyika and the companies concerned so that he may consider the desirability of its publication?
    Mr. THOMAS: The Governor has informed me that the agreement, which has not yet been signed, will be published as a sessional paper for the October session of the Legislative Council. I will see that a copy, when received, is placed in the Library.

  PALESTINE.

    OLD TESTAMENT NAMES (SPELLING).
    Colonel WEDGWOODasked the Secretary of State for the Colonies for what reasons official action has been taken in Palestine to change the spelling of places named in the Old Testament from that familiar to English culture to an Oriental form?
    Mr. THOMAS: If the right hon. and gallant Gentleman will give me examples of what he has in mind, I shall be happy to cause inquiries to be made.

    MR. NORMAN BENTWICH.
    Colonel WEDGWOODasked the Secretary of State for the Colonies whether he can inform the House as to the circumstances connected with the departure of Mr. Norman Bentwich from the post of Attorney-General in Palestine?
    Mr. THOMAS: The right hon. and gallant Gentleman is aware of the peculiar racial and political conditions of Palestine, and of the difficulties with which the Administration has in consequence to contend. The late Secretary of State satisfied himself, after the most careful consideration, that, for reasons in no way affecting Mr. Bentwich's personal character or record, those difficulties would not be diminished by his retention of the office of Attorney-General. In these circumstances, the late Secretary of State was anxious that employment suitable to Mr. Bentwich's distinguished abilities should be found for him elsewhere; and offers to submit his name for promotion to high judicial office in the Colonial Service were made to him on two occasions. As, however, Mr. Bentwich made it clear that he would not accept a post outside Palestine, there was no alternative but to retire him on pension. His retirement will take effect from the 1st of November.
    Colonel WEDGWOOD: May I ask whether the real reason why Mr. Bentwich was retired was that he was a Jew, and, further—
    Mr. SPEAKER: That question does not arise out of the answer.
    Colonel WEDGWOOD: I submit, Sir, that it does arise. I have asked why he was retired, and the reason was that they failed to assassinate him.
    Colonel HOWARD-BURYasked the Secretary of State for the Colonies seeing that it is proposed to retire the Attorney-General of Palestine eight years before he has reached pensionable age and that in order to do this special regulations had to be made to entitle him to a pension, and in view of the need for world economy, whether he will reconsider this expenditure?
    Mr. THOMAS: No, Sir.
    Mr. MATHERS: Does the right hon. Gentleman find in this a precedent for the National Union of Railwaymen to follow?
    Mr. THOMAS: I do not know, but I am quite sure that any precedents set up during my association with the National Union of Railwaymen would be good ones.
    Colonel HOWARD-BURY: Is not this gentleman being retired on pension before his time?
    Colonel WEDGWOOD: May I press the right hon. Gentleman to answer my question? Is it not a fact that the intended assassination of Bentwich forms a strong element in the need for his retirement?
    Mr. THOMAS: I have no reason to suppose, and I refuse to admit, that my predecessor was influenced by other than the highest and best motives.
    Colonel HOWARD-BURY: Can the right hon. Gentleman answer my question? Is not this gentleman being retired on pension?

    SEALED ARMOURIES.
    Mr. BROCKWAYasked the Secretary of State for the Colonies whether he is aware that the placing of sealed armouries in various parts of Palestine has created a tense situation in Palestine, leading to a strike throughout the country on 23rd August; and whether he will state the number of armouries established, the names of the places in which these armouries are located, and what is the armament what they contain?
    Mr. THOMAS: I am aware that there have been protests against the decision, which was taken as long ago as April, 1930, to re-establish sealed armouries in Jewish colonies. These protests led to

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    some local excitement about a month ago, but the situation was handled effectively by the Palestine Government and is now described as quiet.

    DEFENCE FORCES (COST).
    Mr. BROCKWAYasked the Secretary of State for the Colonies, whether he will state the size and composition of the forces, including police, now maintained for the purpose of defence in Palestine and Transjordan, the extra cost of the employment of British forces in Palestine and Transjordan during the present year, and the additional grant-in-aid towards the cost of the Transjordan frontier force?
    Mr. THOMAS: As regards the first part of the question, I would invite the hon. Member's attention to pages 6 and 79 of the annual report on Palestine and Transjordan for 1930, issued by the Colonial Office (Colonial No. 59), of which, I understand, there is a copy in the House of Commons Library. As regards the second and third parts of the question, I would refer the hon. Member to sub-heads J. 1 and J. 2 of the Colonial and Middle Eastern Service Vote for 1931 (Class II. 9).
    Colonel HOWARD-BURY: Can the right hon. Gentleman say whether these defence forces are needed for external defence, or only to protect the colonists imported by the British Government?
    Mr. THOMAS: That question does not arise out of the answer.

    DEVELOPMENT (LOAN).
    Mr. BROCKWAYasked the Secretary of State for the Colonies whether it is still proposed to ask Parliament to guarantee a loan of £2,500,000 for the relief of agriculture in Palestine; and, if so, who will administer the scheme which the loan is intended to facilitate?
    Mr. THOMAS: The projected loan is for development purposes, the details of which are under investigation. The question of asking Parliament to authorise His Majesty's Government to guarantee such a loan does not arise for the moment, hut will be further considered in due course in the light of the general financial situation. The scheme if and when approved by His Majesty's Government would be administered by the Director of Development in Palestine.
    Colonel WEDGWOOD: Is the right hon. Gentleman aware that a large part of the money involved in this scheme is for the purchase of land in Palestine from Arab owners?
    Mr. THOMAS: I have said that all these questions will be raised at the moment when the money is required.
    Mr. McSHANE: Before this loan is given will the House be made aware of the conditions?

    NIGERIA (FINANCIAL SITUATION).
    Colonel WEDGWOODasked the Secretary of State for the Colonies what is the total amount of loans raised for public works in and by Nigeria during the last 10 years for which His Majesty's Government has undertaken to pay interest during initial years; and whether the Budget of Nigeria balances and is expected to balance in the current year?
    Mr. THOMAS: The answer to the first part of the question is "Nil"; and to the second part "Yes, with some resort to past surplus balances."

    COLONIAL DEVELOPMENT FUND.
    Mr. HORRABINasked the Secretary of State for the Colonies whether the grants or loans, made or approved, towards technical education, the training of African dispensers, sanitary inspectors, etc., will be affected by the proposed reductions in the Colonial Development Fund: and whether further grants or loans of this kind are to he discontinued?
    Mr. THOMAS: The answer to the first part of the question is in the negative. As regards the second part, Schemes submitted by Colonial Governments will be considered, as in the past, on their individual merits, but regard will he paid to the consideration set forth on page 8 of the White Paper (Cmd. 3952) and to the reduced funds available.
    Mr. HORRABIN: May we have the right hon. Gentleman's assurance that services of this kind will receive as much consideration as say the Zambesi bridge scheme?
    Mr. THOMAS: That is not a fair analogy, because the Zambesi bridge scheme was dealt with under a fund sanctioned by this House in connection with unemployment; but I can assure my hon. Friend that consideration will be given to the importance of the subject.
    Colonel WEDGWOOD: Will the right hon. Gentleman refer to what is being done by the Foreign Office in the Sudan in this respect and bring the Colonial Office up to that level?
    Mr. THOMAS: I hope that while I am administering the Colonial Office the right hon. and gallant Gentleman will never have to draw comparisons between it and other offices.

    BRITISH HONDURAS (HURRICANE).
    Mr. DAYasked the Secretary of State for the Colonies if he can now make a further statement with regard to the recent cyclone disaster at Belize, British Honduras; and will he say what measures are being taken to relieve the distress of the people there and to repair the damage caused?
    Mr. THOMAS: The latest telegraphic reports from the Governor of British Honduras have been published in the newspapers. They contain detailed information, to which there is nothing that I could usefully add, regarding the measures that are being taken to deal with the situation in the Colony. The House is no doubt aware that the Lord Mayor of London has opened a fund in aid of the sufferers.
    Mr. DAY: Can the right hon. Gentleman say when the last reports were received?
    Mr. THOMAS: I had a cable this morning, and the House will be pleased to know that every effort was made to deal with the unfortunate occurrences there.
    Mr. McSHANE: Will the Lord Mayor open a fund to help the unemployed?
    Lieut.-Colonel FREMANTLE: Will the right hon. Gentleman publish a list of those British residents who have survived this disaster in Belize?
    Mr. THOMAS: I will do all I can to supply the information I have, but it is very difficult to promise the issue of a list which might have to be varied from day to day.

    MAURITIUS.
    Mr. McSHANEasked the Secretary of State for the Colonies whether the annual report on Mauritius is now available for Members of this House?
    Mr. THOMAS: The report has recently been received in the Colonial Office and will be printed and published with as little delay as possible.

  TRANSPORT.

    ROAD MATERIALS.
    Mr. LOUIS SMITHasked the Minister of Transport whether he will consider the desirability of asking Parliament for powers to prohibit the purchase of foreign road stone by local authorities in view of the fact that ample supplies of this material are available in this country?
    The MINISTER of TRANSPORT (Mr. Pybus): I deplore the use of foreign road material by local authorities in this country, and I am issuing a further circular urging those responsible for these purchases to review the position in view of the present grave situation. The hon. Member will, however, appreciate that the geographical position and exceptional transport facilities with the Continent enjoyed by certain counties render the question of seeking compulsory powers to prohibit all foreign material one of considerable difficulty.
    Lieut.-Colonel ACLAND-TROYTE: Will the Minister of Transport consider giving reduced grants to the authorities using foreign stone?
    Captain GUNSTON: Is the hon. Gentleman aware that in Gloucestershire we have ample harbours and we export stone to every part of the country?
    Mr. PYBUS: If, as my hon. and gallant Friend states, there are people in this country who are able to supply first-class materials at the same price as or at a less price than material dumped from abroad, I hope they will press on with it.
    Mr. HERBERT MORRISON: Would the Minister keep in mind the fact that the present Government is supported by a predominantly Protectionist majority and shape his course accordingly?
    Mr. PYBUS: I think the right hon. Gentleman is now asking a question with regard to policy which should properly be addressed elsewhere.

    ELEPHANT AND CASTLE IMPROVEMENT SCHEME.
    Mr. ISAACSasked the Minister of Transport whether, in view of the present state of national finance, any decision has been reached to withhold or vary any grant-in-aid of the proposed Elephant and Castle traffic improvements now contemplated by the London County Council?
    Mr. PYBUS: Discussions are proceeding with the London County Council as to the desirability of deferring the Elephant and Castle improvement scheme.
    Mr. ISAACS: Can the Minister of Transport give me any indication when a decision is likely to be reached?
    Mr. PYBUS: I cannot usefully add to the answer which I have already given, except to state that co-operation between the London County Council and my Department is friendly and complete.
    Mr. HERBERT MORRISON: Can the hon. Member state whether the London County Council is willing to abandon the Elephant and Castle scheme?
    Mr. PYBUS: The London County Council have made no communication to us to that effect, or the other way either.

    FORTH ROAD-BRIDGE SCHEME.
    Mr. MATHERSasked the Minister of Transport what policy is being pursued with regard to the proposed Forth road-bridge, near Queensferry; and what is the present position?
    Mr. PYBUS: Discussions regarding the suggested road-bridge across the Forth at Queensferry were suspended some months ago, owing to the request of the local authorities that investigations should be conducted into the feasibility of constructing a bridge at less cost on a site near Rosyth. In present circum-
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    stances, however, I should not feel justified in incurring the expense of a preliminary investigation into this alternative project for bridging the Forth.
    Mr. MATHERS: Is the hon. Gentleman not aware that a bridge near Queens-ferry and a bridge near Rosyth are the same thing; and is it not a, fact that the preliminary investigation authorised this bridge, and is that bridge to be proceeded with?
    Mr. PYBUS: The hon. Gentleman overlooks the fact that if you change the site of a bridge even one or two hundred yards, fresh bearings may have to be taken and completely new investigations made. I do not think that at this time, when we have a very limited amount of money to spare, we can afford to spend £1,000 on scientific and engineering investigations which will have to be put into cold storage until it is possible to go on with the scheme if we could spend that same £1,000 keeping people in work on other schemes during the winter.
    Mr. SHINWELL: Does the Minister of Transport mean that the Government have definitely abandoned this project whatever the views of the local authorities are or may be?
    Mr. PYBUS: I am consulting the local authorities tomorrow morning on this subject.
    Mr. SHINWELL: Does the hon. Gentleman mean by that answer that the bridge has not definitely been abandoned?
    Mr. PYBUS: I mean nothing more than I have said.
    Mr. HERBERT MORRISON: Did not the last Government definitely sanction an engineering inquiry into this new scheme; and are we to understand that the new. Government have cancelled and reversed the decision of the late Government on that point?
    Mr. PYBUS: The investigation of the scheme for constructing the bridge at very much less cost has never been undertaken.
    Mr. MORRISON: The hon. Gentleman has not replied to my question. Is the Minister of Transport not aware that the first scheme was not in fact ever established to be too expensive; and is it not

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    a fact that the last Government definitely sanctioned a new engineering inquiry into the later scheme; and are we to understand that the new Government have reversed that decision?
    HON. MEMBERS: Answer!
    Mr. SPEAKER: The Minister has given four answers already.
    Mr. MATHERS: In view of the lack of information in the answers given by the Minister of Transport, I beg to give notice that I shall raise this matter on the Motion for the Adjournment at the earliest opportunity.

    GREAT WEST ROAD.
    Mr. HERBERT MORRISONasked the Minister of Transport whether he is taking any steps to secure greater safety for road traffic on the Great West Road?
    Mr. PYBUS: I am very concerned as to the number of accidents which are reported on this road. Discussions have taken place between officials of my Department and of the Middlesex County Council. I understand that additional refuges are to be provided and that it is proposed to lay a white line along the centre of the road for the purpose of separating the opposing streams of traffic. Further measures, including the improvement of the lay-out of certain of the junctions, are also under consideration.
    Lieut. - Commander KENWORTHY: Can a white line be put on the Treasury Bench also?
    Mr. McSHANE: Would not a white sheet be better?

    OMNIBUS DRIVERS' HOURS, SOUTH YORKSHIRE.
    Mr. T. WILLIAMSasked the Minister of Transport if he is aware that certain transport companies in South Yorkshire are compelling omnibus drivers to work on and off for periods as long as 14 hours per day; and will he state what steps his Department have taken or intend to take to improve the conditions of these men?
    Mr. PYBUS: No complaints of this nature have reached me from South Yorkshire. Section 93 of the Road Traffic Act provides that the payment
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    of fair wages and the observance of proper conditions of employment shall be required in connection with the grant of a road service licence. It is further provided that representations on such matters may be made to the Traffic Commissioners by any organisation representative of persons engaged in the road transport industry and that if the matter in dispute cannot otherwise be disposed of it shall be referred by the Minister of Labour to the Industrial Court for settlement.
    Mr. WILLIAMS: Is my hon. Friend not aware that the Yorkshire Traction Company are compelling sonic of their omnibus drivers to work from 10 a.m. to 1 p.m., from 6 p.m. to 10 p.m. and from 11 p.m. to 12 midnight in one 24 hours for an eight hour wage, and does he think those terms are even decent?
    Mr. PYBUS: I dealt with that point when I said that representatives of the people engaged in the Road Transport industry can make complaints, and that does not appear to have been done.
    Mr. WILLIAMS: Does the hon. Member not think that his Department has some responsibility for the safety of the public?

    LICENCES AND CERTIFICATES.
    Mr. T. WILLIAMSasked the Minister of Transport how many appeal cases have been heard against the decision of traffic commissioners since the passage of the Road Traffic Bill; and how many appeals have been successful?
    Mr. PYBUS: I assume that the hon. Member refers to appeals lodged under Section 81 of the Road Traffic Act, 1930, against decisions of the traffic commissioners in regard to licences and certificates. The number of appeals of this nature which have been heard is 76. The decisions of the Traffic Commissioners have been upheld in 41 cases, and the parties have been informed accordingly. In seven other cases I have reached decisions which will be announced immediately. In four of these cases Orders have been made on the traffic commissioners.
    Mr. WILLIAMS: Is it possible, when once a decision has been taken by the Minister, for it to be reconsidered?
    Mr. MARJORIBANKS: Will the Minister instruct the traffic commissioners to

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    try their cases according to rules of evidence, and not own rough knowledge or freely?

    ELECTRICITY SUPPLIES (SEALAND).
    Sir CHARLES CAYZERasked the Minister of Transport what are the reasons for which the Electricity Commissioners have revoked the Fringe Orders of the Chester Corporation under Section 6 of the Electricity Lighting Act, 1909, under which electricity is supplied to certain premises in the parish of Sea-land, in order that henceforth the supply may be made to this district by the Hawarden Council; what expenditure is involved in this change; whether any local inquiry has yet been held into the matter; and what action it is now proposed to take?
    Mr. PYBUS: The terms under which Fringe Orders are made authorising temporary supplies of electricity in the area of one authorised undertaker by another, provide for the revocation of such Orders at such time as the authorised undertaker of the area in which the supply is being given is able and willing to take over the supply and give it on reasonable terms. There is the further condition that the undertaker taking over the supply shall reimburse the undertaker who previously gave the supply the capital expenditure incurred in connection therewith. The parish of Sealand is in the rural district of Hawarden and the council are the authorised distributors in their own area. The Commissioners see no reason to continue the powers of the Chester Corporation to supply in the area of the Hawarden Council. The capital cost to be refunded to the Chester Corporation has, I understand, not been determined; no local inquiry has been held into the matter; and no further action is proposed.
    Sir C. CAYZER: Does not the Minister consider in this case that the unnecessary displacement of a perfectly satisfactory existing supply could not possibly promote the interests of the public?
    Mr. PYBUS: I have answered the hon. Baronet's question at great length. He is well aware that this is a complex and almost historic difference of opinion. I am not justified in taking up the time of
    1638
    the House in endeavouring to explain it any further.

    POST OFFICE (MAIL CONTRACTS).
    Mr. FREEMANasked the Postmaster-General the total amount paid by the British Government to the Peninsular and Oriental Steamship Company, Limited, and its subsidiary lines for the carriage of mails for 1930?
    The POSTMASTER-GENERAL (Mr. Ormsby-Gore): The amount paid to the Peninsular and Oriental Steamship Company for the conveyance of mails under contract between Great Britain, India, China and Australia is £295,000 per annum. In 1930 there was also a payment of about £49,000 for extra services not covered by the contract.
    Mr. FREEMAN: In view of the large sums paid by His Majesty's Government to this company, will the right hon. Gentleman stipulate in any further contracts that no lower standard of wages shall be paid to able-bodied seamen than is paid to British workers?
    Mr. ORMSBY-GORE: I do not quite know what to gather from the hon. Member's question. If his suggestion is that the same rates should be paid to lascars as are paid to Europeans, I do not think I can give him an affirmative answer.
    Mr. FREEMAN: My suggestion is that no lower standard than is paid to British workmen should be paid, in view of the fact that they are carrying British mails.
    Mr. ORMSBY-GORE: I cannot give that undertaking.
    Mr. MACLEAN: Is it not the case that, where a Government contract is entered into, certain conditions are laid down with regard both to fair wages and to other things; and will not the right hon. Gentleman see that inquiries are made to find out whether these things are being done in the case of this company?
    Mr. ORMSBY-GORE: I must ask the hon. Gentleman to await the reply to the next question, which deals more specifically with that point, but I want to make it quite clear that the case of mail contracts is on a slightly different footing from certain other cases.
    Mr. MACLEAN: Can the right hon. Gentleman say where the difference lies between a contract for mails and any other contract entered into by the British Government?
    Mr. ORMSBY-GORE: Perhaps the hon. Member will await the next answer.
    Mr. FREEMANasked the Postmaster-General whether the Fair Wage Clause operates in all contracts between His Majesty's Government and the Peninsular and Oriental Steamship Company, Limited, and its subsidiary companies; what is the number and proportion of lascars employed by them during 1930; and the average monthly wage paid to each class of sailors and firemen employed in English currency?
    Mr. ORMSBY-GORE: In reply to the first part of the hon. Member's question, the Fair Wages Resolution has never been considered applicable to contracts with steamship companies for the conveyance of mails, nor do I think it practicable to apply it to them. Steamship companies, like railway companies, are mainly engaged in large commercial operations, and the conveyance of mails is no more than an incidental part of the general business of transport on which their labour is employed. As regards the second part of the question, I regret that I have no information.
    Mr. FREEMAN: Is it the case that the average wages paid to these lascars amount to £1 7s. 6d. per month; and will not the right hon. Gentleman consider inserting a Fair Wages Clause in all future contracts?
    Mr. ORMSBY-GORE: I cannot give that undertaking, and I am not aware whether the figures quoted lay the hon. Member are correct or not; but I think it is very undesirable to attempt to enforce the employment of European labour in the Red Sea during the summer months.
    HON. MEMBERS: Nonsense!
    Mr. SHINWELL: In view of the difficulty of applying the Fair Wages Clause to lascars, will the right hon. Gentleman consider advising the Government to insert a Clause in the conditions of contract stipulating that none but British seamen
    1640
    should be employed; and is he aware that there is no difficulty in employing British seamen in the Red Sea?
    Mr. ORMSBY-GORE: If the hon. Gentleman had been in the Red Sea as often as I have—[Interruption.]
    Lieut.-Commander KENWORTHY: It is an insult to British seamen.
    Commander O. LOCKER-LAMPSON: Could not Mr. Gandhi look after that matter?
    Mr. MACLEAN rose—
    HON. MEMBERS: Order!
    Mr. MACLEAN: I understood, Mr. Speaker, that you resumed your seat to allow me to put a supplementary question.
    Mr. SPEAKER: I did not do anything of the kind.
    Lieut.-Commander KENWORTHY: It is an insult to British seamen—[Interruption]—and nonsense.

    FISHING INDUSTRY (FOREIGN CATCHES, MILFORD HAVEN).
    Sir BASIL PETOasked the Minister of Agriculture whether he is aware of the competition with Milford Haven trawlers by Spanish boats fishing in pairs with one long seine between the two, and that 60 such boats have been engaged in this fishing this year and have landed fish value nearly £15,000 at Milford in June, July and August; and whether, in view of the damage to the British trawler industry at that port and the economic effect of this export of capital he will take steps to prohibit the landing of fish by foreign vessels in our fishing ports?
    The MINISTER of AGRICULTURE (Sir John Gilmour): The answer to the first part of the question is in the affirmative. The suggestion put forward by my hon. Friend in the second part can only be considered as a part of the general question of foreign imports, as to which I am not in a position to make any statement.
    Sir B. PETO: Has the Minister any information as to whether the catches of British fishing vessels are allowed to be landed at Spanish ports?
    Sir J. GILMOUR: I will send my hon. Friend a copy of the reply given by the Secretary to the Department of Overseas Trade on the 6th July.

    LAND DRAINAGE (RATES).
    Mr. BLINDELLasked the Minister of Agriculture whether he is aware that internal drainage boards are unable to levy rates or meet. precepts levied upon them by catchment boards on account of the Land Drainage Act, 1930, providing for the basis of assessment being changed from that of acreage to annual value; and what steps he will take to put these boards in a position to function properly during the period necessary for reassessment?
    Sir J. GILMOUR: I am aware that in the case of many of the smaller internal boards the difficulty referred to by my hon. Friend has arisen; but any alteration of the basis of assessment would require legislation, which is impracticable at present. I can only suggest that drainage boards who are experiencing difficulty should make their own temporary arrangements to deal with the situation until they have completed their records on which the required valuation on the basis of annual value is made.
    Mr. BLINDELL: May I further ask the right hon. Gentleman what temporary arrangements these internal drainage boards can make in order to levy rates for the purpose of proceeding with their work, when some of these boards have 3,000 or 4,000 different assessments on different people upon whom they cannot levy any rate in order to carry on the work of drainage in their districts?
    Sir J. GILMOUR: It must be left to each drainage board to take the course that is most suitable to it. They have had a, considerable period—over a year —in which they might in many cases have been proceeding with arrangements, which they have failed to do.
    Mr. BLINDELL: Is it not a fact that these internal drainage boards have been in correspondence with the right hon. Gentleman's Department for at least 12 months, and that they have no locus standi as regards levying rates unless the Department will move by way of a small amending Bill or by regulations?
    Mr. T. WILLIAMS: Is not the solution of the hon. Member's problem to be found in a, Clause in the 1929 Drainage Bill, which enables an authority to collect a debt as a civil debt?
    Sir J. GILMOUR: Obviously, legislation would be required in order to pursue the line indicated by the hon. Member for Holland-with-Boston (Mr. Blindell), and legislation is out of the question at the present time.

    COAL INDUSTRY (OIL EXTRACTION).
    Mr. TOM SMITHasked the Lord President of the Council if he can make a statement with regard to the research schemes into the hydrogenation of tar oils and coal decided upon by the late Government?
    Mr. S. BALDWIN: It has been decided to proceed with these schemes. Some modifications in the detailed arrangements have been determined upon, but these, while enabling some saving in capital costs to be made, will in no way alter the essential features of the scheme nor prejudice the value of the results it is hoped to obtain from the experiments.
    Mr. SHINWELL: Is it not the case that schemes have been considerably slowed down, and that, instead of the installation of the necessary plant being proceeded with immediately, it is only to be done over a period of years?
    Mr. BALDWIN: If the hon. Member wishes for more detailed information than I have given, and will put down a question, I shall be very pleased to answer it.
    Mr. GEORGE HARDIE: May I ask what is being done on the experimental side so far as the hydrogenation process is concerned, and whether it is not now being operated on something approaching a commercial scale?
    Mr. BALDWIN: It is quite obvious that I must ask that that, question should be put down.

    EDUCATION (TEACHERS' PENSIONS).
    Mr. ROWSONasked the President of the Board of Education what is the total amount paid annually by teachers

    1643
    to the superannuation fund; what amount is paid annually in pensions from the fund; and what is the balance in hand in the fund accumulated since 1925?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Sir Kingsley Wood): The pension contributions paid by teachers in the year 1930–31 amounted to £2,624,134, and the total amount paid by the Board in respect of pensions to teachers in the same year was £5,330,477. There is no accumulating superannuation fund in connection with teachers' pensions, the payments being made out of money voted annually for the Board of Education and the teachers' contributions being appropriated in aid thereof. A note on the subject appears on page 6 of the Estimates.

    INDIA (RUPEE-STERLING EXCHANGE).
    Mr. FREEMANasked the Secretary of State for India whether he will state the amount of gold held by the Government in India and the measures proposed for maintaining the value of the rupee?
    Captain MARGESSON (Lord of the Treasury): I have been asked to reply. The amount of gold held by the Government of India in India on the 15th September, 1931, was £31,092,000 in addition to which sterling securities and gold now held in London amount to approximately £12,250,000. In addition to the above amounts held in the Reserves approximately £6 millions are held in London on Treasury account. The maintenance of the exchange value of the rupee will be secured on lines hitherto followed.
    Mr. FREEMAN: Is the hon. Gentleman aware that this artificial maintenance of the level of the rupee at 1s. 6d. and now linking that to sterling is considered to affect adversely conditions in India?
    Captain MARGESSON: Obviously that does not arise out of this question, but the point put by the hon. Member will be referred to my right hon. Friend.
    Mr. FREEMAN: Will the matter be allowed to be discussed in the Indian Legislature?
    Captain MARGESSON: Perhaps the hon. Member will put that question on the Paper.

    SCOTLAND (NATIONAL LOCAL GOVERNMENT).
    Mr. MATHERSasked the Prime Minister if he is now in a position to make a statement regarding the promised inquiry into Scottish local and National Government?
    Mr. S. BALDWIN: My right hon. Friend is not in a position to make any statement.
    Mr. MATHERS: In view of the lapse of over two years since the Prime Minister made the statement that he would institute such an inquiry after one year's working of the Local Government (Scotland) Act, is not this a breach of faith?

    UNEMPLOYMENT.
    Mr. McSHANEasked the Prime Minister whether any and, if so, what proposals are under consideration to prevent further increases in the unemployment figures?
    Mr. S. BALDWIN: I would refer the hon. Member to the answer given by the Prime Minister on Monday last in reply to a question by the hon. Member for Leicester East (Mr. Wise).
    Mr. McSHANE: Is the right hon. Gentleman aware that there was not a single specific scheme to prevent further unemployment in that reply?
    Mr. BALDWIN: It was only the day before yesterday that the Prime Minister said our attention would be devoted urgently to the measures necessary to correct the unfavourable trade position. Nothing further can be added to-day.
    Mr. HERBERT MORRISON: Would the right hon. Gentleman consult with the Parliamentary Secretary to the Board of Education, who repeatedly put such questions to the late Government and who is obviously brimful of ideas?

  NATIONAL FINANCE.

    PROPOSED CUTS (COST OF CONCESSIONS).
    Mr. PERRYasked the Prime Minister to what amount the £70,032,000 of

    1645
    economies in the financial year 1932 will be reduced by the concessions to be made to teachers, police and members of the Fighting Services; and if the Government will now extend similar concessions to unemployed persons in view of the increased prices of commodities since 19th September?
    Mr. S. BALDWIN: The answer to the first part of the question is that the cost of the concessions referred to is estimated to amount approximately to £3,545,000 in 1932—that is a full year—and that the necessary steps are being taken to secure such additional economies as may be required in order to maintain the balance of next year's Budget. I cannot follow the assumption implied in the latter part of the question and as the Prime Minister stated on the 21st September the reduction in the rates of unemployment benefit must remain at 10 per cent.
    Mr. PERRY: Is the right hon. Gentleman aware that the flour millers have already issued a circular increasing their prices by 12½ per cent.?
    Mr. BALDWIN: I hope the hon. Member will not get nervous about the situation. All the advice we have at present is that there is no immediate fear of a rise in prices, and it is impossible at this moment to say what the ultimate effect of the events of last week will be.
    Mr. PERRY: Will the right hon. Gentleman kindly consider the quotation sent out by the flour millers already increasing prices by 12½ per cent.? I am not nervous.
    Sir WILLIAM DAVISON: Will the Government in case any increased taxation is made necessary by these relaxations also consider the position of the co-operative societies, the only class of traders who are making no sacrifice?
    Mr. R. A. TAYLOR: Is it impossible for the right hon. Gentleman to agree to any concession with regard to the unemployed by reason of any agreement that he was party to with any financiers. British or foreign?
    Mr. SPEAKER: These supplementary questions do not arise from the original question, and therefore should not be answered.

    BRITISH TREASURY CREDITS (UNITED STATES AND FRANCE).
    Mr. WISEasked the Chancellor of the Exchequer under what statutory powers the costs of the £50,000,000 credit obtained by the Bank of England in July for the support of the exchange are being borne by the taxpayer instead of by the Bank of England itself?
    The FINANCIAL SECRETARY to the TREASURY (Major Elliot): This transaction was carried out by the Bank of England on behalf of the Issue Department and the costs therefore fall to be dealt with under Section 6 of the Currency and Bank Notes Act, 1928.
    Mr. WISE: Is it not the case that the effect of that answer is that the loss of those credits has to be borne by the Treasury, since the profits and losses of the Issue Department are met by the Treasury, and that the effect on the depreciation of the exchange will inevitably be a loss of £20,000,000 or £30,000,000 which is not allowed for in the Budget?
    Major ELLIOT: If the hon. Member knows so much about this matter, why did he bother me by asking this question?
    Mr. WISE: Is not the hon. and gallant Member fully aware that the purpose of this question was to indicate to him and to the House that this transaction involves the country in a loss of £20,000,000 or £30,000,000 and will in itself unbalance the Budget?
    Major ELLIOT: The hon. Member will surely realise that it is impossible to debate a matter such as that within the limits of a question.

    CONSUMERS' COUNCIL BILL.
    Mr. MORLEYasked the Prime Minister if he is now prepared to give facilities for the passage into law of the Consumers' Council Bill?
    Mr. S. BALDWIN: The answer is in the negative.
    Mr, MORLEY: What alternative methods do the Government propose to take to check profiteering during the period of rising prices, which is inevitable?
    Mr. SPEAKER: That really cannot arise out of this question.
    Mr. G. HARDIE: Is it the case, when a question comes up dealing with prices, that members are not really allowed to state, as I can state, an advance in a particular commodity? Prices did increase yesterday.
    Mr. SPEAKER: Hon. Members are not allowed to make statements.
    Mr. McSHANE: On a point of Order. With the greatest respect to you, Sir, this question is asking whether the Consumers' Council Bill is to be introduced for the purpose of protecting the public against excessive prices.
    Mr. SPEAKER: There is nothing about that in the question.
    Mr. MACLEAN: Although there is nothing about it in the question, is it not the case that the very Title and purport of the Bill is what the question is based upon?
    Mr. SPEAKER: Mr. Dixey.

    TARIFFS.
    Mr. DIXEYasked the Prime Minister whether, in view of the need for tariffs to redress the present trade balance and of the interest widely felt in the country and of the urgency of the situation, he will give time at once to the House of Commons to enable Members to vote on the question?
    Mr. S. BALDWIN: As I explained in moving the Time Table Motion yesterday, it is necessary that all available time in the immediate present should be devoted to completing the further stages of the Finance and Economy Bill.
    Mr. DIXEY: Is not the right hon. Gentleman well aware that the whole of the provisions of the Economy Bill are not deemed to be sufficient without these tariffs?
    Mr. SPEAKER: Lieut.-Colonel Moore.

    PARLIAMENTARY ELECTIONS (EXPENSES).
    Lieut.-Colonel MOOREasked the Prime Minister whether, in view of the need for individual and national economy,
    1648
    he will consider introducing legislation to limit the expenditure that may be incurred by candidates at parliamentary elections to 2d. and 3d. per head in burgh and county constituencies, respectively?
    Mr. S. BALDWIN: I am afraid that my hon. and gallant Friend's suggestion is not practicable.
    Lieut.-Colonel MOORE: Is not my right hon. Friend aware that such a suggestion would have practically the unanimous support of the House of Commons?
    Mr. BALDWIN: That is exactly what I am in doubt about. All the experience of the last three years has shown that the House of Commons can never agree on the amount which should be paid by candidates at elections.

    MERCHANT SHIPPING (SAFETY AND LOAD LINE CONVENTIONS) BILL.
    Mr. EDEasked the Prime Minister if he will state the Government's intention with regard to the Merchant Shipping (Safety and Load Line Conventions) Bill?
    Mr. S. BALDWIN: I regret that from inquiries which have been made it appears that this Measure cannot be regarded as non-controversial, and therefore in the present circumstances there would appear to be no chance of its passage into law.

    SUMMER TIME.
    Mr. DAYasked the Secretary of State for the Home Department whether he is prepared, in the interest of public economy, to consider the suggestion that the termination of summer time should be postponed for a period of a month or six weeks?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel): The duration of summer time is fixed by Statute. It will end this year on 3rd October. As the period of daylight will then be less than 12 hours and will be rapidly diminishing, there would be no advantages and, on the contrary, many disadvantages in adopting the hon. Member's suggestion, apart from the Impracticability of passing the necessary legislation in present circumstances.
    Mr. O' C0NNOR: Can the right hon. Gentleman say what would be the saving if the hon. Member's questions were limited to one day?

    STOCK EXCHANGE (TRANSFER DEED STAMPS).
    Mr. EDEasked the Chancellor of the Exchequer the respective cost to the Exchequer of the concession granted to the Stock Exchange firms for obtaining transfer deed stamps since it became operative and also during the past 10 years the issue of transfer forms free to the public during the past 10 years and also from the time when they were first issued free of charge; and the concession granted to the Stock Exchange dealers under Section 42 of the Finance Act of 1920 since that Act became operative?

    —

    Duty exigible under old law.

    Exigible and paid under Sec. 42.

    Difference.

    £

    £

    £

    1st Sept., 1920, to 31st March, 1921

    …

    85,343

    21,288

    64,055

    Year to 31st March, 1922

    …

    180,438

    41,586

    138,852

    Year to 31st March, 1923

    …

    363,394

    85,536

    277,858

    Year to 31st March, 1924

    …

    366,281

    86,772

    279,509

    Year to 31st March, 1925

    …

    423,835

    82,759

    341,076

    Year to 31st March, 1926

    …

    552,393

    128,735

    423,658

    Year to 31st March, 1927

    …

    562,754

    117,206

    445,548

    Year to 31st March, 1928

    …

    749,847

    136,370

    613,477

    Year to 31st March, 1929

    …

    905,404

    160,692

    744,712

    Year to 31st March, 1930

    …

    597,685

    137,786

    459,899

    Year to 31st March, 1931

    …

    447,395

    80,627

    366,768

ORDERS OF THE DAY.

  FINANCE (No. 2) BILL.
  [ALLOTTED DAY.]
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read a Second time.—[Mr. P. Snowden.]
  Mr. PETHICK-LAWRENCE: I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words:
  "this House declines to assent to the Second Reading of a Bill which, in raising additional revenue, inflicts disproportionate hardships upon those least able to bear new taxes and treats with comparative leniency the resources of the rich and those who live upon unearned incomes."
  On Monday we buried the Gold Standard. This afternoon, two days after the funeral, the Government are presenting to us one of the nasty bottles of medicine which they prescribed for their old friend. He did not drink it because he died after some of their earlier treatment. To be fair to the right hon. Gentlemen opposite, I am not suggesting that it was their treatment that killed the Gold Standard, but at any rate they failed to preserve its life. This Government was formed for the express purpose of preserving the Gold Standard and as its objective has now definitely been abandoned we shall, no doubt before long hear from the Prime Minister what is going to happen to the Government itself. Will it, like the Indian widow of old, follow its spouse to the funeral pyre, or will it live on unhonoured and discredited?
  It is too late to discuss now whether any definite action would have saved the Gold Standard, but I would remind the House that a leading international banker put forward the proposal to which I referred a few nights ago that foreign securities held by British subjects should be mobilised. The Chancellor of the Exchequer told us on Monday that some consideration was given to this proposal but that the conclusion was reached that it could not have been adopted in time to save the situation. I wonder whether the Chancellor of the Exchequer gave full consideration to the fact that if an announcement of the intention to take
  1656
  this course had been made over the authority of the leaders of all three parties in this country, that announcement by itself must have had a very considerable effect in steadying the exchange. However, as I have already said, it is too late now to test that issue. What we do know, and what has been decided, is that the methods which the Government adopted for this purpose have definitely failed. The Chancellor of the Exchequer, both in his speech here and in his broadcast speech on Monday night, attempted to throw the blame upon us because, he said, there had not been a united front. Who is to blame for that? You cannot break contracts; you cannot commit violent social injustice and preserve a united front. He must not blame his colleagues in the old Government; if they had stood with him the Members of this party in the House would have revolted. If this party had remained silent, millions of people in the country would have raised their voices in indignant protest. The right hon. Gentleman knows perfectly well what happened in the Fleet. He will not suggest that that action was prompted by Members in this House. The disunited front arose not from our attitude but from the inherent injustice of the Government's proposals.
  This Bill imposes upon all sections of the people burdens of various kinds. If it stood alone, detached from all the other proposals of the Government and from the repercussions that have taken place this week, the Government might plead that their proposals were not wholly unfair. The taxes imposed on members of the working classes inside the four corners of this Bill bear some relationship to the taxes imposed upon persons of wealth. But the Budget does not stand alone. It has to be taken in conjunction with the Government's other proposals. But even within its own limits this Bill departs very far from the principles of equality of sacrifice. My hon. Friend the Member for Chesterfield (Mr. Benson) gave several examples in his speech the other night. I will not repeat them, but I will take one illustration. Let me take the case of a married couple with £500 a year of earned income. The additional tax that is being imposed on that couple owing to the change in the Income Tax amounts to over £21, or to snore than 4 per cent.

  1657
  of their income. On the other hand, if you take the case of a single man with an income of £1,000 a year, he will only bear an additional tax of £28 a year, Or less than 3 per cent. of his income. That cannot possibly be justified on any principle of equality of sacrifice.
  The injustice inflicted by the Chancellor of the Exchequer's proposals is not confined wholly to the increase in the burden of taxation. It is very much increased by two considerations. In the Finance Act of this year, which was passed in the earlier part of the Session, the Chancellor of the Exchequer made a considerable alteration in the way in which the Income Tax is to be paid. The taxes of certain classes of Income Tax payers were formerly paid half yearly by equal instalments. A change was made so that in future in those classes of Income Tax three-fourths of the tax should be paid next year, on the let January, and one-fourth on the let July. Let me show how that arrangement will affect the married couple to whom I have referred. Last July, in accordance with the old scheme of taxation, they paid £9 12s., or half of what was then the Income Tax due, but on the 1st January next they will have to pay £30 9s. three-fourths of their full payment, or £21 more in that one instalment than they paid on the previous occasion.
  The Chancellor of the Exchequer may say, and hon. Members behind him will say: "Did we not agree to that alteration?" Certainly, we did, but on the assumption that the old rates of Income Tax for those people in the humbler ranges of income were going to remain at the level at which they then stood. It makes a great deal of difference, after the very large increase of taxation on these people in the lower ranges of Income Tax, that this new burden for the 1st January should still remain. I hope that it will be possible for the Chancellor of the Exchequer even now to reconsider the application of that provision, in view of the present circumstances.
  There is another way in which the taxpayer will have unequal payments to make. Owing to the late imposition of the tax, in September instead of the usual time, people whose Income Tax is deducted at the source will have to pay later, before the end of March, a
  1658
  very much larger sum than they would otherwise have to do. Take the case of a single woman who has an income from investments of £200 a year. Hitherto she has been paying a total Income Tax of about £6 10s., by two equal instalments of £3 5s. The tax has been deducted from her half-yearly dividend. According to the proposals in this Bill, under the arrangement outlined in the Third Schedule, the whole of the additional burden for the whole year will fall on the second part of her deduction. She will, therefore, have to pay £9 5s. on the second instalment.
  That brings me to criticise what I might call the oscillatory character of the finance of the Chancellor of the Exchequer. Last February he gave a grave warning to the country. In April he increased taxation but little, taking an optimistic view of the situation. In September he reverses the wheels, throwing the passengers into difficulties and injuring the mechanism of the car. [HON. MEMBERS: "What did you do?"] I will state exactly what was my position as Financial Secretary to the Treasury. It is true that I supported the Budget of the right hon. Gentleman in April. What I am complaining about is that in September he reverts to his view of February, and that if he had in mind then that he was going to take the view which he is taking to-day, it was wrong on his part to put forward in April an optimistic Budget. The other night, in his broadcast statement, he showed that he realised the difficulty of his position in regard to this matter, and he defended himself by claiming that when he introduced his Budget in April he was waiting for the report of the May Committee. If he really at that time foresaw what was likely to be his course of action, then what he did in April was unfair to the taxpayers.
  Mr. SMITHERS: As Financial Secretary, did you tell him so?
  4.0 p.m.
  Mr. PETHICK-LAWRENCE: The present situation had not then arisen. I am complaining of what he is doing now by reversing his decision of last April, and I say that if he had in mind then the situation of to-day, he was wrong in taking the course which he took when he introduced his Budget in April. It would have been much better had he

  1659
  not encouraged the people of this country to arrange their lives according to the system of taxation which he then proposed, when he was going to reverse the position and take the large toll of taxation which he is taking in this Bill. I have already said that we cannot divorce the provisions of this Bill from the other proposals of the Chancellor of the Exchequer, because the taxes which this Bill imposes are not in substitution, but are in addition to the cuts which are being put forward in the Economy Bill, and I want to ask what justification there is for singling out the employés of the State, teachers, civil servants, the police, members of His Majesty's Forces and also the unemployed for this special treatment? It is grossly unfair to place on these people special burdens of this kind simply because you have the whip-hand over them owing to their being your employés. [Interruption.]
  Mr. SPEAKER: These constant interruptions only lead to an acrimonious Debate.
  Mr. PETHICK-LAWRENCE: The Government have no right to put this additional burden on teachers who have spent large sums of money on their training, upon the understanding that their contract with the State would be carried out, and they have no right, as the hon. Member for the English Universities (Miss Rathbone) told us the other night, to put these burdens on the unemployed, and to bring them down below the subsistence level. What justification is there for this course? It will be said, of course, that it is in order to balance the Budget. But you have no right to balance the Budget unfairly. It is one of the cardinal principles of taxation that such burdens as have to he borne should be borne equitably between the different sections of the public, and you have no right to degrade the public service below the level of outside occupations. What is the justification for doing so? Is it not that it is an invitation to private employers to make similar cuts in the wages of their employés? I have heard that denied, but everyone knows that the bulk of the people who support these proposals have supported them from the first, for those reasons. If it were not so, then it would be unfair discrimination between one
  1660
  class and another. If it is so, then it is a deliberate attempt to reduce the standard of life of the people.
  But if it was unfair to impose those cuts before we went off the Gold Standard, surely it is a monstrous injustice to impose them when, in addition, the Gold Standard has gone. We were told by the Prime Minister, and I think by the Chancellor of the Exchequer, that these cuts were justified, because they would save the Gold Standard and keep prices down. The Prime Minister told us more than once that the unemployed would lose far more by going off the Gold Standard than they would by these cuts, and that it was in their interest that he was taking this course. Both he and the Chancellor of the Exchequer tell quite a different story to-day to justify them, on the ground that it is more necessary than ever to balance the Budget in order to prevent inflation. I believe, in any case, that that view is founded on an entire misapprehension, but who can say what the effect is going to be upon prices and other things after what has happened? Who can say what is going to be the effect on the Budget? If we are to believe the newspapers which support right hon. Gentlemen opposite, we shall find, as they anticipate, that there is going to be a great revival of trade. Anyone who has studied this question carefully, and has realised that this unemployment has been during all these years a money phenomenon, will not deny the great probability of that expectation being fulfilled.
  If there is to be a great increase of trade, unemployment will go down below the 3,000,000 mark on which basis this Budget was estimated. It may go down, possibly, below 2,000,000, and when that happens we know what the attitude of hon. and right hon. Gentlemen opposite will be. They will take credit to themselves and this Government, if still in office, for that fall in unemployment. They will take credit for a fall in unemployment which has arisen from something which this Government was formed for the express purpose of preventing. But if unemployment does go down, all those hypotheses on which this Budget and the prospective Budget of 1932–33 have been framed, disappear. If you get rid of unemployment, or if you get rid of a considerable part of it, none

  1661
  of this deficit will have to be met, and I do put it to the Government that, in view of this, certainly in view of the acknowledged fact that the economy cuts in the Budget are going to injure the employment position of this country, they ought to withdraw these proposed cuts.
  Let me put this question to the Chancellor. It has been suggested that this cut in unemployment benefit is necessitated as part of the arrangements which had been made in order to secure these foreign loans. I will ask the Chancellor to state whether that is so or not. If he were to say, which I hope he will not, that it is so, then I would say that the sooner we get rid of these obligations by paying them off either in gold or by the sale of foreign securities, the better. But if it be not true, as I think it cannot be true, that any such humiliating condition has been attached, then I say, in Heaven's name, what right have you to retain these cuts in your programme when you introduced them on the understanding that they were there to save the unemployed from the greater evil of a fall from the Gold Standard?
  There are also two other matters of fundamental importance on which we are entitled to information from the right hon. Gentleman. Has the Treasury learnt its lesson from the bitter experience of the last 12 years? The right hon. Gentleman will not forget that it was in November, 1919, that the Bank of England, with the active support of the Treasury, commenced the policy of deflation which resulted in the fearful slump in the years 1920 and 1921. After he left the office he is now occupying in the previous administration in 1924, another deflation drive was begun which sent prices down and unemployment up in the winter of 1924–25, culminating in the restoration of the Gold Standard. I waited eagerly the other day when the right hon. Member for Epping (Mr. Churchill) rose to speak to hear what he would say about his own position in this matter. It is one of the engaging characteristics of the right hon. Member for Epping that he is able to slough his skin in his progress from the chrysalis to the butterfly, and I wanted to see how far his gold skin had come off. I was not disappointed. Of course, he did not recant his heresy, but he recognised that
  1662
  the Gold Standard as it was working then had ruined the world.
  The question I want to ask is this. Now that we are off the Gold Standard—temporarily, we are told—does the Chancellor, with the help of the Bank of England, intend to force us back en to it at the old parity? is credit to be restricted, the country's life squeezed and unemployment increased with this object? We are entitled to an answer to that question. If there is any such idea in the Chancellor's mind, I warn him that the country will not stand it, and I am confident that in that I am not merely speaking for those behind me: I am speaking also for the great mass of employers in this country who have learnt their lesson. They stood the deflation of 1919–20. They stood the further deflation of 1924–25, because they were ignorant of the consequences which were likely to ensue. They have learnt better by now, and they will not stand any attempt of the Treasury and the Bank of England to force them back into the impossible position from which we have at last escaped. Let us be careful this time when we are once again off the Gold Standard that we take the right course.
  This is essentially an international question, and the only real solution is an international one which will stabilise both the exchanges and the price level at the same time. That, of course, is a very difficult thing to do. No one minimises the difficulty of the undertaking, but that is the objective which we all have in view, and that was the objective that was set before the bunking interests of the world several years ago in the international conference that was held at Genoa. The right hon. Gentleman told us on Monday that he would have liked to have had an international conference, but that one or two of the Powers stood in the way. His attitude was, I think, somewhat like that of Hotspur in "Henry IV" when Glendower had said to him:
  "I can call spirits from the vasty deep"
  and Hotspur replied:
  "Why, so can I, or so can any man. But will they come, when you do call for them"
  That I take to be the attitude of the Chancellor of the Exchequer, but we really cannot afford to leave it at that, and I hope the right hon. Gentleman, when he

  1663
  comes to reply, will have something to tell us as to the course which he intends to pursue in this matter. I have not often found myself in agreement with the right hon. Member for Epping, but, in this respect, I thoroughly endorse what he said, that we are by no means so powerless as is sometimes supposed. After all, we are still, to a large extent, the bankers of the world, and even today sterling still exercises an enormous influence on world affairs. Will the Chancellor show a little of that obstinacy of which he is so proud? When he went to the Hague a couple of years ago to get an increase in the British share of reparations, he was very considerably disliked in taking that course, but he stuck to his guns and won his point, because he considered it to be of importance.
  The issue to-day is a far greater matter than a few million pounds. It is nothing less than to find a stable basis for the whole commerce of the world, and whether you keep the capitalist system, in which hon. Members opposite believe, or whether you adopt the Socialist system, which we on this side believe—[HON. MEMBERS: "What is it?"]—a stable basis for the commerce of the world is necessary in either case. I suggest to the Chancellor of the Exchequer that a little diplomacy could get around the difficulty of the Powers coming together in a conference. If one or two do stay out, even if they are one or two of the largest and most important, there are a great many other Powers in the world, and if they came together and decided to found a monetary system on a sound and permanent basis it would not be long before the Powers which were standing out would find it necessary to come into the arrangement. Let the right hon. Gentleman in the name of Great Britain give a lead to the world in getting a sound currency. The path which the Chancellor of the Exchequer has been forcing on this country in the last few weeks has been a path which to us seems very humiliating and has aroused in us a sense of deep indignation, but in spite of what has happened in the last few weeks this country still retains the initiative, if we are allowed to use it. Will the Chancellor of the Exchequer, even now, rise to his opportunity or will he remain hidebound to the traditions of the past?
  Sir JOHN SIMON: The hon. Member for Leicester West (Mr. Pethick-Lawrence)—[Interruption.]
  Lieut.-Commander KENWORTHY: Where is the Home Secretary?
  Sir J. SIMON: The hon. Member in his last sentence made an appeal to the Chancellor of the Exchequer to rise to the height of his opportunity. It is precisely because most of us in this House, and I believe the great majority in the country, admire the course which the Chancellor of the Exchequer has followed, that we are confident, not only that the Finance Bill will get a Second Reading but that in carrying it into law he will be serving the best interests of the nation. I suppose an Opposition has never had ready made so obvious an instrument for belabouring the head of the Chancellor of the Exchequer, and if it were not for the gravity of the times no one doubts that the hon. Member for West Leicester would have made more abundant use of the opportunity.
  When the Budget Resolutions were proposed, when this Finance Bill was introduced, we were on the Gold Standard, and it is quite true to say that one of the main arguments advanced with authority and in high quarters for the steps we were invited to take was precisely because by such means it was hoped to keep on the Gold Standard. It is therefore very tempting to irresponsible—[Interruption]—I am referring to no one in this House, but to people outside—and thoughtless people to make the very obvious retort that last week you were defending the Budget and your cuts as necessary steps if the Gold Standard was to be preserved, as well as a contribution towards balancing the Budget, while this week, exactly seven days after the Finance Bill was introduced, the Gold Standard has been suspended.
  The plain question which the public wants discussed and answered is this; how fax does that unquestioned change in the situation affect the necessity of carrying the Finance Bill, how far is it a sound and serious argument to urge that some of the hopes which were expressed last week have been falsified and, therefore, the edifice erected upon them is unsound and unsatisfactory? I am

  1665
  quite prepared to urge the simple proposition that what has happened in the last few days makes the passage of this Bill into law more urgent than ever. The hon. Member for West Leicester in a parenthesis said that in his view the notion that a balanced Budget was a necessary means for preventing inflation was founded on an entire fallacy. In these high matters one must pay great attention to the pronouncements of experts, but, looking at the matter in a much simpler way, I should have thought the proposition was easy to prove, that whatever may be the importance of balancing the Budget when your currency is on a Gold Standard a balanced Budget is even more necessary when the value of the sterling may fluctuate freely, not being tied to gold. To put it in another way, you may say that it is more important to sit a boat when you are in a rapid tideway than when the vessel is attached to terra firma. [Interruption.] I am not in the least discomposed if I am thought to be saying things that are too simple. After all, it is the simple truths and reflections about this matter which the country most urgently needs.
  We have the less excuse for making a mistake because it is not long ago that we had before our eyes the actual spectacle of the painful consequences of unlimited inflation, when so many of the European currencies rushed to destruction, and there was nothing whatever to stop them. It is as well to repeat here so that it may be read outside, that in the German crisis, although German employers and workmen met once a day in order to negotiate and settle the rate of wage, by the end of the day the money would not purchase what it was intended to represent when the day's work began, with the result that at the moment anyone in that crisis found himself possessed afresh of a, substantial sum of cash he rushed to turn it into something other than cash which would not melt in his hands. That is the situation of which we have had warning, and it appears to me that it is not difficult to show by a simple course of reasoning that once this country has suspended its Gold Standard we are more than ever bound to take steps, however severe they may be, for balancing the Budget unless we are prepared to follow the same course.
  1666
  The truth is that any nation, any State, that maintains, and is going to maintain, its Gold Standard has by that very fact a guarantee, an insurance, against great inflation. If when we went back to the Gold Standard in 1925 this country had set to work to retrench and save instead of spend we should be on the Gold Standard at the present moment. As long as your central bank is under an obligation to redeem bank notes when presented to it in sufficient numbers, as long as your central bank is prepared to discharge that obligation, the uncontrolled not of inflation is, it seems to me, automatically prevented, and, therefore, last week we were really in a position to defend ourselves against this insidious and powerfu1 foe of a sudden and dangerous inflation because we held two rows of trenches. We held a front line which, as long as we were prepared to occupy it, was impregnable—that was the Gold Standard. If by circumstances very largely due to the claims of foreigners upon the balances we owed to them, circumstances which are not in themselves any discredit to us and which arise in one sense from the high position we have held, we find it necessary to withdraw from this impregnable fortress, then it seems to me that a profoundly new and special obligation rests upon everyone to defend this second line of trenches, come what may. As long as circumstances permitted that the fortress of the Gold Standard could be occupied, I do not see how we could have been exposed to serious risk. But if, as has been the case in the last few days, that situation alters, I should have thought that the balancing of the Budget by any and every means that are open to us, however severe and disagreeable, is the only way to avoid inflation and to limit the risk to sterling.
  Let me follow out the position as I see it, in the simplest terms. If by resolute retrenchment, and as far as must be, supplementing it by additional taxes, and by this Finance Bill, the State puts itself in the position where it can meet its current expenditure, its payment to the Army and Navy and the pensioner and to the unemployed, to those who supply it with stores, to those Who hold its promise to pay interest—if the State by rigid retrenchment and by unpleasant taxation is able to meet its current expenditure

  1667
  out of its current revenue without recourse to borrowing, we are quite safe from the misuse of the printing press for the purposes of inflation. What happens is that as long as that occurs the State really, under the authority of Parliament, is transferring a certain portion of existing purchasing power lying in the hands of the citizen who pays the tax, and is using that same amount of purchasing power to discharge the State's obligation wherever it may be. There is no need for inflation there.
  But what is so neceessary to insist upon here, in order that ordinary public opinion in the country may fully appreciate it, is that the stability of the British financial system can only be preserved in present circumstances by methods such as that, and if those methods are adopted and are enforced and carried through religiously to the end, without whittling down, what no doubt is so unpleasant, then whether we go off the Gold Standard or not, we have avoided the danger of inflation. There must be many Members of the House like myself who, in our present situation, remind themselves again of the warning that was given so long ago as last January, from our Treasury Department by Sir Richard Hopkins. I cannot imagine language which more precisely fits the situation that we are now considering on this Bill. Two sentences have become familiar, but they are so apposite to the occasion and such a complete justification of what the Chancellor of the Exchequer now proposes, that I ask leave to read them. In that famous Memorandum submitted by the Treasury to the Commission on Unemployment Insurance, dated 21st January, Sir Richard said:
  "Continued State borrowing on the present vast scale, without adequate provision for repayment by the Fund, would quickly call in question the stability of the British financial system."
  Last January there were a great many of us in this House, and certainly a great many in the country, who treated the stability of the British financial system as as much a matter of course as the position of any of the great public buildings in London. We have all learned a great deal, and what it is very material to observe is, that this distinguished
  1668
  authority, speaking for the Treasury, put his finger on the exact point when he wrote that passage in January last, and everyone understands it now. The other sentence is this:
  "These vast Treasury loans are coming to represent, in effect, State borrowing to relieve current State obligations at the expense of the future, and that is the ordinary and well recognised sign of an unbalanced Budget."
  Therefore, the conclusion which I have reached and the conclusion which I think we ought to reach unanimously is this: Let it be granted that the hopes expressed a week ago of saving the gold pound have not been realised. Let it be granted that the argument then urged upon the public to that extent may seem to have failed of its justification. But what is the moral? The moral is not that this Finance Bill becomes a less important instrument of recovery, but that we are now in the position of having to accept both retrenchment and taxation as the only means by which we can escape the peril previously guarded against by the Gold Standard.
  Last week Britain was held by two anchors. She could not plunge into economic chaos while those two anchors held. The one was the anchor of the Gold Standard, and that is gone. But we are still left with the other anchor—a resolute determination to restore financial stability. I do not think that those who understand what would happen if that anchor parted will doubt that our duty now is to do nothing whatever to whittle away or reduce its potency to save us. It is an anchor which is equal to the strain, standing alone, if we ourselves, here in Parliament and outside do nothing to weaken it.
  That is the first of the two questions which, it seems to me, are immediately suggested by the tremendous events of the last few days and the enormous change which is involved in departing from the Gold Standard. There is another entirely apposite inquiry in relation to going off the Gold Standard. I notice that in the last few days a number of people—some of them with great confidence and dogmatism—declare that the fact that this country has gone off the Gold Standard has automatically disposed of the problem of adverse trade

  1669
  balance. For my part in these difficult matters I deprecate dogmatism. But I deprecate dogmatism on either side. In certain quarters, especially in certain quarters which last week were disposed to deny the validity of the argument that the adverse trade balance called for extremely drastic and unusual steps, we are this week confidently assured that all anxieties on that score may be regarded as removed, and that the suggested remedy of a limitation of free imports is, in view of the suspension of the Gold Standard, put logically and automatically out of court.
  Let me examine that for a moment. What is the course of reasoning which is supposed to lead to that result? It is said that if you suspend the Gold Standard, the balance of your external trade will look after itself; that if sterling is not tied to gold then any difference of level will be adjusted, just as the difference of level in two bodies of water would be adjusted if you pulled up the sluice between them; and that if we get rid of the Gold Standard, the trade balance will necessarily come right. It might be first observed that that does not appear to be the lesson that one would gather from the recent experience of Europe. The experience of those countries in Europe which found their financial position increasingly difficult and suffered from continual depreciation of currency was this: As long as the depreciation of their currency continued and went worse and worse, to that extent undoubtedly it operated as a bounty on their exports. But when at length by tremendous efforts, by assistance from other and more favoured countries, one or other of these communities in Europe succeeded once again in holding their currency at a given figure so that it depreciated no more, this operation of the bounty on exports and a block on imports ceased. It is not the fact that your currency to-day is at a lower figure than it was yesterday which tends to give a bounty on exports; it is the fact that it is going to be lower still to-morrow.
  The lesson, therefore, which may be drawn from the experience of Europe is this: That when at length those countries did succeed in fixing the value of their currency at some new and low figure, it was not in the least the case that they had an adjusted trade balance. Every one of them had an adverse trade
  1670
  balance and every one of them needed assistance from outside in order to get right. There is a second consideration. Those who use the argument that we need not trouble any more about the adverse trade balance because we have suspended the Gold Standard seem to assume that Britain can go through that tremendous operation which we authorised in a few hours on Monday without other countries doing the same. But inasmuch as all these things are relative, it is impossible to argue as to what is going to be the outcome of all this when so many other factors are obviously and constantly changing.
  But I go further. Before I could accept the proposition that going off the Gold Standard will have all the effect which a check on imports deliberately enacted by Parliament might secure, I would want to call attention to this distinction. Going off the Gold Standard for the time being operates no doubt as a block in the way of foreign imports, but it is a perfectly indiscriminate block. In so far as it operates like a tariff it is a tariff on food and on raw material to exactly the same extent as it is a: tariff on the most highly-finished articles and manufactured luxuries. Unless it is to be said that in these matters the best thing to do is to fling yourself upon the reactions of world economic forces, that really on the whole chance will do better for you than the best that you can do by intelligent thinking for yourself, I should find it quite impossible to accept the view that the removal of the Gold Standard provided all that is needed. Some people think it might be provided—and others fear it will have to be provided—by the intelligent and discriminating restriction of imports. Again, the writing down of the value of the pound knows nothing whatever of Imperial Preference. [Interruption.] The Government that hon. Gentlemen opposite were so fond of, maintained Imperial Preference. It knows nothing of sources of supply. It is a perfectly blind indiscriminate and automatic proceeding and I should have thought it very far removed indeed from what anybody, whatever his fiscal opinions might be, would contemplate if he came to the considered construction by a tariff.
  Lastly, may I point out that whoever takes the view that going off the

  1671
  Gold Standard has cleared out of the way, as an obsolete and irrelevant suggestion, deliberate interference for the purpose of correcting the trade balance—whoever takes that view it certainly cannot be taken by the Chancellor of the Exchequer. How did the right hon. Gentleman finish his speech on Monday when he was recommendig the Gold Standard (Amendment) Bill, the very enactment which was going to produce the result of going off the Gold Standard? Did he finish it by saying: "Well now, these things have to take place and the subcommittee of the Cabinet which is dealing with the adverse trade balance is wasting its time. We need not trouble any more about things of that sort. They have all passed from the picture as being cancelled out."? Not at all. This is what the Chancellor of the Exchequer said in the last paragraph of his speech proposing the suspension of the Gold Standard:
  "The question of the adverse trade balance has to be dealt with, and the Government are giving that matter their fullest consideration. In the process of rebuilding, we may have to adopt, as we have done in connection with balancing the Budget, many expedients which in other circumstances would be repugnant to us."—[OFFICIAL REPORT, 21st September, 1931; col. 1299, Vol. 256.]
  The conclusion as it seems to me is this: I conceive that not much can be done by detailed cut-and-thrust in Debate. At a moment of this sort, our duty as I conceive it, is to give united support to the Second Reading of the Finance Bill. It appears to me that with these enormous world conditions changing hour by hour, it is quite impossible to suppose that by elaborate Parliamentary discussion, and by our long-drawn-out Debates—that by these leisurely processes, you are going, in every case, to deal with things in time. I believe that it is absolutely necessary for the country to satisfy itself that the Administration is an Administration in which it has confidence; and it is absolutely necessary that that confidence should be given to the Administration in a quite unusual degree. As a matter of fact, we are all acting so at this moment. The reason why we do not hear from the Front Bench opposite more effective, rhetorical, shattering criticisms, is precisely because they share responsibility with all the rest, and the
  1672
  best advice that we can give, and the best example that we can give to the country is to put confidence in an Administration that is prepared to look at this new situation with unprejudiced eyes. I confirm, if I respectfully may, the advice which the hon. Gentleman who preceded me tendered to his distinguished ex-chief. We trust that he, too, will rise to the height of his opportunity.
  Mr. TINKER: The right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) in speaking about irresponsible criticism, hardly gave a fair idea of what hon. Members on this side mean. We, along with other Members, realise the difficult position which the country is in and we are just as anxious as anyone else to get it on to an even keel. The Chancellor in his Budget speech said he had a most disagreeable task to do and that he was going through with it with determination. We all realise the difficulty of the task hut we say that there are two ways of dealing with it, and we contend that the way that we propose is the least obnoxious. Taxation in any form is disagreeable, and the taxation proposed by the Chancellor in this Finance Bill certainly does not meet with approval on these benches. We claim that the money could have been secured in far better ways, and on that point alone I differ with the Chancellor. I do not differ with the Chancellor because he has come forward and explained to the country the gravity of the position. That was his duty and he carried out his duty manfully. The question arises however as to the best way of raising the necessary revenue, and on that point we hold very strong views.
  I may first ask certain specific questions. We are told that there is a deficit of £25,000,000 in what is called the revenue, but the Chancellor has not explained in detail wherein the revenue falls short—whether it is in Income Tax or Super-tax or Death Duties. The House is entitled to a detailed statement showing wherein the revenue has fallen below the expectations of the Budget of April last. In trying to meet that deficiency the Chancellor has imposed certain burdens including increased taxation on beer which is expected to bring in £4,000,000 this year.

  1673
  I am not sure, but I imagine that this additional taxation means a penny on the pint of beer. I speak of localities with which I am familiar where beer is 5d. per pint, and I work it out as meaning a 20 per cent. increase to the ordinary working men. That is one instance in which I claim that the Chancellor has been too hard on the working man. He might have made it less, if he had to impose any taxation at all in this respect. A teetotal person might say that beer is a luxury and that the working man can do without it. I think if those who hold that view could see some of the instances which I have seen, they would not say that it was purely a luxury. During the Recess I was speaking in my constituency and one night I went to a Labour club which is close to a colliery. A number of workmen who had finished their afternoon shift came in just before 10 o'clock, begrimed and tired out. Anyone who has worked in a coal mine must realise the value of a pint of beer after finishing work—
  Mr. J. JONES: And before.
  Mr. TINKER: I cannot agree with my hon. Friend in that respect. The collier does not take beer before his work. In the case I have in mind, these colliers at the end of their hard spell of work had their pints of beer, and I think no one could say that they were not thoroughly entitled to that refreshment. It is something to which they look forward after an arduous shift. This taxation means to these workers a penny on each pint, or, as I say, a 20 per cent. tax. I know that the Chancellor of the Exchequer is a rigid teetotaller. Possibly he may be biased in this matter, but I appeal to him to realise that to the ordinary working man a pint of beer is of the utmost value in certain circumstances such as I have described. It lightens his hard toils and is something to which he can look forward when he has finished his work. I would also point out the unfairness of the tax. The Chancellor is only putting 10 per cent. on the Super-tax payer, but in this case he is, I contend, putting 20 per cent. on the poor working men who have been more hardly hit than the Super-tax payers.
  1674
  I turn to the Income Tax. The right hon. Gentleman is putting on 6d. in the £ and scaling down the allowances. I do not object to the 6d. It is a fair method of taxation, but I object to the scaling down of the allowances. I think that the married man is being hit in that way much more hardly than lie ought to be and it will also work out harshly in regard to dependants. I think the Chancellor was wrong in not putting up the Income Tax on the occasion of the previous Budget. I may remind hon. Members opposite that on the previous Budget they moved Amendments to reduce the then existing rate of 4s. 6d. in the pound. They argued that it was too much and we had two Divisions on the question of bringing it below 4s. 6d. The Chancellor of the Exchequer would have been better advised had he put on 6d. then, and his Budget would have been in a much sounder condition. In regard to Super-tax, there, again, I claim that the Chancellor has not gone as far as he ought to go. I have some figures showing the amount of money possessed by the people who are liable to this taxation. According to these figures, we have 97,000 Super-tax payers and according to the last financial returns their total income was £541,000,000 for 12 months.
  The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): What year was that?
  Mr. TINKER: That was the year 1929–1930. I have not been able to get later figures, but possibly the Chancellor will help me in that respect. Those figures give them an average income of £5,500 each per annum. I admit the necessity of balancing the Budget, but I suggest that the Chancellor could have gone in other directions to find some of the money for the purpose. The right hon. Gentleman the Member for Spen Valley spoke about two lines of trenches. The Super-tax payers in my opinion have always occupied the second line of trenches.
  Mr. J. JONES: No, they have always been at the back of the front.
  5.0 p.m.
  Mr. TINKER: Well I take it that if there are only two lines, they occupy the second line. They occupy the last line of defence; but the ordinary working

  1675
  man is always in the front line where all the hardship has to be faced. I think that the Chancellor might have brought these people into the front line to bear their share. As the Chancellor has put 20 per cent. on to one class of taxation I would appeal to him, even yet, to alter his plan and put 20 per cent. on to the Super-tax payers. Now I turn to the Death Duties. It has been one of my pet theories and I have advanced it every time I have spoken in this House in regard to taxation, that the money which people leave behind on death could be turned to better uses than it has been turned to in the past. I will give some more figures from the Chancellor of the Exchequer to prove my point. In 1912–13 the amount left at death subject to Death Duties was £299,000,000; in 1920–21 it had gone up to £372,000,000; and in 1929–30 the amount was £538,000,000, or an increase of £166,000,000 from 1920 to 1930, and 15 persons among those people left at death £32,700,000, or an average of over £2,000,000 each. I claim that, especially at a time like this, fortunes left at death could very well 'be more handsomely taxed than they are at the present time. I do not see where there would be any trouble at all, because the psychological effect on people is this, that if you have got hold of money, you do not like parting with it, but when you die the money is then left and has to be handed down to successors or heirs. If the State steps in and says, "I am going to take a certain amount of this money," they may feel a bit sore about the State doing that, but I think it would be a more effective way of raising taxation than by putting it on the backs of the poor people.
  The right hon. Gentleman the Chancellor of the Exchequer has held in many speeches that he has made from that bench, that he is trying to put the burden of taxation on the broadest backs. I have tried to outline this afternoon where the taxation could very well be put, and I repeat that I take my stand with every other hon. Member of the House of Commons in a desire to see the Budget put on a sound financial footing. None of us on these benches object to that, and it is wrong for any hon. Mem-
  1676
  ber opposite to say that we have any different thought in our minds from that. We are fighting the Finance Bill because the burden of taxation is not evenly distributed. If it were, there is not one of us on these benches who would not say that the time had come when the Budget must be balanced, and we should all assist in carrying that into effect.
  Lord HUGH CECIL: We are engaged in reviewing the financial position of the country at a time of not inconsiderable anxiety, and I will endeavour to compress as closely as possible the observations that I desire to offer to the House. Something has already been said about our position in respect of the Gold Standard, and I respectfully submit to the hon. Member for West Leicester (Mr. Pethick-Lawrence) that, in common with a good many critics in and outside the House, he seemed to speak of the Gold Standard as though it were, shall we say, a valuable vase set upon a pedestal and knocked down, as if we were either on it or off it. But I suggest to him that that does not quite accurately represent the situation. We are rather going down a hill, down a slope, and it is highly important that we should go as little as possible down that slope. We have not lost altogether the Gold Standard—we should indeed be in a parlous condition if so—but we are no longer strictly anchored to it. The relation of our currency to the value of gold is not yet stabilised in any degree, even temporarily, and just now more than ever, as the right hon. and learned Member for Spen Valley (Sir J. Simon) truly said, it is important to vindicate the solvency of the country and our respect for the foundations of British credit.
  It has been said to-day and on other occasions that hon. and right hon. Members opposite, no less than those on this side, are in favour of balancing the Budget. I do not doubt a, and I rejoice in it, but do not let it be thought that there is a great variety of ways of balancing the Budget. You cannot balance a Budget as you would order a suit of clothes, saying you were as much in favour of clothing your nakedness as anyone else, but that you preferred, shall we say, a sports suit with "plus four" breeches to a banker's dress of frock coat and grey trousers. There is none of that

  1677
  variety of choice in respect of balancing a Budget. There are only two things that you can do; you can save money or you can levy taxes. Indeed, the surroundings are much more those of a torture chamber than a tailor's shop. You may either have the "little ease" of economy or the rack of taxation. Therefore, if you do not like economy—and hon. Members opposite appear not to like it—that only means that you must have more of the rack; and, if you do not like the rack, that only means that you must have more of the "hale ease."
  So we are driven to these disagreeable expedients if, with a unanimous consent, we desire to balance the Budget. But, of course, hon. Members opposite want, as they say, to throw more of the burden on the rich and less on the poor. I pass over the difficulty and the danger of so arranging your financial system that those who, by their votes at elections, decide on the limits of expenditure shall bear no substantial share in the expenditure which their votes indirectly cause. That is a very grave danger in a democratic system.
  But, apart from that, what is this principle of equality of sacrifice of which we hear so much? OIL what basis are you going to measure the equality of sacrifice? [An HON. MEMBER "According to ability to pay!"] It is assumed, of course, either that property is a true moral right or that it is not, and, if you are going to measure one sacrifice against another, you must make up your mind whether a person has a right to the property he possesses or whether he has not. Not only do I think that a man has a right to his property, but I am sure it is expedient that the State should act on that hypothesis. First, let me point out that if you do accept the view that private property is a true moral right, you cannot fairly measure the loss by a millionaire, let us say, of 60 per cent. of his income, which is his own income, from his own property, with a 10 per cent, loss of a poor unemployed man, which is a limitation on a gift out of other people's money. Obviously, at any rate, they are incommensurable: they are quite different things. To he disappointed to the extent of 10 per cent. in a gift from other people's property is not the same thing
  1678
  and cannot be compared, numerically at any rate, with losing 60 per cent, of your own property.
  Mr. R. RICHARDSON: Insurance is not a gift.
  Lord H. CECIL: I am speaking of the contribution that comes from the State, which obviously is not the property of the individual. However, I should not agree with hon. Members opposite about that matter, and I want to point out to them, because it seems to me to he the very kernel of the controversy that divides us, that in dealing with the problem which we have before us we are concerned to save the credit of the country. I suppose that is common ground. We all wish that the credit of the country should he maintained. Indeed, so artificial is our economic structure that if our credit were destroyed, we should indeed sink into that abyss which has been more than once referred to, and not merely the rich but a very large proportion of the poorer classes would actually starve to death from the want of supplies from abroad, so important is it to have our credit system maintained.
  We are indeed the richest country in the world for our area and population, but we also have the most artificial and the most complicated economic system in the world, and therefore it is not safe to compare our position with that of such great countries as the United States or as Australia, which have vast natural resources still undeveloped, nor even with that of such countries as France and Germany, which, though much more closely resembling us, are yet not in a position so entirely dependent on their mercantile and commercial prosperity and on the degree to which credit enters into their industrial life as we are. Therefore, we have to maintain our, credit. That we agree about.
  I think hon. Members by this time have realised that it is not bankers whom one has to consider in these matters; it is investors; it is in the satisfaction of the investors that the credit system of the country finds its firm foothold, and the investor is, by hypothesis, by his very name, a propertied person. Therefore, I entreat hon. Members to realise that what we have to do in order to secure the

  1679
  financial prosperity of the country is to satisfy property owners, the opinion of those who have property. They are the investors whom we have to keep satisfied, and it is quite idle, therefore, to take another point of view, the point of view of those who think that property is theft and who desire to see it abolished.
  To put the matter in a sentence, when you maintain credit, you have to satisfy, and even gratify, creditors, and from that there is no escape. It is not a thing imposed by a majority in this House who are Conservatives, let us say, nor by one class upon another. It arises inherently out of the economic system which exists in this country. You cannot escape from it as long as you maintain the sanctity of private property and what is called the capitalist system. [HON. MEMBERS: "Hear, hear!"] I think I gather from those kindly cheers what the answer would be if hon. Members were not too orderly-minded to interrupt me. I think I know what they would say. They would say this: "Yes, of course, that is capitalism, but we have always been against capitalism, and capitalism leads inevitably to these, as we think, humiliating and disastrous consequences, that you have to adjust your financial position to satisfy investors, creditors, and therefore provide that the Budget should so appear as to be not offensive to their feelings." Well, I can understand criticising capitalism—I could do it myself—but it is there. Many people do not like the fashions of modern dress, but that would not justify you in stripping yourself naked on a cold winter's day and calling it dress reform; or, to vary the metaphor, supposing a ship's company are on the ocean in a ship, some of them may think it is a bad ship and others may think it is a good ship, but if it is the only ship within reach, there is no sense in boring a hole in the hull and sending it to the bottom. As far as I know, the only ship besides the capitalist ship in existence is one ambiguous craft which is building on the Neva. We hear about another one, which is not even yet designed, but which we hear is to be built on the Clyde. The choice really before hon. Members is not between capitalism and Socialism, but between capitalism and Davy Jones's
  1680
  locker, and that is no choice at all. If we are bound, therefore, to support capitalism which we cannot change at once, even if we thought it desirable to change it, to what are we to look forward do the difficulties which we have to encounter?
  My right hon. Friend the Member for Spen Valley, in the admirable and lucid speech which he has just delivered, clearly showed that it is a profound mistake to think that the balance of trade will in the end be permanently affected by a change in the standard of currency. We might, of course, go to total destruction, but if we stabilise the balance of trade at a new level of economic prices, it will be just what it is to-day. Therefore, we are faced with the adverse balance of trade, and that really is the most essential part of the difficulties we have to overcome. Many of my hon. Friends are desirous of setting up tariffs as a remedy. I am myself in favour of levying revenue by a tariff because I think that in the very peculiar circumstances of foreign international trade at the present time you might really do what is always desirable, get part of your revenue paid by the foreigner, and part also by the distributor instead of by the consumer. That arises, of course, not in normal economic conditions, but under the peculiar conditions of the present time.
  Some hon. Members wish to go further than that and have what may be called a safeguarding tariff; that is, a tariff designed not to increase prices at home, but to secure a certain measure of stability by which the home trade can be more easily expanded with greater security, and the prosperity of the country increased. Against that I see no theoretic objection. The great difficulty I have always found is in respect of the particular application to the actual circumstances of the case, into which it would not be relevant to enter at any length to-day. There is now coming to the front another tariff. The traditional Tariff Reform movement was always in favour of a stabilising tariff, not a tariff designed to increase prices. I observe in the Press, and to some extent in this House, a scheme to raise prices in the home market by a tariff definitely intended to restrict imports with a view to raising

  1681
  prices. I am sure that that would be a disastrous plan. I do not object to my hon. Friends putting on a revenue tariff, and I should be happy to see an experiment in a safeguarding tariff. Whether they will be successful I do not know; certainly they would do no serious harm. But to put on a truly restrictive tariff would, indeed, be a, calamitous step, because it would in the end destroy a large part of the wealth of the country which comes from abroad, and it would suffocate altogether the foreign trade which must depend in the long run on a certain balance between exports and imports. You would make all sorts of people pay more for what they need, and you would still keep up the high level of the costs of production so far as the world prices of goods went. Therefore, you would not save your export trade at all. That has been abundantly shown in the cases of the United States and of Australia. They have both found that if you depend on exports, a high tariff, a restrictionist tariff helps you not at all, but that on the contrary it is injurious.
  It remains then to expand exports. That is the only thing, as I see the economic situation, that can really do good. Unless you can expand exports, you will not really redress in a healthy way the adverse balance of trade. I see no way of expanding exports except by reducing costs of production in this country. I do not believe that there is any way of getting out of it. I know that it is profoundly unacceptable to the great body of trade union workmen. They say that to reduce the cost of production means, in large part, reducing wages. That is true. They say, "We see that wages would come down, but we do not see that they would ever go up again. We should therefore lose permanently the standard of living which we have obtained with great difficulty, and, whatever else in the way of financial reform is carried out, anything that lowers the wages of this country and the standards of living is not acceptable." I can understand that point of view, but I am sure that if Labour were wisely guided, they would connect wages with profits and prices and have an elastic wage system which would rise and fall automatically without friction or strikes or lock-outs, so that a fall of wages would only take place when it was needful for
  1682
  the prosperity of the industry, and it would be balanced by a rise as the prosperity of the industry returned. That is the ideal.
  The ideal is to have an elastic moving standard, not the rigid standard which only ends in prodigious unemployment and in a hard long-drawn-out struggle to keep wages up against the incubus of a great body of unemployment. If you had an elastic system there would be a rapid fall of wages but there would be a rapid rise as soon as the short depression had passed away. Of this I am sure, that you cannot save the export trade of the country and maintain Great Britain with an essentially higher price for labour than is the price for the world. Labour, like everything else, must conform to the world prices. It may have the highest price obtainable in the market by bargaining, or it may economise by the best use of machinery, but in the end you must conform to the world market for labour, or you must give up the hope of restoring your export trade.
  I see, therefore, only one way before this House or before any citizens who are interested in our present economic position. It is the way of economy, of diminishing expenditure, and of meeting that diminished expenditure fairly and safely, as we propose to do, out of taxation, and making that taxation such as is acceptable and gives confidence to the great class of investors at home and abroad whose good opinion is quite essential. That is the way to prosperity, and if it can be supplemented by inducing the working-classes of this country to accept an elastic system of wages which will rise and fall as the condition of the world requires, I am sure that prosperity will come back to us all and not least to the working-classes of this country. They make a profound mistake to believe that you can separate in a great community the economic interests of one class from another. It is not true. It is when one part of the community gets rich that the other part must soon enjoy the gain that has been made. You cannot have riches without speculating or saving, and how can you help benefiting the working-classes either when you spend or save.
  You cannot stand alone. The conception of a plutocrat on the top of a

  1683
  mountain of gold would only mean that he would starve to death. All economic relations are essentially interlocked, and the prosperity of each is necessarily the prosperity of all; it is so not in virtue of the individual, but necessarily, and by reason of quite unalterable economic laws. This then is the way to prosperity—a balanced Budget, and, if it may be, elastic wages. You cannot have any other way. I have pointed out that you cannot in a day or suddenly pass from capitalism to Socialism, even if we knew exactly what Socialism would mean. You can therefore only destroy the whole credit system of the country and cast us down into measureless distress for all parties and for all classes in the community. There is no choice. There is but one way to prosperity. The only other path leads to the abyss.
  Mr. MONTAGUE: I am sure that the House is always gratified to be brought into touch with such a profound mind as that of the Noble Lord who has just spoken, and I may be regarded as somewhat presumptuous in following him in order to answer, or attempt to answer, one or two of the points that he has brought forward. In the first part of his speech he touched upon some very fundamental issues, which I regard as issues which should be debated because they come very closely to a subject to which the House has to bend its mind today. The Noble Lord dealt with the principles of taxation, and said that one has to consider that property is in itself either moral or immoral, and that if we regard property as moral, then the taxation of a millionaire must be regarded from the standpoint of that morality, and the disappointment of the millionaire, as compared with the disappointment of the poor man who is taxed, must be regarded as comparative and relative. Now that does really come down to the issue that divides parties in this House—not always quite as consciously and as definitely as I want to put it, but it is really the philosophic difference between us—the question of property and the rights of property, and how far the nation should consider the morality and righteousness of property when it is considering the subject of the rights of the State and of the taxation of individuals.
  1684
  Our point of view is not that people who possess property live on that property or enjoy income from that property, but that the income that they enjoy comes out of the current services of people who render useful services in society. That is the fundamental principle upon which we stand, it is the basis of our Socialistic ideas and our Socialistic philosophy. Property is the result of past use of labour, of past purchase of labour and past exploitation of labour. Property is not the result of service. [HON. MEMBERS: "What about doctors?"] The people in the State who render services render services from day to day, and everyone else who lives in the State without rendering service lives not upon property but upon the produce of that service, upon what is performed in the way of serviceable labour. I am using the term "labour" in its widest sense, meaning service of all kinds. In determining the principles of taxation the State has, surely, the right to recognise the fact that whatever values there are in the State in the form of property of individuals is the current product of those who render service. At present there are 96,000 super-tax payers in this country—I am referring to the conditions which existed before we pass this Bill—and they are paying £170,000,000 in taxation out of an income of more than £500,000,000; which means that after they have paid their tax and super-tax the average income of each of them is £72 a week. The Noble Lord said that it is moral that they should draw an income of that character, and that they ought not upon moral grounds—I am not talking of economic grounds for the moment—to be called upon to render any further return to the State, even though the State is in an emergency.
  Lord H. CECIL: I did not say that.
  Mr. MONTAGUE: I think that was the implication of the argument of the Noble Lord, and if it was not the exact implication I think it is approximately correct.
  Lord H. CECIL: The point is this. I do not seek to judge on any particular case which, we should agree, depends oil the circumstances of the case, whether a tax on rich people is wise or just or not; but what I do say is, if you take money away from people then, if property

  1685
  be a true moral right, you inflict a real injury upon them, and that injury has to be balanced against the injuries that are inflicted on other people; and you cannot compare, because they are incommensurable, being of a different kind, the injury inflicted by taking away the property of a person which belongs to him and the injury you inflict on a person by not giving him a gift which he had reason to anticipate.
  Mr. M0NTAGUE: I am quite prepared to agree that you cannot compare the sacrifices of the two, that you cannot compare the sacrifice of a millionaire when he is asked to surrender—supposing he were asked£even 20 per cent. more, and the sacrifice of the unemployed man, or the working man, or the lower middle class man, who is asked to surrender the same proportion out of his income. The working man is one of those persons who performs service, and, never, as a result of that service, possesses property—never possesses property. Those who serve do not possess property—at least nothing to speak of. For all practical purposes the working class is a, propertyless class. When you tax a man with an exceedingly small income you are encroaching upon that part of his expenditure which is necessary to the real, full life, he ought to live. When you come to the upper ranges of income you are not encroaching upon what is necessary for a full, round life. For that reason I suggest that the question of morality is upon the side of those who say that taxation should be levied upon those who can pay best, and who are least injured as regards the amount they have left when the taxation has been imposed, rather than upon those whose lives are a constant struggle not merely to make ends meet out really to be able to render in physical health, in capacity, in the exercise of their mental powers, the fullest possible service they desire to render, and ought to be able to render, to the State. The view that the Noble Lord has upon that subject is as poles asunder from the view we have. It is a question of fundamental principle.
  If it is going to be considered from the standpoint of taxation, we claim to be justified in urging that higher taxation, even in normal times, let alone in times of emergency, ought to be levied upon
  1686
  those who possess vast resources rather than upon the poorer sections of the community. I do not believe it is practical politics to agree with Mr. George Bernard Shaw on economics. Mr. George Bernard Shaw, in a book called "The Intelligent Woman's Guide to Socialism," advocates equality of income. I do not think that equality of income is practical politics, but I do urge upon the Noble Lord and other Members of the House that equality of income, if it is a question of the interests of the State and the issues of morality, is a much sounder principle than the inequality which the Noble Lord advocates. I challenge the Noble Lord to defend the system under which 2 per cent. of the population are enabled to obtain, not by working but by investing—investing the products of other people's labour—an income more than half the total of the national income. I challenge it on Christian grounds and on moral grounds. It cannot be defended, and so far as economics are concerned it is just that inequality, just that mad system of society which produces such inequalities, which has led us into the economic quagmire in which we find ourselves.
  The Noble Lord's remedy is to reduce wages. If you are going to argue upon the assumption that there need not he, and it is possible to avoid there being, a break in our economic system—a change from capitalism as we have understood it—and that we can go on imagining that we can get back our foreign trade, it may be there is no way out save that of reducing the standard of life of the people. That is what is behind all the present political position. That is what is being imposed upon this House and this nation by those who have been determined for years that there shall be a reduction of wages, and a reduction of the standard of life of the people. But I do want the Noble Lord to realise this: whatever the immediate urgency, whatever the logic of the position from his point of view, our economic troubles are due to the fact that we can produce more and more per head of the population with every year that passes; and I want to know from those who, in philosophic terms, defend the capitalist system, how we are going to solve that problem of rapid increase of production upon the basis of a lower purchasing value. Let us not imagine that

  1687
  we can maintain our system of foreign trade and regain lost markets, under modern conditions, when every country in the civilised world is in precisely the same position as ourselves, when every country has its own problems of markets to consider. We cannot do that upon the basis of reducing the wages of the workers of this country.
  As a final word, I would point out to the Noble Lord that when he was echoing Dr. Sprague's remarks, when he says that we can only achieve economic salvation by reducing wages to the world level, that the world level does not mean America and Europe alone but it means the East, the rapidly industrialising East. So that all the Noble Lord has to offer, and all the Tory and Liberal party have to offer, is a reduction of the wages of British workmen to the coolie level of wages. If ever there was a justification for the Labour party sitting in the position we now occupy it is the revelation of the profundities of the situation which the Noble Lord has discovered to the House this afternoon.
  Mr. WARDLAW-MILNE: It would be extremely interesting to follow the hon. Member for West Islington (Mr. Montague) into the point he has raised regarding the possibility of what he has described as the psychological and physiological results of the system to which the Noble Lord referred, but he will forgive me if, as a practical person, I leave that realm for more practical ones such as are before us every day. I will deal with only one of his closing remarks. He asked—and it was a very pertinent question—how it was possible to find markets for the increasing production of the world when, in fact, every country is suffering from under-consumption? I think that is a fair statement of the proposition which he put to the House. If that were the question which had to be put to the world it would be entirely unanswerable, but, fortunately, that is not the question. I entirely deny the premises upon which the hon. Gentleman based that observation. In my view, there is no such thing as over-production. How can there be over-production in a world in which there are millions under-fed and under-clothed? [HON. MEMBERS: "Hear, hear!"] I am going to give hon. Mem
  1688
  bers opposite more to cheer at before I have finished, and something, also, which I hope will make them think. I say there is no such thing as over-production in these circumstances. What is wrong is that there has been a failure in the methods of the exchange of commodities. It is not a want of consuming power, but a, defect in the monetary system and the exchange system which prevents commodities being transferred from those who produce them to those who consume them.
  Hon. Members opposite may say that all this shows the failure of the capitalist system, but, unfortunately, for them it is not so. Even if it were, it would be no argument that Socialism would have been a success. The Socialist system, like the capitalist system, has been very often tried, and, unlike the capitalist system, the Socialist system has always been found to be a failure. [HON. MEMBERS: "No!" and "Where?"] I admit that the present position shows a serious defect in the capitalist system, and I am prepared to admit that the position into which the countries of the world have fallen shows that there is a defect which must be remedied. This is a subject in which I am particularly interested, and I wish to point out that in Great Britain we have been suffering from an aggravated form of an evil which has attacked the whole world. The return of this country to the so-called Gold Standard was desirable in itself, but the result of neglecting entirely the manufacturing industries for the benefit of the importer and the middleman has placed on our commercial system and upon the international payments between ourselves and other countries a strain which no Gold Standard could bear.
  A strain was placed upon our Gold Standard by the payment of large sums for Reparations, and it is clear that no system like that could stand such a burden. That brings me to the question which was put to the Chancellor of the Exchequer earlier in the evening by the hon. Member for West Leicester (Mr. Pethick-Lawrence), who asked that the Chancellor of the Exchequer should state definitely what was the intention of the Government regarding a standard which was to take the place of the so-called Gold Standard which we have lost, and in regard to which he said that the

  1689
  public were entitled to know the intentions of the Government. I trust that the Chancellor of the Exchequer will not attempt to answer such a question, for the best of reasons, that neither the Chancellor of the Exchequer nor anybody else can say what we shall find it will be necessary to do in the future to provide a solution of our monetary difficulties, and what will be the best standard to adopt.
  I suggest to the House that not only have we been suffering from a standard upon which we have put an unusual and impossible burden, but we have neglected to realise the conditions of many other countries which are our best buyers. The situation in the Far East is one in which much use is made of silver, and in this connection the possibility of our trade with the East, and more especially Lancashire trade, is extremely important. Those who have had any experience of Eastern trade know the immense part that silver plays in the trade of India and China, and, without the slightest attempt to minimise the splendid work which can be done at the Round Table Conference, and without in any way belittling those who sit round that Table trying to settle very difficult questions, I do not hesitate to say to this House that if a standard in connection with currency could be evolved for the Empire and for the world upon some satisfactory basis, including silver, we should be doing more for India than the Round Table Conference can possibly do, and it would do snore to save China from the disastrous consequences of the wars and troubles of the last 10 years than any other step that could be taken. What I suggest is not so difficult as some orthodox economists would have us believe. We have relieved ourselves of a bad standard, and we should not now make a false move. Therefore, I sincerely trust that the Chancellor of the Exchequer will not give any reply satisfactory to the hon. Gentleman who asked that we should have an immediate statement as to what should be done in regard to another standard.
  During the last fortnight I have sat in this House day after day listening to wrangles across the Floor of the House as to what was agreed to and what was not agreed to in the last Cabinet and the last Cabinet Committee in regard to a reduction of taxation. I
  1690
  am sure no one in this House will resent my saying that most of us on both sides of the House and most of the people in the country are tired of all this wrangling. It does not matter whether some of these proposals were provisionally agreed to or entirely agreed to by the late Cabinet. At any rate, it is clear that the late Cabinet were in favour of most, if not all, of the cuts which have now been proposed, with the exception of the cut dealing with the unemployed.
  I would like to ask hon. Members opposite, would any of the Members of the late Government have resigned if the Unemployment Insurance cut had been eliminated from those proposals? They would not. The question which interests the people most is, how are you going to redress the balance of trade and bring back prosperity to this country? I agree that the Measure we are discussing is essential. We are not voting for increased taxation which is proposed in the Finance Bill or the cuts provided for in the Economy Bill because we like them, but we are voting for them because they are necessary; but we detest them all the time.
  When hon. Gentlemen opposite say that the rich taxpayer is not paying his share of direct taxation, I ask them to look at the proportion of taxation which is paid by direct taxpayers at the present time as compared with what they paid previous to the War. The hon. Member for West Islington said that the money required should be obtained from those who have it. I would remind the hon. Member that money is not kept in an old stocking. It may be that at some future time there will be a Government in office which will bring forward a Socialist system in which everything will be perfect, but, as far as we can see, it is imperative that you should not destroy the source from which revenue is to come. What is wrong is that our trade has fallen steadily and our expenditure has gone up. The figures of expenditure of Governments in the last few years are very startling. In 1924 the Socialist Budget amounted to £706,000,000; in 1929, the Conservative Budget was £891,000,000; and in 1931 the Socialist Budget Estimates amounted to £751,000,000. Sinking funds and self-balancing items are excluded in each case.
  Mr. W. THORNE: Why not quote the Budgets for other years?
  Mr. WARDLAW-MILNE: Another item I wish to quote shows the tremendous falling off in trade. In 1930 British Overseas Trade, that is to say, imports, exports and re-exports, declined by £357,000,000. At the present time it is utterly impossible to say what system of currency is going to work best throughout the world, and I think it is more than likely that the other countries of the world will have to follow the example of Great Britain. If the last Socialist Government had taken warning, and if the Chancellor of the Exchequer had listened to his own voice, it would not have been necessary to have been forced off the Gold Standard, and we should have got off that standard six months ago with our colours flying. Other countries may have to follow our example, and it may be that America and France will be left sitting on their own gold. That is the answer which, I hope, will be given to the question which has been put to the Chancellor of the Exchequer, if any answer is given at all.
  Let us appreciate clearly that under the Finance Bill and the Economy Bill we are not helping the country back to prosperity, and they contain merely forced measures which all of us, if we are patriotic, must support. What the country has got to get back is our balance of trade, and the problem we have to consider is how to get our people back to work. Hon. Members opposite have spoken over and over again about the miseries that will be caused to the unemployed under the cuts which are now proposed, and I entirely agree with them. There is not an hon. Member of this side of the House who suggests that an unemployed man can live decently or respectably with or without these cuts on the amounts received. The real feeling about the insurance benefit and the dole is not that the men are getting too much, or that they should not get it; it is the abuses of the system that have put up the backs of the people. The last Government deliberately encouraged those abuses. I remember the ex-Attorney-General asking hon. Members, "Do you expect to pass a Bill which will allow a man simply to stay at home, smoke his pipe, and not look for work?"
  1692
  Hon. Members know as well as I do that such abuses are going on, and we should all like to see them removed. A large number of women have been encouraged to take work for a week with no intention of continuing work, and this has been done in order to get benefit. Then there are boys and young men who will not take on an extra day's work because it would deprive them of the dole for half the week. It is also aimed against a number of men who really do not try to get work—
  Miss LEE: Does the hon. Member contend that what these people do is any worse than those who indulge in buying dollars and other transactions of that kind?
  6.0 p.m.
  Mr. WARDLAW-MILNE: I am afraid that I cannot see any analogy between those two cases. Unfortunately, I know nothing about those who are making profits by buying dollars. What I was trying to make clear was that I do not believe there is any person in this country who is more anxious than I am that the unemployed man should get the best it is possible to give him, but those who benefit should be genuinely unemployed men. I have no hesitation in saying that the way to deal with that problem is to do everything we can to get the people back to work. Changes which have been proposed over and over again from these benches will, we believe, achieve that object. If people will face the situation with courage, and show the world that we are prepared to put our house in order here at home, and are also prepared to trade fairly with the world—not under unfair conditions, as has been the case in the past—we need not fear for the future. Many hon. Gentlemen on the opposite side of the House pay lip service to Free Trade. There is no surer way of getting Free Trade in the world than by Great Britain taking to tariffs. There is no body of men who are more responsible for the existence of tariffs throughout the rest of the world than the trade unions of this country, by their adherence to Free Trade. I think it will be found that there are a good many people in the Socialist party who hold these views to-day. I myself have no fear for the future, but I hope we shall realise that our currency system has

  1693
  been at fault and must be put right, and that it can only be put right by a system which works first and foremost for the benefit of the Empire, and which, I believe, will bring about a great system of Empire currency—perhaps a great Empire Bank—and will give us back the purchasing power of our best customers, namely, our customers in the East.
  Mr. PRICE: I do not intend to follow the hon. Member for Kidderminster (Mr. Wardlaw-Milne) in the latter part of his remarks, because I do not think that his references to what he called the abuses of unemployment insurance are germane to the main discussion; but I think that the first part of what he said would find a certain echo on these benches. The manner in which he dealt with one aspect of the capitalist system clearly shows that that system has broken down. I refer to what he said with regard to the failure of capitalism to keep up the consumption of the masses of the people throughout the world. But I would connect with that the obvious fact that the breakdown of the Gold Standard throughout the world which is threatened and which has come nearer to being a fact now that this country has gone off the Gold Standard is also an indication of the breakdown of the capitalist system itself. As has been shown by economists going back as far as the middle of the last century, beginning with Karl Marx, the capitalist system has developed from one stage to another until it has reached the position that there are such immense accumulations of finance capital in certain great centres of the world that it is no longer possible in an orderly manner to export that capital to the undeveloped portions of the world in order to keep the machinery of exchange working.
  It is not merely we on these benches and those in the Socialist movement who for a long time have doubted the wisdom of the Gold Standard as it has been run in recent years. Various economists of Liberal and Radical tendencies, and even quite independent scientific economists like Professor Cassel in Sweden, Mr. J. M. Keynes here, and others, have for a long time been saying that this system of tying the currencies of the world to a metal the vale of which itself is fluctuating, owing to War debts and high tariffs, is bound sooner or later to lead
  1694
  the economic system of the world to irreparable catastrophe. The hon. Member for Kidderminster referred also to the problem of China and the Far East, and spoke of the possibility of dealing with the problem of silver there. I would suggest, however, that the problem in China and the Far East is not so much the problem of the fall in the price in silver as the fact that the Chinese foreign debt is bound to gold, and China has to pay her debts abroad in gold. The consequence is that, like all debtor countries, she is unable, owing to the catastrophic fall in wholesale prices, to liquidate those debts, or even to pay the interest on them. It is the appreciation of gold rather than the relatively small depreciation of silver that is responsible for the disastrous situation in China and the Far East; it is all part and parcel of the general world problem.
  The right hon. and learned Member for Spen Valley (Sir J. Simon), as I understood him, started by doubting whether we on this side of the House were really earnest in our desire to see the Budgets of this country balanced. It has been repeatedly stated on this side of the House that the question is not whether we desire this Budget to be balanced or not; the question is as to the method by which we desire to see the balancing take place. The right hon. and learned Gentleman referred, though I do not quite see what the connection was, to the dangers of unorganised inflation, and I think he went on to say that it is just as necessary even now, when we have gone off the Gold Standard, to balance our Budget, as it was before. No one will dispute that statement. It is, however, absolutely off the point to argue that there is the slightest danger of this country going the way of Germany. I think that I am probably the only Member of this House who resided for four years in Germany during that serious time of inflation, and I was able to experience exactly what went on there, and also to know some of the things that were going on behind the scenes.
  It was not merely the unbalanced German Budget that caused the inflation; it was not merely the fact that Germany had enormous foreign debts and very few assets—that she had no investments abroad, that she had enormous foreign debts on Reparation Account, and

  1695
  that a portion of her great coalfield was occupied by the French. There was also—and this is the important thing—a deliberate policy on the part of the chief German industrialists at that time, in collaboration with the President of the Reichsbank, to reconstruct German industry with borrowed capital paid off in six months' time in totally depreciated currency. That is an entirely different situation from that of any other country; it is a deliberate matter of policy; and it is foolish to suggest, as has been suggested ever since the crisis began, that this country is in the slightest danger of any development of that kind.
  It is far more reasonable to compare this country with what happened in France in 1925, when the franc fell, partly owing to unbalanced Budgets and partly owing to the trade balance being on the wrong side. But the fall of the franc was controlled, owing to the fact that the Bank of France was able to keep the situation in hand. They stabilised the franc, at a level, it is true, a long way below parity, but for years afterwards French costs of production were well below world prices, and the French trade balance began to come back, and remained so for years. The right hon. and learned Member for Spen Valley told us that there is no advantage in devaluation except when the currency is in process of falling, but I would point out that in France that process went on for at least four or five years, and even now French costs of production, owing to the stabilisation of the franc at a level below parity, are somewhat below the costs of the rest of the world. Therefore, I would say that considerable advantages to this country will arise from the fact that our costs of production will be below those of many of our competitors.
  At the same time, I agree with the right hon. and learned Member for Spen Valley that that cannot be a permanent situation; it must be a prelude to something else, and that something else is what was foreshadowed and asked for in a speech of the right hon. Gentleman the Member for Epping (Mr. Churchill) when he said that what we require is an international conference to deal with the whole gold question. This step which this country has taken can only be a prelude to something much bigger—an inter-
  1696
  national arrangement whereby we shall be able to make gold, not our master, but our servant. After the Chancellor of the Exchequer had made his Budget statement last April, I had the temerity, on the Second Reading of the Finance Bill, to say that, while I shared his optimism at that time, I felt that the success or otherwise which he would experience would depend less on himself than on those who controlled the monetary policy of this country. I venture to think that what I said then has been proved to be abundantly true. The policy of those who have controlled our monetary system and that of the world has rendered his Budget for this year valueless, and he has had to introduce another. The Budget has been ruined by the fact that wholesale prices throughout the world have gone on falling, and the deflationary tendencies of the last 10 years have intensified that fall rather than otherwise, so that all his plans for balancing his Budget last spring have been rendered nugatory.
  As a result of the situation that has been developing throughout this summer, there have been two schools of thought, the one represented in the report of the Macmillan Committee and the other represented in the report of the May Committee. The report of the Macmillan Committee, is, shall I say, the Bible of those unorthodox monetary rebels who say that gold and currency must be our servants, and not our masters. The May Committee, on the other hand, has been the Bible of those orthodox persons who believe that we can attain stability for our trade by reducing our costs of reduction or, putting it in a simpler way, by organised starvation. Unfortunately, it is the last point of view which is embodied in this Bill and which helped to produce the crisis of this summer.
  There are three methods by which the balancing of the Budget can be controlled. One is by cuts in the cost of production, as was foreshadowed by the May Committee. The second is by a direct method of controlling our imports either by taxation or by licence—Import Boards and so forth. The third is by devaluing the currency. The Government have chosen the first of those methods, forced economy in the Civil Service and the other services, which will be succeeded, obviously, by reductions of wages in industry and by increases in taxation. But, in spite of themselves, they have been compelled to

  1697
  adopt the third method, which has proved that we were right when we said from the beginning that the first method is, obviously, entirely unsatisfactory and cannot possibly bring the desired results. The devaluation of the pound now is bound to be reflected in the budgetary situation in the coming year. It will tend to stimulate our export trade. It will tend to prevent the profits of industry from falling as they have been falling for a long time past. It will tend to stabilise, and possibly, show a small increase in the yield of Income Tax and Surtax, even at the present rate. It is in many ways like a tariff but without the disadvantages of a tariff that it does not bring serious political repercussions in its train.
  The ultimate solution of this problem can only be by international agreement for the redistribution of the gold resources of the world and the unlocking of those great gold resources of America and France which are now lying idle. The raising of a tariff barrier in this country, which will probably be answered by further tariffs throughout the world, will accentuate the very trouble which has helped to cause the present wrong distribution of gold. The wrong distribution of gold has been partly, if not mainly, caused by the attempts of the debtor countries to pay their debts, first of all, in the only way in which debts can be paid if not in gold—by goods of various kinds. They have been driven to the export of gold by the tariffs which have been raised in the creditor countries. Therefore, the increase of tariff barriers throughout the world will do the very thing which will damage the atmosphere for the international agreement that we all ought to be aiming at. But that does not mean to say that the process of devaluation of the pound sterling is not a thing that is desirable. On the contrary, I regard it as the alternative to a tariff, because it can have the same effect upon the commerce of the country as a tariff without the serious repercussions which a tariff will, obviously, bring in its train. Tariffs are bound to interfere with the international arrangements to which I have referred.
  The serious thing about this Budget is this: It may tend to undo the good that will come from the currency finding its natural level in the world, because
  1698
  it will tend to decrease the purchasing power of the great masses of our people. The income of the well-to-do classes will be reduced by less than 5 per cent., while the teachers, the Civil Service, the Army and Navy and the unemployed will suffer a reduction of their incomes of 10 per cent., and probably more. Also let us consider this. Of the total deficit which this Budget and the Economy Bill is to fill, three-eighths is to be dealt with by economies which affect the wage-earners and the unemployed, either in increased contributions or in a reduction in unemployment benefit, while direct taxation accounts for a third of the deficit, and a large part of that third is going to be levied on the incomes of the small middle class and not upon the higher incomes. That is our main and specific grievance against this Budget. Why was it not possible, if there was this need, as we all admit, to raise money, to be a little unorthodox with the Sinking Fund? It is true that we have reduced it to £32,000,000, but could we not have saved the teachers a cut of £6,000,000, and unemployment benefit a reduction of £12,000,000, by reducing the Sinking Fund by that amount? There was no reason certainly then, in the period of deflation which was going on before we went off the Gold Standard, for having a Sinking Fund at all. We could perfectly well, before we went off the pound, not have had anything at all in the Sinking Fund for that year. The situation may be a little different now, but, even so, with the high Bank Rate of 6 per cent., I do not think gilt-edged security holders will suffer very much now that we have gone off the Gold Standard. It seems to me that the bondholders are still going to try to get the best of both worlds.
  In regard to the burden of the National Debt, on the 5th instant the "Manchester Guardian" said, in a leading article:
  "The argument that unemployment benefit has to come down because the cost of living has fallen in the last two years applies with much greater force to the holders of War Loan."
  And in another passage:
  "What is wanted is a scheme of conversion which will apply to all Government War Debt."

  1699
  It has been a matter of common knowledge that holders of gilt-edged securities have benefited enormously in the last 10 years. From 1920 to 1930 it is true that the interest on the National Debt has been reduced by £35,000,000, but, reckoned in terms of goods, the burden of the interest on the National Debt annually has been increased by £93,000,000 owing to the fall in wholesale prices. In 1913 it has been estimated that the burden that industry bore in debt repayment, industrial debentures, and other forms of first charges upon it, amounted to £16,000,000. In 1930 it had risen to the enormous figure of £277,000,000. The time had come when the Government might have asked the bondholders to make some special contribution. Income Tax and Super-tax are not the only instruments that can be used. They fall on industrial capital as well as on bondholders' capital and, if they are screwed up too high, that can only have the effect on industrial concerns of preventing reinvestment in industry. I recognise the limits, under the system of capitalism, of raising the Income Tax and Super-tax. My point is that it is time another instrument was applied. It is possible that a special tax could be imposed upon fixed interest-bearing securities. Moreover, I think the time is ripe when something more should be done to reduce the interest on the National Debt. We have seen in Australia examples of what the Government was able to do by a patriotic appeal to reduce the interest on the National Debt by 1 per cent. In the background there was also the threat of compulsion. Our complaint is that in this Budget contracts with the unemployed and the Civil Service have been interfered with, but no steps have been taken to ask the bondholders to pay their share also by assenting to a reduction of interest.
  There seem to me to be two dangers ahead for future Budgets. The Chancellor of the Exchequer has failed to balance this year's Budget and has now had to introduce an emergency Budget. He has failed because the bankers of the world have snatched the fruits away from him. I believe in Dante's "Inferno" there is a passage in which some doomed souls are condemned to a torture in which rare and refreshing fruits are
  1700
  put before them but are snatched away the moment they try to get at them. If a modern Dante came here he might depict the Chancellor of the Exchequer going through another kind of torment, the torment of having the rare and refreshing fruit of a balanced Budget before his eyes snatched away by the Governor of the Bank of England. I do not mean to say that the Governor of the Bank of England was solely responsible. On the contrary, he was only part of the general system. The whole system has been allowed to go on, and it is high time that the world, and we in this country particularly, paid attention to the method of putting it right.
  The dangers which, I think, are there for future Budgets are, first, the agitation for the imposition of tariffs in this country, which endanger the possibility of bringing about an international agreement, and the settlement of the gold problem, and, secondly, that the Government may, after all, try to peg down sterling at too high a figure. The fact that the Chancellor of the Exchequer has thought of only a temporary going off of the Gold Standard seems to lend colour to that idea. Personally, I should like to see the pound sterling reach whatever natural level is conditioned by the balance of trade. I do not believe that there will be a flight from the pound, because the trade balance of the country will naturally improve in the course of the next year or so. Moreover, I do not see any reason why we should not use the £130,000,000 of gold reserves in the Bank of England for the purpose of paying off some of those foreign debts which we have contracted in the last few weeks. What is the use of paying 6 per cent. upon £180,000,000 borrowed from abroad when £130,000,000 lies idle in the Bank of England earning no interest at all? There is a danger that if we try to peg the exchange too high we shall, all too speedily get back into the old deflation period.
  Therefore, the Government ought, before very long, to state their policy in this matter. Do they intend to allow the national currency to find its natural level, or do they intend to continue the policy of unnaturally bolstering up the exchange, which will lead us once more into the disasters from which

  1701
  this country, and, indeed, all the world have been suffering? Finally, unless this question is solved, there are bound to be defaults and bankruptcies in most of the debtor countries of the world which will have disastrous effects upon the Budget of this country. It will mean that the large incomes we are still getting from overseas investments will be reduced to an almost negligible level, and the result will be still further to endanger the balancing of Budgets in future years. Therefore, I hope that the Government will look into this question most carefully and see to it that we do not go back to the disastrous conditions from which this country has been suffering so long.
  Mr. ARTHUR MICHAEL SAMUEL: I should like to challenge the statement which fell from the lips of the hon. Gentleman the Member for Whitehaven (Mr. Price). I understand that he desires that some further imposts should be put upon the bondholders—those persons who have lent money to the State—because, among other reasons, there has been, he implies, a great increase in the purchasing power of the pound. Before I pass to the exact point which I want to make, I would remind him that the holder of State loans has paid his fair share in Income Tax and Super-tax on every occasion, and he has almost been bled white. If the hon. Gentleman says that that is not so, and if he will look at the yields of the taxes which are published every week in the "Times," lie will see, to use an old Latin tag, "cantabit vacuus coram latrone viator," which means that in front of the tax gatherer the taxpayer with an empty pocket can laugh as his pocket has been cleared out. I hope that the hon. Gentleman will have the generosity to realise that those men who have money from interest after earning it and saving it and living on the interest of their savings, have paid their full, indeed, full measure and running over, in Income Tax and Super-tax, and now that Income Tax is being put up from 4s. 6d. to 5s. they do not grumble. We will bear our burdens. We must get the country put right. An increase from 4s. 6d. to 5s. is 11 per cent. increase. On top of that there is also a capital levy of 20 per cent. There is the extra Surtax of 10 per cent. on what we pay already for Surtax.
  1702
  There is very little left for us with which to pay now from income.
  But that is not the point I wish to make. I have heard it said in this House and outside, and by the right hon. Gentleman the Prime Minister, that the bondholder receives better pounds than the pounds he lent. When people sneer at bondholders, they forget that there are 15,000,000 of them and that most of them are small men. If they do not own investments themselves, money is invested in Government bonds on their behalf by insurance companies, other thrift institutions, and trades unions in which they are interested. Hon. Gentlemen forget that most of the National Debt, which is now £7,500,000,000, was borrowed prior to 1918. There are only two loans, raised with new money, the Funding loan and Victory bonds, since 1918; and some of the money was earlier money converted into those loans.
  As this is a Debate upon economics, perhaps the House will forgive me if I go into detail with a few figures. They are rather technical, but the House will please bear with me. Out of the £7,500,000,000 of debt which exists, £680,000,000 was pre-War Consols of which the pound in 1913 was equal in value to 1913=100. The cost of living went up during the War and since, and although the Consol holder lent £100 he is now paying £145 for food and necessaries of life as against £100 which was the 1913 purchasing value of the pounds when he lent that £680,000,000. In other words, the pounds which we lent to the Government for the Consol bonds were better pounds than those he now gets back in interest. Money was lent in 1914 and 1915 when there was a plus of 25 or 26 on cost of living, and therefore men lent money at a time when the purchasing power was roughly lessened by 26 points as compared with 1913. In 1915 and 1916 the cost of living went to 46 plus, and in 1917 it went up to plus 76 on 1913=100. Taking an average of all the money lent by the public to the State between 1913 and 1917 I should think that the greater part of the money was lent when the purchasing power was subject to an average of about plus 50 points in the cost of living, which is nearly about the figure now. The consequence is that people are not on average receiving money from the State

  1703
  in the form of interest which has a greater purchasing power than the average money which they lent. It is a fallacy to say that they are getting money of greater value than that which they lent. The plus 172 came on to the cost of living in 1920 and in those days no new money was lent by the bond-holders to the State, nor much after 1918.
  It is wrong for the present Prime Minister—he has said this in the City— and hon. Gentlemen opposite, to state that the average National Debt bond-holder is getting back on an average a better pound than that which he lent. He is getting back about the value that he lent, while for some years he was heavily penalised—from 1919 to 1922. [An HON. MEMBER: "How many times does he get it back?"] An hon. Gentleman asks me, "How many times does he get it back?" I believe that he is connected with an insurance company, and I hope that he does not sneer at interest. If he does, he has forgotten the first principles of reward of that which might be called the ordinary handling of stored labour, for that is all that interest on capital means—the reward of reserved labour. The hon. Gentleman the Member for Whitehaven and the hon. Gentleman the Member for West. Islington (Mr. Montague) said that Capitalism has failed. Capitalism has not failed. Capitalism has been a great success. What has failed is the Socialism which has tried to wreck Capitalism. Hon. Gentlemen must. remember that the original state of mankind was poverty. [Interruption.] The laws of private ownership did not create poverty. The laws of man and the wealth which they created, as property, gave man the capital which relieved want and poverty. If hon. Members think that capital has done harm or brought poverty to the people, they are not. realising that the rise in the condition of mankind is due entirely to the creation of wealth and the use of capital by the laws of property. The hon. Gentleman the Member for West Islington, who was carried away for the moment, told us that the bulk of the people had no property. We know that £2,500,000,000 is owned by our people with incomes probably under £10 a week.
  Mr. MONTAGUE: I gave my reasons for making that statement, which was to
  1704
  the effect that 2 per cent. of the population took more than 50 per cent. of the wealth.
  Mr. SAMUEL: I am not prepared to accept that. I will not now stop to quarrel with it, but that matter requires a great deal of looking into. When the hon. Gentleman says that working people, or people of less well-to-do means have no property it is not correct. The savings of the less well-to-do in every form of investment are stupendous. I can very easily produce to him figures quoted the other day by the right hon. Gentleman the Member for St. Ives (Mr. Runciman) to the effect that there are 15,000,000 small people who own no less than £2,500,000,000. The hon. Member for West Islington went on to say that everything depended upon Labour; on the labour of others depended the great salaries and incomes which certain people have and are enjoying. Take the case of the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) who has just spoken. What he has earned and what he lives upon is entirely due to the work of his own brain. What does he owe to the labour of others or to the State? And so it may be with regard to many doctors and many scientific men. Assertions shouted vigorously at the Treasury Box deceive nobody—they are quite easily disproved.
  There is a point on which the right hon. and learned Gentleman the Member for Spen Valley spoke at some length. I, too, was in Germany and saw something of the inflation. Do hon. Gentlemen opposite wish to see the inflation of the currency and the reduction of the wealth of the people? I ask that question because only two days ago the hon. Gentleman the Member for Central Sheffield (Mr. Hoffman) asked questions in this House as to whether there should not be an increase in the fiduciary issue. If there is one thing that we do not want it is an increase of any kind in the currency which might mean inflation, with the result that we should see the wealth of everyone slip away beyond the exchange point at which it is now. Let us know what is the policy or intention of the Opposition about inflation. Let there be no misunderstanding about this point. Anything that reduces the value of the

  1705
  nation's currency must be bad. If the currency slips away it must be disastrous. Have not hon. Members opposite seen what happened in Germany? Have not they seen during the late disaster in Austria and Germany that if there is one thing a German hates it is any recurrence of inflation of currency with results that came to Germany a few years ago? I should like to have a definite answer as to whether there is any section of hon. Members opposite which has the slightest desire to see an inflation of currency. If so, we will deal with it right away.
  It must be a bitter pill to hon. Members opposite to swallow in what has happened as the result of 2½ years of Socialist policy. It must be a bitter pill for them to swallow in what has happened after a number of years of Labour Socialist policy in one of our great Dominions, Australia. About nine months ago pointed out in this Chamber that the same thing was developing here. What is the reason for this Bill? The party opposite, when they were in office, went on determined to spend beyond the economic strength of the nation. They raised taxation to such a pitch that the present Chancellor of the Exchequer, when he was in office in the late Government, stated that any further taxation would be the last straw for industry. Having failed to raise further and even excessive taxation, because the pump was ceasing to draw, they went on for some months borrowing; at the rate of £1,000,000 a week. Their whole policy has come down in a crash.
  It is not capitalism that is a failure but the principles of Socialism in attacking Capitalism, which actuated the policy of the late Government for the last 2½ years which have very nearly brought the whole economic structure of the country down. Look at the result. Does any hon. Member opposite deny the statement made by that distinguished civil servant, Sir Richard Hopkins, whom I for one should like to thank for the great service he did the country by his warning memorandum. He was the first to arouse us to our danger. He produced that document with the acquiescence and probably at the desire of the Chancellor of the Exchequer. I remember the Chancellor of the Exchequer being asked about it
  1706
  and although he did not say that he approved of it, he certainly knew that it was coming forward. That document has helped to put us on guard. [An HON. MEMBER "What did he say?"] I think the Chancellor said that it was brought forward either with his approval or approbation. I am not sure of the words. It was a complete condemnation of the late Government's policy. And it unfortunately was true, as events show.
  The Amendment which has been moved by the party opposite says that this Bill
  "treats with comparative leniency the resources of the rich and those who live upon unearned incomes."
  Do they really think that that statement is in accord with the position as it stands I Here is the financial statement No. 90 for 1931–32 issued from Treasury Chambers, and signed by F. W. Pethick-Lawrence. It states that the total amount of tax revenue is £697,000,000 and of that revenue £447,000,000 comes solely from people who pay direct taxation. On the top of that £447,000,000 it is now proposed to add another £51,000,000 of annual direct taxation. That increase comes largely out of the capital of the people who pay it. There was a very pregnant statement made in this House by the Chancellor of the Exchequer within the last few days. I was astonished to hear it. It was a statement of the highest importance. He said that wages were being paid out of capital. No country can go on paying out of capital either wages or taxes. I may have to pay my taxes out of capital. We shall bear our share of taxation and we shall not squeal about it. But we object that hon. Members opposite should say in this Amendment that those who pay direct taxation or the so-called rich are being treated leniently. It is not true.
  The hon. Member opposite, and I think the late Financial Secretary to the Treasury desired that there should be some deflation of the value of the pound. I would remind hon. Members of what that means. Out of our savings in past years we have amassed holdings abroad, mostly in sterling, amounting to £4,000,000,000. Those are Sir Robert Kindersley's figures. We do not hold as many dollar and other non-sterling securities as we did before the War. Many of them we sold. Owing to the shock to public confidence during and after the

  1707
  War about the currency confusion, most of the fresh overseas loans issued here in late years have been issued in terms of sterling. Therefore, a very large portion of the £4,000,000,000 of overseas and foreign loans which are owned by us are expressed in terms of sterling. If the world reduces sterling, as I am sorry to say may be possible, to 15s., it means that we give one-fourth of that £4,000,000,000 to those who owe that money to us.
  Mr. PRICE: Is not that better than bankruptcy?
  Mr. SAMUEL: Anything is better than bankruptcy. We will sacrifice everything rather than lose our honour. If we devalued the pound to 15s.—I am not arguing whether any one should do it or not —it means that at one stroke of the pen we have given £1,000,000,000 sterling as a gift for nothing to the people who owe us money at 113 grains of gold to the pound sterling. That £1,000,000,000 sterling would go a long way towards dealing with our unemployment problem. If you devalue sterling as suggested by the hon. Member for West Leicester (Mr. PethickLawrence) remember that you have in honour entered into an obligation to pay 5,000,000,000 dollars, it may be a little less, to the United States of America for the War debt. That has to be paid in gold; it is not expressed in terms of sterling, and if you have to pay in dollars and you get only 4.20 or four dollars to the pound instead of 4 dollars 86 cents to the pound, it means that you have increased our debt by an amount of roughly one thousand million dollars. Therefore, when hon. Members talk about devaluation of the pound sterling they ought to pause and think what it really means, and then remember that a devaluation of the pound to, say, 15s. means a gift to others of at least £1,200 millions sterling for two items alone.
  I want to ventilate a matter which I have had in my mind for some time. The right hon. Member for Spen Valley (Sir J. Simon) said, quite rightly, that it was necessary to decrease the gap between imports and exports, and that it was that gap that was causing the strain on sterling. On that point I should like to say something about the effect of the
  1708
  housing expenditure, and I preface my remarks by saying that I am not expressing any opinion one way or the other as to the propriety or impropriety of the housing policy that has been adopted. Hon. Members must realise that our housing policy has been responsible for a portion of that oversea trade gap. Housing is, of course, a necessity of life for our people, but the question is how are we to pay for it. On every house that is built money is spent upon labour and materials. We have in recent years spent something over £1,000,000,000 in building houses.
  Instead of the imports arising from the housing policy being put into the trade with which, for example, I am connected or into any trades with which hon. Members opposite are connected, so that some manufactured goods arising from the housing imports could go out and help to pay for the housing imports, not a, farthing's worth is exportable. Of that £1,000,000,000 that has been spent in building houses, whatever may have been spent in wages or in imports as clothes or food for the worker, indirectly or directly employed on the houses, or in payment for the materials put into the houses, the fact remains that not one single farthing of it has been able to be exported in the form of goods. It have been anchored down to the soil in the form of a house. To that extent you have put a drain upon sterling by increasing your imports without increasing your exports by one farthing. Therefore, the housing policy, for weal or woe—and I am not questioning the necessity of providing houses for the people—has meant that we have increased our imports by the amount that we have spent in imports on our housing, without being able to send a single farthing of exports back to pay for the imports due to that housing policy. That point, I think, has not been realised sufficiently, and it ought to be taken into consideration by the Treasury who are examining what we are to do about the oversea trade gap.
  I believe that we can reduce our imports—I do not at the moment say what the imports are—without losing a pennyworth of export trade.
  Mr. SANDHAM: What about £41,000,000 worth of pigs.
  7.0 p.m.
  Mr. SAMUEL: I should like to see all of them produced in our own country. Let me proceed. Last year we had £235,000,000 worth of dividend warrants due to us for interest upon investments made abroad years ago. When we came to finish up the year 1930, instead of having something like £200,000,000 or £235,000,000 due to us as a plus overseas balance, we had an overseas credit balance of only £39,000,000. It is difficult to put one import against an invisible export, or to allocate the imports and exports so as to match them, but the fact remains that, instead of bringing £235,000,000 worth of dividend warrants here and having them to our credit, on which we could say to the foreigner, "We owe £20,000,000 or £200,000,000 to you and you want it; you can take it out of the £235,000,000 of dividends that you owe to us," we had only £39,000,000. That would have prevented the export of gold. However, we had only £39,000,000 due to us, with the result that there has been a strain on the exchange, with the final result that we have had to bleed gold, with the consequences that we have seen. That means that as between the £235,000,000 of dividend warrants due to us and the £39,000,000 that we have got, we have surrendered £196,000,000 worth of dividend warrants to pay for imports. If we stop £196,000,000 worth of imports it would include pigs, such as have been mentioned by the hon. Member for Kirkdale (Mr. Sandham) or luxuries or what you will. If we did stop them coining in we should not have stopped a single export by so doing. That is my point. What we should have stopped would be the surrender by us of £196,000,000 worth of dividend warrants on oversea investments, and the only people who would have been affected would have been those clerks who posted the letters or entered up the books. When Free Traders tell us that every import calls for an export they are talking nonsense unless they define what sort of export. We are paying for £196,000,000 worth of imports, some of which we can produce here, and merely exporting dividend warrants. When, as in this current year, we import more than the dividend warrants can pay for, then we get the gap in oversea trade which is now the cause of all our troubles. We see that while this £196,000,000 of
  1710
  imports come into this country the only exports they draw are £196,000,000 in dividend warrants. If we had stopped these imported goods coming in we would not have thrown men out of work; but our clerks might have been saved the labour of sending back dividend warrants for £196,000,000. We would have held these warrants here to our credit, and when the French and American depositors, having got frightened at the result of the bank smash in Austria, came to us and said "We want our money," as they did, we should not have been in the trouble about exchange and gold that we have been, but we could and would have said "Take it out of the £196,000,000 the world owes us." That is where and how the gap can be stopped and our position remedied.
  Mr. W. SANDERS: I do not propose to answer all the very interesting points raised by the last speaker who has a reputation in this House of being one who possesses a very full and technical knowledge of finance. I only desire with the permission of the House to deal with one or two matters which he raised in the course of his long and very detailed speech. First of all, with regard to the attitude of my hon. Friend behind me on the question of inflation. We on this side of the House have never for a moment believed in a policy of unlimited inflation; but many of us do believe, as possibly hon. Members do on the other side and as certainly all Governments have done, in a managed currency. I noticed the other day that under the Act of Parliament which was passed to manage currency, the fiduciary issue was increased for a special purpose and that is nothing more or less than inflation within definite limits. As far as that is concerned, we do not oppose it any more than hon. Members on the other side. To suggest that there is a hard and fast line between inflation and no inflation is trying to state something which does not exist in the minds of any hon. Member opposite as far as I know and certainly not in the minds of my hon. Friend behind me. Not for a moment do we avoid facing the danger that would occur to this country of unlimited inflation, and we ought to do everything we can to prevent a mad policy such as we saw in Germany when they went through their terrific currency crisis.

  1711
  Then the hon. Gentleman dealt with the burden—for we hold it is a burden—on the country through the tribute which the bondholders wrest from the country every year and which is looked upon by the gentlemen on the other side as being absolutely sacred. We on this side do not believe that there is anything more sacred about a money contract pure and simple than a contract with regard to money which is mixed up with human welfare and human life. That is the point which I wish to put before the House. It has been one which has been in my mind ever since the War ended. It is a point which in my opinion has never been fairly and squarely faced by the people who have been responsible for the financial destiny of this country. I am not a skilled and technical financier. I am simply an ordinary student of political economy, and I do know a little about how to manage a small income, having never had a large one. I do know that if my income shrinks in money value and my debts remain the same in money value it becomes more and more difficult for me to meet my debts and to live comfortably.
  I want the House to realise what the figures of our income and our national Debt mean when they are put in the way I wish to put them. Before the War it is estimated that our national income was round about £2,000,000,000 per annum, and of that £2,000,000,000 we had a burden of national Debt of something like £800,000,000. At the present moment our Debt is from nine to 10 times that amount, but our national income has not more than doubled. I say, and no financier can reason me out of it, that it is impossible for the country to flourish when it has upon its hack a Debt of that magnitude, and when its income has only risen to the extent I have mentioned.
  Mr. A. M. SAMUEL: The hon. Member must not forget that we did not put that Debt on ourselves for pleasure. We were fighting for our life and our honour, and we had to do it.
  Mr. SANDERS: The hon. Gentleman who has just spoken has a clear and probably precise knowledge of finance, but I think lie should also recognise that when we are discussing finance we cannot enter into motives. I may have an income of
  1712
  £100, and I may borrow a £1,000 with the best intention in the world and for the best purposes, but, if I have to pay back that £1,000 out of my £100 income, the effect on me is just the same whether my motive is good or bad. I ask the hon. Member not to mix his categories, but to keep to finance and not to go into questions of motive and psychology. It is true that we may have borrowed for the best purpose in the world; I do not deny it, but the Debt remains, and what I want to point out is that while our income has only doubled we are burdened with a Debt 10 times what it was before the War. I contend that unless you do something swiftly to reduce that annual burden you are not going to find any permanent solution of the problem with which we are confronted.
  You must face fairly and squarely the question whether you will not have to do what Australia has done and appeal to the patriotic instincts of the investors in War Loans of various kinds and ask them to lighten the burden on this income by agreeing voluntary to accept a lower rate of interest in view of the state of the country's finances. I do not know what the response would be, but until that is done I can see no hope of permanently balancing our Budget by cutting down the wages and salary of people on whose consumption depends the trade and commerce of our country, both internal and external. There is no doubt that in a world where mass production has become the dominating force, you must have mass consumption.
  I read an article a few days ago written by a celebrated Free Trade Liberal economist—and we all know that economists disagree with one another—saying that what the world was suffering from was the absence of a sufficient number of rich people to buy the goods that are manufactured. Everybody who has studied the course of the world's commerce and industry knows that more and more we are producing even luxuries like motor cars with the idea that there is going to be mass consumption on the part of a very large number of people with moderate incomes, and not that the consumption of the world is to be carried on by a more or less numerous class of comparatively wealthy people. If that is so, it should be the object of this House to endeavour to increase, rather than depress, the consumptive power of the

  1713
  great mass of the people. That, at bottom, is the economic, apart from the class, reason why we are fighting against what is implied in this Budget, which is that the taxation burdens of the poorer sections of the community should be increased and in addition to that large cuts should be made in their income at a moment when we all know that by the step that the Government have been compelled to adopt in taking England off the Gold Standard, the cost of living is bound, in a short time, to rise.
  The third point I want to deal with is the charge that all this trouble, financial and otherwise, that has arisen—I presume not only in this country but all over the world—is due to the existence of a Labour Government in office but not in power in this country. That is paying a tremendous compliment to this Labour party. It is not for me to refuse the compliment. I do believe that subconsciously the great financial interests of the world have disliked and feared this Labour party and the Labour Government. Without saying that there has been a conscious and deliberate conspiracy to do everything that was possible to make our task difficult yet I am certain there has been no friendly feeling in the world—among Governments and other people who do not believe in the principles that my associates believe in—towards the Labour Government. Nothing helpful was done by those people to assist us in the great task that was placed upon us.
  Let me turn for a, moment to another country, the United States, with which we can make a comparison. If the Labour Government is responsible for this worldwide economic blizzard—as it was first christened by the right hon. Gentleman the Member for Epping (Mr. Churchill), though I do not believe he had the unfairness to ascribe it to the Labour party—why is it that the greatest capitalist country in the world, which has in it none of this so-called poison of Socialism and which does not for a moment agree with any of the tenets that are accepted by my colleagues, has not been able to avoid the disasters which are said to have overtaken us?
  The United States have all the advantages which come, according to hon. Members opposite, from having a Government Which consistently and logically believes in the capitalist system and
  1714
  which tries to work it on purely capitalist lines. It does not believe in attempts to soften the working of the capitalist system, which even some hon. Members opposite are willing and sometimes anxious to adopt. They believe in the old hard individualistic rule, that what are called economic laws, which are after all man made laws, should work themselves out and let the weakest go to the wall. They have protected themselves with the highest tariff in the world. They have a country which is, or could be, almost completely self-supporting. They have a population of 45 to the square mile while England has a population of 700 to the square mile. They could feed themselves quite easily; we cannot. They have almost unlimited raw materials, and an enormous production in petrol, which has displaced coal from leadership in the fuel world. Yet at the present moment that great capitalist country, so we are told by the Press associated with the party opposite, the capitalist Press, is faced with a deficit of £200,000,000, not dollars, and next year, unless something is done, there will be a Budget deficit of £300,000,000, and this at a time when they have £1,000,000,000 of gold buried in their bank cellars.
  At the moment, as far as can be ascertained, there is in the United States an unemployed army of anything up to 10,000,000. The right hon. Gentleman the Member for Epping, with that cool judgment for which we all admire him and with his well-known knowledge of America, says that in a, few months time unemployment in America will probably rise to 14,000,000. That is under a pure and unadulterated capitalist Government. If that is the result of adopting the ideas of hon. Members opposite then I say with the full assent of my colleagues on these benches, that bad as is the situation in this country, we have softened the evils of the capitalist system by the measures we have been able to adopt until hon. Members opposite put a stop to our efforts. We as a Labour party have been able to help the people who have been suffering under this great economic blizzard, whereas in the great capitalist country of the United States the condition of the masses of the people is becoming rapidly worse. That is my answer to the last point. I

  1715
  want to assure hon. Members opposite that we on this side have no less faith in the programme for which we have stood and no less faith in the ideals upon which the party is based because of the difficulties which have been created by the world crisis. We are not responsible for that crisis. It is the outcome of the system which hon. Members opposite believe in and which shows its effect in the greatest capitalist country in the world to a much larger extent than it does here. I am fully convinced that with the common sense and imaginative ability of the great mass of my countrymen, who are coming more and more to our side, we shall as a Labour party ultimately solve this great economic crisis more effectively than it will be solved in any other country in the world.
  Mr. MARJORIBANKS: The hon. Member for North Battersea (Mr. Sanders), so far as I understood his argument, began by boasting that the Socialist Government was responsible for the present position of the country and then in a magnificent peroration denied all responsibility whatever. This Bill has a number of Clauses and a number of specific proposals, but during the Debate there has been very little discussion of any of the proposals. We know the reason of this. Behind these proposals there lies a much graver and much larger question. It is the question of the immediate urgency with which we should deal, not the wider and more general philosophic and financial questions which have been raised on both sides of the House. The real difference between right hon. Members of the Socialist party on this side and those opposite is the difference in their point of view as to the urgency of the situation. That is the question before and between us. We have been treated during the Debates to some very bitter and acrimonious discussions between old colleagues. There has not been such acrimonious Debates heard in this House since the Home Rule Debates before the War, but, as a matter of fact, there has been much more of importance in these acrimonious discussions than is usual in arguments of that kind between colleagues who have become opponents. For the country must judge between them.
  1716
  If right hon. Members opposite believe in their case with all their minds and strength, then, as the accredited leaders of the Socialist party—I. suppose I must call them that though I think they are hopelessly discredited—they will carry great weight with their fellow countrymen. But if, on the other hand, it can be shown that at the material time—I say that because it is easy to be wise after the event—hon. and right hon. Members opposite were prepared to lead their party on much the same course that is now being proposed by the Government, then, I think, we shall be able to justify our course and our policy to our fellow countrymen, who will be able to see clearly the injustice of the case put forward by hon. Members opposite. If we can show further that owing to some outside influence, some electoral consideration, right hon. Members opposite were driven from the course which their good sense suggested they should take, we shall have gone one step further towards proving that the present Government have a clear right to claim the suffrages of the people of the country. Many years ago Mr. Asquith made a quotation on a famous occasion in this House. He said:
  Roma locuta est; causa finita est.
  [Interruption.] I see that hon. Members opposite apparently both appreciate and understand the quotation and its application. But for those who do not let me give them a free translation of it. It is this—"The executive of the Trades Union Congress has spoken, there is no need for further argument." [Interruption.]
  Hon. Members opposite have given one excuse after another for the course they have pursued, but their arguments are quite unconvincing. I heard the late President of the Board of Education with some amazement the other day when he said that if only he had known that the Super-tax and Income Tax were going to be increased he would never have provisionally agreed to the cut in education. He said that such high taxes as were now being proposed and the revenue therefrom would, of course, justify a decrease in the cut to which he had provisionally agreed. He seems to have erred on the side of moderation in imposing taxation. Hon. Gentlemen opposite are always talking about the

  1717
  "whole picture." That is their continual evasion; that is their parrot cry. But in our Debates the "whole picture" is emerging clearly, so that he who runs may read. It is the picture of a Government, very conscientious in some ways somewhat incompetent and hopelessly divided amongst itself, some preferring the interests of the nation to those of party and others finding themselves absolutely bound to the party and the cause and the class which put them where they were. I can understand the division of opinion, why some of them left the Cabinet while some of them stayed—
  Mr. R. RICHARDSON: Is there no division in the Tory party?
  Mr. MARJORIBANKS: Our party has never been more united than it is now. We have this picture clearly emerging of some hon. Members staying in the Government, taking what, I think, was the far more creditable course, and others, may be from very loyal motives, leaving the ship. What happens? Much to their surprise they find that the ship is still afloat, and they immediately say, "There is no cause for alarm, there never was any danger. It was all lies and nonsense," and then, when the storm begins once more to arise, they immediately rejoice and say, "We told you so." They contend that there never was anything in the capitalist system which could sustain the ship of State afloat, and they try to prevent the further voyage of that ship because they are not members and officers of the crew. They say that the whole thing is a conspiracy of the first-class passengers against the crew, and they refuse to give any assistance whatever until they are taken on board again and are able to pursue their own way.
  It is not perhaps fair to blame hon. Members opposite for the course they have taken, because, after all, I know that they are not politically free. It is not possible for anyone to be absolutely free politically, but the lack of freedom which hon. Members opposite enjoy is something approaching slavery. It was not because they were foolish or because they were inexperienced, or because they did not know what was happening that they did not dare to take the only course
  1718
  which would save the country; or to tell the people the truth, that it was because they were not free. They have our sympathy; we are very sorry for them, I assure them. The picture is being filled in, the perspective is being drawn, the true influences behind the work of art are showing themselves. Everybody has helped in the drawing of it. I refer particularly to the masterpiece of journalism perpetrated by the late President of the Board of Trade. He has painted his picture of the Socialist party clearly in an article published in a capitalist newspaper: he has told us of the Labour party as being now free from its responsibilities and its record, having left to others the odious task of lightening the ship, just because people have short memories and are not concerned with economic truths, but only influenced by simple slogans, marching back along the high road that leads to absolute power. I suggest that such artless cynicism does less than justice to what is usually a discreet and plausible showmanship, and I would suggest that before the right hon. Gentleman writes to the popular papers again he should go to some competent journalist for advice. There was another article written by the hon. Lady the Member for East Middlesbrough (Miss Wilkinson) before the House reassembled to discuss this crisis, which showed the degree of enlightenment of hon. Members opposite, and in which she said that when she got back to Parliament she would ask what all the fuss was about. One can realise from such an article the unfortunate way in which hon. Members opposite are able to impose on the credulity of their constituents. I suppose that there were ladies of the sort of intelligence of the hon. Member for East Middlesbrough at Belshazzar's Feast, when the writing on the wall was seen. "Tried in the Balance and found wanting," but I cannot think that these ladies added either to the culture or safety of ancient Babylon.
  What is the constructive proposal of hon. Gentlemen opposite as an alternative to this Budget? They have none. They have never done anything for industry but tax it. That is why they have done nothing for unemployment. They are not concerned with the creation of wealth in any way; they are merely concerned with considering the distribu-

  1719
  tion of the wealth that is shrinking before their eyes, as they talk. But there are hon. Gentlemen opposite who have something like constructive proposals to make. There is one right hon. Member opposite whom I regard as probably the most idealistic Member of the House. I refer to the right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood). He said last week that inflation was essential and that it must come. He said that it had come in France and Germany and would come here. I have no doubt that now he is boasting that his prophecy has come true. But his prophecy has not yet come true. Because we have been forced to retreat a mile it does not mean that we have begun a headlong retreat. It becomes all the more important to defend the next pass. The right hon. Gentleman did not realise how this country differs in essentials from other nations. We import £1,000,000,000 work of commodities overseas. Germany and France do not import anything like that amount. We import the necessities for the people of every class in this country. If unlimited inflation is allowed prices in this country will increase and the whole of the people will suffer.
  Then, of course, our attention has been called during these Debates to the vast savings of the masses of the people. The poor people of this country have invested at least £2,000,000,000 of their savings. Is that to be allowed to vanish like a dream? The savings of the people are, I suppose, some concern to hon. Members opposite, as they certainly are to those who sit on this side of the House. There is another class of hon. Gentlement opposite to whom I would refer—hon. Members like the hon. Members for Bridgeton (Mr. Maxton), for Ebbw Vale (Mr. A. Bevan) and West Wolvertampton (Mr. W. J. Brown). They are people who are so fanatically convinced of the justice of their mad cause that they are prepared to face fully the consequences of this economic breakdown. It. seems to me that they welcome the very fact that it has taken place in order that there may be the frightful acceleration of the coming of the republic of their dreams. Although kindly and generous people who think that a 10 per cent. cut in unemployment benefit is unjustifiable, they are willing to face for themselves
  1720
  and their constituents, men and women, all the unspeakable privations and misery that would occur if there was a breakdown of the present system of society. At least, however, these men are sincere.
  As the hon. Member for Bridgeton reminded us, there are degrees of sincerity. I would contrast the hon. Member's speeches with those of the hon. Member for East Leicester (Mr. Wise). I never heard so many unfair statements in the course of one speech as I heard in the first speech of the hon. Member for East Leicester. He ignored the fact that the Super-tax payer was also the Income Tax payer. He ignored the fact that the Super-tax payers paid a quarter of our national taxation out of their huge gross income. He ignored the fact that of this new taxation the Super-tax payer and the Income Tax payer would pay nearly 70 per cent., and it may now be more. Yet he professed to speak for the poorest of the poor. A man may take up any intellectual position that he chooses, but he has not the same right, apart from his intellectual position, to speak for the poor as has the hon. Member for Bridgeton. Perhaps he has no more right to speak for the poorest of the poor than I myself.
  There was one other hon. Member whom I heard speak, and I hope he will not be offended if I say that I regard him as a personal friend. He has visited my constituency and I have welcomed him. He represents a Leeds constituency and held office in the last Labour Government. He said with real emotion in his voice that one of the saddest things he had seen in his life was the sight of hon. Members here cheering the opening speech of the Chancellor of the Exchequer. I heard another hon. Member, brother of the possessor of one of the greatest and most honoured names in the Socialist party, say the same thing with even more emotion. I have no doubt that they said it with sincerity, but I do not think they can have appreciated what those cheers meant. They were the cheers of hon. Members who saw in a man whom they had been fighting for a long time, a man who held entirely different political opinions from their own—they saw in him the indomitable spirit of the British race coming out again, saw that it was stronger than anything that was physical,

  1721
  and saw the spirit of the man and of the Englishmen as the strongest thing in the world. They were the cheers of men who were themselves going to make sacrifices. Who could resist the Chancellor's appeal? It was an appeal calling for a general spirit of sacrifice throughout the country as the only hope of salvation. The Chancellor called on every class to recognise the fact that only in that spirit could we get back to prosperity and that this may arise from a bold and courageous poverty, but never from a cowardly pauperism.
  There collies the question of the particular proposals of the Budget. Had I come here for the first time, had I not heard any of these Debates and had I not read any of the newspapers, I should have said that this House was committed to a course of absolutely rigid economy. But events have moved, and adversity has made strange bedfellows and taught us strong lessons. Every day we have further evidence that opinion in this country is changing. I do not believe that the Budget is the highest common measure of agreement in this House now. I listened with distress to the speech of the Noble Lord the Member for Oxford University (Lord H. Cecil). He might have been a ghost. The only hope he had for the future of this country was reducing the standard of life. There are many hon. Members on this side of the House who do not agree with that conclusion and do not agree with the Noble Lord's premises. We say that there is a method of protecting the standards of life of the people of this country. Hon. Members opposite know what I am going to say. Before we came upon this crisis there were certain reasons why the Conservative party was entering upon a constructive policy. Conservatives believe in the policy of Imperial unity. The policy of tariffs was a long range policy. But events have forced upon us a short range policy. If we could raise money by import duties, from immediate taxation, to prevent dumping, many of the economies in the Bill might be unnecessary. We say that it is essential also to restore the balance of trade. That is an immediate necessity.
  I listened to the speech of the right hon. Member for St. Ives (Mr. Runciman). He gave us a narrow argument
  1722
  about the taxation of luxuries. The only value of his speech was that it was a statement of principle from a hidebound Free Trader. Naturally foreign countries concerned with the luxury trades immediately resented the speech and it caused a great deal of misunderstanding. It has already become old fashioned. Yet the speech did establish the fact that there are certain Liberals who are prepared to introduce the most violent form of import duties, prohibitive import duties. Between that extreme standpoint and ancient Cobdenism the ordinary classical Conservative policy of tariffs stands as a middle course. It may be said that this House has no mandate for a policy of tariffs. There is implicit in every single Member of this House the right in an emergency to do what is best for his country. There was no mandate for the War. Some may think that the votes which Members of this House gave in 1914 were wrong, but no one would question their right in that emergency to vote "aye" or "no" on that question of war. We have the same right, if necessity or occasion arise, to vote for tariffs without going to the country. To deny that right is to emasculate democracy.
  I appeal to the Prime Minister to face the issue at once and to have a vote of this House on the question of tariffs and a constructive policy. Let us see what the House decides about it. The Leader of the Opposition may say soft words, as he did the other day. We may get some common measure of agreement to help our workpeople at this critical time. I appeal to the Chancellor of the Exchequer also. He is the crucial Minister on this matter. We know that all his life he has believed that Free Trade was bound up with the cause of the people. But we have seen a change of view. Yesterday he said he was prepared to adopt measures which were repugnant to him. I fail to believe that he could have meant the demobilisation of foreign securities or a capital levy. Such things could not have been repugnant to him. When he made that statement I think he could only have meant something of the nature of import duties. If the Chancellor did change his mind now I think that only the vulgar and the ignorant would call his an apostate. I ask him to consider whether he will not make this

  1723
  further decision at this time. We will forgive him. If he will not look upon the policy of Imperial economic unity as a great and prosperous voyage on which he can launch the ship of State, we will be satisfied if he will regard it as a safe and temporary harbour of refuge.
  Mr. BENSON: The hon. Member who has just sat down referred to the "constructive" policy of the Tory party. I think that "constructive" is, perhaps, the last possible word that should be applied to the policy of Protection, which is the cure-all in which the Tory party believe so firmly. In discussing not so much the crisis as the general depression from which the world has been suffering during the past 2 years, the hon. Member for Kidderminster (Mr. WardlawMilne) in, an extremely interesting speech diagnosed the situation as resulting from a breakdown in the exchange of goods. I think that that diagnosis is perfectly correct. On this side of the House I have heard references more than once to a breakdown of capitalism. I do not believe that capitalism is breaking down. Capitalism, particularly upon its productive side, has been developing during the last 10 years at an enormous and accelerated rate. Year by year, the productive power of the world has grown apace. Today I do not think it is an exaggeration to say that the productive power of capitalism is probably 50 per cent. to 100 per cent. greater than it was 10 years ago.
  What has happened has been this—that during a period of expanding productive power, there has been a mad not of economic nationalism which has prevented the nations exchanging the goods that the capitalist system is increasingly capable of producing. Year after year our power of production has gone up and our power of exchanging goods between one nation and another has been limited. With increased power of production, there has gone an increase in the tariffs of practically every country in the world. What has been the result? The natural result that one would expect. In the words of the hon. Member for Kidderminster there has been a breakdown of the exchange, because the exchange itself has been definitely and consciously interfered with by tariffs. As the object
  1724
  of tariffs is to interfere with exchanges, it is hardly surprising after 10 years of this mad tariff policy that it has succeeded to such an extent that practically every country in the world is upon half production. What is the Tory remedy for this breakdown of the Exchange It is "more barriers." It is not "a hair of the dog that bit them" that they want; it is a full injection of the virus of the hydrophobia. They want to put up further barriers, as if all the barriers in the world at the present moment were not high enough.
  The hon. Member for Farnham (Mr. A. M. Samuel) accused the Labour party of being responsible for the present crisis. He suggested that the crisis had come upon us because we had over-spent and because the taxation of the country was so high as to cripple it, and he held the Labour party responsible. Quite apart from the fact that the Labour party's increases of taxation during the two years when they were in office, were not very large, I challenge entirely the idea that the burdens which this country was standing until the world slump—which did not commence here, and for which nothing in this country is responsible—I challenge the idea that those burdens had anything to do with the present crisis. If we are going to search for culprits, if we are going to find out which party was responsible more than another for the present financial crisis, then I say definitely that if any political party is responsible, it is the Tory party.
  Hon. Members opposite may smile but for seven years the Tory party have been fouling their own nest. Ever since they started their Protectionist agitation they have done everything they could to belittle this country. They have taken every opportunity of pretending that this country was going down hill. I do not think that in the whole history of British politics there has been a campaign which, for brazen mendacity, is equal to the Tory compaign of misrepresentation and belittlement of Great Britain. Let me congratulate the Chancellor of the Exchequer. We were told only six months ago, I think by the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) that the May Budget was the last Free Trade Budget but within six months the right hon. Gentleman the

  1725
  Member for Tamworth has followed his Free Trade leader in the introduction of another Free Trade Budget.
  Let me get back to the question of Protection. What are the facts with regard to the present crisis? The crisis arose, not because there was anything wrong with this country. There was a great demand on the Bank of England, on London for short-term money. That was very largely due to the desire of other financial centres to strengthen their own position. Owing to the fact that we had some £60,000,000 or £70,000,000 short money locked up in Germany, and owing to the enormous run that there was by other countries desiring to strengthen their financial position, London, the banking centre of the world, failed to meet the run. That run would have been nothing like so bad had it not been for the seven years' propaganda of the Tory party. They have been trying to stampede the English people and have succeeded instead in stampeding the foreign lender. If we are going to search for culprits it is not upon this side of the House that we shall find the responsibility for the present crisis but upon the other side.
  The Tory party, having helped to make this crisis infinitely more severe by their "stinking fish" policy are now seizing the opportunity to stampede the country into a Protectionist policy which is bound to make things infinitely worse. They pretend that it is a "constructive" policy. That is the word used by the hon. Member for Eastbourne (Mr. Marjori- banks). How can a policy which aims at interfering with the free exchange of goods and making that exchange more difficult be constructive when the whole trouble from which the world is suffering is the fact that the barriers to the exchange of goods have grown so high that they have practically paralysed in- ternational trade.
  Vice-Admiral TAYLOR: The hon. Member for Chesterfield (Mr. Benson) has intimated to the House that the present trouble is due to the propaganda of the Conservative party in this country. I entirely deny that statement. I understood that it was generally agreed that the troubles with which we are faced are, at any rate to some extent, due to the fact that we have been spending beyond
  1726
  our income over a long period of years. As far as propaganda is concerned, I have repeatedly heard right hon. and hon. Gentleman opposite talk about the British manufacturer's obsolete machinery and suggest that he did not know his work, that his salemanship was bad and so on. I very much regret that in this Finance Bill and in the measures to be taken under the Economy Bill, the whole burden of balancing the Budget is being placed on the shoulders of the people of this country. In so far as there is increased taxation, cuts in salaries and wages, and economy in Government expenditure, there will undoubtedly be an increase in unemployment. Bat there is nothing in the Finance Bill which will assist the trade and industry of this country on which, ultimately, the balancing of any Budget must depend. Therefore, I am very much concerned because no measure whatever is being taken which will do anything to restore the balance of trade.
  Figures have been given especially by the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) with regard to the position of our trade. He has shown that he himself, having been a great Free Trader, has been turned from that conviction and that owing to the position of the country at the moment he has been converted to the necessity of restricting the import of goods into this country. In order that the Budget may be balanced every Member on this side will vote for the passing of the Finance Bill. They realise that it is absolutely necessary that the Bill should be passed. But the measures which are being taken are only measures which will meet the temporary crisis. Running alongside the financial crisis in which we find ourselves there is a still worse crisis—the industrial crisis. Unless some measures other than those contained in the Finance Bill are taken we shall be faced with a far more difficult problem than we are faced with at present. In order that the trade balance may be adjusted it is, in my opinion, necessary to take measures to secure a greater sale of British products in our home market and an increased export trade in British products.
  8.0 p.m
  To an observer abroad it must appear as if our home market is regarded by us

  1727
  as of no importance as far as we ourselves are concerned. We do not think it matters. We allow articles to be sent in here by people outside this country irrespective of what the result may be and they are bought because they are cheap. I am sure that foreigners are convinced that that is a stupid policy on our part. Our home market is the best market we have. It is of vital importance to us. The more British products are sold in that market, the more will the credit, which we obtain abroad by our export trade, be available for paying for the food and raw materials which we must import in such vast quantities. Whatever our production of food we must import very large quantities of it. What is the position with regard to this home market? In 1929 we sold of manufactured goods to the foreigner some £304,000,000 worth, but we imported from the foreigner £300,000,000 worth of manufactured goods. We allowed our market to be absorbed by foreign articles to that extent, and the result was that on balance there was only £4,000,000 worth of the export of our goods to foreign countries which could be taken to pay for the food and raw materials which we had to import. That is an absurd state of affairs, but that is not the worst. We were told by the late Parliamentary Secretary to the Board of Trade, on the 20th July last, in this House, that in 1930 the total import of manufactured goods from foreign countries exceeded our export of manufactured goods to foreign countries by £33,000,000. The whole of our export of manufactured goods to foreign countries was not sufficient to pay for the import of foreign manufactured goods into this country.
  Does any hon. Member suggest that that is a state of affairs which should be allowed to continue? Not only was the export of manufactured goods not able to pay one penny piece towards the import of the food and raw materials that we required, but it was not even able to pay for the import of foreign manufactured goods. Money had to be found in some other way to do that. Surely we must live in this country by the sale of our own goods first in our home market and then through our export trade. We must import so much food, but if we allowed this market to be
  1728
  taken from us here, how shall we continue, how shall be put our people into work to get our manufactures going? The trouble, as I understand it, is that there are so many unemployed who cannot get work.
  It has been stated that a tariff, a restriction on imports of foreign goods, will reduce wages and raise prices. Let me take the question of the raising of prices. That might be perfectly true if our factories in this country were working at a maximum of efficiency and turning out as much as they could turn out, and then you put on a tariff. That might raise prices, but that is not what is going on in this country at the present time. Our factories are not working full time, and nothing like it, but I desire that they shall do so, and that they shall have a fair chance against the foreigner in our own markets, which they have not got now. If you place a tariff against the foreigner, you give our manufacturers a fair chance. They will increase their production, and in that way they will be able to reduce their overhead charges and not increase the price but reduce the price at which they turn out their goods. [An HON. MEMBER: "Why do they not do it now?"] Because they have not got the chance, but they have done it in the industries which have been safeguarded, and the Chancellor of the Exchequer has himself thrown away some £5,000,000 a year by doing away with those Safeguarding Duties.
  Mr. MARLEY: My trade is the piano trade, and it is protected, but under Safeguarding 80 per cent. of the piano workers are out of work.
  Vice-Admiral TAYLOR: The piano industry has been improved by the Safeguarding Duties. It is quite impossible that we should ever get back again to a favourable trade balance if we allow this continued import of manufactured articles into this country without any restriction whatever. It is now almost universally agreed throughout the country that we must have a restriction of these imports in order to increase our own production, and so employ our own people. We are more and more becoming a nation of merchants. We are buying goods as cheaply as we can and selling them as dearly as we can, and that does not help the workman here, but we have to get back to the position of being producers and sellers of our own goods.

  1729
  This crippling of the home market so far as manufactured goods is concerned applies equally to agriculture. Agriculture is the greatest industry in this country. Until a short time ago it employed more people than any other industry, but it does not do so to-day. It is either third or fourth on the list so far as the number of people employed is concerned. It is impossible to have any country prosperous with its greatest industry in the state in which our agriculture finds itself now. The total volume of products from the land has remained stationary for over 20 years, but the population of this country has increased, and therefore the demand for food has increased. We have not met it by increased production in this country, but by an increase of imports from outside. How is it suggested by hon. Members opposite that the cereal farmers are to continue? How is it suggested that the growers of soft fruits, vegetables and so on, the farmers in many spheres of agriculture, are to continue to produce? No suggestion has been put forward except to put men on the land, to have smallholders and so on, but what is the use of putting more people on the land to produce more fruit, or vegetables, or whatever it may be, and then to put that product on to an already overstocked market?
  Unless the agriculturist can receive an economic price for his produce, it is obvious that he is going out of business, and that is what is happening in agriculture in this country to-day. It is obvious that some active and positive measures must be taken in the case of the agriculturist just as in the case of the industrialist. We have to get back to the balance of population as between urban and rural communities in this country. We do not produce anything like the amount which we are capable of producing. During the War, I think I am right in saying, we produced about three times as much as we do to-day. We can, if we take measures, undoubtedly increase the production in this country.
  It has been put forward as an argument that you cannot protect the agriculturist because the industrialist will not agree to it. I do not believe it for a moment. How can a man working in a factory say, "I desire protection for the product of my industry, because it cannot be sold owing to foreign competition," and then turn round to the agri-
  1730
  cultural labourer and say, "Well, you want it too, but you will not get it. You produce food, and I am not going to allow you to get protection. I am going to have it, but you are not going to have it." I do not believe it. There is too much sense of fair play in this country between the workers, and one man has just as much right to have his product protected, where necessary, as another.
  We must have restriction not only as far as manufactured articles are concerned, but also on the import of foreign food. The argument is at once raised that that will raise the price of food, hut, I do not agree. It is not necessary to place such a tariff against the foreigner as to raise the price of food, when we consider that immediately you put on a tariff you increase your production, because you give a market for your goods; and we have at our disposal the whole of the food of the Empire. We have an Empire which can supply us practically—not entirely, but nearly so—with all the food that we require. I would let that food come in here free. It is not those products that the farmers fear; it is the products from foreign countries.
  There are difficulties, of course. We might not be able to go in for the full policy at the commencement, but at any rate we can make a start. It is no use having a revenue tariff only. It will do no good. It will be absolutely useless for the purpose for which we require a tariff, which is the protection of British industry, the increased production of British industry, and a certain sale in our home market for British produce. Therefore, the tariff must be one which will ensure those objects being achieved. It is not a question of being hostile to the foreigner, but of getting fair play for this country, which it does not get now. We are told that the foreigners will retaliate, but we are only proposing to do what the foreigner is doing himself, and we are more likely to do business with the foreigner if we are on the same level as he is and if we have something to bargain with, which we have not got now.
  As regards our exports, we have had a diminishing export trade for some time. There is nothing new about that. We have not yet got the exports that we had pre-War, but the world trade has increased. We are importing, as I have already said, more manufactured goods

  1731
  than we export to the foreigner, and that means that the foreigner himself is manufacturing such an enormous amount that he can afford to send us over here that volume of goods. I cannot see any great expansion in our export trade in foreign countries. They are being more and more highly developed year by year, putting up more and more factories, and turning out more and more manufactured goods. We have a restricted market in foreign countries, and on account of their tariffs they make certain that their home markets will be for themselves first. Therefore, not only have we a restricted market in foreign countries, but we have greater difficulty in getting into those markets at all.
  I do not consider, therefore, that we should look to foreign markets for an expansion of our export trade, which is so necessary. I do not think we shall get it there, but there is ready, lying at our door, a very large market and an immensely expanding market in the future. I refer to the Empire, an immense market, if we will only take the opportunity which now offers to us to bring into operation a real, constructive, Imperial policy, together with a policy of protection for our imports.
  Mr. TINKER: On a point of Order. I have been looking through the Finance Bill, but can find no connection at all with the points raised by the hon. and gallant Member.
  Vice-Admiral TAYLOR: The whole question is an alternative to provide money for balancing our Budget, and that we can do by increasing the sale of our articles at home and by increasing our export trade. As regards Empire trade, there was from 1900 to 1929 a gradual but persistent percentage fall in the value of goods imported from this country into the self-governing Dominions and British India. At the same time, there was a percentage increase from foreign countries into those great Dominions and British India. That is a very disquieting fact. It only shows this—and it is very important to remember it—that the trend of that trade has been away from this country and towards the foreigner, and we ought to take this opportunity to arrest that trend of trade before it is too late. If we do not take
  1732
  steps to arrest it, trade with the Empire will go further and further away from us. I will give the House a few figures to prove what I have said. Canada in 1900 imported 24.8 per cent. of her goods from this country, and in 1929, 15.3 per cent.; from abroad Canada took 73.3 per cent. in 1900 and 79.7 per cent. in 1929. Australia took from this country 51.3 per cent. in 1900 and 39.8 per cent. in 1929; whereas from foreign countries she took 27.4 per cent. in 1900 and 46.9 per cent. in 1929. For New Zealand the figures were 61.1 and 46 from this country, and 14.2 and 32.3 from the foreigner. South Africa's figures were 65.3 and 43.8 from this country, and 24.7 and 43.9 from the foreigner. British India's figures were 68 and 43.8 from this country, and 20 and 47.9 from the foreigner.
  These are very serious figures, and we should, as the head of the Empire, do everything possible by a really constructive Imperial policy to stop this trend of trade and to obtain, as far as it is possible, a much greater proportion of Empire trade than we have now. We can only do that if we are prepared to give them a market here for their food and raw materials. Unless we do that, we cannot expect that the self-governing Dominions will, in their turn, be able to buy more of our manufactured goods. It is important to remember the character of the trade which we do with the Empire as opposed to foreign countries. I have told the House that we imported from foreigners for 1929 only £4,000,000 less manufactured goods than we sent them. On the other hand, we exported to the British Empire £270,000,000 worth of manufactured goods, and we took back only £38,000,000 worth from them. In fact, our manufactured goods exported to the Empire are paying for the food and raw materials which we have to import from them. That is the trade which we want to faster and to encourage by every means in our power in order that we may get back the trade balance.
  The same fact emerges with regard to our Colonial Empire. We had an increase in our trade with the Colonies between 1900 and 1929, but the foreigner had a greater increase. The figures show that there is the same trend of trade in the Crown Colonies away from this country and towards the foreigner. Surely we

  1733
  should take some steps to obtain a far greater proportion of our trade with the Colonial Empire than we have now. To continue to neglect the development of Imperial trade is to undo the whole of the good which accrued to us by the voluntary preference which has been given to us by the Empire since the beginning of this century. We are not reaping the reward of our vast investments and our expenditure in the development of the Empire.
  Too long have we carried out the policy of treating other parts of the Empire no better than foreign countries. It is true that we give them preferences on a few articles, for which they are grateful, but on the whole we treat them no better than the foreigner, and it is time that we altered that policy. We have nothing to offer them. The foreigners with their tariffs, the Empire with their tariffs, have been able to make mutual trade agreements, but we have nothing to offer them at all. Now is our opportunity, because this country is going to adopt the policy of Protection, and when we have adopted that policy, it will be our opportunity to bring into being a real constructive Imperial policy with the greatest possible freedom of trade between all parts of the Empire. We will really lay the foundation stone of the construction of far greater Imperial economic unity and greater Imperial trade than we have at the present time. It is to the Empire that we have to look for an increase in our export trade and to get back the trade balance in favour of this country. It is only by a full policy of Protection and of the development of the Empire that we can really bring back to this country a betterment in the well-being of the people and a prosperity which does not now exist.
  Dr. MARION PHILLIPS: In rising to speak, I will certainly not follow the hon. and gallant Gentleman the Member for South Paddington (Vice-Admiral Taylor) in developing his constructive policy. In the concluding words of a very long speech which seemed to have comparatively little to do with the Finance Bill, he spoke especially of constructing a great forward policy. I do not know exactly how that fits in to the various parts of the speech which preceded it. At one moment the hon. and gallant Gentleman
  1734
  told us that the tax which would be levied on foreign manufactured goods and on foreign foodstuffs was not to be so high that it could possibly increase the price of those goods at home. He said there was no reason why it should. The mere putting on of that tax would have such an immediate effect in increasing production that we would have our home market filled with goods produced at home. I do not quite see how he does it. In another part of his speech he said that a revenue tariff would he no good at all, because it would be too low. We were left wondering what sort of tariff his constructive programme would provide. The truth of the matter is that the arithmetic of the hon. and gallant Member needs a little revision. He is a magnificent example intellectually of that emasculated democracy which the previous speaker from that side said was putting us in fear and awe.
  I wish to bring the House back to the question we have been discussing, the Second Reading of the Finance Bill, which embodies the Budget. In the first discussion several Members warned the Chancellor that the main object of the I3udget, namely, preventing a flight from the pound, could not be achieved, and within a very short time we were proved right. Already this country is off the Gold Standard. I notice that some hon. Member said the Government had taken us off the Gold Standard. It is not the Government that has taken us off the Gold Standard; the facts of the case have made it impossible for us to remain on it. I do not think that is a bad thing. I think that, properly handled, it is a very good thing; but what I am afraid of is that the Chancellor is not of that opinion, and that he will endeavour, within as short a time as he can, to put us back upon the Gold Standard, and prevent the world and ourselves gaining the benefit of what has happened.
  It is not only the question of the Gold Standard that is at stake, but the question of internal finance. We were told that the Government had to produce a scheme of economies and of heavy taxation in order to save the pound. In order to do it they had to get a loan, and in order to get the loan they had to

  1735
  decrease unemployment benefits. That is not merely an attack upon the unemployed, it is a definite attack on all wage-earners and all who work for salaries. It is part of a perfectly definite scheme seen in all parts of the world today. I have here a statement from the American Press as long ago as 20th August, before the crisis here had fully developed. Speaking at a conference to consider the critical situation in the United States, Mr. McGrady, legislative representative of the American Federation of Labour, made this interesting statement:
  "There is a movement on foot by the bankers to deflate still lower American wages. Business men, anxious to extend their activities, have gone to the banks to borrow funds and have been told they could not have the money because the wages they paid were too high."
  That policy of American bankers is precisely the policy that has been forced by bankers in this country—with what help we are not quite sure from America and France—upon the Government of the day. He went on, dealing with the question of wages in the United States, to point out that wage payments for the first half of 1930 were below those of 1929 by 707,000,000 dollars, while dividend payments increased by 350,000,000 dollars. Put in another way, the incomes of the wage earners were cut 12 per cent. while stockholders' dividends increased 28 per cent. That is a situation so remarkably like the situation in this country that I think we may very well see in what is happening here an equally strong attempt by the financial interests to carry out that policy of depressing wages, of which the most effective method is to reduce unemployment benefit. After all, there is some reason to believe that it was not only a desire to see that policy carried, but carried by a Government that was not hampered by Labour supporters, that led to the fall of the Labour Government. It is rather interesting to note, again quoting America, that in the President's pet organ, the "United States Daily," the editor, Mr. David Lawrence, dealing at length with the British crisis, makes this statement:
  "There is no doubt that British bankers themselves are in accord with the suggestions of foreign bankers, and it would not be surprising if the true British situation
  1736
  were exaggerated in order to bring about the fall of the Labour Ministry."
  We have had the fall of the Labour Ministry, and we have a Budget which fully justifies us who are on this side of the House in opposing the present Government with all our strength. What will that Budget do to our home market, and especially in the depressed areas? We used to know the present Chancellor of the Exchequer as the housewife's friend. He will not be so known after this Budget. The working class woman will have to suffer a very heavy loss in the money with which she has to buy her household goods.
  I took the trouble to reckon up what the loss would be to the town which I represent in this House, Sunderland, a town which has suffered by unemployment perhaps as heavily as any other part of the country. At present we have more than 28,000 unemployed. The reduction in the benefit paid to those people, and the money withdrawn from wages to pay for the increased insurance contributions which those fortunate enough to be still in work will have to pay, means a loss of purchasing power of over £181,000 a year. That is a direct loss to those who sell goods for immediate consumption in that town, for the unemployed have no money to pay for anything but what is required for immediate consumption. But that is not all that the shopkeeper, the small trader, will lose. There is the cut in the wages of the teachers and policemen; there is the cut in the allowances—we still do not know quite what that is going to be—for the wives and children of soldiers and sailors; there are the reductions in civil servants wages; and there is the increased Income Tax, which will fall so heavily on all the smaller middle-class people. All that is a direct loss to the ordinary trade of a small town which, through years of depression, has already suffered gravely.
  Shopkeepers are not usually supporters of this party, but we do not wish to exclude them from our support when they are in difficulties, and the difficulties of the shopkeepers in a depressed area will be peculiarly severe during the coming winter. They will pay an enormously increased Income Tax, and some who have never paid Income Tax before will have to pay it in future. Speaking in broad terms, all those with incomes below

  1737
  £700 a year will be paying at least double the Income Tax they paid last year, and they will be paying it for a year of better trade than they are now going to experience. In addition to this, they will have to pay three quarters of it in January, at a time when they are suffering most through the loss of purchasing power, and this will be accompanied by an ever-widening circle of unemployment. When we first heard about the cuts which are to he made, we were told that they had to be endured for fear of worse things to come if there should be a flight from the pound. Now we are told that those cuts have to be endured in addition to any rise of prices which takes place in consequence of the flight from the pound.
  I believe that there will be some advantage in that, inasmuch as the whole world will gain by our having altered the high value which we placed upon the pound. But in the intervening time, unless some action is taken in order to prevent profiteering, and to prevent an advantage being taken of the possibilities of increasing prices, there will undoubtedly be bad times ahead for the workers of this country. We shall find wages coming down, unemployment benefit coming down, and those people now on transitional benefit will be reduced to a very much smaller benefit, or it may be taken from them altogether. For the smaller middle-class people there will be a very heavy Income Tax and an alteration in allowances, and, at the same time, there will be an untrammelled opportunity to profiteers to do what they like now that the pound has fallen. We have tried over and over again to get from the Front Bench some recognition of the need for restraining those operations, but all we have got so far is a Budget that will press down lower and lower the purchasing power and standard of life of the people. Apparently, the only classes in the community that are to receive the care and attention of the Government are the classes who receive interest, and live by bondholding and similar methods.
  We have had a most pathetic speech from one of the bondholders this after- noon. The hon. Gentleman the Member for Farnham (Mr. A. M. Samuel) frankly admitted that he was a bondholder, and he said that they were being bled white. All I can say is that it is a very different
  1738
  kind of bleeding from that which the unemployed workers are going to suffer. After all, it is what a person has left, and not what he gives up, that we have to consider when anyone talks about being bled white. The hon. Member for Farnham said that so much had been taken away from him and his friends that they were bled white. In another part of his speech the same hon. Gentleman told us that capitalism had been a good thing for the world because mankind was poverty-stricken until capitalism came to help people out of their trouble. That was an interesting excursion into the history of man, but, like the hon. Gentleman's economics, it is a little bit old-fashioned, and, if he will take the trouble to investigate more modern scientific writings on the subject of the history of man, he will find that men lived under happy and pleasant conditions until the accumulation of property began to cause dissension among the early groups.
  The right hon. Gentleman will also find that while capitalism has played an important part in the evolution of man, and in improving conditions in some respects with regard to the production of wealth, capitalism, like every other phase of society in the history of man, will give way to another system, and the course of evolution is not yet considered to be complete. We believe that capitalism has played its part, and it is our job not only to convince the country of that fact, but to lead them away from that system, and take them over to a better form of society in which when we get into difficulties, national or international, we shall not pursue the policy which this Government is pursuing, of making the poorest suffer while those who are rich are able to live comfortably.
  Another statement which has been made by hon. Members opposite is that the Government, although they have had to make cuts in unemployment benefit, have left the children's allowance alone. On behalf of the unemployed women throughout the country, I want to say how much they resent that statement. To a married man who is unemployed today, a certain amount is paid for himself, a certain amount for his wife, and 2s. for each child. We have never contended, on these benches, that the 2s. allowance kept the child, and it was always regarded as being simply a slight

  1739
  addition to the amount of the benefit, and for hon. Members to take credit for not reducing the children's allowance of 2s. when 1s. is being taken off the chief dependant's allowance, and Is. 9d. off the man's benefit, reducing the family income by 2s. 9d., is indeed a callous and abominable statement. You cannot separate the income from the allowance given to the children.
  I know what will happen. The allowance is now so small that it only just fills out the bare necessities from week to week, and, when a mother is faced with the need of living with 2s. 9d. less per week, and is looking round for something on which she can possibly save, it will have to be—there is no other way out for her—the milk for her children. She cannot take bread from them; they must have food; she will try her best to save here and there, but the milk bill will be about the only thing on which she will be able to save. And yet, when I suggested to the Minister of Health in this House that, on account of the reduction, he might at least ask the local authorities to provide milk under a more liberal scheme for necessitous mothers and babies, I was unable to get any assurance from him that he would do anything of the kind. By cutting the unemployment benefit of the married man with children, you are "bleeding white" the children. It is not the Sur-tax payers, but the children of the unemployed, who will suffer.
  We have in this Budget no sign of part of the present forward with any of advantage in improving the prosperity of the country and in enabling even his own Budget to balance. Since it has been introduced, reductions have actually been made, which, though we welcome them in themselves, make it still more impossible for the Budget to balance. Frankly, we shall try to get further reductions in economies, but, even though we shall do that, we shall do it knowing quite well that in no circumstances, so far as we can tell from the utterances of the Chancellor up to the present, is he prepared to take any other steps to improve the financial conditions of the country. We have never seen a Budget so hopeless in itself, and never, I am sure, has this House listened to
  1740
  speeches from a Chancellor which have been so devoid of any intention, any expectation, of doing anything during the coming winter except to press the standard of life down still further, depressing the purchasing power of the people, and doing more and more to damage the home market.
  It is strange that, on the top of all that is being taken directly from the workers and from the small salaried people, we have that small and dismal economy at the expense even of the allotment holders—that failure to continue one of the most useful pieces of work for the unemployed workers that the Labour Government carried out. We have the Government unwilling even to help the mail to provide food for his family—food which he will find it so much more difficult to get under the Budget proposals. We find them making a saving of a few thousand pounds which will prevent him from getting even that benefit. There is nothing in this Budget that is going to help us, but a great deal that is going to hurt us, and I hope that the House will show, by a strong vote on the Second Reading, that it resents the methods which are being taken to deal with the country's difficulties.
  Mr. SHAKESPEARE: I listened with great interest to the speech of the hon. Member for Sunderland (Dr. Phillips), but it might have been a speech made in relation to no crisis at all. I find it very difficult to believe the suggestion made in the quotation which the hon. Lady read, that the Prime Minister and the Chancellor of the Exchequer, who, more than any other two men in this House, have built up the Labour party, had joined with the bankers to get rid of the late Labour Government.
  Dr. PHILLIPS: I never said that they had joined; I said that the bankers had.
  Mr. SHAKESPEARE: Exactly, but the implication is that the Prime Minister and the Chancellor of the Exchequer concurred with the bankers.
  Dr. PHILLIPS: No; that they gave in to them. It may be an accusation of weakness, but I did not say that they concurred.
  Mr. SHAKESPEARE: We need not quibble about terms. If the bankers

  1741
  turned out the Labour Government, the Prime Minister and the Chancellor of the Exchequer have concurred in that course. During the last two or three weeks we have witnessed a most dramatic wrangle between the two Front Benches, and those of us who have not been engaged in this wrangle have been acting as a British jury, trying to form our impressions. I can only give the House my impressions as one of the jurymen. My impression is that, at some time during that fateful week in August, the bulk of the late Labour Cabinet realised that only by the death of the Labour Government could the resurrection of the Labour party come about; and now, after having taken that course, they pose as the champions of those from whom at one time they were prepared to demand sacrifices. I was reading only yesterday, in a very famous book, that this process is very common—in a chapter in the book called "The Golden Bough," on the ordeal of death and resurrection. It describes a certain tribe in the Congo who, whenever an epidemic attacks them, appoint a certain number of initiates who retire behind a stockade and go through the process of death and resurrection, coming out again after about a fortnight; and it is strange that, when they come out, they have entirely forgotten what has happened within the stockade. [An HoN. MEMBER: "Who is going to resurrect the Liberals?"] At a time like this, no Liberal is thinking of the position of his own party.
  I am still ignorant as to which horse the Labour Front Bench are going to back. Some of them have taken the line that they were prepared, in the country's crisis, to accept provisionally any economy in order to save the country, but the bulk of them have since taken the line that they are not now prepared, and never were prepared, to accept any economies. We ought to know, from anyone who is going to reply from those benches, which horse they intend to ride. I suppose there has been no time in politics within the memory of anyone here when Members have been so confused even as regards facts and issues. I suppose that most Members in this House have at one time or other seen the play "Dear Brutus." It will be remembered that in the second act, when the house party come out of the wood,
  1742
  they are trying to hold on to some fact of everyday life by which they can come back to consciousness of ordinary things, and Matey, the butler, says to Mrs. Coadie:
  "I cannot remember where I have seen you before, but your face reminds me of a hard-boiled egg."
  And someone says:
  "Hold on to the hard-boiled egg."
  We are all of us trying to hold on to something. Last week we were holding on to the gold pound. Now that has gone. But I have a strong opinion that what we have to hold on to now is the pound sterling. Some people have argued that, now that we are off the Gold Standard, the bulk of the economies are no longer necessary. I take exactly the opposite view. I think the economies and the balancing of the Budget are 10 times as important as they were a week ago because, unless the Budget is balanced, there is nothing whatever to stand between us and an absolute collapse of our currency. I was in Germany in October, 1923. [Interruption.] The hon. Member is extremely funny. I wish he would try to listen to some of the arguments used on this side. I always listen to him. A continuous stream of interruptions is not even worthy of him. I am trying to treat the problem in a serious way, and I ask him to listen to me in that spirit. I saw the extraordinary chaos and suffering that cart occur in a country where the collapse of the currency has taken place. I do not suggest that anything will occur here approaching what occurred in Germany through the collapse of the mark, but I am convinced that, now that we are off the Gold Standard, unless we balanced our Budget and give an appearance to the world of strict financial orthodoxy, there is no one who can predict to what low level sterling would fall. In December, 1922, the mark stood at about 35,000 and, although there had been fluctuations during the previous two years, there were not any great fluctuations. Then the French entered the Ruhr. The exchange was 2,000,000,000 to the pound at the beginning of the week in October when I was in Berlin. By the end of the week it was 35,000,000,000 marks. A man working in a, steel factory would receive 4,500,000,000 marks at the beginning of the week, worth about 36s. according to the rate of exchange, and

  1743
  by the end of the week, with the collapse of the exchange, that 36s. was not worth is. The whole country came almost to a standstill. Taxation was a farce because a tax on beer—which might appeal to the hon. Member opposite—which was a reasonable tax when it was imposed, by the time it came to be collected was the equivalent of a halfpenny per 66,000,000 pints of beer.
  Mr. J. JONES: On a point of Order. I should like to ask your protection in this case, Sir. Why am I always singled out as the horrible example?
  Mr. DEPUTY-SPEAKER (Sir Dennis Herbert): I will protect the hon. Member if he needs protection.
  9.0 p.m
  Mr. SHAKESPEARE: These economies, with this taxation, grave as it is, are the only means of preserving sterling at a reasonable level. I should like to know what in the view of the Government is likely to be the effect of devaluation. I very much doubt whether it will give that stimulus to the export trade that many people imagine. It is very surprising to know that, during the devaluation of the German currency, Germany never recovered more than 29 per cent. of her exports right down to 1923, because such was the uncertainty of the exchange position that traders never knew where they were from one day to another. It seems to me that the essential thing is not devaluation, but that sterling should be stabilised as soon as possible at a constant figure. I do not want to enter upon the thorny controversy of the balance of trade, or indeed to follow the usual Protection and Free Trade arguments. The dominant fact to my mind in this crisis is to have a stable Government as long as possible.
  I do not want to argue whether we should maintain a Free Trade system when 90 per cent. of industry is against it. I have long wondered how long that condition can survive. I remain a theoretical Free Trader, but I believe, whatever my private views and predilections may be, the one vital thing is a stable Government and, in spite of every utterance I have ever made, if the Prime Minister and the Chancellor of the Exchequer and the Government came to
  1744
  the House and said that, in a state of emergency, a scientific form of tariffs was necessary, even covering foodstuffs, in order that we might redress the balance of trade and grow at home a large part of that £200,000,000 or £300,000,000 worth that we now import, they would certainly get my support, and I believe that of the whole Liberal party. In this crisis, we have to get a crisis mind. [Interruption.] I can only speak for myself. I believe a return to government by the men who have shown themselves so irresponsible as they have done in the last crisis would be about the worst thing that could happen to the country, and, rather than that, I would pay any price, even at the expense of my most cherished convictions.
  I want to say a word in reply to the hon. Lady. She spoke about the great sacrifices that are entailed. No one knows that better than myself. I have taken a very definite line in the House. I have joined with the most extreme Members on those benches. I was one of the few Liberals who voted against the Anomalies Bill. I objected to singling out any class of the community for any particular treatment. It is a very different thing to-day. If there is a crisis, you must ask everybody to accept, not an equality of sacrifice—you can never, however scientifically exact you make it, get equality—but an equality of the spirit of sacrifice. I have received nearly 600 letters from teachers and others, and I have read most of them in a mood of despair, anger and resentment. I can honestly say that the unemployed for whom I have spoken realise the gravity of the situation and are prepared to make their contribution even in their poverty. It is remarkable. I am amazed at the mood and temper of the nation at this moment. I believe that the Government could call upon this country for far greater sacrifices than they have hitherto called for. A few lines of Browning stick in my memory:
  "Here and here did England help me: how can I help England?"
  I believe that the Government have not yet realised the degree of sacrifice which the citizens of the country are prepared to make in this crisis. I only hope that the appeal is made in that spirit.
  Mr. FRANK OWEN: I hope that my hon. Friend the Member for Norwich (Mr. Shakespeare) will not take it amiss if I suggest that the complete irrelevance of our deliberations in this House to the real problem of the country has never been more clearly illustrated than by today's proceedings. We have been required to give two days of Parliamentary time to a Finance Bill which no one has ever pretended that he likes, the provisions of which almost everybody who has spoken in Debate has doubted to be of any value, and the operation of which very few people in this House appear to believe will ever begin. We have been told that economy is the watchword in this time. There has been certainly economy of thought upon this Finance Bill. I suggest that if it is necessary to have an economy of time since time—as we have so often been told—is the essence of the contract, that by far the better thing that the Opposition can do on this occasion is to lot the Bill go by as quickly as possible. I take it that at this time no one disputes that there was an emergency when this Bill was introduced. There were, indeed, many hon. Members in the House who doubted whether the provisions contained in the Bill were adequate to meet the situation. But whatever set of circumstances may have been adduced at the time in support of the Bill, many of them cannot be said to obtain now.
  We were told—and it was the strongest argument of all—that it was necessary to have the Bill driven swiftly through the House in order to preserve our position with regard to the Gold Standard. Our position with regard to the Gold Standard has not been preserved, and we are now told that it is necessary that we should preserve our position with regard to sterling. We have had many reminders of the terrible situation in which the Germans found themselves when they themselves had a period of inflation. We were told to-day by the right hon. and learned Gentleman the Member for Span Valley (Sir J. Simon) that because we have gone off the Gold Standard it is more than ever necessary that we should balance our Budget. I do not dispute that it is necessary to balance the Budget. It is not challenged in any quarter of the House, only I would remind the House
  1746
  that during the War we were off the Gold Standard and also did not balance our Budget. There is still a condition of emergency. In the minds of the Front Bench, at all events, there is a continuing or a varying state of emergency, otherwise they would not have taken the drastic powers which they took yesterday from this House and they would not Lave forced their Measures through the House in the arbitrary way in which they propose to do. But I ask, What kind of emergency is it that still continues? Because plainly in the minds of four-fifths of the supporters of the Government it is not the same emergency as obtained a week ago. A week ago, or three weeks ago, the conditions when the National Government was brought into being were such that the country was told that it must support the Government at all cost; every patriot must stand behind the National Government and every patriot must rally to the Union Jack and the Gold Standard. The Gold Standard has disappeared, and it appears that the Union Jack is on its way towards vanishing as well. For so little do some hon. Gentlemen in the Conservative party here believe that it is necessary to maintain the national unity, or even the illusion of national unity, that they are clamorously insistent that at the earliest possible moment we should divide the country into two, three, four, or as many more parties as they like. I suggest that they are anxious, at the earliest possible moment, to divide the country upon this issue. [Interruption.] I have a right to speak my mind. I was not sent here by Conservative votes nor, for that matter, by Socialist.
  So little are those members of the Conservative party who want an election—those of them who do want it—impressed by the gravity of the situation that though they have denounced hon. and right hon. Gentlemen opposite as ravening wolves, wreckers of society and architects of ruin, they are prepared to take the very grave risk in an electoral gamble of handing over the country to their Government within the next month. Can it be that the problem has changed in this respect—that whereas a week ago it was thought that the credit of the British Treasury was about to be exhausted, to-day the danger is that the patience of

  1747
  the Conservative party is running out? I am prepared to accord a considerable measure of sympathy to hon. Members above the Gangway here who want to have an election as quickly as possible on the issue of tariffs. A week ago the chief electoral appeal of a tariff was that it would diminish the widening gap between the export and import figures. Over night devaluation has begun that process. So that hon. and right hon. Gentlemen in the Conservative party are in the unfortunate position of standing in the market place and offering a quack remedy for a disease, the virulence of which has already begun to abate.
  Perhaps then, the urgency of this emergency is that the emergency is running out. The appeal for a tariff is hourly losing its strength in the country. How else are we to explain the constant lobbying which has taken place in this House during the last few days? Nobody who has been in this House can have been blind to the fact that, there have been comings and goings and conversations and confabulations with a desire to create in this House a new kind of political emergency. There have been manifestos and memorials circulated to selected parts of certain parties. An explanation of it may be that, having missed taking the tide at the flood, there are those who are anxious to utilise as much of it as remains before the certain ebb sets in.
  If I cannot summon up any enthusiasm for this Budget, nobody else who has spoken in support of it for at least a week has been able to do better. What are the Budgetary results which we may expect? Let me remind hon. Members of what we have been told again and again in all quarters of the House must follow from this Measure if it passes into law. If the contention of hon. and right hon. Gentlemen above the Gangway is true, that increased taxes will result in a diminished yield by these proposals you are extending your trade gap at that end. Nor is it in doubt in any quarter of the House that the result of lowering wages and salaries and of giving a pointer to every industry to follow the lead of the Government, must result in the diminishing of the volume of home trade, in decreasing profits and consequently decreasing the revenue to be ex-
  1748
  pected from that source. Therefore, the gap is being widened at that end. Nor is there any compensation to be expected from the export trade, because at the same time the Government have put fresh burdens upon the export trade by increased Income Tax.
  They have also put another burden on the export trade by increased contributions on the part of the employers to the Unemployment Insurance Fund. Therefore, we can obtain no commensurate advantage upon that score. Further, by adopting these economy methods in order to meet the budgetary problem, the Government will have provoked or will in time provoke direct social clashes throughout a great range of industry. We have had one most melancholy warning of what is likely to happen. The right hon. and learned Member for Spen Valley (Sir J. Simon) this afternoon talked in a somewhat elaborate simile of the ship of State being anchored to the Gold Standard, and to the weight of sterling. He forebore to speak of the temper and mind of the crew. It is certain that the policy contained in this Measure will reduce the standard of life in this country, with no compensating advantages in any other place. I suggest that the Measure should be rejected. I will not go into the question of equality of sacrifice. That is a phrase which already has a most unfortunate connotation, for the Government can no longer claim, even with the specious analogy of the percentage cut, that they are demanding equality of sacrifice.
  Other lands, some more Socialist than this, have in time of stress required sacrifices from their people. They required them, they obtained them voluntarily or they enforced them, but the people believed at least that in the end they would gain more than they immediately sacrificed. I have seen some little of that in other countries. But, in the provisions now before us I see no sign, no hope, no glimmer of light that there is anything that can be compared with that. It is not a question of pressing upon a spring with the knowledge that when the pressure is released the spring will fly hack. Your machine is already cracking under the burden imposed upon it. All that the Government are doing in this Measure is to pile fresh weights upon it, and

  1749
  there is no prospect that there is anywhere a new spring to be supplied at any point. Until we see a sign of such I suggest that for us to subscribe to this Bill is to subscribe to a policy of despair, of degradation and of disaster.
  Sir BASIL PETO: I do not propose to follow the hon. Member in the general remarks that he has made, but as certain nautical similes have been used, I would suggest, after the hon. Member's speech, that there is no pursuit which involves a less amount of labour and more certainty of gain than that of the wrecker. The hon. Member, while saying everything that he could think of against this emergency Budget, which has been embodied in the Finance Bill, made appeals to hon. Members opposite, which were heartily responded to by their cheers. He blamed this Finance Bill for placing new burdens upon the people and upon industry, whereas hon. Members opposite have protested that it is too moderate in its burdens. I propose to address myself to the Finance Bill, unlike most hon. Members who have spoken to-day. There are one or two things about the Finance Bill to which I would draw special attention. We do not support it because we think it is an ideal Finance Bill. We have to consider the circumstances in which it was introduced and the purpose which is was intended to fulfil. The Chancellor of the Exchequer was right in not attempting any original form of taxation, any new departures, but simply relying upon three or four well-established taxes, and adding to those taxes the amounts necessary in order to balance the Budget. That is the essential purpose of the Finance Bill, and it is as vital in the interests of the country or even more vital to-day than when it was introduced in the form of Budget Resolutions.
  I want to say a few words in regard to what the Chancellor of the Exchequer said, with the greatest candour, in his speech about the burdens which the increased Income Tax was bound to impose upon industry. He made it clear that it was the part of the Income Tax which was charged upon sums placed to reserve which were a direct method of imposing a burden upon industry. He said that in regard to the sums placed to reserve he would endeavour to see whether he
  1750
  could to some extent minimise the effect upon industry of this increase in the Income Tax. He further said that in regard to the general question of freeing that portion of the profits of industry from Income Tax, he did not despair of eventually finding some satisfactory solution of the problem, and that he would keep it under consideration. In the meantime in his proposals he deals with the increase of the Income Tax by allowing 10 per cent. addition to the sums usually allowed for depreciation, or wear and tear. That is only dealing with the increase of 6d. in the pound. The great question of the incidence of the Income Tax as a whole which, now that it amounts to 5s. in the pound is a deterrent to the reconstitution of industry and the rebuilding of plant and machinery, is laying in abeyance. All that he told us was that he hoped eventually to find a solution. So far as dealing witht the sixpence is concerned, we do not find it mentioned in the present Finance Bill, and he pointed out that it would have to await the introduction ofthe next Budget. He went on to deal with the question of obsolescent plant—a subject I have frequently brought before the House in past years—and he said:
  "I may add also that the practice in regard to the allowance for obsolence of plant and machinery has been for some time under consideration. Complaints have been made that too narrow a view has been taken of what constitutes replacement for the purpose of this allowance. In future it is proposed to take a somewhat more liberal view."—[OFFICIAL REPORT, 10th September, 1931; col. 305, Vol. 256.]
  I was very glad to hear that statement, because there is no doubt the way in which allowances for replacement of obsolescent plant have actually been made has been a great deterrent to the scrapping of obsolescent plant. Let me give an illustration which was brought to my notice the other day. It was proposed to amalgamate two small gas works, each of which was supplying only a small area where production would be rather more cheaply done by one gas works supplying the whole area. It meant the scrapping of gasholders and other plant at one works, and substituting for them a bigger main and other things of that sort which were necessary to work the gas supply over a larger district from a single unit, and yet the allowance could

  1751
  not be made because precisely the same kind of plant was not going to be replaced. Therefore, it will be a distinct assistance to the improvement and reconstruction of industrial plant to have a much wider interpretation of what constitutes replacement.
  While I welcome this small indication of concession in a matter which is of vital moment to this country, namely, the incidence of Income Tax at anything like its present rate upon industry, I do want to make an appeal to the Financial Secretary to do more than keep this matter under consideration as the Chancellor has indicated. It is clear from his speech that we shall have to have some Clause in the next Finance Bill to carry out his Budget pledge in regard to the incidence of the 6d. additional Income Tax. I suggest that nothing could be more important than to work out between now and the introduction of the next Finance Bill, some practical measure which would have general agreement throughout the country—and that is much more important than general agreement in this House—in regard to this question which has been before the House for over 20 years.
  We have there questions of obsolescent plant and of sums placed to reserve intended to be used in the development of industry and the improvement of its machinery and plant. In both cases, these things are not properly taxable profits at all. They are not profits. These things can only be done and industry can only be got into the condition into which it is necessary to get it in order that it may compete on equal terms in all parts of the world, if we do not put this great burden of 5s. in the pound upon it. It comes to this, that the advanced industrialist who wants to improve his undertaking has got to make £100 profit in order to be allowed to spend £75 on improved machinery. We must get over that question and see that the Income Tax falls where it was originally intended to fall in the earliest Income Tax Acts, namely, upon the profits of industry. Such part of those profits as is devoted to improvements on plant and machinery should not be taxed at all. The Chancellor of the Exchequer said he did not despair of arriving at a solution, and I believe if the Financial
  1752
  Secretary will give his attention to this matter in the course of the next three or four months, we may clear this old bone of contention out of the way, so that we need have no more speeches on future Finance Bills on the question of obsolescent machinery, and so on.
  I want to say one word, more particularly as I see the former First Lord of the Admiralty in his place, in regard to the question of co-operative trading. In this matter there are the sums placed to reserve, quite apart from the contentious question of what are profits and now generally referred to as surpluses, which are supposed to be a return in the form of dividends. Quite apart from that, it is an uncontested fact that this great co-operative industry is doing more than £300,000,000 worth of trade annually, and making a profit or surplus of something like one-tenth of that amount, namely, between £28,000,000 and £30,000,000 every year. What is more important, it is placing to reserve annually sums exceeding £2,000,000. Surely it is an unreasonable proposition that what really amounts to a great subsidy towards one form of trading should go on being granted, at any rate as far as the sums placed to reserve are concerned? See what happens.
  I mentioned just now that industry generally has to earn £100 in order to place £75 to expansion or improvement in machinery. In the co-operative industry £100 is earned and £100 can be spent, without paying a penny of Income Tax, on improving business, or for the purchase of new premises or improvement in machinery. I do not think that can be justified. It cannot certainly be justified as being equality of sacrifice between all classes. In the present state of affairs it appears to me that now is the time when this question can no longer be bucked. Hon. Members may cheer when I mention the size of the industry at present. I do not mind that. No doubt it will be bigger every year. Their admitted intention is, if they can succeed in their full programme, ultimately entirely to eliminate all private enterprise in this country.
  I ask the Financial Secretary particularly to consider what will happen as we get a diminishing circle of taxpayers and of industries that are still carried on by

  1753
  private enterprise, and upon whom a constantly increasing and accumulating burden of tax is placed, because a larger and larger proportion of industry is absorbed in the tax-free co-operative enterprise. If one may take it to a logical conclusion, ultimately when they have achieved the goal which they have set forth quite clearly as their object, who is going to pay the tax in those circumstances? Is it not much better that they should shoulder now in one form or another some fair share of the burden which should be common to all? Underlying the exemption from Income Tax is the original idea that these co-operative societies were a small association of very poor people who bought small quantities of produce on wholesale terms which they could not possibly have got individually, and then divided it up, making no profit and simply running the thing under the system which we understand as co-operative.
  Anything more absolutely opposed to that idea of co-operative trade than that which exists at the present time could not possibly be imagined. The co-operative society enters into contracts, undertakes banking and coal mining, goes in for huge experiments in agriculture and for every form of manufacture; it appeals to members and non-members, not only in this country but in such far away Places as East Africa, deals with anybody who will deal with it and makes a profit out of these transactions, and the question as to whether this huge volume of trade is to avoid taxation cannot any longer be left in abeyance. Chancellor after Chancellor of the Exchequer has said that it is a difficult question which will be considered in the hope of being able to find a solution; but we have not yet arrived at any definite conclusion. It is not very creditable to this House and to the different Governments which have considered this matter that no solution should have been arrived at, because it naturally leads one to think that there must be some reason other than economic to account for it, such as a question of votes.
  I hold that the appeals which have been made to the Chancellor of the Exchequer in this emergency by the National Chamber of Trade, the Coal Merchants' Federation of Great Britain and the Scottish Federation of Grocers, to mention
  1754
  only three out of a large number, demand that some solution of this question should be reached, and I hope that before we arrive at our next Budget we shall find that the Treasury have worked out a fair solution in regard to that portion of the profits made by the co-operative movement which are placed to reserve, unless there is a proposal to free all such sums in all industries, whether co-operative or otherwise, from the incidence of taxation. If that were done, as far as reserves are concerned, all traders will be upon the same basis, although there would still remain the great question of the trade with non-members. As far as that is concerned, we ought to have a return of the trade which is done with their own members. It may be that the Treasury argument that the collection of Income Tax would not be worth while is good, but that is now altered by the lowering of the limit of Income Tax in the Finance Bill. With regard to the trade with non-members, there is no question that this should be regarded in exactly the same way as any similar trade done by any other organisation. I wish to bring these two points to the attention of the Financial Secretary and to assure the House that I have no desire to follow the wide range of subjects which have been referred to this afternoon, most of which would have been more appropriately kept for the platform in three weeks' time.
  Mr. QUIBELL: The late First Lord of the Admiralty and the organisation with which he has been so actively identified will be deeply grateful for the unsolicited testimonial which has been given to the co-operative society as to its strength and the rate at which it is growing by the hon. Member for Barnstaple (Sir B. Peto). The Debate had been remarkable for the variety of speeches delivered and sitting here, as I have during most of it, I had an opportunity of looking at the Chancellor of the Exchequer when the hon. and gallant Member for Paddington South (Vice-Admiral Taylor) was speaking on the question of Empire Free Trade and Protection. The face of the Chancellor of the Exchequer was really a picture. Whatever may be the looks on the faces of hon. Members on this side, the look on the face of the Chancellor of the Exchequer was as if the next election meant

  1755
  certain defeat. The hon. and gallant Member for Paddington South was very concerned about the agricultural districts of the country; he would put a tax on the imports of foreign foodstuffs and allow Empire foodstuffs to come in free.
  I should like to know how that is going to help the farmers in Lincolnshire. There was not much comfort in that speech for my constituents. The hon. and gallant Member might have mentioned that the Government propose to increase the price of beer by 1d. per pint. If the Government wanted to help the industry and assist the balance of trade they might have inserted a Clause in the Bill which would compel British brewers, who can well afford to pay an economic price for British barley, to give British farmers the same price they give to foreign farmers. The hon. and gallant Member spoke of tariffs. There is a great deal we can do without the operation of tariffs at all. In regard to many industries we have the solution of this difficulty in our own hands. For instance, we import millions of pounds worth of steel. Going through St. Pancras the other day I saw a board with these words upon it: "British steel used in this building." I wondered whether such a notice implied that it was so rare a thing to use British steel in the construction of a building that it was necessary to advertise it.
  In dealing with that side of the matter there is, without the operation of a tariff, a solution of the problem very largely in our own hands. I am not without experience when I say that in asking for the price of constructional steel the reply one gets is that if one asks for British steel one can get it, but that in many cases inducements are offered on account of the price—there is not very much difference in that—to have a certain amount of foreign steel. Our great local authorities and great Government Departments, without affecting the price of steel or introducing the principle of tariffs, could adopt a simple remedy by specifying British steel and insisting on its use in buildings. The same statement applies to many other things. There is no need to buy a foreign motor car, for there are plenty of good British makes. I once talked to a friend who Was engaged in the steel industry, who complained about the state
  1756
  of that industry and then set out on a journey in an Italian Fiat car. It is within our power to increase the amount of British steel used in this country.
  I was amazed to-day at an argument used by a Noble Lord who bears an honoured name and represents Oxford University (Lord H. Cecil). The language of the speech was fine, but what did the speech amount to? The Noble Lord said that the country had to face up to the fact that wages must be reduced so that we could produce more cheaply and abundantly and compete in foreign markets. I remember reading a speech by one of the United States senators in which he showed that America during nine months of the year could produce all that the workmen could buy back with their wages or that the employing class could use or waste, and that for three months of the year America depended on her home market to get rid of surplus products. In this country, under machine production, we can produce abundantly and there is a huge surplus for which we need a foreign market. It is said that in France and Germany and in every other highly industrialised country over-production is taking place. That being the problem, there are only one of two solutions possible. We must either more thoroughly exploit the home market or find new markets. It is admittedly a difficult problem.
  It has been argued that the country which can produce most cheaply is the country that will survive in the world market. If that is true there can be no solution in low wages. No one can contemplate for a moment the Lancashire cotton operative being able to compete with the Japanese or Chinese cotton operative who works a similar machine for something like 10d. a day compared with five or six times that amount paid to the Lancashire man. If that is the Noble Lord's conception of what we have to do with the standard of life in this country, it is a philosophy which not a single Member on this side of the House will accept. Then with respect to the Finance Bill and unemployment. We have seen the Chancellor of the Exchequer make himself responsible for this Bill. The Bill imposes cuts that I do not believe a single Member of the House opposite would wish to justify. The worst

  1757
  case of all is the cut in the benefit of the unemployed man.
  Mr. SPEAKER: The Debate has involved a very wide discussion, but the Economy Bill and the question of unemployment benefit cannot be discussed on the Finance Bill.
  Mr. QUBELL: Then I reserve my remarks for another occasion. This Bill is a Bill to which we shall offer uncompromising opposition, and I trust that it will be rejected.
  Mrs. HAMILTON: Many right hon. and hon. Members have meditated at times on the strange working of democracy. An illustration of the working of democracy is offered to the House by my presence in a position which to me is probably even more awkwardly unfamiliar than the back benches are to the right hon. Member for Epping (Mr. Churchill). We have had a Debate whose characteristic atmosphere has been very singular. The inclination on the benches opposite, both above and below the Gangway, has been to avoid the Finance Bill and to select for illustration or point of view images which are remarkably suggestive. We had the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) describing to us ships which do everything but sail. The right hon. Gentleman the Member for Oxford University (Lord Hugh Cecil) abounded in reminiscences of the torture chamber. The hon. Member for Farnham (Mr. A. M. Samuel) dealt with frozen blood, and the hon. Member for Norwich (Mr. Shakespeare) finished up with a reference to ritual murder. The approach of dissolution and destruction seems to dwell in the minds of hon. Members opposite to an extraordinary degree. I cannot help feeling that these images, combined with the evidence contained in the Finance Bill, suggest a sense of guilt which I should wish clearly to bring home to them.
  I think it will be admitted that on this side of the House we fully realise the crisis in which our country and the world is involved. Perhaps we realise it more fully than some hon. and right hon. Gentlemen opposite—those who have not been willing to put their pet nostrums into cold storage for more than the shortest space of time, regardless a the risks that may be involved. There is one
  1758
  thing which I would like to urge on the House about this crisis. It has a feature in common with the smaller but equally acute crises which affect us in our private lives. At a time of crisis more decidedly than at any other time the foundations of belief are tested, and the individual and the nation discover, perforce, what things are to them of ultimate and true value. This applies to the housekeeping problem presented to every individual, and I think it applies also with great force to the problem of the housekeeping of the nation, as it presents itself to the Chancellor of the Exchequer.
  Our main criticism must be that important as are those methods of taxation which can distribute wealth more evenly at normal times, they are still more important and more vitally necessary in times of difficulty when that difficulty jeopardises the real strength of the nation and causes undeserved suffering to those people who are the repositories of its essential strength. We do not stand for the theory that there are two nations in our country. The view which I wish to put to the House is that there are not two nations but one nation; that the wage-earners of all classes, the workers by hand and brain, do represent the nation and that any forms of economy or taxation which undercut their strength and their power of service are detrimental, not only on grounds of social justice but on economic grounds. It is from that point of view that we are bound to criticise the provisions of this Finance Bill and to ask the House to reject the unequal incidence of its taxation, because of the possibilities involved of grave social and economic disaster.
  It is not necessary for anyone speaking at this stage of the Debate to say that we accept the view that the nation's housekeeping must rest upon balanced Budgets. We accept that view. We do not oppose taxation. What we do say, however, is that the scales of the taxation which it is here sought to impose are wrongly weighted; that on principles which no one has taught us so effectively as the Chancellor of the Exchequer himself, the burdens ought to be adapted to the breadth and strength of the backs on which they are to be laid, and that regard ought to be had not only to what is taken in taxation, but to what is left. Our criticism, therefore, of the Finance

  1759
  Bill is that too much is taken from the relatively ill-to-do and not enough from the relatively well-to-do, and we must criticise expressly the means, through the variation of allowances and reliefs, whereby there have been brought into the ambit of taxation and of heavy taxation, precisely those groups in the community on which, more particularly at a juncture like the present, its strength, its power to readjust and its power to lift itself out of the present circumstances, depend.
  10.0 p.m.
  The classes and the groups on whom this new taxation falls in the main represent the skilled workers, the technicians, the professional people and their children, and we are very much afraid that the effect of this taxation is going to be to compel just those people on whose power to make educational provision for their children so much depends, to restrict expenditure which is necessary for the nation. Beyond that, we must and we do put with force the view which I believe is described in economic theory as the diminishing utility of money. There is no getting away from the fact that when you get below a certain range of incomes any sacrifices, any additional imposts levied have to be taken out of the necessaries of life, and that in a range of incomes just above that, they have to be taken out of the necessaries for efficiency. In so far as that is done, the imposition is made with the maximum of disproportion between advantage to the Exchequer and disadvantage to the taxpayer, and therefore to the nation. There is no social comparison, no effective comparison at all between the cost to the married man with three children of an additional impost of between £11 and £12, and an addition of that amount or an equal proportionate amount to the man whose income is assessed not in tens, but in hundreds or thousands.
  We have to remind the House, in taking a decision on this Bill, that the taxation provisions and the burdens which they impose on the middle incomes and the wage-earners' incomes do not by any means give us the whole picture. It is among the 1,500,000 or 2,000,000 of new taxpayers that you find those upon whose
  1760
  shoulders the burden will fall very heavily. On them will also fall the new indirect taxes and they are the same people who have suffered and who will suffer from the contraction of the social services. Employed or, often, unemployed, they are the people who have to carry the burden of cuts. On them there weighs at the present the heavy lag between retail prices and wholesale prices. They have to carry the burden of unregulated prices. On them will fall the first brunt of that rise in prices which, among all the varying expectations of the results of leaving the Gold Standard, seems to be the one as to which there is agreement.
  Of course we know—it has been expressed again and again in this Debate and there is no escape from the conclusion—that this policy of burdens and of reductions in the normal standard is bound to have reactions upon the standard rate of wages. Whatever be the intention it is already having that result. Groups of employés all over the country, great groups like those in the cotton industry and the engineering industry, are feeling it already. It is going on within smaller industrial groups in every direction and there will be no stopping it, if the nation sees its Budget launched on a policy like this.
  This criticism of the taxes imposed gains part of its sting from the bitter disappointment which the unfolding of the Budget brought to those of us who believed that sacrifices exacted from the wage-earners could be asked by a Government like the present Government only because such a Government could and would enforce by legislation what the "Economist" called parallel contributions from the recipients of rent, interest, and profit. We do not find parallel contributions or anything resembling them in this Budget, and that is our great criticism of it. Neither in the Budget nor in the Measures onside the Budget do we find parallel contributions. We hoped, in our simplicity, that there might be at once a great patriotic drive for scaling down War Debt interest.
  After all, every argument which has been used to apply to the unemployed and to the classes who have to support the cut about the effects on their expenditure of the fall in prices applies with at least equal force to the holders of War

  1761
  Debt. Every argument that has been used about the variability of contracts at a time of national emergency applies with at least equal force to these contracts. The balance of social advantage as between one case and the other is entirely on the side of laying the burdens on the broad backs, the backs of the debtholders.
  Patriotism has been shown, as many hon. Members have said, by people who could very ill afford it. An impulse of real generosity, which we honour, has been present in the minds of hundreds and thousands of very small and poor people. What disappoints us, and I think must disappoint the nation, is that there has not been a really equal, compensating movement on the other side such as we thought there might have been and such as we believed, with an adequate drive behind it, might have been carried through. If we do not find in the Finance Bill any really adequate taxation of high incomes, and the discrimination between earned and unearned incomes is carried so feebly in the higher ranges, but that, of course, we have to accept as the price of coalition.
  When we are asked to see in this any element of equality of sacrifice, I confess that the only kind of equality that it seems to represent to me is that recorded in the ancient fable about a selfish individual who, being offered a wish governed by the condition that his neighbour should have twice whatever he got for himself, paused in puzzlement as to how he could combine giving injury to his neighbour with getting a wish of his own, and at last decided that the only thing he could wish was that he should be blinded of one eye in order that his neighbour might be blinded of both eyes. To be blinded of one eye is a very dangerous condition for any group of people. I am afraid that we have to warn this House and the country that to blind of two eyes the great mass of your fellow citizens and impose upon them burdens too heavy to bear, burdens which are dangerously apt to blur their judgment, is going to make those who are blind of two eyes dangerous to those who have wilfully blinded themselves of one eye.
  After all, we ought never to forget that one of the main reasons why in this
  1762
  country it has been possible, over a great period of disastrous unemployment, for our people to bear that stress of mind and heartache that such a condition involves to a people like ours, without loss of self-respect and moral, is that they have been saved not only from deteriorating by the legislation of the late Labour Government, but saved by a, sense that they were being treated with equal justice. That sense they have not got now. That is a real danger, an unnecessary danger, that ought to be mentioned—no one wishes for it—but it is a danger that is there, and it has to be faced.
  I turn now to a criticism of the Finance Bill propositions in their more directly economic aspects. There too the want of relationship to the real conditions of our problem seems to us plain. I do not need to re-establish again the connection between the high efficiency of our work-people and a reasonable standard of life for those workpeople—that is a matter of common admission—but the point I want to make is this, that any economy or taxation proposal which cuts at the consuming power of that great central block of consumers is going to injure us in that market which is the one section of the economic sphere on which we have actually maintained our hold. The figures about that are striking.
  In the current number of the "Economic Journal" hon. Members will find an analysis of the share retained by home production of our home market, which gives some very surprising results. Actually in 1930 we had a larger share of the home market, or, to put it another way, the imports had a smaller share of the home market, than was the case in 1913. The discrepancy is really striking. If you take imports, even including non-ferrous metals and petrol, the proportion of imports in 1913 was over 25 per cent., and in 1930 it was only 19 per cent., and the difference is more striking if you leave out the non-ferrous metals and petrol, which are not strictly manufactured goods. We then get in 1930 15 per cent. of the home market taken by foreign imports, and in 1913 20 per cent. That market, of vital importance to our industry, largely depends, as every hon. Member knows, on a steady demand for subsistence and efficiency goods which comes precisely from the block of consumers

  1763
  whose consuming power of the necessaries or of subsistence goods must be hit at by this Bill.
  It has been frequently said, notably by the Prime Minister, that the crisis through which we are still passing is a crisis of confidence, our own confidence in ourselves and the confidence of other nations in us. The "Times" of 25th August, in a leader, rejoiced that a step had been taken which would reverse the whole trend of a national policy which the Labour party had made peculiarly their own. They referred accurately to a national policy. It is not merely our policy; it is a national policy in the fullest sense; it is indeed what distinguishes this nation honourably from many other nations of Europe, more potent than prestige or armaments for good. Many of us still have in mind the praise and recognition given by M. Albert Thomas at the time of the International Labour Conference last spring to the steady lead given on this side by Great Britain, a lead maintained to its honour even in circumstances of the gravest economical difficulty. To turn our backs on this policy, to give it up at a time like this, is not either calculated to maintain foreign confidence in ourselves or, what is much more important, to re-establish, strengthen and confirm that vital confidence in ourselves which is the thing this nation needs more than any other. There is no disposition on this side of the House to minimise the crisis in which this country is involved. On the contrary, it is because we recognise the scale and character of that crisis as an international crisis and a crisis of under-consumption, that we are bound to criticise the proposals of the Finance Bill. Years ago a great British economist who has had far too little honour in his own country—J. A. Hobson—made an analysis of the creeping paralysis which was coming over capitalism on the lines which facts have demonstrated quite lately. This crisis of under-consumption is a tragedy, but there is contained in it great hope of the means by which we can come out of the crisis and re-establish ourselves on the other side. The reality, fantastic as it is, is that the world is not poor to-day. Great Britain is not poor. A writer in the "Round Table," whom hon. Gentlemen opposite will not suspect of prejudice, says:
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  "The world was never equipped to produce so much wealth so easily as at the present time. There is no question of impoverishment if the machinery of national credit and exchange can be so organised and controlled as to insure its growth and steady working."
  This organisation and control, internationally and nationally applied, is the method of Socialism, the method which we on this side are not prepared to put into cold storage, the method which this country and the world needs more than it ever did. You can put it how you like, but everyone in this House knows that capitalism is in dissolution. Its break-down, with its economic folly in its most characteristic international expression, the Versailles Treaty, is at present shattering the foundation of organised life in Europe. That economic nationalism which is a doctrine which some hon. Members would like us to take over for our salvation here, is finishing the destruction which the War and the treaties began. A world disorganised, as it is under capitalism, cannot take advantage of this, the greatest economic revolution which promises relief. Actually society is out-growing the privileged nation and the privileged class living on exploitation. What we in this country require, and what the world requires, is not tariffs but national and international planning, regulation on a basis of common service and common good. Tariffs, which aggravate economic nationalism, and are a danger to the world reconstruction which we require, are no guarantee of industrial reorganisation, are no guarantee and no protection against unemployment. We on this side renew the pressure which there is from many quarters on the Chancellor to stimulate international action, because we sincerely believe that without that action the balance of the Budget has already gone and that nothing can really retrieve it.
  So far as home policy goes, we welcome the use of taxation as an instrument of reorganisation, but it can only be an effective instrument of reorganisation when it is directed by a policy of real equality and social performance. We stand here to-day in a crisis as acute as that of the War itself and with a much clearer perception that this crisis requires the application of those Socialist principles that the War itself showed to be economically necessary to carry on the

  1765
  nation. If we are to get out of this crisis without ruin and disaster we should be taking steps now which would permit the nation and not the banks to control our financial policy, the nation and not private interests to control our economic policy. On that issue the late Government, though in most difficult circumstances, showed that it was absolutely on the right lines. Its policy was directed on the one hand to maintaining the standard of life, to the immense advantage of this nation, and on the other hand to laying the foundations of national control of the great nerves of economic life—transport, coal and agriculture. They were preparing for their reorganisation and control for public service. That was a contribution of a real character to national reorganisation such as would fit this nation to deal with this crisis both in its domestic and in its international phases.
  Since we believe, if possible more keenly than we did before the present phase of the world crisis struck us, in a planned reorganisation of industry and finance under national control, and believe that that is the one road of salvation for this country and for the other countries with whom its destiny is tied up, we on this side should be false to our beliefs, and failing to make that contribution which any honest conviction renders to the nation, if we did anything but refuse to give our support and sanction to a Finance Bill which in our judgment is wrongly conceived, inadequate to the needs of this nation, and certain to accentuate the distress from which all classes of the community who live by labour are already suffering. We in this House, without any need to talk about it, are, and cannot help being, our brothers' keepers, and it is because this Bill seems to us to deny that obligation, and in so doing betray the nation, that we have to appeal to the House to send the Bill hack and ask for something more adequate and more worthy of us to replace it.
  The FINANCIAL SECRETARY to the TREASURY (Major Elliot): It fell to my lot to compliment the Minister for Labour in the previous Government as the first woman Minister who introduced a major Measure in Parliament. It also falls to my lot to compliment the hon. Member for Blackburn (Mrs. Hamilton)
  1766
  on her power of criticism in regard to the main finance Measure of the year. I apply to her the same compliment which I applied to the late Minister of Labour, namely, that we should forget altogether our sex, and I will criticise her speech purely on the strength of the weight of argument which she has advanced, and I think that is the sincerest compliment which I can pay to her. May I say that that is a compliment which she well deserves on her first attempt at what is to any one of us a trying ordeal, that is making a speech from the Front Bench either on the Opposition or the Government side, and still more a speech on the Finance Bill in which I am as much a tyro as she is herself.
  Let me say in the presence of two or more redoubtable masters of finance, the Chancellor of the Exchequer and the late President of the Board of Trade, and also in the presence of the late Financial Secretary to the Treasury, that while I fully appreciate the eloquent speech which the hon. Member for Blackburn has made, I should have appreciated it more if the Motion for rejection had not attached to it the name of the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham). I have been considering the draft Budget which the right hon. Gentleman brought forward, and I have compared it item for item with the White Paper. The figures I am speaking of consist of the taxation which he suggested, not which he submitted to the Cabinet, but figures used by him when he had shaken himself free from the trammels of office and from association with the reactionary Chancellor of the Exchequer.
  What were the items which the right hon. Gentleman the Member for Central Edinburgh put forward and for which the hon. Member for Blackburn, in her indignation, has told the House that the Government are turning their back on the social services. The items which the right hon. Gentleman suggested in order to balance the Budget were £2,500,000 from the Beer Duty, £2,500,000 from tobacco, and £3,000,000 from the tax on petrol. Surely in the circumstances it is a travesty of language to suggest that we are turning our backs upon the social services. May I point out that £400,000,000 is being raised in the Budget for social services, not for one section but for all sections of the nation. The

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  chief items recommended by the right hon. Gentleman the Member for Central Edinburgh in his Budget, and which he recommended to the Labour movement in the Labour organ under the title "How to balance the Budget" are contained in the White Paper, and for it to be suggested now that this is turning our backs on the social services is an argument which the circumstances do not support.
  Let us consider the main attack which has been delivered from the other side, because, after all, the question of direct and indirect taxation has scarcely been broached. It is true, as the hon. Lady said, that a great number of subjects have been touched upon in this Debate, and it would be impossible for me to follow them all into their many ramifications; but the main outlines of this Budget are, after all, the main lines of the Budget which was introduced in the spring of this year. The second half of that Budget is the first half of this one, and, in the second half of this Budget, are seen through a magnifying glass all of the items proportionately enlarged; but there is no departure from policy, there is no departure from the main lines which were then laid down. Indeed, hon. and right hon. Friends of mine could well wish that some further departure had been made. We admit, as everyone who joins in this Government must admit, that continuity of policy is desirable, but my right hon. Friend the Chancellor of the Exchequer, in drafting this Budget, made no special concessions to the political prejudices of those with whom he had to work. He drafted this Budget, as he drafted his previous one, on the lines which he himself laid down and which were then sanctioned and approved by hon. and right hon. Gentlemen opposite. He presents it to the House, supported, certainly, by a different majority from that which originally supported these measures, but certainly without his having made, I do not say wide and sweeping concessions, but I say, on behalf of myself and my hon. Friends, without any concessions at all to purely political prejudices.
  Let us consider the Finance Bill as we find it, regarding it as the supplement, as the second instalment of the Budget
  1768
  which was introduced in the earlier part of this year, and which was wholeheartedly supported by hon. and right hon. Gentlemen opposite. I can give quotations from my speeches at the time, giving even the date at which the Chancellor of the Exchequer would call for our support, and saying that I hoped that, when he called for it, he would call for it in full, and that we should in full accord it; and it is in fulfilment of that pledge that I am standing here. The proposals of the Budget proved inadequate. They proved inadequate, as the Chancellor of the Exchequer had warned the House, to fulfil the main financial purpose of the year, which was to balance the Budget. The Chancellor of the Exchequer warned the House that the May Committee and the Holman Gregory Commission would need to be called in, and their counsels considered when the balancing of the Budget was finally accomplished. He made no secret then of the fact that a balanced Budget was essential to the British financial system, more particularly in the crisis which he saw approaching, and certainly it is more than ever essential in the stage which the crisis has now reached.
  Right hon. Gentlemen opposite say, "We agree that the Budget ought to be balanced, but not in this fashion. We agree that taxes ought to be raised, but not these taxes. We agree that alterations ought to be made, but not these alterations." Let us see what is the main accusation which the Amendment brings against the case which we present in this Finance Bill. The accusation is brought forward that it inequitably distributes the burden, and touches lower ranges of incomes than those which it ought to touch; but that, in fact, has been, and is, the programme of the right hon. Gentleman whose name heads this Amendment. The right hon. Gentleman's policy is specifically the regrading of the Income Tax, and not regrading it on the higher ranges. His specific statement, given as advice to the Labour party, is, "Regrading the Income Tax to reach lower ranges of income." [Interruption.] There is the date, the 3rd September; and on the 23rd September the right hon. Gentleman puts his name to an Amendment which condemns the Chancellor of the Exchequer for doing the

  1769
  very thing which he impressed upon him on the 3rd of this month.
  The argument that the Budget should be balanced is accepted on all sides of the House, but the method by which it is to be balanced is brought under challenge. Let us see along what lines it is challenged. Is it on the proportion of direct and indirect taxation? It was 33 to 66 in the Budget of March, which the then Financial Secretary of the Treasury supported, and it is 33 to 66 to-day in this supplementary Budget. Is it the duty on beer? That is undoubtedly a heavy duty, but is one that can be avoided at the will of the consumer. That is an argument that has been thundered from the Opposition Benches in times past. The tax on tobacco bears on a luxury which is greatly appreciated by the poorest among us.
  We all agree that these taxes are not put on for amusement and because people wish taxes to be put on. They are put on because of that emergency which has brought us here, which still continues, and which at this moment stands at the door to know whether the House of Commons is going to face up to its financial responsibilities or not. No part of the House quarrels—the Opposition does not quarrel—with the proportion that has been maintained between direct and indirect taxation. [An HON. MEMBER: "Yes, we do!"] No speaker to-night has quarrelled with it. It has been left to an interjection at 25 minutes to Eleven. There has been no quarrel between any sections of the House on the proportion of direct and indirect taxation or as to the indirect taxes that have been proposed, the Beer Duty, the Tobacco Duty, the Petrol Duty and the Entertainments Duty. The. Entertainments Duty, which was criticised during the Debates on the Resolutions, has not been raised again to-night, and, therefore, it is clear that the reasonableness of raising some amount, at any rate, from the entertainments of the country during the present crisis has been generally accepted as desirable and necessary in all parts of the House. I do not say that the amount of the revenue has been accepted as reasonable and, when we come to the Committee stage of the Bill, it will be further discussed, but the reasonableness of the four main heads under which the
  1770
  Chancellor has asked for a contribution from indirect taxation to the country's necessity is accepted by the opinion of the great body of the House.
  Now we come to the quarrel on which the hon. Lady laid the greatest stress, and on which I think the hon. Member for West Leicester (Mr. Pethick-Lawrence) also laid the greatest stress. The hon. Gentleman stressed it in an earlier calculation in which he drew attention to what he considered the inadequate contribution made by a man with an income of £5,000 a year. As it turned out, on examining his figures, that he was considering that contribution as a percentage not merely on the income which a man with £5,000 had, but also on the portion of his income which had already been removed from his purview by the tax gatherer, his mental arithmetic was not as convincing as it appeared at the time. The grading of the Income Tax on the lower reaches of income is the one point upon which the main weight of the Opposition criticism has been launched. You must consider that over a period of years. The hon. Lady said that these allowances, the policy of grading the Income Tax or making generous allowances, was a Labour policy. It is not the policy of one side of the House; it is the policy of both sides of the House. When does the hon. Lady think most of those allowances were introduced? They were not introduced in the last Budget or in the Budget before it; they were introduced in previous Budgets. The continuity of policy for which she appeals—as I am sure that the Chancellor of the Exchequer would most readily admit—has been followed up right from the time when my right hon. Friend the ex-President of the Board of Trade as one of the signatories of the Royal Commission on Income Tax recommended the exemption, which was then a tenth. The exemption of great blocks of taxation in the lower level has been pursued by Chancellor of the Exchequer after Chancellor of the Exchequer. The main mass of those exemptions were under the Chancellorship of my right hon. Friend the Member for Epping (Mr. Churchill) and not in the tenure of office of the present Chancellor of the Exchequer at all.

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  I am not claiming any special merit for my right hon. Friend the Member for Epping or for the present Chancellor of the Exchequer, but I am saying that these were exemptions widely given by Chancellors of the Exchequer in successive years as the circumstances of the country admitted and are not, to be claimed as purely the party property of any single party in this House. In the year 1924 when the Chancellor of the Exchequer then brought in a Budget which was hailed with the greatest enthusiasm and was, indeed, a notable contribution to the annals of our financial history, a Budget which was greeted by the right hon. Gentleman the ex-Home Secretary as a Budget which had met with nothing but approbation and enthusiasm, with which his then Financial Secretary associated himself, it was the taxation then asked from those very people whom the Opposition Front Bench speakers have been quoting as those chiefly affected; it was the taxation levied upon those classes in a Budget rapturously acclaimed by the Labour party and not brought forward under any special element of crisis or of stringency in our financial affairs, and so, in fact, those unbridled accusations have not been borne out in practice.
  The figures are very striking and well worth the attention of the House. In the year 1924–25 the married taxpayer, with three children, with an income of £135, paid nothing; he pays nothing now. For an income of £200 a year he paid nothing then; he pays nothing now. For an income of £300 he paid nothing then; he pays nothing now. For an income of £400 he paid £5 1s. 3d. then; he pays £5 now. It is a lower rate actually to-day than it was in the year 1924–25 when this country was, relatively speaking, in abounding prosperity. For an income of £500 he paid £15 3s. 9d. then; he is asked to pay £15 to-day. For an income of £700 he was asked to pay £45 11s. 3d. then; he is asked to pay £48 2s. 6d. to-day.
  Mr. THORNE: Why not give the 1913 figures?
  Major ELLIOT: I will give the figures for 1918. The same man who is only today asked to pay £48 2s. 6d. was asked
  1772
  to pay £79 10s. then. A man with £500 a year who is now asked to pay £15, was asked to pay £33 15s. then.
  Mr. THORNE: Are we not to make any progress?
  Major ELLIOT: If the hon. Member had thought that the figures had shown what they did, he would not have put his question. These figures obsolutely dispose of the contention that the lower ranges of Income Tax payers have been struck just now with a peculiar severity which will degrade them, grind them down, destroy the standard of living and bring about all those other results which have been so enlarged upon by hon. Members opposite.
  Mr. J. JONES: What about the stomach tax?
  Major ELLIOT: If the hon. Member does not think that a tax of £79 is more of a stomach tax than a tax of £48 2s. 6d., he and I will never agree. Take the point of savings in the lower grades, the income derived from investments. It is not true to say the whole investment income is simply that of the millionaire or the multi-millionaire who draw great sums. Take the married man with three children, with small savings from which he derives a rentier income, which is as important an item in his family 'budget as any other. He has to make sure that his savings are invested in safe investments. The taxation on a sum up to £200 a year, which is the sum derivable from an investment of £4,000, is wholly exempted from tax. Can anyone say that a married man with £4,000 invested, on which he pays no tax, or with an earned income of £400 a year on which he only pays £5 a year, is a man who can be properly described in the lurid language which we have heard from the front and back benches opposite? Let hon. Members take any rates they like and we are perfectly willing to challenge an examination of the comparisons.
  Take the effective rate of tax. The effective rate of tax for a married man is in pence in the pound and not in shillings in the pound for the lower rates of income, even after all these changes. The married man with three children up to an income of £350 a year is free of all tax. The effective rate of tax on a

  1773
  married man with an income of £400 is 3d. in the pound and on an income of £500, 7d. in the pound. The tax does not reach 2s. in the pound until you get over an income of £900 a year. The arguments brought forward from the other side show a total lack of acquaintance with the real figures upon which they ought to base their case.
  Mr. SHILLAKER: I pay 3s. in the pound on £900.
  Major ELLIOT: It would not be seemly to go into the family circumstances of the hon. Member. I shall be very pleased, indeed, to go into those figures with the hon. Member at a later time. I was dealing with the general block of figures applicable to those cases which have been brought forward as hard cases, namely, the married couple with children and those in the lower ranges of Income Tax. Then let me take the accusation that the rich have been let off—[Interruption.] It is said that not enough taxation has been piled on their shoulders. That accusation also we can show to be wholly unfounded. It was said by the hon. Lady who preceded me that you must consider not merely what is taken but what is left. We will apply that also to the Budget which was so wholeheartedly supported by the late Home Secretary and commended to the House by his then Financial Secretary the right hon. Member for Central Edinburgh (Mr. W. Graham). In the higher ranges of income the taxes are not merely higher to-day, but thousands of pounds higher than in 1924–25. You take Income Tax, Super-tax and the annual value of Death Duties. [HON. MEMBERS: "Why?"] Everybody knows that these are the three items under which direct taxation is collected, and you have no right to leave out the annual value of Death Duties. [Interruption.]
  Mr. SPEAKER: The hon. Member must really be allowed to finish his argument.
  Major ELLIOT: Let me quote the figures, which are very surprising, and well worth the attention of the House. Take an income which would be called an enormous amount—an income of £25,000 a year. In the Budget of 1924 the sum taken out of that income by
  1774
  taxation was £16,315. What is it in this Budget which is described by our opponents as so generous to the rich, and as leaving out of account the burdens which ought to be piled on to the rich? The total burden to-day is £21,000. [Interruption.] The figures I am giving to the House are official figures given in question and answer, and hon. Members cannot say they are wrong. I will repeat them. The figure of Income Tax on an income of £25,000 under the 1924–25 Budget, which was enthusiastically supported by the whole Labour party, was £16,315. The burden on that income today under the proposal brought forward for which we on this side are going to vote whole-heartedly to-night, is over £21,000. The amount left to that man in 1924–25 was £8,600, and to-day out of £25,000 the amount left is under £4,000. [Interruption.]
  Mr. JAMES HUDSON: That is not an answer to my question.
  Mr. SPEAKER: Hon. Members must allow the hon. Gentleman to continue his speech. We cannot conduct a Debate in this way.
  Major ELLIOT: I wish to carry out the desire of the House as far as possible.
  Mr. WEST: Can the hon. and gallant Member give the figures for an income of £50,000?
  Major ELLIOT: I am asked for the figures for an income of £50,000. In the year 1924—[Interruption.] This is very important because the hon. Lady said that if the people of this country felt that they were being fairly treated, that the burdens placed on the richer sections of the community were fair, they would support the Chancellor of the Exchequer in the burdens which he was asking the community to carry, and I am asking the House to bear with me while I demonstrate by irrefutable arithmetic that this is being done. In regard to an investment income of £50,000, in the year 1924 the burden upon that income was £37,987. What is the burden in the present year? The burden in the present year is so great that it does not only absorb all the income [Interruption.]
  Mr. WEST: What rot!
  Major ELLIOT: That is a very discourteous observation indeed.
  Mr. WEST: It is true.
  Mr. SPEAKER: The hon. Member must be aware that he cannot make such remarks.
  Major ELLIOT: I will read the figures again because I do not wish this to be misunderstood. These figures are not the moonshine of my imagination but were printed in the OFFICIAL REPORT on a previous occasion and will be in the OFFICIAL REPORT again. They will be open to the inspection of the hon. Member, or to any accountant in any part of the country. The burden of Income Tax, Super-tax and the annual value of Death Duties—[Interruption]—upon that income—these are the figures upon which this comparison must be taken—is so high that it not merely absorbs the income but trenches upon the capital. The hon. Member cannot deny that.
  Mr. WEST: Then he is bankrupt every year.
  Major ELLIOT: The hon. Member will find the full particulars in an answer given to a Parliamentary question on 14th September. I have tried, no doubt imperfectly, to do my best to show to the House, first, that the taxation upon
  the lower ranges of income is not more than can reasonably be asked and is not more than has been asked from these incomes; and that the taxation on the higher ranges of income is not merely higher than before but enormously higher, mountainously higher, in some cases so high that, as the hon. Member says, it absorbs the whole income of the year and trenches seriously upon the capital resources of the individual. Other occasions will arise when it will be possible to go further into this matter and when we shall be able to discuss the question which we have not had time to discuss to-night; for instance there is the instalment of three-quarters of the Income Tax falling due on 1st January. I am sensible as to the grievous burden which is imposed and we desire administratively to consider whether it is possible without pushing any of the sum due into the next financial year, to make some alleviation. At present all I can say is that we have brought forward proposals which are not unworthy of the House of Commons and we confidently ask for its support.
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 297; Noes, 238.

  Division No. 490.]

  AYES.

  [11.1 p.m.

  Acland-Troyte, Lieut.-Colonel

  Buchan, John

  Croft, Brigadier-General Sir H.

  Ainsworth, Lieut. Col. Charles

  Buchan-Hepburn, P. G. T.

  Crookshank, Capt. H. C.

  Aitchison, Rt. Hon. Craigle M.

  Bullock, Captain Malcolm

  Croom-Johnson, R. P.

  Albery, Irving James

  Burgin, Dr. E. L.

  Culverwell, C. T. (Bristol, West)

  Alexander, Sir Wm. (Glasgow, Cent'l)

  Burton, Colonel H. W.

  Cunliffe-Lister, Rt. Hon. Sir Philip

  Allen, Sir J. Sandeman (Liverp'l, W.)

  Butler, R. A.

  Dalkeith, Earl of

  Allen, Lt.-Col. Sir William (Armagh)

  Butt, Sir Alfred

  Dairymple-White, Lt.-Col. Sir Godfrey

  Amery, Rt. Hon. Leopold C. M. S.

  Cadogan, Major Hon. Edward

  Davidson, Rt. Hon. J. (Hertford)

  Aske, Sir Robert

  Caine, Hall-, Derwent

  Davies, Dr. Veruon

  Astor, Maj. Hn. John J. (Kent, Dover)

  Campbell, E. T.

  Davies, E, C. (Montgomery)

  Atholl, Duchess of

  Carver, Major W. H.

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

  Atkinson, C.

  Castle Stewart, Earl of

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

  Baldwin, Rt. Hon. Stanley (Bewdley)

  Cautley, Sir Henry S.

  Dawson, Sir Philip

  Balfour, George (Hampstead)

  Cayzer, Sir C. (Chester, City)

  Denman, Hon. R. D.

  Balfour, Captain H. H. (I. of Thanet)

  Cayzer, Maj.Sir Herbt. R.(Prtsmth,S.)

  Despencer-Robertson, Major J. A. F.

  Balniel, Lord

  Cazalet, Captain Victor A.

  Dixey, A. C.

  Beamish, Rear-Admiral T. P. H.

  Cecil, Rt. Hon. Lord H. (Ox. Univ.)

  Dixon, Captain Rt. Hon. Herbert

  Bellairs, Commander Carlyon

  Chamberlain, Rt. Hn.SirJ.A.(Birm.,W.)

  Duckworth, G. A. V.

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

  Chamberlain, Rt. Hon. N. (Edgbaston)

  Dugdale, Capt. T. L.

  Berry, Sir George

  Chapman, Sir S.

  Eden, Captain Anthony

  Betterton, Sir Henry B.

  Christie, J. A.

  Edge, Sir William

  Bevan, S. J. (Holborn)

  Church, Major A. G

  Edmondson, Major A. J.

  Birchall, Major Sir John Dearman

  Clydesdale, Marquess of

  Elliot, Major Walter E.

  Birkett, W. Norman

  Cobb, Sir Cyril

  Eimley, Viscount

  Blindell, James

  Cockerill, Brig.-General Sir George

  England, Colonel A.

  Boothby, R. J. G.

  Cohen, Major J. Brunel

  Erskine, Lord (Somerset,Weston-s-M.)

  Bowater, Col. Sir T. Vansittart

  Colfox, Major William Philip

  Evans, Capt. Ernest (Welsh Univer.)

  Bowyer, Captain Sir George E. W.

  Colman, N. C. D.

  Everard, W. Lindsay

  Boyce, Leslie

  Colville, Major D. J.

  Falle, Sir Bertram G.

  Bracken, B.

  Conway, Sir W. Martin

  Ferguson, Sir John

  Braithwaite, Major A. N.

  Cooper, A. Duff

  Fielden, E. B.

  Briscoe, Richard George

  Courtauld, Major J. S.

  Fison, F. G. Clavering

  Broadbent, Colonel J.

  Courthope, Colonel Sir G. L.

  Foot, Isaac

  Brown, Col. D. C. (N'th'I'd., Hexham)

  Cowan, D. M.

  Ford, Sir P. J.

  Brown, Ernest (Leith)

  Cranborne, Viscount

  Forestier-Walker, Sir L.

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

  Crichton-Stuart, Lord C.

  Fremantle, Lieut.-Colonel Francis E.

  Galbraith, J. F. W.

  Llewellin, Major J. J.

  Russell, Alexander West (Tynemouth)

  Ganzoni, Sir John

  Locker-Lampson, Rt. Hon. Godfrey

  Russell, Richard John (Eddlsbury)

  Gault, Lieut.-Col. A. Hamilton

  Locker-Lampson, Com. O.(Handsw'th)

  Salmon, Major I.

  George, Major G. Lloyd (Pembroke)

  Lockwood, Captain J. H.

  Samuel, A. M. (Surrey, Farnham)

  George, Megan Lloyd (Anglesea)

  Long, Major Hon. Eric

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

  Gibson, C. G. (Pudsey & Otley)

  Lovat-Fraser, J. A.

  Samuel, Samuel (W'dsworth, Putney)

  Gillett, George M.

  Lymington, Viscount

  Sandeman, Sir N. Stewart

  Gilmour, Lt.-Col. Rt. Hon. Sir John

  McConnell, Sir Joseph

  Sassoon, Rt. Hon, Sir Philip A. G. D.

  Glassey, A. E.

  MacDonald, Malcolm (Bassetlaw)

  Savery, S. S.

  Glyn, Major R. G. C.

  Macdonald, Sir M. (Inverness)

  Scott James

  Gower, Sir Robert

  Macdonald, Capt. P. D. (I. of W.)

  Shakespeare, Geoffrey H.

  Graham, Fergus (Cumberland, N.)

  Maclean, Sir Donald (Cornwall, N.)

  Shepperson, Sir Ernest Whittome

  Granville, E.

  Macpherson, Rt. Hon. James I.

  Simms, Major-General J.

  Grattan-Doyle, Sir N.

  Macquisten, F. A.

  Simon, Rt. Hon. Sir John

  Gray, Milner

  Maitland, A. (Kent, Faversham)

  Sinclair, Rt. Hon. Sir A. (Caithness)

  Greaves-Lord, Sir Walter

  Makins, Brigadier-General E.

  Skelton, A N.

  Greene, W. P. Crawford

  Mander, Geoffrey le M.

  Smith, Louis W. (Sheffield, Hallam)

  Grenfell, Edward C. (City of London)

  Margesson, Captain H. D.

  Smith-Carington, Neville W.

  Gretton, Colonel Rt. Hon. John

  Marjoribanks, Edward

  Smithers, Waldron

  Griffith, F. Kingsley (Middlesbro' W.)

  Markham, S. F.

  Snowden, Rt. Hon. Philip

  Gritten, W. G. Howard

  Mason, Colonel Glyn K.

  Somerset, Thomas

  Gunston, Captain D. W.

  Meller, R. J.

  Somervilie, A. A. (Windsor)

  Hacking, Rt. Hon. Douglas H.

  Merriman, Sir F. Boyd

  Somerville, D. G. (Willesden, East)

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

  Millar, J. D.

  Southby, Commander A. R. J.

  Hamilton, Sir George (ilford)

  Mitchell, Sir W. Lane (Streatham)

  Spender-Clay, Colonel H.

  Hamilton, Sir R. (Orkney & Zetland)

  Moore, Lieut.-Colonel T. C. R. (Ayr)

  Stanley, Lord (Fylde)

  Hammersley, S. S.

  Morris, Rhys Hopkins

  Stanley, Hon. O. (Westmorland)

  Hanbury, C.

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

  Stewart, W. J. (Belfast South)

  Hannon, Patrick Joseph Henry

  Muirhead, A. J.

  Stuart, Hon. J. (Moray and Nairn)

  Harbord, A.

  Nail-Cain, A. R. N.

  Sueter, Rear-Admiral M. F.

  Hartington, Marquess of

  Nathan, Major H. L.

  Taylor, Vice-Admiral E. A.

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

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

  Thomas, Rt. Hon. J. H. (Derby)

  Haslam, Henry C.

  Newton, Sir D. G. C. (Cambridge)

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

  Henderson. Capt. R. R. (Oxf'd,Henley)

  Nicholson, O. (Westminster)

  Thompson, Luke

  Heneage, Lieut.-Colonel Arthur P.

  Nicholson, Col. Rt. Hn. W. G, (Ptrsf'ld)

  Thomson, Sir F.

  Hennessy, Major Sir G. R. J.

  O'Connor, T. J.

  Thomson, Mitchell-, Rt. Hon. Sir W.

  Hills, Major Rt. Hon. John Waller

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

  Titchfield, Major the Marquess of

  Hope, Sir Harry (Forfar)

  Oman, Sir Charles William C.

  Todd, Capt. A. J.

  Hore-Belisha, Leslie

  Ormsby-Gore, Rt. Hon. William

  Train, J.

  Horne, Rt. Hon. Sir Robert S.

  Peake, Capt. Osbert

  Tryon, Rt. Hon. George Clement

  Howard-Bury, Colonel C. K.

  Penny, Sir George

  Turton, Robert Hugh

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

  Percy, Lord Eustace (Hastings)

  Vaughan-Morgan, Sir Kenyon

  Hunter, Dr. Joseph

  Peters, Dr. Sidney John

  Wallace, Capt. D, E. (Hornsey)

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Peto, Sir Basil E. (Devon, Barnstaple)

  Walters, Rt. Hon. Sir J. Tudor

  Hurd, Percy A.

  Power, Sir John Cecil

  Ward, Lieut.-Col. Sir A. Lambert

  Hurst, Sir Gerald B.

  Pownall, Sir Assheton

  Warrender, Sir Victor

  Hutchison, Maj.-Gen. Sir R.

  Pybus, Percy John

  Waterhouse, Captain Charles

  Inskip, Sir Thomas

  Ramsay, T. B. Wilson

  Wayland, Sir William A.

  Iveagh, Countess of

  Ramsbotham, H.

  Wells, Sydney R.

  Jones, Llewellyn-, F.

  Rathbone, Eleanor

  White, H. G.

  Jones, Sir G. W. H. (Stoke New'gton)

  Rawson, Sir Cooper

  Williams, Charles (Devon, Torquay)

  Jones, Henry Haydn (Merioneth)

  Reid, David D. (County Down)

  Wilson, G. H. A. (Cambridge U.)

  Jones, Rt. Hon. Leif (Camborne)

  Remer, John R.

  Windsor Clive, Lieut.-Colonel George

  Jowitt, Rt. Hon. Sir W. A. (Preston)

  Rentoul, Sir Gervals S.

  Winterton, Rt. Hon. Earl

  Kedward, R. M. (Kent, Ashford)

  Rhys, Hon. C. A. U.

  Withers, Sir John James

  Kindersley, Major G. M.

  Richardson, Sir P. W. (Sur'y, Ch'ts'y)

  Wolmer, Rt. Hon. Viscount

  Knight, Holford

  Roberts, Sir Samuel (Ecclesall)

  Womersley, W. J.

  Knox, Sir Alfred

  Robinson, Sir T. (Lanes, Stretford)

  Wood, Rt, Hon. Sir Kingsley

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

  Rodd, Rt. Hon. Sir James Rennell

  Wood, Major McKenzie (Banff)

  Lane Fox, Col. Rt. Hon. George R.

  Rosbotham, D. S. T.

  Young, Rt. Hon. Sir Hilton

  Law, Sir Alfred (Derby, High Peak)

  Ross, Ronald D.

  Leighton, Major B. E. P.

  Rothschild, J. de

  TELLERS FOR THE AYES.—

  Lewis, Oswald (Colchester)

  Ruggles-Brise, Colonel E.

  Commander Sir B. Eyres Monsel and Major Owen.

  Little, Graham-, Sir Ernest

  Runciman, Rt. Hon. Walter

  NOES.

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

  Benson, G.

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

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

  Bevan, Aneurin (Ebbw Vale)

  Chater, Daniel

  Addison, Rt. Hon. Dr. Christopher

  Bowen, J. W.

  Clarke, J. S.

  Alexander, Rt. Hon. A. V. (Hillsbro')

  Bowerman, Rt. Hon. Charles W.

  Cluse, W. S.

  Alpass, J. H.

  Broad, Francis Alfred

  Clynes, Rt. Hon. John H.

  Ammon, Charles George

  Brockway, A. Fenner

  Cocks, Frederick Seymour

  Angell, Sir Norman

  Bromfield, William

  Compton, Joseph

  Arnott, John

  Bromley, J.

  Cripps, Sir Stafford

  Attlee, Clement Richard

  Brooke, W.

  Daggar, George

  Ayles, Walter

  Brothers, M.

  Dallas, George

  Baker, John (Wolverhampton, Bilston)

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

  Dalton, Hugh

  Baldwin, Oliver (Dudley)

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

  Davies, D. L. (Pontypridd)

  Barnes, Alfred John

  Buchanan, G.

  Davies, Rhys John (Westhoughton)

  Barr, James

  Burgess, F. G.

  Day, Harry

  Batey, Joseph

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

  Dukes, C.

  Beckett, John (Camberwell, Peckham)

  Cameron, A. G.

  Duncan, Charles

  Bennett, William (Battersea, South)

  Cape, Thomas

  Dunnico, H.

  1778

  1779

  Ede, James Chuter

  Lloyd, C. Ellis

  Shaw, Rt. Hon. Thomas (Preston)

  Edmunds, J. E.

  Logan, David Gilbert

  Shepherd, Arthur Lewis

  Edwards, C. (Monmouth, Bedwellty)

  Longbottom, A. W.

  Sherwood, G. H.

  Edwards, E. (Morpeth)

  Longden, F.

  Shield, George william

  Egan, W. H.

  Lunn, William

  Shiels, Dr. Drummond

  Forgan, Dr. Robert

  Macdonald, Gordon (Ince)

  Shillaker, J. F.

  Freeman, Peter

  McElwee, A.

  Shinwell, E.

  Gardner, B. W. (West Ham. Upton)

  McEntee, V. L.

  Short, Alfred (Wednesbury)

  Gardner, J. P. (Hammersmith, N.)

  McKinlay, A.

  Simmons, C. J.

  Gibson, H. M. (Lanes, Mossley)

  MacLaren, Andrew

  Sinkinson, George

  Gill, T. H.

  Maclean, Nell (Glasgow, Govan)

  Sitch, Charles H.

  Gossling, A. G.

  MacNeill-Weir, L.

  Smith, Ben (Bermondsey, Rotherhithe)

  Gould, F.

  Manning, E. L.

  Smith, Frank (Nuneaton)

  Graham, Rt. Hon.Wm. (Edin.,Cent.)

  Mansfield, W.

  Smith, Tom (Pontefract)

  Greenwood, Rt. Hon. A. (Colne)

  Marcus, M.

  Smith, W. R. (Norwich)

  Grenfell, D. R. (Glamorgan)

  Marley, J.

  Snowden, Thomas (Accrington)

  Griffiths, T. (Monmouth, Pontypool)

  Marshall, Fred

  Sorenson, R.

  Grundy, Thomas W.

  Mathers, George

  Stamford, Thomas W.

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

  Maxton, James

  Stephen, Campbell

  Hall, G. H. (Merthyr Tydvll)

  Messer, Fred

  Strachey, E. J. St. Loe

  Hall, J. H. (Whitechapel)

  Middleton, G.

  Strauss, G. R.

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

  Mills, J. E.

  Sullivan, J.

  Hamilton, Mary Agnes (Blackburn)

  Milner, Major J.

  Sutton, J. E.

  Hardle, David (Rutherglen)

  Montague, Frederick

  Taylor, R. A. (Lincoln)

  Hardle, G. D. (Springburn)

  Morgan, Dr. H. B.

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

  Hastings, Dr. Somerville

  Morley, Ralph

  Thorne, W. (West Ham, Plaistow)

  Haycock, A. W.

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

  Thurtle, Ernest

  Henderson, Right Hon. A. (Burnley)

  Mort, D. L.

  Tillett, Ben

  Henderson, Joseph (Ardwick)

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

  Tinker, John Joseph

  Henderson, Thomas (Glasgow)

  Mosley, Sir Oswald (Smethwick)

  Toole, Joseph

  Henderson, W. W. (Middx., Enfield)

  Muff, G.

  Tout, W. J.

  Herriotts, J.

  Murnin, Hugh

  Townend, A. E.

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

  Naylor, T. E.

  Trevelyan, Rt. Hon. Sir Charles

  Hirst, W. (Bradford, South)

  Noel Baker, P. J.

  Turner, Sir Ben

  Hoffman, P. C.

  Noel-Buxton, Baroness (Norfolk, N.)

  Vaughan, David

  Hollins, A.

  Owen, H. F. (Hereford)

  Viant, S. P.

  Hopkin, Daniel

  Palin, John Henry

  Walkden, A. G.

  Horrabin, J. F.

  Paling, Wilfrid

  Walker, J.

  Hudson, James H. (Huddersfield)

  Palmer, E. T.

  Wallace, H. W.

  Isaacs, George

  Parkinson, John Allen (Wigan)

  Watkins, F. C.

  Jenkins, Sir William

  Perry, S. F.

  Watson, W. M. (Dunfermline)

  John, William (Rhondda, West)

  Pethick-Lawrence, F. W.

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

  Johnston, Rt. Hon. Thomas

  Phillips, Dr. Marion

  Wedgwood, Rt. Hon. Josiah

  Jones, J. J. (West Ham, Silvertown)

  Picton-Turbervill, Edith

  Wellock, Wilfred

  Jones, Morgan (Caerphilly)

  Pole, Major D. G.

  Welsh, James (Paisley)

  Jowett, Rt. Hon. F. W.

  Potts, John S.

  Welsh, James C. (Coatbridge)

  Kelly, W. T.

  Price, M. P.

  West, F. R.

  Kennedy, Rt. Hon. Thomas

  Quibell, D. J. K.

  Westwood, Joseph

  Kenworthy, Lt.-Com. Hon. Joseph M.

  Raynes, W. R.

  Whiteley, Wilfrid (Blrm., Ladywood)

  Kinley, J.

  Richards, R.

  Whiteley, William (Blaydon)

  Kirkwood, D.

  Richardson, R. (Houghton-le-Spring)

  Wilkinson, Ellen C.

  Lansbury, Rt. Hon. George

  Riley, Ben (Dewsbury)

  Williams, David (Swansea, East)

  Lathan, G. (Sheffield, Park)

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

  Williams, E. J. (Ogmore)

  Law, Albert (Bolton)

  Ritson, J.

  Williams Dr. J. H. (Llanelly)

  Law, A. (Rossendale)

  Romeril, H. G.

  Williams, T. (York, Don Valley)

  Lawrence, Susan

  Rowson, Guy

  Wilson, C. H. (Sheffield, Attercliffe)

  Lawrie, Hugh Hartley (Stalybridge)

  Salter, Dr. Alfred

  Wilson, J. (Oldham)

  Lawson, John James

  Samuel, H. Walter (Swansea, West)

  Wilson. R. J. (Jarrow)

  Lawther, W. (Barnard Castle)

  Sanders, W. S.

  Wise, E. F.

  Leach, W.

  Sandham, E.

  Young, R. S. (Islington, North)

  Lee, Frank (Derby, N.E.)

  Scrymgeour, E.

  Young, Sir R. (Lancaster, Newton)

  Lee, Jennie (Lanark, Northern)

  Scurr, John

  Leonard, W.

  Sexton, Sir James

  TELLERS FOR THE NOES. —

  Mr. Hayes and Mr. Charleton.

  Bill read a Second time, and committed to a Committee of the Whole House for To-morrow.

  The remaining Government Orders were read, and postponed.

  HOUSING (RENTS).
  Whereupon SPEAKER, pursuant to the Order of the House of the 9th September, proposed the Question, "That this House do now adjourn."
  Mr. KIRKWOOD: I desire to raise a matter that concerns the Minister of Health and to urge that the rents of working-class houses should be reduced by 40 per cent. When cuts are the order of the day and we find the Prime Minister, both in his wireless speech and

  1781
  in his speech in the House, justifying cuts in unemployment benefit on the ground that the cost of living has fallen, I want to prove that, as far as one of the most particular items in working-class life is concerned, there has been no reduction but a decided increase, and that is in the rents of houses. I want to do all that I can to appeal to the Minister of Health, because, owing to conditions that he introduced when he decontrolled rents, the poor people—at any rate, I can speak authoritatively for the West of Scotland—have been bled white. I have in my possession—
  Mr. SPEAKER: Do the proposals of the hon. Member require legislation If he is after legislation, I am afraid he is not in order. Or is it by administration?
  Mr. KIRKWOOD: It is by administration, and not only that, but the rent question in this country, as far as this House is concerned, goes back to 1913, when this House first decided that it would say what were to be the rents of working-class houses in this country, and it was done by Order in Council, so that the same can be done here again. We find that the rents of working-class houses enter largely into the expenditure of that class. In 1919 the Tory Government gave the landlords the right to increase rents by 47½ per cent. The first increase was 33⅛ per cent., and they got that increase because in 1915 the working class forced the Government to pass an Order in Council that for the duration—
  Mr. SPEAKER: I do not see how this can possibly be done without legislation. Perhaps the Minister can inform me.
  The MINISTER of HEALTH (Mr. Chamberlain): I was waiting to hear some suggestion from the hon. Member as to how it could be done by administration, because I was under the impression that the proposal he wished to bring forward was a proposal for new legislation. I do not see how by administration it is possible to alter the rent of decontrolled houses, which are under Statute.
  Mr. KIRKWOOD: It will not take me long, and, if you will permit me, I will explain to the Minister how this is working out, in a terribly hard fashion for the poorest of the people.
  Mr. SPEAKER: That may be so, but I should not be doing my duty if I allowed the hon. Member, on the Adjournment Motion, to make proposals which would involve legislation. I cannot allow him to do what I would not allow other hon. Members to do.
  Mr. KIRKWOOD: I have no desire to go beyond the Rules of the House, but when cuts are the order of the day I wish to show that as far as rents are concerned—in view of the statement of the Prime Minister that the cost of living had gone down and that that was the justification for reducing unemployment benefit—I wish to show that in 1926 and 1927 the landlords and factors of Glasgow owing to decontrol, have taken large sums of money from the poorest people. Here is the statement on the matter drawn up by the City Assessors of Glasgow. Since decontrol the poorest section of the people have been exploited to the extent of £57—
  Mr. SPEAKER: The hon. Member admits that this was done by legislation, and obviously it cannot be undone without legislation.
  Mr. MAXTON: I am sure that your Ruling will be accepted by my hon. Friend, namely, that in this Adjournment period we are not permitted to raise questions that necessitate legislation. Within the last few weeks, however, precedents have been made in this House that have been a break with tradition. I would suggest that it would not be too big a break in these days, when private Members' rights have been reduced to such an extent, to extend a certain amount of latitude on the Adjournment Motion. I want to put the point that under the Rent Restrictions legislation the owners of houses are permitted to impose on their tenants a certain additional percentage over the pre-War level. We believe that that might have had some justification in the period of soaring prices, but it has no justification now. It is true that as regards the large proportion of that increase of rent, it would require legislation to abolish it, but there is a certain fraction of that percentage increase which the landlord can only impose on condition that he is making substantial and effective repairs to the property. The majority of the landlords are not making these repairs,

  1783
  and it is within the competence of the Minister of Health administratively to say to them, "Unless you can show me that you have made substantial repairs you must cease to charge that additional fraction." Therefore, I put it to you that it is within the competence of my hon. Friend to raise the question of the 40 per cent. increase.
  Mr. SPEAKER: I said before that it would be in order to raise now anything that could be done by the Minister of Health in his Department. If the hon. Member can show me that he is asking for something the Minister can do without legislation he would be in order, but o far as he has gone he has been suggesting legislation.
  Mr. CHAMBERLAIN: On that point of Order. I submit, in the first place, that the Minister of Health is not the administrator as regards Scotland.
  Mr. MAXTON: We are not speaking for Scotland.
  Mr. CHAMBERLAIN: The Minister of Health is not the person responsible for that part of the administration in Great Britain. Whether a, landlord is carrying out his duty in respect of repairs is a matter entirely for the local authorities. If the tenant can bring a certificate from a sanitary inspector that the house is not in a proper state of repair, he can refuse now to pay the 25 per cent. increase of rent on that account.
  Mr. KIRKWOOD: It is not my fault that the Minister of Health is replying. I put my question to the Prime Minister, who handed it on to the right hon. Gentleman, so it is not I who am to blame. This is a very serious matter for the very poorest people in the country, and I am giving the hard facts.
  Mr. SPEAKER: I am not concerned at the moment with the hard facts but with the Orders of this House. The remedy of those hard facts suggested by the hon. Members is one that needs legislation.
  Mr. STEPHEN: Would it be in order for the hon. Member to bring forward a statement of hardships in order to persuade the Minister of Health to make an appeal to property owners voluntarily to reduce rents? That would not involve
  1784
  legislation, but it would involve the Minister of Health simply making an appeal to the property owners to take action. Unless it is something which is part of the duty of the Ministry of Health, I am afraid it cannot be dealt with because it would involve legislation.
  Mr. KIRKWOOD: Over and above the 47½ per cent. that has been permitted by law, the factors in the West of Scotland have put 48.99 per cent. on the poorest of the people. I am asking the Minister of Health to use his good offices to have that stopped. Since the right hon. Gentleman introduced his decontrol the blood has been sucked from the poorest of the poor, over and above that 47½ per cent., to the extent of £57,541 3s. Those are the figures stated by the City Assessor of Glasgow, and we should do something to stop those difficulties, because when the increase of rent was allowed, it was given on the distinct understanding that they would make the necessary repairs because there had been no repairs done during the War. Before they got that increase there were certain things to be carried out and they were automatically looked upon by the poor folk in the West of Scotland as things that would be done by the landlord, such things as whitewashing walls and doing some of the painting. None of those things has been done, and the tenants have to do all that themselves, and then comes along the blood-sucking lot. What I have given are not my figures, and surely in those circumstances something should be done. Only a month ago, in the Dumbarton Sheriff Court, the sheriff gave those factors an increase of 1½ per cent. for collecting the rates. That is what is going on, and surely the House of Commons can do something to protect the poorest of the poor. If we cannot do something in the House of Commons we shall have to try elsewhere. I am doing all I can to get something done here. I do not want to put out any threats, but something has to be done, and I make an appeal to the Minister of Health.
  Mr. CHAMBERLAIN: I am afraid that the hon. Member has found his style rather cramped by the limitations of Debate under the Standing Orders of the House, and I am equally handicapped in replying to him, because I am quite at

  1785
  a loss to know what is the final suggestion which he puts before me and asks me to consider.
  Mr. MAXTON: The suggestion is that you might do something.
  Mr. CHAMBERLAIN: Something, yes; but what? The hon. Member for Bridgeton (Mr. Maxton) said that he was speaking As a Member of the House of Commons and not as a Scottish Member, but he will recollect that the hon. Member for Dumbarton Burghs (Mr. Kirkwood) in his illustrations has quoted only figures applying to the city of Glasgow. Obviously it is not my business to make any appeal to the factors in the city of Glasgow. [Interruption.] I certainly can in my private capacity as a citizen make an appeal to landlords in Birmingham but why should one stop at landlords of one par-
  1786
  ticular kind. Why should not one make an appeal to all landlords—[HON. MEMBERS: "Hear, hear!"] But the question arises, what appeal am I to make? I would remind the hon. Member that, under the existing Act, the tenant can apply to the county court for an order suspending—
  Mr. KIRKWOOD: I have stood in the court and appealed for days for these people, and now I have come here to the highest court in the land. If we get nothing here, we will appeal to something else, and that is force. [Interruption.] I have told you, and, by God, you will get it.
  It being Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

UNEMPLOYMENT.
  TRANSITIONAL BENEFIT (NEEDS TEST).
  TRANSITIONAL BENEFIT (NEEDS TEST).
  EXCHANGE, GAINSBOROUGH.
  EXCHANGE, GAINSBOROUGH.
  DEAD SEA SALTS (CONCESSION).
  DEAD SEA SALTS (CONCESSION).
  KENT COUNTY ADVISORY COMMITTEE.
  KENT COUNTY ADVISORY COMMITTEE.
  AFFORESTATION, KENT.
  AFFORESTATION, KENT.
  COAL INDUSTRY (NORTH STAFFORDSHIRE DISTRICT SCHEME).
  COAL INDUSTRY (NORTH STAFFORDSHIRE DISTRICT SCHEME).
TRADE AND COMMERCE.
  BRITISH INDUSTRIES FAIR (TEXTILES).
  BRITISH INDUSTRIES FAIR (TEXTILES).
  MESSRS. EXHIBITION ORGANISERS.
  MESSRS. EXHIBITION ORGANISERS.
  ENTERTAINMENTS DUTY (LITERARY SOCIETIES' LECTURES).
  ENTERTAINMENTS DUTY (LITERARY SOCIETIES' LECTURES).
  INDIA (CONFERENCE).
  INDIA (CONFERENCE).