Sitting of 8 June 1932

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
NEW WRIT.
For the Montrose District of Burghs, in the room of Major-General Sir Robert Hutchison, K.C.M.G., C.B., D.S.O. (Chiltern Hundreds).— [Mr. Shakespeare.]

PRIVATE BUSINESS.
Dagenham Trading Estate Bill [Lords],
Read the Third time, and passed, with an Amendment.
Marriages Provisional Order (No. 2) Bill,
Newcastle-upon-Tyne Fire Brigade Provisional Order Bill,
Read a Second time, and committed.
Glasgow Corporation Order Confirmation Bill (by Order),
Read the Third time, and passed.

ORAL ANSWERS TO QUESTIONS.

  FOREIGN COUNTRIES (BRITISH INVESTORS).
  Mr. TEMPLETONasked the Secretary of State for Foreign Affairs if he is yet in a position to report whether arrangements have been made by the authorities of the State of Rio de Janeiro to resume fulfilment of their obligations to those British investors who have lent their savings to the State of Rio de Janeiro?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): I am informed that negotiations are still proceeding at Rio de Janeiro between the interested parties, but that no definite agreement has yet been reached.
  Sir ARTHUR MICHAEL SAMUEL: Is the Under-Secretary aware that the quicker an arrangement is reached the quicker will our own revenue benefit?
  Mr. EDEN: Yes, that had occurred to me.
  Captain PEAKEasked the Secretary of State for Foreign Affairs what was the result of the representations made to the German Government against the detention of funds destined for the service of the city of Budapest 4 per cent. loans, 1910?
  Mr. EDEN: I am glad to be able to inform the House that these sums have been released and that funds are accordingly available to pay the British bondholders in full.

  CHINA AND JAPAN.

    BRITISH INTERESTS.
    Mr. POTTERasked the Secretary of State for Foreign Affairs whether he is aware that His Majesty's Chinese Secretary of Legation is proceeding home on leave at the same time as the British Minister, and to whom British interests in China will be entrusted in the absence of the two senior representatives?
    Mr. EDEN: The answer to the first part of the question is in the affirmative. But my hon. Friend appears to be under a misapprehension; Mr. E. M. B. Ingram, Counsellor to His Majesty's Legation in China, is the officer next in rank to His Majesty's Minister and would in any event act as chargé d'affaires in Sir Miles Lampson's absence.

    MANCHURIA.
    Sir A. M. SAMUELasked the Secretary of State for Foreign Affairs if he will inquire from the Japanese Government whether the local Japanese authorities prevent merchandise from entering Manchuria via Dairen when not provided with a pass by the Chinese maritime customs office; and if he will represent to the Japanese Government that steps should be taken to discourage agencies within the leased territory placing British goods at a disadvantage by passing dutiable articles into Manchuria unknown to the Chinese customs authorities?
    Mr. EDEN: My right hon. Friend has already received reports on this question and, on his instructions, His Majesty's Ambassador at Tokio has raised the matter with the Japanese Government, and received an assurance that the matter will be taken up immediately.
    Mr. COCKSasked the Secretary of State for Foreign Affairs (1) whether he has any information regarding the present situation in Manchuria;
    (2) whether he is aware that the Chinese Government has sent the Secretary-General of the League of Nations a memorandum recalling the fact that the Powers having representatives in Manchuria undertook last December to keep the League informed as to the development of the situation and asking that these Governments should comply with this undertaking by providing information on the present military situation in Manchuria; and whether, in view of the recent fighting and increasing tension in Northern Manchuria, His Majesty's Government will supply the League with this information?
    Mr. EDEN: Such reports as have reached my right hon. Friend with regard to military operations in Manchuria do not indicate that these were of such a character as to justify the expense of sending special officers to observe and report upon them. Moreover, the League of Nations Commission which was in Manchuria at the time has but recently concluded its investigations there as to which it has submitted a preliminary report dealing mainly with the military situation.
    Mr. COCKS: Is the hon. Member not aware that the resolution of the League of Nations provides that this special information shall be sent in addition to any information which may have been given? Will he carry out that part of the resolution?
    Mr. EDEN: My answer shows that we did not think it necessary to incur any expenditure in sending a special officer when the League of Nations Commission was actually on the spot.
    Captain CAZALET: Who represents British commercial interests in Manchuria at the moment?
    Mr. EDEN: I must have notice of that question.

    SHANGHAI.
    Sir JOHN WARDLAW- MILNEasked the Secretary of State for Foreign Affairs whether, in view of the fact that a memorandum endorsed by the British, American, French, Italian, Netherlands, and general chambers of commerce in
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    Shanghai has been handed to His Majesty's consul-general requesting that a round-table conference be held to arrive at a solution of the many outstanding issues affecting the settlement, he will instruct His Majesty's consul-general to negotiate with the representatives of the other Powers concerned with the object of inaugurating such a conference without delay?
    Mr. HALL-CAINEasked the Secretary of State for Foreign Affairs whether he has considered the request submitted by the British residents' association at Shanghai urging that an early round-table conference should be held to settle outstanding problems at Shanghai; and whether, in view of the danger of the troubles of 1927 and 1931 being repeated unless these problems are settled at an early date, he can state what action, if any, he has taken to promote such a conference?
    Mr. EDEN: I understand that such a resolution has been under consideration but it has not yet been submitted to His Majesty's Government. The position with regard to the proposed Shanghai Conference is that the confidential discussion referred to in the answer returned to the hon. Member for Caerphilly (Mr. Morgan Jones) on 26th May last is still continuing.
    Sir J. WARD LAW-MILNE: Does the Under-Secretary refer to this conference or the one to which he referred in his previous answer?
    Mr. EDEN: These are confidential discussions which have been initiated by the Japanese Government, and it is to these that I refer.
    Sir J. WARD LAW-MILNE: If representations are made as a result of this conference, will His Majesty's Government do everything possible to permit a conference being held and an agreement reached?
    Mr. KIRKPATRICK: If this conference is held, will the Secretary of State consider the Feetham Report as a basis of the proposed conference and as a perfectly statesmanlike solution equally fair to Chinese and foreigners.
    Mr. EDEN: The matter is distinctly in the region of confidential discussion, and I cannot make any other statement. The

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    hon. Member may be sure that all relevant facts will be borne in mind.

    DISARMAMENT CONFERENCE.
    Mr. VYVYAN ADAMSasked the Secretary of State for Foreign Affairs whether he has any statement to make regarding the progress of the Disarmament Conference at Geneva?
    Mr. EDEN: I am circulating in the OFFICIAL REPORT an account of the work of the conference since my right hon. Friend's last statement on the subject.
    Following is the account:
    Since the end of April the Technical Commissioners of the Disarmament Conference have been at work in accordance with the terms of two resolutions which I proposed in the General Commission of the Conference on the 2oth of April and 22nd of April respectively, and which were adopted, after some discussion, in the following form:
    "(a) Without prejudice to other proposals which fall to be discussed under later heads of the agenda, the conference declares its approval of the principle of qualitative disarmament, i.e., the selection of certain classes or descriptions of weapons the possession or use of which should be absolutely prohibited to all States or internationalised by means of a general Convention.
    (b) In seeking to apply the principle of qualitative disarmament as defined in the previous resolution, the conference is of opinion that the range of land, sea and air armaments should be examined by the competent special commissions with a view to selecting those weapons whose character is the most specially offensive or those most efficacious against national defence or most threatening to civilians."
    The second of these resolutions has involved the technical Commission in much arduous work and lengthy discussion. It is however hoped that their reports may be ready by the end of the present week; and it is presumed that the Bureau of the Conference will then be authorised to co-ordinate them for the General Commission.

  ROYAL NAVY.

    EPILEPSY.
    Sir BERTRAM FALLEasked the First Lord of the Admiralty what test or
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    tests are applied to prove the existence of epilepsy before a naval rating is discharged as suffering from that disease?
    The FIRST LORD of the ADMIRALTY (Sir Bolton Eyres Monsell): No officer or rating is invalided from the service for this cause unless he has been seen actually suffering from definite symptoms of the disease; the evidence must rest upon the testimony of reliable witnesses. In addition subsequent investigation is made to exclude other causes of fits. All these matters are thoroughly investigated by the Board of Survey before action is taken.

    DOCUMENTS.
    Lieut.-Commander BOWERasked the First Lord of the Admiralty what authority at the Admiralty decides whether documents placed before the board shall be destroyed or kept for record?
    Sir B. EYRES MONSELL: The decision whether Admiralty documents should be weeded or transferred to the Public Record Office as permanent records is governed by office rules based on the "Schedules for the destruction of valueless documents" issued from time to time by the Master of the Rolls pursuant to the Public Record Office Act, 1877. Any case of doubt under these rules is submitted to the Permanent Secretary, who decides it or refers to higher authority if necessary. Documents placed before meetings of the full board are in all cases kept for record.

    ADMIRALTY LIBRARY.
    Lieut.-Commander BOWERasked the First Lord of the Admiralty whether, having regard to the inaccessibility of the Admiralty library, he will consider transferring the important historical documents contained therein to a place accessible to the public?
    Sir B. EYRES MONSELL: I cannot agree either that the Admiralty library is inaccessible or that it contains important historical documents. The library is largely used and appreciated by naval officers and students of naval matters, but it is merely a naval library in the ordinary sense of the term, and probably contains no work that is not also accessible at the Reading Room of the British Museum.
    Lieut.-Commander BOWER: Can the First Lord say whether "Flinders Journal" is in the Admiralty Library?
    Sir B. EYRES MONSELL: I must have notice of that question.

    PULVERISED COAL.
    Mr. CHORLTONasked the First Lord of the Admiralty if he will make a statement as to the progress made in the use of pulverised coal for the ships of the Navy with the object of helping the coal industry of this country?
    Sir B. EYRES MONSELL: The Admiralty do not contemplate the use of pulverised coal for the ships of the Navy, owing to the disadvantages inseparable from the employment of coal as a fuel for warships, namely reduced endurance for a given weight of fuel and increased weight and space required for a given power.

    ROYAL NAVAL COLLEGE, DARTMOUTH.
    Mr. HUTCHISONasked the First Lord of the Admiralty whether any investigation is taking place at the present time with a view to reducing the present expenditure at the Royal Naval College, Dartmouth; and, if not, whether he is satisfied that no economies are possible in so far as a reduction of staff is concerned at that college?
    Sir B. EYRES MONSELL: I am satisfied as the result of the general inquiries which have been made up to date that reductions in the cost of Dartmouth are both necessary and possible in the matter of staff as well as in other directions. I am particularly anxious to see removed as soon as possible this one real source of criticism since I regard the continuance of the college as a matter of the first importance.
    Major HARVEY: Is it not absolutely essential for the future of the British Navy to maintain this college as far as possible at the highest efficiency?
    Sir B. EYRES MONSELL: That is my opinion.
    Lieut.-Commander AGNEW: Would the First Lord consider postponing the age of entry for cadets and saving money to the State in that way?
    Sir B. EYRES MONSELL: The whole subject is now under consideration, and I
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    should not like to give a detailed answer to the question before I have considered the report in full.
    Commander MARSDEN: May I ask whether that part of the college which is not in use now will be used for any other purpose?
    Sir B. EYRES MONSELL: That and everything else is under consideration.

  KENYA.

    LAND INQUIRY.
    Mr. T. WILLIAMSasked the Secretary of State for the Colonies when the Kenya Land Inquiry Committee proposes to start its work; whether the question of adding independent Europeans and Africans has received the attention of His Majesty's Government; and, if so, with what result?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): With the concurrence of his colleagues on the commission, the chairman, Sir William Morris Carter, is devoting the present month to taking essential evidence on points of fact from retired Kenya officials, settlers and missionaries in this country. His departure for Kenya has accordingly been postponed until the 1st of July, and the first formal sitting of the commission in the Colony will no doubt be held shortly after his arrival. As regards the second part of the question, as I stated in a recent Debate, I am satisfied that the members of the commission are admirably suited for the task, and I see no reason for adding to their number.
    Mr. WILLIAMS: Is the right hon. Gentleman aware of the general disappointment that a settler should have been selected as the commissioner and that there is no countervailing influence on the other side—on the part of the natives?
    Sir P. CUNLIFFE-LISTER: I think the general expression of opinion is one of great satisfaction with the selection. I would point out that the selection of a settler follows very closely the recommendation of the Joint Select Committee of both Houses that settlers should be encouraged to take an active interest in these matters.
    Mr. WILLIAMS: While we do not disagree with the appointment of a settler we disagree regarding the fact that no representative of the natives, who would have been a countervailing influence, has been appointed.
    Sir P. CUNLIFFE-LISTER: I entirely repudiate that statement. Let the hon. Member consider the members of this inquiry. Sir William Morris Carter, the chairman, did the whole of this kind of work in Rhodesia, and he is by common consent the ideal man for the purpose; and there is Mr. Hemsted, who is also, I think, by common consent one of the ablest commissioners and representatives of native interests there has ever been in Kenya.

    ZAMBESI BRIDGE.
    Captain ERSKINE-BOLSTasked the Secretary of State for the Colonies what progress has been made up to date in the construction of the Zambesi bridge; and whether it has been found necessary to retard operations in view of the financial crisis?
    Sir P. CUNLIFFE-LISTER: As the answer is a rather long one, with my hon. and gallant Friend's permission, I will circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The present position in the construction of the bridge is as follows:
    On the right bank the abutment is finished and the foundations for 17 spans of the viaduct are completed. On the left bank the abutment and all the piers for the six approach spans are completed and girders are being erected. For the main spans four out of the 34 piers are practically finished and six more piers are in progress. The material for about two-thirds of the viaduct, which is 3,000 feet long, is on the site; also a further large quantity of permanent material is either on the site or ready for shipment. Contractors' plant for the whole work is on the site. The approach railway, 25 miles long, is practically finished and construction trains are running through. The reply to the second part of the question is in the negative.

    AIR-MAIL STAMPS (COLONIES).
    Captain ERSKINE-BOLSTasked the Secretary of State for the Colonies the number of colonies which now have their own air-mail stamps; and whether he will suggest to all of them, including Kenya which has not, the desirability of having such stamps in the interests of propaganda?
    Sir P. CUNLIFFE-LISTER: The only Colony issuing air-mail stamps is Malta where a 6d. postage stamp is surcharged for that purpose. It is not proposed to invite any Colonies to consider the issue of special air-mail stamps. Air-mail letters are already easily distinguishable by reason of the blue air-mail labels required by the Postal Union Convention, the use of which remains obligatory even if special stamps are issued.

  PALESTINE.

    INSURANCE COMPANIES (GUARANTEES).
    Mr. DAVID ADAMSasked the Secretary of State for the Colonies whether the Palestine Government proposes to take steps to ensure that the public are properly safeguarded against bankruptcy of insurance companies by requiring insurance companies to deposit with the State treasury a considerable sum as a guarantee?
    Sir P. CUNLIFFE-LISTER: Provision has already been made for such deposits in Section 101 of the Palestine Companies Ordinance of 1929, of which there is a copy in the Library of the House.

    IRAQ OIL TRANSPORT (FAIR WAGES CLAUSE).
    Mr. D. ADAMSasked the Secretary of State for the Colonies whether arrangements have now been made to ensure fair wages and fair conditions of labour on the work carried out under the Convention regulating the Transit of Mineral Oils of Iraq Petroleum Company, Limited, through the territory of Palestine; and, if so, whether wages and conditions on it will be similar to those in force on the Haifa harbour construction?
    Sir P. CUNLIFFE-LISTER: The company have given His Majesty's Government a formal assurance that they will observe fair conditions of labour in the execution of all works carried out under the Convention. I am not yet in posses-

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    sion of information as to these conditions of labour but I know that the matter is engaging the attention of the High Commissioner with reference to the assurance given by the company.

    FILM CENSORSHIP (KENYA AND TANGANYIKA).
    Captain ERSKINE-BOLSTasked the Secretary of State for the Colonies if he can now make any statement as to the activities of the new committee which has been appointed to censor films for use in countries, where there is a Native population; whether he is aware of the constant difference of tratement of films in Tanganyika and Kenya; and whether he will endeavour to ensure that the different censoring authorities in those countries have some similarity in their decisions?
    Sir P. CUNLIFFE-LISTER: As I explained to my hon. and gallant Friend in the reply which I gave to him on the 18th April, the committee to which he refers is of an advisory nature only and it is not intended that it should undertake the censorship of films. Its function is to advise the distributing company in the selection of films suitable for exhibition in the Colonies. As regards the latter part of the question I have received no complaints of the difference of treatment of films in Kenya and Tanganyika.

  GOVERNMENT DEPARTMENTS.

    COLONIAL OFFICE.
    Colonel GRETTONasked the Secretary of State for the Colonies if he will state what was the total number of the staff of the Colonial Office in the year 1913 and the total amount of the salaries; and will he state the number of the staff in the year 1931 and the total amount of the salaries paid last year?
    Sir P. CUNLIFFE-LISTER: On the 31st of December, 1913, the staff of the Colonial Office numbered 189 and the expenditure on salaries during the financial year 1913–14 amounted to £57,023. On the 31st of December, 1931, the staff numbered 393 and expenditure on salaries during 1931–32 amounted to £144,500. The latter figure includes the salaries of staff engaged on joint services for the Dominions Office and Colonial Office.
    Colonel GRETTON: Can my right hon. Friend say whether any of the staff engaged in the Colonial Office in 1913 were subsequently transferred to the Dominions Office and not replaced in the Colonial Office?
    Sir P. CUNLIFFE-LISTER: I think my right hon. Friend has on the Paper a question about the Dominions Office. There is a small Dominions Office staff. The staff which performs joint services for both Departments, for example, library, legal advisers' typists, are included in this. I inquired into this matter myself, and I found that a few years ago a very careful inquiry had been conducted by a committee, including two of the highest Treasury officials, into the whole of the staffing and work of this Department. That seemed to me satisfactory, as I think close Treasury control is the most effective means of economy.
    Major COLFOX: Is it not true that in 1913 one office carried out the duties of the Colonial and Dominions Offices?
    Sir P. CUNLIFFE-LISTER: Yes, Sir.
    Major COLFOX: Are the figures given for 1913 figures which really cover both Offices at the present time?
    Sir P. CUNLIFFE-LISTER: Yes, Sir.

    DOMINIONS OFFICE.
    Colonel GRETTONasked the Secretary of State for Dominion Affairs what was the total number of the staff of the Dominions Office in the year 1931 and the amount of their salaries?
    The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): On 31st December, 1931, the staff of the Dominions Office, excluding the Oversea Settlement Department and the Empire Marketing Board which are virtually separate Departments, was 63. The expenditure on salaries during 1931–32 was £36,607. These figures do not include the staff engaged on joint services for the Dominions Office and the Colonial Office whose salaries are provided in the Vote for the Colonial Office.

  TRANSPORT.

    ROAD SERVICE LICENCES.
    Lieut.-Colonel SANDEMAN ALLENasked the Minister of Transport if he is aware that the licensing authorities for

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    public service vehicles require applicants for licences to provide a vehicle on which to pass their tests; that this precludes the majority of applicants from attempting to qualify; and what steps he proposes to take to remedy this?
    The MINISTER of TRANSPORT (Mr. Pybus): My attention has been drawn to few instances in which this difficulty has arisen. Many operators make their own arrangements for the training and testing of their drivers and in other cases it is usual for the applicant to approach his prospective employer and obtain permission for the test to be carried out on one of his vehicles.
    Lieut.-Colonel SANDEMAN ALLEN: What is going to happen to the man without a licence who has a prospective employer and expects to get a job?
    Mr. PYBUS: The hon. and gallant Gentleman would scarcely suggest that at this time we should keep a number of vehicles for the express purpose of allowing people who wish to enter the industry of motor-driving to take their tests upon them.
    Lieut.-Colonel SANDEMAN ALLEN: Could not the hon. Gentleman make municipal vehicles available in such cases?
    Mr. PYBUS: That is not within my power.

    PUBLIC SERVICE VEHICLES (FIRST-AID EQUIPMENT).
    Mr. GUYasked the Minister of Transport what steps are taken to ensure that the Public Service Vehicle (Equipment and Use) Provisional Regulations (No. 2), 1931, providing for the carrying by public service vehicles of first-aid equipment of suitable design and construction, are being complied with?
    Mr. PYBUS: In cases where first-aid equipment is required to be carried such equipment is examined when the vehicle is presented for licensing.
    Mr. GUY: Is the Minister aware that certain types of equipment carried by many public service vehicles are not of suitable quality, and will he consult with the British Medical Association on the subject?
    Mr. PYBUS: No, Sir. The specification of the equipment to be carried was
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    approved by the British Medical Association.
    Mr. GUY: That is not a reply to my question, which was whether the equipment now carried complies with the regulations.
    Mr. PYBUS: The specification on which the regulations were founded was drawn up after consultation with the British Medical Association, and I see no reason to take any action in the matter.

    ROUNDABOUT TRAFFIC, LONDON SQUARES.
    Viscount CRANBORNEasked the Minister of Transport whether he will consider the introduction of the roundabout system of traffic in all London squares?
    Mr. PYBUS: I am advised that roundabout working should only be introduced in cases where definite advantages to traffic are likely to accrue. In a number of London squares the volume of traffic is small, and no serious difficulties are experienced under the existing arrangements.
    Viscount CRANBORNE: Does not my hon. Friend feel that owing to the present chaotic system in London squares there is great danger both for pedestrians and for motorists, and, if the roundabout system has succeeded in Parliament Square and other squares, why should it not be extended to all the London squares?
    Mr. PYBUS: For the reason that I have already given, namely, that we do not consider it desirable to extend it to all the squares and that the roundabout system must be dependent on traffic conditions.
    Mr. MACQUISTEN: Is my hon. Friend not aware that the roundabout system has not done anything but increase the taximen's charges?
    Mr. CHORLTON: Will my hon. Friend explain why the arrangement for a roundabout at the Westminster end of the new Lambeth Bridge has been made, whereas at the other end no such traffic improvement has been provided?
    Mr. PYBUS: I do not think that question arises here, but, if my hon. Friend will put it down, I will see to it.

    TRAFFIC COMMISSIONERS (EXPENSES).
    Lord SCONEasked the Minister of Transport (1) if he will state, to the nearest convenient date, the itemised expenses incurred by the traffic commissioners for the Scotland (Northern) area since the present chairman entered upon his duties, together with the expenses incurred by the same commissioners during the three months immediately preceding the change of chairman;
    (2) the respective expenses incurred by each group of traffic commissioners during the first three months of the present year?
    Mr. PYBUS: I am obtaining the information asked for in these questions and will forward it to my Noble Friend when available.

  ELECTRICITY SUPPLIES.

    CLYDE VALLEY.
    Mr. McGOVERNasked the Minister of Transport whether any decision has been arrived at in connection with the taking over by the Glasgow Corporation of the electric supply in the Sandyhills area, which is at present supplied by the Clyde Valley Electrical Power Company?
    Mr. PYBUS: My only jurisdiction in this matter was to appoint an arbiter to determine certain questions which had arisen between the corporation and the company. I understand that the decision of the arbiter has now been given.
    Mr. MACQUISTEN: Is it not perfectly well known that the Clyde Valley produces electricity at a lower rate than Glasgow Corporation?
    Mr. McGOVERN: That is not true.

    LEATHERHEAD UNDERTAKING (PURCHASE).
    Mr. HERBERT WILLIAMSasked the Minister of Transport whether the approval of the Electricity Commissioners to the purchase by the London and Home Counties Joint Electricity Authority from the Leatherhead and district undertaking for the sum of £312,540, assets which stood in the books of the latter at £230,148, was based on general considerations or was the result of special circumstances; and, if so, will he state the nature of the special circumstances?
    Mr. PYBUS: The undertaking, comprising both fixed and liquid assets, was purchased on the basis of a going concern and the value does not depend wholly on the value of the fixed assets.

  INDIA.

    PRISONERS.
    Sir CHARLES OMANasked the Secretary of State for India whether he will take into consideration the relieving of the congestion of the Indian gaols by political prisoners by the method of deporting such persons to localities outside India, such as the Andamans?
    The SECRETARY of STATE for INDIA (Sir Samuel Hoare): The question of transporting certain classes of prisoners to the Andamans is under consideration.
    Mr. LEONARD: Will the right hon. Gentleman consider the advisability of taking guidance as to the results of all such repressive measures from a professor of history?

    CINEMATOGRAPH FILMS.
    Major BEAUMONT THOMASasked the Secretary of State for India if any steps are being taken to ensure the supply and adequate distribution of suitable films for Native audiences in India?
    Sir S. HOARE: This is a matter which was dealt with in detail in the Report of the Indian Cinematograph Committee, a copy of which is in the Library of the House. The Provincial Governments have their own censorship arrangements to ensure that unsuitable films are not shown.
    Major THOMAS: Is my right hon. Friend satisfied that British interests predominate in the production of these films, and that those possessing knowledge of India and the peculiar problems involved are being consulted with regard to the matter?
    Sir S. HOARE: I am not sure that I caught the question. I am looking into this matter again and am actually in communication with the Government of India. I will take into account the supplementary question.

    HOUSING (LOCAL AUTHORITIES' SCHEMES).
    Mr. POTTERasked the Minister of Health whether he will request local authorities to consider the advisability of restricting the building of houses provided by State assistance to the type of dwelling costing no more than £450, in order that persons in a position to pay economic rents should not be enabled to obtain by means of subsidised rentals cheap houses which they could buy through building societies?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Ernest Brown): I am sending to my hon. Friend a copy of a circular issued to local authorities in England and Wales on the 12th January last on the subject. The latest returns available indicate that the average cost of houses now being erected by them is well within the figure mentioned by him.

    FISHING INDUSTRY (PROPAGANDA).
    Mr. POTTERasked the Minister of Agriculture if, having regard to the depression in the British fishing industry, he will grant facilities for lectures and propaganda relating to the benefits of a regular fish diet, with a view to assisting this industry?
    Captain AUSTIN HUDSON (Lord of the Treasury): I have been asked to reply. My right hon. Friend thinks the benefits of a fish diet are well appreciated in the country, as evidenced by the steady consumption of fish, which shows no sign of decline.

    IMPERIAL ECONOMIC CONFERENCE.
    Mr. V. ADAMSasked the Secretary of State for Dominions Affairs whether he has any statement to make as to the preparations, particular or general, that are being made by His Majesty's Government for the forthcoming Conference at Ottawa?
    Mr. THOMAS: As I informed the House on 11th December, an organisation was set up both among Ministers and in the Departments, within the first week after the present Government took office, to prepare for the Conference, and that
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    organisation has been continuously at work. In addition, Ministers and the Departments concerned have been in close touch with representative organisations in this country and with the representatives of the numerous trades which have desired to express their views to us. Since the beginning of May we have had the advantage of the advice and assistance of the industrial advisers whose names have been announced, and who will accompany the United Kingdom delegation to Ottawa, These gentlemen are constantly being consulted by us on matters affecting trade interests and generally, and are themselves in direct communication with those qualified to speak on behalf of particular trades and industries in this country. Finally, as I stated in reply to the hon. Member for East Wolverhampton (Mr. Mander) on 2nd June, preliminary discussions have been taking place with Canada, the Commonwealth of Australia, New Zealand, the Union of South Africa. Newfoundland and Southern Rhodesia, and also with India.

    FOREIGN TRADE DEBTS.
    Mr. CHORLTONasked the Secretary to the Overseas Trade Department when the committee considering the application of the clearing-house system to foreign trade debts or remittances will be able to report?
    Mr. JOHN COLVILLE (Secretary, Overseas Trade Department): I must refer my hon. Friend to the answer I gave to his question on Monday last. The matter is under the examination of the responsible Departments and not of a formal committee. Consideration is being pressed forward.
    Mr. CHORLTON: Can the hon. Gentleman tell us whether any progress is being made in connection with this very difficult subject; that is to say, the payment of these remittances or trade debts?
    Mr. COLVILLE: As the hon. Member says, the subject is a very difficult one. The answer to the next question throws a little light in a certain direction.

    EXCHANGE RESTRICTIONS.
    Mr. JOELasked the Secretary to the Overseas Trade Department the

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    names of those countries which still impose restrictions upon exchange transactions; and whether, so far as British subjects are concerned, any such restrictions by any countries have been modified since the beginning of the year?
    Mr. COLVILLE: There are some 30 countries affected, and I propose, therefore, with my hon. Friend's permission, to circulate the names with the OFFICIAL REPORT. Since the beginning of 1932 some change has been made in the form of control in practically all these countries. In a few cases only has there been an improvement. In Sweden and Finland exchange control was removed in December, 1931. In Portugal and Spain the difficulties have been reduced. In Estonia efforts are being made to liquidate outstanding debts and in Venezuela the rationing system adopted by the banks has been removed.
    Following is the list of countries in which restrictions upon exchange transactions are operative:

    Austria.

    Bulgaria.

    Czechoslovakia.

    Denmark.

    Estonia.

    Germany.

    Greece.

    Hungary.

    Iceland.

    Latvia.

    Portugal.

    Rumania.

    Spain (including Canary Islands).

    Turkey.

    Yugoslavia.

    Portuguese West Africa.

    Portuguese East Africa.

    Portuguese Guinea.

    Argentina.

    Bolivia.

    Brazil.

    Chile.

    Colombia.

    Costa Rica.

    Ecuador.

    Nicaragua.

    Salvador.

    Uruguay.

    In the following countries registration or supervision is undertaken by the banks: Italy, Lithuania, Norway.

    IRISH SWEEPSTAKES.
    Mr. LAMBERTasked the Secretary of State for the Home Department the estimated amount to date of the payments to and receipts from the various Irish sweepstakes in respect of subscribers to those sweepstakes in Great Britain?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel): On 15th April last I gave an estimate of the amount subscribed in Great Britain to the five Irish sweepstakes which had been held up to that time. So far as I am aware an audited statement relating to the latest sweepstake has not yet been published, but an estimate based on the available material appears to indicate that the amount subscribed to it from Great Britain would be about £3,785,000 (including sellers' commission of about £757,000) and that £2,086,000 was received in prizes. Altogether in respect of the six Irish sweepstakes so far held, approximately £13,285,000 has been subscribed in Great Britain (including sellers' commission estimated at about £2,357,000), and £7,086,000 has been won in prizes.
    Sir WILLIAM DAVIS0N: Do not these tremendous figures given by my right hon. Friend show him that it is very desirable that we should have an interim report from the Royal Commission on this matter; and will he make some representations to them, by way of request in that respect?
    Sir H. SAMUEL: That is a separate question. I think the Royal Commission have the matter already in hand.
    Mr. LEVY: Is the right hon. Gentleman aware that the Irish Free State Government is taking a large proportion of these funds for their own Exchequer?
    Sir H. SAMUEL: That does not arise out of the question.

  POLICE.

    FEDERATION (REPRESENTATIONS).
    Mr. LUNNasked the Home Secretary the nature of the representations he has received from the Police Federation regarding matters upon which dissatisfaction is felt; and whether any action is being taken to deal with matters so raised?
    Sir H. SAMUEL: The resolution submitted by the Joint Central Committee of the Police Federation covered certain matters (such as the present deduction from pay and prohibition of open meetings) which concern the service as a whole; while others were matters of Metropolitan Police administration such as the training of members of the Metropolitan Special Constabulary Reserve, the arrangements for the employment of uniform men in plain clothes, and the conditions governing the grant of certain special increments of pay. Some of these matters I dealt with in the course of the debate on the Police Vote: for the rest I can only say that the representations are under my consideration.
    Mr. LUNN: Is the right hon. Gentleman aware that the delay in replying to these representations is causing very great feeling among the men; and is he further aware that one branch of the federation has already resigned because of the apparent indifference of the Department to their representations?
    Sir H. SAMUEL: No, Sir. I was not aware of the last fact suggested by the hon. Member. Several of these matters do not admit of early answer.

    TRAFFIC CONTROL (LONDON).
    Captain HAROLD BALFOURasked the Home Secretary the number of police officers in the Metropolitan area employed daily in ensuring that traffic turns at the correct point for one-way circuits; and the cost per annum of the employment of police on such services?
    Sir H. SAMUEL: I am informed that the number of men employed on this particular duty is 10. The cost would be about £3,000 per annum.
    Captain BALFOUR: Can the right hon. Gentleman give any forecast as to when these men will be replaced by mechanical signals?
    Sir H. SAMUEL: No, Sir, not these particular men, but the question of the rapid extension of the system of automatic light signals for controlling traffic has recently been under consideration by my hon. Friend the Minister of Transport and myself. We have been in communication with the local authorities in London, and I hope that more speedy progress will be made in that matter.

    INCOME TAX APPEALS (COSTS).
    Sir W. DAVISONasked the Chancellor of the Exchequer whether his attention has been drawn to a recent decision of the High Court to the effect that the costs which a taxpayer had incurred in connection with an Income Tax appeal cannot be treated as a deductable expense in arriving at his profits for Income Tax purposes; whether he is aware that the taxpayer in the case referred to, though successful on appeal before the Income Tax Commissioners, was as the result of the High Court decision mulcted in costs; and whether steps can be taken to relieve a taxpayer of the payment of costs in any event where such taxpayer has been successful on appeal before the General or Special Commissioners and the case has been taken to the High Court on the application of the revenue authorities?
    The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I am aware of the case to which my hon. Friend refers. The decision of the High Court on the question at issue confirmed the established practice with which the Income Tax Commissioners' decision did not accord, and my right hon. Friend can see nothing in the circumstances of the case which would support a proposal for an alteration in the existing position in regard to the costs of appeals to the Courts.
    Sir W. DAVISON: Is my right hon. and gallant Friend aware that the Income Tax Commission in their report definitely drew attention to the hardship of the taxpayer having to decide doubtful points of Income Tax law and expressly recommended that, where the taxpayer had been successful, in the High Court if the Inland Revenue authorities appealed against that decision, they should bear the costs of both sides?
    Major ELLIOT: My right hon. Friend the Chancellor of the Exchequer has to have regard to the interests of the taxpayers who do not appeal, as well as to the interests of those who do.
    Mr. MACQUISTEN: Is not that appeal on behalf of all the taxpayers?
    Major ELLIOT: Not at all.

    LOCAL AUTHORITIES' EXPENDITURE.
    Mr. H. WILLIAMSasked the Chancellor of the Exchequer whether, in view of the increase from £105,302,000 in the year ended 31st March, 1914, to £318,000,000 in the year ended 31st March, 1932, of the expenditure of local authorities in Great Britain borne out of rates and Parliamentary grants he proposes to reconsider the financial relationship of the Exchequer to the local authorities with a view to restricting the expenditure of the Latter?
    Major ELLIOT: The Government have the whole question of local authorities' expenditure under careful scrutiny and no opportunity of securing economies will be overlooked, but they doubt whether an alteration of the financial relationship of the Exchequer to the local authorities is in the present circumstances the best way of approach.
    Mr. WILLIAMS: Having regard to the fact that this represents the principal source of extravagance, are we not justified in taking steps to secure that local authorities shall make economies in this respect and will the Government force economies on the local authorities by reducing the grants?
    Major ELLIOT: It is a question whether it is better done through the financial relationship of the Exchequer to the local authorities, or by means of general policy.
    Mr. MACQUISTEN: Is it not inevitable that, if one set of men provide the money and another set of men have the spending of it, there will always be extravagance?

    BEET-SUGAR INDUSTRY.
    Captain PETER MACD0NALDasked the Chancellor of the Exchequer whether it is intended to set up the committee of investigation on the beet-sugar industry before the summer Recess?
    Mr. GROVESasked the Chancellor of the Exchequer (1) whether, in view of the desirability of placing the beet-sugar industry of the country on an economic basis at the earliest possible opportunity, he will arrange for the work of the committee on that industry to be commenced during the present month;
    1930
    (2) what are the reasons for the delay in announcing the names of the committee that is to investigate the sugar-beet industry?
    Major ELLIOT: This matter is still under consideration, and I regret that I am not yet in a position to make a statement.
    Captain MACDONALD: Can my right hon. and gallant Friend not answer my question, as to whether it is intended to set up the committee before the Summer Recess?
    Major ELLIOT: I am afraid my answer must be as I have already stated. I am not yet in a position to make a statement.
    Mr. GROVES: What is the reason for the delay?
    Major ELLIOT: The reason for the delay is that the matter is still under consideration.
    Mr. BOOTHBY: Does not my right hon. and gallant Friend think that enough money has been wasted on the beet-sugar industry already?

    PETROL DUTY.
    Mrs. TATEasked the Financial Secretary to the Treasury if he can give any estimate showing separately the yield of Petrol Duty for the financial years 1928–29, 1929–30, 1930–31, and 1931–32 from the spirit consumed by the Royal Air Force, Imperial Airways on home services, including joy-riding, other civil flying, stationary plants, and motor-cars and road transport?
    Major ELLIOT: I regret that it is not possible to furnish an estimate such as my hon. Friend desires.

  SCOTLAND.

    OMNIBUS COMPANIES (BURGH PROSECUTORS).
    Mr. NEIL MACLEAN (for Mr. DUNCAN GRAHAM)asked the Secretary of State for Scotland if he is aware that free passes are being given by omnibus companies to burgh prosecutors whose

    1931
    duty it is to look after the operation of the law relating to omnibus companies; whether his Department approves of such a practice; and, if not, will he issue recommendations on the subject to the appropriate authorities?
    The SECRETARY of STATE for SCOTLAND (Major Sir Archibald Sinclair): I have no information on this subject. I would regard such a practice as undesirable, and, if the hon. Member will furnish particulars of specific cases, I shall communicate them to the appropriate authorities.

    LOCAL AUTHORITIES (SPECIFICATIONS).
    Mr. MACLEAN (for Mr. D. GRAHAM)asked the Secretary of State for Scotland if he will give the name of the local authority which had a clause in their specifications for plumber work, limiting the work within their own area to the exclusion of manufacturers of the same material within the same county; and whether the representations made by his Department have had the effect of inducing the local authority concerned to withdraw this limiting clause from their future specifications?
    Sir A. SINCLAIR: The local authority in question is the County Council of Stirlingshire. As regards the latter part of the question, the representations made by the Department of Health for Scotland have had the effect of inducing the local authority to withdraw the limiting clause from their subsequent specifications.

    DISTURBANCES, KILBIRNIE.
    Mr. MACLEAN (for Mr. D. GRAHAM)asked the Secretary of State for Scotland if his attention has been called to the complaints made at the Kilbirnie riot trial of unnecessary batoning of men and women by the police; whether he is aware that these complaints were made by reputable members of the community who did not form part of the deputation to the public assistance committee; and will he institute an inquiry with a view to clearing the police of the charges made against them?
    Sir A. SINCLAIR: I am aware that in the course of the recent trial in Kilmarnock Sheriff Court of nine men charged with disorderly and riotous con-
    1932
    duct at Kilbirnie on the 8th February, allegations were made against the police by certain witnesses. I am informed that although these witnesses were not members of the deputation to the public assistance committee, they were members of the crowd on the evening of the 8th February. After consideration of the proceedings at the trial and of reports which I have obtained, I am satisfied that no further action on my part is necessary.
    Mr. MACLEAN: May we take it that every individual who was present where these disturbances took place and might not form part of the crowd or take part in the disturbances has been considered as an individual whose word cannot be accepted, and will he therefore make further inquiry to see whether any definite statements alleged later against the police are not accurate?
    Sir A. SINCLAIR: I want to make it clear that they were actually part of the riotous crowd, according to my information, but that their statements were made in court to the sheriff and that, in spite of their statements, the sheriff found the charges proved against the men concerned. If, however, my hon. Friend is dissatisfied, it is open to him and to others who may be dissatisfied to ask the Procurator-Fiscal to take up the case in the ordinary way.
    Mr. MACQUISTEN: Has my right hon. Friend had any complaint about the conduct of the police in Glasgow on Saturday in defending the two hon. Members opposite?
    Mr. KIRKWOOD: It was Sunday!

    IMPORT RESTRICTIONS, DENMARK.
    Mr. MABANE (by Private Notice)asked the Secretary to the Department of Overseas Trade whether his attention has been called to the import restrictions recently imposed by the Danish authorities; whether it is correct that the Danish authorities intend to restrict the importation of textiles to 15 per cent. of last year's importation; whether he is aware that Danish importers are cancelling orders already in process of delivery, and what action he proposes to take to protect the interests of British exporters and their employés in this urgent matter?
    Mr. COLVILLE: I have no information in regard to the second part of my hon. Friend's question, but I am making inquiries. I am aware that Denmark is taking steps to reduce the volume of her total imports. His Majesty's Minister in Copenhagen is keeping in the closest touch with the Danish Government in order to alleviate the effect of these steps upon British interests. I myself have been in communication with the Danish Minister in London on this subject and have pointed out that, in view of the balance of trade between the two countries, it is desirable that any restrictions on our trade should be as temporary as possible.
    Mr. CHORLTON: With reference particularly to textiles, is it not possible to take definite and urgent action like that, in view of the present position of the textile trade in Lancashire?
    Mr. COLVILLE: All possible action will be taken in this regard, I can assure my hon. Friend.
    Mr. WALLHEAD: Is not the restriction of imports precisely the policy which this country is carrying out?

    CHAIRMEN'S PANEL.
    Mr. William Nicholson reported from the Chairmen's Panel; That they had appointed Sir Cyril Cobb to act as Chairman of Standing Committee C (in respect of the Gas Undertakings Bill [Lords]).
    Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE C.
  Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Members from Standing Committee C (added in respect of the Gas Undertakings Bill [Lords]): the Marquess of Clydesdale, Mr. Emrys-Evans, Brigadier-General Making, Mr. Nunn, and Mr. James Reid; and had appointed in substitution: Mr. Clarry, Mr. Maitland, Mr. Ross Taylor, the Solicitor-General for Scotland, and Mr. Herbert Williams.
  Report to lie upon the Table.

BILLS OF EXCHANGE ACT (1882) AMENDMENT BILL,
"to amend the Bills of Exchange Act, 1882," presented by Mr. Herbert Williams; supported by Mr. Samuel Samuel, Mr. David Grenfell, Mr. David Mason, Mr. Edward Grenfell, and Mr. Janner; to be read a Second time upon Monday next, and to be printed. [Bill 95.]
NATIONALITY OF MARRIED WOMEN BILL,
"to allow women marrying foreigners freedom to retain their nationality," presented by Captain Cazalet; to be read a Second time upon Monday next, and to be printed. [Bill 96.]

PUBLICATIONS AND DEBATES' REPORTS.
First Report from the Select Committee, with Minutes of Evidence, brought up, and read.
Report to lie upon the Table, and to be printed. [No. 84.]

MESSAGE FROM THE LORDS.
That they have agreed to,—
Amendments to—
Welwyn Garden City Urban District Council Bill [Lords], without Amendment.
That they have passed a Bill, intituled, "An Act to increase the capital powers of the South Metropolitan Gas Company; and for other purposes." [South Metropolitan Gas Bill [Lords].]

SOUTH METROPOLITAN GAS BILL [Lords].
Read the First time; and referred to the Examiners of Petitions for Private Bills.
ORDERS OF THE DAY.
  FINANCE BILL.
  As amended, considered.
  FINANCE BILL.

    NEW CLAUSE.—(Deduction in certain cases in respect of unemployed dependent relative.)
    If any person who is assessable to Income Tax proves to the satisfaction of the Commissioners of Inland Revenue that he has a relative living with him who has been denied, wholly or in part, transitional payment under the Unemployment Insurance Acts, as amended by the National Economy Act, 1931, or any Order in Council made thereunder, on the ground that the relative is being maintained wholly or partly by him he shall be entitled to a deduction of fifty pounds in respect of his assessment.— [Mr. Hicks.]
    Brought up, and read the First time.
    Mr. HICKS: I beg to move, "That the Clause be read a Second time."
    In so doing, I would urge that the principle contained in this Clause is both reasonable and just. The present position is that if a person has exhausted his statutory unemployment benefit and applies to a public assistance committee for transitional payment, and if the income in the home where the individual resides, providing he is a relative, averages in the London area—it may be varied in other parts—between 8s. and 10s. per week per person—and two children under 14 in this instance count as one adult—then the individual so applying for transitional payment receives the verdict of the public assistance committee of nil determination. Therefore, the person so contributing to the home has an additional liability in having to maintain the relative, providing that the relative is still remaining in the home. Our point is that the State is relieved of responsibility for any payment to that relative, because the member of the household becomes responsible for discharging that duty of maintenance, and we think the individual who now takes the responsibility of the State should not, in common fairness and justness, be charged Income Tax upon the amount of money that he has paid in relieving the relative in question. The Clause is self-explanatory in this respect and asks that such a person should have at least £50 less income assessed to him in respect of his liability to Income Tax.
    3.30 p.m.
    Mr. TINKER: In supporting this proposed Clause, I want to point out to the Financial Secretary that a new set of circumstances has arisen in the last 12 months. Since the last Finance Act, the Government have thought fit to bring the means test into operation, and that has brought into being a set of people who have to take on the burden of keeping some member of the family. A person may have been drawing unemployment benefit, but, owing to the means test, the income of the family prevents him getting any benefit or transitional payments at all. The burden of keeping him has to be borne by some member of the family, and this new Clause is introduced in order to relieve that member of the family from some of his Income Tax. I know of cases where parents have put their children to the teaching profession. They borrow the money from the local authority in order to send the children to college, and the loan is paid back when the children enter the teaching profession.
    I have in mind two cases of a boy and a girl from separate families who have passed through college and gone into the teaching profession, and the money which was borrowed for their children's training has now to be repaid. The fathers in each case are miners who are out of work and have been refused transitional payment because of the earnings of their children, who now have to bear the double burden of paying back the borrowed money and helping to keep their parents. We claim that those children should receive relief and the parents be recognised as dependent relatives as they are in other cases under the Income Tax provisions. The proposition is so fair that it only wants to be brought to the notice of the House to be recognised as such. It may be urged that this concession would upset the financial aspect of the Bill, but I do not think that it will make such a vast difference.
    Mr. BUCHANAN: The proposed Clause is very reasonable and fair. A set of circumstances has arisen which has not been in operation in any other year. A number of men have to keep dependent relatives owing to the operation of the new regulations governing Unemployment Insurance. These people

    1943
    are also faced with the ordinary Income Tax calls, and it is an extremely hard and formidable burden to throw on poor people. I am not so much concerned about the teaching profession, because it may be argued that they have continuity of work, but I am concerned about those who may be employed during one year earning fairly reasonable wages and who follow an occupation which results in their experiencing a good deal of unemployment in the next year. They have to meet an Income Tax claim based on the previous year's earnings, and, owing to their unemployment, it is almost impossible to meet it. I lave a case which I sent to the Minister, who replied to it courteously saying that nothing could be done. The man is being called upon to pay Income Tax during a period when he has to maintain a wife and certain relatives. To make matters worse, he is on short time and not earning sufficient to pay his Income Tax demand.
    We on this side have had no concessions in this Finance Bill at all. [An HON. MEMBER: "Nobody has!"] It may be that nobody has, but attempts are being made by the Government's own supporters to get certain concessions, particularly in regard to beer. I have no doubt that they will be rejected, but I heard the Chancellor say that he hoped that in any review that might take place beer would get a proper share of the rebate. We are putting forward a request for a reasonable concession which should be met. It has been granted in the case of men who have to maintain their mothers, and surely, where the State has thrown the added burden of maintaining dependent relatives on other members of the family, it ought to relieve them of some burden of their Income Tax.
    Mr. PIKE: The House is entitled to an explanation of the underlying requirements of the Mover of this proposed Clause before we decide on its merits. I am inclined to agree with the principle of it, but I am rather suspicious of its actual meaning. If a man has a relative living with him, all that he will have to do under this new Clause is to prove that that relative has been living with him at his expense during some period of the year in order to
    1944
    receive the relief of £50. The relative might live with one member of the family for one month, and with another for another month, and so on round the family, and 12 branches of the family might make claims for relief. The result would be 12 distinct inquiries into one case. In consequence, the Commissioners would be involved in expenditure, which at this time we are not in a position to afford. The Clause also refers to a relative who has been
    "denied, wholly or in part, transitional payment under the Unemployment Insurance Acts."
    What exactly does that mean? We understand the word "wholly," but what does denied "in part" mean? Certain ranges of allowance are made according to the financial condition of applicants, and if every applicant's condition has to be investigated there will be a lot of unnecessary inquiry. Before we are asked to accept this Clause hon. Members opposite should state their case much more clearly, telling us for exactly how long a relative must live with a person and be dependent upon him in order that the abatement of Income Tax may be granted, and exactly what they mean by denied "in part" so far as transitional payments are concerned.
    Mr. NEIL MACLEAN: I am afraid that the hon. Member for Attercliffe (Mr. Pike) has not properly understood the Clause, and that his misunderstanding of it must be due to his misunderstanding of the conditions prevailing amongst unemployed people even in his own constituency. If he were taking a greater interest in the unemployed, and trying to push their interests in a little warmer manner than he seems to be doing, he would have a wider knowledge of the conditions among them and would understand clearly the reason for moving this new Clause.
    Mr. PIKE: I think I do understand the purpose for which the Clause is being moved, but what I am asking hon. Members opposite to do is to let the House have their own explanations of it, so that we may understand it as they would desire us to understand it.
    Mr. MACLEAN: I have merely taken what the hon. Member has said as indicating that he does not understand the circumstances of the unemployed. He talks about an unemployed person

    1945
    living a month with each member of the family in turn, and each member of that family—12 in all—afterwards sending in to the Treasury applications for a reduction of £50 from the amount which they have been assessed for Income Tax. If there were many such cases as he imagines the Ministry of Transport would have to provide additional facilities to enable people to travel round among their relatives. I think the purpose of this Clause is clearly understood by the Financial Secretary to the Treasury. The hon. Member for Gorbals (Mr. Buchanan) has told us that he has sent him a case or two, and I also have sent him cases dealing with this particular point. There are young men or young women who have been educated at the expense of their parents—working people —who have made many sacrifices in order to send them to a university. At that time the father was in good work, but now, with the economic depression from which we are suffering, the father has become unemployed. The son or the daughter is regarded by the public assistance committee as being able to maintain the unemployed parent out of the income derived from teaching or the Civil Service, or whatever the occupation followed; but when the son or the daughter makes application to the Income Tax authorities for a rebate because of supporting their parents the Income Tax authorities refuse to regard them as maintaining their parents, and say they are not entitled to an abatement of Income Tax.
    Therefore we have this curious situation: the public assistance committees and the Employment Exchanges, which are Government or public departments, look upon these young men and young women as being capable of maintaining their parents and compel them to do so —though in using the word "compel" I do not want to suggest that the young man or young woman seeks to escape the obligation. The public assistance committee says, "With your income you must support your father and mother; we will not give them any transitional payment in view of the income which you enjoy." Those young people are regarded by one Department of the Government as being wholly responsible for the support of their parents, and yet the taxing authority, another Department of the Government, tell them they are not
    1946
    supporting them, and therefore are not entitled to receive an abatement of Income Tax. An hon. Member opposite shakes his head. Let him ask the Financial Secretary if that is not the case. Letter after letter upon this one point has been sent to the Financial Secretary, and the replies we have had, while quite courteous, have stated that under the law as it stands at present nothing can be done in the matter, that no abatement of Income Tax could be granted in respect of the expense to which they were put in maintaining their relatives.
    The purpose of this new Clause is to say that where a son or daughter is looked upon by the public assistance authority as maintaining the father and the mother, who on that account are getting no transitional payment, they shall be regarded as supporting their parents, and that the amount of the allowance which the public assistance authorities withhold, whether it be the full sum of 15s. 3d. plus the allowance for the mother, or whether it be a part of that sum, shall be regarded by the Income Tax assessors as being the amount of the abatement in respect of Income Tax to which the son or daughter is entitled. The people on whose behalf we are putting forward this claim arc not many in number, and to grant it would not mean any large sacrifice on the part of the Treasury. I doubt whether throughout the whole country more than 2,000 to 3,000 people would be affected. We have a very good case, a very fair case. It is a new situation, one that could not have been foreseen in any previous Finance Act, not even the Act brought in last autumn. The situation has arisen entirely out of the legislation passed in view of the economic proposals of the National Government. I hope that the National Government will consider this as a perfectly fair and legitimate request, and that this little injustice from which a number of people are suffering will be put right.
    The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I readily admit that, in the first instance, this seems a very reasonable proposal. Certainly from those letters, when they came in to me, as they did from the hon. Member for Gorbals (Mr. Buchanan), the hon. Member for Govan (Mr. Maclean) and from their constituents and from my own

    1947
    constituents and those of other hon. Members, it seemed at first that there was an injustice which ought to be remedied. Then when I examined the matter it seemed to me that the following points arose which I should now like the House to consider. In the first place, we all agree that this is not a case of officials refusing anything, but is the present state of the law. In the second place, these special circumstances have arisen in the case of one set of persons only. The proposed new Clause would relieve this one set of persons and not the others, and persons who have had to maintain uninsured relatives in the past, and will have to maintain them in the future if those relatives do not fall under the statutory provisions with regard to old age and infirmity, would receive no relief. Under these proposals, no relief is given in respect of anybody except the ex-insured persons, and the relatives of the middle-class, who suffer as much as anybody from such circumstances, and the relatives of agricultural labourers, who also suffer under those circumstances, would not receive any relief whatever under the proposals. I do not want to do more than just make the point. [An HON. MEMBER: "Do agricultural labourers pay Income Tax?"] I am talking now of such people as the small shopkeeping class who pay Income Tax. There are people engaged in small farming occupations, perhaps a little higher than agricultural labourers, who feel very keenly at present in regard to the maintenance of relatives. Their burden could not be relieved under the proposed new Clause. Perhaps the term "agricultural labourer" was a mistake. The relief proposed here is double the amount allowed in the case of a dependent relative, which is £25, and here it is £50, but I do not want to found myself on that.
    The present state of the law is that a person may have relief on account of a dependent relative living with him if the relative is incapacitated by reason of old age or infirmity. Under this proposed new Clause that provision is to be extended to relatives who are not incapacitated in that way. Let me tell the House why I think it is an unsound proposal for such a small number of people. The
    1948
    Income Tax authorities can only make an annual determination, but the public assistance committees make a monthly determination. If a determination is made by a local authority it is made in the case of what is admittedly, in theory, a temporary condition. A person is unemployed, and, though unfortunately by the circumstances of the case unemployment may continue for a very long period, it does not continue as long as old age and infirmity which are permanent disabilities. Unemployment, especially in the case of younger people, is a thing which may vary from month to month. In that case, the question asked by the hon. Member for Attercliffe (Mr. Pike) is a perfectly reasonable one. Who is to carry out the investigation which would be necessary in order to make sure that the relative was being maintained to the satisfaction of the Commissioners of Inland Revenue? Obviously, that must be ascertained throughout the whole period of the year during which the person was either wholly or partly dependent upon the relative by whom that person was being kept. Those authorities would need to have investigating machinery to enable them to satisfy themselves that in cases which would no doubt be lodged, cases either of fraud or of infringement of this provision, the person was in fact during the whole of the 12 months in respect of which the claim was made being wholly or mainly maintained by the relative for whom the reduction of Income Tax was being asked. The hon. Member for Gorbals will agree that that is not a difficulty which arises in cases of old age or infirmity, in both of which there is permanent disability which can be easily verified. For the reason that the proposed new Clause only applies to ex-insured persons, and therefore cuts out large sections of the community altogether; for the reason—
    Mr. MACLEAN: May I put this point? The point that seems to present difficulties to the Financial Secretary is that of investigation. Could not the same method be adopted as is used at present to rule people out of transitional payments? Could not the investigating authority be the public assistance committee which at present investigates the need of people in regard to transitional payments?
    Major ELLIOT: The hon. Member will see at once that that could not apply. In the case of the Inland Revenue, a claim is made for a period of 12 months, and it would involve us in an inexplicable tangle of administrative complications if relatively small sums of 35s. or £2 had to be reclaimed by the Inland Revenue from the persons who had received exemption, and if a series of claims and correspondence were to go on for a small sum for the period of a year.
    Mr. BUCHANAN: Could not this be done: Every man who is refused unemployment benefit by the public assistance committee is supplied with a form by the authorities. The form says that his claim is nil. Could not the responsibility be put upon the man who was claiming in respect of a relative of supplying forms for a particular period, and handing them to the authorities after they have been duly authenticated and signed? Would not that be sufficient evidence to cover the period without any investigation at all?
    Major ELLIOT: Surely the hon. Member for Gorbals will realise that these are determinations and investigations which are proper to the consideration between the person claiming benefit and the public assistance committee. The local committee have investigating machinery. To bring the Inland Revenue authorities into this is a wholly unnecessary complication. If the person is not receiving adequate relief, then that is the business of the public assistance committee, which is not asked to find out the facts out of its own money; it has been put into funds by this House, and their investigations are carried on out of funds provided by this House. It is the business of the public assistance committees to ensure that due and adequate relief is given. To complicate that with a series of claims which would be matters of shillings rather than of pounds is to import undesirable complications into the Inland Revenue system of this country.
    4.0 p.m.
    Let me go further. The Inland Revenue realise that certain circumstances are operating as far as these people are concerned, and that there is a class of case with which previously we have not had to deal. We are anxious, and I will give a pledge that we will do our utmost to
    1950
    mitigate by administrative action the difficulties that have arisen. For instance, in the most difficult cases where a parent is being assisted, and where there are younger brothers and sisters, it has been found possible to give Income Tax relief by reference to the younger brothers and sisters, treating them as adopted children. There is a class of case running over a long period of time in which it is right and reasonable that such relief should be given. Furthermore, in every case where it can be shown that existing conditions in an elderly man's trade effectively destroy his chance of employment on that account, he is to all intents and purposes incapacitated by old age, and therefore is brought within the meaning of the dependant relatives provision. But I would ask my hon. Friends in all parts of the House to realise that it is not possible to deal in the Inland Revenue with every class of case which arises in the course of a year. The Royal Commission on Income Tax, on which Members belonging to all parties sat, went into this question very closely and very sympathetically, and they said:
    "These claims, while differing in degree, all arise out of the personal or domestic circumstances of the taxpayer, and although we are conscious that in particular cases the operation of the general rule may result in individual hardship, we feel that we cannot advise any general relaxation of the principles on which the tax is levied."
    That report was signed, as we know, among others by Mr. William Graham. That was in the year 1920. The fact is that it is not possible to adapt the Income Tax provisions to the circumstances of every case, and particularly an annual determination is not adapted to temporary circumstances. That was true in 1920, and it remains true to-day. The public assistance committee have a very important duty to perform. That duty must be primarily the responsibility of the public assistance committees. This House has gone a very long way in placing vast sums at the disposal of the public assistance committees which they have to administer to obviate these cases of hardship, and I would ask the House to leave the machine of the Inland Revenue to operate, as in the past, on an annual determination, and to leave the short determination to be carried out by the public assistance committee. That, I think, will be found in practice much more satisfactory, and much less liable

    1951
    to give rise to a double set of means test investigations—which would be the worst thing that could happen to these people—than a system brought in under such a Clause as this.
    Mr. ATTLEE: The right hon. and gallant Gentleman has given us a large number of reasons, including many weak ones, for not accepting this Clause. After all, Income Tax is based on the income of the previous year, and the right hon. and gallant Gentleman takes the line that family circumstances have not changed, and that the system is a perfect one. That, is not so. He says that the facts are ascertainable. There may be an aged person supported in one year, and who may die in that year. There may be children who are born and die in the course of a year. You do not make these adjustments. Your Income Tax regulations are only an approximation at best, and when the right hon. and gallant Gentleman takes the line that you must have it absolutely perfect, I think he is quite wrong. As a matter of fact, the Income Tax takes the broad circumstances of a person, and you do not get a readjustment of injustices. Now the right hon. and gallant Gentleman says that we cannot do justice in this case, because if we try to do it we shall have to do justice in every other kind of case, and bring in all kinds of persons. That is a very familiar argument coming from the Treasury Bench and from the representative of the Treasury, but the right hon. and gallant Gentleman has ignored that this particular set of circumstances is the creation of the Legislature. It is the creation of the action of this Government with its specific means test. It is quite possible to avoid this by a process, which the National Government are so actively carrying on, of breaking up the family.
    Major ELLIOT: My hon. Friend will agree that that would not obviate the real difficulty, that this would apply only to one section of the community.
    Mr. ATTLEE: I quite agree, but the right hon. and gallant Gentleman cannot charge that against this Clause. It is a fact that the Government do not insure agricultural labourers against unemployment, but does that mean, therefore, that the doing of justice to any class must beheld over until the Government choose
    1952
    to give unemployment insurance to agricultural labourers? Of course, the social system is full of anomalies. If we are to wait until justice is done all round, we shall never get anywhere. But in this specific case you have an elaborate system of means tests, under which committees are charged with taking into consideration the means of certain members of a family. The right hon. Gentleman's Department is already removing those means, and therefore it is entirely unfair that an amount of money which is coming into the household should be estimated on an income which is not the income at all, because it is subject to deduction of Income Tax.
    Major ELLIOT: Any deductions made from income would certainly be a perfectly legitimate thing for the public assistance committee to take into account.
    Mr. ATTLEE: But do those committees, as a matter of fact, take into account Income Tax in every case? Has the right hon. and gallant Gentleman given such instructions? I do not believe, as a matter of fact, that they do; but here is the point. These persons are having a burden put upon their income of keeping a relative, and they are being charged with Income Tax on that part of their income which, in fact, they are not receiving. I consider that the right hon. Gentleman's arguments with regard to the practicability of this Clause are extraordinarily weak, because they postulate a state of completeness and accuracy in Income Tax which does not exist, and I think that his argument that it is impossible to do anything for these people because we cannot bring in everybody, is really only the sort of argument we always get on a point like this. If we tried to bring in everybody, the right hon. and gallant Gentleman would say, "If it had only been a case of a few hundred people, we might have done something, but we cannot afford this." It is a good old Treasury retort. On the merits of the case, I think the attitude of the Government is quite unreasonable, and we shall press this Motion to a Division.
    Mr. ANEURIN BEVAN: The Financial Secretary, I know, finds himself this afternoon in a difficulty. He had to admit the principal case which the Opposition has put up, namely, that a new class of dependants has recently been created. He

    1953
    must have had in mind that the Government of which ho is a member has declared that a person who is in receipt of transitional payment, and who is living as a member of a family where there are persons who are earning wages, is, in fact, a dependant of the wage-earners. The case which he cited, where large numbers of people would not have relief if this Clause were added to the Bill, is that of a voluntary association. The law has not declared, in fact, that they are legal dependants, and, therefore, it cannot be held that they are entitled to relief. But this is a class which the law has declared is a new class of legal dependants.
    Major ELLIOT: Surely my hon. Friend is not quite accurate. The determination, according to the Poor Law standard, has not been in any way altered. We are dealing, not with the question of dependants as regards the Inland Revenue, but as regards the Poor Law. The definition of dependants as regards the Poor Law is in. no way altered.
    Mr. BEVAN: I accept the statement made by the Financial Secretary that this set of circumstances could have arisen, and did arise, with respect to the Poor Law before; but a new class of dependants, notwithstanding, has been created, because you have now transferred to the Poor Law machinery a large number of persons who were formerly insured. You have, in fact, created a new class of dependants, and you have declared that any persons in a household in receipt of transitional payment shall be legal dependants of the other members of the household. All that we desire by this proposed new Clause is to carry the logic of the position to the Inland Revenue, and to say that if the law declares that these persons are dependants for the purpose of assessing transitional payment, they shall be dependants for the purpose of assessing Income Tax in regard to the members of the family, That is a perfectly reasonable and logical stand to take.
    What is the actual nature of the injustice which the Financial Secretary is defending? The law up to now has said that it is unjust to tax an income below £120 a year. The law said that it was unreasonable to pay taxation to the State when living at a standard of life represented by less than £120 a year. [An HON. MEMBER: "£135."] £135. That is precisely what the law has said.
    1954
    I know of the case of an uncertificated school teacher receiving as such teachers do receive, very low wages, paying a very small amount of Income Tax because her earnings are just above the taxable level. There is a brother living with her who had 15s. 3d. a week, and the transitional payment people have taken 10s. a week from that relative on the ground that his sister must now keep him. That has lowered her annual income well below the level at which the State has said it is unreasonable to levy Income Tax. That seems to be a rank injustice, because the State has said, "We think you ought not to be taxed, because your income ought not to be less than a certain amount." The law has said in another of its Departments, "You must live upon a lot less than this, because we shall make your brother chargeable to you." That is a powerful case which has not been met, and we earnestly submit that this is carrying the whole thing a little too far; indeed, it is levying so high a tax upon the earnings of some members of families as gravely to reduce the incentive to earn wages at all. I do submit, in view of these considerations, that the Financial Secretary might reconsider the position. If he does not like our form of words, perhaps he can suggest a form of words to meet the main gravamen of the charge which we are bringing against this Bill.
    Mr. LANSBURY: With regard to what is called the legal position in this matter, I always understood that legally an able-bodied person was obliged to support a non-able-bodied relative, whether living with him or not, but I always understood, also, that no person was obliged under the Poor Law to help to maintain an able-bodied relative. I do not know of any legal right by which the Government, through the public assistance committees, are compelling relatives to maintain able-bodied persons who are out of work. [Interruption.] I have been helping to administer the Poor Law for nearly 40 years, and I always understood that that was the law. The other night in the House I asked if anyone could contradict me on that point, and no one has done so yet. The position is brought about in this way: The public assistance committee say: "There is enough coming into the house, and you must share it and must bear the burden of the unemployment of your relative."

    1955
    They have not any legal right to do that. If the relatives say, "No, we are not going to do this," then the public assistance committee reply, "Well, your friend, or brother, or whoever he is, must go into the workhouse." They have that weapon which they hold over both the applicant and the relative. There is no legal obligation to do this, and I believe that, if the House of Commons really understood the terrible burden that is being put upon quite hard-working people by this family income test, it would be removed. I only rose to say
    this because the right hon. and gallant Gentleman talked about the legality of it. There is no legality at all for making relatives maintain able-bodied relatives, though there is in the case of non-able-bodied relatives. It is an innovation that has been brought into the working of the Poor Law, and it is made to work because the alternative is the workhouse, which very few people will accept.
    Question put, "That the Clause be read a Second time."
    The House divided: Ayes, 45; Noes, 323.

    Division No. 218.]

    AYES.

    [4.18 p.m.

    Adams, D. M. (Poplar, South)

    Grundy, Thomas W.

    Maclean, Neil (Glasgow, Govan)

    Attlee, Clement Richard

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

    Parkinson, John Allen

    Batey, Joseph

    Hall, George H. (Merthyr Tydvil)

    Pickering, Ernest H.

    Bevan, Aneurin (Ebbw Vale)

    Healy, Cahir

    Price, Gabriel

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

    Hicks, Ernest George

    Salter, Dr. Alfred

    Buchanan, George

    Hirst, George Henry

    Thorne, William James

    Cocks, Frederick Seymour

    Janner, Barnett

    Tinker, John Joseph

    Cove, William G.

    Jenkins, Sir William

    Wallhead, Richard C.

    Daggar, George

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

    Wedgwood, Rt. Hon. Josiah

    Davies, Rhys John (Westhoughton)

    Jones, Morgan (Caerphilly)

    Williams, David (Swansea, East)

    Duncan, Charles (Derby, Claycross)

    Kirk wood, David

    Williams, Edward John (Ogmore)

    Edwards, Charles

    Lansbury, Rt. Hon. George

    Williams, Dr. John H. (Lianelly)

    Greenwood, Rt. Hon. Arthur

    Leonard, William

    Williams, Thomas (York, Don Valley)

    Grenfell, David Rees (Glamorgan)

    Logan, David Gilbert

    Griffiths, T. (Monmouth, Pontypool)

    Lunn, William

    TELLERS FOR THE AYES.—

    Groves, Thomas E.

    McGovern, John

    Mr. John and Mr. Cordon

    Macdonald.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Cazalet, Thelma (Islington, E.)

    Dugdale, Captain Thomas Lionel

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Cazalet, Capt. V. A. (Chippenham)

    Duggan, Hubert John

    Agnew, Lieut.-Com. P. G.

    Chalmers, John Rutherford

    Duncan. James A.L.(Kensington, N.)

    Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)

    Chamberlain, Rt. Hon. Sir J. A. (Birm., W)

    Dunglass, Lord

    Allen, William (Stoke-an-Trent)

    Chamberlain, Rt. Hon. N.(Edgbaston)

    Eden, Robert Anthony

    Applin, Lieut.-Col. Reginald V. K.

    Choriton, Alan Ernest Leofric

    Edmondson, Major A. J.

    Apsley, Lord

    Chotzner, Alfred James

    Elliot, Major Rt. Hon. Walter E.

    Astbury, Lieut.-Com. Frederick Wolfe

    Christie, James Archibald

    Elliston, Captain George Sampson

    Atholl, Duchess of

    Churchill, Rt. Hon. Winston Spencer

    Elmley, Viscount

    Balley, Eric Alfred George

    Clarke, Frank

    Emmott, Charles E. G. C.

    Baldwin, Rt. Hon. Stanley

    Clarry, Reginald George

    Emrys-Evans, p. V.

    Balfour, Capt. Harold (I. of Thanet)

    Clayton, Dr. George C.

    Entwistle, Cyril Fullard

    Balniel, Lord

    Clydesdale, Marquess of

    Erskine-Bolst, Capt. C. C. (Blackpool)

    Barclay-Harvey, C. M.

    Cobb, Sir Cyril

    Essenhigh, Reginald Clare

    Barton, Capt. Basil Kelsey

    Cochrane, Commander Hon. A. D.

    Evans, Capt. Ernest (Welsh Univ.)

    Beauchamp, Sir Brograve Campbell

    Colfox, Major William Philip

    Evans, R. T. (Carmarthen)

    Bennett, Capt. Sir Ernest Nathaniel

    Collins, Sir Godfrey

    Everard, W. Lindsay

    Betterton, Rt. Hon. Sir Henry B.

    Colman, N. C. D.

    Faile, Sir Bertram G.

    Bird, Ernest Roy (Yorks., Skipton)

    Colville, John

    Ferguson, Sir John

    Boothby, Robert John Graham

    Conant, R. J. E.

    Fermoy, Lord

    Borodale, Viscount

    Cook, Thomas A.

    Fielden, Edward Brockiehurst

    Bower, Lieut.-Com. Robert Tatton

    Cooke, Douglas

    Foot, Isaac (Cornwall, Bodmin)

    Bowyer, Capt. Sir George E. W.

    Copeland, Ida

    Ford, Sir Patrick J.

    Boyce, H. Leslie

    Courtauld, Major John Sewell

    Fuller, Captain A. O.

    Braithwaite, Maj. A. N. (Yorks, E. R.)

    Craddock, Sir Reginald Henry

    Ganzoni Sir John

    Braithwaite, J. G. (Hillsborough)

    Cranborne, Viscount

    Gault, Lieut.-Col. A. Hamilton

    Briscoe, Capt. Richard George

    Craven-Ellis, William

    Gillett, Sir George Masterman

    Brockiebank, C. E. R.

    Croft, Brigadier-General Sir H.

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

    Brown, Ernest (Leith)

    Crooke, J. Smedley

    Gledhill, Gilbert

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

    Crookshank, Col. C. de Windt (Bootie)

    Glossop, C. W. H.

    Buchan, John

    Cruddas, Lieut.-Colonel Bernard

    Gluckstein, Louis Halle

    Buchan-Hepburn, P. G. T.

    Culverwell, Cyril Tom

    Glyn, Major Ralph G. C.

    Burghley, Lord

    Curry, A. C.

    Goff, Sir Park

    Burnett, John George

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

    Goodman, Colonel Albert W.

    Cadogan, Hon. Edward

    Davison, Sir William Henry

    Gower, Sir Robert

    Campbell, Edward Taswell (Bromley)

    Denman, Hon. R. D.

    Graham, Fergus (Cumberland, N.)

    Campbell, Rear-Adml. G. (Bromley)

    Denville, Alfred

    Grattan-Doyle, Sir Nicholas

    Campbell-Johnston, Malcolm

    Dickie, John P.

    Graves, Marjorie

    Caporn, Arthur Cecil

    Dixey, Arthur C. N.

    Greaves-Lord, Sir Walter

    Castle Stewart, Earl

    Donner, P. W.

    Gretton, Colonel Rt. Hon. John

    Cautley, Sir Henry S.

    Drews, Cedric

    Griffith, F. Kingsley (Middlesbro', W.)

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

    Duckworth, George A. V.

    Grimston, R. V.

    Gritten, W. G. Howard

    Macquisten, Frederick Alexander

    Salt, Edward W.

    Guinness, Thomas L. E. B.

    Magnay, Thomas

    Samuel, Sir Arthur Michael (F'nham)

    Gunston, Captain D. W.

    Makins, Brigadier-General Ernest

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

    Guy, J. C. Morrison

    Mallalieu, Edward Lancelot

    Sandeman, Sir A. N. Stewart

    Hamilton, Sir George (Word)

    Manningham-Buller, Lt.-Col. Sir M.

    Sanderson, Sir Frank Barnard

    Hamilton, Sir H. W. (Orkney & Z'tl'nd)

    Margesson, Capt. Henry David R.

    Savery, Samuel Servington

    Hanley, Dennis A.

    Marsden, Commander Arthur

    Scone, Lord

    Hartland, George A.

    Mayhew, Lieut.-Colonel John

    Selley, Harry R.

    Harvey, George (Lambeth, Kenningt'n)

    Merriman, Sir F. Boyd

    Shakespeare, Geoffrey H.

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

    Mills, Sir Frederick (Leyton, E.)

    Shaw, Helen B. (Lanark, Bothwell)

    Haslam, Henry (Lindsay, H'ncastle)

    Mills, Major J. D. (New Forest)

    Simon, Rt. Hon. Sir John

    Haslam, Sir John (Bolton)

    Milne, Charles

    Sinclair, Maj. Rt. Hn. Sir A.(C'thness)

    Hellgers, Captain F. F. A.

    Milne, Sir John S. Wardlaw-

    Smiles, Lieut.-Col. Sir Walter D.

    Henderson, Sir Vivian L. (Cheimeford)

    Mitchell, Harold P.[Br'tf'd & Chisw'k)

    Smith-Carington, Neville W.

    Heneage, Lieut.-Colonel Arthur P.

    Mitchell, Sir W. Lane (Streatham)

    Somerville, Annesley A. (Windsor)

    Hepworth, Joseph

    Molson, A. Hugh Eisdale

    Soper, Richard

    Hills, Major Rt. Hon. John Waller

    Monsell, Rt. Hon. Sir B. Eyres

    Sotheron-Estcourt, Captain T. E.

    Hoare Lt.-Col. Rt. Hon. Sir S. J. G.

    Moreing, Adrian C.

    Southby, Commander Archibald R. J.

    Hore-Belisha, Leslie

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

    Spears, Brigadier-General Edward L.

    Hornby Frank

    Morrison, William Shepherd

    Spencer, Captain Richard A.

    Horobin Ian M.

    Moss, Captain H. J.

    Spender-Clay, Rt. Hon. Herbert H.

    Horsbrugh, Florence

    Muirhead, Major A. J.

    Stevenson, James

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

    Munro, Patrick

    Stones, James

    Hume, Sir George Hopwood

    Nail-Cain, Arthur Ronald N.

    Storey, Samuel

    Hurd, Sir Percy

    Nation, Brigadier-General J. J. H.

    Stourton, Hon. John J.

    Hutchison, W. D. (Essex, Romf'd)

    Newton, Sir Douglas George C.

    Strauss, Edward A.

    Jackson, Sir Henry (Wandsworth, C.)

    Nicholson, Godfrey (Morpeth)

    Strickland, Captain W. F.

    Jackson, J. C (Heywood & Radcliffe)

    Nicholson. Rt. Hn. W. G. (Petersf'ld)

    Sueter, Rear-Admiral Murray F.

    Jesson, Major Thomas E.

    North, Captain Edward T.

    Sugden, Sir Wilfrid Hart

    Joel Dudley J. Barnato

    Nunn, William

    Sutcliffe, Harold

    Jones, Lewis (Swansea, West)

    O'Donovan, Dr. William James

    Tate, Mavis Constance

    Ker, J Campbell

    Ormiston, Thomas

    Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)

    Kerr, Hamilton W.

    Ormsby-Gore, Rt. Hon. William G. A.

    Templeton, William P.

    Kimball Lawrence

    Palmer, Francis Noel

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

    Knatchbull Captain Hon. M. H. R.

    Peake, Captain Osbert

    Thomas, James P. L. (Hereford)

    Knebworth, Viscount

    Pearson, William G.

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

    Knox Sir Alfred

    Percy, Lord Eustace

    Thomson, Sir Frederick Charles

    Law, Sir Alfred

    Perkins, Walter R. D.

    Thorp, Union Theodore

    Law Richard K. (Hull, S.W.)

    Petherick, M.

    Titchfield, Major the Marquess of

    Leech, Dr J. W.

    Peto, Sir Basil E. (Devon, Barnstaple)

    Todd, Capt. A. J. K. (B'wick-on-T.)

    Lees-Jones John

    Peto, Geoffrey K. (Wverh'pt'n, Bliston)

    Todd, A. L. S. (Kingswinford)

    Leighton Major B. E. P.

    Pike, Cecil F.

    Touche, Gordon Cosmo

    Lennox-Boyd, A. T.

    Potter, John

    Tryon, Rt. Hon. George Clement

    Levy Thomas

    Powell, Lieut.-Col. Evelyn G. H.

    Turton, Robert Hugh

    Liddall Walter S.

    Powell, Sir Assheton

    Wallace, Captain D. E. (Hornsey)

    Lindsay, Noel Ker

    Procter, Major Henry Adam

    Wallace, John (Dunfermline)

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Pybus, Percy John

    Ward, Lt.-Col. Sir A. L. (Hull)

    Llewellin, Major John J.

    Ramsay, Capt. A. H. M. (Midlothian)

    Ward, Irene Mary Bewick (Wallsend)

    Llewellyn-Jones, Frederick

    Ramsay, T. B. W. (Western Isles)

    Warrantor, Sir Victor A. G.

    Lloyd, Geoffrey

    Ramsbotham, Herwald

    Waterhouse, Captain Charles.

    Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)

    Ramsden, E.

    Wayland, Sir William A.

    Lockwood, John C. (Hackney, C.)

    Ray, Sir William

    Wedderburn, Henry James Scrymgeour.

    Loder Captain J. de Vere

    Rea, Walter Russell

    Wells, Sydney Richard

    Lovat-Fraser, James Alexander

    Reed, Arthur C. (Exeter)

    Weymouth, Viscount

    Lumley, Captain Lawrence R.

    Reid, James S. C. (Stirling)

    Whiteside, Borras Noel H.

    Lyons, Abraham Montagu

    Reid. William Allan (Derby)

    Williams, Charles (Devon, Torquay)

    Mabane, William

    Remer, John R.

    Williams, Herbert G. (Croydon, S.)

    McCorquodale, M. S.

    Reynolds, Col. Sir James Philip

    Wills, Wilfrid

    MacDonald, Rt. Hon. J. R. (Seaham)

    Robinson, John Roland

    Windsor-Clive, Lieut.-Colonel George

    MacDonald Malcolm (Bassetlaw)

    Rosbotham, S. T.

    Womesley, Walter James

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

    Ross, Ronald D.

    Worthington, Dr. John V.

    McEwen Captain J. H. F.

    Ross Taylor, Walter (Woodbridge)

    Wragg, Herbert

    Mckeag, William

    Runciman, Rt. Hon. Walter

    Young, Rt. Hon. Sir Hilton (S'v'noaks)

    McKie, John Hamilton

    Runge, Norah Cecil

    Maclay, Hon. Joseph Paton

    Russell, Alexander West (Tynemouth)

    TELLERS FOR THE NOES.—

    McLean, Major Alan

    Russell, Hamer Field (Sheffield, B'tside)

    Sir George Penny and Lord

    McLean, Dr. W. H. (Tradeston)

    Salmon, Major Isidore

    Erskine.

    NEW CLAUSE.—(Amendment as to payment of tax by instalments.)
    Section eight of the Finance Act, 1931 (which relates to the payment of Income Tax by instalments), is hereby repealed, and Sub-section (2) of Section one hundred and fifty-seven of the Income Tax Act, 1918, shall have effect as originally enacted.—[Mr. Morgan Jones.]
    Brought up, and read the First time.
    Mr. MORGAN JONES: I beg to move, "That the Clause be read a Second time."
    1958
    4.30 p.m.
    I think the substance of this Clause will be apparent to hon. Members in all parts of the House. It will be recollected that in the Finance Act of last year it was made incumbent upon Income Tax payers to pay three-quarters of their tax in the first half-year, and one-quarter in the second half-year. That was a departure from the principle laid down in the Income Tax Act, 1918, whereby, although the Income Tax was in fact due on the 1st January of each year, arrange-

    1959
    ments were made that it should be actually payable in two instalments, one in January and one in July. We think that everyone representing all sorts of Income Tax payers-both the upper and the middle classes, and also the lower middle class, to whom the right hon. Gentleman referred a few minutes ago- will feel that, in these days of very substantial industrial depression and of financial difficulty to individuals, this arrangement of last year might involve a considerable measure of embarrassment to individual Income Tax payers. We feel, therefore, that, in view of the circumstances of the time, circumstances which this year may, perhaps, be even harder than they were last year, the case for a reversion to the 1918 form of procedure is sufficiently overwhelming to invite the cordial assent of the House.
    Major ELLIOT: It is undoubtedly a very good thing that the House should realise the difficulties in which direct taxpayers are placed. Reinforced from the source from which we have just heard it, it is all the more welcome. But I will not twit hon. and right hon. Gentlemen opposite with the fact that it was they who imposed the original collection of five quarters of the tax in four quarters of the year. I will merely say that we all realise that that was a strain on the taxpayers. In the future, of course, that strain will not be so heavy, because the collection of the tax will still be four quarters of the tax in four quarters of the year. The real strain came from five quarters of the tax in four quarters of the year far more than the fact that three-quarters is collected in one period and only one-quarter in another. The immediate proposal before us is that
    direct taxpayers under Schedule A and also individuals under Schedules B, D and E should only pay three-quarters of their Income Tax this year. That is a consummation devoutly to be wished, but it would cost us £15,000,000 in the present year. And if Schedule A is included, as it is as the Clause is drafted, it would cost £38,000,000 this year. In these circumstances, I am sure hon. and right hon. Gentlemen opposite will realise that, while we greatly appreciate the suggestion which they have put forward, it is not within the bounds of possibility for the Chancellor of the Exchequer to assent to it in the current year.
    Mr. GRUNDY: I am very sorry that the Financial Secretary to the Treasury has so little to say about the matter. It seems to mo a matter of simple justice. The payment of three-quarters of the Income Tax in the first half of the year has been and is a very great hardship indeed to those who have to pay Income Tax. We are simply asking, as a measure of justice, that we should revert to the old system and that Income Tax should be paid in two equal instalments. By reducing the limit from £225 to £150 you have shorn the sheep pretty close to the skin. I am not sure you have not taken some of the skin. We might at least have expected more favourable consideration than has been given to the Clause. We are really asking the Financial Secretary to temper the wind to the lambs after the Chancellor of the Exchequer has shorn them very closely and to allow them to pay in two half yearly instalments.
    Question put, "That the Clause be read a Second time."
    The House divided: Ayes, 42; Noes, 319.

    Division No. 219.]

    AYES.

    [4.36 p.m.

    Adams, D. M. (Poplar, South)

    Grundy, Thomas W.

    McGovern, John

    Attlee, Clement Richard

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

    Maclean, Neil (Glasgow, Govan)

    Batey, Joseph

    Hall, George H. (Mertnyr Tydvil)

    Parkinson, John Allen

    Bevan, Aneurin (Ebbw Vale)

    Healy, Cahir

    Price, Gabriel

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

    Hicks, Ernest George

    Salter, Dr. Alfred

    Buchanan, George

    Hirst, George Henry

    Thorne, William James

    Cocks, Frederick Seymour

    Jenkins, Sir William

    Tinker, John Joseph

    Cove, William G.

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

    Wallhead, Richard C.

    Daggar, George

    Jones, Morgan (Caerphilly)

    Williams, David (Swansea, East)

    Davies, Rhys John (Westhoughton)

    Kirkwood, David

    Williams, Edward John (Ogmore)

    Duncan, Charles (Derby, Claycross)

    Lansbury, Rt. Hon. George

    Williams, Dr. John H. (Lianelly)

    Edwards, Charles

    Leonard, William

    Williams, Thomas (York, Don Valley)

    Greenwood, Rt. Hon. Arthur

    Logan, David Gilbert

    Grenfell, David Rees (Glamorgan)

    Lunn, William

    TELLERS FOR THE AYES.—

    Griffiths, T. (Monmouth, Pontypool)

    Macdonald, Gordon (Ince)

    Mr. John and Mr. Groves.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Duggan, Hubert John

    Law, Sir Alfred

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Duncan, James A. L. (Kensington, N.)

    Law, Richard K. (Hull, S.W.)

    Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)

    Dunglass, Lord

    Leech, Dr. J. W.

    Allen, William (Stoke-on-Trent)

    Eden, Robert Anthony

    Lees-Jones, John

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

    Edmondson, Major A. J.

    Leighton, Major B. E. P.

    Applin, Lieut.-Col. Reginald V. K.

    Elliot, Major Rt. Hon. Walter E.

    Lennox-Boyd, A. T.

    Apsley, Lord

    Ellis, Sir R. Geoffrey

    Levy, Thomas

    Astbury, Lieut.-Com. Frederick Wolfe

    Elliston, Captain George Sampson

    Liddall, Walter S.

    Atholl, Duchess of

    Elmley, Viscount

    Lindsay, Noel Ker

    Bailey, Eric Alfred George

    Emmott, Charles E. G. C.

    Llewellin, Major John J.

    Balfour, Capt. Harold (I. of Thanet)

    Emrys-Evans, P. V.

    Llewellyn-Jones, Frederick

    Balniel, Lord

    Entwistle, Cyril Fullard

    Lloyd, Geoffrey

    Barclay-Harvey, C. M.

    Erskine-Bolst, Capt. C. C. (Blackpool)

    Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)

    Barton, Capt. Basil Kelsey

    Essenhigh, Reginald Clare

    Lockwood, John C. (Hackney, C.)

    Beauchamp, Sir Brograve Campbell

    Evans, Capt. Ernest (Welsh Univ.)

    Loder, Captain J. de Vere

    Bennett, Capt. Sir Ernest Nathaniel

    Evans, R. T. (Carmarthen)

    Lovat-Fraser, James Alexander

    Bird, Ernest Roy (Yorks., Skipton)

    Everard, W. Lindsay

    Lumley, Captain Lawrence R.

    Boothby, Robert John Graham

    Falle, Sir Bertram G.

    Lyons, Abraham Montagu

    Borodale, Viscount

    Ferguson, Sir John

    Mabane, William

    Bower, Lieut.-Com. Robert Tatton

    Fermoy, Lord

    MacDonald, Malcolm (Bassetlaw)

    Bowyer, Capt. Sir George E. W.

    Fielden, Edward Brockiehurst

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

    Boyce, H. Leslie

    Foot, Isaac (Cornwall, Bodmin)

    McEwen, Captain J. H. F.

    Braithwaite, Maj. A. N. (Yorks, E. R.)

    Ford, Sir Patrick J.

    McKeag, William

    Braithwaite J. G. (Hillsborough)

    Fremantle, Sir Francis

    McKie, John Hamilton

    Briscoe, Capt. Richard George

    Fuller, Captain A. Q.

    Maclay, Hon. Joseph Paton

    Brockiebank, C. E. R.

    Ganzoni, Sir John

    McLean, Major Alan

    Brown, Ernest (Leith)

    Gault, Lieut.-Col. A. Hamilton

    McLean, Dr. W. H. (Tradeston)

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

    Gillett, Sir George Masterman

    Macquisten, Frederick Alexander

    Buchan, John

    Gledhill, Gilbert

    Magnay, Thomas

    Buchan-Hepburn, P. G. T.

    Glossop, C. W. H.

    Makins, Brigadier-General Ernest

    Burghley, Lord

    Gluckstein, Louis Halle

    Mallalieu, Edward Lancelot

    Burnett, John George

    Glyn, Major Ralph G. C.

    Manningham-Buller, Lt.-Col. Sir M.

    Cadogan, Hon. Edward

    Goff, Sir Park

    Margesson, Capt. Henry David R.

    Campbell, Edward Taswell (Bromley)

    Goodman, Colonel Albert W.

    Marsden, Commander Arthur

    Campbell, Rear-Admiral G. (Burnley)

    Gower, Sir Robert

    Mason, David M. (Edinburgh, E.)

    Campbell-Johnston, Malcolm

    Graham, Fergus (Cumberland, N.)

    Mayhew, Lieut.-Colonel John

    Caporn, Arthur Cecil

    Grattan-Doyle, Sir Nicholas

    Merriman, Sir F. Boyd

    Castle Stewart, Earl

    Graves, Marjorie

    Mills, Sir Frederick (Leyton, E.)

    Cautley, Sir Henry S.

    Greaves-Lord, Sir Walter

    Mills, Major J. D. (New Forest)

    Cayzer, Maj. Sir H. R. (P'rtsm'th, S.)

    Gretton, Colonel Rt. Hon. John

    Milne, Charles

    Cazalet, Thelma (Islington, E.)

    Griffith, F. Kingsley (Middlesbro', W.)

    Milne, Sir John S. Wardlaw-

    Chalmers, John Rutherford

    Grimston, R. V.

    Mitchell, Sir W. Lane (Streatham)

    Chamberlain, Rt. Hon. Sir J. A. (Birm., W)

    Gritten, W. G. Howard

    Molson, A. Hugh Eisdale

    Choriton, Alan Ernest Leofric

    Guinness, Thomas L. E. B.

    Moreing, Adrian C.

    Chotzner, Alfred James

    Gunston, Captain D. W.

    Morrison, William Shepherd

    Christie, James Archibald

    Guy, J. C. Morrison

    Moss, Captain H. J.

    Churchill, Rt. Hon. Winston Spencer

    Hamilton, Sir George (Ilford)

    Muirhead, Major A. J.

    Clarke, Frank

    Hamilton, Sir R. W.(Orkney & Ztl'nd)

    Munro, Patrick

    Clarry, Reginald George

    Hanbury, Cecil

    Nail-Cain, Arthur Ronald N.

    Clayton, Dr. George C.

    Hanley, Dennis A.

    Nation, Brigadier-General J. J. H.

    Clydesdale, Marquess of

    Hartland, George A.

    Newton, Sir Douglas George C.

    Cobb, Sir Cyril

    Harvey, George (Lambeth, Kenn'gt'n)

    Nicholson, Godfrey (Morpeth)

    Cochrane, Commander Hon. A. D.

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

    Nicholson, Rt. Hn. W. G. (Petersf'ld)

    Colfox, Major William Philip

    Haslam, Henry (Lindsay, H'ncastle)

    North, Captain Edward T.

    Collins, Sir Godfrey

    Haslam, Sir John (Bolton)

    Nunn, William

    Colman, N. C. D.

    Hellgers, Captain F. F. A.

    O'Neill, Rt. Hon. Sir Hugh

    Colville, John

    Henderson, Sir Vivian L. (Cheimsf'd)

    Ormiston, Thomas

    Conant, R. J. E.

    Heneage, Lieut.-Colonel Arthur P.

    Palmer, Francis Noel

    Cook, Thomas A.

    Hepworth, Joseph

    Peake, Captain Osbert

    Cooke, Douglas

    Hills, Major Rt. Hon. John Walter

    Pearson, William G.

    Copeland, Ida

    Hore-Belisha, Leslie

    Penny, Sir George

    Courtauld, Major John Sewell

    Hornby, Frank

    Percy, Lord Eustace

    Craddock, Sir Reginald Henry

    Horobin, Ian M.

    Perkins, Walter R. D.

    Cranborne, Viscount

    Horsbrugh, Florence

    Petherick, M.

    Craven-Ellis, William

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

    Peto, Sir Basil E. (Devon, Barnstaple)

    Croft, Brigadier-General Sir H.

    Hume, Sir George Hopwood

    Peto, Geoffrey K.(W'verh'pt'n, Bliston)

    Crooke, J. Smedley

    Hunter. Capt. M. J. (Brigg)

    Pickering, Ernest H.

    Crookshank, Col. C. de Windt (Bootle)

    Hurd, Sir Percy

    Pike, Cecil F.

    Crookshank, Capt. H. C. (Gainsb'ro)

    Hutchison, W. D. (Essex, Romf'd)

    Potter, John

    Crossley, A. C.

    Jackson, Sir Henry (Wandsworth, C.)

    Powell, Lieut.-Col. Evelyn G. H.

    Cruddas, Lieut.-Colonel Bernard

    Jackson, J. C. (Heywood & Radcliffe)

    Procter, Major Henry Adam

    Culverwell, Cyril Tom

    James, Wing.-Com. A. W. H.

    Pybus, Percy John

    Curry, A. C.

    Janner, Barnett

    Raikes, Henry V. A. M.

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

    Jesson, Major Thomas E.

    Ramsay, Capt. A. H. M. (Midlothian)

    Davison, Sir William Henry

    Joel, Dudley J. Barnato

    Ramsay, T. B. W. (Western Isles)

    Denman, Hon. R. D.

    Jones, Lewis (Swansea, West)

    Ramsbotham, Herwald

    Denville, Alfred

    Ker, J. Campbell

    Ramsden, E.

    Dickie, John P.

    Kerr, Hamilton W.

    Ratcliffe, Arthur

    Dixey, Arthur C. N.

    Kimball, Lawrence

    Rathbone, Eleanor

    Donner, P. W.

    Knatchbull, Captain Hon. M. H. R.

    Ray, Sir William

    Drewe, Cedric

    Knebworth, Viscount

    Rea, Walter Russell

    Duckworth, George A. V.

    Knox, Sir Alfred

    Reed, Arthur C. (Exeter)

    Dugdale, Captain Thomas Lionel

    Lamb, Sir Joseph Quinton

    Reid, James S. C. (Stirling)

    1962

    1963

    Reid, William Allan (Derby)

    Somerville, Annesley A. (Windsor)

    Todd, Capt. A. J. K. (B'wick-on-T.)

    Remer, John R.

    Soper, Richard

    Todd, A. L. S. (Kingswinford)

    Reynolds, Col. Sir James Philip

    Sotheron-Estcourt, Captain T. E.

    Touche, Gordon Cosmo

    Robinson, John Roland

    Southby, Commander Archibald R. J.

    Tryon, Rt. Hon. George Clement

    Rosbotham, S. T.

    Spears, Brigadier-General Edward L.

    Turton, Robert Hugh

    Ross, Ronald D.

    Spencer, Captain Richard A.

    Wallace, Captain D. E. (Hornsey)

    Ross Taylor, Walter (Woodbridge)

    Spender-Clay, Rt. Hon. Herbert H.

    Wallace, John (Dunfermline)

    Runge, Norah Cecil

    Stanley, Lord (Lancaster, Fylde)

    Ward, Lt.-Col. Sir A. L. (Hull)

    Russell, Albert (Kirkcaldy)

    Stevenson, James

    Ward, Irene Mary Bewick (Wallsend)

    Russell, Alexander West (Tynemouth)

    Stones, James

    Warrender, Sir Victor A. G.

    Russell, Hamer Field (Sheffield, B'tside)

    Stourton, Hon. John J.

    Waterhouse, Captain Charles

    Salmon, Major Isidore

    Strauss, Edward A.

    Wayland, Sir William A.

    Salt, Edward W.

    Strickland, Captain W. F.

    Wedderburn, Henry James Scrymgeour-

    Samuel, Sir Arthur Michael (F'nham)

    Sueter, Rear-Admiral Murray F.

    Wells, Sydney Richard

    Sandeman, Sir A. N. Stewart

    Sugden, Sir Wilfrid Hart

    Weymouth, Viscount

    Sanderson, Sir Frank Barnard

    Sutcliffe, Harold

    Whiteside, Borras Noel H.

    Savery, Samuel Servington

    Tate, Mavis Constance

    Williams, Charles (Devon, Torquay)

    Scone, Lord

    Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)

    Williams, Herbert G. (Croydon, S.)

    Selley, Harry R.

    Templeton, William P.

    Wills, Wilfrid D.

    Shakespeare, Geoffrey H.

    Thomas, James P. L. (Hereford)

    Windsor-Clive, Lieut.-Colonel George

    Shaw, Helen B. (Lanark, Bothwell)

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

    Worthington, Dr. John V.

    Simmonds, Oliver Edwin

    Thomson, Sir Frederick Charles

    Wragg, Herbert

    Smiles, Lieut.-Col. Sir Walter D.

    Thorp, Linton Theodore

    Smith-Carington, Neville W.

    Titchfield, Major the Marquess of

    TELLERS FOR THE NOES.—

    Mr. Womersley and Lord Erskine.

    Mr. SPEAKER: The next new Clause I shall take is that (Duties on coffee and cocoa) standing in the name of the right hon. Gentleman the Member for Spark-brook (Mr. Amery).
    Mr. T. WILLIAMS: May I ask whether the new Clause (Reduction of club duty) in the name of my hon. Friend the Member for East Woolwich (Mr. Hicks) is not to be taken? It is regarded in certain quarters as being fairly important. It was not called during the Committee stage, and it is thought by many hon. Members that the point raised in the proposed new Clause is of sufficient importance at any rate to be ventilated in view of certain other Sections contained in the Finance Bill. May I ask, therefore, whether a case may not be stated why the Clause should be called?
    Mr. SPEAKER: I am afraid that I came to the conclusion that I would not select it.

    NEW CLAUSE.—(Duties on coffee and cocoa.)
    (1) As from the first day of July, nineteen hundred and thirty-two, the customs duties in respect of coffee and cocoa which are Empire products shall be at the rates specified in the Fourth Schedule to this Act instead of at the rates theretofore chargeable.
    (2) In this Section the expression "Empire product" has the same meaning as in Sub-section (1) of Section eight of the Finance Act, 1919.—[Mr. R. Williams.]
    Brought up, and read the First time.
    Mr. HERBERT WILLIAMS: I beg to move, "That the Clause be read a Second time."
    1964
    In moving the Clause which stands in the name of my right hon. Friend the Member for Sparkbrook (Mr. Amery) and the names of myself and other hon. Members, I wish to point out that up to the time that the Tea Duty was abolished in 1929 it had been the practice to regard the duties on tea, coffee, and cocoa as having a certain relationship one to another, and they were generally increased or decreased in proportion. The gradual reduction in the duties, which are preferential on a percentage basis— 16⅔ per cent. of the duty being the amount of preference-has had the effect of diminishing very much the total amount of preference, so that to-day the preferences on coffee and cocoa are really very small indeed. It had been the hope of some of us that when tea was put upon a satisfactory preferential basis in the present Finance Bill the same might have been done for coffee and cocoa, but, unfortunately, for reasons which possibly are perfectly sound in the mind of the Chancellor of the Exchequer, that course has not been taken. It is our hope, therefore, that that course will be taken later on. I am doubtful if it could be taken now in the form in which we have moved it, because we are moving a reduction of a duty at a time when possibly the Exchequer cannot very well afford such a reduction. The more appropriate method of dealing with the situation would be by some ordinary increase in the rates of duty on foreign products, which in the case of these commodities would not mean any addiional charge to consumers in the country.

    1965
    The amount of preference to-day is very small indeed. In the case of coffee not kiln-dried, roasted or ground the present rate of duty on foreign coffee is 14s. per cwt. and on Empire coffee 11s. 8d., a preference which hon. Members will agree, is very small indeed. Nevertheless, this preference and the larger preference which existed in the past have had a marked effect in stimulating in this country the use of Empire coffee. In the latest year for which I have complete figures, the financial year ending 31st March, 1931, the retained imports of foreign coffee were 172,000 cwts. and of Empire coffee 163,000 cwts., so that the imports of Empire coffee have nearly caught up with the imports of foreign coffee. There is no reason why, in due course, the whole of our supply should not be drawn from Empire countries. The quality of the coffee of the Empire is probably the highest that can be offered to us.
    In respect of cocoa, the situation is not quite the same, because cocoa can come to us in three separate forms—in the form of cocoa beans, cocoa butter, which is extracted from the cocoa bean, and which is the actual primary product used in the manufacture of cocoa for drinking and confectionary, and, lastly, in the form of prepared chocolate. The existing system of duties appears to be unsatisfactory, because the same rate of duty applies to raw cocoa, that is, cocoa beans, as to cocoa butter. I am told that it takes 3 lbs. of beans to make 1 lb. of butter, and obviously the rates of duty require modification in any event. At the present time there is a substantial importation of cocoa butter from Continental countries and, though that cocoa butter is to a very large extent made from Empire-grown cocoa, nevertheless I think that the butter ought to be made in the United Kingdom.
    There is a strong case for a complete reconstruction of the duties upon cocoa both from the point of view of Imperial preference, though of course the Empire has established an amazingly strong position in this country, and from the point of view of employment. We import at the moment very large quantities of chocolate confectionary which amounts nearly to £1,000,000. [An HON. MEMBER: "Over £1,000,000."] The chocolate manufactures could with great advantage be
    1966
    made in this country, offering employment to a large number of people, by firms who have been opposed to protective duties. [Interruption.] I am not so narrow-minded as to deny the benefits of Protection to the Free Trader. I hope that the Financial Secretary to the Treasury, even though he may find it incumbent upon himself to say that he cannot afford to agree to the new Clause at the moment, will, nevertheless, give some undertaking that the whole question of preferential duties and protective duties both for coffee and cocoa shall receive the consideration of His Majesty's Government at the earliest possible moment.
    Mr. AMERY: I only wish to add a few words of general comment upon the rather peculiar position in which coffee and cocoa are left under the present Budget. If they had not been subjected to duty before, they would naturally come under the provisions of the Import Duties Act and enjoy the 10 per cent. preference, a very much larger preference than they enjoy at the present time. I am not sure whether my hon. Friend the Member for South Croydon (Mr. H. Williams) would not have been wiser to have suggested a complete abolition of the duties in question, in which case those articles would automatically have come under the Import Duties Act. I submit that there is really no reason why these two very important products of the Colonial Empire should not get the same substantial preference which is given, not only to tea, but to every other Colonial product. There is still, in the case of coffee at any rate, room for a very considerable expansion of the Empire trade, and anybody who knows anything about the terrible difficulties under which our people in Kenya are carrying on would be glad to give them some assistance to what is practically their major industry. I know that they have been doing reasonably well as compared with some of their other industries in the last few months, but in the present state of world trade and world prices, and in the condition in which our primary producing colonies are situated, it would be, not only a generous, but a prudent action on our part wherever we could to give them the fullest measure of preference possible.
    We are very much concerned with the development of our export trade, and,

    1967
    while it is true, for instance, that the Gold Coast already supplies the bulk of our cocoa, it is also true that in the present state of world prices it is not supplying it at a profit. It is worth mentioning in that connection that the natives of the Gold Coast, who have themselves developed this great industry —for as hon. Members well know it is a native and not a planters' industry—are among the best customers of this country. In normal times the people of the Gold Coast buy per head five times as much from this country as the people of the United States of America. Therefore, surely it is well worth while at a time like this, when every pound which we can add to our exports is worth securing, doing something that would increase the purchasing power of one of our best customers. From our own immediate interests as well as from the obligation we owe to the Colonies for whose administration we are responsible, I should think that there was an overwhelming case for giving those colonial industries at any rate the same degree of protection as is given to the rest of their products. It is not a question of negotiation or bargaining. On the other hand, it is important, to do this, if we can, before we go to Ottawa, because when we go to Ottawa we shall go, I hope, concerned to advocate not only the interests of the industries and productions of this country but also the interests and productions of the Colonies for which we are responsible. If we want to secure in Canada and the other Dominions a generous measure of preference for the products of our West African and East African Colonies, we shall not be in a strong position if we have to confess that our own preference is a rather measly and inadequate one. I hope that from that point of view, too, the matter may deserve further consideration.
    There is another point which was touched upon by my hon. Friend, and it is that in cocoa you are dealing, not only with a colonial product, but with an important British industry, and, unless these duties are recast, that industry will be denied the protection that every other industry in the country is receiving to-day. I fully realise the difficulties of the Chancellor of the
    1968
    Exchequer in attempting to recast his Budget at the last moment. I am quite prepared to receive the answer that it is too late in the day to ask for these things. I wish that they had been dealt with before. The matter must have been well within the cognisance of the Treasury and of the Ministers responsible, but I can at any rate express the hope, when the Financial Secretary to the Treasury replies, that, even if he cannot meet us to-day, he will give us a reasonable assurance that when we come to another Budget these important Colonial products will receive an adequate measure of preference, and that the British cocoa and chocolate industry will also be treated on the same footing as other British industries.
    Major ELLIOT: The right hon. Member for Sparkbrook (Mr. Amery), and indeed the hon. Member for South Croydon (Mr. H. Williams), have given this subject a great deal of attention and have devoted many years of ardent work to it. Indeed, the work which my right hon. Friend the Member for Sparkbrook has done in his enthusiastic advocacy of Colonial as well as of Dominion development has attracted the greatest possible attention and sympathy in all parts of the country. I would, however, ask him to consider that we are not merely setting up a logical system, but a working system. In the case of cocoa, there is no doubt that whether the preference is measly, as my right hon. Friend says, or not, at any rate it is effective, because 90 per cent. of the cocoa supplies of this country are derived from Empire sources. In the first place, it seems to us, therefore, that it is not unreasonable to suggest that we can review this at more leisure than we can review, for example, other industries which comparatively are losing ground.
    5.0 p.m.
    So far as cocoa is concerned, with 90 per cent. of our supplies already derived from Empire sources and with no signs of a falling off in that percentage, it; may be said that that matter can be reviewed at greater leisure than it would be possible for us to do it in the very rapid course of events since the General Election and the present Budget.
    Mr. H. WILLIAMS: What about the position of the manufacturers of chocolate?
    Major ELLIOT: I am not dealing with the general position but with the amount of cocoa imported into this country. Coming to the position of coffee, the Empire production is only 3 per cent. of the world production but it is 50 per cent. of the British consumption. That seems to show that the very substantial amount of preference is being effective in that case. With the Empire production only representing 3 per cent. of the world production and 50 per cent. of our consumption, we are achieving what we desire, namely, that as far as possible we should buy from those who buy from us and support and trade with those who, as the right hon. Gentleman said, consume so large a percentage of British manufactured goods in the way of exports. My right hon. Friend admitted that it was difficult to suppose that the Chancellor of the Exchequer would be able to make the concession which he desires.
    Mr. CHARLES DUNCAN: Oh!
    Major ELLIOT: I am sure that the hon. Member for Claycross (Mr. C. Duncan) will sympathise with me and even agree with me when I give him the reason. The reason why the Chancellor of the Exchequer will not be able to make this concession is that it would cost him £50,000 in respect of coffee and, £'300,000 for cocoa, a loss of nearly £l,000 a day—£350,000 a year. This is not a year in which it is possible for us to contemplate a loss of revenue to that extent. It may be said that this is a quibble, because it would be possible to raise that amount on the competing imports but we should only be able to raise the duty on 10 per cent. of our cocoa imports and on 50 per cent. of our coffee imports. It seems to us, therefore, that this question might reasonably be considered at Ottawa. It is reasonable to suggest that when such a conference is about to take place we should consider as far as possible everything at that conference, and, as this is not a matter of urgency, it might well be considered at Ottawa. My right hon. Friend asked me to give an assurance that this matter will be dealt with in the next Finance Bill. I am afraid that it will not be possible for me to give that assurance, but I can say that it will be considered even before the next Finance Bill, because it will be considered in the
    1970
    discussions which are about to take place, in which it is our desire to obtain a greater share of trade with our Colonies and our Dependencies than we have had in the past. It would be rather foolish for us to give away the whole of our bargaining power before the discussion started. [Interruption.] I am bargaining for the taxpayers and producers in this country as well as for the case put forward by my right hon. Friend the Member for Sparkbrook (Mr. Amery). I hope that he will not find it necessary to press the Clause, having been given the assurance that the matter will be reviewed at the Ottawa Conference and having regard to our attitude towards the general principle which he has put forward.
    Brigadier-General Sir HENRY CROFT: I thank the right hon. Gentleman for the very friendly manner in which he has referred to the new Clause. We know the difficulty. I beg of him not to be under the impression that the great expansion in the coffee production in the British Empire is due to preference, because I can assure him that it is not. It is due to the excellence of the coffee. I think that is generally admitted. I ask him not to think that because there has been this expansion in coffee production there is any considerable profit in it at the present time. Unfortunately, I have evidence that numerous planters cannot make coffee pay, and any advantage that could be given to them would help Kenya over these difficult days.
    Sir PERCY HARRIS: I am not disputing the decision of the right hon. Gentleman, because I appreciate the reason of the well-thought-out case that he has presented. I should like to know exactly what will happen at Ottawa in regard to these particular raw materials. We understand the position clearly as regards the Dominions. There will be representatives from the independent self-governing States concerning their economic position, but the Crown Colonies are in an entirely different position. I understand that they will be mainly represented by the Colonial Secretary. We assume that the Colonial Secretary is in a position to speak for the Crown Colonies of Kenya, the Gold Coast and so on where these particular products are produced. Is it that the Crown Colonies are going to come into the negotiations for a general arrangement

    1971
    with the Dominions in regard to raw materials, or is it merely that the whole economic position of the Empire is going to be thrown into the melting pot at Ottawa? We ought not to be led astray.
    I am ready to jump at any reduction in taxation and at anything that will make commodities cheaper, and I am all for materials coming from our Crown Colonies wherever they can be obtained without detriment to our consumers and the general public in this country; but we are entitled to know whether the Crown Colonies will be in a position to bargain on their own, with their own accredited representatives, or whether the Secretary of State for the Colonies will be their only representative when it comes to making commercial bargains. Will they be in a position, alternatively, to give us any benefit in their markets in return for concessions from this country. I do not see how, as they have no great industries, they will be able to make many concessions. It would be well that a statement should be made in regard to Ottawa and that the whole position should be made clear.
    Mr. MACOUISTEN: Will the right hon. Gentleman make representations to the chairman of the Kitchen Committee to get some of the superior Empire coffee in the House?
    Sir P. HARRIS: It is there already.
    Major ELLIOT: I always order Kenya coffee, because it is the best. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) will not expect me to enter into a discussion on the very technical position of the Crown Colonies, governed as they are in half-a-dozen ways and controlled as they are by many international instruments of one sort or another. It would be impossible to lay down any general principle, but, as he asked me a specific question, I can say that the whole position of the Empire as an economic comity is to be reviewed at Ottawa. The Crown Colonies will be represented there primarily by the Secretary of State for the Colonies, whose duty it is. We shall also do our best to get the advantage of the opinion of producers in the various Crown Colonies to reinforce ourselves when we go into discussion.
    Question, "That the Clause be read a Second time," put, and negatived.

    NEW CLAUSE.—(Excise duties on matches and mechanical lighters.)
    As from the first day of July, nineteen hundred and thirty-two, the excise duties in respect of matches and mechanical lighters shall be at the rates specified in the Fifth. Schedule to this Act instead of at the rates theretofore chargeable.—[Sir H. Croft.]
    Brought up, and read the First time.
    Sir H. CROFT: I beg to move, "That the Clause be read a Second time."
    I understand that the next new Clause, "Excise duty on playing cards," will not be called. The principle is somewhat the same in regard to the two Clauses. Purely by accident these industries have suffered, not on account of any question of merit but simply and solely because they happened to be included in our previous fiscal system and in consequence they are excluded from the benefits of the Tariff Bill. Anyone who has gone into the subject of these industries will agree that there is no other explanation why they have been left on one side and are practically the only industries in the whole country which receive no protection. Matches are at the present time dutiable at the same rate whether imported or manufactured here, except that there is a very slight difference in the rate of Excise in order to cover the expense which manufacturers incur in connection with the application of the duty. The result is that there is no protective effect. On the other hand, the match producers in this country, quite naturally, point out that although matches are not included in the Revenue Bill the raw material of their matches is, and that some of their raw materials come in under the 10 per cent. duty referred to in the Act which we discussed not long ago. The mechanical lighter has seriously affected the match industry. It is estimated that something like £750,000 of revenue is being lost to the State from matches which has gone to the mechanical lighters. On these grounds the match industry deserves consideration.
    The effect of the new Clause is to reduce the Excise Duty on matches by about one-sixth. We know that that is not sufficient protection to give the advantage which we would like to give to the home producer, but we realise that we cannot press the Chancellor of the Exchequer to make any great sacrifice

    1973
    of revenue. We do, however, ask him if he cannot give the match industry this small advantage. The obvious course would be to have imposed a substantially higher duty upon imported matches than we impose upon our own. That would have done no harm to anyone but it would have transferred practically the whole production of matches to the workers in this country, without any loss of revenue. As far as one can judge from the estimate, it is calculated that slightly more than half the matches consumed in this country are of British production. We all know that in efficiency we can compete with foreign countries, and we only want a slight advantage to see this trade transferred to our own people. We are up against great difficulties. Here is £1,000,000 of trade which might be given to home production by the readjustment of the duty. I believe hon. Members are tired of seeing, wherever they go, matches produced in Belgium, Sweden or Soviet Russia, with high-sounding British names on the boxes, simply because matches, like a lost child, had gone astray and did not catch the Chancellor of the Exchequer's eye at the time when the proposals were being examined. For these reasons, I urge that this Clause is worthy of the consideration of the Government. I hope that the Financial Secretary will give way on this point. If he cannot do so to-day I hope that he will give it his serious consideration in the near future. With regard to mechanical lighters, about 10 per cent. of them are being manufactured in this country. There again, why should mechanical lighters be left out of the general tariff scheme? I am sure that it is an oversight and that the Financial Secretary will assure us that the matter will have his attention.
    Mr. MACOUISTEN: I beg to second the Motion.
    I think that we should make our own matches. We have all seen the mess into which the match industry has got through the operations of a great financier. We do not want to be mixed up with those concerns. We should make our own matches, encourage our own people, and give employment to our own workers. Up in the Highlands there is a large amount of timber which might be used in the making of matches; and mechanical lighters should be made in
    1974
    Sheffield, and nowhere else. There is no reason why we should lose revenue. Let us put a tariff on the imported stuff. The result to the revenue would be the same while a lot of our own people would be employed, and we should get better matches.
    Mr. GROVES: The hon. and learned Member for Argyllshire (Mr. Macquisten) said that there is timber in this country which is suitable for match making—
    Sir H. CROFT: In the British Empire.
    Mr. GROVES: That is a different proposition. The hon. and learned Member said in this country, and, as I am interested in this question, I should like to know where it is.
    Mr. MACOUISTEN: If the hon. Member will come up into Argyllshire, I will show him. I do not know whether the trees are ready for cutting yet, but I know that a great deal of land has been under afforestation, and much better afforestation than that of the Government.
    Major HILLS: I agree that the match industry has been left in an extremely difficult position through the most illogical action of the Import Duties Act, whereby the manufactured match made abroad comes in free of duty while the British manufacturer is taxed on his raw materials. It is the case that Bryant and May are putting down large plantations for the growth of this special timber. There is only one timber which makes matches, and that is aspen, which is not grown in this country, and until these plantations are in bearing our timber has to come from the Baltic. Practically all the matches made in England are made of Baltic timber. A large quantity of the chemicals employed in match-making have to come from abroad. We have, therefore, the impossible position that we give a preference to the foreign producer. The situation is not unlike that which occurred in the case of the silk industry. The right hon. Member for Sparkhrook (Mr. Amery) whose name is down to this new Clause, proposes to remedy that by revising the Excise on home-made matches.
    I will take the figures for the standard box of 50 matches. At present the Import Duty on 144 dozen boxes of matches

    1975
    is 4s. 4d., and under the scale proposed by this new Clause the Excise Duty would be 3s. 5⅔d., so that there would be a preference of 10⅓d., call it 10d., on that number of boxes. The first comment I have to make is that the revenue would lose £400,000. I should not mind that if the industry would benefit, but I do not think it would benefit. If you take some of the duty off, the manufacturer would be able to sell rather cheaper, but the consumer would not benefit, because an immense quantity of matches is sold in single boxes and the price of a single box is 1d. You cannot translate a remission of something like three farthings on 12 boxes of matches on to a single box. We have no coin small enough to effect it. Therefore, I am perfectly sure that the whole of the profit would go to the wholesaler or the middleman; or a large part of it. There might be a reduction of one-halfpenny on 12 boxes where they are sold in packets of 12, but I do not think that would occur in all cases, and it could not occur in the case of single boxes. I have no doubt that the House realises the immense number of matches which are sold in single boxes, although the housewife might by buying matches in boxes of 12 get a reduction of one-halfpenny. There is no benefit therefore to the consumer; and I believe that the greater part of the benefit would go to the middleman and the wholesaler.
    Take the case of lighters. At present the duty is 6d. per lighter, and foreign lighters, being a Customs Duty article, come in free of the 10 per cent. Import Duty. My hon. Friend proposes a preference of one penny per lighter in favour of the home producer. That would not assist the English producer, who produces almost entirely the expensive sort of lighter which is no doubt carried by my hon. Friends. The imported lighters are the cheap lighters, including what is known as the flash pistol, which will light a gas stove but will not light a cigar. These arc imported, and they come in with an average value of 1s. A preference of one-sixth would not do much to help the British industry.
    May I suggest a way in which the match industry could be helped? There is an increased consumption of lighters. It is now nearly 3,000,000. In 1930 it was 2,100,000 and last year 2,800,000. The immense majority of
    1976
    these are imported, and each lighter is taxed at 6d. The makers claim that these lighters have 10,000 lights. Now 10,000 matches would produce a revenue of 6s. for the Chancellor of the Exchequer, but all he gets is 6d. If he could reduce the use of lighters and increase the use of matches he would get more money; for each lighter now costs the revenue 5s. or 5s. 6d. The revenue is now losing between £500,000 and £750,000 a year. I put this to the House, that it is a canon of fair taxation that a substitute should be taxed to a proportionate amount in comparison with the article with which it competes. That is a principle which is recognised in nearly all countries. If that principle is carried out here it would mean a much bigger tax on lighters.
    In the case of matches, I agree that the real remedy is a tax on foreign imported matches. That would increase employment here. We could do a large part of the trade which is now taken by these imported matches, and show a very handsome revenue for the Chancellor of the Exchequer. It would also rectify the present absurd position whereby we give the foreigner a preference and tax the raw materials of the British producer. It would give our manufacturer a larger share in the trade, without costing one single penny to the consumer. I do not think that the House realises the substantial amount of revenue which matches and mechanical lighters produce. It is estimated this year at over £4,000,000, which, by the way, is a greater sum than foreign wines produce and also greater than the sum which the new Tea Duty produces. It is a substantial revenue, and it could be largely increased by a tax on foreign matches.
    Mr. REMER: I should not have intervened but for the observations of the hon. Member for Stratford (Mr. Groves) who asked a question about the timber used for matches. The timber used is aspen, but during the war it was utterly impossible to get any aspen from the Baltic into this country, and the great works of Bryant and May were kept going with home-grown timber. I have yet to learn that the matches were any the worse for that. I am sure that it is possible for matches to be made out of home-grown timber instead of foreign timber.
    5.30 p.m.
    Major ELLIOT: I am sure that hon. Members who have raised this point have done so not in the hope that the proposal will be accepted because it will cost £300,000 to the revenue this year, and that, obviously, is a loss which we cannot contemplate. Furthermore the answer to their question, as to why a higher duty was not levied upon foreign matches, is simply that, as has been stated by my right hon. Friend the Member for Ripon (Major Hills), these are revenue duties bringing in an important sum, £4,000,000 sterling, and we are very unwilling to make any alterations which, while they might have a. greater protective effect, may diminish the actual revenue, until we see the working of the other tariffs which we have imposed. When imposing a tariff, you must balance the amount of revenue, as against he amount of foreign goods that you will exclude. You will improve your position by greater employment in this country, but for all that you may have to set off against it a certain loss of revenue. Everyone agrees with that statement. In the case of matches we did not propose any alteration of the existing duty. In spite of that the home-produced article has in fact been gaining upon the foreign article in recent years.
    The revenue derived from British matches in 1928–29 was £1,880,000, and from foreign matches, £2,060,000; in 1929 from British matches £2,000,000 and from foreign matches, £2,110,000; in 1930–31, £2,020,000 from home matches, and £2,070,000 from foreign matches; and this year our estimates show £2,120,000 derived from home matches and only £1,950,000 from foreign matches. So at any rate the consumption of the British goods shows progress. It is true that great firms such as Bryant and May are taking steps in Argyllshire and elsewhere to plant large areas on the hillside with timber for future use in matchmaking. All we can say is that we are greatly indebted to the public spirit of those firms which have struck out on these bold new experiments. It is very clear, first, that we cannot accept the Amendment as it stands, and, secondly, that the home trade is still expanding at the expense of foreign goods. As to mechanical lighters I approach the subject very gingerly. Mechanical lighters are very well known
    1978
    to be perilous things for Financial Secretaries to the Treasury. The House on a previous occasion, on the initiative of my right hon. Friend the Member for Spark-brook (Mr. Amery), ignited a considerable discussion, which went on for quite a long time. I do not wish to be led into that again. I merely say that in this case also the production of the home article is increasing and rapidly increasing. We levied taxes on 174,000 mechanical lighters in 1929–30; on 241,000 in 1930–31; on 457,000 in 1931–32. There, again, the trade is showing a healthy tendency, and it is open to us to consider the matter without any urgency about it.
    Mr. MACOUISTENHas the Financial Secretary taken into consideration the duty on the petrol used?
    Major ELLIOT: I have not gone into all the minutiae of the question. A trade which has expanded in that way is a trade which at any rate shows a healthy expansion such as we would be very glad to see in many other industries. I agree with the right hon. and gallant Member for Ripon that the steady growth of the mechanical lighter does offer a certain menace to the match industry. A final point was that there was actual injury to the home trade in matches because of this growth, that certain of our raw materials were taxed while no corresponding duty was imposed on foreign competitors. A revenue duty is imposed but is balanced by an excise duty. The Chancellor of the Exchequer agrees that there is a case there for consideration, and he has referred it to the Advisory Committee for their opinion. After these explanations I hope that it will not be found necessary to press the Amendment.
    Mr. AMERY: After the conciliatory speech of the Financial Secretary we need not press the Clause, especially as he has told us—it is satisfactory news—that this question of the effect of the Import Duties Act will be considered by the Advisory Committee. But I do not think the Financial Secretary ought quite to get away with his rather thin argument on the issue of revenue. Those of us who have spoken on this matter have made it clear that in order to conform with the Rules of this House we have moved a reduction of the home excise, but that our real intention was to ventilate the suggestion that these duties should be

    1979
    altered so as to give a protective effect. In this particular case there can be no conflict between protection and revenue, because there is no reason for remitting excise on the home matches. Any transfer of match production from foreign to home production would still give a full yield to the excise revenue but would give protection as well. Therefore the case here is doubly strong from the point of view alike of protection and of immediate revenue.
    It is the fatal error of the Treasury always to think in terms of next week's revenue, and not to think enough of the solid industrial position of this country, from which revenue alone is derived. The important thing in the case of a duty is not to ask what will it yield in revenue, but what contribution does it make to the total production of the country and therefore to the yield of all other duties? If this were a case in which immediate revenue were sacrified to production increase, the ultimate benefit to the Treasury from that production, from Income Tax, from rates, from consumption tax, would certainly be greater than any immediate loss of revenue. I wish that the Financial Secretary and his chief would keep that point of view in mind when it is their business, as it should be, to override the narrow immediate-revenue-hunting propensities of their Department. However, that subject does not arise at the moment, because in fact there is no reason why direct revenue should be lost, and there is every reason for securing more employment and more direct revenue. I hope that the Chancellor of the Exchequer will remit to the Advisory Committee not only the question of the incidence of the 10 per cent. duty on imported timber, but, as he did in the case of the Silk Duties, the whole effect of the present match duties, and see whether they cannot suggest to him a scheme which will both preserve the revenue and give this industry the same measure of protection as other industries enjoy.
    Question, "That the Clause be read a Second time," put, and negatived.

    NEW CLAUSE.—(Death duties payable in stock.)
    It shall be lawful for the Treasury to accept payment of death duties in stocks
    1980
    or shares by agreement with the representatives of the deceased and with the consent of the board of the company concerned. —[Mr. Mander.]
    Brought up, and read the First time.
    Mr. MANDER: I beg to move, "That the Clause be read a Second time."
    I hope that the Financial Secretary will lend a sympathetic ear to this very moderate and reasonable Amendment. I am not raising any objection whatever to the Death Duties, which seem to be perfectly sound and necessary, in view of the present state of the country and the heavy burden that is laid on people who are in a very much poorer position. It is not the rate—I think that is right—but it is the fact that in certain cases it has been found very difficult to pay on the one side, and to collect on the other, in certain circumstances. Let me explain exactly what the Clause will do. In cases where you have full agreement, first of all with the Treasury, then with the representatives of the deceased, and then with the board of the company that is affected, you would be able in certain circumstances to pay the Death Duties in stock. It is not suggested that that stock would be held for more than a very short period. The Treasury would no doubt get rid of it at the earliest possible moment, as soon as there was a market.
    I am sure that hon. Members opposite may well look upon this as being a means of gradually transferring the whole of industry to the State. That is not my idea for a moment, and I am sure it is not the idea of anyone who will ever be at the Treasury. But everyone in this House will appreciate that under present conditions you may have the cases of a large number of private companies where nearly all the capital may be in the form of shares in those companies, and it is not realisable with readiness on the market. You may get other cases of public companies where the stock is of such a kind that it really is not practicable, without a very great sacrifice of capital, and therefore contrary to the interests of the State as well as of the individual, that forced sales should take place. A Conservative friend of mine has put down an Amendment which, although in different terms, is on the same lines as mine, and I think he has more or less the same idea.
    There is no new precedent involved in legislation of this kind. I think it was

    1981
    in the Budget of 1910 that the Treasury were allowed to accept payment of Death Duties in land. I know that a great deal of use has not been made of that provision, but it is a valuable thing to have on this Statute Book. In the payment of Income Tax during the last 10 difficult years quite a substantial sum has been taken by the Treasury in the form of stocks and shares, for the very good reason that unless they took Income Tax in that form there was very small chance of their getting it at all. The Financial Secretary may no doubt say that to pass a Clause of this kind might suggest to people that it was no longer necessary to insure, as now, against Death Duties, and that it would simply remain for the State to take over whatever shares it cared to have. That is not a sound argument. It would be sound if it were at the option of the person who was paying the tax. But I am sure there will be very few cases where the Treasury will agree to payment in this form, and only in cases where in the public interest it is desirable that that should be done.
    Furthermore, I think many people are finding it most difficult in present circumstances to insure against Death Duties at all. It is not a practicable proposition; and I do not think that my right hon. and gallant Friend will make a strong point if he puts forward that argument. I suggest that we have in this proposed new Clause a very useful little Measure which, if placed upon the Statute Book, may do something to ease the very heavy burden now lying upon certain classes of taxpayers. Just the same amount of revenue will be brought into the State under it as is brought in at present, and it will give satisfaction in certain circles. I hope that if the Financial Secretary cannot accept it to-day, he will look into the matter and consult with the industrial interests of this country to see whether it may not be possible, perhaps in some other form, to introduce a proposal of the kind next year.
    Mr. JANNER: I beg to second the Motion.
    The new Clause has been explained in such a clear and lucid manner by my hon. Friend that I do not think I need add much to what he has said. Here is an opportunity for the Treasury to use its discretion in this matter. It is not
    1982
    being asked definitely to accept stocks or shares. It is simply being given the opportunity, in cases of difficulty should they arise, to use its discretion in the acceptance of stocks or shares. Those who have experience of the winding-up of estates when a person dies know that there are cases in which it is exceedingly difficult to put stocks and shares on the market in order to pay Estate Duty. I do not say that such a difficulty arises on every occasion but it arises in many instances and produces very bad results not only for those who are called upon to pay but also for the companies in which those stocks and shares are held. That being the case and in view of the fact that the Treasury are not anxious to lose revenue, nor are the successors of the deceased person anxious to deprive the Treasury of what is properly due to it, I submit that the Financial Secretary might consider accepting this proposed new Clause. I commend it on two grounds, in the first place that it is discretionary, and in the second place that it would help in many instances where the Treasury might, without it he deprived entirely or partially of the revenue which would normally arise from an estate, owing to the fact that the people concerned were called upon to sell shares to pay the duty.
    Mr. MACOUISTEN: I wish to add my support to the proposed new Clause. I have come across some very tragic cases in professional life arising out of the difficulty with which the new Clause proposes to deal. I know of one case in which a man who died in 1919 left a fortune apparently of over £180,000 but when the six months period had elapsed and his debts were payable, circumstances had so changed that the total value of the estate turned out to be less than £10,000 and there was nothing with which to pay the Death Duties. There have been many cases of that kind in which businesses have slumped altogether and in which the successors have been left in a very difficult position. The idea of taxation is to adjust the burden to the back which has to bear it and it is perfectly monstrous that when a commercial misfortune of the kind which I have described has fallen upon the descendents of thrifty and industrious people, the State should come in and sweep away the whole of the estate and leave the successors destitute.

    1983
    It is no answer to say that if the shares went up the beneficiaries would get the benefit. That is no answer to people who have been ruined in instances such as I have indicated. There should be some provision of the kind proposed in the new Clause whereby those who are administering an estate can hand over stock to the Treasury and the same thing should apply in the case of land. When a man dies leaving a big estate and the Treasury claims 50 per cent. of the value of the land it should be possible to say to the Treasury, "Take the land and give us the change." The land would soon be given back in that case and that would be the best way to put a check upon that kind of thing. It should always be possible to deal with these matters by a system of barter. That is what we are being driven to in international trade and just as nobody has any right to demand payments in gold in other respects the Treasury should not demand the money in a case like this, but should be prepared to take stock instead. It would be a humane and effective manner of dealing with the difficulties which arise in these cases and would lighten a burden of taxation which has ruined many a respectable man.
    Mr. ALBERY: The hon. Member for East Wolverhampton (Mr. Mander) has mentioned an Amendment which I put down on the Committee stage of the Bill. I did not put it down again for the Report stage as I thought the question at issue could be discussed on this proposed new Clause. My Amendment only referred to railway stock and I put it down because there is a very large sum of money in this country invested—really invested and not speculated—in railway stock. The total probably runs into a thousand million pounds and a great proportion of it consists of trustee securities. I think in most cases of large estates it is found that some portion of the estate is invested in railway securities. The present system is that those securities are valued at some fraction under the middle market price and in the present state of the market it is quite impossible to liquidate any considerable amount of railway stock at anything approaching the market price. So, right away, an injustice is inflicted upon the people interested. I mention the
    1984
    matter not so much from the point of view of the individual, but because I think that, from the point of view of the State also, some measure of this kind ought to be considered. Under the present system we go on depreciating the value of the important industrial securities in this country. The credit of the country in the long run depends upon its main industries. If our main industries are of no value, neither is the credit of the country and it is not in the interests of the State to depreciate unnecessarily and without any real justification the value of important industrial interests in this country.
    Mr. PIKE: I am in sympathy with the proposed new Clause but before the Financial Secretary replies I should like to know whether the promoters of the new Clause wish the House to accept, as the value of the shares in a case like this, their value on the date of the death of the person concerned, or their value on the date on which they are acquired by the Government, or their value on the date on which they are ultimately disposed of by the Government. It may be assumed that the differences in value as between these dates may be very great and we should have some idea from the promoters of this proposal as to which position they ask us to accept.
    Mr. MANDER: That would clearly be a matter for negotiation between the Treasury, the representatives of the deceased and the board of the company concerned. If they were all in agreement the matter would so through but if any one of the three was not in agreement, then it would not go through.
    Major ELLIOT: The new Clause moved in such conciliatory and persuasive terms by the hon. Member for East Wolverhampton (Mr. Mander) at first sight appears reasonable and it was supported by the hon. Member for Gravesend (Mr. Albery) on the ground that it could not be the desire of the State to ruin or even depreciate its main industries by causing stock to be thrown on the market. But if hon. Members pursue that argument a little further they will see that what the State requires, and what is required for the running of the country, is not securities but ready money. It would be no use offering the Army, the Navy or the Air Force a section of land in Argyllshire or even some bonds in a private

    1985
    business. The ordinary private in the Army wants has wages and wants to carry on his ordinary activities and for that purpose certain sums of money and not securities, must be handed over to the Army authorities. The same applies to other great expenditures of the State such as grants to local authorities, payments of War debt, and so forth. It would be no use handing to a holder of War loan a certain number of railway shares in payment of his annual dividend. He would go into the market to realise and by that means he would not get any further forward.
    The proposal originally brought forward by the hon. Member for East Wolverhampton was much more moderate. He said that it would only apply in cases were all three parties concerned were agreed. He said it would be an advantage to have such a Clause on the Statute Book even if no use were made of it. He admitted that there was such a provision on the Statute Book in the case of land and that it had scarcely ever been used, but he argued that nevertheless it was a good thing to have it there. I join issue with him on that point. I think it is a mistake to import anything into the Finance Bill of the year unless we seriously think that considerable use is going to be made of it. This new Clause is brought forward as a concession to the Treasury but the Treasury is not asking for it. The hon. Member proposes to leave it to the discretion of the Treasury as to whether it will use this power or not. My advisers say that they can conceive of no circumstances in which they would be likely to use it and therefore it seems to me that it would be an illusory thing.
    Mr. MANDER: But is it not a fact that the Treasury already have accepted stock in payment of Income Tax?
    Major ELLIOT: That is quite another matter. They have accepted Victory Bonds in payment of Estate Duty. That is a concession which was specially given in the case of Victory Bonds and is a concession which could not, of course, be indefinitely extended.
    Mr. DAVID MASON: That is Government stock.
    Major ELLIOT: Yes, it is a Government stock. I do not wish, however, to be led into a discussion on the whole ques-
    1986
    tion as to whether the State should or should not take into its coffers in these cases either Government stock or private stock. The thing is that the State, which is ourselves, which is the community, requires a certain amount of money—a very large amount of money, it may be an injuriously large amount of money—in order to carry on its activities and you cannot escape from that fact by any complicated methods of shifting the burden from one shoulder to another. The only way in which you can lighten the burden upon the citizen is to make a smaller demand from the citizen. It is no use trying to lighten the burden in this way or the other way if you simply have to increase the taxation imposed upon the citizen in general in order to make up for a particular concession if concession there be.
    Mr. CHURCHILL: In the least injurious way.
    Major ELLIOT: Certainly the object is to do it in the least injurious way. In this case I think we are all agreed that the State, if it were to obtain bonds or stocks, would not obtain bonds or stocks which could readily be sold in the open market. They would only get stocks or shares which could not be disposed of readily for some reason or another.
    Mr. MANDER: For a time.
    Major ELLIOT: For how long a time? Supposing that the State is asked to take instead of £1,000 of good money £1,000 of Kreuger and Toll shares, how long is it to hold those shares and in what circumstances is it to realise them?
    Mr. MANDER: You would not accept them.
    Mr. MACQUISTEN: But suppose they were Bryant and Mays?
    6.0 p.m.
    Major ELLIOT: I only say that that is not the sort of transaction into which the State could possibly enter, because the State requires these sums for expenditure within the current year for the purposes of the current year. Hard as it may be on the individual to make provision for the heavy taxes levied by the State, this is a responsibility which must rest upon him so long as the State imposes these gigantic taxes. The only way in which the burden can be diminished is by a

    1987
    diminution of the taxes, not by finding such methods as this.
    Sir STAFFORD CRIPPS: I am sure the right hon. and gallant Gentleman the Financial Secretary to the Treasury could not really have thought that those who brought forward this new Clause were doing so on the basis that the State would ever sell the shares it received. It is obvious that the hon. and learned Member for Argyll (Mr. Macquisten) has really become converted to Socialism, but he has tried to cloak his conversion with specious arguments put forward on another ground. The intention of the Mover and supporters of the Amendment is perfectly clear. They desire that the right hon. Gentleman and the Treasury should gradually, through this means, accumulate stocks in the railways and industries of the country and should accumulate the land of the country; and, of course, no one would expect them to realise, especially in the conditions of the market that have been spoken of. They would issue Government securities and raise the money which they would need for the day-to-day business. Although we look upon this as a very extravagant system for socialisation, still, in view of the quarters from which it comes, we intend, certainly as a gesture, to give it our support, in the hope that the hon. and learned Member for Argyll, when he makes his next essay into practical Socialism, will be able to do it perhaps on better advice and in a more economical way.
    Mr. CHARLES WILLIAMS: I thoroughly agree with all those who have said bad things about the Death Duties, yet no illustration is wanted, after the speech to which we have just listened, to show that the real meaning behind this Clause, which has unfortunately deceived some of my hon. Friends, is that it should be ultimately used for the process of building up another great Government department. It causes very great sorrow to me to think that my hon. and learned Friend the Member for Argyll (Mr. Macquisten) should fall into a trap set by hon. Members below the Gangway quite as easily as he has done this afternoon. I hope, at any rate, although he has given himself away, he will not go any further by voting against the
    1988
    Government on this or on any other question.
    Mr. D. MASON: I rather hoped that my right hon. and gallant Friend the Financial Secretary to the Treasury would meet my hon. Friend the Member for East Wolverhampton (Mr. Mander) by offering some concession in the way of time for the collection of these duties. To place many stocks on the market at one time leads to great depreciation, which means an ultimate loss to the whole country, and I am sure the right hon. and gallant Gentleman does not wish to bring that about, especially in these days, when it is so very difficult to do business. If he could meet the case by offering time in the collection of these duties, perhaps my hon. Friend would withdraw his Clause.
    Mr. MANDER: I must say that I am not convinced by the arguments used by my right hon. and gallant Friend for not accepting this very moderate permissive proposal, and I am glad to note that it has met with a large body of support in all quarters of the House and from all parties. I hope that, attention having been called to the idea, it will be studied and thought over during the next 12 months, and that when the next Finance Bill comes up this or something on these lines may perhaps find a place within it. In the circumstances, I ask leave to withdraw the Clause.
    HON. MEMBERS: No.
    Question put, "That the Clause be read a Second time."
    The House proceeded to a Division.
    There being no Member willing to act as Teller for the Ayes, Mr. SPEAKER declared that the Noes had it.

    NEW CLAUSE.—(Amendment of duties on beer.)
    (1) As from the first day of July, nineteen hundred and thirty-two, there shall be charged in respect of beer brewed in the United Kingdom (not being beer of any of the descriptions specified in Subsection (1) of Section two of the Finance Act, 1930), the following duty of excise in lieu of the duty charged under Section one of the Finance (No. 2) Act, 1931—

    £

    s.

    d.

    For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees

    5

    3

    0

    1989
    and on the exportation from the United Kingdom as merchandise or for the use as ships' stores of any beer on which it is shown that the excise duty charged by this Section has been paid, there shall be allowed the following excise drawback in lieu of the drawback allowed under the said Section one—

    £

    s.

    d.

    For every thirty-six gallons of an original gravity of one thousand and fifty-five degrees

    5

    3

    3

    and so as to both duty and drawback in proportion for any difference in quantity or gravity.
    (2) As from the date aforesaid there shall be charged on beer imported into the United Kingdom (not being beer of any of the descriptions specified in Sub-section (1) of Section two of the Finance Act, 1930) the following duty of Customs in lieu of the duty charged by Sub-section (2) of the said Section two—

    £

    s.

    d.

    For every thirty-six gallons where the worts thereof were before fermentation of a specific gravity of one thousand and fifty-five degrees

    5

    3

    6

    and on the exportation or shipment for use as stores of any beer on which it is shown that the Customs duty charged by this Section has been paid there shall be allowed the following Customs drawback in lieu of the drawback allowed under Subsection (3) of the said Section two—

    £

    s.

    d.

    For every thirty-six gallons of an original gravity of one thousand and fifty-five degrees

    5

    3

    3

    and so as to both duty and drawback in proportion for any difference in gravity.
    (3) Nothing in this Section shall affect the provisions of Section seven of the Finance Act, 1925, with respect to the additional duty and drawbacks in respect of beer to be paid and allowed, respectively, under the said Section.—[Sir W. Wayland.]
    Brought up, and read the First time.
    Sir WILLIAM WAYLAND: I beg to move, "That the Clause be read a Second time."
    May I first be allowed to say how delighted I am to see the Chancellor of the Exchequer in his place this afternoon? It is compensation for the debacle which occurred the week before last. I and my Friends who support this Amendment keenly appreciate the difficulties which have been facing the right hon. Gentleman, which are facing him, and which probably will be facing him in the future, and it is not with any idea of obstructing him, but with the idea of helping him, that I am moving this Clause. It is the third time that I have had the pleasure
    1990
    of moving an Amendment in this House to reduce the Beer Duty, and I hope that as long as I remain in this House I shall go on putting such Amendments until this iniquitous tax is reduced by at least 93s. a standard barrel.
    I do not think the Chancellor of the Exchequer can possibly justify this tax by saying that it will imbalance the Budget. If the tax is a bad one, whether or not it unbalances the Budget, it should be removed. The other excuse which has been made is that he could not defend the reduction of this tax in the eyes of the world as being a tax on something which part of the world looked upon as a luxury and the other part as a necessity. My answer to that is that if you have a tax which, from a business point of view, is a bad one, no business man in the world would condemn you for getting rid of it. On the contrary, he would say that the nation which still kept on demanding a certain duty which was not paying its way was doing a very stupid and uneconomic thing. I think the Chancellor of the Exchequer ought to be able to prove that the tax has not unfairly or injuriously affected the industry taxed and prevented its legitimate development, that it has not imposed an unfair burden upon the consumer, and that the yield, from a Treasury and business point of view, has justified its imposition.
    The right hon. Gentleman the Chancellor of the Exchequer, in his Budget speech, agreed that beer was taxed excessively, but he also made the remark that other things were taxed excessively and that the burden on the individual was excessive. I agree, but he might have added that beer is taxed not only excessively, but super-excessively, and that there is no equality of sacrifice at all in this tax, considering its difference to-day compared with what it was in pre-war times. I hope the House will excuse my repeating figures which are so well known, but it is necessary to do so. In 1914 the duty was 7s. 9d. per standard barrel. After the War, in 1919, the duty was 50s. Within a year or two after the War all duties were reduced, and there was not a single duty which had been imposed during the War that was not reduced in amount, but we find that although in 1919 the tax upon beer was 50s. a standard barrel, in 1920 it was

    1991
    raised to 70s.; not satisfied with that, in the following year the Chancellor of the day raised it to 100s., and then in the Budget of April, 1931, another 3s. was added, and in September of last year the last straw was placed upon the poor camel's back, and the duty was raised by another 31s. to 134s., or more than 16 times what it was before the War. Is there any record in the history of this country of an industry, a legitimate industry, being penalised to the extent that the brewing industry has been since 1914, or more particularly since 1919?
    Let us examine the estimate which the ex-Chancellor of the Exchequer, Lord Snowden, made of what he expected to obtain from the additional 31s. He expected to obtain in the first six months £4,500,000 and in a full year £10,000,000. Let us see what the results have been. Taking the standard barrelage of beef and comparing each month in 1931 with the corresponding month in 1930, we find that in October, the month after this extra duty was imposed, there was a decrease of 421,000, equivalent to 26 per cent. There were decreases in November of 296,000, equivalent to 21.8 per cent.; and in December of 317,000, equivalent to 19 per cent. In January, 1932, compared with January, 1931, the decrease was 294,056, equivalent to 23 per cent.; in February, 212,000, equivalent to 19 per cent.; and in March, 386,000, equivalent to 26 per cent. In April this year the decrease amounted to 400,000 barrels, equivalent to 27 per cent. Taking all the months I have mentioned, the average decrease is 23.1 per cent. Let us see what the Chancellor has obtained since this additional duty was imposed. In the 30 weeks between 10th September, 1931, and 7th April, 1932, the Treasury received, in round figures, £3,250,000. All my figures are very conservative; they are not exaggerated. On the contrary, I think that I have underestimated them in many cases against me. This sum in the 30 weeks represents £108,344 per week, or £5,633,334 a year. or £4,366,666 short of the estimate of £10,000,000, a reduction on the estimate of nearly 50 per cent.
    How has this duty affected the various trades which rely upon the industry? I will touch upon the different trades. What is the effect upon agriculture? In
    1992
    my constituency, where hops are grown very largely, it has had the most disastrous effects. Hop growers can only look forward to the barest time that they have ever had in their lives, or probably at any time. There are sufficient hops in store for the next year, and probably for two years, and the crop which will be grown, and must be grown this year, will probably be unsaleable. It is estimated that, owing to the increased tax, at least 60,000 less cwts. of hops will be required. Hop growing is a form of agriculture which employs more labour per 100 acres than any other crop; 15 to 16 men are employed per 100 acres, in addition to which the ground has to be more highly manured than for any other crop, and much more money is spent in various ways than upon anything else that is grown in this country. In addition, you have to consider that during the picking season, in normal times, about 100,000 of the working class, many of them from the East End, who never see the countryside except during the hop-picking season, take themselves and their children and pick hops, earning a little money and returning better in health and in pocket from their sojourn of two or three weeks in the country.
    Let me turn to the barley grower. There was 10,000,000 cwts. of home-grown barley used for malting in 1930. That was grown upon 750,000 acres of land. Those hon. Members who are farmers know that if they grow malting barley, they get a much higher price than when they grow only feeding barley. Therefore, in East Anglia and those parts of the country where they specialise in malting barley, there must be a very serious loss to the farmers. I come next to the browers' loss of profits. The House is apt to laugh when one speaks about the brewers. The House is also apt to forget that brewers in this country represent hundreds of thousands of investors. Those investors should certainly receive the same consideration as the investors in any other industrial concerns. Then there are the allied trades. Fifty different trades cater for brewers, and in those 50 different trades there are 2,000 different firms. All those firms are feeling the draught very seriously owing to this duty. Naturally the brewers cannot afford, under present conditions, to spend any more money than they can possibly help. These firms are therefore suffer-

    1993
    ing, and it means a great loss of profit to them as well as to the country. Then there are the licensed victuallers, a very honest body of men who are carrying on their business far better probably than their fathers carried it on. They are a group of men who are respected to-day. They number about 100,000, and they are seriously suffering because of the extra tax on beer.
    An even more serious matter is the amount of unemployment which this tax has created. At a very moderate estimate, it cannot be less than 80,000; some have said 200,000; but if we take 60,000 as the number who are receiving what we are pleased to term the "dole," and if we reckon that each family receives on an average £l per week, it is easy to calculate that the unemployment created by this additional tax is costing the Chancellor of the Exchequer something in the region of £3,000,000 per annum. In addition, we have to consider the loss in Income Tax under Schedules A and D, not only in this year, but in following years. I know that the Chancellor will say that he is out for what he can get this year, that he is not going to bother his head about next year, and that he will remain optimistic and hopeful. I am afraid his optimism will not be justified. There is a loss of Income Tax under Schedules A and D, and also a loss in Stamp Duties, which the Chancellor has complained did not realise what he anticipated. In addition, there will be a reduction in the rate receipts of local authorities because licensed victuallers, seeing that their business has decreased 25 per cent. to 30 per cent., will naturally make a general appeal against their assessments, an appeal which cannot be rejected, but must be listened to with sympathy.
    To sum up the debit side. I put the loss of Income Tax under Schedule D at not less than £2,000,000, and the estimated loss of rates and taxes under Schedule A at probably the same sum. With the £3,000,000 which is being paid out on account of the "dole," we arrive at £7,000,000, without taking into account the loss to agriculture and to all the allied trades, such as sugar refiners, engineers and so on. I think that the Chancellor will get at the outside something like £5,632,000 from the tax. I hope that I have proved that he will lose, perhaps, £10,000,000, but at least £7,000,000.
    1994
    So what is the use of keeping on this tax one minute longer than is necessary?
    6.30 p.m.
    The Chancellor will ask what the alternatives are. An article in universal use, which no previous Chancellors have taxed, is rubber. It is very extensively imported, and in 1931 the imports amounted to 300,000,000 lbs. As rubber is being sold in the market at a ridiculously low price owing to over-production and competition, why should we not place 1s. a pound duty on it and give 6d. a pound preference to our own plantations? That would mean placing them on a profitable footing and putting into the Exchequer at least £8,000,000. There will be no interference with consumption, as there is in the case of the Beer Duty. If rubber were taxed 1s. a pound, there would not be one pound less purchased or employed in the United Kingdom. The cost of rubber tyres bears no relation to the cost of the rubber in them. I come to sugar, which the Chancellor stated was a necessity, and which he declined to tax more. In 1925 the Sugar and Tea Duties produced a revenue of nearly £50,000,000. They were just as great necessities then as they are to-day, and therefore there is nothing in that argument. If he puts 1d. on sugar in addition to what is already imposed, and allows one-halfpenny preference, he will achieve two objects. The tax will not be felt by the people of this country, and he will give such a preference to our own Dominions and Colonies which grow sugar that they will at least be able to make of it a profitable industry instead of, as they are now, working without profit and becoming practically bankrupt. I am not going to deal with the question of economy in public expenditure, because that has already received attention in the House, and I have only one other word to say. The Chancellor of the Exchequer will understand that I mean no disrespect, but it has been whispered in my ear that if this Amendment were carried it would mean the resignation of the Chancellor and also of the Government. I have always had a very high opinion of the common sense and business instincts of the Chancellor of the Exchequer, and I do not for one moment think he would ever contemplate resigning over an Amendment such as this. I feel that we are sent to this Chamber to

    1995
    form our own opinions and to give expression to them, and not merely to be automatic machines, and if we think this tax is a bad one, we should not hesitate to go into the Lobby against it. I am not only pleading for the trades I have mentioned, and for the exercise of common sense in this matter, but for the man in the street, that inarticulate being who has no means of voicing his opinions, the man who finds that it is a hard struggle to get any joy out of his existence. One of his principal pleasures is beer. [Interruption.] Yes, one of his principal joys is beer. Especially is that true of the agricultural labourer, who has no cinemas to run to, no theatres at his door, and who has to rely upon beer for his refreshment—that is in the case of those who drink beer, and the majority do—during eventime. I am speaking on behalf of those men, both those in shiny broadcloth and those in corduroy, who feel a very great resentment at having been penalised by the imposition of this extra duty. I cannot help feeling that in the past—I am not saying now—this supertaxation has had behind it the sinister influence of the teetotal party. I hope that hon. Members, undismayed by any threats, will follow us into the Division Lobby if, in their opinion, this tax is, as we believe it to be, not only an unfair tax but a most uneconomic one.
    Mr. DIXEY: I beg to second the Motion.
    I would like to say, quite frankly, that we feel our responsibility in moving this Clause, but I do not think the Chancellor of the Exchequer will complain, because, after all, this is a national House of Commons and the Measures which are being decided affect the interests of the nation as a whole. One of the underlying things behind this Amendment, I frankly admit, is that we feel some disquiet regarding the action of the Chancellor of the Exchequer, and I think we are entitled to ask whether the remission which we ask for has not been included in this Budget because this is a National Government? I would like to ask the Chancellor of the Exchequer whether it would have been different if we had had a Conservative Government, with the majority behind it that there is in the country—because, after all, it is the working men of the country who sent
    1996
    us here, and it is their interests which I am putting before the House. I suggest that we are entitled to know that this decision was taken by the Chancellor of the Exchequer of his own free will, and that it was not a compromise decision, because I say with great respect that some of us are alarmed at the compromises of this Government, both in the Cabinet and among their supporters. Only the other day we had the Leader of the House admitting quite frankly in Debate that he as a back bencher would not have supported the Measure which was then before us—at least, if he did not actually say that, that was my understanding of his view.
    In the interests of the country we are entitled to ask whether this decision about beer is a compromise decision? Is it one which the right hon. Gentleman has accepted with the agreement of Lord Snowden? Are we having put before us in the Budget certain compromises which, in our view, are not in the interest of the country? I think the right hon. Gentleman is in the position of one of those gentlemen in a recent play called, I think, "Wings over Europe." In that play the Cabinet met at a critical moment, when they had only a few hours of life, and said with great frankness what they thought of one another. I would like to know frankly what the right hon. Gentleman really thinks about the decision not to allow this particular remission of duty, which the country as a whole desires. It cannot be a question of money. Some of us in this House hold strong views on tariffs and say to the Government, "You are responsible for delaying tariffs." [Interruption.] Surely my right hon. Friend must know as well as I do that had a Conservative Government, with such a majority, been returned to power as a party Government, we should have had tariffs immediately? [HON. MEMBERS: "No!"] I am only putting the point as I see it. Through that delay six months' revenue was lost to the nation. If that revenue had been obtained by the proper and speedy application of tariffs, this remission of duty could have been granted.
    I and every other hon. and right hon. Gentleman who stood on the national ticket went to the country and said, "We are going to do the best we can to secure equality of sacrifice, to secure a remission of taxation, and an increase of work," and

    1997
    I suggest that to withhold this remission of taxation is unfair to the working class and unfair, too, in its effect upon the unemployment question, Which the Government were put into office to tackle. To talk of the amount of revenue at stake in this case is not a fair answer. Whips and others on the Treasury Bench may laugh, but I am entitled to make that point. A very strong representation was made by the country for an arrangement with respect to State lotteries. There was a majority in favour of State lotteries in this House, and a very substantial revenue could have been obtained by their institution. The other week hon. and right hon. Gentlemen who probably voted against State lotteries here paid certain revenue to the Irish Free State. [Interruption.] In my view this is fast becoming not a National Government but a Coalition Government. The working people who supported the present Government at the election are entitled to say to them, "Before you refuse this remission of duty on beer, you should do two things—you should tackle the provision of revenue"—in the ways I have already pointed out—" and, in addition, you should introduce economies." There are a large number of economies which might be effected were Members of Parliament not afraid of the party Whips. [Interruption.] Those who jeer me realise as well as I do that great economies could be made in the Departments of State, and the Government have the power to tackle that problem, and ought to do so before telling the working people that they are not to have a just remission of taxation on beer— a healthy drink. An hon. Friend showed me just now a return concerning working men in steel works, showing that beer, properly administered, was a very healthy diet for a hard working man. I say in conclusion—not offensively, but because I believe it— that when we are facing a difficult Autumn, when right hon. Gentlemen on the Treasury Bench know quite well that there will have to be an Autumn Budget because the returns from taxation are not keeping pace with the demands, we ought to take this nation into the battle before us with a decently-contented working class population.
    Major the Marquess of TITCHFIELD: I should not have intervened in this Debate if my constituency did not happen to
    1998
    be the metropolis of malt, and I wish to point out to my right hon. Friend the Chancellor of the Exchequer the serious position in which the sales maltsters find themselves at the moment. Unlike my hon. Friend the Member for Canterbury (Sir W. Wayland) I shall give only two figures. In 1913, the sales maltsters of this country produced 3,268,000 quarters of malt—very nearly half the total production. This year, owing to the current high taxation and, of course, for other reasons, the demand for malt has been reduced to 500,000 quarters. I have been told, on very good authority, that the position is even worse than those figures indicate, because some of the maltsters, thinking early in the year that the tax might be reduced, increased their output, and to-day have stored in the kilns of this country enough malt to last the brewers until July of next year.
    Some time ago I sent to my right hon. Friend an alternative scheme. It was that we should allow each brewery in the country to increase the average gravity of beer by eight degrees without having to pay any increase in the average duty payable. It was a simple scheme, and I thought it would be easy to work, and, of course, it would be a great help to the maltster, the barley-grower and the hop-grower. I am told, on very good authority, that if only five degrees of extra gravity were allowed to the maltster, it would increase the demand for barley by over 500,000 quarters. That is, indeed, a great boom. Not very long ago I had a short, but very courteous letter from the Chancellor of the Exchequer informing me that he was sorry that he could not agree with my scheme. The reasons he gave were two-fold: First of all, that the brewers of high gravity beer could not agree with the scheme, and, secondly, that he had been informed by his excise officials that there might be some loss in revenue. I cannot understand why the high gravity brewer in this country cannot agree to this scheme. I understand that the high gravity brewers do not brew one sort of beer but sometimes half a dozen, or it may be, a dozen sorts. I understand that the high gravity brewers brew anything from 27 degrees of gravity to somewhere up to 55.
    I can quite understand that if this scheme were put into operation it would

    1999
    make severe competition for the 55 degree beer, but surely if 8 degrees more gravity were allowed in the inferior beer it would make those beers easier to sell. From the point of view of the high gravity brewer, what he loses on the swings he will gain on the roundabouts. I cannot believe that the competition can be very great from the high gravity beer, because most of the big brewers have tied houses, and more or less a monopoly of the sale of beer in those houses. The sale maltster cannot wait. Something ought to be done immediately. If we wait for a great scheme from the brewers we may wait until the crack of doom. If we wait very much longer, the maltster, the hop-grower and the barley-grower will be in the bankruptcy court. I quite understand that there might be, and that there is, a technical difficulty as regards a suitable datum line, but I cannot believe that this difficulty is so great that it cannot be overcome by the right hon. Gentleman's Excise officers. As regards the loss of revenue, I find it very difficult to believe that by allowing a better article to be put on the market the Chancellor is going to lose money. There is one more point, and that is in regard to the cost of materials. I understand that 8 degrees extra gravity would cost the brewer about 2s. per standard barrel. This scheme, I believe, would be a godsend to the hop-grower, the maltster and the farmer, I hope that the Chancellor of the Exchequer, although he has turned down this scheme, will give his careful attention to other schemes of this sort which may be put before him between now and the next few months. I hope that before the Debate is over, I shall get a favourable reply from my right hon. Friend.
    I would like to say one or two words to my hon. Friend the Member for Canterbury and to other hon. Members who have put down this Clause. They have put it down in order that they may defeat the Government. [Interruption.] There can be no other reason. [An HON. MEMBER: "On its merits."] I can assure my right hon. Friend and the Member for Canterbury that the maltsters of my constituency are just as hard hit by this tax as are the hop-growers in Kent. Early in the year my maltsters said to me, "You go and vote against the Government,"
    2000
    and my reply to that was: "Not likely. No one out of Bedlam would do a thing like that, and I have not gone as far as that yet." [Interruption.] Cheap popularity is an extremely easy thing to get. I should like to remind all those hon. Gentlemen who put their names to this Clause, that cheap popularity is a very fickle lady to woo. Cheap popularity is like a butterfly; it is here to-day and gone to-morrow. Cheap popularity is rather like Cinderella. If I remember rightly Cinderella had grand fun going to the ball. She went in her silver coach and she had glass slippers. When 12 o'clock struck, if my memory serves me, she left the ball in a somewhat dilapidated condition. My hon. Friend the Member for Canterbury will go down to the hop-fields of Kent at the end of the week and to the hop-growers around him he will say: "Look at me, the White Knight, sans peur et sans reproche, who was not frightened to break a lance with a stupid and tyrannical Minister." I hope, after he has got that sort of stuff off his chest, he will remember that cheap popularity is but an unsatisfactory and a fleeting pleasure.
    Lieut.-Colonel SPENDER-CLAY: This tax has strained the loyalty of a great many followers of the Government, and it is as well to remember that there is deep feeling behind all that has been said already. I have been down to my constituency, and I know in the talk that I had with those in the hop-growing areas real distress is going to be felt from the primary producer, the man who originally tills the soil and who is helped by his wife to tie up the hops, down to the consumer, who has to pay higher prices for the inferior article. As the hon. Member for Canterbury (Sir W. Wayland) has pointed out, between those two people, the original producer and the consumer, there is a whole host of allied trades, everyone of which is going to suffer. I will mention one or two of them, in addition to those that have already been mentioned. First of all, there is the hop-grower. The majority of those growers who are dependent on hope for their living are nearly bankrupt. Then there are the merchants. I do not stand up in this House and speak for them, but I am given to understand that they have reduced their staffs by half, and that many of them are unable to pay Income Tax because of the way they have to

    2001
    operate to-day. The Chancellor of the Exchequer gets no dividend from them, while a large number are kept unemployed. There are the distributors, the makers of cord and twine for tying up the hops, the coopers and even the miners and the transport workers.
    Then, as has already been mentioned, there is that large army of women and chldren who come into the hop gardens in the early autumn in order to get a healthy holiday and to make a few shillings. There are the brewers, and lastly, but by no means least, there are the holders of the licensed houses and the working men's clubs. All down the line, from the primary producer to the consumer, is one tale of burden, of a tendency to unemployment and depriving the worker of the beverage that he has been accustomed to drink. I know the Chancellor of the Exchequer says that he cannot afford the money. By the reduced return from Income Tax, and the increased amount of unemployment benefit payments and in other ways, he will lose considerably more than the £10,000,000 which he says he would lose if he gave up the tax.
    7.0 p.m.
    While the duty on beer has been more than doubled since 1923–24, the tax on tea and sugar has been more than halved. I agree with the hon. Member for Canterbury that if the Chancellor put a 1d. a pound on sugar, not only would he get more revenue, but the burdens on the consumer would not be increased, owing to the fact that there is so much sugar in the world at the present moment that must find a market, and the price of sugar in this country would be reduced. He would also get rid of that incubus of the subsidy on beet sugar. Many of us have acquiesced in it in the past, but I am certain that millions of pounds are spent on that subsidy while the industry to-day does not look like being in any better economic position than it was seven, eight or 10 years ago. I believe that much of the profits coming from this industry goes into the pockets of foreign shareholders, and has not benefited the British workers at all. The right hon. Gentleman is injuring by this tax the revenue producer and injuring the future prospects of getting revenue from beer; at the same time, he is subsidising an industry which is parasitic on
    2002
    this country. I would like to add one other point. In addition to the money which has been wasted on the subsidy, our West Indian Colonies are at this moment in a bankrupt condition, and we have to give grants-in-aid to the West Indian islands to keep them on their legs while we are subsidising the home production. I never heard of such topsy-turvy finance and cannot imagine anything more absurd. What action are those of us to take who feel strongly about this matter? The hon. Member for Canterbury talked about voting against the Government and said that, of course, the Government would not go out. If the Government were defeated on a Measure of this kind, they must resign, and they would have-to be reconstituted. I do not believe that any Government would carry on as if nothing had happened after a vote of this kind. If we were living in normal times, I should certainly vote against the Government, but we are not living in normal times. We have, during the next few weeks, conferences of enormous importance, both at Lausanne and at Ottawa. If the Government were defeated on this, it must mean that their prestige would receive a blow from which they would suffer when they went to Ottawa. Foolish as I believe this taxation to be, and strongly as I feel that this tax is a great mistake and that the Chancellor of the Exchequer will not get the revenue which he expects to get from it, nevertheless I shall not follow the advice of the hon. Member for Canterbury but shall vote against this Clause, because I believe that, though by the defeat of the Government at this moment one might attain cheap popularity in one's own division, it would be against the best interests of the country.
    Dr. SALTER: I am bound to comment, in the first instance, on the fact that for the discussion on the Beer Duty the House is very full, whereas last week, during the Debate on the very important mining question, the House was very empty. [Interruption.] I appreciate the studied discourtesy on the part of certain Members in walking out. They announced beforehand that, when a teetotal speech was going to be made, they would walk out of the House. In addressing the House on this Motion, I desire to say that I am speaking only for myself and

    2003
    not on behalf of my party. The Labour party, by a unanimous vote, agreed that its Members should have a perfectly free hand in this discussion. It is an actual fact that the beer question cuts across all political parties, and that there are divisions though not necessarily in the same proportion, in each of the three principal parties represented in the House. Admittedly high taxation of beer, as on any other article, diminishes consumption. There has been a very remarkable and very pronounced diminution in the consumption of beer since this additional tax was imposed last September. I would call attention to the fact that, simultaneously with that addition to the tax, a great many other things happened. There were very general reductions of wages, reductions in unemployment benefit, and reductions in Poor Law relief and there were also many other reductions, which lowered the purchasing power of the working classes in particular. All those factors have an influence upon the amount of beer sold and consumed.
    The net result is that at the present moment there is less beer being drunk per head in the country than at any previous time in our history. I ask the House whether that state of things is desirable or not. Is the fact that the consumption of beer has been reduced to this minimum point a national calamity? I say that, on the contrary, particularly at this juncture, it is decidedly a national advantage. On this very point the Royal Commission on Licensing has expressed itself in no uncertain terms. The Commission was appointed to consider any further necessary legislation in regard to alcoholic liquor. That Commission was not constituted of teetotallers, but was a very mixed body. It had a large majority of non-teetotallers in its composition. After 18 months' consideration of the subject and after taking the most voluminous evidence, the Commission came to certain conclusions on this point. The Commission said, for example, in paragraph 106, of their report and recommendations:
    "A general reduction in consumption of intoxicants ought to be aimed at."
    It went on to say in the same paragraph that
    2004
    "excessive drinking still persists in very large measure and that, apart from actual intemperance, expenditure on intoxicants still reaches a figure which is definitely uneconomic."
    That is the considered verdict of a body of men and women who—
    Sir W. WAYLAND: Prejudice!
    Dr. SALTER: The hon. Member says, "Prejudice," but a very large proportion, in fact a majority, of the members of that Commission are not personal abstainers, and are opposed to the temperance party generally. It was a ground of complaint by the temperance party that so many non-abstainers and persons known to be opposed to the temperance party were placed on the Commission. I will not weary the House by citing all the paragraphs on the importance of this point, but, on the purely economic point, the Commission said—and it was also the considered judgment of Sir Josiah Stamp when he gave evidence—
    "The benefits to be derived from the diminution of the present excessive expenditure would progressively compensate for any loss in taxation yield from that source."
    In paragraph 94, the Commission says that
    "industry stands to gain by a further reduction in the consumption of intoxicants."
    I could go on for half an hour or an hour quoting similar statements by the Commission in support of those views. The attitude expressed in those recommendations was the considered judgment of a large body, not of prejudiced and partial persons, but of impartial persons. I have been a doctor practising for over 30 years in one of the poorest boroughs of London, and in one of the poorest quarters of the whole country. During that time I have been the recipient of very intimate and very sacred confidences. I have been into many thousands of homes; I suppose there is not one house in the whole of my borough into which I have not been at some time or other. I have been able to watch family life from the inside, and I say without hesitation that, not in the far distant past, not in the days before the War, but at the present time there are enormous numbers of families where babies are going short of milk, where children are going short of boots, where the whole family happiness is being wrecked, be-

    2005
    cause the father is an excessive beer consumer. There can be no doubt about that. The evidence before the Royal Commission proved it. Evidence from clergy, social workers, chairmen of licensing benches, all went to show that there is still a certain amount of excessive drinking in certain strata of the community.
    Mr. GEORGE BALFOUR: On a point of Order. Is the Debate on the whole range of temperance reform?
    Mr. SPEAKER: The hon. Member is quite in order in his remarks.
    Dr. SALTER: I am endeavouring to show that the effect of the duty, if, as is claimed, it has reduced the consumption of beer, is beneficial to the community and should be continued. I am endeavouring to adduce evidence to that effect. Although I agree that primary poverty is not due to drink, yet a very large proportion of secondary poverty is due to drink. I have addressed in my own constituency meetings of 1,500 or more persons, and in those assemblies I have asserted that, of the homes in my own area where there was insufficient money and insufficient food and clothing, in 25 per cent. of cases that was due to the fact that the father was spending too large a proportion of his income upon beer and too small a proportion on the necessities of life for his family. I have made that challenge to the working men of my own constituency on many occasions and never once have I had a repudiation from the audience, because it is true. Many hon. Members who are attacking this tax to-day know perfectly well that it is true. It is claimed that it is not fair or right to use the weapon of taxation for reducing the consumption of beer. All I say is that, after what I have seen in my own experience and in view of what I know is going on to-day, almost any measure is fair and right if it will result in the reduction of the consumption of drink, and in a larger proportion of the family income going to the purchase of household necessities.
    One point which has been made is that, if a man, particularly a working man, gives up beer because of its high cost, or spends less upon it because of its high cost, therefore the revenue and all kinds of subsidiary industries suffer and the
    2006
    national interest is accordingly prejudiced. One side of the balance sheet, to which the hon. Member for Canterbury (Sir W. Wayland) referred, has certainly been overlooked by those who took that point of view. It is true that the maltster, the brewer, the publican, and persons who are engaged in ancillary industries in the drink trade have suffered, and are suffering to-day.
    There are, however, compensating advantages on the other side. Apart from the sort of budget balance to which the hon. Member for Canterbury referred, publications and memoranda have been sent to every Member of the House by the Allied Brewery Traders and a number of other people, and they deal with the matter on a debit and credit basis. On the debit side there is, they say, a loss of Income Tax owing to decreased profits in the case of brewers, maltsters, farmers, hop merchants, licensed victuallers, and so on, and on the credit side there is merely the estimated increase in the Beer Duty. But, if the compilers of these balance sheets are really honest, they will include on the credit side certain other items.
    If a man who has been accustomed to purchasing two pints of beer a day, or on the average 14 pints a week, at 5d. per pint, decides, because the price is raised to 6d., to give up beer altogether, he has 5s. 10d. a week to spend on something else. That money does not simply disappear into nothingness, nor is it washed down the drain; it is used, in such circumstances, for expenditure upon additional household requisites and necessaries—on milk—[Interruption.] Someone says, "Not necessaries." It may go in the sweepstakes, I agree, but the overwhelming probability is that, if such a man reduces his expenditure upon beer, it is because he feels that he cannot possibly afford it, having regard to the need of doing justice to his family, and the money so saved will be expended on household necessaries like boots, clothing, furniture, milk, and so on. If that be so, it means that, although the purveyors of beer and those who are dependent upon them will receive less income, and so will pay less Income Tax and so on, yet the manufacturers of useful staple articles of all descriptions will, on the other hand, receive more, and, in consequence, will pay more Income Tax; and

    2007
    I venture to suggest that these additional items will more than balance the items put upon the debit side by the hon. Member for Canterbury.
    I would go further, and say that it is a distinct national advantage that money should be spent on household goods and staple articles rather than on alcoholic drinks. It is an economic advantage. I would remind the House of the figures given in the Board of Trade Journal between 1927 and 1928 summarising the results of the last Census of Production. It was definitely stated, in that official Government periodical, that, for every £1,000,000 worth of production in the brewing and malting industries, only 650 people were employed, whereas for every £1,000,000 worth of production in 19 staple industries, including iron and steel, textiles, coalmining, and so on, 5,733 people were employed. In other words, putting it a little more simply, for every 1,000 persons employed in brewing and malting, 10,423 persons were employed in the other trades in producing commodities of the same value. As far as I know, those official figures have never been disputed by anyone, and they have a considerable bearing on the economic side of the question which is now before the House.
    I suggest that the result of the diminution in the consumption of beer, partly owing to the economic state of this country at the present time, and partly, doubtless, owing to the additional tax imposed last September, has been a net gain to the whole country, and I should assume that in the long run it will be a net gain to the revenue. Other industries have stood to gain; certainly the women and children and many other persons dependent upon beer drinkers have gained a great deal; and I believe that the moral and spiritual life of the community has gained also in no small degree. If hon. Members of this House are very anxious to assist the revenue and to assist employment, I would suggest that if, instead of encouraging people to drink beer by reducing its price, they encourage people to drink milk and to provide more milk for children and adolescents, they will not only be assisting the Chancellor of the Exchequer and promoting the public health of the country, but they will be
    2008
    assisting the whole national interest in the very largest and highest sense. At the present time, this country is the country which consumes almost less milk than any other civilised country in the world. We only consume, on the average, one-third of a pint of milk per head per day—
    Mr. SPEAKER: I must point out to the hon. Member that this proposed new Clause relates to beer.
    Dr. SALTER: I bow to your Ruling, and I recognise, of course, that I was trespassing a little beyond the limits of the Debate. I shall not follow up that point beyond saying that an increase in the consumption of milk from one-third of a pint to half a pint per head per day would mean, according to agricultural experts, the employment of an additional 100,000 men in the country, and that would be a matter of very considerable importance.
    The Chancellor of the Exchequer has stated—he will correct me if I have misunderstood him—that, if he abandoned this tax, it would be necessary for the consumption of beer in this country to. increase by 40 per cent. in order to "give him the same revenue. I do not suppose that there is anyone in this House who would suggest that, under existing economic conditions, there is any possibility of an increase of 40 per cent. in the total consumption of beer, and, if there were, I do not think there would be any responsible person in the whole country, whether teetotaller or not, who would not regard such an increased consumption of beer at the present time as a positive national calamity. At any rate I would say, from my knowledge of working-class life and working-class conditions, particularly in my own borough, that I cannot imagine a greater disaster to my own area at the present moment than that there should be any considerable increase in the consumption of beer. I know the sort of avalanche of human misery, wrecked homes, and general moral as well as material damage that would result to the community if any such thing happened. I should say that almost any calamity would be better than a calamity such as that. We shall hear what the Chancellor of the Exchequer has to say, but I gather, from all that has appeared in the Press, that he is going to be adamant on this question. I congratulate

    2009
    him very warmly on that attitude, and, for the first time since this Government came into existence, I shall, if there is a Division on this Clause, have the pleasure of going into the. Lobby in support of the Chancellor against his revolters.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): My hon. Friend the Member for Canterbury (Sir W. Wayland) was kind enough, in opening his defence of this Clause, to express his pleasure at seeing me in my place again. I was going to return the compliment, but, unfortunately, I am debarred from doing so, because I do not see my hon. Friend in his place. When he comes back, I hope I shall be able to command the support of the House in asking it to give him a suitable reception. My hon. Friend, in putting his case, told us, first of all, how very much this tax had been increased since the time before the War, and, secondly, how very seriously, not only the brewing trade, but a number of allied trades, were suffering in consequence of it; and that plea has been reinforced, in perhaps more convincing terms, by my right hon. and gallant Friend the Member for Tonbridge (Lieut.-Colonel Spender-Clay). My right hon. and gallant Friend said that he felt very strongly on this subject, as, indeed, was obvious, but let us not be drawn away by the state of our feelings into exaggerations of the case which will not bear thorough examination.
    It is not accurate to attribute to the increase of the Beer Duty last September the whole of the depression which has taken place in the brewing trade and in the allied industries which are dependent upon it. We have only to look at the position of the great staple trades in the country—the iron trade, the ship-building trade, the coal trade, the textile trade— to be able to parallel over and over again the sort of trouble and suffering and hardship and depression which have been adduced by my right hon. and gallant Friend in support of his contention that this tax is bearing so hardly upon those trades in which he is particularly interested. We must not allow ourselves to exaggerate the position.
    My hon. Friend the Member for Canterbury dwelt upon the unemployment which he said was caused by this
    2010
    duty. He went so far as to repeat here a statement which I think he has made in the country before, that in his view the increase in the Beer Duty has already caused an increase of over 80,000 in the number of persons unemployed. In order to arrive at that figure, he drew in, beside the brewing trade, agriculture—the barley trade and the hop trade—merchants, licensed victuallers, and so on; but, putting them all together, is it possible that the increased Beer Duty could have effected so large an increase in the unemployment figures as 80,000? I have tried to find out what evidence one could get on this subject, and I find that, although I have no figures which will cover all the industries named by my hon. Friend, if I take all the drink industries— not only beer, but all those which are concerned with the manufacture of both alcoholic and non-alcoholic drinks—the increase in unemployment between August last and April, that is to say, since the new duty has been in force, is 1,064; while, if I take the hotel, public-house, restaurant, boarding house and club services, I find that the increase during the same period in all these services—which, of course, do not necessarily depend on the sale of beer—is 7,130.
    Mr. PIKE: Is that permanent or temporary?
    Mr. CHAMBERLAIN: That is the increase between August, before the duty was imposed, and April, since it was imposed. These figures are obviously not comparable to those mentioned by my hon. Friend, but I think they show clearly that any such estimate as an increase of 80,000 is utterly fantastic and incredible.
    7.30 p.m.
    There is another point. It is said that there is a very large loss of profits, and my right hon. Friend has even convinced himself that, if I take into consideration the loss of profits in the various trades concerned together with the increase of unemployment, the actual loss to the Revenue in the year would be sufficient to counterbalance the £10,000,000 which I should expect to lose if the duty were remitted. Can my right hon. Friend really have deceived himself as much as that? The figures of the revenue from profits for the current year would not be affected at all, because they are based on the profits of last year and not of this

    2011
    year. It is no use for my right hon. Friend to say, "I am thinking of the year after this and not of this year," because, although presently I shall have to think of next year, at this moment I have this year to consider, and it is this Budget which has to be balanced and not at the moment that of next year.
    Lieut. - Colonel SPENDER CLAY: Ought not my right hon. Friend to preserve the revenue of next year as well?
    Mr. CHAMBERLAIN: That is not the point that I am dealing with at the moment. I am dealing with the point my right hon. Friend made that the losses owing to the increase of unemployment and the diminution of profits would be so great that this year they would counterbalance the £10,000,000 which I should lose by the remission of the duty, and I am pointing out that that could not possibly be so, not only because the figures of the increase of unemployment have been grossly exaggerated, but also because, even if it were true that the profits were so largely diminished as is thought to be the case by some of my hon. Friends, that could not affect the revenue of this year, because that is not the way the Income Tax is calculated upon those profits. An hon. Member opposite said Income Tax under Schedule A. He does not seem to be aware that Income Tax under Schedule A depends upon valuations which are made quinquennially and the present valuations under Schedule A are not due to be altered until the year 1936–37. There, again, there can be no alteration in the revenue under Schedule A by reason of anything that takes place in consequence of this duty.
    Another hon. Member inquired whether the maintenance of this duty was really due to any sincere conviction on my own part or whether it was not rather a compromise arrived at in order to please some other Members of the Cabinet. One wonders a little what is the use of saying anything in this House if hon. Members keep on asking questions as though one had never said a word on the subject. I stated quite definitely on a previous occasion that the whole responsibility for the maintenance of this duty rested upon my shoulders, because I had taken my decision on the subject before ever consulting any one of my colleagues
    2012
    in the Cabinet. If the hon. and gallant Gentleman does not believe me, I cannot help it, but I cannot convince him by repeating a statement which I have already made publicly and solemnly declared in this House. Of course, the real point is not that I deny the injurious effects of over-taxation on a particular industry or hardships which may be thereby caused to individuals. I never put the maintenance of the tax upon the ground that it was a tax that was desirable in itself. I have never denied my view that the beer industry is over-taxed at present. I agree that it is very hard that this tax should have gone on being increased time after time, with obvious detriment to the industry itself and, in the long run, to the Revenue. See already what has happened to spirits, which have been so heavily taxed that the yield has declined over a series of years, and it is obvious now that no Chancellor of the Exchequer can ever calculate upon getting from spirits anything like the yield that his predecessors have done. The same sort of thing is happening with beer.
    Side by side with that, we must not lose sight of the fact that there is taking place a definite change in the habits of the people. That is one of the factors that I have to bear in mind. I consider that the imposition of this tax has accelerated a movement that was going on before and that, if you were to remit the tax, the consumption of beer would not immediately go back to what it would have been if the tax had never been imposed. That is a position that is not taken up by the brewers themselves. None of them would expect that the consumption of beer would go back to the line that it was pursuing before the tax was imposed, and it is for that reason that, while I have only budgeted for an increase of revenue amounting to £8,000,000 from this tax, I nevertheless expect that, if the tax were remitted, I should lose not £8,000,000 but £10,000,000. That is the problem that the Chancellor of the Exchequer has to face in present circumstances.
    Can he afford to give away £10,000,000; in the present year, whatever the effect of leaving the tax on may be upon future revenue from beer? In other years we may have other things to assist us. In this year, we have nothing to assist us. We are not starting here with a perfectly

    2013
    clean sheet, with no taxes in operation, but merely the question how we can most conveniently raise a certain sum of money. The position when certain taxes are actually in force is different from what it would be if you had to begin at the beginning. You cannot remove a tax which is already in operation without producing a number of secondary consequences some of which may be very serious. But the very fact that a tax of any kind has been remitted, even if it has been replaced by a tax of some other kind, in present day circumstances might have reactions far beyond even our own shores. We have seen already, if I may give only one instance, that the figures of unemployment are not diminishing as we all hoped that they would have done. On the contrary, they show an increase which, however explained by the circumstance of the prolongation of the holiday or whatever it may be, are not encouraging us to hope that things are rapidly going to get very much better than they are.
    All of us, no doubt, can see reasons for hope and confidence in the future. At the same time, I do not think we can feel so satisfied that the worst is over that we can afford to sacrifice any reserves that we may have behind us. My hon. Friend, with some courage, has made some suggestions for substitutes for a tax on beer. I do not propose to examine them in detail, but, if there is any way of raising further taxation more easily, or any way by which we can make available funds which can be used for the purpose of substitution for these taxes, we ought to keep those new sources of taxation as reserves available for other purposes in case they should be wanted later on in the year. One thing that I am certain of is that this country cannot to-day stand further taxation. Therefore, it is quite impossible, with due regard to my responsibilities, to accept a Clause of this kind.
    I know very well that many Members feel strongly on the matter. I respect their sincerity of feeling and their desire to preserve their independence. I should be the last person to try to make use of anything in the nature of a threat against those who exercise such independence but I think I might fairly make an appeal to hon. Members who have been returned to support the National Government, and
    2014
    who have supported the National Government, among other things, because they have felt that a National Government would represent this country overseas with a prestige and authority which could not attach to any purely party Government. We are on the eve of one of the most important conferences that have taken place since the War. Next week I shall be leaving this country for Lausanne, and the Prime Minister will already have gone. There is no question of the Government being defeated on this Clause. We are not afraid about that. But will hon. Members, even those who feel strongly on this subject, bear this in mind also, that, short of a defeat, a really substantial vote against the Government on a matter of such importance as this—I quite agree with my right hon. Friend that this is a matter of first-class importance—on an essential part of the Budget cannot do otherwise than injure and diminish its authority. I ask hon. Members not to forget those great national and international world interests which are going to be discussed and the future of which may perhaps be decided in the course of the next few weeks, and not to take a step at this moment which might do anything to make less the influence and the power that the Government exercise.
    Mr. CHURCHILL: I should like to join with my hon. Friend the Member for Canterbury (Sir W. Wayland) in congratulating my right hon. Friend the Chancellor of the Exchequer upon his return, as we can see, in the fullest mental vigour, to the House. It must have been very disappointing to any Minister as assiduous and-so keenly enveloped in political affairs to be absent while his Budget was actually under discussion. We are very glad that he has come back, and has come back to take part in a discussion of this kind. I think that my hon. Friend the Member for Canterbury was quite justified in raising the discussion, but I hope that he will not press his proposal to a Division. I have on two occasions voted against the present National Government in this Parliament, but those were great matters of permanent Imperial consequence such as the Statute of Westminster and a democratic constitution for India. This is not a matter on the same level. It is a

    2015
    matter of domestic housekeeping and of annual finance, and we are not, I think, at all called upon to press opinions about the expediency of a particular tax to a point where they would raise, as has been pointed out by the Chancellor of the Exchequer, all those other far greater considerations affecting the whole life and position of the country. Nevertheless I think that it is right that the case against the over-taxation of this particular commodity should have been stated, as it has been with so much moderation and force from both sides of the House. We are entitled to deal with this matter as a revenue matter primarily.
    I admit the force of much of what was said by the hon. Member for West Bermondsey (Dr. Salter) on the temperance aspect, but, when you consider the progress which has been made, no doubt under the influence of high taxation in the past, in the sobriety of this country, no one can consider that the temperance aspect is an urgent aspect in the discussion at the present time. In the year 1913, the last pre-war year, there were 183,000 convictions for drunkenness, and in 1931, the last year for which we have the complete figures, they had fallen to 53,000. It is perfectly clear that the temperance aspect of the matter ought not to sway our opinions about this tax at the present time, and that we are entitled to look at it solely from the point of view of revenue. I will look at it—and I want to detain the House very briefly—only from that point of view. The question is not whether we should tax beer, but whether we should over-tax it. My right hon. Friend admitted that it was over-taxed. In the five Budgets which I opened and carried through the House I received an average of £81,000,000 a year from beer. I admit that there was a slight falling off in the last year. In the three Budgets which have been carried and proposed since the duty was raised the average, including the estimate for this year,, is only £76,000,000, so that there is on the face of the figures a net and absolute Joss of something like £5,000,000 attendant upon the increase of the tax. It is a very extraordinary and tremendous fact that that should be so.
    2016
    I agree that it is fair to say as my right hon. Friend did that it is not all due to the tax. The bad trade, the changing habits of the people, all those have played their part, but it must be remembered that bad trade has been largely mitigated by the enormous sums contributed for the relief of unemployment and distress, and also that the progressive cheapness of living has kept pace with the depression. Therefore, I think, it is not unfair to argue that probably three-quarters of this loss of revenue has been due to overtaxation and to trying to get more from this source than it will in fact yield, copious as has been the supply which it has yielded to the revenue. Whatever the need of money may be now or in the future, it surely cannot be sound, economic or provident finance to injure and run the risk of destroying a revenue what has been can of the main, long-established, abundant sources of perennial revenue to the State, and one which, if it were to be destroyed, could not be replaced in any way that we can see at the present time.
    Every commodity will bear a certain degree of taxation, and the modern view, differing altogether from the Glad-stonian theory that you should have very few taxes and so on—the modern view undoubtedly of the House is that each commodity should, if necessary, and if otherwise convenient, bear its proper weight and burden of taxation, and that you should spread the taxation over a number of separate commodities rather than press unduly heavily on one particular source so as to inflict a serious permanent injury upon the trade concerned. Men can carry heavy weights if they are well distributed and well balanced. The question which we are entitled to ask when any particular tax is being considered is, Is the knapsack being well fitted upon the shoulders which have to bear it? Under the Budget of the late Chancellor of the Exchequer in September last, I could not feel that he was adapting the national burden which the nation was ready, nay determined to assume, to the national shoulders with wisdom. It seemed to me to be most clumsily imposed, and this was one of the taxes which struck me as being not only im-

    2017
    provident from a financial point of view but vexatious and irritating.
    I hoped that my right hon. Friend, a Conservative Chancellor of the Exchequer free from the narrow prejudices which hampered his predecessor, would have seen his way to retrace the foolish step which was taken in September last under very peculiar conditions and which I do not intend now to animadvert upon at all. The right hon. Gentleman says that his remission of the revenue duty would C03t him £10,000,000. Of course, the figures are highly disputable, because it was only realised in the April White Paper that the first Snowden increase of duty produced a heavy shortage. When he made an estimate for an increased yield in the year he did not mention the fact that the duty was already down on the year. So it is impossible for private Members to disentangle the effects of the first over-taxation of beer from its second and aggravated over-taxation. All is mixed up and also influenced by general causes to which reference has been made, but, however you look at it, the destruction of revenue is indisputable. There has been a destruction of revenue of perhaps £4,000,000 or £5,000,000 accompanied by a most heavy increase of the rate of the tax.
    This question cannot be put forward as a matter of indulgence. This is no time for indulgence. It is simply a question of obtaining the largest possible permanent revenue not only this year but in years to come. If it be true that we have reduced our revenue by £4,000,000 or £5,000,000 through trying to get more from the tax than it can yield that is an enormous argument for stopping, if not now, at the very first available opportunity, and getting back to a degree of taxation which will safeguard the future. In his speech my right hon. Friend almost accepted the fact that injuries were being inflicted now which coupled with the habits of the country would permanently impair the revenue from this source. That will leave an increasing gap to be filled in future years, and which can only be filled by imposing other additional burdens or by making further heavy cuts. It really cannot be thrifty finance to pursue such courses.
    In a House like this, with so many supporters of the Government and many
    2018
    friends and political associates, I agree with what has been said from various quarters, that those who suggest that any tax should be taken off are under a moral obligation to suggest some alternative, serious as are the risks to private Members who suggest possible alternatives. I proposed, when I spoke on the Second Reading of the Budget that the necessary £10,000,000 might have been taken from the moneys which were set aside to form the nucleus of the new Exchange Equalisation Fund, and, of course, I was very much denounced for that. I was accused of using a capital asset for recurrent expenditure. But this same capital asset was used last year by the late Chancellor of the Exchequer to meet recurrent expenditure, and it was used by the National Government after it came into power for recurrent expenditure, and I saw no reason at all under any canon of orthodoxy which the Government have so far erected why a similar amount from the same source should not have been taken for the assistance of the Chancellor of the Exchequer when he was framing his Budget in the first instance. It is easy to sneer at such suggestions and assume a great air of financial correctitude, but I am sure that if the Chancellor of the Exchequer, when he was framing his Budget, had wished to reduce this particular taxation, this beer taxation to its maximum economic level, he could, quite easily and without any reproach, have presented his proposals in the form in which I have suggested.
    8.0 p.m.
    Upon this question of orthodoxy, let me ask the Government: Are you orthodox? Are you pure? Besides impairing a source of revenue, beer over-taxation causes, as we know, serious losses under other heads of revenue. I do not want to enter into an argument of detail about what those losses are. I have been given some figures which have been carefully prepared and which show that on Schedule D, on the Surtax, on the Estate and Stamp Duties, especially the junior class of securities, and ultimately on the licence duties under Schedule A, that there an additional loss of something between £5,000,000 and £6,000,000 is to be apprehended by the injury done to the beer revenue and to the beer trade. I know that those figures are disputable,

    2019
    but that the loss is substantial is common ground in all parts of the House. What does my right hon. Friend the Chancellor of the Exchequer say when he is confronted with that fact? He says: "Ah, loss there may be, but this loss will not fall on this year. It will only fall on next year." That may be an argument, but it is an argument fatal to financial orthodoxy, for what is that but an admission of a forestalment of revenue for next year? We are to gain £8,000,000 in our revenue this year at a cost of £5,000,000 or £6,000,000 next year. It is a forestalment that will have to be made up in a future year, and at a time when the steady, continuous impairment of revenue from beer is actually in progress. It is not only a case of devouring the seed corn but of mortgaging future reduced harvests. With all the good will in the world, one must object to the Government's right in this matter to parade with virtue, impeccable and austere, their financial orthodoxy. It is an even worse deviation from financial strictness to create this situation, this forestalment of revenue from next year, than if the right hon. Gentleman had used the £10,000,000 of the Dollar Exchange Fund, when he had it in his possession, in the same manner that it was used by his predecessor. And what about the argument that no capital asset should be used for recurrent finance? How we delude ourselves if we suppose that we can inflict, possibly, a lasting, mordant lesion upon a vital indispensable source of revenue, without committing the fault of using a capital asset for a temporary emergency, and not only a capital asset, because this is a source of continued revenue from year to year exceeding the value of any of those capital assets sometimes brought into Exchequer finance in a difficult year.
    I should have thought that the fundamental change that had taken place in the country in our affairs, in our outlook upon finance, since the Budget of last September would have justified a review of this over-taxation of beer. In those days, the whole object was to maintain a high level of exchange, and for that purpose a Sinking Fund of great strength was needed, but now that we are labouring to keep our exchange down, and spending money for that purpose, it is
    2020
    strange that the same taxation and the same sources of revenue should be maintained. Some hon. Members have mentioned sugar as an alternative source of taxation. I raised that point in September. We could obtain £20,000,000 from sugar by merely restoring the relief given to sugar given by the late Chancellor of the Exchequer and by myself, and the cost of sugar would then be less than it was in 1928, when everybody said how cheap sugar was and how gratifying was the increase in public consumption. What does the Chancellor of the Exchequer say? What he said was most grave and alarming. He said that he could not afford in the present situation to sacrifice his reserves. If that meant anything, it meant that he cannot consider sugar as an alternative, because he may need sugar too. Am I right in that assumption? I am afraid that I am. That raises the extremely serious position that we must not use sugar as an alternative method in place of beer to raise this extra revenue, because sugar may be wanted too. Before we get to that, or to anything of that kind, it will be the duty of the Government to exercise every other alternative before they impose further taxation in relief of the present situation and to supply extra revenue to the State. The Government in such an eventuality will have to consider not only Sinking Fund needs in view of present conditions, but the question of public expenditure in all its branches will have to be considered by the House.
    I see no reason why we should press this Debate to a Division. For my part, I should certainly not vote against the Government on this subject. We cannot hope to alter the finance of this year. The right hon. Gentleman declared the obvious truth, that the Government must stand or fall by a serious vote on a main item of its Budget proposals. True, His Majesty's Government have magnified this issue by posing it in this manner, but with the international conferences that are pending there are good and solid reasons why we in this country should not seem to shirk any burden, however unwisely or however unfortunately imposed upon us. We may have our own opinion about policy, and we are entitled to express it in debate. We are entitled to complain at the manner in which the pieces have been set upon the board, and it is not futile. We hope by debate to

    2021
    influence opinion in the future. We may have to submit and suffer, and suffer we shall, needlessly and fruitlessly, but if we can build up opinion in the House of Commons and among Ministers, then we shall make it very unlikely that this particular specimen of regrettable over taxation will be forced upon us in the forthcoming year.
    Mr. TINKER: We have had a delightful speech from the right hon. Member for Epping (Mr. Churchill), who has taken the opportunity once more of leading the House up the garden. This occasion has provided him with an opportunity of getting at the late Chancellor of the Exchequer and saying what he thinks about him on the Beer Duty. It has also provided him with an opportunity of telling the Government what he thinks about them. But he is afraid to strike when the time comes to strike. I have listened to him previously and have heard him say that now is the time for the National Government to be bold. He has proved conclusively from his point of view that the Beer Duty is wrong. Anyone reading his speech would think that the Government have done wrong in retaining the Beer Duty at its present level. That being so, and the right hon. Gentleman having gone out of his way to prove it, to be logical he must go into the Division Lobby when the Division is forced, as I believe it will be forced. On the question of being logical, I remember the Home Secretary last Friday saying that most things in this country were illogical. He said that the English language was illogical, among other things. I think, therefore, we can look upon the right hon. Member for Epping as belonging to the illogical class, because he will not follow up his speech by his vote. We shall wait for another remarkable speech from him on the next occasion.
    The Chancellor of the Exchequer gave a very close and reasoned speech in attempting to defend the Beer Duty on the ground of required taxation. He wants £10,000,000 and he is going to go for it where he thinks he can get it. I want to follow up that line of argument. I do not desire to follow the line of argument of my hon. Friend the Member for West Bermondsey (Dr. Salter), who dealt with the question of prohibition or no?
    2022
    prohibition. We are not discussing prohibition to-day. This country, and I think rightly, does not believe in prohibition. It believes in trying to bring about sobriety by education and by the people seeing the right in this matter, and not by prohibition. My hon. Friend sometimes enters into the fanatical class, but he is a man I admire, because when he believes in a thing he is going to get it by hook or crook.
    Is this particular tax right or wrong? It is a continuation of indirect taxation of a commodity which many working-class people like. Some of the mining community, for whom I speak, believe in going to cinemas. Out of the little money they have to spare they spend some in going to the cinema. Others believe in having a pint of beer at the end of a shift. They enjoy having a pint of beer, and no one will say that there is anything wrong in that. A pint of beer at the end of a shift on five or six days in the week is not a vast expenditure and cannot be called immoral. I do not think that even the hon. Member for West Bermondsey would say that it was. This particular tax puts a greater burden upon those people. It means that for one day in the week they will have to miss the joy of their pint of beer because of the extra tax. I have been all over my constituency and in different parts of the country, and good citizens who believe in the welfare of the country think that the tax is in the wrong place. It cannot be said that it will lead to greater sobriety and prevent immorality. It is for that reason that I take exception to it.
    I believe that the extra taxation might be directed into different quarters. This tax means taking from many working-class people a certain amount of enjoyment. Some hon. Members suggest putting the tax on sugar. That would be wrong. I should certainly not support taking off this duty on beer if I thought that the Chancellor of the Exchequer was going to tax sugar in order to balance it. I am going to show where the money could be got. Many who are supporting the remission of the Beer Duty belong to the richer classes, and it is from that quarter that the taxation ought to come. I have been going through the figures of estates liable to Estate Duty in 1930 and 1931, and I find that the num-

    2023
    ber of estates representing fortunes of over £100,000 amounted to 497. Of these 214 represented fortunes from £100,000 to £150,000. Of those estates over £1,000,000 there were eight, over £1,500,000, three; between £2,000,000 and £3,000,000, six, and over £3,000,000, five. The taxation in Estate Duty ranges from 20 to 50 per cent. on estates up to £1,000,000. I claim that in the times of stress and difficulty through which we are passing the revenue could have been got by increasing the 20 per cent. by 10 per cent. That would have brought in all the money that was required. The estate duties have not been increased. Hon. Members opposite claim that they are already taxed to the hilt. All other sources of revenue, including indirect taxation, have been increased, and I ask the National Government and those who are asking for a remission of the Beer Duty to support us in trying to get the revenue from the direction that I have indicated. If they are honest in their intention to help the working man to get one penny off his pint of beer, they ought to support us in getting the money in another direction.
    Mr. MOREING: How is the hon. Member going to ensure that the people whose estate has to bear duties will die at the right moment?
    Mr. TINKER: The hon. Member is quite right. We have to take an average over a number of years, that is how the Budget is balanced. Last year the Death Duties showed an increase over the yield of the year before. I agree with the Amendment. I believe it is a move in the right direction, but I shall not be like the right hon. Member for Epping, I shall follow my convictions and go into the Lobby against the Government, and I hope that other hon. Members will do the same.
    Mr. BAILEY: I have listened with great interest to the arguments which have been put forward why we should not go into the Lobby against the Government, because we who at the moment intend to vote against the Government are just as anxious to do the right thing as the right hon. Member for Epping (Mr. Churchill) who advises us not to vote against the Government. We have been told what will be our position if we vote
    2024
    against the Government. The hon. and gallant Member for Newark (Marquess of Titchfield) has told us that we should be like Cinderella when she returned from the ball at midnight in a dilapidated condition. I take a little comfort from that, because I am going to pursue Cinderella a little further. In a week's time she was covered with glory for her conduct; and I hope that we shall be like Cinderella.
    Then the hon. and gallant Member said, and I noticed the approval on the faces of Members on the Government Bench, that anyone who voted against the Government was mad. Members of the Government approved. Is the Home Secretary mad, because he frequently votes against the Government? I am a young Member; I do not understand these things, and possibly it will take much longer than I shall have the privilege of being here for me to understand such Parliamentary sanity. If the Home Secretary is mad because he votes against the Government, then the Government cannot be too sane if they approve of the continuance of a mad dog in their midst. If you keep a mad dog in your midst unchained, are you not mad also? I am not much impressed by the argument that anybody is mad to vote against the Government when anyone in the position of the Home Secretary is allowed to vote against the Government. Private Members claim that they were elected on the same basis and that they have exactly the same right.
    The right hon. Member for Epping tells us that we should not vote against the Government. I aim always a little suspicious—I say this without 'any disrespect, because there is no young Member of the House who admires more his Parliamentary greatness—when I see. him trying to help the Government and I cannot think that his heart really lies in that direction. I may be wrong. He says that we ought not to vote against the Government, because to do so will damage their prestige.
    Mr. CHURCHILL: No.
    Mr. BAILEY: He used an expression to that effect. What then is the argument of the right hon. Gentleman?
    Mr. CHURCHILL: I said that there were reasons why in my opinion the

    2025
    Government should not be forced to take off this tax this time which would not apply next year.
    Mr. BAILEY: There are "reasons why the Government should not be forced." What are those reasons? Why should we not force the Government, except that we may damage their prestige? Does the right hon. Member for Epping think that a speech like his this evening, in which he not only said that this tax but that the Budget as a whole was clumsy, is going to damage the Government less than our vote against them on a matter which we think to be right? In defence of the time he said that when he saw fit to vote against the Government he only did so on matters of major importance. Why on earth is a vote against the Government on matters of major importance, when one sees fit, right, but on matters of minor importance wrong? I should have thought it was the other way round. But the right hon. Gentleman contradicted his own argument. He said that this is not a matter of importance but has been so magnified that it has become a matter of major importance. What does he mean? What does a young Member of this House learn listening to these great exponents of Parliamentary tradition? What is he to do? How can I be guided by his advice? How can I be guided by the arguments he advanced in justification of his advice? No, Sir, my friends and I are going to do what we conceive to be our duty. We think that this tax is wrong, and we are going into the Lobby against it. We much regret having to do so. It will be the first time, and I hope the last, on which I shall have to vote against the Government which is doing so much and which is to-day the only refuge against anarchy. But we believe that we do the Government less harm by voting against it in a plain and straightforward manner on an occasion in which we think they are wrong than by constantly subjecting it to a policy of pin pricks and insults under the cover of friendliness. When we are against the Government we will be honest about it. When we are in favour, we will speak in its favour.
    Let me say a few words on the question of the tax itself. On the subject of teetotalism I need say very little, because the motives of the Government do not run in that direction. Those who
    2026
    have put down Amendments on the Order Paper accept the assurances of the Chancellor of the Exchequer on that point, that he is looking at this matter from a revenue point of view. We do not think that the teetotal question arises. We do not agree that it is necessary to tax beer out of existence, like the hon. Member for West Bermondsey (Dr. Salter) who says that the working-classes will do themselves much damage by drinking beer if we do not do so. We think that many other Socialists besides the hon. Member for West Bermondsey underrate the common sense and decency of working-classes. In my division you will see very little drunkenness; and actually you will not cure drunkenness by raising the tax. The man who is a drunkard will buy beer whatever it costs. It is the man who needs beer as a food that you will hit by this tax.
    Why do we say that this tax is unfair? We all agree that beer is a commodity which should certainly bear its fair share of taxation, especially in times of emergency. With that we absolutely agree. But we say that it is not merely supertaxed but that it is taxed in an outrageous fashion. One can put it in this way: Out of every l0d. raised in taxation a penny is raised from beer. Can anyone, can any Government say that it is really fair that 10 per cent. of the total revenue should be taken from one commodity? Why not tax cyder? Why not tax lemonade? Why not tax chocolate? Are not private motor cars as much a luxury as beer? But they do not pay 10 per cent. of the total taxation. It is utterly unfair, for the purpose of getting revenue by hook or by crook, and that is what we object to. Again the Chancellor of the Exchequer used arguments—I say this with the greatest respect—which I never thought to hear a Conservative Minister use, "I have no care about next year's revenue; I am dealing with this year's revenue." Was that not our constant criticism of the Socialists? They did not care about the future but only about the present. They said, "Let other people have to clear up the mess." That policy of not bothering in the least about the future, as applied to beer or any commodity, is utterly unsound and one which I cannot but be a little surprised to have heard from such a distinguished and orthodox Minister.

    2027
    In regard to the question of unemployment, statistics can be quoted. I have a list here which would bear out the view of the Chancellor of the Exchequer. One absolutely agrees that the increases in unemployment during the past few months are not due solely or even largely to the increased taxation on beer. It is unfair to score a point merely for what has been termed cheap popularity. But there is no doubt that this tax is doing great damage. The tax was imposed on beer. Beer consumption has declined roughly by 25 per cent. since the tax was introduced. Beer no more than most other luxury commodities has been bit by the general depression. It has been hit as much and as little as other luxury commodities, but on the average they have not declined by 25 per cent. I believe the percentage in their case is about 15. Therefore we are right in saying that by this tax you have lowered by 10 per cent. the consumption in an industry which employs 700,000 men indirectly. It is all very well to say, with a grand smile, "I do not care who is employed indirectly." What was the point of giving £6,000,000 to wheat and taking it away from barley? We want to know.
    One feels one is bound to vote against the Government. One regrets it. No decent horse that is going over a fence decides to turn round. One knows that the Government has made up its mind. But one does hope that in the near future the Government will practically, though not in words, acknowledge its mistake, because the Government needs more than the majorities which we are prepared to give it in this House; it needs in the years ahead, years perhaps of graver difficulties than we have known before, the support of a united people. It is one of those curious psychological things—I hate the word "psychology" because most psychologists are frauds—that the nation wants a reduction of the tax on beer. The tax is a barometer. If the tax were reduced people would think that things were going for the better. When the Chancellor said the tax could not be reduced, and that other taxes had to be put on, he was crying stinking fish and destroying the optimism which is so valuable a groundwork for the Govern-
    2028
    ment to continue to possess in the confidence of the people. One does hope that in this particular matter, which affects so many of the working people, so gravely —one does hope, without in any way making an appeal to cheap sentimentality or popularity, that the Government may be able to do something. They may ultimately be able to reduce the tax. We who are going to vote against them, although our numbers are small, believe that it will be for their good and for the good of the country. Although the Government have it in their power to over-ride the wishes of the country and the wishes of the House, we believe that they will be making a mistake, even if they are sure of a cast-iron majority.
    8.30 p.m.
    Major McLEAN: The announcement by the Chancellor of the Exchequer that he was unable to accept the new Clause proposed by the hon. Member for Canterbury (Sir W. Wayland) was not a surprise, but it was a great disappointment to many supporters of the Government in the House and in the country. It is no doubt easy to exaggerate the effect of the increased Beer Duty in the country, but anyone who is in close touch with the malting barley areas of East Anglia must realise that the increased Beer Duty has had a considerable and an adverse effect not only on the farmers who grow malting barley, but also on the maltsters and on the agricultural labourers and employés generally in those two great industries. The demand for malting barley has fallen off enormously. A maltster told me that in Norfolk last winter only one-third of his maltings were working, and this coming winter he expected there would be far less. You can imagine the loss of employment to these people. Hon. Members know that many brewers do a considerable amount of malting themselves, and naturally a brewer who is conducting malting operations himself does not cut down his own maltings first but cuts down his purchase of malt from other maltsters. Therefore, the effect on the country maltster in particular is far greater than the actual reduction in the consumption of beer would seem to indicate. To the farmers who are growing malting barley there is no doubt that the increased demand for malting barley will mean that many of them will have to sell their malting barley next winter at the

    2029
    comparatively small price that can be got for feeding barley. It may be thought that farmers should take advantage of the wheat quota and grow wheat instead of barley, but much of the land in Norfolk and Suffolk that is famous for malting barley is quite unsuitable for growing wheat.
    A word about the beer drinker, and especially the agricultural labourer. Let me give one instance to show the decreased consumption of beer that has resulted, comparing this past winter with the previous winter. Take the period 1st November, 1930, to 30th April, 1931, and the same period for the past winter. In the particular club whose figures I have inspected, although the membership went up something like 50 per cent., instead of an increased beer consumption of 50 per cent. there was a decrease, but a very small one. But turning to the draught beers, a better index, instead of an increased consumption of 50 per cent., there was a decrease of something like 20 per cent. Personally I feel that the longer this taxation is kept on the more adverse will be the effect on farmers who grow malting barley, and the worse it will be for the maltsters and the agricultural labourers.
    We all recognise that the Chancellor of the Exchequer is faced with difficulties and some of my hon. Friends from Norfolk and Suffolk and myself have put down an Amendment to the proposed new Clause the purpose of which is to restrict the rebate to those brewers who brew entirely from British malt hops and sugar. We believe that such an Amendment would give the maximum benefit to the farmers and maltsters and occasion the minimum expense to the Treasury and would be a very good example indeed in connection with the "Buy British" campaign. In the Eastern counties we have a well-known beer brewed entirely from British material. Some people know it as "Norfolk Stingo" and we believe that if brewers were encouraged by a rebate of duty to brew entirely from British materials, it would do a great deal to help the producers of barley and hops. If that proposal were accepted by the Government I believe that the loss of revenue would be small and that great encouragement would be given to the growers of malt and barley.
    2030
    There is one argument which we have not heard of so far this afternoon. Last autumn we imposed a number of new taxes and also cuts in salaries and so forth and it was then said again and again, and it is repeated in this morning's "Times," that it was necessary to maintain equality of sacrifice, and therefore necessary to maintain all those taxes and cuts. But it is difficult to persuade the man who has lost his employment and has therefore lost 100 per cent. of his pay, that he is having equality of sacrifice with the man who has suffered a 10 per cent. cut in his salary. It is very difficult to persuade the farmer who has been unable to sell his malting barley, who has been driven into bankruptcy or forced to execute a deed of assignment, that there is equality of sacrifice as between him and the man who has only had a 10 per cent. cut. I hope that when the Government give further consideration to this matter, if they find that they cannot accept in its entirety the proposals of the hon. and gallant Member for Canterbury (Sir W. Wayland), they will consider giving a remission such as we ask for in the Amendment which we have put down to the proposed new Clause. The effect of this duty in Norfolk and Suffolk is very serious and in view of the distressed state of the agricultural industry I hope that the Chancellor of the Exchequer will take the earliest opportunity of giving us some relief in this respect.
    Mr. MACQUISTEN: I have listened with great interest to the various speeches on this subject, and I would like, first of all, to deal with that of the hon. Member for West Bermondsey (Dr. Salter). His was the speech which was most of all in favour of the reduction of the duty although apparently he was quite unaware of the effects of his remarks. His complaint is that the working man spends so much upon beer. If the hon. Member could get the Beer Duty abolished altogether, the working man would spend very little on beer and get all of it that he wanted. The reason why the working man spends so much on beer is because the taxation imposed upon it before this extra duty was put on, and indeed ever since the War, has been so high. Take away the taxation, and you would get beer at a halfpenny a pint and the working man, no matter how

    2031
    diligently he devoted himself to the consumption of beer, could not possibly spend any serious sum out of his weekly wages upon it.
    The only reason why the working man spends the amount to which the hon. Member for West Bermondsey objects, is because the hon. Member and his friends who think like him are not paying their share of taxation. They have a sour outlook upon life, and they think that beer is a damaging thing and bad for the health. A lot of things are damaging to health. I believe that in addition to his duties as a medical man the hon. Member for West Bermondsey practices the occupation of a baker. If that be so, I may tell him that, if he lived in poor benighted Portugal, or in one or two other European countries and sold the white bread which he sells to the masses of the people in Bermondsey, he would be sent to gaol for a long period of imprisonment for selling a substance dangerous to human health. The devitalised stuff which bakers sell here, with all the real good taken out of it, lacking all the things which are body building, which make teeth, and so on, is thoroughly bad, and the hon. Member for Bermondsey and his friends in that trade have done more harm than all the brewers in the district round about London. I am sorry that the hon. Member is not here to listen to my remarks. As a medical man, he must know the injurious nature of the bread which he sells. There is no body-building quality in it. It is just pure starch and that is why so many people, whose main subsistence it is, suffer. A little beer would help them very much.
    I do not wish to see anything like Prohibition imposed, even by Act of Parliament. There can be nothing worse or more demoralising for a country, but we are getting to it in this country. Look at what has happened in the United States where civilisation is breaking down before our eyes. America is going down in a welter of anarchy. Look at what has happened in that country where, to-day, there is neither law, nor order, nor freedom, nor safety; where a man has to guard his children with guns and where people of substance have to live, like feudal lords, in country districts with great walls around them and
    2032
    highly-charged electric wires and machine guns to protect them from outrage. These things are all the fruits of the views of people like the hon. Member for West Bermondsey and the hon. Member for the Sutton Division of Plymouth (Viscountess Astor). The American nation is full of ladies holding the views of the hon. Member for the Sutton Division of Plymouth, and they have enforced their views on American civilisation and have destroyed it.
    I do not want to see those views enforced here, even by means of taxation, but if this extreme form of taxation continues for long we shall see exactly the same phenomena here as we see in America. We are already getting it. Hon. Members have no idea of the amount of illicit production which is going on in this country. It is colossal in many parts, and it is surprising probably to hon. Members to learn of some of the stuff that is being drunk. A favourite stuff is surgical spirits which, I am informed, contains a little castor oil and a very small proportion of boracic acid and can be bought without any prescription, in any chemist's shop, notably in all the branches of "Blank's" Drug Stores. I do not propose to give the name. But I have their advertisement here. Then there is the spirit used by French polishers which contains only a small quantity of wood spirit and appears to be consumed with comparative safety by many people. There is also the ordinary mineralised methylated spirit which I am told is only consumed by the most abandoned persons and is well known as being sold in some districts in small quantities of twopenny worth and threepenny worth at a time. A certain firm of merchants in a town in Scotland which I shall not mention is said to be doing a good trade in one or other of these commodities, and I learn that they are rather notorious, being of a teetotal family. There are actually advertisements of the surgical spirit which is being sold.
    Mr. LOGAN: That is in Scotland.
    Mr. MACQUISTEN: And I have no doubt that it prevails in Liverpool also. Liverpool is largely populated by Irish who make their own stuff, in their own tenements, in districts where there is generally an Irish policeman "on the beat."

    2033
    Who can blame them? I say that a Government that puts a tax of 72s. 6d. on a substance only valued at 1s. is asking for it, and that is what will happen. We shall get a reproduction of the lawlessness that they have in the United States if we continue this harsh and penal taxation at the dictates of people in the Cabinet. There is no doubt whatever that this is the result of the semi-Coalition, the so-called National Government, which is rapidly becoming a Coalition, and a Coalition is always known as a conspiracy of the politicians against the electors. Think of the position of affairs in my country in Campbeltown and Islay. We have contributed scores of millions to the British revenue, and now all the poor fellows are on the dole. That is all the thanks that they are getting. What is the use of talking about the tax being fair? Take the taxation of tea, which is quite a luxury. You get 150 cups of tea out of one pound of tea, and the taxation is nonsensical as compared with beer or whiskey. It is not a halfpenny a gallon, and tea could stand a great deal more taxation. People waste their tea. Take sugar. There is no difficulty in the way of putting a tax on sugar sufficient to meet this reduction of the tax on beer.
    I do not consider that this is a brewer's question or a publican's question. I am looking at the poor working man who likes his pint of beer. Think of the poor fellow coining up sweating from the mine in his dirty clothes, sweating out the essential salts from his body. Give him a glass of milk, and he will be sick. I have pointed out before that there are far more people injured by tuberculous milk than by beer. Yet I do not propose to prohibit or to tax cows. Take the farm labourers and the men who sweat and toil with their bodies. These are the men who can drink a pint or even a quart of beer, and it does them good. These are the men to be considered. When you make the price 6d. a pint, it is not so bad, but when you make it 7d. or 8d., it is practically breaking a shilling. It is the same thing with the duty on spirits. 12s. 6d. a bottle is no good to anyone. Make it 10s., and you will double the revenue, because a man will get at least two bottles for £1 instead of one for 12s. 6d., and so you will get your revenue. In 1920, before the heavy duties were put on, there was £40,000,000 taken out of the Spirit Duties, but when the higher duty
    2034
    was put on it went down to £31,000,000 this last year, and £32,000,000 the year before.
    This is the worst and most injurious form of class legislation. You are saying to the poor working-man and the sweating working-man who toils at his job: "You are too poor to be allowed to have a drink. It can only be the people who are comfortably off who can be allowed to drink." Can you wonder that there is a frantic amount of discontent? It looks as if it is called a National Government because it taxes the national beverage. This is the most unnational thing that you could possibly do.
    Mr. LOGAN: Unnatural.
    Mr. MACQUISTEN: Yes, unnatural too. There are other sources of revenue open to the Chancellor, and I am not inclined to give him the blame. It is the blame of Liberals and Labour men in the Government. We do not need to mind the Liberal party, because, if the Government go on as they are doing, the Liberals will all be in the House of Lords before the conclusion of this Government. It is the natural goal of all good Liberals to get along to the other end of the passage. Why cannot we insist on getting our own Conservative views? We do not want these tyrants. The Noble Lord the hon. Member for Newark (Marquess of Titchfield) spoke about cheap popularity, and some Members seem to think it is a kind of blasphemy to vote against the Government. He was once a Whip, and I think there is still some of the Whip complex about him. What are we to do? Are we all just to stand up and make a speech, but not to carry the thing through? Suppose the Government was reconstructed. There are plenty of good men in the House who would make just as good Front Benchers as we have now. When I hear back bench men on the Labour side speaking, I always think they make a much better show than their Front Bench men, and I hope the impression is the same on the other side.
    Take these taxes as a whole. What a terrible infringement of liberty they are. Here am I. I buy my own barley, sugar, yeast and treacle, and I get a little kettle business, and start to distil something for myself. Why should I not? What a terrible thing it is for the Government to

    2035
    say: "These are your own commodities, but you cannot cook them in a particular way." We used to cook them in the Highlands in a wholesale fashion up till 1825, and even still I believe there is some of it done. There is in Glasgow, at any rate. There are in Glasgow some who come from the South of Ireland, as my hon. Friend the Member for Shettleston (Mr. McGovern) knows very well. I remember once being entertained in a place, and I said: "This is a very stout commodity." I was told: "That has never paid duty." That was not many years ago, and this thing is being done. This tyrannical interference with a man's right to do what he likes with his own can be tolerated up to a point, but it has reached the breaking point, and the revenue is disappearing, and all these evils are following upon that.
    We have had a Government elected for economy, and we have had no word about it yet. We have got the cuts of the May Committee, but they have not the courage to enforce them. The reason is that both Front Benches for the last 30 years have been carrying on politics on the principles of the "Unjust Steward," and that is why they cannot make reductions. They have been using the money of the taxpayer to see if they cannot square different sets of electors, and both parties are equally guilty. I saw a definition in a newspaper the other day of the difference between a statesman and a politician. It was said there that a statesman is a man who wants to do something for his country and that a politician is a man who wants his country to do something for him. I thought that was a very good definition, and that is how the finances of this country have been handled for nearly 30 years. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) began it, and all the rest have followed like sheep, believing that as a result they would get power and control; and they have got it from time to time. It has been a choice of two evils before the electorate.
    We believed this time that we had got a Government that would go in rigidly for economy and that they would scrap a great many of these eleemosynary schemes which lead only to the breeding of innumerable officials. The beneficiaries of all our social service schemes cease to
    2036
    exist after a time, but there are more and more officials created. We spent last week passing a Bill which will only lead to more officialdom and expense. What about the thrifty and industrious members of the community, who sweat and toil at their work, and who are entitled to a glass of beer? They are being taxed more and more while the machine is getting on top of the people. The country is being carried on as if it existed for the machinery of Government, but we want a Government that will believe that a Government exists for the people and not that the people exist for the Government. Get rid of this disgracefully high taxation on this particular commodity, which is the working-man's comfort. It and tobacco are his two great comforts, and about the only things he can afford, and yet we make them so dear that they cannot get them. If we get a change in the psychology of the Front Bench, to realise that it is not their business to create more and more Departments of the State, and tax people, and tax people, and tax people, then there will be a remission of taxation, and we shall get a reduction of the Beer Duty. This is the first tax that ought to be reduced, because it is the tax that affects the hardest working section of the whole community.
    Mr. McGOVERN: I rise to express the hope that has been expressed by one or two hon. Members that this Clause is going to be carried to the Division Lobby and I am sure that, after 3½ hours of discussion in this House, it will be nothing short of disgraceful if the division is called off, and all this time used in discussing a Clause which there was no intention of carrying to a division. I have always stated, and I state again, that I deprecate the putting down of Amendments upon which there is no intention of dividing. The right hon. Member for Epping (Mr. Churchill) at the outset of his speech showed that this tax was wrong, and then proceeded to advise those who had put down their names to the Clause not to divide against the Government as it would be a grievous wrong at this time. I was rather inclined to think that the right hon. Gentleman was in a more chastened mood than that which he was in a fortnight ago. It seems that the "telling-off" that he received from the Leader of the Labour party, which was cheered to the

    2037
    echo by a great number of Members of the House, has had the desired effect, but I am rather inclined to smile at the right hon. Gentleman coming to the House and telling it what its duty is in regard to the Government after having gone about the country deriding the Government because they were not doing the things that he wanted them to do.
    There has been grave exaggeration in this Debate both about the effects of the tax and what would happen if the tax were remitted. The hon. Member for West Bermondsey (Dr. Salter) made a speech in which he honestly and openly stated that he welcomed the tax and would welcome any addition to it so long as it had the desired result of putting an end to the drinking of beer. He said that if the money spent on beer went to provide boots, clothes, and food, it would be much better spent. I agree that to take anything out of the home to buy beer, if it is required for food and clothes, is wrong. I would point out to the hon. Member that last year 186,000 people were denied unemployment benefit under the Anomalies Act. He voted for that Act and thus deprived people of benefit that could have gone to provide the milk, boots and clothes which are so essential to his poor people in the East End of London. I cannot understand the hypocrisy of people coming here as Simon Pures over the question of beer and being anxious to bring about prohibition by means of a tax when they themselves attack the workers in a more vicious fashion at other times.
    9.0 p.m.
    I speak as one who has no interest in the beer trade and who is a total abstainer. I have never tasted beer in my life. I do not know the taste of it or of any kind of alcohol. At the same time I shall go into the Lobby to-night and vote against the Beer Duty and vote with those who are anxious to reduce it. At one stage of my life I was like the hon. Member for West Bermondsey, a fairly enthusiastic Prohibitionist. I have got through that stage, however, for the experience of America has been a useful education to me. You can educate people by reason and by the use of their brains, but you cannot by the prohibition of anything that the individual wants. If you prohibited me from taking anything I wanted I would try to get it by every means in my power. I am inclined to agree with
    2038
    the hon. and learned Member for Argyllshire (Mr. Macquisten). I remember four or five years ago a man came to me when I had a plumbing business in the Shettleston area to make up some copper tubes with couplings. When I had done the work, he said, "That was a very fine still you made for me, and it is producing excellent whisky. "He gave me a bottle of the whisky that he produced, and said that it cost 3d. for a five-gill bottle. Not long afterwards he appeared in the Sheriff Court in Glasgow, and the Procurator-Fiscal said during the evidence: "This is one of the finest stills that has ever been made in this country." I had unwittingly contributed to the making of this still to avoid the excise. I afterwards discovered that there was a great number of them in the City of Glasgow.
    Mr. MACQUISTEN: You can make it without a still.
    Mr. McGOVERN: My friends will be prepared to learn that also. The hon. Member for West Bermondsey said that if the tax is high you bring about a state almost bordering on prohibition. I do not agree. If a man is determined to have whisky or beer, and if the price is raised, is there not a tendency for him to take more from the food of the children and from the milk and boot bill so that the last position will be worse than the first? If he is an individual who has so little humanity in his being that he is determined to have beer out of the food money, he will get it. Therefore, I am not inclined to agree to that method of bringing about prohibition in this country. If you want prohibition, have it straight out and advocate it straight out, and do not attempt to get it by this method.
    Let me point out another aspect in-regard to the price of beer. In the city of Glasgow, just outside the Glasgow Corporation Buildings, there is the Municipal Square, and anyone who goes down there in the evening will see a large number of demoralised and debauched people who have taken to the drinking of what is known as "Red Wine" or "Red Vinegar" and methylated spirits. They go before the stipendiary because they become a public nuisance, and it is noticed that the whole facial expression of these people has been distorted to a

    2039
    state almost bordering on the imbecile. That has been brought about because they are determined to have a stimulant, and, the price of beer and whisky being high, they are driven to substitutes which are more dangerous than the things of which they have been deprived. Therefore, there is growing up in the city of Glasgow, and it may be in many other cities, a class of people who are driven to these substitutes because of their desire to get a stimulant of some kind. We are thus producing a state which might be welcomed by my hon. Friend, but which I deprecate in the most serious manner.
    The Chancellor stated that he could not remit any of this duty, and said a vote against the Government at this time would be a most serious thing for the government of the country. Is there a Member here, even with greater experience of this House than I have, who believes that statement to be true? All Government spokesmen on the Treasury Bench "come away with" that story. I was glad to hear— and I do not say it in an insulting way— the hon. Member for West Bermondsey say the Labour party have decided on a free vote. If they go on in that way, they will have to amend their standing orders so much that I may join them! They allow a free vote on beer, but we were virtually expelled from the party because we voted against the Anomalies Act, which took away benefits from 186,000 people. I welcome that change, and hope it means that the Labour party are going to take the sensible view adopted by the Home Secretary, the Secretary of State for Scotland and the Minister of Education in standing up from the Treasury Bench and advocating that Members of the National Government should dissociate themselves from the National Government and vote with them— should defeat the Government on tariffs, which the Government were returned to impose.
    The Government were overwhelmingly returned to carry out a mandate. Whether we agree with tariffs or not there was, in my estimate, a mandate for tariffs at the last election, because the workers believed, rightly or wrongly, that employment would be found if tariffs were introduced. Then those Members of the
    2040
    Government, speaking from the Front Bench, say to the Members of the Liberal party, "Vote against the Government, destroy the Government, prevent tariffs— but do not vote for a remission of taxation on beer or it will be a serious thing for the government of this country." Does any person seriously believe such tomfoolery and hypocrisy? They have been chosen by the nation as first-class citizens to run the nation's affairs, and then we get cheap melodrama of that sort. I hope hon. Members will take that for what it is worth.
    In regard to the duty itself, if we increase the taxation on beer, and in that way decrease the opportunities of the people to buy beer, it has the same effect as reducing wages, reducing unemployment allowances or applying a means test, and the consideration which guides me in opposing all those things, guides me in opposing this additional duty on beer. I do not want beer, and so the duty does not affect me. For a short time I was in Queensland and occasionally accompanied a few friends to a public house. They took a pint of beer, with the white froth on it, while I, with the perspiration running down the back of my neck, used to drink a bottle of lemonade now and again. I used to say "If I am here much longer I shall be driven to start on the stuff with the white froth on top." But that is in passing. Why should I have a right to decide that a man is to be excluded from drinking beer by making the price of it high, while I am free to have a cup of tea or, like the hon. Member for West Bermondsey, a glass of milk? I have no right to impose continued taxation on that beverage for a particular fad of my own. Even if I had the outlook of the hon. Member for West Bermondsey, I have no right to use this House for the purpose of imposing additional taxation to prevent other people from getting a drink when they want it.
    I have often played a game of golf with a man and have seen him take a bottle of beer before the game began and one afterwards, and I could not see anything seriously wrong with his doing so. Why should I be free from taxation on my lemonade or cup of tea while he has a crushing burden of taxation imposed on his drink? I am going to vote for this Amendment, because the methods

    2041
    adopted by the Government remind me of a little piece of poetry which runs something like this:
    "If you can't get potatoes,
    And you find flour is dear,
    You can still rely on whisky
    Or, for preference, on beer.
    If this should exceed your income,
    And the hunger still is felt,
    You can easily appease it
    If you tighten up your belt."
    I am afraid we are getting to the stage where we are bound to ask for a remission of some of this taxation. The means test and the dole cuts had their effect on trade; let us not assume that the decrease in the consumption of beer is to be attributed solely to the imposition of this additional burden; and any course which will put greater purchasing power in the hands of the people is desirable, in my opinion. I would say, like the hon. Member for West Bermondsey, that I am speaking for myself. I do not know wholly the mind of our party on this subject. We always decide after the vote is taken! I think we are all voting for the reduction in the duty, just as we would vote for abolishing the reduction in the dole. I say in conclusion that I hope this Amendment will be carried to a division, and that hon. Members will not be frightened by the sort of bogy man which has been displayed to-night or by the timidity shown by the right hon. Member for Epping. That is a role which he should never assume in this House. The occasion was too small a one for him to play the part he did. He should have taken up the usual bold-man, rebel attitude. Therefore I hope hon. Members will not be deterred from discharging what they believe to be a public duty. Let them allow their own consciences to operate, because they will find that every time they vote according to their consciences they will go home feeling much better and much more at ease.
    Mr. HARTLAND: Anyone who listened to the speech of the Chancellor of the Exchequer in introducing the Budget and who also listened to the firm manner in which he dealt with this subject this afternoon must realise that there is no possible hope whatever of any reduction in the beer duty at present, but it does not follow on that account that there is not a very large, a preponderating, concensus of opinion in the
    2042
    House, and possibly a still more preponderating concensus of opinion in the country, that this duty is iniquitous, bad in principle and dangerous in practice, and that it would be better for all concerned, and also for the revenue, if this extra duty were remitted. Again, notwithstanding that fact, in my opinion, and in the opinion, I think, of the vast majority of Conservative Members, the iniquity of this particular duty, the superimposition of a penny a pint on beer, will never be, can never be, a sufficient justification for the majority of this House risking the existence of a Government on which the whole future of this country, the Empire and possibly the world will ultimately depend. Nobody, however strong be the views he holds on this subject, can for one moment think of taking an action which might result— might result— in the substitution for the present Government of the party which placed the country in a position which necessitated not only this tax but so many other brutal impositions on the people.
    While we may not look for any immediate reduction of this tax, and we may know perfectly well that the proposed new Clause has no chance of being put into effect; and while, again, those of us who would like to support the new Clause might, in the circumstances that I have outlined, naturally refrain from so doing, it does not follow that there should not be other means of approaching this question by which some, at any rate, of the evils might be removed and some ultimate good might result to the country. Looking upon that general aspect in a very humble way, some of my hon. Friends from East Anglia and myself have put our names to the new Clause which appears on the Order Paper to-day. The effect of it, at its worst, would be so small that it could do no damage, at least, for this year, about which the right hon. Gentleman the Chancellor of the Exchequer is so much concerned, and it would do no material harm to his Budget proposals. All we ask in the new Clause is that the extra taxation on beer should be taken off immediately from all beer brewed by brewers who use nothing but English grown barley, English grown hops, and at the worst Imperial grown sugar. We are given to understand that only about

    2043
    two brewers in the whole country would be affected at once by this proposal, and we are very proud to think that both of those breweries are situated in East Anglia.
    I have heard it said by a very distinguished authority on the beer question that British barley and malt cannot produce a beer which is palatable to British beer drinkers. I could take the right hon. Gentleman in question to a city which I have the honour to represent, where beer forms no small item in the day's takings, where the people are very proud about the quality of their beer, and where a most excellent beer is served up, which is a joy and delight for all to look upon and imbibe, and which has never known any foreign ingredient of any sort or kind. If the Chancellor would be prepared to consider the small concession that we ask, that the extra duty be taken off brewers who will undertake to use only British grown materials, then I say that, while the effect on the Budget must immediately be trifling, the ultimate effect on the country might be very great, and certainly it would be a gesture to the people worthy of a National Government which was returned primarily on a ticket to encourage and further in every way British industry for the British people.
    The effect would be infinitesimal on the Budget, but what would be the effect on those farmers who depend entirely for their prosperity on the growing of British barley? I repeat a question which I put on a former occasion in this House, and which I notice was repeated to-day: Why should there be £6,000,000 bonus for the growers of wheat and nothing but ruinous possibilities for those who grow British barley? Why not encourage those who grow British barley? Why not hold out an inducement to brewers in this country to patronise British barley? Why not hold out a helping hand to the farmer who grows barley as well as to the farmer who grows wheat? Why not give an encouragement to further employment, particularly in East Anglia, to those farm labourers who, if the present imposition upon beer is to continue, see their livelihood within a few months of termination? When we ask for this small concession we do with the knowledge that
    2044
    the Chancellor can, if he likes, condescend to give it without harming his Budget. We suggest to him that it would be making a very great gesture to British agriculture, and would be encouraging those people who make the national beverage to make it in a national way. As the consumption of British materials increased, the call for British-made beer would increase, and what the Revenue lost in one way it would gain threefold in another.
    There is no question, apart altogether from figures which have been produced in this House one way or the other— and people can do anything with figures— and there is nobody in this House or in the length and breadth of the country who does not realise, that the effect of the extra taxation on beer is seriously affecting employment not only in agriculture but in breweries, in transport, in bottling, in woodworking, and in a thousand and one ancillary trades whose figures cannot be produced. I wish to make this appeal to the Chancellor: Will he consider making this small gesture to agriculture and to those who would further employment? Will he, admitting that the effect of this Clause will be little or nothing on his Budget, at least show that while he is anxious, and naturally anxious, to collect the revenue which is essential for this year's Budget, he is willing to take into some account what he admits must be the dangerous effect which will ultimately accrue to a great industry and to great ancillary industries? Is he willing to help them by making this little condescention to popular opinion to bring British beer for British people within reasonable reach of British working-class persons?
    Dr. O'DONOVAN: The Government should be thanked for giving so much time for a full discussion of this question which interests the whole of the country. Food and drink are primal matters, and had this taxation gone through without the fullest discussion in this House there would have been many sore heads to-morrow and allegiance to the National Government would have been temporarily weakened. We must have found this Debate extremely interesting. We have had a specialist in necrology studying the death list and the death-rate of the richer classes, looking with a hungry eye on their mortality rates and their dead possessions. Then

    2045
    we see a member of my profession, like one of the sect of the Manichees, explaining the intrinsic evil of drink, and advising us to take to that drink which was exclusively designed by nature for the nourishment of calves.
    We have gone into the realms of phantasy and heard the Noble Lord the Member for Newark (Marquess of Titchfield) discussing the ways of Cinderella and seeing in some of his brother Members of Parliament signs of that incipient insanity which ends in Bedlam. If there be much of that about this House, there can be no question that our problems should be solved by Freudian psychology and inner light rather than by ordinary debate. Such analyses of fairyland, phantasy and lunancy cannot help us. Then we have had the bludgeon wielded. We have been told by quite junior Members that to vote against this Government is almost a blow at the stability of the British Empire, if not at the stability of the universe. I suggest to some hon. Members that one might vote against the Government in the very modest hope of keeping the matter open, although at the present time the verdict of the Government has gone against our wishes.
    I intervene only to express to the House and to His Majesty's Government the wishes of the poor in my constituency. There is, of course, an Egyptian quality about the Government. I do not suggest for one moment that His Majesty's Chancellor of the Exchequer, like Pharaoh, has hardened his heart, but I can suggest with propriety that he has imitated the Egyptians in this sense that his face, like the sphinx, is inscrutable, and although his heart may respond to our blandishments, he will not give himself away until the proper moment. I put it to him that after the brewers and the various societies that represent the organised brewing and distributing trades have properly made their representations to him, which he must value for his information, there is still the echo of the voice of the very, very poor. I have received, and perhaps other hon. Members have had the same experience, a petition self-organised by the poor of my constituency, and signed by 6,000 people, asking me to do something to persuade the Chancellor of the Exchequer to lower the tax on beer. I speak to-night only to keep this question
    2046
    open. I repudiate entirely the suggestion that the poor in the mass are horrid and made up of potential drunkards. I think that the poor working man lives a life of heroic self-sacrifice in order to keep his wife and children in that condition of decency which he values. He sacrifices practically all the products of his labour for their care and upbringing, and he is ably seconded in that by his wife, who rarely is an addict to alcohol.
    9.30 p.m.
    The poor to-day cannot afford a glass of beer. The agricultural labourer at 30s. a week, who sweats that we may eat, cannot afford a pint of that very poor wash that, of necessity, is sold to-day as beer. I have had a letter from a very humble woman who took the trouble to write, not to me directly, but to my wife, asking her to speak to me as she was not certain that the hon. Members of this House would have time to consider her affairs. The point she puts is this: "Is it not cruel that my husband, who has worked the whole week for me and my children, cannot indulge in a pint of beer without feeling that he is robbing his own flesh and blood?" That cry from the heart should be echoed in this House, and I know it will be listened to with sympathy. It is unfortunate that, owing to our upbringing, we class the publicans with sinners. I think that tends to cloud the issue. Of brewers, all I can say is that I understand they have a tendency to opulence and they are promoted, on good behaviour, to another place. Referring solely to the publicans who are not sinners, I would remind the House that beer was drunk in England before King Alfred burnt the cakes. Beer has been drunk by people with historic names throughout English history, and it will be drunk when we arc dust. The public house is the club of the very poor. Among the poor there is not a place in which a man can comfortably sit once his family has begun to grow. Babies cry, and their washing must be done, and when wages only run to two or three rooms, the man cannot sit in comfort after working an eight hour day. He must go out and surely the streets of London are of hard and cold stone. What will he meet with in the public house but a little cheer, shelter, warmth and a little beer? You can describe that beer in many ways. When I was a medical student there was a rhyme:

    2047
    "A little of what you fancy does you good."
    Then when one is promoted to a higher sphere, one understands that a little alcohol is an anodyne for the discomforts of this weary world. When one is even further promoted to live among the highbrows, one understands that a little alcohol removes those inhibitions which keep us in a state of chronic melancholia. Far be it from me to say one word that would encourage the abuse of human comforts. I only wish to put to this House the suggestion that in English inns, English history has been made. Treaties have been planned, plots have been made and revolutions despatched. In the English inns the greatest influences of human kindness have been cogitated by decent men for the good of their fellows. I would remind the House that my London Hospital, one of the greatest in this country, was founded by a meeting of simple workpeople, business men and merchants in a London tavern. The history of inns is so interwoven with English history and is, on the whole, so good a history, that it is sad to hear that in inns up and down the country barmaids and barmen are being dismissed and innkeepers' wives, who might properly have considered their labours finished, now actually tend the bar and look after customers, and must now at the age of 50, 55 and 60 return to the counter to help their impoverished husbands.
    I put this question before the House in order that it may feel that the hon. Member for Canterbury (Sir W. Way-land), and those who support him tonight, are animated by no spirit of animosity to the Government. We sympathise with the burden that the Chancellor carries, and it is no lip sympathy. We have neither the knowledge nor the courage to carry the burden he carries in these awful days. If we vote against him, I ask him to believe that we do it only for one reason— that that sore feeling of the poor should not lack registration, and that this matter may be kept open for consideration at another time.
    Mr. EASTWOOD: I am one of many in this House who are going to vote against this Clause to-night. I shall vote against it simply through loyalty to the Chancellor and to the Government. I do hope
    2048
    the right hon. Gentleman will realise that, and what it means to me and to other of my hon. Friends in this House who are going to do the same thing. Let me give one short illustration to show what it means. I am not going to deal with the farmers, who put me here. They are suffering enough, and they want to see this tax reduced. I am not going to deal with the licensed trade, who also want to see this tax reduced. But I have in my constituency an enormous number of clubs— working men's clubs, political clubs, social clubs and clubs which go in for sport. All of them are well run, well organised, and well looked after, and they all attract members who cannot afford more than, perhaps, 5s. or 10s. a year in subscriptions. The result is that those clubs, which comprise several thousand members throughout the constituency, are dependent, as regards their ability to carry on, on the reasonable profits that they make from the reasonable sale of beer. As far as those clubs are concerned, since this extra tax came into force there has been a terrible falling off in consumption and in profit, and, entirely for that reason, many of them at the present time are wondering whether or not they can carry on for one more year.
    I say that simply in order that the Chancellor of the Exchequer may realise that this is one of the things that I shall have to face when I go back to my constituents and tell them of the action that I am taking to-night, in spite of what I have promised them, and in spite of my own views— for I believe that this tax is a mistake from start to finish, financially and psychologically, and one which ought to be remedied. Because I have said that year in and year out, and because I drink beer myself, and shall continue to do so while I can afford it, I want the Chancellor of the Exchequer to realise exactly what it means to support him in resisting this Clause, out of loyalty to the Government and to him. I should have been very pleased to-night if the Chancellor of the Exchequer had said, "I realise that beer is over-taxed; I realise that the position has become extreme; and from now onwards I am going to try to reduce the Beer Duty by drastic economies in the spending of the money which the duty produces." If he had said that, I could have gone back to my constituents and

    2049
    told them that that is what we all want to do, and what we are going to do. It has not, however, been said as strongly as I could have wished.
    There is one more thing that I would ask. In September next this tax will have been in force for a year. In October, half the present financial year will be over. I am not suggesting that there should be a supplementary Budget, or anything of that nature; that is not for me to suggest; but, when that year of the Beer Duty is over, and when half the financial year has passed, if the Chancellor of the Exchequer finds that we who say that this tax is a mistake are right, that it is not bringing in the money that he expected and that it is doing more harm than he expected, even then I do not ask him to take the extra tax away, but I do ask him to reconsider the matter then, and to come to us and say that we were right. Then he can get on with the next business of the country, whatever it may be. That is all that I have to say. I end by repeating that, loyal though I may be, it is at a very great price.
    Mr. J. JONES: I am sure that hon. Members will not think that I am speaking from a prejudiced point of view in this case. I am glad to have listened to so many speeches in which sympathy for the poor working man has been so loudly expressed. I happen, in addition to my other crimes, to be a trade union official, and for the last 12 years I have taken part in negotiations with the object of trying to prevent reductions in wages, which are. the main cause of the anxieties of the poor. The price of beer is a very interesting subject, and I am very interested in it. The amount of taxation that is placed upon beer is out of all proportion to the taxation on other commodities. Why that should be so, no one has yet tried to explain. The working class have no objection to paying their fair share of taxation, but they object to being singled out because of their peculiar habits or customs. In the East End of London, where I reside, and which to some extent I understand, the workers object to being singled out for special taxation, as they have been in this case.
    Do hon. Members realise that since 1920 there has been an average reduction in the purchasing power of the workers of this country of £200,000,000 a
    2050
    year? Is not that taxation out of proportion to their standing so far as economic affairs or financial opportunities are concerned? Now we have this tax, and we are told by the Chancellor of the Exchequer that it must remain because he has no other way of finding the money. Nevertheless, when I read the "Times," as I do every morning out of curiosity— not because of the knowledge that it gives me, but because of the opportunity with which it provides me of understanding the mentality of the people who are opposed to the Labour movement— I find that, when some foreign nation wants money for some scheme from which profits are promised, or opportunities for making higher percentages than can be made in this country, the money is there on the nail; it can always be found. I am only an amateur in these matters; I do not profess to be a financial expert; but I suggest that, if the Chancellor of this Exchequer wants to find money to make up the reduction in the taxation upon beer which this Clause proposes, he might give attention to foreign investments by people in this country. We are asked to buy British, and yet British money is exported to other countries in order that it may compete against home industries. If so much importance is attached to buying British goods and trading within the Empire, why should not some financial rearrangement be made so that those people who think they can make more profit by sending their capital abroad may make a substantial contribution to our own Exchequer, and the Government may in that way make up the difference, and not always be trying it on the dog, as this particular tax does?
    I have been very pleased to listen to speeches full of sympathy for the poor working man who lives in a dog-hutch, whose children cannot be brought up properly, and who, therefore, in order to give them a chance to have breathing space, must go to the "pub" or the club. What a commentary upon the state of civilisation in which we are living! I am not going to be like some of those hon. Gentlemen opposite who go out into the country and make violent speeches against the Government, but who are here because they supported a National Government, or, rather, what I should call a national confidence trick upon the

    2051
    people of this country at the last election. Hon. Members are now saying to the Government, "We do not like you; we think you are doing a wrong thing; but we are going to support you." We on these benches are not pledged to any Government in this case, or even to the Labour party, because some of us have had a free hand given to us. I know that some of my friends here believe in prohibition. They have as much right to their opinion on that matter as I have to mine, which is that I believe in prohibiting them.
    In this matter of taxation, I think that people ought only to be taxed in proportion to their ability to pay. No one can say that the working man can afford to pay more for the little things that he enjoys in his ordinary life. To-morrow night I may be in a working-man's club. I am taking the chair at a benefit concert organised for the benefit of the family of a member who died. That is a common thing in working-men's clubs. The men from the docks and factories along the riverside can show their sympathy and they will spend a little money on beer. Next week the takings will be down at the club because they will have spent a little more than they would otherwise have done.
    Dr. SALTER: It would be better if they gave their money to the family.
    Mr. JONES: They have already bought their tickets. My hon. Friend ought to know that. Perhaps, although he is a teetotaler, he has subscribed to the expenses of similar functions in his own constituency. I do not ask whether the man was a teetotaler or not. If I am asked to do something, I do it if there is a justifiable case. You are not going to save the world by denying little pleasures to people or making it almost impossible for them to enjoy them. Teetotalism brought about by means of taxation is not real temperance. It is an insult to the intelligence of the common people. I hope that the appeals to withdraw the Amendment will not be listened to and that there will be some at least who will stand up in defence of the ordinary common people. The brewers do not worry me. They can look after themselves. I have some sympathy with the publicans, because they are very largely tied up,
    2052
    even to the sawdust on the floors. I know the situation that a large number of those interested in the ancillary trades are placed in. They are hard hit. I have some in my constituency who are tinsmiths working in connection with the brewing industry. A fair proportion are out of work.
    You may talk as much as you like about the morality or immorality of drinking, but it is no good going to a man who has been sacked from the brewery and talking to him of the economics of temperance. You have to get down to brass tacks. You have to remember that he has to get his living in the trade in which he was trained. I have in my constituency men between 60 and 60 years of age who have been thrown out of employment because their employers have said definitely that there is no demand for their commodities and they have to reduce staff. If a man is faced with that position, he will go through the list of employers, and they will take men of the oldest age. They are not equal physically, or perhaps mentally, to the younger men, but the insurance companies say that men over a certain age may not be reinsured. The employer has to practise economy in the conduct of his business.
    That is a matter that we cannot control, but here is a matter that we can control. There are other sources from which this money could be found. There are other sources whereby the nation could be asked to face up to its responsibilities. I hope those who are responsible for the Amendment will be as brave inside as they have been outside. I remember the Chancellor's appeal when he spoke of Lausanne and the possibilities in Ottawa, and something that may happen somewhere else. After all, we were promised at the last election that, if we did certain things and if the people backed the Government, everything in the garden would be lovely. We have given them a certain amount of time. Within eight months of the previous General Election the Labour party were challenged about their solution of the unemployment problem. It was demanded that we should categorically give facts and figures to prove that we had dealt with the problem, though we were in the minority. Now the Chancellor of the Exchequer, possibly the most responsible member of

    2053
    the Government, because he is the keeper of the national purse, tells us that things will possibly be worse than they have been up to now, and he has to keep reserves, not in hand but in possibility, so that he may put the screw on someone else later on.
    The people of this country have got what they asked for, and I hope they will not grumble. I am pleased to know that some who have always been the most enthusiastic supporters of the Government when it has been a matter of cutting salaries and starving the total services, the people who have been clamouring for the Amendment and crying out against the Labour party, are the people who are now crying out, when their interests happen to be attacked, against the very Government which they themselves are largely responsible for bringing into existence. I am going into the Lobby against this tax if no one else goes with me. Perhaps they would not on principle. A fair deal means a square deal. We are all in favour of that even in existing circumstances. Beer drinkers in the main are the poorest people, beer is the national beverage and this is a National Government. We will go into the Lobby in support of the Amendment although it comes from a quarter that we have not very great affection for.
    Mr. PIKE: I should like to deal with one or two points which have not been already dealt with. As has been said, this tax is of necessity a revenue collector, but I challenge anyone who is opposing the Amendment to show us one year in which we have had increase after increase of taxation upon beer which has proved valuable to the State from a revenue producing point of view. From 1914 onwards every increase in the taxation upon beer has resulted in a. slow but sure decrease in the revenue of the year, and I maintain that anything that defeats its own purpose is something from which we should rid ourselves, at least at this stage of our national crisis, at the earliest possible moment. It has been said that the fall in the consumption of beer is due in a large degree to the condition of unemployment which has prevailed for a long period of years, but no one can prove to me that the fall in the average consumption from 31.56 gallons in 1900 to 14.75 gallons in 1931 is due to unemployment and nothing else. In my
    2054
    opinion the greater part of the fall in consumption is due to the exorbitant and unjust taxation to which the commodity has been subjected for the last 10 years. At the moment the tax is reduced we shall find the consumption of beer per head of the population rise automatically. As has rightly been said by the hon. Gentleman the Member for Silvertown (Mr. J. Jones), the natural beverage, and I might almost say in many cases the natural food, of the working man is a pint of good English beer, when he can get it. At the Licensing Commission I believe that the hon. Gentleman was asked a question as to who constituted the majority of beer drinkers in this country, and the answer given to Question No. 25,705 was that 70 per cent. of the national drink bill accrued from the moneys of wage-earners whose average wage did not exceed £3 per week. If that is true—and I have no reason to doubt it—this tax, which has not proved a revenue producer, is a tax placed upon the vast majority of the people who can ill afford to pay the tax.
    I am glad that somebody has mentioned the conditions which exist to-day in the public house. The public house is the working man's second home. Public houses are not sinks of iniquity. I go into a good many of them. I go into them for a beverage, and, like many workmen in the little coal mining village in which I live, I go into the public house for the purpose of comfort. In those public houses the working man finds comfortable seats, comfortable fires, comfortable conditions and a little music. Sometimes he is entertained by a singer, a dancer or a pianist, or perhaps by a player or an accordion or a fiddle. In 99 public houses out of 100 you find a factor for which the right hon. Gentleman should be truly thankful and one which tends, not to create unemployment and discomfort, but employment and comfort.
    When the great talkie films were first introduced into this country, thousands of actors and artists were thrown on to the streets. They were not required. If you go into our great cities—and I quote Sheffield as an example—you discover that public houses find employment for those artists. Some public houses have miniature theatres. They attract a man and his wife, who can sit down in com-

    2055
    fort. It is not a question of drinking beer in a common beer house, but of sitting in a well-appointed room surrounded by every comfort and attendance and where one can listen to first-class artists. There are only the brewer and the publican to thank for finding employment for the artists thrown out of work as a result of the introduction, largely, of the American talkie films. In the majority of cases the publican is solely responsible for paying the wages of those artists. The House should realise that the more you tax beer the less possibility there will be of attracting a sufficient number of people to the public houses even to enable the publican to employ those artists, and the result will be more unemployment.
    10.0 p.m.
    I asked the right hon. Gentleman during the course of his speech whether or not he was in a position to say if the figures which he gave in respect to unemployment were figures of permanent or temporary unemployment. He said that the figure of 1,800 for the whole of the drink trade covered the period from August to April of this year. If the right hon. Gentleman went over the country, north, south, east and west, he would find that in 99 breweries out of every 100 the whole of the staffs are engaged only three days out of the six or seven days in the week. The figure of the number temporarily unemployed must vastly exceed the figure given in the House this afternoon. Even if the figure of those permanently unemployed is only 1,800, here is something which can be done to-night, or at some time more convenient to the nation, which at least would remedy to a degree the problem of unemployment.
    It is not fair for me in any circumstances to allege certain weaknesses on the part of the Bill unless I am prepared to suggest a remedy. I do not wish to suggest new legislation, and I do not think that the right hon. Gentleman would help me in this direction, because legislation already exists. But a word from him in this House would go a long way, even at the present prices of beer, to increase the consumption of beer in this country, and, in consequence, the revenue of the Chancellor of the Exchequer. I asked a question of the
    2056
    Secretary for Mines some weeks ago as to the total number of workers employed in the country during the hours of 2 p.m. and 10 p.m., and I discovered that during those hours almost 3,000,000 working shifts had been registered. I do not say that they they were all registered by separate individuals who drink beer, but there are in the country, according to statistics which I have compiled on the minimum basis, at least 1,700,000 workers who work between the hours of 2 and 10 p.m. In the vast majority of districts throughout the country, by the time they get to the nearest public house or the nearest village which possesses one, or somewhere where they can get beer, the public house, by reason of Acts which are commonly called D.O.R.A., is closed. The result is that those men cannot have a pint of beer even if they have money to pay for it, unless their wives, have thought kindly of them and have taken a pint of beer home in a bottle. Any hon. or right hon. Member who has drunk draught beer which has been placed in a bottle after having been drawn either direct from the pump or the wood, will know that it cannot be very palatable to a man who has worked eight hours in front of a furnace or in the pits of the country. I suggest that a word from the Chancellor of the Exchequer to the licensing authorities throughout the country to ensure that men leaving work after the ordinary licensing hours can secure a measure—
    Mr. SPEAKER: The hon. Member is getting far beyond the Clause, which we are now discussing.
    Mr. PIKE: I am sorry. I was hoping to show the right hon. Gentleman at least one means by which he could secure the money he badly needs. The right hon. Gentleman told us that his £3,500,000 of last year fell short of the Estimate, which was £5,000,000. May I point out to him that the greater amount of the money was received during a period which in no circumstances could be considered a normal producing revenue period? I have tried to find out the total amount of beer consumed from 20th December to 3rd January, and I find that the total amount would be something like 48½ per cent. of the total sum the right hon. Gentleman received during the 6½ months that the tax was in existence.

    2057
    Everybody wants his beer, wine or spirits at Christmas time. Even the hon. Member for West Bermondsey (Dr. Salter) gets a little drop in the bottle for his friends who come to see him. He is not going to suggest to me that at Christmas time, the great season of good will and brotherhood, because he dislikes it, hates and detests it, that he is going to deny his relatives and friends, who like a drop, the right to enjoy good fellowship at the seasonable period. Throughout the whole country millions or thousands of teetotallers purchase alcoholics for the purpose of allowing their friends to wish them the best in the new year.
    The Chancellor of the Exchequer will find that next Christmas receipts will be considerably lower than they were last Christmas. Last year the people were buoyed up with the belief that this Government were going to improve matters, that they were going to have their jobs back, and what little money they had saved went in the spirit of good fellowship, in the "never care, never mind, everything-will-be-good spirit. We have a National Government, and we have somebody who is going to find us work." The Chancellor of the Exchequer will not find that result next Christmas, because things are not turning out as we would have liked them to do. People will not have the money to spend in drink and alcoholics that they had last Christmas. The estimate of £8,000,000, although I do not wish to be pessimistic, will fall very short. The amount realised, I am afraid, will be very short of the right hon. Gentleman's optimistic figures. It is unfortunate that that should be so. I ask the right hon. Gentleman, in a final appeal, to promise before we pass from this subject that at the earliest opportunity, in three, six, nine or 12 months he will review the position, and whenever he has the smallest amount of money to dispose of in the relief of taxation he will first and foremost apply it for the relief of this overburdened commodity, which is required by the people who are the poorest paid and probably the worst clad people in the whole country.
    Sir NAIRNE STEWART SANDEMAN: I hold no brief for the brewers, except that they seem to me to have been the people who in the past have laid the golden eggs and that these nest eggs are
    2058
    the sort of eggs which should be encouraged. I am not speaking with any wish to "suck up" to my constituents. My constituents know me far better than that. They know me as one who tells them exactly what I think, whether they like it or not, and for the Noble Lord the Member for Newark (Marquess of Titchfield) to make out that those who speak against this penny on beer are doing it with that sort of idea, leaves me entirely cold. I could make out a pathetic picture of the people in my constituency who cannot buy their beer, but I do not propose to do that. I look at the question from the financial point of view.
    There is an enormous diversity of opinion between the Chancellor of the Exchequer and the hon. Member for Canterbury (Sir W. Wayland) on the unemployment question. I came here with the intention of not putting a single person out of employment, if I could possibly help, and of doing everything in my power to get people jobs. We have the Chancellor of the Exchequer saying that, so far as he can see, only about 2,000 people will be put out of jobs. That strikes me as absolutely absurd. Of course, he is taking the direct figures which he can see, but if you sweep your eye round you see, first of all, the agricultural labourers. If they are put out of a job they are not able to draw unemployment insurance benefit. Then there are the hop growers, who are more or less in the same position. So far as the hop trade is concerned, there is a very big trade in hop bags, which means employment for a very considerable number of people. Then there is the freight on the barley. That means putting people out of work. Then there are the breweries and the malting establishments. Many people in the malting trade have told me that up till now they have kept their workpeople on, because they did not want to put anyone out of a job, if they could possibly avoid it, but now their hands are forced and they have to dismiss a great many people. Then there are the tied houses. I know that they will not be reassessed for some time, but does that matter, because in the meantime they are broke.
    There is the question of the transport of the beer. There are the coopers, and an infinite number of trades, we do not know how many, that will be affected by

    2059
    the lessening consumption of beer. Then there is the question of the effect upon the Income Tax. That will be down and Super-tax will be down. What about the millionaire brewers who have not died. I think the Chancellor of the Exchequer will notice the effect when they happen to come to their time to be released. When all these things are taken into account, I cannot see where the Chancellor of the Exchequer will get the enormous revenue he expects. During the last five years in the estimates of the receipts of revenue they have been out by about £6,000,000 per annum. That reduces the balance very considerably, and when we take into account all the points I have raised I am sure that the few millions that will be left will be finished entirely.
    I do not want to vote against the Government at the present time, but I think very little forethought has been shown in keeping the penny per pint on beer. It is killing the goose that lays the golden eggs. It is prejudicing the revenue for the future as well as the present, and it is also putting a severe tax upon the loyalty of people who, like myself, believe that a very great mistake is being made. We are told that we are putting the Government in an awkward position, but the Government ought to think of these awkward positions before they put us into them. I can assure the Chancellor of the Exchequer that when it is time for him to get busy with his big ideas about the reduction of expenditure, he will have the whole of the Conservative party behind him. There is not one of us who is not ready to vote for a great deal of reduction in expenditure. A great many of us believe that the revenue cannot be raised. If you have not the money you cannot spend it, and the sooner people realise that the better. Let us get down to the basic position that we are right up against it, and that we shall have to go on cutting, cutting and cutting. When we come to a knowledge of these facts the Chancellor of the Exchequer will find that if he makes proposals for some enormous cuts in our expenditure and taxation he will get a reception such as he has never had before.
    Major BRAITHWAITE: I want to put the case of the barley growers, who are deeply concerned at the prolongation of
    2060
    this excessive taxation. I know that the Chancellor of the Exchequer is very interested in the welfare of the agricultural community, but by keeping this tax on he is undoubtedly going to cause a great deal of extra unemployment in the country districts, which we have been trying for the last few months by legislation to alleviate, and he is also going to do a great injustice to the people who live in the country districts. In my constituency there are 125 villages, and the main place where the people meet to discuss local affairs is the village public house. The revenue of the public house is derived almost exclusively from the sale of beer, spirits do not enter into the purview of the ordinary country public house, with their clientele earning about 35s. a week, if they are in employment. The revenue of these establishments is steadily being reduced, until in my own division during the last three months six of them have had to close down. They are houses controlled by substantial brewery companies, houses which have good financial backing, but which cannot be maintained because they are not earning sufficient revenue to keep them open. I want the Chancellor of the Exchequer to realise that he is penalising the poorest paid people in the land, the agricultural worker, by charging them excessively on one of their few pleasures, and at the same time he is doing his best to put them out of work.
    I came here to-night determined to support the hon. Member for Canterbury (Sir W. Wayland), but after the speech of the Chancellor of the Exchequer I do not feel that I can do anything but support the National Government, although I thoroughly disagree with the taxation. At the same time, seeing that the National Government is going into a conference which may have far-reaching effects for this country, I do not want an opinion created by an adverse vote in this House which may be detrimental to our action and, therefore, much against my will, I am going to support the Government. I hope, however, that when the Chancellor of the Exchequer is reconsidering taxation he will try and find some other ways of raising revenue. There are many other ways of raising revenue. You have approximately 10,000,000 bicycles using the roads of this country without any sort of contribution

    2061
    to the Exchequer. That is a field which might reasonably pay a small tax and thus relieve some of this unjust taxation. Again, some teetotallers could pay a little more towards our taxation, and I am sure that the hon. Member for West Bermondsey (Dr. Salter) would not mind at all paying his proportion if the legislation was brought in. There are many other different forms of drink which ought to bear some proportion of taxation. Mineral waters, cider and milk might take some share in providing a contribution to the revenue, and I hope, therefore, that the Chancellor of the Exchequer when he comes to review the possibility of extra taxation will impose some duty on these forms of drink which at present pay no contribution at all.
    I always had the feeling, until we had the Chancellor's reassurance this afternoon, that the late Chancellor of the Exchequer had had a good deal to do with maintaining this duty in the form in which it is. The late Chancellor always made this particular trade one of his pet hunting grounds. But I hoped that when we had a National Government we should have been able to drop that sort of discriminating legislation, which had picked on this trade and on the people who drink this particular form of beverage. I hope that after the very serious pronouncement of the Chancellor of the Exchequer my hon. Friend the Member for Canterbury, whose Amendment I have supported right away through, is not going to press the Amendment. I hope that he will withdraw it, because to embarrass the Government at this time, when the Minister is about to set off on a delicate mission, might do more harm than the prolongation of this tax for a month or two longer.
    Mr. RAIKES: I want to make one further appeal to the hon. Member for Canterbury (Sir W. Wayland) to withdraw his Amendment. I do so as a Tory who is going to support the Government all through on this Measure. I can imagine no folly more criminal than at this stage of the Finance Bill to try to wreck the Bill and form what must be a reconstitution of the present Government. There may be hon. Members who will be tempted to abstain from voting to-night. I suggest that to-night is the one night when every hon. Member who is a supporter of the Government ought to go
    2062
    into the Lobby and even court unpopularity in support of the larger loyalty without which democracy is a farce.
    Sir ERNEST SHEPPERSON: I wish to take this opportunity of making a defence of myself against the attack which was made upon me by the hon. Member for Don Valley (Mr. T. Williams) a month ago. He accused me of deserting my old flame "Beer, glorious Beer" for "Wheat, glorious Wheat," and I want to restore myself to his good graces by telling him that, having satisfied my desires with wheat, I have returned to my old love, beer. At the time of the Budget statement we were all very disappointed that nothing was done for beer. Our disappointment was not because Members of this House could not get their bottles of beer any cheaper, but because of the agricultural labourer, the worker in the country, and the agriculturist. That disappointment was due to a great extent to the method by which the popular Press endeavoured to show that the finance of this country was much better than it really was. The popular Press produced a hope that we should get a reduction of this taxation. I fully support every one of the reasons which have been given for the reduction of this tax.
    What, then, am I to do to-night? I am an agriculturist and I represent a purely agricultural constituency which grows hops and barley. That constituency is suffering and I, personally, am suffering from this increased duty upon beer. I submit that there is nothing which could possibly justify the present high taxation on beer, except one thing and that is, the financial need of the country. As an agriculturist and the representative of a purely rural area, I whole-heartedly support this new Clause but I recognise that to-day there is something greater at stake than the interest of the barley grower. There is at stake the interest of our country. When we see the financial difficulties of America and Europe and are told by the Chancellor of the Exchequer that has expert advisers estimate that the loss of revenue by this concession would be £10,000,000; when we are told that this £10,000,000 is necessary to our financial stability; when we realise that owing to the enormous national sacrifices which have been made our country is weathering

    2063
    the storm but is not yet in sight of port and that to surrender now would make past sacrifices of no avail—when we realise all these things I ask the House can we as Englishmen, ask the Chancellor of the Exchequer to make this concession now? As an agriculturist I am for England first. I am prepared to go under in order that England still may live and if I thought that the action which I am going to take to-night would lose me my seat and end my political career, it would not deter me from doing what I consider to be right for my country in its time of need.
    10.30 p.m.
    It has been said that if the new Clause is not passed there will be a beer strike; that there will be a cessation of consumption of beer by the beer drinker. The consumer of beer is a patriot like the ordinary Income Tax payer. When the country was in difficulty the Income Tax payer came forward readily to pay his money. I am confident that patriotism is not confined to the Income Tax payer. The consumer of beer, when he buys his beer in the future will realise that he is helping his country by the additional tax he is paying. I am confident that when he realises that, his pleasure in consuming beer will increase, because he will realise that he is doing a duty in a very pleasurable manner.
    "England expects every man to do his duty."
    I am confident that the drinker of beer will be equally prepared to do his duty in the future as he has been in the past, and will not decrease that consumption
    of beer, but will realise that by continuing to consume beer he is helping his country in its difficulties. In conjunction with my hon. Friend the Member for Peterborough (Lord Burghley), I have a new Clause on the Paper the purpose of which is that this reduction of taxation should only apply to beer made from British malt and British hops. This new Clause, if carried, would cost the Chancellor of the Exchequer very little indeed, and it would help those whom I particularly desire to help, namely, the agricultural labourer, the farmer, and the grower of malting barley.
    I want to add my appeal to the Chancellor of the Exchequer to grant us this little thing, which would be a tiny step towards what has been my ideal ever since I have been in the House, and that is the possibility of pure beer. Pure beer is not only in the interest of the industry of agriculture; it has back of it the interests of the whole of the nation. We have heard many times the saying that the Battle of Waterloo was won on the playing fields of Eton. Might I suggest that those men of Eton could not have done very much unless they were backed by the consumers of pure beer? I would ask the Chancellor of the Exchequer whether, in the interests not only of the industry of agriculture, but of the working class and of the nation he will not take this step towards that ideal of pure beer.
    Question put, "That the Clause be read a Second time."
    The House divided: Ayes, 71; Noes, 301.

    Division No. 220.]

    AYES.

    [10.34 p.m.

    Adams, D. M (Poplar, South)

    Fuller, Captain A. G.

    Lunn, William

    Attlee, Clement Richard

    Granville, Edgar

    Macdonald, Gordon (Ince)

    Bailey, Eric Alfred George

    Grattan-Doyle, Sir Nicholas

    McGovern. John

    Batey, Joseph

    Greenwood, Rt. Hon. Arthur

    Maclean, Neil (Glasgow, Govan)

    Bevan, Aneurin (Ebbw Vale)

    Gretton, Colonel Rt. Hon. John

    Maxton, James

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

    Griffiths, T. (Monmouth, Pontypool)

    Milner, Major James

    Buchanan, George

    Gritten, W. G. Howard

    Nail, Sir Joseph

    Burton, Colonel Henry Walter

    Groves, Thomas E.

    Nicholson, Rt. Hn. W. G. (Petersf'ld)

    Caine, G. R Hall-

    Grundy, Thomas W.

    Parkinson, John Allen

    Cape, Thomas

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

    Pike, Cecil F.

    Carver, Major William H.

    Hail, George H. (Merthyr Tydvil)

    Price, Gabriel

    Chalmers, John Rutherford

    Haslam, Henry (Lindsay, H'ncastle)

    Remer, John R.

    Chorlton. Alan Ernest Leofric

    Hicks, Ernest George

    Sandeman, Sir A. N. Stewart

    Cocks, Frederick Seymour

    Hirst, George Henry

    Strauss, Edward A.

    Cook, Thomas A.

    Jackson, J. C. (Heywood & Radcliffe)

    Thorne, William James

    Courthope, Colonel Sir George L.

    John, William

    Thorp, Linton Theodore

    Cove, William G.

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

    Tinker, John Joseph

    Craven-Ellis, William

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

    Wells, Sydney Richard

    Cripps, Sir Stafford

    Knox, Sir Alfred

    Williams, Edward John (Ogmore)

    Daggar, George

    Lansbury, Rt. Hon. George

    Williams, Thomas (York, Don Valley)

    Dixey, Arthur C. N.

    Lawson, John James

    Wise, Alfred R.

    Duncan, Charles (Derby, Claycross)

    Lees-Jones, John

    Edwards, Charles

    Lewis, Oswald

    TELLERS FOR THE AYES.—

    Fermoy, Lord

    Lockwood, John C.(Hackney, C.)

    Sir William Wayland and Mr. Macquisten.

    Fielden, Edward Brocklehurst

    Logan, David Gilbert

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Essenhigh, Reginald Clare

    McCorquodale, M. S.

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Evans, Capt. Arthur (Cardiff, S.)

    MacDonald, Malcolm (Bassetlaw)

    Agnew, Lieut.-Com. P. G.

    Evans, Capt. Ernest (Welsh Univ.)

    McKie, John Hamilton

    Albery, Irving James

    Foot, Dingle (Dundee)

    Maclay, Hon. Joseph Paton

    Alien, Sir J. Sandeman (L' pool, W.)

    Foot, Isaac (Cornwall, Bodmin)

    McLean, Dr. w. H. (Tradeston)

    Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)

    Fox, Sir Gifford

    Magnay, Thomas

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

    Fraser, Captain Ian

    Maitland, Adam

    Athol, Duchess of

    Fremantle, Sir Francis

    Mallalieu, Edward Lancelot

    Baldwin, Rt. Hon. Stanley

    Ganzoni, Sir John

    Mander, Geoffrey le M.

    Balfour, Capt. Harold (I. of Thanet)

    George, Megan A. Lloyd (Anglesea)

    Manningham-Buller, Lt.-Col. Sir M.

    Balniel, Lord

    Gillett, Sir George Masterman

    Margesson, Capt. Henry David R.

    Banks, Sir- Reginald Mitchell

    Gledhill, Gilbert

    Marsden, Commander Arthur

    Barclay-Harvey, C. M.

    Glossop, C. W. H.

    Martin, Thomas B.

    Barton, Capt. Basil Kelsey

    Giuckstein, Louis Halle

    Mason, David M. (Edinburgh, E)

    Beauchamp, Sir Brograve Campbell

    Glyn, Major Ralph G. C.

    Mason, Col. Glyn K. (Croydon, N.)

    Beaumont. Hon. R. E.B. (Portsm'th,C.)

    Goldie, Noel B.

    Mayhew, Lieut.-Colonel John

    Belt, Sir Alfred L.

    Goodman, Colonel Albert W.

    Merriman, Sir F. Boyd

    Bevan, Stuart James (Holborn)

    Graham, D. M. (Lanark, Hamilton)

    Millar, Sir James Duncan

    Birchall Major Sir John Dearman

    Graham, Fergus (Cumberland, N.)

    Mills, Sir Frederick (Leyton, E.)

    Bird, Ernest Roy (Yorks., Skipton)

    Graves, Marjorie

    Mills, Major J. D. (New Forest)

    Baker, Sir Reginald

    Greaves-Lord, Sir Walter

    Milne, Charles

    Boothby, Robert John Graham

    Greene, William P. C.

    Milne, Sir John S. Wardiaw-

    Borodale, Viscount

    Grenfell, David Rees (Giamorgan)

    Mitchell, Harold P.(Br'tf'd & Chisw'k)

    Bossom A. C.

    Grenfell, E. C. (City of London)

    Mitcheson, G. G.

    Bouiton, W. W.

    Griffith, F. Kingsley (Middlesbro'.W.)

    Molson, A. Hugh Eisdaie

    Bower, Lieut.-Com. Robert Tatton

    Grimston, R. V.

    Monsell, Rt. Hon. Sir B. Eyres

    Bowyer, Capt. Sir George E. W.

    Guest, Capt. Rt. Hon. F. E.

    Morning, Adrian C.

    Boyce, H. Leslie

    Guinness, Thomas L. E. B.

    Morrison, William Shepherd

    Braithwaite, Maj. A. N. (Yorks, E. R.)

    Gunston, Captain D. W.

    Moss, Captain H. J.

    Braithwaite, J. G. (Hillsborough)

    Guy, J. C. Morrison

    Muirhead, Major A. J.

    Briant, Frank

    Hall, Capt. W. D'Arcy (Brecon)

    Munro, Patrick

    Brockiebank, C. E R.

    Hannon, Patrick Joseph Henry

    Nation, Brigadier-General J. J. H.

    Brown, Ernest (Leith)

    Hartington, Marquess of

    Nicholson, Godfrey (Morpeth)

    Browne, Captain A. C.

    Hartland, George A.

    North, Captain Edward T.

    Buchan, John

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

    Nunn, William

    Buchan-Hepburn, P. G. T.

    Haslam, Sir John (Bolton)

    O'Connor, Terence James

    Burgin, Dr. Edward Leslie

    Henderson, Sir Vivi3n L. (Cheimsford)

    O'Neill, Rt. Hon. Sir Hugh

    Burnett John George

    Hepworth, Joseph

    Ormiston, Thomas

    Campbell, Rear-Admi. G. (Burniey)

    Hills, Major Rt. Hon. John Waller

    Ormsby-Gore, Rt. Hon. William G. A.

    Campbell-Johnston, Malcolm

    Hoare, Lt.-Col. Rt. Hon. Sir S. J. G

    Palmer, Francis Noel

    Caporn Arthur Cecil

    Holdsworth, Herbert

    Patrick, Colin M.

    Castle Stewart, Earl

    Hope, Capt. Arthur O. J. (Aston)

    Penny, Sir George

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

    Hornby, Frank

    Percy, Lord Eustace

    Cazalet, Thelma (Islington, E.)

    Horsbrugh, Florence

    Perkins, Walter B. D.

    Cazalet, Capt. V. A. (Chippenham)

    Howard, Tom Forrest

    Peto, Sir Basil E. (Devon, Barnstaple)

    Cecil, Rt. Hon. Lord Hugh

    Howitt, Dr. Alfred B.

    Peto, Geoffrey K.(W'verh'pt'n, Bliston)

    Chamberlain, Rt. Hn. Sir J.A.(Birm.,W.)

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

    Pickering, Ernest H.

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Hudson, Robert Spear (southport)

    Pickford, Hon. Mary Ada

    Clarke, Frank

    Hume, Sir George Hopwood

    Potter, John

    Clayton, Dr. George C.

    Hunter, Capt. M. J. (Brigg)

    Powell, Lieut.-Col. Evelyn G. H.

    Cochrane, Commander Hon. A. D.

    Hurst, Sir Gerald B.

    Pybus, Percy John

    Colfox, Major William Philip

    Hutchison, W. D. (Essex, Romf'd)

    Raikes, Henry V. A. M.

    Colman, N. C. D.

    Inskip, Rt. Hon. Sir Thomas W. H.

    Ramsay, Capt. A. H. M. (Midlothian)

    Colville, John

    Jackson, Sir Henry (Wandsworth, C.)

    Ramsay, T. B. W. (Western Isles)

    Conant, R. J. E.

    James, Wing.-Com. A. w. H.

    Ramsbotham, Herwaid

    Cooke, Douglas

    Jamieson, Douglas

    Ramadan, E.

    Copeland, Ida

    Jesson, Major Thomas E.

    Rathbone, Eleanor

    Courtauld, Major John Sewell

    Joel, Dudley J. Barnato

    Reed, Arthur C. (Exeter)

    Craddock, Sir Reginald Henry

    Johnstone, Harcourt (S. Shields)

    Reid, James S. C. (Stirling)

    Cranborne, Viscount

    Jones, Henry Haydn (Merioneth)

    Reid, William Allan (Derby)

    Crookshank, Col. C. de Windt (Bootie)

    Jones, Lewis (Swansea, West)

    Rentoul, Sir Gervais S.

    Crookshank, Capt. H. C. (Gainsb'ro)

    Ker, J. Campbell

    Renwick, Major Gustav A.

    Croom-Johnson, R. P.

    Kimball, Lawrence

    Reynolds, Col. Sir James Philip

    Cruddas, Lieut.-Colonel Bernard

    Kirkpatrick, William M.

    Rhys, Hon. Charles Arthur U.

    Curry, A. C.

    Knatchbull, Captain Hon. M. H. R.

    Rosbotham, S. T.

    Davison, Sir William Henry

    Knebworth, Viscount

    Boss, Ronald D.

    Denman, Hon. R. D.

    Lamb, Sir Joseph Quinton

    Rose Taylor, Walter (Woodbridge)

    Despencer-Robertson, Major J. A. F.

    Latham, Sir Herbert Paul

    Ruggies-Brise, Colonel E. A.

    Dickie, John P.

    Law, Richard K. (Hull, S.W.)

    Range, Norah Cecil

    Dixon, Rt. Hon. Herbert

    Leech, Dr. J. w.

    Russell, Albert (Kirkcaldy)

    Donner, P. W.

    Leighton, Major B. E. P.

    Russell, Alexander West (Tynemouth)

    Doran, Edward

    Levy, Thomas

    Russell, Hamer Field (Sheffield, B' Inside)

    Drewe, Cedric

    Liddail, Walter S.

    Salmon, Major Isidore

    Duckworth, George A. V.

    Lindsay, Noel Ker

    Salt, Edward W.

    Dugdale, Captain Thomas Lionel

    Lister, Rt. Hon. Sir Philip Cunliffe.

    Salter, Dr. Alfred

    Duncan, James A. L. (Kensington, N.)

    Liewellin, Major John J.

    Samuel, Sir Arthur Michael (F'nham)

    Eastwood, John Francis

    Lieweilyn-Jones, Frederick

    Samuel, Samuel (W'dsworth, Putney)

    Eden, Robert Anthony

    Lloyd, Geoffrey

    Sanderson, Sir Frank Barnard

    Edmondson, Major A. J.

    Loder, Captain J. de Vere

    Shakespeare, Geoffrey H.

    Elliot, Major Rt. Hon. Walter E.

    Lovat-Fraser, James Alexander

    Shaw, Helen B. (Lanark, Bothwell)

    Ellis, Sir R. Geoffrey

    Lumley, Captain Lawrence R.

    Shaw, Captain William T. (Forfar)

    Elliston, Captain George Sampson

    Lyons, Abraham Montagu

    Simmonds, Oliver Edwin

    Erskine, Lord (Weston-super-Mare)

    Mabane, William

    Sinclair, Maj. Rt. Hn. Sir A.(C'thness)

    2066

    2067

    Slater, John

    Sueter, Rear-Admiral Murray F.

    Weymouth, Viscount

    Smiles, Lieut.-Col. Sir Walter D.

    Sugden, Sir Wilfrid Hart

    White, Henry Graham

    Smith, R. W.(Ab'rd'n & Kinc'dine, C.)

    Tate, Mavis Constance

    Whiteside, Borras Noel H.

    Smith-Carington, Neville W.

    Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)

    Williams, Charles (Devon, Torquay)

    Smithers, Waldron

    Templeton, William P.

    Wills, Wilfrid D.

    Somervell, Donald Bradley

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

    Windsor-Clive, Lieut.-Colonel George

    Somerville, Annesley A. (Windsor)

    Thomson, Sir Frederick Charles

    Winterton, Rt. Hon. Earl

    Somerville, D. G. (Willesden, East)

    Titchfield, Major the Marquess of

    Withers, Sir John James

    Soper, Richard

    Todd, Capt. A. J. K. (B'wick-on-T.)

    Womersley, Walter James

    Sotheron-Estcourt, Captain T. E.

    Todd, A. L. S. (Kingswinford)

    Wood, Rt. Hon. Sir H. Kingsley

    Southby, Commander Archibald R. J.

    Tryon, Rt. Hon. George Clement

    Wood, Sir Murdoch McKenzie (Banff)

    Spears, Brigadier-General Edward L.

    Turton, Robert Hugh

    Worthington, Dr. John V.

    Spender-Clay, Rt. Hon. Herbert H.

    Vaughan-Morgan, Sir Kenyon

    Wragg, Herbert

    Stanley, Lord (Lancaster, Fylde)

    Wallace, Captain D. E. (Hornsey)

    Young, Rt. Hon. Sir Hilton (S'v'noaks)

    Stanley, Hon. O. F. G. (Westmorland)

    Wallace, John (Dunfermline)

    Steel-Maitland, Rt. Hon. Sir Arthur

    Ward, Lt.-Col. Sir A. L. (Hull)

    TELLERS FOR THE NOES.—

    Stones, James

    Ward, Irene Mary Bewick (Wallsend)

    Mr. Walter Rea and Major George

    Storey, Samuel

    Warrender, Sir Victor A. G.

    Davies.

    Strickland, Captain W. F.

    Waterhouse, Captain Charles

    Resolution agreed to.

    NEW CLAUSE.—(Tax on income from research studentships, etc.)
    (1) Income arising from a studentship the holder whereof is required by the regulations governing the studentship to devote himself to research work as a term or condition of his tenure of the studentship and who is not a person, receiving full-time instruction as provided by Section twenty-eight, Sub-section (1) of the Finance Act, 1920, shall be chargeable to income tax under Schedule E, Income Tax Act, 1918, and rules applicable to that schedule.
    (2) In this Section the expression "studentship" includes a fellowship, scholarship, exhibition, bursary, or any other similar educational endowment.
    (3) If any question arises whether any income is income arising from a studentship held as aforesaid, the Commissioners of Inland Revenue may, on the request of the Income Tax Commissioners concerned, consult the Board of Education.
    (4) In the application of this Sub-section to Scotland and Northern Ireland the Scottish Education Department and the governor, respectively, shall be substituted for the Board of Education.—[Sir J. Withers.]
    Brought up, and read the First time.
    Sir JOHN WITHERS: I beg to move, "That the Clause be read a Second time."
    The object of this Amendment is to ensure that certain stipends paid to research students at universities shall be treated, for the purposes of taxation, as earned income and not as unearned income. [Interruption.] The question has arisen owing to the decision of the Inland Revenue authorities, and calls for [Interruption].
    Lieut.-Colonel SANDEMAN ALLEN: On a point of Order. May I ask whether it is in order that there should be so much conversation in the House that one cannot hear what is being moved?
    Mr. SPEAKER: That is never in order.
    Sir J. WITHERS: I was saying that this new Clause proposes that the stipends paid to research students at universities should be treated as earned income and not as unearned income, as has been decided recently by the Inland Revenue authorities. The decision has caused a considerable amount of uneasiness. I will explain the position as it is. While students are undergoing their university course they have as a rule to take up a scholarship. If it is agreed that they are eligible for research work, there are, at Cambridge, for instance, 25 different funds in the hands of trustees which are set aside for the purpose of research work; that is to say, a student is paid a certain amount of income to enable him to carry out a definite scheme of research work in a definite direction. First, the student has to satisfy the experts that he has the ability for research work [Interruption] and he has to apply himself to it and to satisfy the rectors every year, or at shorter intervals, that he is doing his work properly. He is liable to be dismissed at any time if he does not carry out those commissions.
    I should have thought, and I think ordinary people would consider that if any income was received, that was earned income, but for some reason, and by some mistake, it has been treated as unearned income. I have had a very kind note from the Chancellor of the Exchequer saying that he appreciates what is being done, that he has looked into the matter, and I gather from his letter that he admits the principle that I have ennunciated, which is, that under the existing law the income ought to be treated as earned income. I understand that the Chancellor will in future give orders by administrative action that this principle is to be carried into effect. If he does

    2069
    that, and we are satisfied that the stipends will be treated as earned income in the future, I do not wish to press this Clause, but I should like that to be made clear because there has been a good deal of anxiety about it. I should like a clear pronouncement upon the subject.
    Major ELLIOT: I am glad to be able to give my hon. Friend the assurance which he desires. If an individual is getting a stipend on the terms that he is devoting a definite time to research on a special subject, he should be assessed under Schedule E, on the ground that there is employment and that the stipend is earned income. I hope, with that assurance., that my hon. Friend will not find it necessary to press the Clause.
    Sir J. WITHERS: Upon that definite assurance I would like to ask leave to withdraw the Clause.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Duty of trustees of discretionary trusts in respect of a beneficiary's liability to surtax.)
    (1) It shall be the duty of the trustees of any estate or fund, in whom is vested a discretionary trust as to the payment or distribution of the income thereof to or among beneficiaries, or the application of such income for the benefit of any beneficiaries, to retain out of any income or sum which, by virtue or in consequence of any exercise of such discretion, any beneficiary or object of the trust shall become entitled to receive, or to have applied for his or her benefit such a sum as will be sufficient to answer any claim of the Commissioners of Inland Revenue in respect of the Sur-tax payable upon such income or sum.
    (2) The trustees shall give notice to the Commissioners of Inland Revenue of such retention, and shall supply to such Commissioners all such details and information as the Commissioners shall require with reference thereto, and shall continue to hold the sum retained until either—

    (a) the Commissioners shall state in writing to the trustees that all claims for sur-tax in respect of the income or sum above referred to have been paid and satisfied, in which event the sum retained shall be paid or applied in accordance with the trusts affecting the income or sum out of which such retention was made; or

    (b) the Commissioners shall state to the trustees that, default having been made in payment of such surtax, they require payment to themselves of the sum retained, in which event such sum shall be paid to the Commissioners, and shall be applied in or towards satisfaction of the
    2070
    sur-tax due from the beneficiary in question.—[Sir G. Hurst.]

    Brought up, and read the First time.
    Sir GERALD HURST: I beg to move, "That the Clause be read a Second time."
    The purpose of this Clause is to provide a check against the abuse which exists at present by which beneficiaries who enjoy income under a discretionary trust, particularly in cases where there is also a protected life interest, have proved themselves to be able to avoid payment of Surtax over a number of years. This abuse claimed a good deal of publicity in the case of Sir Thomas Beecham in the courts on 30th April last. The facts were that the beneficiary, under a discretionary trust and with a protected life interest, was found to be enjoying an income of £18,000 a year and to have run up arrears exceeding £71,000 in respect of Super-tax and Surtax. Owing to this being a discretionary trust, the trustees had absolute power as to whether or not they would pay the income derived from this trust fund to this particular beneficiary. Owing to there being a protected life interest, the policy of the Inland Revenue authorities had been not to make the beneficiary bankrupt, because they feared they would lose all the arrears owing to the State. The result was that this particular debtor, who owed the State over £71,000, was able with absolute impunity, and without any interference or check by the authorities, to enjoy an income of over £18,000 a year. It is true the Attorney-General said that the Government hoped to arrive at some composition, something like 10s. in the £, but that did not carry with it the full rights, which the Crown should enjoy, and in all these different cases of discretionary trust the Crown has no power of control in regard to Surtax. The trustees may be liable for Income Tax, but the beneficiary, who is the only person liable to Surtax, has been able, and is able, to avoid payment.
    A week after that case there was another one, the Whitburn case, which came before the Court of Appeal, and in which Lord Justice Scrutton said it was a matter of legitimate inquiry how the State could allow a reckless spendthrift to run up an enormous debt of £63,000 while other people were struggling to pay Income Tax and Surtax. It is an extra-

    2071
    ordinary instance of the way in which some beneficiaries under trusts can avoid Surtax that these two debtors should owe the State over £134,000 Surtax while the great mass of the population are made to pay their taxes. One has to compare that impunity with the annual return of over 2,000 persons going to prison for non-payment of rates, and nearly 100 every year for non-payment of taxes. Of course, a more enlightening contrast is between these debtors and people who do, in fact, pay the tax. In every part of the country you have people pinching themselves, making sacrifices, to find the money to pay taxes, whereas these debtors avoid payment altogether. The object of the Clause is to provide simple machinery by which in some cases this avoidance of a national obligation to pay Surtax can be checked.
    The idea of the Clause is that it shall be the duty of the trustees to impound a certain amount of the income derived from the trust estate with a view to having funds available in the event of the beneficiary not paying the money himself. When the trustees are satisfied by the Commissioners of Inland Revenue that the beneficiary has paid the tax, the impounded income is released and goes to the beneficiary. This Clause is one which, I believe, is watertight. It does not go the whole way, but at all events, it would prevent the avoidance of Surtax in a very large number of cases. It may not go as far as one would wish, but it goes a certain way, and I think it would prevent a considerable number of the abuses which have scandalised the country. People feel that there is inequality before the law—that, while some are making great sacrifices, these splendid debtors are able to avoid those sacrifices with impunity. I hope that the Chancellor of the Exchequer will seriously consider this Clause with a view to accepting it and if possible enlarging it to cover a greater number of cases. It in no way increases the charge upon any taxpayer, but simply avoids the present inequality and unfairness.
    Major MILLS: I beg to second the Motion.
    My hon. and learned Friend is well qualified to speak from the legal point of view, and I desire to speak as a layman
    2072
    appealing for the simple taxpayer. The ordinary taxpayer like myself had never heard of the discretionary trust until some six weeks ago, when the Beecham case was before the courts, and he knows very little about the details now; but he knows that he is honourably and honestly doing his best in difficult circumstances to pay his share of the crushing burden of direct taxation, very often realising capital for the purpose of paying what is a recurring charge, and he resents it very much when he finds that richer men than himself are able, by such means as this, to escape their liability in regard to Surtax.
    It is obvious that in these difficult financial times the Chancellor of the Exchequer must be seeking in every possible way to mend any hole that there may be in his tax-gathering net, and I hope, as will other taxpayers, that he will be able to accept this Clause in the spirit in which it is offered—because it is meant to be helpful—or, if he cannot accept it in the precise form in which it is put down, that he will at any rate take up the idea and clothe it in words which he may be advised are preferable, because I am sure it ought to be possible to prevent such trusts from enabling spendthrift beneficiaries to escape their liabilities.
    11.0 p.m.
    Mr. CHAMBERLAIN: I have given careful consideration to this Clause, with a great desire to meet my hon. Friends. I have every sympathy with the purpose they have in view, but I cannot agree with my hon. and learned Friend the Member for Moss Side (Sir G. Hurst) that it is watertight or is a simple piece of machinery. I do not think it is possible for me to accept it, for the simple reason that it appears to me to impose upon the trustees of these discretionary trusts a duty which they cannot carry out. Consider what they are asked to do. They are asked to set aside, from the income which is to come to the beneficiary, a sufficient sum to meet any claims for Surtax which may be made upon him by the Commissioners of Inland Revenue. How on earth are the trustees to know what the claims for Surtax are going to be. They will depend, of course, upon the whole income of the beneficiaries, and the trustee will have no means of knowing what that income is going to be. It is

    2073
    quite possible that a particular individual might not only have income apart from the income derived from the discretionary trust. He might have not only income derived from investments of his own but he might be the subject of a second or a third beneficiary trust. It would seem to be quite impossible to ask the trustees to carry out the duty, which it is sought to impose upon them by the Clause as drafted. Having said that, I would say to the Seconder that I agree, that there is here something that requires to be remedied and I do not think it should be beyond our powers to devise some means of remedying it. But I do not think the thing is very simple or easy. It will require careful consideration and all I can promise at the moment —and I promise this—is that we will give our earnest and careful consideration to the subject and to the purpose which my hon. Friends have in view and will endeavour to find a Clause which shall be watertight and which shall not impose upon trustees anything that they are not able to carry out.
    Sir G. HURST: Having regard to what my right hon. Friend has said, which is satisfactory to everyone interested in the cause which the new Clause is designed to promote, I beg to ask leave to withdraw it.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Extension of relief under s. 32 of 8 and 9 Geo. V., c. 40, in respect of certain insurance premiums to premiums on insurances made with certain underwriters.)
    Section thirty-two of the Income Tax Act, 1918 (which provides for relief from tax in respect of life insurance premiums, etc.), shall be extended so as to apply to insurances made and annuities contracted for with underwriters, being members of Lloyd's or of any other association of underwriters approved by the Board of Trade, who comply with the requirements set forth in the Eighth Schedule to the Insurance Companies Act, 1909), as that Section applies to insurances made and annuities contracted for with such an insurance company as is mentioned therein.—[Sir A. Steel-Maitland.]
    Brought up, and read the First time.
    Sir ARTHUR STEEL-MAITLAND: I beg to move, "That the Clause be read a Second time."
    The object of the Clause is quite simple. Relief from Income Tax is already given
    2074
    in respect of some premiums on life assurance policies taken out by a man either on his own life or on that of his wife. At present this relief is only given in respect of policies taken out with insurance companies established in the United Kingdom or in the British Dominions and registered friendly societies. There is a growing practice to effect life assurance policies with underwriters, and the object of this Clause is to extend, as can quite properly be done, this relief from Income Tax to life assurance policies taken out with underwriters at Lloyd's and other underwriters approved by the Board of Trade. I think the interests both of the Revenue and of the insurers are well safeguarded by the last lines in the Clause which enact that the underwriters should be members of Lloyd's or other association of underwriters approved by the Board of Trade and the reference to the Eighth Schedule of the Insurance Companies Act means that the underwriters with whom such policies are taken out have deposited sufficient sums to form a proper guarantee and that those sums are invested in accordance with rules approved by the Board of Trade.
    Major ELLIOT: My right hon. Friend's proposal seems a most reasonable one, and I accept it.
    Clause added to the Bill.

    NEW CLAUSE.—(Penalty on misdescribing substances as beer.)
    (1) The following provisions of this Section shall have effect for the protection of the revenue arising from the Customs and Excise duties on beer.
    (2) If any person—

    (a) for the purpose of selling any substance, describes the substance (whether in any notice or advertisement, or on any label, or in any other manner whatsoever) by any name or wordy which is or are calculated to indicate that the substance is, or is a substitute for, or bears any resemblance to, ale, beer, porter, or stout, or any description of ale, beer, porter, or stout; or

    (b) sells, offers for sale, or has in his possession for the purpose of sale, any substance so described;

    that person shall be guilty of an offence under this Section unless ho proves that either the Customs duty or the Excise duty chargeable on beer has been paid in respect of the whole of the substance.
    Provided that a person shall not be guilty of an offence under this Section by reason only that he has, at some time between the

    2075
    commencement of this Act and the first day of October, nineteen hundred and tihirty-two, described any substance by any such name or words as aforesaid either on, or on a label affixed to, the container of the substance or the wrapper or other covering or partial covering of the container, or sold, offered for sale, or had in his possession for the purpose of sale any substance so described if he proves that containers, labels, wrappers, coverings, or partial coverings identical in all respects (including the name or words thereon) with the container, label, wrapper, covering, or partial covering used in the case in question were in use before the eighth day of June, nineteen hundred and thirty-two, for the purpose of describing the substance.
    (3) For the purposes of this Section the name "ginger beer" or "ginger ale" shall not in itself be taken to be calculated to give any such indication as aforesaid.
    (4) Any person guilty of an offence under this Section shall, in respect of each offence, be liable on summary conviction to a fine not exceeding one hundred pounds, and on the conviction of a person under this Section the court may order that any articles by means of or in relation to which the offence has been committed, shall be forfeited, and any articles so directed to be forfeited shall be destroyed or otherwise disposed of as the court may direct.—[Colonel Gretton.]
    Brought up, and read the First time.
    Colonel GRETTON: I beg to move, "That the Clause be read a Second time."
    The Clause looks formidable because of its length, but its purpose is quite simple. Owing to the excessive taxation of beer, and especially during the last two months or so since the decision of the Chancellor of the Exchequer to continue the increased Beer Duty during the present financial year, a large number of so-called non-alcoholic beverages called beer, stout or other names have been offered for sale. Vested interests are growing up which are endangering the revenue and competing with the legitimate brewing trade. The Clause proposes to prohibit the use of the names of ale, stout, beer or porter or any such designation of any liquors or articles which have not to pay Customs or Excise Duty. The revenue insists that the beverages subject to Customs and Excise shall be a certain gravity and that below that gravity no brewer shall be allowed to brew any beverage. The Clause makes the same arrangement as
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    regards the general public, that those who want to sell teetotal drinks which are not alcoholic shall find for them some other name than that of beer, ale or stout. The second part of the Clause gives a three months' moratorium to dispose of stocks of any such articles or substances prepared for sale, and the final part of the Clause saves the old-fashioned name of "ginger beer" or "ginger ale" which can by no means be mistaken for brewers' ale or beer. I need hardly say that the Clause has been carefully drafted and, if agreed to by the Government, will give some assistance to the brewing trade which is now bearing a heavy rate of taxation and struggling against great difficulties. It will also safeguard the revenue. The interests of the brewers and the revenue are one in this matter, and they want to preserve the names of beer, ale and stout to those articles which pay Customs and Excise Duty.
    Major ELLIOT: It certainly seems to be a reasonable proposal that those who pay very heavily for the right to use a name should be protected, and it is my pleasure on behalf of the Government to accept the Clause.
    Clause added to the Bill.
    Ordered, "That further Consideration of the Bill, as amended, be now adjourned."—[Captain Margesson.]
    Bill, as amended, to be further considered To-morrow.

    PATENTS AND DESIGNS [EXPENSES].
    Resolution reported:
    "That, for the purpose of any Act of the present Session to amend the Patents and Designs Acts, 1907 to 1928, it is expedient to authorise the expenses of the Appeal Tribunal to be constituted under the said Act to be defrayed as if the Tribunal were a Court of the High Court of Justice."

    RATING AND VALUATION [No. 2] BILL [Lords].
    Read a Second time, and committed, to a Standing Committee.

    GAS UNDERTAKINGS BILL [Lords].
    Ordered,
    "That it be an Instruction to the Committee on the Gas Undertakings Bill [Lords] that they have power to insert a provision making the Bill applicable to all gas undertakers to whom the Gas Regulation Acts, 1920 and 1929, apply."—[Mr. Clarry.]
    The remaining Orders were read, and postponed.

    ADJOURNMENT.
    Resolved, "That this House do now adjourn."— [Captain Margesson.]
    Adjourned accordingly at Twelve Minutes after Eleven o'clock.

UNEMPLOYMENT.
  COMPAEATIVE STATISTICS.
  COMPAEATIVE STATISTICS.
  ROYAL AIR FORCE PARK, PETERBOROUGH.
  ROYAL AIR FORCE PARK, PETERBOROUGH.
  TRANSITIONAL PAYMENTS.
  TRANSITIONAL PAYMENTS.
  LONDON.
  LONDON.
  ELECTRICITY SUPPLY.
  ELECTRICITY SUPPLY.
  OLD AGE PENSIONS.
  OLD AGE PENSIONS.
  POOR LAW RELIEF, DURHAM.
  POOR LAW RELIEF, DURHAM.
  SMALL-POX.
  SMALL-POX.
  JUDGES (SALARIES).
  JUDGES (SALARIES).
  ALIENS (BRITISH WIVES).
  ALIENS (BRITISH WIVES).
  ROAD ACCIDENTS (POLICE REPORTS).
  ROAD ACCIDENTS (POLICE REPORTS).
TRADE AND COMMERCE.
  LILY BULBS (IMPORT).
  LILY BULBS (IMPORT).
  BARLEY (IMPORT).
  BARLEY (IMPORT).
  AGRICULTURE (NORTHAMPTONSHIRE).
  AGRICULTURE (NORTHAMPTONSHIRE).
Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
COMMERCIAL GAS BILL.
Read 2a, and committed.
SOUTH SUBURBAN GAS BILL.
Read 2a, and committed.
SOUTH METROPOLITAN GAS BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
TOWN AND COUNTRY PLANNING BILL.
Brought from the Commons; read 1a; and to be printed.
THAMES CONSERVANCY BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered, and agreed to.
COATBRIDGE DRAINAGE ORDER CONFIRMATION BILL.
Brought from the Commons; read 1a, to be printed, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899) deemed to have been read 2a and reported from the Committee.

GRANGEMOUTH AND STIRLING WATER ORDER CONFIRMATION BILL. [H.L.]
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I beg leave to introduce a Bill to confirm a Provisional Order under Sections 8 and 9 of the Private Legislation Procedure (Scotland) Act, 1899, relating to Grangemouth and Stirling Water; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Strathcona and Mount Royal.)
On Question, Bill read 1a; and to be printed.

SOUTH YORKSHIRE AND DERBY- SHIRE GAS ORDER, 1932.
LORD TEMPLEMORE: My Lords, I beg to move that the Motion standing in my name with reference to this Special Order, be approved.
Moved, That the Special Order, as reported from the Special Orders Committee on Thursday last, be approved.—(Lord Templemore.)
On Question, Motion agreed to.

COAL MINES BILL.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM): My Lords, I confess that it is with some regret that I find myself compelled to invite your Lordships to give a Second Reading to a Bill dealing with the coal mining industry. It has always seemed to me almost a tragedy that in the coal mining industry, which is certainly one of the most important, if not the most important, of the industries of this country, it should have proved so often impossible for the persons engaged in the industry to compose their own differences, to regulate their own affairs, and that it should so often have been necessary for Parliament to intervene and to give a decision upon matters as to which the miners and the mine-owners were quite unable to reach any satisfactory agreement. But it is, I think, manifest that it would be quite unthinkable that Parliament or the Government should allow the fact that the partners in this industry were unable to agree with one another, to paralyse its continuance. It is impossible that we should allow them, in the effort to work out their own salvation, to accomplish only their own common destruction. The industry itself is one whose continuance is essential to the well-being of our country. In addition to its own primary importance it is the source of power, light and heat to every industrial and domestic consumer, and it is vital that its continuance should be assured.
In approaching the consideration of any of the problems to which the regulation of this industry gives rise one is of necessity hampered and trammelled by the previous Parliamentary history of the political
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organisation and political regulation of the industry. There are three or four matters with regard to which Parliament has found it necessary to intervene and to impose regulations. There is the question of hours; there is the question of production; there is the question of prices; and there is the question of wages. In the present Bill three of those matters, hours, prices and production, are dealt with. The question of wages is not directly dealt with, although, as I shall presently explain to your Lordships, it is very closely linked up with the Bill and has been carefully safeguarded in the settlement of the form which this Bill takes.
First of all with regard to hours. I mention it first, although it comes last in the Bill, because it is the question of hours which makes immediate legislation an absolute necessity. As your Lordships are aware, by a series of Acts of Parliament the permissible hours of work are to-day fixed at 7½ hours per day, but unless Parliament intervenes that figure will be altered in exactly one month—namely, on July 8—and will fall to 7 hours a day. No one, I am quite sure, would wish that the hours spent in work, and especially work underground in a hazardous occupation such as coal mining necessarily is, should be fixed at too high a figure. Most of us, I think, would be very glad if it were possible to allow the Change to take place and 7 hours to be substituted for 7½, but, my Lords, that is plainly impossible in the present state of world trade. If 7 hours became the rule in July next the result must be a considerable increase in the cost of production, which would of necessity involve the loss of a great part of our export trade, and it would cause either an increase in price at home, which the domestic consumer cannot afford, or else a fall in wages to compensate for the increased cost of production, which the miners could not be asked to accept. Accordingly, I think there is common consent in the industry that the existing limit of 7½ hours must be continued.
The question, then, which the Government had to solve was whether that extension should be for a limited period. The last Act of Parliament continued the 7½ hours for one year. It has seemed to the Government that to continue the fixation of hours for a fixed and comparatively short period so that

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at the end of that period the hours would automatically be altered, would be a great mistake. It would involve the assumption to-day as to what conditions would prevail in, say, a year's time, a matter which I suppose no man could be so bold as to prophesy with any sort of assurance, and it might involve that when the allotted time expired it would be necessary for Parliament once again to intervene and interfere, and Parliamentary interference, we think, should be discouraged as much as it is possible to do so. Accordingly the method the Government has adopted has been to extend the hours from 7 to 7½ so long as the proposed Convention which will limit hours in competing countries remains unratified.
As your Lordships know there has been an International Convention drafted which will reduce the hours in the case of those countries which ratify it to 7¼ per day, and the attitude which His Majesty's Government have adopted is that, provided certain modifications can be obtained with regard to which there ought not to be much difficulty, they would welcome the ratification of that Convention and would ratify it themselves if the main competing countries in Europe are able to take the same course at the same time; because to reduce hours in this country while leaving them unaltered in other parts of the world would merely mean that we should lose trade to competitors who are already making very serious inroads into our export business. Accordingly, His Majesty's Government have announced that so soon as the seven principal competing countries are in agreement with ourselves and are prepared to ratify with the modifications which I have mentioned, we shall for our part be prepared to ratify and we shall be prepared to introduce the necessary legislation to give effect to the Convention.
We have already secured the adherence in principle of, I think, five out of the main competing countries and therefore there is a very reasonable hope that before a very long time it may be possible to secure ratification, although I should be misleading your Lordships if I were not to point out, firstly, that even after the agreement to ratify has been made a certain interval must elapse before the
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actual ratification and the necessary legislation has been passed; and, secondly, that there is a period prescribed in the Convention of, I think, six months before the actual change in hours takes effect. But the method we ask the House to approve with regard to hours is that we extend the time permissible from July 8 next to 7½ hours, which is the existing period, until such time as that Convention becomes effective.
The second matter which requires dealing with is the regulation of production and prices. As your Lordships know, by the Coal Mines Act, 1930, district schemes were set up in the different parts of the country under which district boards were chosen by the coalowners in each district and those boards prepared schemes which regulated the production of each mine and regulated the minimum price at which it was permissible to sell coal. The question which the Government had to determine was whether or not those provisions should continue in force. Under the 1930 Act they would lapse in December of this year. We took pains to ascertain the views of those directly interested in the industry. The workers, through the Miners' Federation, expressed a strong desire for the continuance of the Act and prepared a very careful, reasoned statement of their grounds for that desire. The Mining Association, which, as your Lordships know, is the body representative of the coalowners, was divided in opinion, but the majority of the Association expressed the same view as the Miners' Federation and desired that the Act should be continued. The coal merchant exporters desired that it should not continue, but it is fair to remember that the interest of the exporting merchant is merely to sell as much coal as possible abroad regardless of the price so long as the price at which he is able to sell exceeds that at which he is able to buy. The question whether or not the production is profitable for the mine owner, or whether the wage paid is one which the miner can fairly be asked to accept, is a matter which does not affect him commercially at all. The retail merchants expressed themselves in favour of the continuance of the Act. Accordingly it seemed to the Government that there was a very considerable preponderance of opinion of those directly interested in favour of the Act being continued.

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It is fair also to say, and I think material to remember, that one result of the Act so far has undoubtedly been to maintain prices in this country at a very stable figure when they were fluctuating much more widely in other parts of the world. If you compare 1929 with 1930 and 1931 your Lordships will find that there has not been a difference of morethan 3d. or 4d. per ton and that practically in 1931 the price was within 1d. of the price prevailing in 1929. It is fair also to remember that the export of coal, although it has dropped, has dropped not owing to any operation of the quota system, but owing to the restrictions which have been placed in our main markets abroad against the importation of British coal. In France, Germany and Italy regulations have been adopted—with regard to same of which we are now in negotiation with the Governments of those respective countries—which have had a very damaging effect on our export trade and which would equally restrict its size whether the price were raised or lowered. It is fair also to remember that in the case of one of our principal competitors, Poland, by means of an export levy equivalent to something like 1s. 6d. per ton bounty on export coal, they have been able largely to reduce their prices, and there is no reasonable cause to doubt that merely a reduction of price in our export coal would not result in any increased sale for our products. It would result in a very considerable loss to our collieries, possibly in the closing of some of our mines, and it certainly would have a very disastrous effect on the industry as a whole.
We are advised further that if the regulation of production and of price imposed by the 1930 Act were removed the effect must be such a competition as would bring down the price of coal very materially—the best estimate seems to be not less than 2s. a ton. In those circumstances his Majesty's Government have thought it right to ask Parliament to continue the operation of the Act of 1930 for a period of five years; that is to say, until December, 1937. That has the additional advantage that in this trade in which contracts are made for a considerable period in advance the fact that the Act is continuing until 1937 will assist our merchants and producers to make
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their contracts with a reasonable certainty as to the conditions under which they will be able to obtain the coal which they desire to sell.
Then I come to the third of the four matters which are regulated by Parliament, the question of wages. There is in the Bill no provision regulating wages, and that matter has been made a subject of criticism in another place. But the fact that no such provision is contained in the Bill does not mean that the Government has not been able to make any effective provision for regulating wages. We have, in fact, it is true after very considerable difficulty, been able to secure from every district in the country a guarantee that for twelve months to come—the whole of the next year—wages shall not be reduced. While I for my part have more than once felt it my duty to say some things in criticism of the mine owners, I am bound to confess that in giving that guarantee it seems to me that the mine owners were making a very great concession towards peace and prosperity in the industry. In almost every other country in Europe—I think I might say in every country in Europe—wages have been substantially reduced in the mining industry during the last twelve months. In this country they have remained stable. Since the cost of living has dropped considerably, the miner is actually better off in real wages to-day than he was twelve months ago. That is not true in any other country in the world. In the face of that fact, and in face of the fact that many of our mines to-day, unhappily, are producing at a loss, and in face of the fact that the whole industrial and economic outlook in the world is one of considerable uncertainty, the giving by the mine owners of a guarantee that wages shall not be reduced for twelve months seems to me to have been a courageous as well as a generous act on their part.
Criticism has been directed against us because the guarantee is only for twelve months. I wonder whether in any other European country the miners would not be astonished, as well as profoundly grateful, if they were able to obtain an assurance that for the next twelve months they were not going to have any reduction of their wages. At any rate that is what we have been able to secure for the miners by arrangement with the

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mine owners. What will happen twelve months hence no man dare prophesy, but one hopes that by reorganisation it may be possible further to reduce costs in this country. One hopes that during twelve months industrial conditions generally will improve, and we are confident that the mine owners will be willing to act reasonably and fairly and to continue the wages which they are at present paying, if it is at all possible for them to do so. At any rate, it has seemed to His Majesty's Government that in securing that concession from the mine owners we have achieved a great deal in support and in help of the miners; and we believe that, by securing that guarantee, we have done much more for them than we should by seeking to impose on the mine owners a statutory obligation for an indefinite period, which circumstances might later on make it impossible to fulfil.
The Bill is a very short one. It consists only of two clauses, of which Clause 2 only provides for the Short Title and exemption of Northern Ireland. By Clause 1 (1) Part I of the Coal Mines Act is continued, as I have explained, till the end of 1937, and by subsection (2) all the existing limit of hours is continued indefinitely until such time as the International Convention comes into force. I at least profoundly hope that, although Parliament has so often had to intervene in this industry, in future wiser counsels will prevail—I am not seeking to apportion blame to one side or the other—that these people whose livelihood and prosperity depend upon the prosperity of their industry will realise that they are partners together in that industry, that the way for each party to gain the best results is not by hindering but by helping the other party, and that by co-operation agreements will be achieved which will render it unnecessary for Parliament in the future to impose a decision from outside. I beg to move.
Moved, That the Bill be now read 2a.—(Viscount Hailsham.)
LORD SNELL: My Lords, the proposals of this Bill, with all that they mean for an industry which is vital to the well being of the State, as well as to the people who are engaged in its service, have been so fully discussed in another place that, quite apart from the speech
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which we have heard from the noble and learned Viscount, its alleged virtues and its merits or demerits must be well established in your Lordships' minds. It is, however, my duty to offer a few reasons why we regard this Bill as unsatisfactory, both from the standpoint of the nation's needs and from that of the needs of those who have to earn their bread at the face of the coal. I do so with every sort of personal disadvantage, because I am neither a coal owner nor a. miner, nor have I any personal practical experience of its many and its complicated problems; but I do know something of the opinions of those whose lives have been spent in the industry, and I will endeavour in as few words as possible to explain to your Lordships what I conceive those opinions to be.
The Bill as presented to us is in the main, call it what you will, a Mine Owners' Relief Bill. It aims to safeguard them while giving them yet another opportunity so to organise their industry as to rescue it from the stagnation and decay in which they have allowed it year after year to degenerate. The noble and learned Viscount has given your Lordships the details of the proposals concerned. Subsection (1) of Clause 1, as I understand it, means that the Coal Mines Act of 1930 is to be extended until December 31, 1937: that is to say, it gives to the coal owners five years in which to undertake the belated task of putting their house in order. We, on these Benches, are in favour of this part of the Bill, because the need for reorganisation is so urgent and overdue, but I think I ought, while agreeing to this part of the Bill, to say to the coal owners that the nation as a whole is thoroughly and completely weary and ashamed of these perpetually recurring crises in an industry which is so necessary to its full well being, and that it is impatient that something drastic in the way of reorganisation should be undertaken.
One hesitates to think of what Parliament would be like if every industry in the country so persistently and so obstinately mismanaged its affairs that almost every year those in charge of it had recourse to the good will of Parliament to rescue it from the perils of mismanagement. We feel that the nation has entrusted to the coal owners functions of the very first importance to its welfare, and if they, either

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from incapacity or perversity, continually fail it, then some other arrangement will have to be made for the industry to be carried on. The coal would not vanish if the coal owners were to depart, but many of the difficulties associated with the industry would undoubtedly do so. Our fear in agreeing to subsection (1) of Clause 1 arises from the fact that the experience of the past gives no one any right to believe that reorganisation, which should have been undertaken ten, twenty years ago, will be faced with any enthusiasm during the five years for which this Bill provides.
The provisions of the Bill in themselves will not restore prosperity to the coal industry. It does nothing in that respect. It does not impose reorganisation upon the coal owners; it merely gives them the time in which to reorganise, if they at long last feel inclined to undertake the task. Thus, for the next five years, the owners are guaranteed against interference, during which time they are, let it be noted, given a complete control over the methods of output and of sale. They therefore should accept the Bill quickly and with great enthusiasm. They may rest assured, I think, that His Majesty's Government, so long as it lasts, will prove indulgent to them, but prudence would suggest that they should not rely too much upon what may in due time supersede it. Their joy over this Bill is with great difficulty hidden. For instance, in the Colliery Guardian of last week, which may be said to represent the owners' opinion, it was stated:
"We think the Government, in escaping from the toils of a time limit, has met the situation in a rational way which will commend itself to the general body of coal owners. The seven and a-half hour day is to be continued indefinitely or until the Geneva Hours Convention is ratified by all the Powers; so far as can be seen at present, Spain being the only European country to ratify, this is a contingency that need not cause many sleepless nights."
Precisely. That, my Lords, represents the old bad spirit which has brought trouble to this industry, and it seems to be, in addition, an affront to Parliament itself.
Your Lordships should not regard the difficulties of the coal industry, as we know them, as new or as having caught the owners unprepared. No industry in the country, I venture to say, has been more completely and keenly aware that
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things were drifting towards an increasingly dangerous position. It was, for example, stated the other day in another place by Mr. Runciman that the conditions in 1932 are worse than in 1930, and that since 1924 one-fifth of the total mines then at work have gone out of operation, so that the condition of the mines at present is one which must have been very clear to the minds of those engaged in the industry for a long time past. Therefore, I submit, with these facts before us, and before we allow the owners another five years of undisturbed sleep, we ought to ask the Government what it proposes to do if at the end of one year or two years the owners have not awakened from their sleep to undertake their duties. That is so far as subsection (1) of Clause 1 is concerned.
In regard to subsection (2) of Clause 1, which deals with the hours of labour, as I understand it this is to continue in force until, through the International Convention, an arrangement recently made has been ratified. I should like to ask the Government with great sincerity and earnestness for some information on this point. Mr. Runciman the other day said that "immediately the Geneva Convention is ratified by the seven principal coal-producing countries in Europe we shall be parties to the ratification." Is it seriously proposed that England should do nothing until every other country has ratified the Convention, that we shall be the last instead of the first to undertake it? I was not clear from what the noble and learned Viscount said whether some modification of Mr. Runciman's statement is not possible. I have to deal with it according to the words set down. To the miners this question of hours is, as your Lordships know, one of the utmost importance, and I ought to make it clear that they regard this proposal with the utmost dislike and with grave apprehension.
It seems to be necessary that we should enquire into the origin of the legislation which this Bill is to replace. Prior to the Coal Mines Act, 1926, the miners worked 7 hours plus one winding time, which gave an average of about 7½ hours underground. In 1926 the Conservative Government added an hour to this time, making 8½ hours underground, which was a longer time than the miners in any country

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worked. We have heard from the noble Viscount this afternoon how much better off our miners are than those of any other European nation, but the fact is that by this Act of 1926 our miners were compelled to work longer than those of any other country. This arrangement was limited to five years and the miners looked forward to the end of that period with the hope that the old conditions would be restored. They thought that during this period a drastic reorganisation of the industry would take place, which would enable the mine owners to agree to their demand for reduced hours.
What happened? Instead of that reorganisation being undertaken, the mine owners immediately began a competitive warfare amongst themselves, which reduced the industry to lower levels and at the same time made reorganisation very much more difficult. By last year the conditions had grown so had that the Labour Government, then in power, could only nibble at this hour and reduce it only by half an hour. In spite of that, the position was again accepted by the miners in the hope that by the end of twelve months better terms would be possible. In this respect the Prime Minister gave a quite specific undertaking, which should not be overlooked in dealing with this matter. I ought to say that it was not made in Parliament but to representatives of the men who interviewed him. The Prime Minister said:
"We shall certainly not allow the owners to go on during the next twelve months without making preparations for meeting the circumstances at the end of the twelve months and we will insist upon bringing before them their duty so as to put the industry in a position to expand when the twelve months are over, expand either in the sense of reducing hours or of giving more wages as you agree with them—or national negotiation, but that is a red rag to a bull. However, even that will come when you get to the right position, although it will not come at the moment."
Nobody suspects that the Prime Minister did not intend to fulfil that promise, but he miscalculated the strength of the selfish inertia of the mine owners on the other side.
When the miners protested, they were told to be patient; they were to await the effect of the marketing scheme. Again the miners agreed to be patient as requested and hoped that some real endeavour would be made to organise the industry, and they attempted to en-
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courage better relationships so that at the end of twelve months the owners and themselves could arrive at conclusions which would be mutually agreeable and helpful. Perhaps I might quote to your Lordships what was said in the House of Commons by Mr. Edwards, who is now the responsible secretary of the Miners' Federation, a man of great judgment and of great moderation and whose word is in every way well worthy of your Lordships' attention. He said:
"It is not my intention to say a single word derogatory to the employers. After all, this is a political discussion in this House, and we are all agreed that if this industry has to be built up on a sound basis, we must negotiate in the best possible spirit with those with whom we shall have to work in the future. I do not think there is any necessity for a crisis arising at the end of twelve months. … We want to utilise from now onwards—and I take the opportunity of making the offer to the employers now—we want to utilise from now onwards the two great national organisations so that we may not only maintain the existing conditions in the industry, but by joint conscientious and considered action, we may be able to build that industry higher towards the day when it can give to our men a living wage—a real wage on which they can live."
As the matter stands to-day, the miners' representatives believe that the failure is due to the refusal of the owners to negotiate with them on conditions. The owners would not agree even to meet the miners until they were required by the Government to do so, and, when they met on April 7, they would not then enter into anything like negotiations. They refused to discuss wages, they insisted upon a 7½ hour day, and both parties reported the interview to the Government. The owners were persuaded by the Government to renew the interview, which took place on the 28th April, and all the owners would offer was precisely the same as is contained in this Bill. The note, which was taken and presented to His Majesty's Government on this interview, was as follows:
"The owners proposed 7½ hours without limit of time save such as might result from legislation ratifying an International Convention adopted and applied also by the other coal-producing countries.
The representatives of the Miners' Federation said that the Federation could not agree to this unless there were satisfactory guarantees on wages.

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The owners intimated that, provided legislation were passed continuing the 7½-hour day without limit of time save as indicated above and without reference to wages, they could secure guarantees for wages from the districts for twelve months similar to those given last year.
The representatives of the Miners' Federation said that they could not accept such guarantees as satisfactory unless (1) they extended for the same period as that of the duration of the 7½-hour day, or (2) if limited to twelve months national machinery were established for regulating district changes of wages thereafter."
The present Bill is therefore precisely that of the mine owners themselves. No concession whatever has been made to the workers and it is therefore, as I said at the beginning, a Mine Owners' Relief Bill and there for the time being I shall have to leave that aspect of it.
I desire, however, to say one or two words on the vital question of wages. Mr. Baldwin, in another place, gave an honourable undertaking that wages would not be reduced within one year, and I gather from the noble Viscount that the miners' representatives and the workers ought to feel very happy at that prospect. But this honourable undertaking is one which I understand cannot be enforced at law, and even while Mr. Baldwin was speaking the Secretary for Mines was informed by a group of owners that they would not keep to the agreement—or rather, I ought to say, that they would withdraw from the agreement. It may be some consolation to a miner earning some few shillings a week that for a year his wage will not be less, but what is to happen after the twelve months are over? Is the reduction merely postponed? In 1920 the average wage of a miner in this country was £224; in 1931 it was £111. That represents, I understand, a fall of something like a thousand million pounds. Therefore the miners have made their sacrifice for the industry, and I should like to know how far the owners have endeavoured to mitigate the sacrifices of the workers by bringing their side of the industry up to an efficient standard. The result of this reduction is, of course, obvious. The home market has been demoralised, shopkeepers and manufacturers have been unable to sell their goods.
The plain facts of the case appear to me to be these: the miners are to be
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asked to work indefinitely hours which the Secretary for Mines admits are too long, for wages which everybody except the coalowners admit are too low, with the knowledge that until the seven coal-producing Powers have ratified an arrangement nothing is to happen. The miners are to accept these conditions with the probability that in twelve months time they will be placed in a worse position than now, whilst on the other hand the owners are given five years of undisturbed sleep before anything is likely to happen to them.
My last word on this important measure has to deal with the question of the relationships between the miners and the owners. The Bill does not deal with this, yet it is a most vital factor. I cannot close without expressing my own belief, for what it is worth, that the Miners' Federation, with the urgent needs of the men upon their hands, have maintained throughout these difficult times a level of courtesy and of give-and-take of a high order and have shown an understanding of the main problem which has been worthy of the best traditions of trade union practice. They alone at this time, in face of grievous disappointment, have decided to endeavour still further to pursue the hitherto fruitless way of reason and accommodation. We feel, my Lords, very strongly that if this Bill is passed it should provide some machinery for an emergency which may arise twelve months hence. It would be short-sighted on the part of your Lordships to pass this Bill feeling that the next twelve months may take care of themselves and that in the end everything may be all right. There may be a very grievous danger to the nation's industry at the end of that period if things are allowed to drift. The owners, of course, have their difficulties. They are fairly well known, and it is not my business to explain those difficulties because I am sure they will be explained by other speakers. I have endeavoured to the best of my ability—I hope with fairness and with the modesty which becomes a layman—to place before your Lordships the viewpoint of the working miner whose character and capacity are beyond question, and who, like the coal owner, wishes his industry to prosper for the good of himself and the owner as well as the nation as a whole.
LORD GAIKFORD: My Lords, I am glad the noble Lord who has just addressed you has thought it well to repeat some of the allegations which have been uttered in another place with no representative of the coal owners to reply. I think he would have been better advised if he had adhered to the words of Mr. Edwards when he said that he was not prepared to say anything derogatory of the coal owners, but he has gone out of his way not only to say that the coal owners are asleep but to attach great blame to them for the depressed condition of their industry and—to use his own words—for obstinately mismanaging their industry. He used other adjectives on which it is not necessary for me to dwell. What I feel is that this Bill is not a Coal Owners' Relief Bill, as he stated. The Government, when they hear it said on one side that this is a Coal Owners' Relief Bill and when they hear another noble Lord—myself—say that it is not, may take the view that they have adopted the right course in introducing it, since neither party is satisfied with this measure.
I want to represent to your Lordships that this Bill only meets the owners' point of view to the extent that the Government have been wise enough—the late Government were not wise enough—to prevent recurring crises in the industry by fixing the limitation of hours for an undefined period. This is a question which inevitably causes differences between the owners and the men and is a cause of great disturbance. The Government have wisely adhered to the present hours, and I am sorry that the miners, who recognise to the full to-day that no shorter hours are possible in the present depressed condition of the industry, have not helped in securing the regulation on a permanent basis of hours which they recognise to-day are the hours which can reasonably be expected.
The noble Lord who has just sat down spoke of the refusal of the owners to meet the men. We have never refused to meet the men in connection with any legislative proposal. On the contrary, before the Government came near us we approached the miners and the Miners' Federation about the proposals in this Bill. We invited them to consider with us proposals on hours of work. It is perfectly true that the Miners' Federation
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and the Mining Association of Great Britain cannot discuss wages, for the very simple reason that in 1926 we had a difference of opinion as to whether a body like the Miners' Federation, which had political objects which they desired to promote and which were not objects which helped the industry, should in future regulate wages or whether we should have regulation of wages by districts. We decided that in 1926, and, from 1926 to the present time, the owners have met the miners' leaders in every district, considered all questions of wages, and made their agreements with the miners. We are all working quite smoothly with the men's leaders in our districts, and we are not influenced, to-day, by the Miners' Federation in connection with our wage settlements. We propose to continue that method, because we prefer meeting the men in our districts, who know the circumstances and conditions in the districts far better than individuals who happen to be promoted to the executive of the Miners' Federation.
The conditions to-day are admittedly more difficult than they were a year ago, and merely to talk about rationalisation and nationalisation, and not to deal with the difficulties of the situation, does not really carry us any further. The difficulties of this industry are very much the same difficulties as those of all the other great industries of this country. If you take agriculture, are the land owners alone to be blamed for agricultural conditions? Are the owners of cotton mills alone to be blamed for the depression in their trade? Are those engaged in any other trade which is depressed to be blamed because of that depression? The owners have been doing their best in very difficult circumstances. They have, under pressure from the Government, undertaken to continue the present percentage rates on wages. They cannot guarantee wages in the way the noble Viscount stated when he introduced this Bill, or in the words of the noble Lord behind me. When men are working on piece, as all the hewers do, you cannot guarantee that each man is going to receive the same wage, day by day, but we do guarantee that the subsistence wage, which is the minimum wage a man can secure on datal work, and the percentages which have been in force during the last year, shall be continued for another year.

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We have voluntarily entered into that arrangement, and although the noble Lord said it could not be guaranteed in one district, I am informed that that district has come absolutely into line with all the other owners, and that there is an honourable undertaking that these percentage rates shall continue during the next year. But we recognise that we are running considerable risk in undertaking that guarantee, and, as the noble Viscount said, who can foretell what are the circumstances which are going to prevail during next year? What is most important to the men is that they should have their wages and employment, and that the collieries should be carried on. What is more important to the men even than the particular percentage paid is the purchasing power of their wages, because if the cost of living goes down they will naturally be better off. Therefore that is far more important than the undertaking we have given them.
We have entered into these serious obligations really in order to try to secure peace in the industry. We are losing money. The last accountant's certificate for the two years 1930–31 indicated that the whole industry made £3,800,000 in 1930, and £2,800,000 in 1931, but the accountant's certificate does not include a great number of items in our costs which are not produced in those Parliamentary returns and we know, with the increased overdrafts at the banks, that we ought to add at least 6d. to our costs above the figure given in the Parliamentary returns; or in other words, in both the last two years the aggregate loss in the industry has been over £1,000,000 in each year, and we have had practically no fresh capital to put into the industry. When the noble Lord behind me talks about the necessity of owners expanding their industry, I say that they are only too anxious to expand it, and if you could find the capital many of us could invest it with advantage to the industry; but who is going to put money into an industry which is not making profits? Unless you are making profits there is great difficulty in finding the capital with which to secure the greatest economy in the production of coal.
Our main losses have been attributable to the fact that one-fifth of the collieries have gone out of production for the
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moment, and a great number of these have obviously to be maintained under the lease provisions, and in order to keep them available for coal getting in the event of the demand for coal increasing in the future. If it does not increase the collieries might have to be closed down, and a great deal of the coal lost to the nation for all time. Therefore, certain expenditure has to be undertaken to prevent the absolute loss of the coal in the various coal mines in the country; but if we had been able to secure, under the wage agreement made in 1926, 15 per cent. of the proceeds of the industry, which was the amount we received as owners prior to the War, we should have been able to put into our pockets £77,000,000 since 1926. That sum has been spent in paying the minimum rates of wages, so as to guarantee the miners a minimum percentage, throughout the last six years, and but for the loss of that £77,000,000, which in ordinary results we should have been able to secure, it would have been possible to keep the industry up-to-date, and to pay many poor people some percentage upon their investments in the industry.
I want to say something about a question which is vital to the industry. It is true that there have been reductions in our export trade. To what is that attributable? It is attributable to our costs being greater than those in foreign countries. Our precarious position is not only due to the higher wages which we pay as compared with those paid in other countries, but to the fact that we are handicapped by higher railway rates, by levies imposed by Parliament, and by constant interference with the hours of labour by legislative enactment. The result is we are up against a very difficult proposition in securing new markets for our export trade. Whilst we have been able to maintain constantly our rates of wages during the last two years, nearly every other industry has been suffering from a reduction in wages. In Belgium the miners' wage have been reduced 25.7 per cent., in France 12.8 per cent., in the Saar 13.5 per cent., in the Ruhr 21.4 per cent., in Poland 8 per cent., and in the Netherlands 14.4 per cent. It is very difficult to carry on an industry like ours when you are competing with a country like Polish Silesia, with wages just half what they are in this country.

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We are up against a very difficult problem when our railway rates have to be taken into account. In other countries large subsidies are paid to enable the coal to reach the ports at much lower rates than the normal railway rates.
I should like to ask the noble and learned Viscount if he can tell us this afternoon, or at any time which would suit his convenience, what the Government are doing to try to secure for us those rights and privileges which we believe ought to be secured for our export of coal to France, Italy and Germany particularly. We know that the Government have been making representations, but when we have honourable undertakings, as from Germany after the War, that no preferential position would be afforded to any other nation in comparison with Great Britain, it is unfair to find that that country has been importing coal from other countries in preferential quantities. What the coal trade wants to know is the result of the representations which have been made, and the attitude of these countries with regard to differentiating against us, when people who are prepared to buy our coal are prevented by the Governments of those countries from taking it. It is a very serious problem. We are up against a great number of things in connection with the coal trade and when foreign countries who are supposed to be friendly with us, differentiate against us, it is time our Government stepped in and secured for us fair competitive terms.
My next point is that I think it is unfortunate that there should be any reference in this Bill to the Hours' Convention. If the way in which that Convention was brought about was studied it would be realised that it was not in our national interest to ratify the Convention without very serious modification. The noble and learned Viscount alluded to certain modifications which he thought it would not be difficult to obtain. I believe it would be extremely difficult to obtain them and in the Convention as it stands the dice would be seriously loaded against us in the event of ratification by other countries. Take the case of the United States. The United States are not going to ratify, South Africa is not going to, India and Australia are not going to, and we are up
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against that competition in the event of ratification. We are very anxious to send our coal into Canada—we have been sending a certain amount recently. We are also anxious to secure the South American market and the Atlantic bunker trade; but if these other countries are not coming in we are going to be prejudiced because our wages are higher and the reduction of hours would entail an increase in our costs of production greater than that of our neighbours. In America they work 8 hours at the actual coal face, while at the mines in this country we are only working 5¾. To suggest that our hours are longer than those of any other country is not, of course, true and, further, those who understand the methods of working abroad realise that when they have these statutory enactments regarding hours and wages, those enactments are, to a large extent, evaded. There are different ways of getting round their laws.
Poland, I think, is mainly responsible for the serious reduction in coal prices, for they cut their prices as low as possible and it has not been difficult for them to compete in the Baltic trade. I want also to point out that the Convention would be inequitable to our country because it does not permit a short Saturday such as we have. Men leave their work before 12 and many of them work eleven days a fortnight. So anxious were the late Labour Government to arrange any Convention that they allowed Germany to exclude lignite mines. The great proportion of their coal is of a lignite character and to allow the Germans to exclude those mines is to place the Germans in a. much better position in competition with ourselves in the event of the ratification of the Convention, because men can work longer hours in the lignite mines. The German Government have also indicated that by a Bill they have introduced with a view, apparently, to carry out the Convention, there may be contracting-out of the hours altogether by agreement between the men and the owners in any district. Then too, France makes its own terms that 60 hours may be worked overtime. Just at the time when prices rise, that is in winter, the French propose to ignore the hours, working rather shorter hours in summer when there is little demand for coal.

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That kind of competition from France and Germany shows that if we ratify a Convention of this kind, as it is at present drawn, it would operate not to our advantage, but to the advantage of other countries. In our country we do obey the law and we know that in other countries there is great evasion of laws of this character. This Convention, while it deals with the matter in the abstract, takes no steps, so far, to enforce what it deals with in practice. Until there is a Convention which, when ratified, enforces in practice equal hours upon all countries, we as owners are going to offer our opposition because we believe the dice will be loaded against us and that ratification, instead of helping the industry, will tend to destroy it. We have no fear of fair competition even working at our higher rates of wages, but it is unfair to be called upon to ratify a Convention which is going to shorten our hours and permit evasion in other countries, as would be the case in the event of the present Convention becoming ratified. Therefore I repeat that I regret that the Government, without full knowledge of what the attitude of other countries will be in regard to the hours of work, should have introduced a proposal to ratify a Convention which, in the terms in which it is proposed, will not secure fair treatment for the British miner and the industry, but will place them at a disadvantage.
The other part of the Bill deals with the standard prices, the standard output, and the quotas which are permitted by the various district boards under the Coal Mines Act of 1930. We are prepared to accept the continuation of that state of things. Whether it is wise to extend it for five years or not is a matter for discussion in Committee. My own view is that a shorter period would be better in order that we might find out whether the artificial limiting of output and standardising of prices are going to be to the advantage of the country in the long run. The majority of coalowners feel that the standardisation of prices has helped, but at the same time a great number of isolated interests have been very much prejudiced by the quota. Areas which have developing coalfields feel that they have been unduly restricted, and have not been able to produce coal to the best advantage. because when they were able to sell coal
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they have been limited in their output. But, of course, we are living in an artificial period of the world, when wages are regulated apparently by Parliament, and when there is a great deal of Parliamentary interference of all kinds with industry. If we were only left alone I am quite satisfied that the feeling between the men and the owners in the districts is such that they are anxious to work together. It is the political influence which has been brought in which has caused such untold harm, and if we were only allowed to work out our own salivation in our own way I am satisfied that the industry has just as good a prospect as any other in the country.
LORD BANBURY OF SOUTHAM: May I ask the noble Lord whether it was not his own Party which started all this?
LORD GAINFORD: The noble Lord wants me to go back to the original Bill restricting the industry, but he may recollect that the late Lord Rhondda and I objected to that policy from the outset; we divided the House of Commons on more than one occasion.
LORD BANBURY OF SOUTHAM: I am sure I voted with you.
LORD GAINFORD: I believe probably the noble Lord voted with me. At any rate, I have never been in favour of statutory interference with industries in the way that the coal industry has been interfered with, and I am anxious that, now that we have got a permanent settlement, as I hope, of the hours question, Parliament will let us alone in the future.
LORD LAMINGTON: My Lords, the noble Lord has given us a very interesting survey of the coal export trade, and I do hope that the Government will consider whether, on the Committee stage, they can accept some modification of the period of five years for the continuance of the quota system. The noble and learned Viscount the Leader of the House said it was not true that the exportation of coal had dropped owing to the quota system. Of course, it is very difficult to say exactly whether that is the case or not, but the quota system imposes many hindrances on export trade. How can a coal exporter, for example, who has probably been offered a contract for twelve months, be sure what his quota will be during that

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period? The quotas are fixed quarterly. Again, there is the question of the minimum prices of coal. It is very difficult indeed to determine what will be the minimum price for any particular coalfield owing to the diversity in the working of the pits and the difficulty of winning the coal.
In their districts the coal owners are mainly in favour of the quota system because they are able to raise and keep up the price of coal. That is not the case with the coal exporters. When minimum prices are fixed for the sale of coal those prices have to be advertised, and they are at once known on the Continent, where the coal producer can undercut the coal exporters in this country. In Scotland 46 per cent. of the coal trade is opposed to the quota system. It does not allow them to obtain any advantage that they might possibly get by a sudden world recovery of prices, in which the coal exporter would not be able to participate. Or, again, there may be some coal strike in some part of the world, Poland or elsewhere, and the coal owners would be limited in their power of supplying the demand that might thereby be created elsewhere. Therefore I do not think it is possible to contend that the quota system has not retarded the export of coal.
The noble Lord opposite, Lord Snell, puts down all the unhappiness of the coal trade to the coal owners. What happened in former days when our commercial greatness was built up owing to the export of coal, when the coal business was free of all these Government restrictions and of the many obligations imposed by the powerful coal unions? It is desirable that something should be done, if possible, to remove the many restrictions under which the coal business is carried on, and it is very desirable that the quota system should be restricted in its operation to two, or certainly to not more than three years. If it proves during that period to be successful it can always be re-enacted, but, from the point of view of those with whom I am associated, nothing but harm is done by the continuance of the quota system. Therefore, I do trust that the Government will consider the desirability of allowing some elasticity, some power to meet a possible revival of the coal business.
THE EARL OF LISTOWEL: My Lords, my excuse for intervening for a very short space in the course of the debate this evening, after the extremely interesting and lucid accounts that we have heard of the extraordinary and almost overwhelming difficulties That confront both the coal owners and the miners at the present time, is that it appears to me that the dissatisfaction felt by the Opposition with the present Bill has not been altogether adequately voiced. First in regard to wages. As the noble and learned Viscount who introduced the Bill has pointed out, in spite of the fact that there is no reference to wages in the clauses of the Bill itself, there has been a guarantee on the part of the mine owners that wages will not fall in the course of the coming twelve months. Yet, in spite of that, the regulations in regard to hours are dependent on an agreement which our Government may make with foreign Governments in reference to the unanimous lowering of the number of hours in the working day. That is likely to take place, if it does take place, at least further ahead than the next twelve months, so that the arrangement in regard to wages does not run pari passu with the extension of the working hours, and it should be added that prices are likely, in the not very distant future, to rise owing to our dependence on foreign countries remaining on the gold standard for raw materials and for foodstuffs, so that in point of fact the coal miner is likely to be worse off in a year's time than he is at the present moment. So much for wages.
In the matter of hours I feel obliged to adopt an attitude diametrically opposed to that of the noble Lord, Lord Gainford, who has just spoken on the subject. I venture to suggest that the ratification of the draft Convention on hours of work in coal mines passed by the annual general meeting of the International Labour Organisation last year would be of very great advantage indeed to our own people and to the coal mining population in other countries. In the first place, as noble Lords probably are aware, the occupation of a coal miner is one of the most severe and difficult forms of manual labour that exist in the whole of our economic system. It is, therefore, impossible for the miner to develop his entire personality during the hours he is at work in the coal mine, so that to him the hours of leisure are really the only

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time that he has to occupy in those ways that raise life to a level that makes it really worth living. Hence the importance of extending the period of leisure and of diminishing the length of hours devoted to work underground. It is only then that he can develop his cultural interests, that he can experience the joys of family life, and of relationships with his fellow-men.
And, again, in the interests not only of our own mining population, but of miners throughout the world, it is of paramount importance that the functions of the International Labour Organisation, all of which aim at promoting human welfare, should meet with a measure of success. There is no worse discouragement than to feel that the years of labour are completely wasted, and one cannot imagine Governments continuing to support the International Labour Organisation in its practical work so long as they feel that it is achieving absolutely nothing. The present draft Convention has meant three years of labour in committees and in investigation of the facts, and if it is not ratified by the coal-mining nations concerned these years will have been completely thrown away. It is, therefore, of paramount importance to the progress and efficacy of this great institution that its resolutions and Conventions should not be neglected by the Governments concerned.
Turning from considerations that affect the general welfare of the working population of the world to those that are concerned more directly with the interests of our own working people, let me urge, in spite of what the noble Lord, Lord Gainford, has told us, that it is in the immediate economic interests of our own country that the present Convention should be ratified. As regards competition from the other great mining nations of Europe, let me point out that, our hours of labour being shorter than those worked abroad, we should have a competitive advantage, or we should gain at least a relative advantage, if all the seven countries concerned were to reduce the length of their working day. It is not fair, as the noble Lord, Lord Gainford, has done, to mention countries like America and Australia, because they are not competitors in the same markets as ourselves.
LORD GAINFORD: May I interrupt the noble Lord to correct that statement? In the Mediterranean they are direct competitors.
THE EARL OF LISTOWEL: The noble Lord has corrected me on a distinct point, and I should like to withdraw what I said, while maintaining still that our principal markets are not affected by the competition of America or Australia. For instance, Poland, which is a very ardent competitor indeed, and which works considerably longer hours than we work over here, would, on the ratification of this Convention, be placed in a position exactly equal to that of ourselves. Let me point out, however, that, so long as there is no limitation of the hours of work in coal mines, the competitive lengthening of the working day, which has already begun since the economic depression on the Continent, is likely to increase so that, unless we are to undermine the structure of social welfare which we have built up in the last fifty years, we should be placed in a still weaker competitive position. On these grounds I urge that it is in the economic interests of the country to ratify this Convention of the International Labour Organisation.
This Convention would limit the working day in underground coal mines, as a general rule, to 7¾ hours, a period which would include the time taken in the ascent and descent of the shaft leading from the pithead as well as the actual hours worked underground. This is the central feature of the Convention and this would become operative not immediately, as the noble Viscount has pointed out, but eventually if our Government and the other mining nations of Europe were to give their consent to its adoption. On those grounds, it would appear that the adoption of this International Convention would really be in the interests of our own mining population and of the mining populations in Continental countries. All I would add is that one cannot be completely satisfied that our Government are taking the steps required in order that this ratification may take place at the earliest possible opportunity.
There is no doubt that unilateral ratification of this Convention would immediately place one country in an extremely unfair and disadvantageous

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position, but, on the other hand, this difficulty would be avoided by simultaneous ratification. There is no disagreement on principle between the seven great coal-producing nations that this Convention should be ratified simultaneously, but the crux of the matter is that a definite and precise date should be agreed upon and that this date should be the time when the ratification shall take place. At present there is no agreement of this kind and, in fact, the whole matter is vague and indefinite. I would urgently press on the Government the necessity of entering into negotiations in order to fix some specific date on which the nations concerned would simultaneously ratify the draft Convention of the International Labour Organisation.
THE EARL OF CRAWFORD: My Lords, you will allow me on your behalf to thank Lord Listowel for his very thoughtful speech on the most difficult aspect of this most difficult question. It is quite clear that the noble Earl fully realises the difficulty with which this industry is faced and his contribution to the debate has been valuable in that he has clearly seen how important is the effect on our own problem of a simultaneous and fair application of an international settlement. The noble Earl's speech was in marked and very agreeable contrast to that of the noble Lord, Lord Snell, from whom we got the old well-worn, dull, and obsolete denunciations of the coalowners. We had sentence after sentence of these attacks, generally founded on very insufficient knowledge of the subject, leading us nowhere and doing what the miners' leaders to-day are not doing, exacerbating the situation by personal attack. Will the noble Lord, Lord Snell, be good enough to take note of the fact that to-day the miners' leaders have seen the futility of that attitude and have abandoned it?
The noble Lord talked of obstinacy, incompetence, unwillingness to move, stagnation, persistent mismanagement, five years of undisturbed sleep—an astonishing statement—and so on. Then the noble Lord made—if I may say so with all respect to him—the most farcical of all is farcical statements, that the coal owners came and had recourse to the good will of Parliament to rescue them. The noble Lord went on to indicate quite
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clearly that the solution lies in State control of this industry. We have had experience of State control of this industry. Has the noble Lord, Lord Snell, forgotten it? Can he tell the House how much it cost? We had it for years and the cost to the British taxpayer was £40,000,000 a year. That is what the noble Lord is prepared to go back to. I wish to make this point to meet the argument which is so frequently advanced. What is the fundamental and root cause of the difficulties with which the industry is faced? It is unquestionably the attitude and action of the State towards the industry. Let us go back a very few years to a period well after the War, when the State was throwing away £40,000,000 a year on mismanaging the industry. Suddenly the State decontrols the industry at a very few months' notice. The industry, which was on wholly artificial and uneconomic lines, was immediately thrown back into the most acute degree of economic competition. We all remember what happened. There was the great and the prolonged stoppage inevitable from the circumstances—followed by what? By a political settlement in which Parliament came in to clear up the mess which Parliament had created.
That was the first of a series of disastrous interventions by the State. Inquiry followed inquiry. I can only remember five of them in ten years but I am pretty sure there is one I cannot recall to memory. There was the inquiry associated with the name of Sir Herbert Samuel, and the inquiry associated with the name of the noble and learned Lord, Lord Buckmaster. Then there was inquiry number three associated with the name of Lord Macmillan, number four associated with the name of the noble and learned Viscount on the Woolsack, number five with the name of Mr. Shin-well, and there was one further inquiry associated with a name that has escaped my memory. Now what happens? When an inquiry of that kind is announced the whole work of the industry has to be deflected from its proper course of looking after business, getting orders, seeing they are carried out, looking after customers: the whole course of the industry is, I say, deflected into preparing for the inquiry. Months are occupied by that.
The inquiries themselves occupy months of time and when they are over they

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are followed by months of disorganisation. Then a new inquiry begins before the solution imposed on the industry by the State has had a fair chance, and before the industry has had a chance of looking round to see how the economic factors forced upon it are going to work out. There are months of preparing for inquiry, months of inquiry, months cleaning up the mess and then a new Act of Parliament. Then the new Act of Parliament does not work and there is more inquiry and then another Act of Parliament. And in between, if you please, a subsidy or two—enough to ruin any industry—a subsidy forced on the industry, not asked for by the industry but forced upon it. So it goes on. New inquiries, new Acts of Parliament. I ask what other industry could have survived that series of attentions from the State?
LORD MARLEY: What about the bankers?
THE EARL OF CRAWFORD: They have not had inquiries.
LORD MARLEY: They have gone on.
THE EARL OF CRAWFORD: Will the noble Lord explain, please?
LORD MARLEY: I did not intend to intervene in this debate, but since the noble Earl puts the question to me I would like to remind your Lordships that if there had been no State interference with the industry we should be back in the time when women and children were working ten or twelve or fourteen hours a day. It was the interference of Parliament with this industry which stopped that. The noble Marquess, Lord Londonderry, knows from his own history that that was the case in 1841 and in 1842.
SEVERAL NOBLE LORDS: Order, order.
THE EARL OF CRAWFORD: I rise to order. The noble Lord interrupted me by a question about bankers and I was not clear as to what he meant, but I am not going to give way in order to hear a political speech about what happened in 1841. If he has any answer about the bankers I shall be glad to hear it.
LORD MARLEY: I raised the question about bankers because bankers are admittedly responsible for a great deal of the mess and trouble in which this country and other countries have found themselves.
THE EARL OF CRAWFORD: Oh!
LORD MARLEY: The noble Earl does not agree with me?
THE EARL OF CRAWFORD: I did not say "No."
LORD MARLEY: But I say it is a fact that there has been a monetary mess which has resulted from leaving banks in private control. I and those with whom I am associated desire that the banks should come under public control and be properly managed in the interests of the nation.
THE EARL OF CRAWFORD: If that is the view of the noble Lord may I in a friendly way offer him a word of advice?
LORD MARLEY: I do not want it.
THE EARL OF CRAWFORD: Then I offer it to my very old friend who sits beside him, the noble Lord, Lord Ponsonby.
LORD MARLEY: I do not suppose he wants it either.
THE EARL OF CRAWFORD: I would say to him do not let him try to break them before he does it. Do not let him subject them to five inquiries in ten years and twelve Acts of Parliament and so smash a great organisation. I beg your Lordships to realise before we come to the Committee stage of this Bill that it is no good making vague denunciations such as we have just heard from the noble Lord, Lord Marley. Those are the glib denunciations of the doctrinaire. They are not serious contributions to the solution of our difficulties. We really want to face facts in these matters and the more speeches we hear like those from the noble Lords, Lord Snell and Lord Marley, the further we shall be from a solution.
VISCOUNT HAILSHAM: My Lords, the speech to which we have just listened from my noble friend the Earl of Crawford relieves me of a good deal of what I should otherwise have had to say. As I listened to the criticism which the noble Lord, Lord Snell, was good enough to address to us about this Bill, I could not help regretting that he had not seen fit to follow the advice which he himself quoted from the leader of the miners that there was no necessity to express a

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single word derogatory of the coal owners. Instead of that a great deal of his speech was directed to, I will not say vulgar abuse, because we are in the House of Lords, but to violent abuse of people who at any rate do not suffer from the disadvantage which Lord Snell claimed. They do know something of the subject about which he was talking. I could not help wondering whether he really was addressing his observations to this House or whether he was not trying, as has so often been done in the past, to make political capital out of the difficulties of a very great industry.
When I opened this discussion I was careful to say that so far as I was able to appreciate the facts it was not possible to attribute all the blame to either side. The noble Lord nods his assent. He will forgive my saying that when I listened to his speech and heard that throughout the miners' leaders had shown a spirit of reasonable accommodation worthy of the best traditions of trade unionism, and that the mine owners were guilty of selfish inertia and incapacity and perversity and all those other attributes which have been quoted, I thought that he was not agreeing with me then so completely as he seems now to be disposed to do.
Really my purpose in rising was not to detain your Lordships for more than a few minutes, but because, in courtesy to those who have taken part in what to me at any rate has been a very interesting debate, I want to answer one or two questions which have been addressed to me. My noble friend Lord Gainford referred to the difficulties which had been created for the export trade by the restrictions which have been imposed in foreign countries, and he asked if I could give any information about what the Government are doing. I am speaking without having had an opportunity of consulting with the Foreign Office since the question was directed to me, and therefore I speak under reserve, but I think I am right in saying that there are four countries—France, Germany, Italy and Belgium—in each of which regulations have been adopted which, in the opinion of His Majesty's Government, are not consistent with their treaty obligations to this country and are inequitable to the mining industry of this country. In each case the actual form which the
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restrictions take has been somewhat different. Therefore one is not able to generalise about them or to point out what the particular unfairness is.
In each case the matter has been actively taken up with the Government concerned, and we have received replies. We have continued to press our point of view, and the matter is still under active discussion with each of those four countries. I know it would be more satisfactory, of course, if I were able to announce that we had achieved a success in persuading any one of the four countries to accept our point of view. I cannot say that, but I do not think it would help us to achieve that success if I were to detail the exact state of the discussion in any one case. I can only assure the noble Lord and the House that the matter is being actively prosecuted, and that the Government do not intend to allow it to drop. Then there were some questions raised from different angles with regard to the desirability of a Convention limiting the hours of work. Lord Gainford took the view that it was undesirable ever to ratify such a Convention.
LORD GAINFORD: I am all in favour of a Convention if it can be secured on fair terms between all the Powers and without any preferential position being attained by any Power and means taken to enforce its provisions.
VISCOUNT HAILSHAM: Those naturally are very reasonable requirements, but one must remember that a Convention, if signed by a number of powers, equally binds every signatory, and I do not think it is possible to proceed with an international agreement on the basis that we all assume that some at least of those who sign will not carry out the agreement which they enter into. If one makes that assumption then international agreement is a hopeless undertaking, and for my part, while I quite recognise that in some other countries there are hours now being worked and wages being paid which make it very difficult for our country to compete with them, I should have thought that it would be better, if possible, to secure the adhesion of such a country to a Convention which limited the hours of work, rather than leave it free and unfettered to carry on its industry under conditions which give it an unfair advantage over its British competi-

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tor. We have not reached, fortunately or unfortunately, the stage in which it is possible to discuss in this House ratification. Of course we are not going to wait until every other Power has ratified and then do the same ourselves. What we are going to do is what my right hon. friend the President of the Board of Trade stated in another place. We are negotiating with the seven principal countries and hoping to secure their agreement to a simultaneous ratification, and when that simultaneous ratification is secured then, as Lord Listowel pointed out, it is very important to see that the Convention comes into operation simultaneously in the various countries.
Then I was asked as to the five years limit for the extension of Part 1 of the Coal Mines Act, 1930, and, as both my noble friends quite accurately pointed out, that is a Committee point. I can only say, with regard to that, that the Mines Department went into the matter with some care, that the period named in the Bill is a period which seemed to them, after full examination and discussion with the interests affected, to be the best; but of course His Majesty's Government will be prepared to consider —I do not say accept Amendments, but consider any argument brought forward to convince them that the period, which so far they think is the best one, can for any good reason be extended or shortened.
I will just add this, that I think Lord Lamington a little under-estimates the elasticity at present provided by the quota. For instance, he said that if some particular crisis arose, or situation emerged, in which it was desirable that we should have an increased quota, we should be likely to lose our markets by reason of the rigidity of the quota. It so happens that there was an example last year when the country went off the gold standard, and it was hoped that an advantage would be secured, in consequence, by our export trade. Within forty-eight hours an alteration was made in the quota to enable advantage to be taken of the situation. In truth, owing to other circumstances, the whole advantage was not gained, by reason of the fact that our opponents, by export bounties and other means, were able to bring down prices. Still it shows that it is possible, even under the existing system, to take advantage of any particular situation which may arise.
LORD LAMINGTON: The instance to which the noble Viscount refers was one of general application, was it not? It might be more difficult in the case of some two or three collieries only.
VISCOUNT HAILSHAM: They would be at perfect liberty to represent the facts to the district committee, and that committee would have power to give effect to their representations. I think that really does exhaust the specific questions put to me. I do not pretend that this is legislation which we have embarked upon with any enthusiasm. I agree with a great deal that the noble Earl, Lord Crawford, said as to the misfortune of constant legislative interference with industry. I profoundly differ from the view of Lord Snell that one way in which you can make everything right in this industry is by constant threats of nationalisation. I can imagine nothing which can do more harm than living under a perpetual threat of confiscation, or of unfair interference being applied, which would prevent people from putting into the industry capital which is urgently needed for development, or from carrying on the industry with any long view of the future. It is not necessary for me to elaborate that point of view because it has already been far better put before the House. I will only say that I am glad to see that by the great majority of people the necessity of some such legislation as this is recognised, and I think the great bulk of your Lordships accept also the view that the particular provisions we are bringing forward are provisions which are fair and reasonable to both sides.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BUSINESS OF THE HOUSE.
LORD PONSONBY OF SHULBREDE: May I ask the noble Viscount if he can state what will be the business tomorrow?
VISCOUNT HAILSHAM: We are taking to-morrow the Committee stage of the Children and Young Persons Bill. A considerable number of Amendments have already been put down to that Bill. Some of them, I think, ought not to take long, and I hope we may be able to dispose of the Committee stage to-morrow afternoon. I should be sorry if that

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did not happen, because there is a good deal of business before your Lordships next week and it is not a very convenient week for all of your Lordships to be in London. If we can dispose of the Committee stage, and give adequate consideration of the Amendments to-morrow, I think it would be for the general convenience. If, unfortunately, that should prove to be impracticable, I think we might meet on Monday to continue the Committee stage of the Bill.
LORD PONSONBY OF SHULBREDE: Would it be possible to start the sitting at an earlier hour to-morrow?
VISCOUNT HAILSHAM: I am obliged to the noble Lord for his suggestion, but I am afraid that judicial business renders that impossible.
House adjourned at ten minutes past six o'clock.