Sitting of 1 March 1933

Preamble
The House met at a Quarter before Three of the Clock,Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
  MINISTRY OF HEALTH PROVISIONAL ORDER (TORQUAY) BILL,
  " to confirm a Provisional Order of the Minister of Health relating to the borough of Torquay," presented by Sir Hilton Young; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 62.]
  NEW WRIT.
  For the County of Kent (Ashford Division), in the room of Captain the hon. Michael Herbert Randolf Knatchbull, M.O., now Lord Brabourne, called up to the House of Peers.—[Sir Frederick Thomson.]
ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE.

    PORTUGUESE PORTS (FLAG DISCRIMINATION).
    Mr. LOUIS SMITHasked the Secretary of State for Foreign Affairs if he can expedite the settlement of the negotiations with Portugal respecting the discriminatory rates on British goods to Portugal in favour of vessels flying the Portuguese flag, and more especially because its continuance is hampering the development of trade between the two countries?
    The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): Every effort is being made by His Majesty's Government in the United Kingdom to bring these negotiations to a satisfactory conclusion. The prejudicial effect of flag discrimination upon Anglo-Portuguese trade is fully appreciated by His Majesty's Government.

    IMPERIAL PREFERENCE (COTTON GOODS).
    Mr. RANKINasked the Secretary of State for the Colonies whether any special efforts and, if so, of what nature are now being made to secure increased preference for cotton goods within the Empire?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): I would refer my hon. Friend to the answer given by my hon. Friend the right hon. the Secretary of State for Dominion Affairs yesterday to the same question.

    RUSSIA.
    Sir BASIL PETOasked the President of the Board of Trade the total balance of trade between this country and the Soviet Republic during the past 11 years and also the corresponding figure for trade between the United States of America and the Soviet Republic; and whether, in making any fresh trade agreement, the Government will limit our purchases from the Soviet Government selling agency to an amount which will correspond with their purchases of goods produced in this country?
    Lieut. - Colonel JOHN COLVILLE (Secretary, Overseas Trade Department): During the 11 years, 1922 to 1932, there was an excess of imports over exports of merchandise in the trade of the United Kingdom with the Soviet Union to the value of £136,500,000. In the case of the United States, exports to the Soviet Union during the same period exceeded in value imports from that country by about 619,000,000 dollars. It is the aim of His Majesty's Government in the negotiations now in progress to secure an improvement in the balance of trade.
    Sir B. PETO: Can the hon. and gallant Gentleman say whether the figures he gave of trade between the United Kingdom and the Soviet Republic included re-exports, or did they relate only to the products of this country exchanged for the products of the Soviet?
    Lieut.-Colonel COLVILLE: The figures are actually merchandise sent.
    Sir B. PETO: Then they would include re-exports7 What are the figures for re-exports?
    Lieut.-Colonel COLVILLE: I could not say without notice.
    Sir HERBERT SAMUELasked the President of the Board of Trade if he will state on what date the notice given by the Government to terminate the present Anglo-Russian trade agreement expires; and what progress has been made in the negotiations for a new agreement?
    Lieut.-Colonel COLVILLE: The present agreement will cease to be in force from the 17th April, 1933. Negotiations are continuing, but the right hon. Gentleman will not expect me to discuss the course of the negotiations while they are proceeding.

    GLOVE INDUSTRY.
    Sir B. PETOasked the President of the Board of Trade whether he can give any date by which an order may be expected, in accordance with the recommendations of the Import Duties Advisory Committee, on the application of the fabric glove industry; whether the commercial negotiations with foreign countries, which are delaying the decision, relate to the glove industry or other industries; and whether, in view of the depression in the fabric glove industry in this country, due to the dumping of surplus foreign produce at prices below cost of production, he will arrive at a decision at the earliest possible moment?
    Lieut.-Colonel COLVILLE: I cannot give a date by which a decision will be reached on the Committee's recommendations but the hon. Member may rest assured that there will be no unnecessary delay. As regards the second part of the question, it would not be expedient to make detailed announcements as to the scope of negotiations while they are in progress.
    Sir B. PETO: Owing to the unsatisfactory nature of the reply, I beg to give notice that I shall raise the question on the Adjournment.

    GREEK GUARANTEED LOAN.
    Sir NICHOLAS GRATTAN-DOYLEasked the Secretary of State for Foreign Affairs if he will explain the steps he is taking to recover the £512,187 4s. 9d. due from the Greek Government to Great Britain in respect of an old guarantee by the British Government; and whether he has brought the matter before those experts of the League of Nations who
    350
    advised upon the recent Greek loans issued under the supervision of the League of Nations?
    Sir J. SIMON: By a convention concluded in 1860 between the Greek Government and the Governments which had guaranteed the loan of 1832 the Greek Government are liable to pay £12,000 annually to His Majesty's Government to be applied in reduction of the capital sum outstanding. The instalment due on the 31st December, 1932, has not yet been received and correspondence is taking place with the Greek Government with regard thereto. The answer to the second part of the question is in the. negative.
    Sir N. GRATTAN-DOYLE: Since" this question has been outstanding for such a long time will my right hon. Friend give me an assurance that all possible steps are being taken to hasten a conclusion?
    Mr. HANNON: Can my right hon. Friend tell the House that he hopes that the whole loan will be discharged?
    Sir J. SIMON: As regards the last question I cannot answer it. I have not examined the exact terms of the loan. The only instalment, I think, which has not been paid is this last one. My hon. Friends may be assured that the Treasury of this country is taking active steps to make representations to the authorities concerned in this matter.

    FIGHTING SERVICES (FISH SUPPLIES).
    Mr. BURNETTasked the First Lord of the Admiralty whether he will issue instructions to the accountant officers in ships, etc., victualled on the general mess system, for the purchase of a reasonable quantity of British-caught fish?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lord Stanley): Accountant officers of ships victualled on the general mess system are instructed to introduce as much variety into the dietary as possible, and fish appears frequently in the daily menus. The fish are bought on the open market, and in home waters there is no reason to suppose that they are other than British caught. As accountant officers of general

    351
    mess ships are limited in their expenditure to a fixed daily allowance per man, it would not be expedient to introduce any rule of the kind suggested by the hon. Member.
    Mr. BURNETT: Will the Noble Lord, as far as possible, impress upon those concerned the importance of the fishing industry to the nation and the nutritious quality of a fish diet?
    43. Mr. BURNETTasked the Financial Secretary to the War Office whether, in the next tenders for Army rations, quotations will he invited for British-caught fish?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): No, Sir. I am not prepared to substitute fish for meat in the soldier's standard ration. Fish is purchased by units out of the messing cash allowance which is issued with the object of enabling the messing authorities to provide a varied diet.
    Mr. BOOTHBY: Why is not the hon. Gentleman prepared to include fish?
    Mr. COOPER: I do not think that it would be popular to replace meat by fish as a standard ration.

    MALAYA.
    Mr. HICKSasked the Secretary of State for the Colonies whether he has ascertained from the Governor of the Straits Settlements and the High Commissioner of the Federated Malay States whether there is any obstacle against the putting into force of the Workmen's Compensation Act in both Colonies; and whether he can state when the administrative orders will be applied?
    Sir P. CUNLIFFE-LISTER: I consulted the Governor by despatch after the hon. Member put his question to me on 20th December last. There has not yet been time for me to receive the Governor's reply.
    Mr. HICKS: Will the right hon. Gentleman pursue this matter; and can he indicate when I may repeat this question with the hope of getting an answer?
    Sir P. CUNLIFFE-LISTER: I can give an answer to the hon. Member when I have received the reply from the Governor.
    8. Mr. HICKSasked the Secretary of State for the Colonies whether he can give the names of the selection board for the cadet services of Malaya; what qualifications are demanded of candidates; and whether there is any racial discrimination?
    Sir P. CUNLIFFE-LISTER: The Malayan Civil Service is now part of the Colonial Administrative Service, and its personnel will in future be selected under the general system in force for that service. Selection is entrusted to the Colonial Appointments Board.
    The members are:

    His Majesty's Civil Service Commissioners for the time being;

    Sir Horace A. Byatt;

    Sir Walter Buchanan-Riddell;

    Mr. Charles Goldschmidt:

    Captain Philip Lonsdale; and

    Mr. C. W. B. Prescott.

    The Chairman is the First Civil Service Commissioner (Sir Roderick Meiklejohn). I may add that it is my intention to add to the board an experienced retired officer of the Eastern Cadet Service. Owing to the many-sided nature of the work of the Colonial Administrative Service, no rigid qualifications, other than age, are of deliberate purpose, set down. The established rule, so far as concerns personnel recruited in this country for the Colonial Administrative Service, is that "Candidates must be natural-born British subjects of pure European descent on both sides." There are, however, facilities in the Colonies themselves for the appointment of locally-recruited personnel to the service.
    Mr. HICKSasked the Secretary of State for the Colonies whether he is aware that recruitment of the Civil Service cadets of the Federated Malay States is by selection rather than by competitive examination; and what steps he is taking to put this recruitment on a competitive basis?
    Sir P. CUNLIFFE-LISTER: The reasons for my decision that recruitment for the Malayan Civil Service should in future be carried out by the selection system instead of by the competitive

    353
    examination previously in force were given in my reply to the hon. Member's question on 20th December, 1932. I have no intention whatever of returning to the system of competitive examination.

    KENYA GOLDFIELD.
    Mr. HOLDSWORTHasked the Secretary of State for the Colonies whether it is proposed to restore to the native councils of the Kenya Colony Reserves the right of consultation provided for in the original Ordinance before any particular piece of land is leased?
    Sir P. CUNLIFFE-LISTER: No, Sir. As I explained in the Debate, the Native Council of the North Kavirondo Reserve consists of 64 members drawn from all parts of the Reserve and is clearly an inappropriate body for the purpose mentioned. The expression of native views in regard to the proposed excision, for leasing purposes, of any particular piece of land, is fully provided for by the statutory reference to the local land board, which will include for this purpose representatives of the location or section concerned, in addition to the permanent African member chosen from the local native council.
    Mr. HOLDSWORTHasked the Secretary of State for the Colonies whether all rents accruing from any lease of lands for gold winning are to be credited to the native councils of Kenya Colony?
    Sir P. CUNLIFFE-LISTER: No, Sir. Any land leased for mining will first be excluded from the Reserve in exchange either for alternative land or for a monetary payment to the local native council of the full capital value thereof.
    Mr. GRAHAM WHITEasked the Secretary of State for the Colonies whether, seeing that any land in the native Reserves in Kenya Colony which is not required for gold winning is to be restored to the natives, any provision is included in the lease for repairing any surface disturbance which has taken place on land formerly leased?
    Sir P. CUNLIFFE-LISTER: No, Sir. As full compensation for the land will have already been made to the natives,
    354
    I do not think it would be reasonable to impose this additional obligation on the lessee.
    Mr. WHITEasked the Secretary of State for the Colonies whether, seeing that large numbers of natives are to be employed in gold winning in Kenya Colony, it is his intention to instruct the Governor to prepare legislation providing for compensation for accidents and those diseases which usually accompany the work of winning gold?
    Sir P. CUNLIFFE-LISTER: Statutory provision for compensation to natives in respect of death or serious injuries arising from mining accidents already exists in the Kenya Mining Ordinance of 1931. The Governor of Kenya has also under consideration a Workmen's Compensation Bill covering occupational diseases as well as the results of accidents.

    PALESTINE (JEWISH WATCHMAN'S DEATH).
    Colonel WEDGWOODasked the Secretary of State for the Colonies whether he has any information as to the killing of Joseph Benjamini, an ex-soldier of the British Army, in a raid by Bedouins against a Jewish settlement on this side of Jordan; and why the British police or the Transjordan force did not prevent the raid or protect the raided?
    Sir P. CUNLIFFE-LISTER: 4s the answer is a long one I will, with the right hon. and gallant Gentleman's permission, circulate it in the OFFICIAL REPORT.
    Colonel WEDGWOOD: May I ask whether the district commissioners are in charge of the police in their respective areas; and whether Mr. Samuel has been made a district commissioner?
    Sir P. CUNLIFFE-LISTER: I take a great interest in every detail of Colonial administration, but I could not be expected to answer those questions offhand.
    Colonel WEDGWOOD: The right hon. Gentleman will realise, I hope, that the post of district commissioner is infinitely more important, if the commissioners have charge of law and order in their districts.
    Following is the answer:
    The telegraphic report on this incident which I have received from the High Commissioner is as follows:
    There was no raid by Bedouin on the Wady Hawareth. A party of police, consisting of one British non-commissioned officer and three British constables under the Assistant District Superintendent of Police, Tulkarem, acting on orders of court, evicted a. number of Arabs occupying 50 tents who were trespassing on Jewish property near Nathaniyza, on the coast west of Tulkarem. The Arabs refused to leave voluntarily, claiming that they had no land to which to go. Forcible measures were taken, and the Arabs and their possessions were placed on the road between Nathaniyza. and Ummkhalid. Some of the Arabs then asked permission to remove themselves to a neighbouring property owned by an Arab, who offered no objection, and the police gave permission. On their way to the Arab property this small party entered the land of a settlement of Jewish ex-soldiers. The deceased person, who was a Jewish watchman, spoke to the Arabs and the British corporal asked him to allow the Arabs to proceed, since, otherwise, the party, with their effects carried by hand, would be obliged to make a detour of more than two kilometres. The land of the settlement is not at this point cultivated. The British corporal then rejoined the main body on the road, 100 to 300 yards distant. Within the space of a few minutes the police engaged in moving the main body heard cries of "murder" from the land of the settlement, to which they immediately went. The Jewish watchman was on the ground. On being helped to rise, he pointed to an Arab who, he said, had struck him with a stick. Apart from a group of Arabs, there was no satisfactory eyewitness of the incident. The Jewish watchman died the same night about five hours after the assault. Three arrests have been made. The High Commissioner added that he was not yet in a position to offer observations. These will follow by despatch.

  AVIATION.

    LANDING GROUNDS.
    Mr. McENTEEasked the Under-Secretary of State for Air if he will fur
    356
    nish a list of landing-grounds available for aeroplanes in Britain; the number that have been opened with assistance from the State; and whether any of the landing-grounds of the Royal Air Force are available for use by private aeroplanes, and the charge?
    Sir FREDERICK THOMSON (Treasurer of the Household): I have been asked to reply. As the answer is long I will, with the hon. Member's permission circulate it in the OFFICIAL REPORT.
    Following is the answer:
    As regards the first and last parts of the question, on 31st January last there were 377 licensed civil aerodromes of all kinds in Great Britain and Northern Ireland. It should be borne in mind, however, that the majority of these were only licensed for short periods for pleasure flying. I would refer the hon. Member to the "Air Pilot," Volume 1, published by His Majesty's Stationery Office, for particulars of those in regular use and also for particulars, including charges, of some 50 Royal Air Force aerodromes, which are available in emergency for use by civil aircraft. In addition, there is a certain number of privately-owned and unlicensed landing-grounds. As regards the second part of the question, five aerodromes and landing-grounds available for public use are owned and maintained by the State, and I understand that grants from the Unemployment Grants Committee have been made in resepect of eight municipal aerodromes. Assistance has also been given indirectly towards the establishment of aerodromes through the grants to Light Aeroplane Clubs.

    IRISH FREE STATE.
    Sir N. GRATTAN-DOYLEasked the Under-Secretary of State for Air whether he is aware that there is no direct communication between Great Britain and the Irish Free State by air; and whether he will consult with the appropriate authorities of the Irish. Free State to remedy this inconvenience, which is a matter of concern to many people in this country?
    Sir F. THOMSON: The answer to the first part of the question is in the affirmative. As regards the second part, the

    357
    establishment of an air service between Great Britain and the Irish Free State would be a matter for private enterprise and in these circumstances, though my Noble Friend is in full sympathy with the object in view, he does not consider there would be any advantage in consultation with His Majesty's Government in the Irish Free State.
    Sir N. GRATTAN-DOYLE: Is the hon. Gentleman aware that anyone who wishes to proceed from Great Britain to Southern Ireland at the present time by air, finds it necessary to charter a special aeroplane to Dublin and then proceed from Dublin to his destination in Southern Ireland?
    Sir F. THOMSON: I see the hon. Member's point quite clearly but, as I have stated, this would be a matter for private enterprise.

  TRANSPORT.

    OMNIBUS SERVICE, GLASGOW.
    Mr. McGOVERNasked the Minister of Transport if, in view of the fact that the Glasgow Corporation has refused to put omnibuses on the Glasgow-Tollcross route and that a large number of persons are deprived of this means of transport, he will withdraw the prohibition on the Glasgow Omnibus Company to lift and lay passengers in the Tollcross area?
    The MINISTER of TRANSPORT (Mr. Oliver Stanley): I have no jurisdiction over the conditions attached to a road service licence unless an appeal is made to me against a decision of the Traffic Commissioners, by a person entitled to do so, within one month of the date of the decision in question. I cannot trace the receipt of any appeal relating to this matter.
    Mr. McGOVERN: Is the hon. Gentleman aware that in this area people have to walk nearly half-a-mile from a large housing estate to get means of transport to and from Glasgow; and, if he has no jurisdiction in the matter, to whom am I entitled to put questions about it?
    Mr. STANLEY: As my answer has indicated, if there is opposition on the part of the people in the neighbourhood, an appeal can be made against the
    358
    decision of the Traffic Commissioner. I will gladly make further inquiries into the matter for the hon. Gentleman.

    RAIL AND ROAD CONFERENCE (REPORT).
    Mr. H EPWORTHasked the Minister of Transport whether, before intimating to the House the Government's proposals for implementing the Salter Report, he proposes to circulate them for criticism to the interests affected?
    Mr. STANLEY: No, Sir. Full consideration has been given to the numerous written representations already submitted by representative organisations, and I see no sufficient reason for a further series of consultations prior to the introduction of a Bill in Parliament. Such a course would inevitably lead to considerable delay. I shall, however, be ready at any time to consider and discuss any suggestions that may be made to me in connection with the Government's scheme when it is before the House.
    Mr. T. WILLIAMS: Will the hon. Gentleman be good enough to give Members of this House plenty of notice before his proposal is brought on the Floor of the House?
    Mr. STANLEY: The introduction of the Bill will do that.

    ROAD CONSTRUCTION, SCOTLAND.
    Sir PATRICK FORDasked the Minister of Transport what is the total estimated cost of the new Glencoe road from Tyndrum through Glenorchy and Glencoe to Carnach, near Ballachulish; and why it was decided to spend so large a sum on an arterial road in this district instead of spreading over at least part of it on road construction of more economic value in other parts of Scotland?
    Mr. STANLEY: The total estimated cost of constructing the 30 mile section of the Glasgow-Inverness trunk route lying between Tyndrum and Carnach is £512,000. The scheme was included in the trunk road reconstruction programme initiated in 1924–25 as part of the unemployment programme for that year. The importance of this route, in an area where communications are notably deficient, was held to afford good grounds

    359
    for the expenditure. I would remind my hon. Friend that important schemes were also assisted in more populous parts of Scotland, as for example the new Edinburgh-Glasgow road, which was of greater magnitude than that to which he refers.
    Sir P. FORD: Is it not a fact that a great deal of this, to my mind, unnecessary expense is due to too rigid an application of a rule regarding gradients, which is well worth while in England but in areas of the character of the Highlands causes unnecessary expense?
    Mr. STANLEY: That appears to me to be quite a different question from the one on the Paper.

    MOTOR DRIVERS (PHYSICAL FITNESS).
    Mr. ROSS TAYLORasked the Minister of Transport if, in view of the number of accidents on the roads, some of which are due to physical disability and, in particular, defective vision on the part of drivers, he will institute a system for testing the declarations in regard to physical fitness made by applicants for motor-driving licences?
    Mr. STANLEY: Under the Road Traffic Act, 1930, every applicant for a licence to drive a motor vehicle is required to make a declaration in a prescribed form as to his physical fitness, including eyesight. Any person who knowingly makes a false statement is liable to severe penalties under the Act. I have no evidence to show that false declarations are frequent, and, in any case, I think it would be well to gain some rather longer experience of the operation of the provisions of the Act before coming to any conclusion as to the need for imposing further requirements in regard to physical fitness.

    TRAFFIC NOISES.
    Mr. LOVAT-FRASERasked the Minister of Transport if he is aware that the noise abatement committee of New York has done much to check transport noise in that city; and if he will take steps to have a similar body appointed here?
    Mr. STANLEY: I have no information as to the steps taken by this Committee, but I am making inquiries and will then consider whether there is any further action which could usefully be taken.
    Mr. LOVAT-FRASERasked the Minister of Transport how many cases of enforcement have taken place during 1932 under the regulations forbidding the use of motor-cycles which are not fitted with silencers?
    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Douglas Hacking): I have been asked to reply. I regret that I cannot give the information asked for, as the returns made by the police for purposes of the annual return of motoring offences do not distinguish between motor-cycles and other motor vehicles in respect of noise offences.
    Mr. LO VAT-FRASERasked the Secretary of State for the Home Department if he is aware that, on the adjournment of the Committee on Traffic Noises sine die about three years ago, Sir Henry Maybury, the chairman, promised that the Ministry would refer the question of evolving a standard motor-horn, which should be at once effective and less injurious to the health and nerves of the community, to the committee of research; and whether anything has been done with regard to this?
    Mr. STANLEY: I have been asked to reply. Inquiries were made from the National Physical Laboratory, and the conclusion was reached that further expenditure on experiments directed towards the production of a standard type of motor-horn was not likely to be useful in results.

  GOVERNMENT DEPARTMENTS.

    EDINBURGH.
    Mr. SCRYMGEOUR-WEDOERBURNasked the First Commissioner of Works whether it is the intention of the Government to proceed immediately with the building of new Government offices in Edinburgh; and whether he can make any statement on this subject?
    Sir SAMUEL CHAPMANasked the First Commissioner of Works whether, in view of the many suggestions which have been made and discussions which have taken place during the last 10 years as to the advisability of concentrating in one building the numerous Government offices which are scattered all over Edinburgh, and in view of the

    361
    present low cost of building, he will consult with the Secretary of State for Scotland for the purpose of taking action to effect this improvement in the interests of economy and efficiency?
    The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): The possibility of proceeding with the scheme for centralising Departmental staffs in one building in Edinburgh is at present under consideration by both the Secretary of State for Scotland and myself. As my hon. Friends are no doubt aware, there are certain site and architectural problems which must be resolved, before a decision whether to proceed with the projected scheme can be taken.
    Mr. SCRYMGEOUR-WEDDERBURN: Can my right hon. Friend say whether Edinburgh will be given equality and similarity of treatment with Whitehall in any extension or reconstruction of Government offices that may be undertaken; and is he aware that great indignation is caused in Scotland by the delay in the erection of this building?
    Mr. ORMSBY-GORE: I am agreeably surprised at the last part of my hon. Friend's question. Hitherto the whole matter has been held up by grave differences of opinion as to the site, style, and character of the building to be erected in Edinburgh, which has made the Government very shy of proceeding with it. The other question was, if I may say so, rather hypothetical, as there is no decision as yet to proceed with the Whitehall scheme.
    Mr. BOOTHBY: Will my right hon. Friend consider the advisability of providing an official residence for the Secretary of State for Scotland in Edinburgh?
    Mr. ORMSBY-GORE: I should like notice of that question.
    Mr. McGOVERN: Have the Department considered any sites at all for these offices in Glasgow?
    Mr. ORMSBY-GORE: The answer is in the negative. I understand that Edinburgh is regarded as the administrative capital of Scotland.

    LONDON.
    Mr. LEVYasked the First Commissioner of Works if any decision has
    362
    yet been reached on the proposal to re-house a number of the Departments under one roof in Whitehall?
    Mr. ORMSBY-GORE: The answer is in the negative.
    Mr. LEVY: Will my right hon. Friend press on with this scheme as a measure of economy and a source of employment in the building industry?
    Mr. ORMSBY-GORE: I am glad the hon. Gentleman put the first supplementary question first. I am at this moment going into the question as to whether an economical scheme can be worked out, assuming that we accept the decision of Parliament that the original scheme cannot proceed, and that we cannot have all the land originally contemplated; and I am examining the question as to whether effective economies can be made by proceeding with a modified scheme.
    Mr. LANSBURY: Before arriving at that decision, will the right hon. Gentleman put the case again to this House? Is he aware that it was only a committee, I think a Joint Committee, that reported, but it was not a unanimous decision, and that there is weighty opinion against the decision of that committee? I am only asking if the right hon. Gentleman will reconsider the whole question without settling for good and all that the site should not be entirely used?
    Mr. ORMSBY-GORE: Since the committee advised against building over any of the open spaces by the Embankment, so far as I can gather public opinion in this country has grown against building over any grass or open spaces in London, and I think a reconsideration of that point might lead us into even further difficulties and delays before we could get the matter considered on its merits.
    Mr. LANSBURY: Will the right hon. Gentleman bear in mind the fact that an open space in Whitehall would be preserved, and that it is only a question of a choice of open spaces?
    Mr. ORMSBY-GORE: It is a question of the building line towards the Thames.
    Mr. HERBERT WILLIAMS: Would not the problem be solved entirely if my right hon. Friend's colleagues employed fewer people?

    Ex-SERVICE MEN (PENSIONS).
    Mr. CLARRYasked the Financial Secretary to the Treasury whether it is the intention of His Majesty's Government to grant pensionable status to the P-class and temporary ex-service technical staff in the Civil Service who have attained the prescribed qualifying service for the clerical staffs; and if he will favourably consider the claim submitted by the Association of Ex-service Civil Servants on the 26th September last at an early date?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): Representations have been received from the association referred to, amongst other bodies, with regard to the position of certain technical staffs temporarily employed in the Government service. It is not yet possible to indicate what will be the outcome.

  WESTMINSTER HALL (WARREN HASTINGS TABLET).
  Major MILLSasked the First Commissioner of Works whether he will follow the precedent set by the tablet in Westminster Hall to Sir William Wallace, who is described thereon as the Scottish patriot, by adding the words First Governor-General of India after the name of Warren Hastings on the new tablet to be placed in Westminster Hall to commemorate the place, date, and issue of the latter's trial?
  Mr. ORMSBY-GORE: I should hesitate to lengthen still further the revised inscription which has been agreed with the donor and the Royal Empire Society. The general public are, I think, aware of the fact that Warren Hastings was Governor-General of India.
  Major MILLS: Will my right hon. Friend take a long view of the help that it would be to the Martians when they are excavating sites in ancient London about the year 7033 to have this additional information?

  NAVAL AND MILITARY PENSIONS AND GRANTS,
  Mr. SMEDLEY CROOKEasked the Minister of Pensions how many of the 361 cases recognised outside the seven years' limit during 1932 have actually been granted a pension?
  The MINISTER of PENSIONS (Major Tryon): Of the 361 cases referred to in the question, 272 received monetary compensation and 89 cases were found to require no more than medical or surgical treatment.

  AGRICULTURE.

    OATS.
    Mr. BOOTHBYasked the Secretary of State for Scotland whether he is aware that the average wholesale price of oats in Germany during the year 1932 was 10s. 2d. per cwt., and of oats consigned from Germany and marketed in this country was 5s. 7½d.; whether he considers that the latter price is a remunerative one for Scottish farmers; and whether he proposes to take any action in the matter?
    The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): The answer to the first part of the question is in the affirmative, subject to the observation that 5s. 7½d. was not the average price at which oats imported from Germany were marketed in this country, but the average declared value on importation which does not include import duty. The average price of oats in certain representative Scottish markets during the year 1932 was 7s. per cwt. With regard to the second and third parts of the question, as I indicated yesterday in my answers to the hon. Member for Moray and Nairn (Mr. Stuart) I fully appreciate the seriousness of the situation with regard to oat prices in Scotland.
    Mr. BOOTHBY: Can my right hon. Friend say when he will be in a position to make some announcement with regard to the oat policy of the Government?
    Sir G. COLLINS: I cannot say when I shall be able to answer that question.

    CREDITS (SCOTLAND).
    Mr. BOOTHBYasked the Secretary of State for Scotland what is the rate of interest charged to farmers by the corporation set up under the Agricultural Credits Act?
    Sir G. COLLINS: I understand that the corporation has not yet announced the terms on which they are prepared to make loans under the Agricultural Credits (Scotland) Act.
    Mr. BOOTHBY: Will my right hon. Friend bring to the notice of the corporation the fact that, owing to the reduction in interest charges on Government securities, the Government of Northern Ireland has made a reduction in interest charges by the corporation, and will he represent to the corporation that it is desirable that it should keep its charges as low as possible?
    Sir G. COLLINS: I will make representations to the corporation.

    WHEAT DEFICIENCY PAYMENT.
    Mr. THORNEasked the Minister of Agriculture the date when the next wheat subsidy is due to be paid to farmers by the Wheat Commission; and the total amount paid up to the nearest available date?
    The MINISTER of AGRICULTURE (Major Elliot): The Wheat Commission have decided to make, on or about 25th March, a payment on account of the deficiency payment to which registered growers are entitled under the Wheat Act, 1932, in respect of valid wheat certificates received by the commission during the period 1st December, 1932, to 28th February, 1933 (inclusive). The hon. Member will recollect that the commission have already made an advance payment in respect of certificates received up to 30th November last, and I am informed that the total amount paid to date in respect of that advance is £1,283,535.
    Mr. THORNE: Does the right hon. and gallant Gentleman think that he is getting value for money?
    Mr. BANFIELD: How much of this wheat is used in the manufacture of flour?

  POST OFFICE.

    TELEGRAPH AND TFLEPHONE POLES.
    Lieut.-Colonel ACLAND-TROYTEasked the Postmaster-General whether, in view of the dislocation of the service caused by the breaking of telegraph and telephone poles during the recent severe weather, he will consider the gradual replacement of these foreign poles by English-made poles of steel or iron, which are not liable to be broken in this manner?
    The ASSISTANT POSTMASTER-GENERAL (Sir Ernest Bennett): Steel telegraph poles are much dearer than wooden poles of equal strength; and the substitution of steel for wooden poles would therefore result in greatly increased expenditure. The breakage of telegraph poles is very rare, and in the recent blizzard the main cause of the breakages was the weight and wind resistance of masses of snow and ice accumulated on the wires.
    Lieut.-Colonel ACLAND-TROYTE: Would not steel poles have stood that weight better than wooden ones?
    Sir E. BENNETT: Possibly, but they are more expensive and are not always reliable, because they corrode, not only externally, but internally. We can deal with external corrosion by frequent layers of paint, but the corrosion inside is another matter and the poles may snap at any moment.
    Mr. T. GRIFFITHS: Is the hon. Gentleman aware that no damage whatever was caused to the wireless pillars and structures and the electricity structures in South Wales because they are made of steel, and will he consider the advisability of replacing wooden telegraph poles by steel poles as that will give employment in the steel trade and the mining industry?
    Sir E. BENNETT: I have already stated the reason why we do not employ them at present. It is because we cannot afford it.
    Captain HAROLD BALFOUR: In arriving at the cheapest method of putting up telegraph posts, has the hon. Gentleman considered the saving in unemployment benefit that will result from employing men to make steel poles instead of wooden poles?

    STAMP-CANCELLING MACHINES.
    Mr. MITCHESONasked the Postmaster-General if he is aware that many of the cancelling machines used by the Post Office with the stamp reading Buy British are made in America; and if he will take steps to obtain such appliances from British sources in future?
    Sir E. BENNETT: I would refer the hon. Member to the reply given by my

    367
    right hon. Friend to the hon. Member for Moseley (Mr. Hannon) on Monday, the 27th February.

  CHINA AND JAPAN (ARMAMENT CONTRACTS).
  Mr. MORGAN JONESasked the President of the Board of Trade if he can inform the House as to the number of the contracts for armaments in existence on 27th February between British manufacturers and merchants and the Governments of China and Japan, respectively, for which his Department has issued licences?
  Lieut.-Colonel COLVILLE: An immediate survey is being undertaken of export licences which are still valid with a view to securing this information. When I am in a position to give it I will communicate with the hon. Member so that he can put down the question again.
  Mr. JONES: May I take it that the hon. and gallant Gentleman will expedite the inquiries as much as possible?
  Lieut.-Colonel COLVILLE: There will be no unnecessary delay.

  UNEMPLOYMENT.

    LAND RECLAMATION (BLACK COUNTRY).
    Mr. BANFIELDasked the Minister of Health whether he will consider the advisability of furthering schemes submitted to him by local authorities for the reclamation of waste and unsightly land in the Black Country, in order to alleviate unemployment and improve the amenities of the district?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My right hon. Friend is prepared to sanction a loan for any scheme within the powers of a local authority if it is remunerative or if good reason can be shown for proceeding with it at once. As the hon. Member is aware the Government do not regard the policy of relief works as likely to provide an effective remedy for unemployment and my right hon. Friend is accordingly not prepared to sanction loans for works undertaken primarily as relief works.
    Mr. T. WILLIAMS: Has the hon. Gentleman's Department or any other Department any effective remedy for unemployment?

    TRANSITIONAL PAYMENTS, TYNESIDE AREA.
    Sir N. GRATTAN-DOYLEasked the Minister of Labour whether he is aware that the scale of transitional payments for single adults in lodgings is 15s. 3d. in Durham, as against 12s. 6d. in Newcastle; for adults living with parents, 10s. in Durham and 6s. in Newcastle; for children under 18, 3s. to 8s. in Durham and 2s. in Newcastle; and whether he will sympathetically consider making provision for avoiding such inequalities in the projected Unemployment Insurance Bill?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): I am aware that there are differences in the scales of transitional payments in the Tyneside area based upon existing differences of public assistance practice. My hon. Friend will remember that a conference of local authorities was called by the Minister of Health a year ago to consider this point and I can assure him that it will be borne in mind in connection with future legislation.
    Sir N. GRATTAN-DOYLE: Will my hon. Friend undertake to impress on the Minister the desirability of bringing those inequalities to an end as soon as possible?
    Mr. McGOVERN: Will the hon. Gentleman bear in mind that in many parts of the country a considerable number of house-breaking cases are directly attributable to the fact that unequal payments—inadequate payments—have been given to a large number of young men?
    Mr. T. WILLIAMS: Is it not the case that the public assistance committee in Newcastle are very largely responsible for this discrimination?
    Mr. HUDSON: The public assistance committee in Newcastle have the matter of the scales in their own hands. My right hon. Friend is not responsible for the scales which they adopt.

  OFFICIAL SECRETS ACT (OFFICER'S ARREST).
  Mr. McENTEEasked the Financial Secretary to the War Office if his attention has been drawn to the fact that Messrs. Foster, Wells, and Coggins, the solicitors of Lieutenant Baillie Stewart, are an Aldershot firm; and whether to assist this officer in the preparation of his defence and to minimise the expense, he will arrange for Lieutenant Stewart to be transferred from the Tower to Aldershot?
  Mr. COOPER: The answer to the first part of the question is in the affirmative, but it is not considered that it would be to the advantage of the accused officer to re-transfer him to Aldershot.
  Mr. McENTEE: Is it not a fact that in the answer given to me last week the hon. Gentleman said that one of the principal reasons for transferring this officer from Aldershot to the Tower was to enable him to prepare his defence; and, in view of the fact that the solicitor actually lives at Aldershot, how does that square with the refusal to allow him to be near his solicitor, and will it not impose upon him the extra expense of bringing his solicitor to the Tower?
  Mr. COOPER: While it is true that his solicitor is at Aldershot, his counsel is in London, and I should imagine that the expense of his counsel going to Aldershot would be higher than his solicitor coming to London.
  Mr. McENTEE: Is it not a fact that the consultations will be with the solicitor and not with counsel, and, in view of that, will not the hon. Gentleman give this officer the opportunity to consult his solicitor under reasonable conditions?
  Mr. COOPER: Every opportunity is given to him to consult with his solicitor, but it is obvious that his solicitor and counsel must keep in very close touch. That necessitates the solicitor and counsel meeting, and one of them must travel between Aldershot and London, and it is obviously to his advantage that the solicitor should travel to London, rather than that the counsel should travel to Aldershot.
  Mr. MAXTON: What is the idea of the fixed bayonets business?
  Mr. McENTEEasked the Financial Secretary to the War Office whether
  370
  Lieutenant Baillie Stewart has yet been informed of the charges against him and, if not, when the information will be furnished; whether he is aware that this officer had to perform his toilet under the guard of soldiers with fixed bayonets; and that he was refused the opportunity of consulting his solicitors before leaving Aldershot for an unknown destination?
  Mr. COOPER: Yes, Sir, Lieutenant Baillie-Stewart has been informed of the charges against him. I am aware that an officer is present when the accused is shaving and that a sentry was present during the first few days of his arrest. As regards the last part of the question, the accused has been in continuous communication with his solicitors, although there may not have been an opportunity for him to consult them immediately prior to his departure from Aldershot.
  Mr. McENTEE: May I ask why it is considered necessary, before a man has been found guilty of anything, that, when he is shaving with an ordinary safety razor, two soldiers with fixed bayonets should be on either side of him?
  Mr. COOPER: Two soldiers were not present. In the early days a private soldier was present carrying the ordinary weapons which he would be carrying at any time. The commanding officer has replaced him by having an officer present while this officer is shaving. He is under a very serious and grave charge, and the reason must be obvious to every hon. Member of the House why the closest supervision is necessary.

  GREAT BRITAIN AND UNITED STATES (DISCUSSIONS).
  Mr. LEVYasked the Prime Minister if he can yet make a statement on the personnel of the British delegation to Washington to discuss the debts settlement?
  The PRIME MINISTER (Mr. Ramsay MacDonald): I would refer my hon. Friend to the answer which I gave on the 22nd February in reply to a question by the hon. Member for Don Valley (Mr. T. Williams), to which at present I have nothing to add.
  Mr. LEVY: Can the right hon. Gentleman say whether he proposes to go himself?
  The PRIME MINISTER: That is covered by the answer I have just given.

  WORLD ECONOMIC CONFERENCE.
  Mr. LINDSAYasked the Prime Minister whether the question of the reduction of hours of labour will be considered by the World Economic Conference?
  The PRIME MINISTER: As my hon. Friend is probably aware, this subject has been under consideration by the International Labour Organisation, and I cannot say at present whether or in what form it may come before the World Economic Conference. It is not included in the Draft Agenda prepared by the Preparatory Committee of Experts.
  Mr. LINDSAY: Is it not the fact that the report of the International Labour Conference is not to be considered until July, and will the right hon. Gentleman not consider the inclusion of this very important question?
  The PRIME MINISTER: It is not in my hands.
  Mr. MAXTON: Having regard to the fact that world conditions have taken a very serious turn since the agenda was drafted, particularly in the United States of America and in Germany, do I understand from the Prime Minister that it will be impossible to add subjects to the agenda as now drafted?
  The PRIME MINISTER: No, I do hope the House will not put that meaning on what I have said. It is not impossible to add subjects to those provided for by the Experts Committee, but, naturally, by the terms of the Conference, I am not going to invite all and sundry to overburden the agenda.
  Mr. HICKS: In the event of it being possible to include the question of hours in the agenda, will the British Government give such a proposal their favourable consideration and sympathy?
  The PRIME MINISTER: It is not merely the British Government which will have to decide on that matter. It will have to be decided in accordance with the ordinary rules of chairmanship.
  Mr. HICKS: In view of the fact that at the Preparatory Conference at Geneva the British Government took up an attitude which was an unenviable one, in my opinion, is it not possible for the British Government to adopt a friendly attitude towards the question of the reduction of the hours of labour?
  The PRIME MINISTER: That is a misapprehension of what was the attitude of the British Government.
  Mr. H. WILLIAMS: Is the right hon. Gentleman bearing in mind that the House gave a considered decision on this subject last December, when it rejected a certain Bill by a very large majority?

  LAW CASES (APPEALS).
  Mr. TURTONasked the Attorney-General how many persons appealed by way of a case stated from courts of summary jurisdiction to the High Court of Justice during the year 1932; in how many cases was the appeal allowed; in how many dismissed; and in how many was the case remitted to the court of summary jurisdiction?
  The ATTORNEY - GENERAL (Sir Thomas Inskip): During the period mentioned there were 62 appeals; 26 were allowed; 23 were dismissed and five cases were remitted to courts of summary jurisdiction.
  Mr. TURTONasked the Home Secretary how many persons appealed from courts of summary jurisdiction to courts of quarter sessions during the years 1931 and 1932, respectively; in how many cases the decisions of the court of summary jurisdiction were quashed or altered; and in how many cases they were affirmed?
  Mr. HACKING: Statistics for 1932 are not yet available. In 1931, apart from appeals in affiliation cases and those relating to rates and similar matters, 281 persons appealed from decisions of courts of summary jurisdiction to quarter sessions; in 117 cases the decision was affirmed without modification; in 96 cases it was affirmed with modification of sentence; in 65 cases the conviction or order was quashed, and in three cases the appeal was abandoned.
  Mr. TURTONasked the Home Secretary how many persons appealed to the Court of Criminal Appeal in the years 1931 and 1932, respectively; in how many cases the conviction was quashed; and in how many cases the sentence was quashed or altered?
  Mr. HACKING: The statistics for 1932 are not yet available. During the year 1931 there were 513 applications to the Court of Criminal Appeal for leave to appeal; in 30 cases the conviction was quashed, and in 35 cases the sentence was quashed or altered.

  HOUSING.

    LOAN INTEREST.
    Mr. HUTCHISONasked the Chancellor of the Exchequer whether, in view of the high rate of interest now being paid for loans under the Small Dwellings Acquisition Acts, he will consider the possibility of floating a large conversion loan to embrace either all such advances or a portion of them, with the object of reducing the interest rate to the level of the interest on the late conversion loan?
    Mr. HORE-BELISHA: I would refer my hon. Friend to the reply given to the lion. Member for East Woolwich (Mr. Hicks) on the 10th November last, of which I am sending him a copy.

    SCOTLAND.
    Mr. DUNCAN GRAHAMasked the Secretary of State for Scotland whether, having regard to the precedent of 1928, when an extra year was granted for the completion of 'State-aided houses under the 1924 Act in Scotland, and having regard also to the desire that slum-clearance schemes should be prosecuted with the utmost vigour, he will be prepared, in view of the anxiety of local authorities to be informed of their position after 1st October next, to make an announcement now as to any extended date by which houses eligible for the present rates of subsidy must be completed?
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): My right hon. Friend fully appreciates the anxiety of local authorities in this matter which is at present under his consideration.
    Mr. HICKS: Do I take it that steps will be taken to communicate to the authorities the end of the period during which the subsidy will be paid, in order that there may not be a rush, with men working overtime and then becoming unemployed? Would it be possible to communicate the dates upon which the subsidies will finish, in order that the work may be spread over?
    Mr. SKELTON: I cannot add more definitely to my answer at the moment further than to say that the precedents of the previous occasions in 1926 and 1928 are being kept in mind.

  LEAGUE OF NATIONS (NEW BUILDINGS, GENEVA).
  Mr. HALL-CAINEasked the Secretary of State for Foreign Affairs if he can state how many contracts in connection with the new Palace of Nations at Geneva have been allocated to British firms; and what proportion of the total cost the value of these contracts will be?
  Sir J. SIMON: The total estimated cost of the Palace of Nations at Geneva is 30 million gold francs, of which 4½ million francs have been generously given by Mr. Rockefeller to cover the cost of the new library. Up to date contracts amounting in all to approximately 151 million francs have been allocated, and of these, two, amounting together to about 870,000 francs have been awarded to British firms. The proportion which the value of these two contracts bears to the total value of the contracts so far awarded is 5.6 per cent.
  Mr. HALL-CAINE: Having regard to the large contribution made by this country towards the building of this house, does not the right hon. Gentleman think that Great Britain ought to have a greater share of the contract?
  Sir J. SIMON: The matter, of course, is not one which can be decided by any one country. There is an international committee which considers tenders.
  Sir PERCY HARRIS: Will the right hon. Gentleman say whether the tenders are competitive?
  Sir J. SIMON: I cannot give a general answer to that question, but in the cases I have inquired into undoubtedly tenders were called for and examined one against another.
  Captain CROOKSHANK: Does not the right hon. Gentleman think this would be a very funny building if it were built in proportion to the contributions paid by all the nations of the world?

  ENTERTAINMENTS DUTY.
  Mr. BUCHANANasked the Chancellor of the Exchequer the total yield from the taxation on entertainments up to and including 6d. admission; and the revenue derived from admission to cinemas?
  Mr. HORE-BELISHA: I am afraid that, the information desired cannot be given, as detailed statistics of the Entertainments Duty at the various prices of admission are not compiled, nor are any figures available showing the amounts of duty paid in respect of particular classes of entertainment.
  Mr. MAXTON: How does that come about? Are not the various stamps sold at their various prices, and should it not be possible for the Department to get the amounts of them?
  Mr. HORS-BELISHA: Yes, but a number of stamps of small denominations may be agglomerated to pay for seats of a higher class, and it is impossible to tell.
  Mr. T. WILLIAMS: Could not the hon. Gentleman obtain the information asked for in the question, and also information as to the reduction in the number of attendances since the ld. duty was imposed?
  Mr. HORE-BELISHA: I am afraid that it is impossible. Naturally, when the question was put down, I did try to obtain that information, but it is quite impossible.

  GERMANY.
  Mr. BOOTHBY (by Private Notice)asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the serious situation in Germany; whether he can give the House any information on the subject; whether he is satisfied with regard to the security of British lives and property in Germany; and whether he proposes to make any representations to the German Government?
  Sir J. SIMON: I receive, of course, frequent reports from His Majesty's Ambassador in Berlin on the situation in Germany. There is no specific fact to add to the matters of fact already reported in the Press. As regards the safety of British lives and property, I must assume that the German Government will continue to discharge their responsibility in reference to British subjects and interests in Germany, and I therefore have no ground for making any representations to the German Government.
  Mr. BOOTHBY: May I ask whether the Minister has seen the report in today's Press that the German Government intend to carry out a purge of its political opponents, following upon the alleged attempt upon the life of the Chancellor, and will he make some inquiry as to whether there is any truth in those reports?
  HON. MEMBERS: Why?
  Sir J. SIMON: I have already said that I am in frequent communication with our own Ambassador. I would remind my hon. Friend that the question that he put to me by the leave of Mr. Speaker had to do with the security of British lives.
  Mr. LANSBURY: May I ask the right hon. Gentleman, not whether he will make representations to the German Government, but whether, in view of the statements that are very widespread in the Press to-day, he will ask the British Ambassador in Berlin to give him a report on the subject? The right hon. Gentleman himself has called attention in his answer to the fact that the Press contains a good deal of very alarmist news, and people with relations in Berlin wish to be reassured on the subject.
  Mr. MICHAEL BEAUMONT: Before the right hon. Gentleman replies, may I ask whether he will bear in mind the necessity of allowing the Germans to manage their own affairs?
  Colonel WEDGWOOD: Will the right hon. Gentleman make known to the German people the feelings of British subjects on this matter?
  Mr. ALBERY: May I ask whether it is not still quite possible for British

  377
  people to telephone, telegraph or write letters to Germany, and to get adequate replies?
  Mr. MAXTON: May I inquire, as to the number of men who are now bearing arms in Germany, and whether the peace treaties that are being infringed—
  Mr. SPEAKER: This is going much too far beyond the original question.
  Mr. LANSBURY: May we not have an answer from the right hon. Gentleman as to whether he will ask our Ambassador in Berlin to give him a report on the present situation?
  Sir J. SIMON: I was waiting to answer the Leader of the Opposition, but a number of other questions were put to me. It is, of course, part of my duty, and part of the Ambassador's duty, that we should keep ourselves in constant communication. I shall not fail to do my duty in that regard, nor, I am sure, will he.

  VISITING FORCES (BRITISH COMMONWEALTH) BILL [Lords].
  Order [28th February] that the Bill, as amended (in the Standing Committee), be printed, read, and discharged.
BILLS REPORTED.

  MINISTRY OF HEALTH PROVISIONAL ORDER (CHESTER AND LANCASTER) BILL.
  Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.
  Bill, as amended, to be considered Tomorrow.

  MINISTRY OF HEALTH PROVISIONAL ORDER (ETON JOINT HOSPITAL DISTRICT) BILL.
  Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.
  Bill, as amended, to be considered To-morrow.

  PRESTON CORPORATION BILL.
  Reported with Amendments; Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Public Works Facilities Scheme (Torquay Corporation) Bill, without Amendment.

CIVIL ESTIMATES (SUPPLE ENTARY ESTIMATE, 1932).
Estimate presented,—of a further Sum required to be voted for the service of the year ending 31st March, 1933 [by Command]; Referred to the Committee of Supply, and to be printed.
SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE A.
  Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A: Captain Arthur Hope; and had appointed in substitution: Commander Agnew.
  Report to lie upon the Table.

EXCESSIVE TAXATION.
3.35 p.m.
Mr. BOULTON: I beg to move:
"That this House views with anxiety the existing high level of taxation and diminishing revenues in this country, believes that this creates an intolerable burden on industry, and urges His Majesty's Government to consider means by which this burden may be lessened at the earliest possible moment."
It is in no mere spirit of carping criticism that I venture to draw attention to the matters mentioned in the Motion. I know how easy it is to air views and to level criticism on such a wide and absorbing subject, and how often the difficulties and the responsibilities of the Chancellor of the Exchequer are forgotten. A year or even six months ago, I should not have felt justified in making this Motion, but the position has materially altered, and now warrants consideration and examination, perhaps from a wider and different angle. The quickly changing circumstances of to-day do not leave very much room for the strictly orthodox. If we are to approach the present-day position with any hope of success, we have to do so with a wide outlook and an elasticity of mind to which we have hitherto been unaccustomed.
To the credit of the Government, three important things have taken place in our national life during the year, which have weighed with me in drawing attention to this question. The first is that financial stability has been restored and the conspicuous ability with which our finances have been handled by the Chancellor of the Exchequer has placed the credit of this country at a higher level than it has enjoyed for a very long time. The second factor is the reversal of our fiscal system, and the third is the Ottawa Agreements. These three factors have made for general stability. They have given us tremendous power, and solid ground as a jumping-off point for using that stability for constructive purposes. The limits of taxation have been reached and passed, as is shown by the declining Revenue and unemployment is at a terribly high figure, and, although the industrial outlook is brighter and there are definite indications of recovery, it is no use blinding our eyes to the fact that confidence is
384
still lacking—the want of inducement to take business risks.
It has been pointed out that large sums of money are lying at the banks waiting for investment and for industrial development. That is true, but that money constitutes the working capital of the country. What is to bring it into active use? Money, like everything else, requires an inducement for use. It has to be given a fair opportunity to make a fair return for reasonable business risk. It is beyond doubt that the heavy burden that is being placed upon our people and upon industry, especially in high rates and taxes, is one of the main factors, if not the main factor, that is stifling industry. It is an obstacle to creating the inducement to release that great volume of working capital, which is the lifeblood of industry. It is hardly necessary for me to remind the House of the distressing effects that high taxation is having on the many thousands of small investors who are living upon their hard-earned savings, and have barely enough to keep a home together, but who are bearing their hardships so quietly; but it is more particularly from the industrial point of view and from the point of view of the effects on unemployment that I want to draw attention to this matter to-day.
This country is taxed about one-third higher than the next highest taxed nation in the world. What does that mean to the competitive power of industry in the markets of the world? In reply to a question in this House as to what it would cost the Exchequer if all company reserves were released from Income Tax, it was stated that in a normal year, at the standard rate of 5s. in the £, it would cost the Exchequer £60,000,000 a year. Think what that means. With £60,000,000 in cash, you could command £600,000,000 of credit. That is some indication of what industry is up against. When we realise the conditions under which our industries are working, and particularly the basic industries upon which we rely and upon which we shall have to depend for our future existence, and the struggle that they are engaged in against world barriers, I would ask the House, can we afford to continue to allow the risk which industry in compelled to take at the present high level of taxation, or is it

385
better to shift the risk and lighten some of the burdens that it now carries?
It is with the broader and more general effects of taxation that I am particularly concerned, but, if the House will bear with me for a few minutes, I would like to give one instance, even at the risk of covering ground which may have been fully covered previously but which I believe is typical of the manner in which excessive taxation is affecting trade, and, consequently, revenue returns. It has been the tradition of our Chancellors, up to quite recent times at any rate, to see that the distribution of taxation should be as fair and just as was possible. Can we claim that for the brewing and allied trades. So long as we are allowed to eat and drink, of course in moderation, what we wish, these trades have a right to receive as fair treatment as any other trades. I do not wish to bore the House with figures, but I should like to give one or two in support of my contention. I do not propose to give many, because they have been so recently published in connection with the deputation which visited the Chancellor of the Exchequer. I would remind the House that in 1914 the Beer Duty was 7s. 9d. per standard barrel, and in 1932 it was 114s. 8d. In 1914, the net standard barrelage was 35,178,000. It fell in 1932 to 15,576,000. The Chancellor of the Exchequer, speaking in this House on the 21st April, 1932, said:
"I see in beer one of the great sources of revenue to the State, which has been for some considerable time declining, and which suffered a severe acceleration of that process by reason of the increase in the duty last September. I do not wish to see such a source of revenue permanently undermined."—OFFICIAL REPORT, 21st April, 1932; col. 1762, Vol. 264.]
Let us see how this increased duty has affected the revenue of this country. In 1931, when the duty was 103s., the Chancellor collected from it, including Customs, £75,700,000. The estimate for the year ending April, 1933, the first full year of the increased duty of 114s. was £80,000,000. I am advised on very reliable authority that it is thought that the Chancellor will collect for the year —and this figure includes only two months for which the yield is estimated—£73,602,000. That shows a loss of £2,000,000 as compared with the amount that he collected in 1931, when the duty
386
was 103s., and is down by £6,000,000 on the estimate of 1932. At the present rate of loss, what is the year 1933–34 going to show? If it were a question of a decrease of £6,000,000 only, it might, perhaps, not be so perturbing, but how much additional loss is my right hon. Friend going to suffer in Income Tax and Surtax, on farmers' profits—if there are any—on maltsters' profits, which have fallen by 77 per cent., and on the profits of allied trades, in Death Duties on lower values, and in Schedule A licence duties in respect of public houses and buildings. Moreover, what is he losing in unemployment payments Taken together, these losses must represent a very large total.
It is difficult to estimate the number of those who have been thrown out of employment, but I think a very reliable indication is given by the wages bill, which shows a fall of 10 per cent. in the actual wages paid on the manufacturing side of the brewing industry, not including the allied trades. If we take all these into account, it must represent a very serious number of persons who are unemployed. I do not wish to labour the point further, for these figures speak only too clearly for themselves. I have only selected this trade because it has always been the most fruitful source of revenue. I hold no special brief for the brewing trade, but I do for justice. I think that the Chancellor of the Exchequer has the sympathy of the large majority of Members of this House, for he inherited this legacy from his predecessor, but I sometimes wonder what Lord Snowden's thoughts must be when he reflects on one of the greatest Budget miscalculation that, I suppose, has ever been made. He may, of course, have had other motives; I do not know; but I am always inclined to think, much as I sympathise with the temperance reformer, that he usually destroys his own case by being too intolerant.
What of the future? How are we going to replace these diminishing revenues? The present high level of taxation is ceasing to perform its natural function. What is going to be done? Unfortunately, my right hon. Friend who is going to reply will not tell me. But this April is the crucial time, and will decide and set the seal on what we can hope to achieve in the lifetime of this Parliament. It is the situation that I have outlined that

387
brings me to the definite conclusion that, however heterodox it may appear at the moment, my right hon. Friend might deflect the course of the financial ship a little with a view to escaping still fouler weather. The Government favours a long-term policy. I have no quarrel with that, but why not apply that policy when reviewing the whole field of taxation? The balancing of the Budget requires no stressing, but I suggest that the Government might take a three years' view of taxation. I may be thought bold, but I suggest that they might reduce the Income Tax by, say, is. 6d. in the £. I believe it would have an immediate and beneficial effect, but close observation of the result of that relief for a few months would quickly gauge the effect. Suppose we were down by £50,000,000 or £60,000,000, and a lesser amount in the second year, that surely need not perturb us. You still have ways and means to correct that.
If my calculations are correct—and I do not think they are very far out—there will this year be added some £40,000,000 to the National Debt. Who can doubt that it would have been fatal if the Chancellor had produced a Supplementary Budget to meet the prospective deficit by imposing taxation? Cannot we apply the same method and precedent in the event of there being a deficit in the first or second year? But the third year I believe you would get a rich reward. Although the conditions are different, I do not see why history should not repeat itself. I am not alone in that belief, for there are many men with far greater experience than I have, better qualified to speak than I am, and whose views are worthy of consideration, who hold the belief that I am expressing. I believe that the bold treatment of the disease of taxation by such means as I have suggested would do more to restore confidence and put heart into our people and into enterprise than anything else. The patient requires a changed treatment. I do not think there will be very much disagreement with that. Our Chancellors up to late years have kept the patient in splints, and have bound them ever tighter as each April came round. The circulation of the patient's blood has been somewhat overlooked.. Relax
388
the taxation bandages and strip some of them off, and see how the improved circulation of the blood will go far to invigorate the whole body politic. Increased purchasing power in the hands of the people will create demand, which will be reflected in every trade, and in our export trade, and will remove the greatest obstacle to greater employment.
It will be said, of course, that it is easy enough to suggest a reduction of taxation, but how can it be met, and what of the risk? The risk of the reduction of taxation is incomparably less than that of maintaining it at its present high level and maintaining 3,000,000 people in enforced idleness at a cost of £130,000,000 a year. At any rate, in present conditions I contend that at least it would be a sound and legitimate risk which the Government would be justified in taking and would be well advised to take. Such a risk is lightened by our restored stability, good credit and the increased power that we have in our hands from our tariff policy and the Ottawa Agreements, which have given us an entirely new outlook. We have also had the great Conversion Loans carried through with dexterous management and truly worthy of this country's financial reputation. That has given us some £30,000,000. There are two sources which my right hon. Friend might call to his aid to meet any problematical risk. If we have to borrow for the Sinking Fund, I would waive the Sinking Fund and reduce taxation. A real surplus is simply a surplus of revenue over expenditure. If there is no surplus, what is the use of borrowing to replace one form of debt for another? I, therefore, say suspend the Sinking Fund if necessary until better days. I will not trouble the House by quoting precedent or authority but I cannot do better than recall a letter recently written to the "Times" by my right hon. Friend the Member for Hill-head (Sir R. Horne) which, no doubt, will still be fresh in many of our minds.
But the most fruitful source from which my right hon. Friend can draw, and one that I particularly wish to stress, is the reduction of unnecessary and wasteful expenditure. Ever since the War, Governments and local authorities have spent on a colossal scale, and much of this has been expenditure of an unproductive nature which should properly be de-

389
ferred to a time of greater prosperity. In a word, we must cut our coat according to our cloth and the fact, that we have not carried out that practice is I think the cause of much of our difficulties in taxation. We are advised to spend wisely, and I entirely agree, but let us see to it that we discontinue and cut out now all expenditure which has been found to be unproductive. There can be little doubt by anyone who has taken the trouble to study the expenditure on some of our services that for much of it we are getting insufficient value. It is wise and intelligent retrenchment that I advocate and not simply shifting the burden from one section and harming another.
Since I put this Motion down I have been inundated with correspondence and suggestions from all parts of the country. I shudder to think what my right hon. Friend's postbag must be, but I do want to remind him, in case he should have overlooked them, of the official and unofficial economy reports. The conclusions and recommendations of those reports resemble each other in a, very marked degree. I had myself the privilege of serving, as a very humble Member, on the latter Committee. It has never been suggested that any individual Member could be expected to agree with all the recommendations made in that report, but I do say that those reports should be a guide and a value in showing the road to very substantial savings, and it will be interesting in due course to learn how far our labours have been appreciated.
The right hon. Gentleman the Member for Darwen (Sir H. Samuel), if I understood him correctly, has given us to u_nderstand that the objects for which His Majesty's Government were returned to power may be said to have been achieved. submit that the first object may be said to have been achieved, but the second, and no less important, has yet to be faced. Retrenchment falls within that category, and is not the least urgent, as we have been sharply reminded by the very disagreeable shock we have had in the publication of the Civil Estimates. I refuse to believe that the Civil Estimates, as issued, are the last word of the Government in the matter of national economy. It would be contrary to everything that my right hon. Friend has told us, that is, that the limits of economy
390
have not yet been reached. But it shows how vitally necessary the question of retrenchment is, and I am sure the right hon. Gentleman the Member for Darwen would not think me offensive or impertinent if I were to say that the attitude of himself and his followers has puzzled me a good deal, as, indeed, it does puzzle a very large number of their former supporters in the country, for, after spending a long summer's day with our Nationals, now in the wintry weather they are experiencing they appear to be finding an excuse for contemplating seeking warmer quarters. I say with all sincerity, is not their spiritual home standing side by side with the Government in pressing forward and supporting their own well-established principle and as a barrier against the peril as represented by hon. and right hon. Gentlemen opposite? I feel sure that I shall have the support of the right hon. Gentleman and his followers for this Motion, for, after all, it embraces one of the oldest and most cherished Liberal principles—retrenchment and reform.
I wonder if it is any use my appealing to those who sit on the opposite benches? [An HON. MEMBER: "Not an earthly."] I would, however, like to remind them, if I may be allowed to repeat what I ventured to say in this House when speaking some short time ago, that the question of Income Tax is not a class question. It is an industrial question, for every point of taxation imposed adversely affects, either directly or indirectly, the very poorest. Our social services are founded on a sound and prosperous industry. Destroy the foundation, and what becomes of your social services? Surely this question is worthy of their reconsideration, if for no other reason than in the interest of that great mass of unemployed persons who are expecting and waiting, not without hope, for some relief from their distress. It is with that object in view, and with that in view primarily, that I have ventured to move this Motion.
I must apologise to the House for having detained it longer than I intended, because I know there are many Members who wish to speak. In conclusion, I would say that to-day we have got to view these problems with a broad mind, with common sense and courage, boldness with prudence, the nation expects.

391
Timidity it will not tolerate. What I have ventured to advocate I can assure my right hon. Friend is in no lighthearted spirit, but from deep conviction, and it is with all humility that I do submit and stress that the time has now come when the Government should seriously consider the reversal of its taxation policy. I can well imagine and appreciate what such a change must mean to anyone who is responsible for the nation's finances, but I, for one, trust and believe, and I am sure that my right hon. Friend will face this issue with his accustomed, traditional family courage.
4.8 p.m.
Sir JOHN WARDLAW-MILNE: I beg to second the Motion.
I congratulate my hon. Friend the Member for Central Sheffield (Mr. Boulton) on having secured first place in the Ballot, and I may tell him that there are a large number of Members who have spent a good many years in this House who have never been so fortunate. I also congratulate him on his perspicacity and judgment in bringing forward a Motion so timely and important when the House is pressed on all sides and from all parts of the country to take its courage in both hands, to reduce taxation and at the same time to incur a good deal of new expenditure. It is one of the difficulties of a discussion of this sort that one is apt to be accused, perhaps naturally, of putting forward contradictory ideas in one speech. I am quite certain that what I have to say this afternoon will certainly lay me open to a charge of that kind, but I think that the extraordinary conditions which we are passing through at the present time justify any departure from precedent in these matters, and, in fact, our difficulties cannot be got over so far as the remedies are under our control here at home, except by both expenditure and economy.
I well remember, and many other hon. Members will also recollect, the speech of the Chancellor of the Exchequer when he introduced his Budget about a year ago. At that time he said that the path of financial stability was hard and stony, and the road long and weary, and he added that the whole country was crying out for relief from taxation. At that
392
time my right hon. Friend the Chancellor of the Exchequer, perhaps naturally, did not feel able to give that relief for which the country was crying so bitterly. I do not quarrel with that, but I think it is clear that what may not have been possible a year ago may certainly be possible to-day. The position is not whether you can produce a complete and an accurate balance sheet which will enable you to reduce taxation. These are not the conditions under which this country to-day can look at this matter. It is not a. question only of justice. Everyone will agree that the taxpayer, to whose self-sacrifice eloquent tributes were paid a year ago, is well deserving of relief, but it is not only a question of justice, it is a question purely of economic accountancy. In our own interests, we cannot go on without industry being relieved of the burden of taxation which is bearing upon it. It is a, truism, but it possibly bears continual repetition, that not only, as my hon. Friend has said, does all taxation come out of industry, but that everything we have, every emolument, every salary, whatever our occupation, primarily comes out of productive industry, and unless we can keep that industry prosperous and enable it to expand, there is no other economic subject that is worth discussion in the country, because on that all depends.
Therefore, if we are to spread the immense burden which this country is bearing over larger tracts of the production area, it can only be done by making industry prosperous. For that reason alone, quite apart from any question of justice, it is to our interest to see what relief will give an impetus to enterprise and will put new life into existing industry. I think there are three causes which prevent that expansion of industry which we all want to see. The first of these is concerned with conditions all over the world. Industry, above all other things, wants industrial world peace, which means political peace. It wants, if possible, to be assured that the ordinary political conditions of the world are not likely to be violently upset, as, unfortunately, there is every sign they are going to be, in the East at any rate, at the present moment. In that regard the Government can do no more than it is doing at the present time. It means international agreement and international negotiation. It means sup-

393
port for the objects of the League of Nations whether the League gives all the result we would all like to see at once or not. I do not suggest that the Government can do more in that direction than it is doing to-day, but international agreements in regard to War Debts and other matters are fundamental.
The second cause is the uncertainty of our own financial policy. In that connection I venture to say that there is a great deal we can do, and, much as I admire what has been done by the National Government, in many directions, it is, to my mind, the one direction in which they have not advanced as they might have done. I have great hopes of my right hon. Friend the Chancellor of the Exchequer, whose recent speeches in the country together with the answer that was given in the Chamber this afternoon, show quite clearly that he, at any rate, is convinced that there can be no return to the Gold Standard until the conditions which made such a standard possible in the past are reestablished in the world.
I wish I could feel quite certain that those who have the daily management of our currency matters were as convinced of that as is the Chancellor of the Exchequer. I am afraid that there is still grave doubt about the views still held by those who are responsible for the timid and vacillating policy in currency matters imposed upon us immediately after we were forced off gold. That policy, apparently, was based upon the idea that there would be some violent upheaval and that the people of this country would rush away from their own money, and as a consequence the policy of an unnecessarily high bank rate was followed for months. I do not want to labour that fact—it has passed—but I hope that those who are responsible for our currency policy to-day are as convinced as the Chancellor of the Exchequer evidently is, judging from his recent speeches, that there is no chance whatever of the return of this country to any Gold Standard until the conditions which make that standard possible can again be set up. Fortunately, to back up any opinion that may be expressed in this House, we have now the views of the experts of the nations and of those responsible for drawing up the Agenda of the World Economic Conference. If anybody has any doubt as to
394
the certainty that you cannot return to gold in the near future he has only to read the conditions which they set out as being fundamental before any such restoration can take place.
I do not know whether these matters will be discussed at the World Economic Conference or not. I fear very much, in spite of the conditions laid down, efforts will be made to try and drag this country back to gold before those conditions are fulfilled. We were forced off gold with great and unnecessary expense to the taxpayer when we should have gone off ourselves months before. Leaving that aside, I would say that in this second difficulty—the question of our financial policy—I desire to congratulate the Government upon what they have done, and particularly upon the working of the Exchange Equalisation Account, which, I think, has been of immense benefit to trade in this country. The whole country has benefited since we went on to sterling and our trade has expanded directly as a cause of it. The Government, however, should make clearer than they have done up to now what their financial policy in future is to be, and how they propose and intend to raise wholesale prices. It is the goal to which they have referred over and over again, and quite rightly, as being the principal aim they have in view, in keeping with the rest of the world, but I think they should make it plainer than they have so far done how they propose to set 'about it, and, above all things, they should make it clear that we intend to stick to sterling and that sterling is to be our money as far ahead as we can see at the present time. Since that period to which I have referred—the period of weakness in policy on the part of the Bank of England and the Treasury—I think you have to combine them—we have had a period of cheap money.
One extraordinary thing is to be found in the speeches of many of the great bankers in this country. I think that it is only right to put these things quite plainly. At the annual meetings of some of these banks I read that it is a matter for congratulation that the balances on deposit in the great banks have gone up £200,000,000, and, presumably, equally a matter of congratulation that the advances to industry and trade have gone down £130,000,000. It is not a matter for congratulation at all. To stand at a

395
table and express satisfaction that the deposits in the banks have grown and to refer to that as being a sign of prosperity appears to me to be only possible on the part of those who have never had anything to do with trade or industry at all. Cheap money has been offered. The reason why the trader does not take that cheap money, and will not accept it, is, first of all, the difficulty of the international situation and the uncertainty in that connection; secondly, owing to the want of a quite definite statement regarding financial and Government policy; and thirdly, because he is absolutely tired of having the Government as a 25 per cent. partner in his industry, taking that share, or a larger one, of his profits but bearing no share of his losses. We are told constantly by Government speakers, bankers, economists and all kinds of people that we are suffering from a lack of confidence. It is true, but the lack of confidence is not something you cannot explain or understand. It is not a psychological phenomenon. It is not something which is going to come right by itself. It is something which we can do a great deal to ensure that it will pass away without very much delay. We can do that, as I have said, in three ways.
I may be told that I have not suggested any definite way in which the Government can set about raising prices. It is hardly usual to expect private Members in this House to put forward definite proposals, but I intend doing so to-day, although I am perfectly well aware that they will not meet with universal acceptance. I say quite frankly, having declared that sterling is not a makeshift but is going to be our money for a long time to come, and making the best progress we can in the settlement of international affairs, such as War Debts and the like, our definite aim should be to consolidate within the Sterling Union, and particularly within the Empire, the exchange rates of the countries concerned on as close a basis as possible. The whole world, and particularly the Sterling Union, is waiting for a lead in this matter. It can be done, and the World Conference should then devote itself to fixing as closely as practicable the basis of exchange between the sterling and gold countries.
Mr. HERBERT WILLIAMS: On a point of Order. I do not want to spoil the speech of the hon. Member. It is very interesting, but it seems to be very remote from the Motion, and there will be no opportunity on the part of hon. Members to reply to arguments from which they dissent.
Mr. SPEAKER: I do not, as a rule, like to interfere with Debates on a private Member's day, but I was just reading the Motion when my attention was called to it. I am bound to say that I do not think that the speech of the hon. Member has anything to do with it.
Sir J. WARDLAW-MILNE: May I draw your attention to the fact, Mr. Speaker, that I am endeavouring to explain the measures which, in my view, will enable the Government to reduce the burden of taxation. May I further point out that the Motion distinctly urges the Government to consider means by which this burden may be lessened. I venture to suggest to you, Sir, that it is useless making statements merely declaring that a reduction in the burden upon industry is essential. Everybody knows that.
Mr. SPEAKER: If the hon. Member leads up to it, it will be all right, but he is taking a long time in doing it.
Sir J. WARDLAW-MILNE: I think that the hon. Member for South Croydon (Mr. H. Williams) should permit me—and I have not taken very long—to develop my argument in my own way, nor do I ask the House for its indulgence as often as he does. I get back, perhaps in a roundabout way from his particular view of the subject, to the means by which this burden may be lightened. I was saying that there are these three causes which directly bear upon the difficulties of carrying on prosperous industry and make it essential that that burden of taxation should be reduced. I have laid stress upon the financial action which the Government should take, because I do not think that you will get any expansion in industry until the points with which I have dealt are dealt with and until traders have some security as to the future in that regard. If anyone suggests any form of reflation in this country we immediately hear talk of the dangers of inflation. We hear that everywhere when any body suggests that prices should be raised by monetary

397
action. It is true, however, that while retail prices have only dropped half-way clown the hill, wholesale prices have dropped to the bottom. Therefore, before any rise should take place in the level of retail prices there is a long way up the hill for wholesale prices to go.
I should have liked to have dealt further with these matters if the occasion had been appropriate, but in view of the anxiety of my hon. Friend to speak on the burden of taxation, he will perhaps allow me to do something which I would rather not have done, and that is, to give him some little idea of what that burden is and of the difficulties with which industry is faced. On the figures which were ascertained for 1913 it was estimated that the total wealth in this country amounted to something like £16,000,000,000 on the gold basis figure of that date. To-day gold prices are very much the same as they were in 1913, a little lower, and consequently probably that figure is not very far out to-day. Just think of the position of the industrialists in this country if that is our total wealth and the country, that is productive industry, is bearing a burden of mortgage debt equal to 50 per cent. almost of its total wealth. There is no other country in the world bearing such a load. Our total National Debt is greater than that of the United States, France and Belgium put together. It is true that if the conditions under which we were working previous to the War had continued it might even have been possible for this country to bear that debt load, but it is certainly one to-day which makes it almost impossible for industry to prosper.
If we are, therefore, in the position that it is impossible for any Government to reduce its taxation, industry must be very prosperous to carry it. That prosperity could be assisted by inflation which I definitely and clearly recommend. I believe that the country has suffered far more than is fully realised from a long period of deflation and that it is high time we reversed the process. We are told that inflation does not help industry at all. It would raise wholesale prices and by so doing would benefit, not only this country, but the whole world. It is so very easy to talk of the dangers of inflation but that talk has been overdone.
398
The second way is by economy. Like my hon. Friend I recommend to the Government the official and unofficial reports on possible economies. Those economies, however, cannot immediately meet the situation, and I believe that you could make certain economies by further expenditure in the right direction. Economies are badly needed where we are wasting money. That is the real economy. But there are certain economies which you can make by spending money. For example, you have the case of unemployment pay alone—the enormous payment of £100,000,000 a year for the benefit of those who are unemployed. Anything which could be done to employ them would mean at once that you were making economies by 'spending money.
I want to give to the House something which, at first sight, hon. Members may-say is entirely fantastic, but I will give it to them as an instance of what is in my mind. Why do we not scrap the Navy altogether, and rebuild it, of course within the limits of the most recent agreements with other nations Why not scrap the Navy? All your battleships are 16 or more years old. They will be out of date any way, if they are not so already, before you can replace them. Scrap the Navy gradually and replace these ships by up-to-date vessels, even by a smaller number if you like. You would spend less on upkeep and it would give employment, not only in building, but throughout the heavy trades of this country. It is not so fantastic as it seems at a first glace. I am not suggesting that it should be done out of current revenue, but I do suggest that a loan of a hundred millions for that purpose would enable the Government to save a very large amount of money in other ways. We have two or three capital ships only which are less than 16 years old. I do not pretend to be an export on the Navy, but one does not need to be an expert to know that your battleships which are 16 years old and your cruisers which are 10 years old are getting out of date, and it is doubtful whether it is good economy to go on paying money for the upkeep of vessels so nearly obsolete. It is better to raise a definite loan for the rebuilding of the, Navy within such limits as have been laid down in the various international

399
agreements and set aside £7,000,000 or £8,000,000 a year for interest and sinking fund.
I hope that in the equipment of the railways, of which we hear so much, the necessity will be considered of providing a big supply of larger capacity wagons and of transferable wagons from road to rail. I think the right hon. Member for Tamworth (Sir A. Steel-Maitland) wrote or spoke about that matter the other day. That is a development in regard to which other parts of the world are setting a very good example to us. There is a great deal that might be done in that direction. In these matters the Government may require to act, but when one comes to consider the question of private enterprise, one is faced with the fact that it does not matter how cheap you make money in the banks the trader will not avail himself of it so long as these immense taxation burdens are upon him, and so long as the State takes such a large share of his profits.
I agree with my hon. Friend who moved the Motion as to the necessity for a reduction in the taxation of beer. There, again, it is not a question of the justice of the case. I do not say that because some hundreds of people, it may be that some of them are ladies, have sent me postcards on the subject. Other hon. Members have also received postcards. If anything would make me disinclined to propose a reduction in' the taxation on beer it is the receipt of these postcards. Some of the writing runs from one line into another and it would appear that the subject was a very vital one at the time in the minds of those who wrote them. From the point of view of mere economic accountancy it is not paying us to tax beer as we do at the present time. I entirely agree that a reduction in this form of taxation is desirable from the working man's point of view, although I do not consider him the only person worth consideration in this connection. The postcards that I have received would lead one to believe that only the working man drinks beer. A great many other people I can assure the writers are interested in the taxation of beer, besides the so-called working man. The increased taxation of beer is not bringing in the expected revenue. It is
400
causing unemployment, it is causing loss of rates, it is driving a large number of retail traders out of business and it is not doing any good to the State or anyone else. Leaving aside the question of justice and the question of the rights and pleasures of the working man, this is a question that the Chancellor of the Exchequer will no doubt consider very seriously in connection with, future Budgets.
I understand that my right hon. Friend the Lord President of the Council is going to reply. I hope that he will forgive me if I say that the bulk of Members of this House—I say this with no disrespect to the Prime Minister or to any other Member of the Government—are looking to him more than anyone else to give us a lead in putting things in order and in measures to give industry a new opportunity of prosperous working. No one understands and appreciates the position of the traders of this country better than my right hon. Friend, and no Member of the Government understands these problems better than he. Many of us remember the time in 1923 when he took his political courage in his hands in order to bring about a new order of things he considered essential and which is now accepted. His proposals were refused by the people then, but they have now been accepted. Just as the tariffs for which he fought then are forming the backbone of our return to prosperity to-day—[Laughter]—There is no doubt about it. If hon. Members have the slightest doubt about that statement, they. will be able to put their case, if not to-day on some other day and we shall be glad to prove our statements. There is not the slightest doubt, however, that the real proof of success—perhaps this will please some hon. Members better—of our tariff policy will be the bringing about of free trade throughout the world. The extension of fair and freer trade throughout the world will be, I repeat, the greatest proof of the success of that policy.
I want to echo what was said by my hon. Friend who moved the Resolution, that the House has waited very patiently and the country has waited very patiently for action to relieve our present distress. Much I agree has been done but more is wanted. The House will accept almost anything from this Government except

401
weakness and timidity. It will attempt almost any new scheme that can be brought forward, and will admire and support I believe any proposals, however drastic, if they really deal with the situation. Every one of us, wherever we may sit in the House, wants industry to be restored to prosperity, but that cannot be done except by bold measures, by the Government saying: "We are dealing with exceptional times, times just as exceptional as in the days of war, and these times require exceptional methods. We care nothing about what may be the ordinary practice in normal days."
The idea of suspending the Sinking Fund may appear to those who live in the past as something too horrible to be considered seriously. We must wipe out that idea altogether. Suspend the Sinking Fund, raise the loan of which I have spoken—which, no doubt, will be described later as fantastic—and rebuild the Navy. That cost would be a mere bagatelle. Some £5,000,000, £8,000,000 or £10,000,000 a year would give you your interest and Sinking Fund, and you would save more than that in regard to unemployment benefit. The Government may not accept that idea. I press nothing in detail upon them to-day but I say that the whole country is waiting for a lead from the Government, and in the end it will he judged by what it has done for industry and unemployment and by that test alone.
4.39 p.m.
Mr. COVE: I beg to move, in line 1, to leave out from the word "House," to the end of the Question, and to add instead thereof the words:
" realises that the existing level of taxation is largely due to expenditure on unproductive services, views with anxiety the growing burden of indirect taxation upon the working classes, and will resist any attempt to reduce direct taxation by further economics in the social services."
I should like to congratulate die Mover of the Resolution on the selection of the subject matter and the manner in which he presented his case. I am very much interested in what he said and I am sure the whole House appreciated his argument. I am glad that this subject has been raised, because it gives me an opportunity of stating, perhaps in an imperfect way, the position of the party to which I belong. We believe that it is impossible within the confines of the
402
capitalist system to give a high standard of living to our people. We believe that out of the present system, in spite of the fact that we have enormous productive capacity, we have not the machinery to distribute that produce amongst the people. The Seconder of the Resolution said that the whole of his party were looking to the Lord President of the Council more than to any other Member of the Government to see that the trade of the country had fair play. He appealed to the right hon. Gentleman to remember the position of the industrialists and the traders of the country.
I want to appeal to the right hon. Gentleman on another score and to ask him to tell us to-night, and also the many thousands of people outside, whether the Government are still maintaining the principle of equality of sacrifice which they evoked during the crisis. At that time the Government stated that the country was in a crisis and all the citizens must make sacrifices towards the recovery of the nation. There were cuts in the pay of the police, the Army, the Navy, and the teachers of round about 10 per cent. The benefit of the unemployed was also cut 10 per cent. I want to ask the right hon. 'Gentleman whether he can reassure me and reassure the unemployed and all the other 'classes that. there will be no relief of direct taxation unless there is also relief of the cut classes, that if the addition to the Income Tax that was put on during the crisis is to be removed then, at the same time, the Government will also remove the cuts that were put upon various people. I hope that the right hon. Gentleman will be able to reassure not only industrialists and traders, but the cut classes who were involved in the principle of equality of sacrifice.
I was much interested in some of the arguments of the Mover and Seconder of the Motion, but I do not think they established their case. I do not think they made it clear that taxation is a burden on industry. It was not made clear to my satisfaction that if we were to remove taxation there would inevitably flow from that fact a revival of trade. As a matter of fact, all the economic opinion that I have been able to consult, including the most exhaustive inquiry that was made in 1925, 1926, and 1927 by the Colwyn Committee, is in the opposite direction. The Colwyn

403
Committee came to the conclusion that taxation was not a burden upon industry, that direct taxation did not enter into prices, that the producer did not, for instance, charge a price higher because there was a, 5s. Income Tax than when there was a 4s. Income Tax.
I remember the late Chancellor of the Exchequer, Lord Snowden, before he became Chancellor of the Exchequer, making a statement on this subject when he sat on the Opposition benches. He said that taxation was levied after profits had been made. That fact establishes the point that taxation is not a burden on industry, does not enter into prices and does not rob us of our competitive power or interfere with the necessary capital needed for the development of British industry. It was abundantly proved by the Colwyn Committee, in the conditions which then existed, that there was sufficient capital not only to finance industry but to finance a substantial increase in trade, and what was true then is doubly true to-day. If the prosperity of British trade depended on the supply of capital British trade would be prosperous at this moment. The seconder of the Motion pointed out that there were millions of pounds lying idle, rotting. You have this condition to-day, on the one side, you have human labour and human beings rotting under our present system of society and, on the other, capital rotting, wasting, lying idle. There is plenty of capital available for effective investment in industry, and there need be no concern on that point. The Colwyn Committee directed special attention to the fact that public companies were largely financing their own industry out of their own reserves and savings; that the great bulk of the new capital needed was being provided by the companies themselves.
Let me draw attention to this important point. If the case put forward by the hon. member in this Motion has any truth in it, if hon. Members opposite really mean business, there is only one way in which they can relieve the burden of taxation effectively and that is by examining the figures of the Budget and tackling those items which really are costing money. What is the main item of cost in the Budget for 1932–33? It is the gigantic item of the unproductive Debt. Look at it. We have an esti-
404
mated expenditure of about £760,000,000, and out of that over £300,000,000 is raised for the purpose of paying interest on the National Debt, that is to say, that about 45 per cent. of the taxation raised in the Budget goes to pay the interest on the National Debt. That is just a shifting over from one set of people to another, a re-distribution of the national income of this country. I remember Lord Snowden saying—I am sure be will be accepted by hon. Members opposite except when he talks about tariffs—that the rich classes of this country were not paying for the Army, the Navy or the Social Services, that the wealthier sections of the community were making little or no contribution to the maintenance of the Navy and Army or the Social Services, that their contributions through direct taxation went back into their own pockets in the form of interest on their investments in the National Debt. As a matter of fact, the direct Income-tax payer to-day is not even paying a sum sufficient to pay for the interest which that class is drawing from the War Debt.
The whole burden of the Social Services and the maintenance of the Navy and Army rests upon the shoulders of the working classes, through the medium of indirect taxation; and I say that if you are going to tackle this problem at all you cannot escape the National Debt. You must cut it down, and not merely by conversion loans, for we shall never get rid of it in that way. Let me refer to that famous report which lowered British prestige so much and helped to create the panic and crisis through which we passed last year—the May report. The figures were evidently got out by one of the Departments. An exhaustive and detailed analysis of national expenditure is given in that report, on page 235. They give the total figures of the increase of budgetary expenditure for 1931-32 over 1913-14, and say:
" From the foregoing table, it will be seen that out of a total increase of £633,318,000, no less than £318,498,000, or 60.24 per cent. is on account of Debt, War Pensions, etc., and if there he added the increase in respect of Defence Services £33,334,000 as being generally related to like purposes, the increase is £414,832,000 —namely, 65.50 per cent. of the total increase.
These are staggering figures. They show that 65 per cent. of the budgetary

405
increase in expenditure for 1931–32 over pre-War is due to the Debt and Defence Services. They go on to say:
" Next in order of increase are the Social Services. To the sum of £99,945,000 there has to be added £12,324,000 increase under grants to local revenues that is £38,324,000 less £26,000,000 for de-rating) showing a total increase of £112,269,000—namely, 17.73 per cent."
Therefore, 65 per cent. of the increase in expenditure in the Budget is due to Debt and War Services and 17 per cent. to Social Services. If the principle of equality of sacrifice is to be applied; if there is to be any equity at all, if you are going to deal with this on principles of sound economy, you must cut down that 65 per cent. burden before you touch the 17 per cent. burden. A reference has been made to the burden of local rates; but in that case there are assets for loans, local authorities have millions of pounds worth of productive assets, houses, electrical works and tramcars, all of them producing wealth now and will produce wealth in the future. But here is an unproductive burden, and a burden behind which there are no real assets at all. This is one of those curious things, an unreal, intangible thing to the extent of £400,000,000 with no assets behind it; waste. It is only real in the sense that it brings in dividends to those who own it. That is the only reality behind it, except of course the reality of the terrible consequences which resulted from the expenditure of the money during the War period.
A reference has already been made to two reports, the Rentoul Report and the Ray Report, and it is suggested that in these reports we have the lines of policy which the Government should follow. What does that mean? It does not mean economy on war Debt but economy on the Social Services. The Mover and Seconder of the Motion did not go into, any detail, they sheltered themselves behind these Reports, but I am sure that the Lord President of the Council will not be much frightened by the Rentoul Report. Everybody ran away from it, and I see a consequence of it sitting on the bench behind the Government. The impression I got was that some people were prepared to say, "We do not mean that; we do not subscribe to every item; we do not want it to be known too thoroughly by the public, but what we
406
are subscribing to is the cutting down of the services of education and the health services, and, generally speaking, curtailing and crippling the Social Services."
I do not understand finance and currency, but it appears to me that the Mover and Seconder of this Motion put forward two entirely contradictory propositions. They pleaded for inflation, high prices, but at the same time advocated a thorough-going policy of deflation, which is absolutely contradictory, because an economic policy is a policy of deflation, of the curtailnient of spending power. It was said that everything depends on a productive industry. No one disagrees with that, but the health and well-being of productive industry does not begin and end with the production of the commodity. It goes into the realm of selling the commodity. Productive industry must have purchasers; there must be spending power. The health of productive industry depends much more upon the ability of our people to spend than on the need of capital. There are millions of capital lying idle and there are millions of unemployed. No one can say that 16s. 3d. a week will keep a man decently, that it will provide a decent standard of life.
The amazing thing, the tragic thing is that some hon. Members opposite think that 6d. in a. rich man's pocket is far more economic for the nation than 6d. in a working man's pocket. There have been demands for 1s. 6d. off the Income Tax. What for? To rot in the banks? What are you going to do with it when you have it? It may be £30,000,000 or £60,000,000. There are those who say, "It does not matter. Let us have the money, even if it means an unbalanced Budget." The sanctity of a balanced Budget has gone. I ask hon. Members opposite to tell us how that money, if it is saved, can be productively employed. It would weaken our opposition to the Motion if hon. Members could tell us that. The fact of the matter is that they know full well that what they are pleading for to-day is the financial easement of a class of people in the nation at the expense of the health and the physical and mental development of the vast masses of the people. Only 6.35 per cent. of the increase in expenditure is due to education. Education has been

407
cut down. I have here other figures which to me are extremely important in relation to this Debate. On page 237 of the famous May Committee's Report we have an analysis of the amount that the Budget has taken out of the national income pre-War and 1931–32. The report gives tables in detail and makes this comment:
" It will be seen that the proportion of expenditure to national income has risen from 7.4 per cent. in 1913–14 to 18.93 per cent. in 1929–30, an increase of 11.53 per cent."
So that you have now in the Budget an increased expenditure out of the national income of 11 per cent. over pre-War. See how it is made up. What are the items that cause it? You have gone up from 7 per cent. pre-War to 18 per cent. in 1929–30. Here are some figures:
Debt interest and management, 7.06 per cent.; Sinking Fund, 87 per cent.; War Pensions, 1.36 per cent.; Social Services, 1.41 per cent. The first three items together account for 9.29 per cent. You have had an increase of expenditure in relation to national income of 11 per cent. Of that 11 per cent., 9 per cent. is due to War debt in the main, and 2 per cent. is due to the social services. Take the subject of education. You are spending a lower percentage of the national income on education to-day than you spent pre-War. It is quite evident that if you are going to deal with this question you cannot avoid dealing with the War debt.
I want now to come to one or two other points. I have been interested in finding some figures which would show the relationship of direct Income Tax to unemployment. It has been stated here to-day that a high level of taxation results in a high number of unemployed. There are no facts in existence to bear out that assertion; there is no correlation at all. I have figures here from 1922 up to the present time. Income Tax for a number of years was 4s. Take the years 1926 to 1930. During those years you had a 4s. Income Tax. Look at the unemployment figures. They have varied from quarter to quarter and from year to year. They have changed while Income Tax remained exactly at the same level. Unemployment figures have fluctuated between 19 per cent. and 9 per cent. I agree that there is one relation-
408
ship between the expenditure of the Budget and unemployment, but it is not the relationship mentioned on the other side to-day. The relationship is this: If you have millions of unemployed you have to tax in order to try to keep them somehow. High taxation is not the direct cause of unemployment, but unemployment is a cause of higher taxation. If you can solve the problem of unemployment you will relieve your budgetary expenditure to that extent.
We believe that it would be a monstrous injustice to relieve the direct taxpayers and forget the "cut classes. It would be a monstrous injustice to take 6d. off the Income Tax and not put that 10 per cent. back for the unemployed. I do not believe that the public conscience of this country would stand it. What you want at the moment is not more capital. That is lying rotting and idle in the banks by millions. What you want to do is to increase the purchasing power of the people. Instead of blowing up the Navy and putting it back, digging a hole and filling it up again, and all that sort of thing, why not scrap your slums? It would be a good thing if you gave enough money to the unemployed to scrap their old clothes and to buy new suits. It would be a sound economic proposition to give money to the children in my division and other divisions so that they could buy the boots they want. That would set the boot factories going. Industry to-day wants greater purchasing power among the people. The party to which I belong has the right policy. It says that the economic health of the nation and the social stability of the people depend in the long run on the standard of remuneration, on the rate of wages they receive, and that employment can be provided only when a higher purchasing power is put into the people's hands.
Mr. LOGAN: I beg formally to second the Amendment.
5.14 p.m.
Sir SAMUEL ROBERTS: I wish first of all heartily to congratulate my colleague in the representation of Sheffield on his good fortune in selecting this subject, and on making a speech of such a calibre as to interest the House and the country—a speech that will be of particular interest to his constituents in

409
Sheffield when they have an opportunity of reading it to-morrow. The subject of the Motion is one which at the moment arouses the intensest interest. Everyone, except possibly hon. Members opposite, will agree that taxation in any form is bad, but that taxation in some form is necessary. If we agree that taxation in all forms is bad, we can test the various forms of taxation in order to ascertain whether they are excessive or not. There are two tests. Taxation is excessive when it ceases to achieve its purpose and results in a reduction of the revenue produced, and it is bad when the tax is not borne by the people who are intended to be taxed but by the people who produce the commodity that is taxed.
There is, for instance, the case of the Tobacco Duty. That is a tax borne by the consumers of tobacco. As far as we know it is not borne to any grievous extent by those who make or distribute tobacco. On the other hand, the Beer Duty seems at the present time to have all the evils of bad taxation. The revenue from it is going down, and it is not being borne mainly by the people who drink beer but by the people who make and distribute the various corn-modifies from which beer is produced. Again, the Entertainments Duty. It might appear to be perfectly fair, in a way, to tax the person who goes to entertainments. It may be found, for instance, in the case of greyhound tracks that the Entertainments Duty is being paid by people who go there to get entertainment. But it is a bad tax when you come to certain classes of seats in cinemas and certain other classes of entertainment, where it can be definitely proved that the tax is not paid by the people who enjoy the entertainment. The burden in those cases falls upon those who provide the entertainment because the tax becomes a charge upon their gross profits. I think we can get in that way a touchstone whereby it is possible to judge whether or not taxation is excessive and evil.
I do not wish to deal with any of the subjects which have been dealt with already except one mentioned by the Mover of the Amendment. He used the oft-repeated statement of the purist that direct taxation, as such, has no evil effect upon industry, in that it is a tax upon profits, after the profits have been ascer-
410
tained and therefore does not appear as a charge upon the particular commodity concerned before that commodity is sold. I agree that Income Tax is better from the point of view of industry than rates, because rates are definitely a prior charge on production. But to say that direct taxation is no injury to industry is very far from true. In order to build up a sound business it is necessary to put aside money year by year and accumulate a reserve. Those businesses which have prospered chiefly in the past and which are now able to weather the storm are those which have been able to put aside large sums for development and for meeting the storm when the storm came. At a time when taxation is very high the tax is borne first by the industry before it comes on to the actual taxpayer. It has to be paid out of the company's profits before those who are running the business can see what they will pay in dividends and what they will put to reserve. Those who are conducting a business look to see What they will pay in dividends after they ascertained what is to be paid in taxation. It may be said that you deduct the taxation when you pay the dividend, yet, from the practical point of view, when profits are small you are naturally inclined, first, to pay a reasonable dividend before you put to reserve—
Mr. ANEURIN BEVAN: Is it not the case that before any taxation is paid, the Inland Revenue authorities make allowances in respect of extensions and replacements and matters of that kind?
Sir S. ROBERTS: The Inland Revenue authorities allow a certain amount for depreciation. They do not allow for any depreciation in value on buildings and nothing for extension, nothing for development and nothing for improvement. It is very difficult to get what is called obsolescence allowance.
Mr. COVE: Surely not?
Sir S. ROBERTS: It is very difficult indeed to get any adequate allowance under that head. But hon. Members opposite appear to be trying—though I do not say that they are doing it wilfully —to divert me from pursuing a rather complicated argument and I must try to get back to that argument. As I was saying, when profits are lean and when the question arises as between reserves and dividends, the natural inclination is

411
to pay a reasonable dividend, taking into account the taxation that will be deducted from what goes into the pockets of the shareholders. The natural inclination is to pay that reasonable dividend before putting anything into reserve. That is one point. Another point is that at the present time when reserves are taxed so heavily, necessarily much less goes to reserve than would be the case if taxation were lower. If only 15s. goes to reserve where 20s. went formerly, then, consequently, the amount of reserves are considerably less than they would otherwise have been and these are the reserves from which all industry must refit and from which all new industrial developments must be produced.
These facts are obvious to anyone with a knowledge of business management, but there is another point which is not quite so obvious. There is the question, not merely of the effect of taxation on profits, but of the effect of taxation on the psychology of the man who is thinking of new developments. That consideration is most important. I mention one instance of which I have heard, and, while I do not know of the case myself, and am not prepared to say that it is true, yet it is a case which sounds likely, because it is in accordance with human nature. It is the case of a dentist who, when the Income Tax was increased at a certain period, ceased to work on Saturdays. He said that he was being taxed so heavily that he was going to enjoy one more half-day off in the week. That is human nature and we all have our human instincts—on this side of the House just as on the other side.
Then consider the case of a man who has thoughts of investing a large sum in a new enterprise. He gets out his plans, specifications and figures and he sees that if he invests that sum in that enterprise it is likely to bring him in 10 per cent. There is of course the risk of the enterprise going wrong. There is no enterprise devoid of risk. He calculates that out of the 10 per cent.,2½ per cent. is going to be taken for Income Tax and possibly another 21 per cent. for Surtax, leaving him a return of only 5 per cent. Such a man will then consider that if he invests that sum of money in some established business—arid at the present time, outside of trustee securities, any wise investor can easily
412
find a safe investment at 5 per cent.—he will get a return, after deducting taxation, of 2½ per cent. on his money. Thus the only margin between taking the risk of the new enterprise and investing outside his business at 5 per cent., is a margin of 2½ per cent. In those circumstances a great many people would prefer not to have the worry, work, anxiety and risk of going in for some big development for such a small margin. This, I may say, is not an entirely imaginary case. I say nothing more than that.
I have to offer one concrete suggestion. I think we ought to try from our own experience to suggest anything which we think might be helpful, and the matter which I wish to mention deals directly with taxation, because it deals with the question of reserves. I suggest that the Lord President of the Council might consider issuing a bold prospectus to the nation—if you like to call it so—to say that anyone who was willing to start some capital reproductive enterprise and start it now would get certain facilities. Proposals would have to be passed by a committee—which ought not to take too long—and if a scheme is found definitely to be a capital reproductive enterprise, then let it be registered with the Inland Revenue authorities who would allow that man or that firm, out of the profits of that enterprise or other profits of the same concern, to set aside the capital value of that enterprise during the next 10 years over and above ordinary depreciation. I believe there would be such a flood of people coming forward with new enterprises as would very quickly cause a substantial deflation in the numbers of unemployed, and by reducing the number of unemployed as quickly as possible you would be reducing the enormous amount which is now being paid week by week for unemployment benefit. The one main way to keep down future taxation is to reduce the vast expenditure of this country. At the present time our taxation is a grievous burden upon all classes, and we confidently look to the Government to take some steps in regard to it. We are grateful for this opportunity of bringing the matter before the Government and of showing, as humble private Members, how strongly some of us feel on this question. We appreciate the opportunity and we hope for results from it.
5.27 p.m.
Mr. LAMBERT: The speeches delivered for and against this Motion have been of a very high order. I desire to join in the Debate because this is an old subject of mine and I remember some 10 or 12 years ago from the opposite side of the House moving a Motion in favour of rationing Government Departments. I would first offer some observations on the speech of the hon. Member for Aberavon (Mr. Cove). He advocated a policy of equality of sacrifice. He represents, I understand, the National Union of Teachers.
Mr. ANEURIN BEVAN: He represents his constituency.
Mr. LAMBERT: I make no suggestion whatever against the hon. Member, but I understand that he has some special connection with the National Union of Teachers, and he complained about the cut of 10 per cent. made in the teachers' salaries a year ago. Let him come to my constituency among the cultivators of the land and he will find cuts, not of 10 per cent. but of 50 per cent., and if there is to be equality of sacrifice the cultivators of the land are entitled to as much consideration as the teachers. The hon. Member spoke of increased purchasing power. What does that mean 4 It means that the Government are to enable the people to buy more commodities. A very large percentage of those commodities will come from abroad. How can those commodities come from abroad unless something is produced here to pay for them? If you increase purchasing power without increasing production surely hon. Members realise what must be the result.
Then the hon. Member referred to unemployment and said that taxation had nothing to do with unemployment. That theory cannot be maintained in these days. We have got in the world now the highest taxation since the War. We have never had taxation so high as it is in this country now, and we have never had unemployment at so high a level. I do not understand the hon. and learned Member for East Bristol (Sir S. Cripps) smiling. I understand that he is appearing in a case in another place, and if he presents a sound argument like mine there, as I suspect he does in his legal capacity, quite different from what he does in his political capacity, I am not
414
surprised at his having the admirable record that I understand he has.
I am very glad that this Motion has been moved. I do not wish to condemn the Chancellor of the Exchequer or the Government, because, after all, the Government succeeded to a terrible heritage. It is an appalling problem that the Chancellor of the Exchequer has had to face, and there is no doubt that the Government have restored the credit of the country to such an extent that money is coming here from abroad to be invested. But I do say that unless there is a rise in prices or a reduction of taxation, there must be a default on many of our fixed public charges. The hon. Member said that taxation does not matter at all. I was brought up in the school of Mr. Gladstone, and I am not ashamed of it. In fact, I am an ardent Gladstonian to-day, though I do not know whether there are many of us left. This is what Mr. Gladstone said about taxation:
" It is a characteristic of the mischiefs that arise from financial prodigality that they creep onwards with a noiseless and stealthy step; that they commonly remain unseen and unfelt, until they have reached a magnitude absolutely overwhelming."
That was Mr. Gladstone's dictum, and he was a greater financier than any man in this House, especially any man on the Front Opposition Bench. Under that system of rigorous economy the wage-earning classes increased their prosperity amazingly.
Mr. LANSBURY indicated dissent.
Mr. LAMBERT: My right hon. Friend the Leader of the Opposition shakes his head. I remember, and he 'does as well as I do, the days in London when there were soup kitchens and all sorts of things, children without boots or shoes, and so on. You do not see that to-day, and the standard of life in this country has increased enormously, but it will go down if taxation continues to be piled up as it is to-day. I feel quite convinced of that.
Mr. LANSBURY: I dissented in regard to wages. Under Mr. Gladstone's great Budgets the wage of an able-bodied workman, with a wife and family, in East London was 17s. or 18s. a week.
Mr. LAMBERT: My right hon. Friend will agree with me that the standard of life as a whole has increased,
Mr. LANSBURY: The right hon. Gentleman was backing up Mr. Glad-stone's greatness.
Mr. LAMBERT: Certainly, because I think Mr. Gladstone was the greatest financier this country has ever produced.
Mr. LANSBURY: He was the greatest —well, never mind.
Mr. LAMBERT: I am very glad to have the Lord President of the Council here, because I am glad that the Conservative party is taking up this question of economy. I always think they have been devoting too much attention to tariffs and too little to taxes. I remember in this House Sir Michael Hicks-Beach, who was a great Conservative statesman, and he was the last man to follow Gladstonian finance. They called him "Black Michael." I believe he had a considerable vocabulary for his colleagues, but I do not suppose that 30 years hence my right hon. Friend the present Chancellor of the Exchequer will be called "Black Neville"; I do not think he is quite so stern. For the past 30 years we have always been spending money to overcome political difficulties. This has got to cease. I have said it here before, and I shall keep on saying it. We had it on Irish land, and I was a Member of the Government that spent a great deal of money on social services and £1,000,000 was voted for the Welsh Church. Then came the War, and since the War we have had an orgy of expenditure.
I have come to the conclusion, which has been fortified by the Debate to-day, that the extension of the franchise in this country has made it impossible for this House to be the guardian of the public purse. The whole system since 1918 has been one of bribing the electors at the taxpayers expense. I am sorry to say it, but there it is, and no longer is the House of Commons the guardian of the public purse. It is always raiding the public purse, and everything which is done here now and demanded in the way of social services, and so on, always means spending more of the taxpayers' money. I think it is a fatal policy. What I am going to suggest may sound strange, coming from an old Liberal, but I am quite convinced that we ought to have a revising Chamber for these questions of finance. It. cannot be the
416
present Upper Chamber—it must be non-hereditary—but there should be some check upon a Government spending money, particularly at the behest of the House of Commons.
Especially do I say this when I hear the arguments from the other side, which are very powerful, and were put very powerfully, I have no doubt, at Rotherham the other day. There must be a greater check on expenditure. We know that, in this House especially, whatever the Cabinet proposes, we carry. The Cabinet has enormous power. We had an example of it the other day on the Austrian loan, when everyone spoke against it, but it was carried. We know, too, that in the last Parliament, owing to the fear of a Dissolution, we had Land Taxes passed by a combination of Liberals and Socialists. I did not join in that combination, but there it was, and there certainly should be some revision of such combinations and such expenditure.
I have thought this over very carefully, and after a long experience of this House, I have really come to the conclusion that it is essential, if we are to get a reduction of taxation in this country, that there shall be some revising Chamber, in order that Governments of the day shall not have an unlimited right to spend money. There is also such an enormous power in the hands of the Prime Minister. He can always threaten a Dissolution of Parliament. I remember Sir William Harcourt once - saying to me here, "There is nothing that the House of Commons dislikes so much as a General Election." Therefore, naturally, Members of Parliament will vote under pressure for many things for which they would not vote if they were not in fear of a General Election. I do not propose to occupy more of the attention of the House. I have said my say. I think that what I have suggested would be of great advantage, and I press it on the Lord President of the Council, who, after all, is the master of the great legions in this House. The Conservative majority is enormous. Do let him think of this question of a revising Chamber, not only for legislation, but also for finance.
5.40 p.m.
Mr. J. P. MORRIS: The hon. Member for Aberavon (Mr. Cove), who moved

417
the official Opposition Amendment, in the course of a very imformative speech, upon which, from his point of view, I congratulate him, stated what, to my mind, is a new viewpoint of political philosophy. He stated that the people who pay Income Tax and Super-tax in effect do not pay it at all, in that the interest on the War debt services is returned to them. All that I can say to him is that, among many of my friends, I know it is a fact that on the occasion of their payment of Income Tax last month, and on the two occasions last year, they did not think they were not paying Income Tax, because in many cases they had to have recourse to their banks for an overdraft to meet the demand. The hon. Member also stated that it would be difficult to visualise how, and where, the money could be spent that would be saved by a reduction of 1s. 6d. in the pound in the Income Tax. My reply to that question is that, if such a miracle were possible, the industry of the country would welcome at once all the savings that would be caused by such a reduction, owing to the increased confidence created in industry. Confidence begets confidence, and that added confidence brings out in the English character that innate quality, the spirit of adventure. The spirit of adventure opens out many avenues wherein risk and speculation may play a part and employment be found for our people.
Of all the subjects that one could choose for the purpose of a private Member's Motion, none, in my opinion, is so worthy as that of excessive taxation. No subject compares in importance or gravity with that of the intolerable burden of excessive taxation which. we have in this country at the moment. It is a subject which should command the undivided attention of this House, and I trust that this House will send a message in such terms and with such. an overwhelming vote that at last His Majesty's Government will realise that something real and effective must be done to reduce this intolerable burden of taxation which is crippling our industries to-day. Let us be frank and honest. Let me ask: Has not every Conservative Minister in the National Government promised a reduction of taxation and economy? Was not the word Retrenchment in the battle cry of the old Liberal party? The right hon. Member for South Molton (Mr.
418
Lambert) proudly said that he was an ardent Gladstonian. It was always a Gladstonian dictum to reduce taxation to the lowest possible limit. I hope, therefore, that the Liberal Members will support this Motion.
All those who supported the National Government at the last election advocated a reduction of taxation. In fact, the party to which I have the honour to belong put the reduction of taxation and economy as a corner-stone of their programme. Did we not buoy up the hopes of the business community that if we were returned to power we would make an effective reduction in taxation and have real economy? I am not unmindful of what the National Government have achieved so far. I know that by the Debt Conversion scheme £23,000,000 has been saved and that in the Budget of last year economies to the extent of 4,79,000,000 were effected, but still Income Tax is 5s. in the £ and more taxes were imposed in the last Budget. This ogre of taxation is destroying the enterprise and confidence of our people. I ask myself why it is that the competitive power of industry has become so impaired since the War. Why is it that from occupying the first place among the nations of the world in the matter of exports we have fallen to third place up to a few months ago? There is only one answer—costs which have been swollen by taxation. Statesmen of a generation ago advocated the lowest possible taxation as the keystone of the archway of industrial prosperity. This country to-day is taxed double and treble compared with its chief competitors. No matter where we look we discover that we are in an unfair competitive position, and never in the history of the world was there such an example as in this country of the dead weight of taxation.
This question is undoubtedly the most important and urgent one before the people of the country. Every economist, industrialist and banker has issued warnings and continues to issue warnings of the dangers confronting us. The leaders of commerce and industry, who have their fingers on the economic pulse of the country, issue similar warnings. I make bold to say that until we effect a real and substantial reduction in taxation there is no possible hope for an improvement in trade or employment.

419
We must recognise the cardinal fact that excessive taxation impoverishes the home markets and deprives industry and enterprise of the capital which is essential to successful development, the capital which is the life blood of industry, without which it is impossible for it ever to achieve its former prosperity. I am only a back bencher, and I do not wish to be presumptuous, but I would like to warn the House not to be lulled into a false sense of contentment and complacency that all is well. Prosperity is not just round the corner, and it is futile to talk of prosperity while the tax gatherers of the country are draining dry the resources of individuals and of industry. I know that it is all very well talking in this strain and not advocating a remedy, but in the short time at my disposal it is not possible to develop the points that I would like to put before the House.
I do suggest, however, that the Government Departments should be rationed. Lord Oxford, who spent many years at the Treasury, said in 1924 that in his opinion the only possible way of dealing with this question was by rationing the Departments. If it is right to ration the spending departments of a business house, is not that policy worthy of consideration for the spending Departments of the Government? Before the War we had 15 Ministries; now we have 19. The number of employés has increased from 11,000 to 43,000, and the cost of administration from £6,000,000 to £22,000,000. I know that a reduction there would be only a small saving compared with the amount that would be desirable to effect any real improvement, but still it would be a march in the right direction.
The Beer Duty has been referred to to-day. Last year I voted for the Government in the retention of the Beer Duty, because, in my opinion, at that time there was no certainty that we would not have a supplementary Budget, and I did not feel disposed to support legislation for the remission of taxation until it was known for a certainty whether or not the country was out of the wood. To-day, however, the position is very different. From the figures supplied, I find that the revenue from beer is estimated to be £2,000,000 less than in 1931 and over £6,000,000 less than the fore-cast of the Chancellor of the Exchequer
420
in presenting his Budget. On top of that, of course, there is the loss to the country caused by increased unemployment and the reduced Income Tax due to the reduction in profits of the farmers and malsters. That is a point which the Government ought seriously to consider.
The Government have been placed in possession of the reports of the unofficial and official committees on economy, and I am certain that by a close scrutiny of those reports the Government would find plenty of ways in which to reduce taxation. I appeal to my right hon. Friend the Lord President of the Council to act firmly and courageously, and to reduce taxation to reasonable limits. The one thing that industry needs to-day is room to breathe, and nothing would give more life to it than the knowledge that excessive taxation was to be reduced to reasonable limits. It would restore confidence to industry, and that confidence, by increasing employment, would bring to the Treasury an increased revenue. An increased confidence in industry would bring to the people who are unemployed hope and a better outlook. I 'appeal to the Government to proceed fearlessly with this reform. I am certain that along the line of reduced taxation they will earn for themselves a place in the annals of this country which centuries will never efface, and that they will attract themselves more favour than any of their predecessors have done.
5.56 p.m.
Mr. McENTEE: I would summarise the speech of the hon. Member who moved the Motion in this way:
" Eighteen pence off Income Tax and a penny off beer;
Accept these two suggestions and the dole will disappear."
The hon. Member tolds us that taxation was excessive and that, as a consequence, industry was suffering keenly. He went on to say that not only were the owners of industry suffering but that it affected the poorest of the poor. Then he told the Government how in his opinion taxation ought to be reduced, and his only suggestion seemed to be 1s. 6d, off Income Tax 'and a reduction in the Beer Duty. The only suggestion which I heard from the hon. Member who seconded the Motion was that we should smash up the ships of the Navy and immediately start

421
re-building. All the arguments of the Mover and Seconder and of those who supported the Motion. were for a reduction of direct taxation. No suggestion of any kind has been made that there should be any reduction in indirect taxation. I have tried to find out the reasons for these suggestions and the source from which they emanate.
I find that the Federation of British Industries have been sending annually to the Government for some years their views as to what ought to be done by the Government. They said that what was needed was a substantial reduction in direct taxation, and in a book, a copy of which every member received, I have no doubt, they went rather carefully into the question of the social and other services and their cost, and put forward suggestions as to how those services should be dealt with and how taxation generally should be handled. A table of figures prepared by the Federation of British Industries in regard to the unemployed is very interesting to me. They stated that in 1931 the rate of benefit for a man and wife and three children was 33s. a week and the rate of benefit for a single man was 17s., and suggested that if those benefits were reduced to correspond to the fall in the cost of living from the peak point to the percentage existing at that time—it was about a year or so ago and I believe the percentage was 23 —the figure of 33s. would be reduced by 46 per cent. and the figure of 1'7s. reduced by 3n per cent. They suggested that the following allowances would be adequate, apparently, or at least all that the country could afford—for a single unemployed man, 11s. 4d., and for a married man with a wife and three children, 17s. 4d.
Those industrialists were asking, and to a large extent they succeeded in inducing, the Government to give them considerable reductions in taxes and in rates. I have in mind arguments advanced by the Federation of British Industries in connection with the De- rating Act. We were told that if the concession of de-rating were made an increase in prosperity would undoubtedly follow. They got the concession, and I have figures here which show that very considerable reductions were made in rates—which would benefit them to exactly the same extent as the reductions
422
in taxation which they are now advocating. The figures are an estimate, it is true, but they are as accurate as such estimates can be. The engineering trades, including marine engineering, benefited by de-rating to the extent of more than £2,000,000, shipbuilding by £400,000, the chemical trades by £600,000, the coal industry by £3,100,000, and the cotton and spinning trade by £1,500,000.
Some 11 or 12 industries, the principal ones in the country, got relief approximating to £17,000,000. That ought to have been a very considerable help to industry, but will anybody dare to say that there is any evidence of prosperity having come to industry in consequence? Everyone who knows anything about it will agree that all those payments to the owners of industry have simply been used to enable them to live a more luxurious life. No Member of this House can show me any evidence of any increase in prosperity in any industry as a consequence of the derating proposals. The main proposal of the Mover of the Motion is a reduction of 1s. 6d. in the Income Tax. The Mover of the Amendment, in an effective and brilliant speech, put a question to the Government which I would like to reinforce: "What can be done by the people who benefit as a consequence of a reduction of the Income Tax by 1s. 6d. or any other sum which can in any way lead to greater prosperity? No answer has been given to that question, and I venture to say no answer will be given. As the Mover of the Amendment said, "Is there really any shortage of capital in industry?" If there were, it might be a legitimate argument to say that a reduction of Income Tax would enable capital to be provided, but every hon. Member knows that so far from there being a shortage of capital there is a surplus.
Mr. HOWARD: What about the Cunarder?
Mr. McENTEE: The hon. Member had better ask those who are on the Treasury Bench. That is hardly a question to be put to me. There is plenty of money for a dozen Cunarders, for 100 Cunarders, in fact, for 1,000 Cunarders. I am not exaggerating when I say there is sufficient idle capital in this country to build 1,000 Cunarders. The seconder of the Motion suggested that, the Navy should

423
be scrapped. He said every ship in it should be broken up and rebuilt. It will take a good few Cunarders to equal the Royal Navy, and I think the hon. Member who interrupted me had better meet the seconder of the Motion, in the Library or somewhere else, and settle whether the scrapping of the Navy or the building of two Cunarders is of the more importance to the unemployed and industry. I have been pointing out that there has been no sign of increased prosperity having followed derating, although it was a considerable financial concession to industry. When they were advocating derating the industrial magnates of the Federation of British Industries told us that it would lead to a great increase in prosperity. In reality that has not been brought about; derating has been followed by a far greater depression in industry than existed previously. But the causes are very much deeper.
I would like to say a word or two with regard to direct and indirect taxation, because, in view of the statistics we have, it is interesting to note that we should be asked still further to reduce direct taxation. It could only be done—other things remaining the same, as they are likely to do—by a further increase in indirect taxation. In one year the proportions between direct and indirect taxation have undergone a very remarkable change. In 1931–32 indirect taxation represented 34.12 per cent. and direct taxation 65.88 per cent. Between 1931–32 and 1932–33 the percentage of indirect taxation rose from 34.12 to 39.06, and the percentage of direct taxation fell from 65.88 to 60.94. In that one year the people who paid direct taxation, who are generally the people represented by hon. Members opposite, did very well indeed in their efforts to shift the burden of taxation from their own shoulders on to the shoulders of the people who, in the main, pay indirect taxation. How have they done it? I do not want to weary the House with a statement of how it has been done, because everyone knows that it is not an easy explanation to give, and it would take more time than the House would like to give me in which to deal with it, but these figures have occurred to me in connection with the figures I have just given. In 1931–32 indirect taxation represented, roughly speaking, £1 and direct taxation £2—
424
broadly speaking, one was double the amount of the other—whereas in 1932-33 £1 of indirect taxation is represented by £1 10s.
How is that change reflected in the every-day life of the people? The social services have been ruthlessly cut down, taxes have been increased on almost everything that the average poor citizen uses. Hundreds of things have been scheduled for taxation, and as a result the poor are more heavily taxed and the rich are more lightly taxed. Now we are being asked for further relief for industry, though not one word has been said by any speaker who is in favour of this Motion to show how industry could be relieved to the benefit of the people generally. It is true that the Mover of the Motion said the poor would benefit, but he gave no evidence in support of that assertion; he just made the statement and expected us to accept it on his assertion. All the evidence is against it, because de-rating which was a reduction in local taxation—but, all the same, taxation—did not lead to greater prosperity but to a greater lack of prosperity.
In regard to the Beer Duty, let me say frankly that if we were considering the taxes which have to be imposed on different industries it would be my personal view, though I am speaking as a total abstainer, and as one who has no interest in and no great love for the beer industry, that there is a measure of injustice in the tax imposed on that industry at the present time. The beer industry is doing very well, in spite of all that may be said to the contrary. I have a set of figures with me taken from the "Economist" dealing with the beer industry, among other trades. I do not know that it matters about reading all the figures, but I notice that the dividends paid in the industry as a whole, during the past seven or eight years, have varied between 17 per cent. and 14.7 per cent.
If those figures are right they prove, I suggest, that the industry is well able to stand a good deal in the way of a reduction of beer prices before the workman, who is generally supposed by hon. Members in this House to be in want of beer—[Interruption]—well, it is not general, but fairly general—the industry would stand a reduction of beer prices, if such a reduction were necessary, and

425
still would be able to pay fairly good dividends. I am not very much concerned about that, because it is a matter of minor importance. I am concerned that any reduction made in taxation should be made in a way that will benefit the indirect taxpayer, and that if there is any increase in taxation, the direct taxpayer ought to pay and not the indirect taxpayer. The indirect taxpayer has been compelled during the last year, and for a number of years, to pay taxation very much in excess of his capacity to pay.
If a vote is taken to-night on this Motion, I have not a shadow of doubt that we shall be beaten by people with interests to serve. Many of them are advocating here the policy of the Federation of British Industries, from whose requests to the Government I have a quotation. The Financial Secretary to the Treasury will know all about that. I have no doubt that he has had an opportunity of reading these communications as they have from time to time been sent to the Government. The Government are fairly subservient to that set of interests, which are able to dictate policy to the Government. The Government pay far more attention to those interests than to the majority of the people who vote for them at General Elections or at any other elections. They arc far more influenced by the class of people who form the Federation of British Industries.
No argument has been put forward—none could be put forward, because there is no such argument—to prove that a reduction of taxation would benefit industry to the extent of increasing trade or of increasing the number of workers engaged in any trade. As a matter of fact, it was stated by the Mover of the Amendment that the arguments and the figures are against it. The reports of committees and commissions set up by the Government are also against it. There is no possible argument that you could put forward that could induce anybody, except an interested party, to vote in favour of a further reduction in taxation that would in no way benefit industry but would benefit industrialists personally, enabling them to live a more comfortable life and to enjoy more of the luxuries, which many of them enjoy almost to superfluity to-day. There is not a shadow of proof that any such
426
reduction as is advocated in the Motion would be of the slightest benefit to the great mass of the people, to whom I adhere, for whom I speak and whose opinions I desire to voice in this House.
6.20 p.m.
Mr. NALL-CAIN: Before discussing the Motion, I would like to say a word or two about the speech made by the hon. Member for West Walthamstow (Mr. McEntee). He said that a reduction of taxation would not benefit industry. If one starts from the idea that there is only a certain amount of money in the country, if the Government take that money the individual cannot spend it on a great many things. If the individual spends it on extra boots, it is obvious that that must help the boot industry. If there is more money in circulation, industry is helped and more people are put into employment and made better off. We are all in favour of doing anything that will help industry and help more people to get employment and wages. When wages are better, there is more money in circulation, and this country is more prosperous.
I would now like to turn to the subject of the Death Duties. I expect that the Opposition will agree with me, not on the subject of Death Duties, but on the subject of spending capital as income. If a Budget takes £80,000,000 a year as capital and spends it as income, that is not a good thing. Signor Mussolini can be taken as an example of a man who has made his country more prosperous. One of the first things that he did was to do away with Death Duties. All Death Duties are very bad. Some people think that if the money from Death Duties is used to reduce the capital Debt of the country that is all right. I have heard it said this afternoon that the Sinking Fund ought to be done away with; if that is so, the Death Duties ought to be done away with also. I do not think that the use of Death Duties to pay the capital Debt of the country makes any difference to the people who pay those Duties. Money goes out of the country, and gets spent as income, and that is bad.
I want to say a, few words about Death Duties upon agricultural land. It may sound like an Irishism to say that agriculture is the greatest industry in this country. When Death Duties are imposed

427
upon agricultural land, that industry is deprived of capital which is more necessary at this time than it ever was. Agricultural properties have to pay, perhaps 20 per cent. or 30 per cent. in Death Duties. The land is being sold, and the farmer is having to buy his own farm. He therefore uses up capital which he ought to employ on his farm. If he cannot find capital, he has to borrow it and to pay a much larger sum in mortgage interest than he did in rent. The Opposition will probably agree with us that the best system of farming is that of a tenant under a landlord, but the Opposition think that the landlord should be the nation, while we think that the landlord should be an individual. It is bad for the farmers in this country to have to buy their own land. Death Duties on land are paid on what might be called the amenity or market value. The assessment is not the same as it is in the case of shares. I know estates that produce no income, or even an annual liability, and yet Death Duties are paid on those estates. The duties are very often considerable.
It is of no use expecting the Government this year, unless they are to unbalance the Budget, to make very large reductions in taxation, but I think that the Mover of this Motion was right when he said that he would take a risk. The risk would be justified. If the Government treated the budgetary position by looking at it in relation to a period of three years, which is until the life of the present Government is over, they would do much better than merely looking at each year as a sort of water-tight compartment. If they took a risk this year I think that they would be repaid. The yield of Death Duties on agricultural land at the present time is not very big; I think it is about £1,700,000, and I suggest to the Chancellor of the Exchequer that if he could see his way to do away with that tax, to reduce the rate of it, or to alter the method of assessment and assess land in the same way as shares, he would be doing a very great thing for the agriculture of this country.
I want to talk about another matter, especially as the hon. Member for West Walthamstow has said that it is a pity that hon. Members who were interested in certain matters talked about them in this House. Some of my personal friends are aware that I happen to be interested
428
in brewing. I am not ashamed of it, except for the reason that the brewing trade is not paying as well as it did. The hon. Member gave a few figures, in the course of which he said that the interest on capital in the brewing industry is 17 per cent., or 14 per cent. He may not have gone into the question that before the War the capital of certain breweries was £1 per share, and that those breweries have reduced their capital to 9d. per share. If 14 per cent. is paid upon ninepenny shares I think the hon. Member might find that the return upon the capital is not very much. Before dogmatising on the capital of any industry, one should look right into the matter and find out what the original capital was and what the losses were, and every other point connected with the matter.
Let me say five things about the brewing trade, not from the point of view either of the industry or of the consumer, but from the point of view of the Revenue. In the last seven years, up to the end of this year, the estimates for the Revenue from beer had been £29,000,000 more than was received. I am not in any way blaming the Treasury, because it is a fact that consumption has been going down. This year the estimate is £80,000,000, and it looks as if the result will be £6,000,000 down on that. It is only fair to say that the reason for the decrease is that most of the beer sold is not good enough. Another reason is that it is not value for money. You cannot expect a workman or anyone else to go on buying something which is not good value. Taxation being as high as it is, it is good policy for the Government to look into the situation and to try to preserve what Revenue they get now, and what Revenue they may get in the course of a few years. When a patient is bad, a stimulant is needed. I am certain if the Government take that course that they will be repaid. Let the Government inspire the people with faith in the future, and in the years to come historians will look back and say that the Budget of Great Britain for 1933 was a turning point in the prosperity of the world.
6.30 p.m.
Mr. DINGLE FOOT: This Motion is couched in terms to which very few of us would take any exception, but, during the

429
short time that I have been a Member of the House, I have discovered that what matters about a private Member's Motion of this kind is not so much what is said by it as what it implies, and that very often a Resolution couched in the mildest and most non-controversial terms is used by the Mover as 'a peg on which to hang most controversial proposals. That is what has happened in the Debate this afternoon. May I briefly remind the House of the proposals which the Mover of the Motion made? He suggested that the Sinking Fund should be suspended, and he calculated that that would give us £32,000,000. He then said that it would not matter if in the first year we were down on our national accounts by £50,000,000 or £60,000,000—that that need not perturb us too much; and, as far as I could follow his argument, his suggestion was that we should use the money gained in this way for two purposes, and for two purposes only—firstly, for some remission of the Beer Duty, and, secondly, and far more important, for a remission of Income Tax in the neighbourhood of 1s. 6d. in the pound.
I want to join with the hon. Member for Aberavon (Mr. Cove) and others who have spoken—most of them from the Opposition benches—in protesting against any proposal of that kind. It is a proposal which did not emanate in the first place from the hon. Member for Central Sheffield (Mr. Boulton), but was advanced a few days ago by the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in a letter to the "Times," and it had some support, I think, in a leading article in the "Times." We have travelled a very long way since the last General Election if we are going to listen to proposals of that kind in this House. May I remind the House of what happened in the period August-October, 1931? We were told that heavy sacrifices must be required from every section of the community, and heavy sacrifices were, in fact, exacted from every section of the community. There was the increase in the standard rate of Income Tax; there were the cuts in the pay of the Services, the teachers and the police; but, in my view—personally, I have never used the expression "equality of sacrifice"—relatively much the heaviest sacrifice was demanded from the unemployed. The National Government imposed those burdens and made those cuts before the
430
General Election, and then it went to the country and asked for an endorsement of them. It won the most remarkable victory, as I think, in modern political history, because, of all the millions of people who voted for the National Government, practically every one was going to be poorer as a result of the policy which that Government had already introduced and carried through. As I have said, it was, perhaps, the most remarkable verdict in our political history.
Why were those sacrifices made? Why was it that even the unemployed themselves in large numbers consented to the cut that was made in the very small amount that they received from week to week'' They consented to it because of the argument put forward that above all things, if we were to retain our financial stability, we must have a balanced Budget, and the central argument on which the National Government was returned at the last General Election was the argument of the supreme necessity of balancing the national accounts. The unemployed and the others accepted the cuts on the basis that the Budget had to be balanced. Now the right hon. Gentleman the Member for Hillhead and the hon. Member who moved this Motion come along and say, "Undo what was done in 1931; unbalance your Budget; it does not matter any longer about having a balanced Budget; unbalance your national accounts, not in order to restore those cuts, but for the sole and exclusive benefit of the direct taxpayer."
HON. MEMBERS: No!
Mr. BOULTON: I do not wish to interrupt the hon. Member, but he is misconstruing, perhaps unintentionally, what I said. My words were: "The balancing of the Budget requires no stressing."
Mr. FOOT: It will be within the recollection of the House that the hon. Member went on to say that, even if in the first year of his scheme the national accounts were down by some £50,000,000 or £60,000,000, that need not perturb us too much; and, if that does not mean unbalancing the Budget, I personally do not understand what it does mean. I say that the whole trend of the hon. Member's remarks in moving the Motion was that it was worth while to take a risk—I think that that was his phrase—and, tem-

431
porarily at any rate, to unbalance the Budget. No one disputes the burden of indirect taxation. I myself speak an an Income Tax payer, at any rate in a small way, and none of us in this House is likely to dispute how heavy a burden direct taxation is. But if it is possible—I do not know if it will be possible, but if by any means it is possible—in the Budget of this year, to give any form of relief, I feel that the first claim on that relief should go, not to the direct taxpayer, however heavy his burden may be, and not even to those other classes who suffered very severe cuts, but that the first claim on any relief that it may be possible to give should be the claim of the unemployed.
Supposing that it were possible to spare even some £5,000,000 or £6,000,000, that, at a rough estimate would enable the standard rate of unemployment benefit to be raised from 15s. 3d. to something in the neighbourhood of 16s. The Mover of the Motion said that we needed an increased circulation of blood in the body politic, and that we needed increased purchasing power in the hands of the people. The remission of direct taxation may or may not increase purchasing power. The money may be put into the bank; some direct taxpayers may even spend it abroad; but, if it is possible to give relief, to however small an extent, to the unemployed, it is quite certain that every penny of that relief will go in increased purchasing power, and that every penny of it will be spent to the very best advantage. I am not for a moment opposing the idea of diminishing, when it is possible to do so, the burden of direct taxation. I think that all of us, even hon. Members on the Opposition Benches, realise how heavy that burden has become. But I feel that, even though most of us in this House may be direct taxpayers, we realise that the heaviest sacrifice of all was demanded from the unemployed, and I think that, if and when it is possible for any relief to be given from the arduous burdens imposed in 1931, the claim of the unemployed should be paramount.
6.37 p.m.
Viscount CRANBORNE: We have before us this afternoon a Motion in favour of reduced expenditure, and an Amendment has been moved, with very
432
great ability, if I may say so, by the hon. Member for Aberavon (Mr. Cove), repudiating that proposal. It is on the Amendment that I should like to speak. The hon. Member was not merely destructive in what he said; he had a remedy; and his remedy, as I understood it, was that we should maintain Government expenditure and, if possible, increase it, raising taxation, if that were required, in order to put more purchasing power in the hands of the unemployed. That is what I took the hon. Member to say, and I think it is a fair account of what he said.
This is not a new remedy. I have only had the honour of being in this House for two years, but I have heard the same remedy put forward by hon. Members opposite a great many times, and, indeed, they put it into force during the two years for which they were in office. They spent, if I remember rightly, about £100,000,000 on relief schemes for the unemployed. They did that with the very best intentions, but, as the Chancellor of the Exchequer pointed out last week, the only result was to raise the number of people unemployed by 1,600,000. I do not want to overstate the case. It is obvious that that was not the only cause, but we on this side of the House believe that it was a material cause. I believe that a main cause of that increase was that increasing expenditure and taxation struck a very great blow at confidence. The hon. Member for Aberavon said that he had never heard any direct evidence that taxation influenced employment. I would like to quote a few words from the Final Report of the Balfour Committee on Trade and Industry. The report states, on page 248, that:
" While the Income Tax, being a charge on profits, is not in the main a burden on industrial costs, nevertheless a high rate of taxation has very serious effects on competitive power, both by diminishing the fund out of which the hulk of the national savings are accumulated, and extensions and improvements of industrial plant provided and also by discouraging enterprise and initiative."
I know that hon. Members opposite do not hold that view. One of the first speeches that I heard after I came into this House was a speech by a right hon. Gentleman who was at that time their Leader, and who is now Lord Snowden. I remember that he said at that time that saving was a question of individual

433
habit; and he went on to explain that in his opinion, once a man had got the habit, nothing would make him alter it. Of course, that is perfectly true with regard to an individual. We all know that there are people who are more apt to save, and people who are more apt to spend. But, nationally, there is obviously a great deal more in it than that. Saving on the part of the nation is undoubtedly dependent on another condition, and that is the condition of security. People put by money for a rainy day, as we say, and they only put it by because they feel that it will be there when the rainy day comes. That is why there is very much more investment in civilised countries than there is in uncivilised countries, because in the former the security is greater. Decrease the security, and you decrease the incentive to save and produce. I know that hon. Members opposite do not hold that view. I remember that when I heard Lord Snowden's speech it reminded me of a very old fable about a man who said that he could teach his horse to live upon nothing. Every day he gave it just a little less and less food, until at last the day came when he was to give it nothing at all. On that day, however, by an unfortunate accident the horse died, and, therefore, as he explained to his friends, he would never know whether he had been right or wrong. If you substitute the word "enterprise" for horse, "and" profits "for" food, "you will get a very near analogy. Hon. Gentlemen opposite thought two years ago that they could get industry and enterprise to live upon nothing. But the horse, willing though it was, pined away and died. That is one of the main causes why we have reached the situation in which we are today.
The principle underlying the policy put forward by the hon. Member for Aberavon is, as I understand it, that he proposes to re-distribute wealth by means of taxation, and increase the consuming power of the poor. All that one can say is that that policy has been tried, and has disastrously failed. The money has been spent, taxation has been increased, and the number of people unemployed is far greater to-day than it was before. It is really impossible for hon. Gentlemen opposite to argue any more that, when taxation is imposed upon a rich
434
man, he alone pays it. What happens in practice, when an employer is very heavily taxed? He knows that, if he makes a profit, the vast proportion of it will go to the State and, if he makes a loss, he will have to bear it himself. Therefore, if he is making a loss, he limits it in the only way he can, and that is by closing his works. Who suffers? It may be said that he suffers because he does not make a profit; but the only persons who really suffer are his work-people, because they are reduced from good wages of 40s. or 50s. or 60s. to the dole. I am certain that hon. Members opposite put their policy forward with the highest motives. But it is not really a policy of economy. It is a sentimental policy. From the point of view of the social services themselves I believe a reduction in taxation is desirable. For the Government has no money of its own. All the money it has comes from productive industry. And, if industry cannot produce at a profit, there will be no social services at all or, at least, they will have to be very greatly reduced. The hon. Member who spoke last said that relief ought to be given first of all to the unemployed. I believe that first of all relief ought to be given to the country and, if the country gets relief, everyone in the country will benefit.
6.46 p.m.
Mr. DENMAN: I should like to put a rather different point of view from those which have hitherto been put before the House because, unlike most Members, I do not really endorse either the Motion or the Amendment. It seems to me that they both stress points which are not of real importance and call attention to rather secondary things. The Motion itself is one of gloom and despondency. Both the Mover and the Seconder implored the Government to show courage, and not timidity. I think their Motion shows a lack of courage. The sort of Motion that I should have liked the House to accept would be:
" The House views with satisfaction the financial strength of the country, will support the Government in maintaining a balanced Budget, and looks to the Government to assist in lightening the burden of industry by a policy of gradual and limited price raising."
The House surely ought to realise and feel immense pleasure in what the Government have achieved and the amazing

435
financial strength that we have attained. We have had this combined position of high taxation coupled with the maintenance of social services, though not at the height or the standard that we should have liked—straitened but not strangled. We are maintaining them at the cost of high taxation, and at the same time we have a financial position of unrivalled strength throughout the world. I would ask anybody in the House who has any responsibility for running a business concern, Is there any country in the world to which he would prefer to transfer his business? There are plenty of countries with lower taxation, if he wants lower taxation. What he will not find anywhere in the world is a country which has succeeded, by imposing high taxation, in maintaining the level of social services and maintaining a position of confidence and financial strength. Industries have been strengthened enormously by the appreciation of reserves which has resulted from the Chancellor's Conversion scheme. Company after company has almost been pulled out of the mire by having its reserves so strengthened. Is not that a thing for which to be grateful? When we get these rather airy and light-hearted suggestions for dreamy and speculative finance, casting away big blocks of our revenue, I submit that we ought to reject those alluring schemes and be content to accept such taxation as is necessary to maintain the financial stability of the country. The whole basis of our industrial prosperity depends on the knowledge of the whole world that we are essentially financially sound. That gives a basis of confidence, and on that basis alone we shall rise in time to prosperity.
6.51 p.m.
The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): It is not without interest to reflect that a very well-known Member of Parliament of the name of Hume, 111 years ago, moved as an Amendment to the Address:
" That we cannot but express most respectfully to His Majesty our opinion, that an excessive taxation, disproportionate to the reduced value of all property, is a principal cause of those distresses; and humbly to intreat that he will be graciously pleased immediately to direct such reductions in every branch of our expenditure, from the highest to the lowest department,
436
as shall enable us forthwith to relieve His Majesty's faithful people from a large portion of that burthen of taxation, which, in their present impoverished condition, presses so heavily upon all classes."
History repeats itself and, as this country extricated itself from the difficulties that existed at the time when Hume moved that Amendment, so I trust and believe that with perseverance we shall extricate ourselves from the difficulty in which we find ourselves to-day. I must apologise to the House for taking the place of the Chancellor of the Exchequer, who is the proper Minister to deal with a Debate of this kind. He had an old engagement to speak to-night in the country, and the House knows how difficult it is to get out of those engagements when once made. But perhaps it is a little easier for me, not being Chancellor, to speak on this subject, because it really is impossible for a Chancellor to speak with any freedom on a question of this kind when the shadow of the Budget is already hanging over his head. I have had some experience in taking part in these Debates, now many years ago, and though there is little that one can say, for the same reason that the Chancellor himself would be found rather fettered, I hope I may be able, by commenting on and perhaps criticising some of the observations which have been made, to make my contribution before we decide whether or not we will adopt the Motion before the House.
I should like to begin by congratulating most warmly the Members of my own party who, at great sacrifice to themselves, have put in so much work on that most difficult subject of examining what economies were and were not possible in the expenditure of the country. Their investigation has been of great service and on one or two points the Government have already adopted their suggestions —the abolition of the housing subsidy, for instance—and I can assure them that the Chancellor is examining with sympathy and with care the suggestions that have been put forward. I do not know whether there is any truth in it—all kinds of rumours reach me in my position as Lord President—but I have heard that some of those who have advocated various economies were a little less enthusiastic in desiring to see them pursued than they have been when they first advocated them.

437
First of all, let me say a word about the speech of my hon. Friend who moved the Motion. I thought both: the quality and the temper of his speech were admirable, and I listened with much interest to what he had to say. He began by saying he wanted to see on the part of the Government a wide outlook and elasticity of mind. Those are two qualities which I have always flattered myself I am not without. He spoke of one subject the idea of which has been advocated in many quarters, that is, a planned Budget over a term of years. I have no doubt that, when my right hon. Friend considers his Budget, he will not fail to give his attention to every suggestion that has been made to make his task less difficult than it would naturally be. My hon. Friend went on to speak of the way in which Income Tax affects the competitive power of this country. That being a subject which interests me very much, as having been at the Treasury at the time when the Income Tax was raised from what we used to consider a normal figure to the height at which it stands today, there are one or two observations that I should like to make, first of all perhaps in the way of comfort. It is quite impossible, I believe, to calculate by any process open to us what the real relative weight of direct taxation is on the industry of one country and another, because we have no reliable data of the proportion of the total taxation in this country to the total wealth and total income of this country—those are very relevant factors—or, indeed, to the comparative distribution of both wealth and income in other countries. You have also to reckon as permanent factors the general character of the industries in each, country.
Remember that we are the first country to apply our direct taxation, at enormous figures, to the balancing of our Budget. No other country has approached us in what we have done in that direction, but it is certain that other countries will have to follow us in some form of taxation or leave their Budgets unbalanced, and unbalanced Budgets over a, term of years mean bankruptcy. Until the time comes that we are all on a level in that work and have balanced Budgets, we have another reason for knowing that we cannot really assess the real relative position of ourselves and other countries
438
with regard to the incidence of Income Tax. It does not in the least follow that Income Tax is not, in the words of the Motion, an intolerable burden. So much has been said by the Chancellor of the Exchequer himself. I know, as every Member of this House knows, that, theoretically, Income Tax is not a charge on industry, but I heard an interesting quotation given by my Noble Friend the Member for Dorsetshire (Viscount Gran-borne) which he took from the Report of the Balfour Committee. I agree entirely with what was said there. There is no doubt very high Income Tax, plus Surtax and Death Duties, all at exorbitant rates, does lower the level of the pool of savings for investment of the country. There is also the psychological effect when trade is bad. The collection of so large a part of income, for the purposes of the Government, depresses very heavily—and far more than would be the case if trade were good—all those on whose skill, brain and energy the satisfactory conduct of business depends. I think anyone who has experience, or knowledge, will agree that, theoretically, whatever may be said about the incidence of Income Tax, there is no doubt that, except in the best of times, it does act as a great burden on the industry of the country.
My hon. Friend mentioned one subject, which was mentioned by a great many other Members, namely, beer. I should like to pay tribute to the altruistic question, propounded by that warm heart we all know he has, of the hon. Member for West Ham (Mr. Thorne), who was so worried because at Streatham it was impossible to get a half-pint measure. No half-pint measure would have any interest to him. I sympathise very deeply with what has been said about beer, but I think that, in the rather judicial view I am trying to give in this Debate, I ought perhaps just to put one consideration which is sometimes overlooked. I know the argument about the Beer Duty with regard to unemployment —unemployment both in the industry and in agriculture. They are weighty arguments undoubtedly, and must be considered. But there is one argument which is used—that lowering of the tax would be necessarily followed by such a large increase of consumption that the loss to the revenue would be negligible. We

439
have had many disappointments in similar respects. There is no doubt that the habit of beer drinking, for good or evil—very likely caused in the first instance by high war taxation—has changed in this country. The money which used to be spent on beer is now largely spent on other things.
I said there were similar cases. I look back a few years to the last time when I was in the Government. We brought in, just as the close of our term, a Measure which we all hoped would be of great benefit to the country—the Measure for rating relief. We hoped, and believed, that it would have a really stimulating effect on the railway services of this country. It may be that we did not realise the way in which the railway habit has been changing in this country. People are taking themselves, and their goods, more and more to the roads. Of course, the result was a terrible falling off and depression in traffic. The fact remains that a most substantial help, which was meant to be a stimulus, failed completely to save this falling traffic which is now causing such anxiety to so many people in this country. This point might be borne in mind. I do not commit myself either way, and it would be most unfair to give any views of my own at this moment, when the Chancellor of the Exchequer has that most difficult task, envied by no one in this House, of getting his Budget ready in the next few weeks.
The question which has been raised in many quarters was also raised by an hon. Member—the suspension of the Sinking Fund. That again is a subject which, of course, will be examined and every relevant factor will be borne in mind. I would like to say something in this connection, which I can do without betraying any secrets. Everyone seems to speak as though there was going to be a large surplus. There may be; I do not know. I know just as well, no better and no worse, than every other Member. Every Member who has an income of any kind from invested funds whether small, medium, or large, will agree that, never has he known so many cases where his income has been reduced, or where dividends have failed to be paid at all as in this last year. He knows perfectly well that that will be reflected directly in terms of Inland Revenue. I have,
440
purposely, not looked at any figures, but I cannot see how, until there is a real improvement in trade, you are going to get any improvement in the figures of what has been for so long, and is to-day, the real standby of the Inland Revenue returns.
My hon. Friend who sits for a constituency adjoining my own—he had the satisfaction of winning a seat which I was unable to win many years ago—was much bolder. He began what looked like being a very interesting discussion on the raising of prices, but I think it dawned on him that that is a subject of discussion next Wednesday. Then he spoke of three measures which might help the Budget. One was inflation, on which I certainly do not propose to embark to-day. The second was economy, with which we all agree. The third was useful work. He mentioned wagons, which I remember being mentioned some time ago. It is very interesting to know that the Great Western Railway have placed, or are on the point of placing, a very large order for 20-ton wagons, and, if that be successful, as I hope and believe it will, then we may see that example followed in many parts of the country. I think he put his finger on a very practical spot there. I think that large-wagon building for commercial purposes is one of the directions in which we may look with some moderate hopes. Frankly, although I do not wish to betray any confidence, the Chancellor of the Exchequer has not yet considered the rebuilding of the Navy. If he returns in safety from Derby, I will tell him of the scheme, and I have no doubt he will give it his most careful consideration.
The hon. Member for Aberavon (Mr. Cove) has a gift which has been denied to me. He can whip himself in two or three minutes into a fervent enthusiasm about anything. I listened with much interest to what he said, but I was rather puzzled by some of the figures he gave about percentages. I do not want to deal with figures, and I do not want to give more than one minute to this matter. I only wish to refer to the matter, because, unintentionally on his part, for a short time he misled me, and he may have misled other Members of the House. The figures he quoted were taken from the Minority report on National Expenditure and the percentages were the percentages of increase.
Mr. COVE: That is what I said.
Mr. BALDWIN: It was difficult to follow. When you are told that the increase since the War was only 15 per cent. for the social services, it does not make you realise the actual fact that the social services have risen since 1913 from about £14,000,000 a year to £100,000,000 a year. I just wanted to mention that in case other hon. Members had been misled. I was very much surprised at the percentage, and did not at first realise it was the percentage difference between 1913 and now. Of course, it is perfectly obvious that when you have a war, and war debts, that the percentage of these debts is an enormous volume of the total increase.
Mr. COVE: I read the exact words.
Mr. BALDWIN: I make no accusation against the hon. Member. I wanted to explain to my friends. The hon. Member must recollect that we have a reputation for being slow thinkers. I was very glad to hear my hon. Friend the Member for Ecclesall (Sir S. Roberts). He, naturally, coming from Sheffield, was very interested in new productive enterprise. I think the suggestion he made was very interesting and well worthy of consideration. The moat amazing suggestion was from my old Friend the Member for South Molton (Mr. Lambert-). I remember many years ago Mr. Asquith saying to me: "I have long ceased to be either surprised, or disgusted, at anything that can happen." In this matter the question of disgust does not come in, and I have ceased to be surprised at anything. While at first sight it seemed a very plausible suggestion we cannot forget what has been in the blood of this House for many centuries. The House has fought for supremacy in finance and whether another body was co-equal, or superior, whatever party was in power in this House, I think there would be a continuous fight until this House either went under or came out on top.
The hon. Member for North Salford (Mr. J. P. Morris) also made an interesting speech. He spoke about rationing the Departments. What does one mean exactly by rationing? You may say that in one way the Departments are rationed now. Their expenditure is carefully checked, and certain things are allowed and certain things are disallowed. By
442
that rationing he means that when a Department has put in a figure, and when you have more or less got an agreement what that figure shall be, you say: "Then you are going to have 75 per cent. of that." The difficulty with that is that you cannot apply rationing to War pensions or to any Department where any large portion, or the whole portion, of its expenditure is statutory or contractual. I can assure my hon. Friends, as having had some experience both of Government Departments and of "axes," because I was alive when the Geddes axe was wielded, there are immense practical difficulties in the way of rationing. If you attempted to carry out rationing, even on a Department where the bulk of its expenditure was not a statutory or contractual obligation, you would in fact create great anomalies and great hardships, and you would probably do some very grave injustices. It is really too much like the unjust steward rendering his accounts.
I have dealt with a number of the speeches, and I am sure that everyone will feel that we have had a most useful Debate. These Debates on Wednesdays are of the greatest value for ventilating opinions. They are not, and cannot be, Debates in which Ministerial policy is set forth at any length. I was myself for so many years a private Member that I am always very jealous of these days for the private Members, and I am very glad to think that to-day has been a private Member's day, and that we have had no speech from any Front Bench except the one which, as a matter of courtesy, I am delivering to the House at this moment.
I should like to make one or two general observations before I sit down. The burden of this Debate has been the urging upon the Government not to relax for one moment the pressure for economy. Not much has been said directly to-day as to the direction in which economy is to be sought, but it is clear that in the minds of every Member is that desire, even if we cannot repeat —and no one expects us to repeat—the phenomenal reductions which were made between 1931 and 1932, yet they do want to feel that the Government will not relax their pressure, Departmental pressure all the time. They want to feel that the Government fully realise the

443
pressure and the burdens of taxation. Anyone who has read the recent speeches of the Chancellor of the Exchequer will recognise freely that he regards the present burden as excessive. He also said the other day that to increase that burden would he disastrous, and he has given very definite pledges about economy. He said in a speech delivered about a month ago—
"While we cannot expect to save tens of millions of pounds by economy, there are economies which individually may not be of a very striking character, but put together they make up a substantial sum, and it will be the duty of the Government to show the House of Commons and the country that they will not tolerate unnecessary expenditure until it is possible again to reduce taxation."
The scrutiny, I can assure the House, is always going on, and in the aggregate the savings are important. Out of this year's Estimates, excluding some 11 mainly token votes which show no change, well over half show a reduction, which is no mean performance after what was done last year, and of those that show increases three of them are increased solely by reason of the absence of receipts from Ireland, quite a number solely by reason of the fall in receipts from fees of different kinds, and a few have been increased by the growth of contractual charges. The watch is constant on expenditure, and I can assure the House that the Chancellor of the Exchequer, the Financial Secretary—a very important person in these days—and the whole of that most efficient staff at the Treasury are as alive to their responsibilities as any Member of this House would like to see them.
I want to say a word on the reduction of taxation. I want to tell the House how I regard it. I am not going to give my views of what ought to be done, because here again I should be impinging on the prerogative of the Chancellor of the Exchequer. I am not the Chancellor of the Exchequer, but I do not see, as he has said in that speech, from where reductions of tens of millions are to come. I believe that you will never get them unless some course were pursued, as has been advised in some quarters today, of gambling with the future. I believe that the real reduction of taxation will come when you are able to get an increase of revenue. That sounds a
444
platitude, but until you can get the yield of the revenue, and especially those great Inland Revenue duties, unless you get an increase there, I do not see very much prospect of getting substantial reliefs apart from that. Those can only come by an improvement in trade.
I come back to the question of the employment of our people. There is nothing which has exercised my mind during the last 11 years more than that. Allusion was made to the election into which I led my party in 1923. I led them to it because I believed that there was nothing else at that time which would help us to fight the unemployment which was beginning and which I saw coming, and which I had little hope at that time of seeing remedied. I do not regret to-day what I did then. I think that we were perfectly right, but the whole situation to-day is still more difficult because now the prosperity of our industry is so wrapped up with the international situation. That makes the great importance of the World Conference, and there is no doubt, as has been said over and over again, we have to do all we can to get reduced tariffs in the world and to get the exchanges set in order. I hope that something in that last respect may be done in the negotiations we are having with our friends in the Argentine, but until world causes are set in order we cannot advance beyond a certain point.
Our situation to-day, I believe, bad as it is, is more favourable than that in any other country in the world, and I take hope from that fact. But I want the House to remember that there is one method of reducing taxation, and that is by reducing it at the expense of the social services, and this Government will not do that. It is perfectly true that many sacrifices were made and made in all classes. I hope that sometimes the party opposite, when they expatiate, and quite rightly, on the sufferings of the very poor, will not forget the real sacrifices which have been made by many poor in their glad consent for the sake of the country to knock 40 per cent. off their incomes from the funds. Our people made great sacrifices there, and, more remarkable, it was made a year after the great sacrifices were made by all the rest of the people. But naturally, when a year or 15 months have gone by after you have made your sacrifice, and you can yet see little that helps, not realising the

445
sounder condition of the country and the more favourable environment for its expansion, but seeing only that work does not come, there is no wonder men's hearts fail them.
What we have to try and do in this House is to keep up our courage, and the courage in the country, with the certain hope that if we keep on courageously we shall do better. I have great hopes of the World Conference. I have great hopes of the position in which we find ourselves. I think that we are ready to take advantage now of what may come, and, while I do not like to use the expression of the Chancellor of the Exchequer, "Pegging away," because everyone interpreted it wrongly the other day, I would rather say: "Let us go forward with high courage and with hope practising those very virtues which the
House would have us do—economy and thrift—and we shall see better times." I would say, on behalf of the Government, that we accept the Motion. There is only one thing I will say about it. I want it to be clear the sense in which I accept the word "intolerable." I do not accept it in its literal meaning. I accept it in its meaning in good, classical English.
But one half-pennyworth of bread to this intolerable deal of sack !
Perhaps that intolerable voice is speaking. If I may take the word "intolerable" in that sense, I accept that Motion on behalf of the Government.
Question put, "That the words proposed to be left out" stand part of the Question.
The House divided: Ayes, 277; Noes, 46.

Division No. 63.]

AYES.

[7.30 p.m.

Acland-Troyte, Lieut.-Colonel

Craddock, Sir Reginald Henry

Harbord, Arthur

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

Cranborne, Viscount

Hartland, George A.

Agnew, Lieut.-Com. P. G.

Craven-Ellis, William

Harvey, George (Lambeth, Kennlngt'n)

Albery, Irving James

Crooks, J. Smedley

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

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

Crookshank, Col. C. de Wlndt (Bootle)

Headlam, Lieut.-Col. Cuthbert M.

Allen, William (Stoke-on-Trent)

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

Hellgers, Captain F. F. A.

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

Croom-Johnson, R. P.

Heneage, Lieut.-Colonel Arthur P.

Anstruther-Gray, W. J.

Crossley, A. C.

Hapworth, Joseph

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

Dalkelth, Earl of

Herbert, Capt. S. (Abbey Division)

Apsley, Lord

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

Hills, Major Rt. Hon. John Waller

Aske, Sir Robert William

Davison, Sir William Henry

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

Astbury, Lieut.-Con.. Frederick Wolfe

Denman, Hon. R, D.

Hore-Bellsha, Leslie

Atkinson, Cyrll

Denvllle, Alfred

Hornby, Frank

Baldwin, Rt. Hon. Stanley

Dlckie, John P.

Horebrugh, Florence

Baldwin-Webb, Colonel J.

Donner, P. W.

Howard, Tom Forrest

Balfour, George (Hampstead)

Doran, Edward

Howltt, Dr. Alfred B.

Balfour, Capt. Harold (I. of Thanet)

Drewe, Codric

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

Balnlel, Lord

Duckworth, George A. V.

Hudson, Robert Spear (Southport)

Barclay-Harvey, C. M

Dugdale, Captain Thomas Lionel

Hume, Sir George Hopwood

Beauchamp, Sir Brograve Campbell

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

Hunter, Dr. Joseph (Dumfries)

Benn, Sir Arthur Shirley

Dunglass, Lord

Hunter, Capt. M. J. (Brigg)

Blrchall, Major Sir John Dearman

Ellis, Sir R. Geoffrey

Iveagh, Countess of

Bird, Ernest Roy (Yorks., Sklpton)

Elmley, Viscount

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

Borodale, Viscount.

Emmott, Charles E. G. C.

Joel, Dudley J. Barnato

Bowyer, Capt. Sir George E W.

Erskine, Lord (Weston-super-Mare)

Johnston, J. W (Clackmannan)

Braithwalte, J. G. (Hillsborough)

Essenhigh, Reginald Clare

Jones, Henry Haydn (Merioneth)

Briscoe, Capt. Richard George

Everard, W. Lindsay

Jones, Lewis (Swansea, West)

Broadbent, Colonel John

Fermoy, Lord

Kerr, Lieut.-Col. Charles (Montrose)

Brown, Ernest (Leith)

Flelden, Edward Broeklehurst

Kerr, Hamilton W.

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

Ford, Sir Patrick J.

Klrkpatrick, William M.

Browne, Captain A. C.

Forestier-Walker, Sir Leolln

Knebworth, Viscount

Buchan-Hepburn, P. G. T.

Fox, Sir Gilford

Knox, Sir Alfred

Burnett, John George

Framantle, Sir Francis

Lambert, Rt. Hon. George

Cadogan, Hon. Edward

Fuller, Captain A. G.

Law, Sir Alfred

Campbell, Vice-Admiral G. (Burnley)

Gault, Lieut.-Col. A. Hamilton

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

Caporn, Arthur Cecil

Gibson, Charles Granville

Lelghton, Major B. E. P.

Carver, Major William H.

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

Lennox-Boyd, A. T.

Cautley, Sir Henry S.

Glossop, C. W. H.

Levy, Thomas

Cazalet, Thelma (Islington, E.)

Goff, Sir Park

Liddall, Walter S.

Chapman, Col.R. (Houghton-le-Spring)

Goodman, Colonel Albert W.

Lindsay, Noel Ker

Chapman. Sir Samuel (Edinburgh, S.)

Gower, Sir Robert

Lister, Rt. Hon. Sir Philip Cunllffe-

Clarke, Frank

Graham, Sir F. Fergus (C'mb'rl'd, N.)

Little, Graham-, Sir Ernest

Clarry, Reginald George

Grattan-Doyle, Sir Nicholas

Llewellin, Major John J.

Cobb, Sir Cyril

Greaves-Lord, Sir Walter

Lloyd, Geoffrey

Cochrane, Commander Hon. A. D.

Gretton, Colonel Rt. Hon. John

Loder, Captain J. de Vere

Colville, Lieut.-Colonel J.

Grimston, R. V.

Lumley, Captain Lawrence R.

Conant, R. J. E.

Guinness, Thomas L. E. B.

Lyons, Abraham Montagu

Cook, Thomas A.

Gunston, Captain D, W.

Mabane, William

Cooper, A. Duff

Guy, J. C. Morrison

Mac Andrew, Lt.-Col C. G. (Partick

Copeland, Ida

Hales, Harold K.

MacAndrew, Capt. J. O. (Ayr)

Courtauld, Major John Sewell

Hannon, Patrick Joseph Henry

McCorquodale, M. S.

MacDonald, Malcolm (Bassetlaw)

Pickford, Hon. Mary Ada

Somervllle, Annesley A. (Windsor)

McEwen, Captain J. H. F.

Potter, John

Sotheron-Estcourt, Captain T. E.

McKie, John Hamilton

Power, Sir John Cecil

Southby, Commander Archibald R. J.

Maclay, Hon. Joseph Paton

Procter, Major Henry Adam

Spears, Brigadier-General Edward L.

McLean, Major Sir Alan

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

Spencer, Captain Richard A.

Macmillan, Maurice Harold

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

Stanley, Lord (Lancaster, Fylde)

Magnay, Thomas

Ramsden, Sir Eugene

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

Maklns, Brigadier-General Ernest

Rankin, Robert

Stewart, J. H. (Fife, E.)

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

Ray, Sir William

Stewart, William J. (Belfast, S.)

Margesson, Capt. Rt. Hon. H. D. R.

Reed, Arthur C. (Exeter)

Storey, Samuel

Marsden, Commander Arthur

Reld, David D. (County Down)

Stourton, Hon. John J.

Martin, Thomas B.

Reld, James S. C. (Stirling)

Sueter, Rear-Admiral Murray F.

Mason, David M. (Edinburgh, E.)

Remer, John R.

Sutcllffe, Harold

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

Rentovl, Sir Gervals S.

Thomas, James P. L. (Hereford)

May hew, Lieut.-Colonel John

Renwick, Major Gustav A.

Thompson, Luke

Merrlman, Sir F. Boyd

Roberts, Sir Samuel (Ecclesall)

Thomson, Sir Frederick Charles

Milne, Charles

Robinson, John Roland

Thorp, Linton Theodore

Molson, A. Hugh Elsdale

Ropper, Colonel L.

Tltchfield, Major the Marquess of

Morris, John Patrick (Salford, N.,

Rosbotham, Sir Samuel

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

Morrison, William Shephard

Ross, Ronald D.

Touche, Gordon Cosmo

Moss, Captain H. J.

Ross Taylor, Walter (Woodbridge)

Train, John

Munro, Patrick

Ruggles-Brise, Colonel E. A.

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

Nail, Sir Joseph

Runge, Norah Cecil

Ward, Irene Mary Bewick (Wallsend)

Nail-Cain, Hon. Ronald

Russell, Albert (Kirkcaldy)

Ward, Sarah Adelaide (Cannock)

Nation, Brigadier-General J. J. H.

Russell, Alexander West (Tynemouth)

Watt, Captain George Steven H.

Newton, Sir Douglas George C.

Rutherford, John (Edmonton)

Wedderburn, Henry James Scrymgeour-

Nicholson, Godfrey (Morpeth)

Rutherford, Sir John Hugo (Llverp'l)

Whiteside, Borras Noel H.

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

Samuel, Sir Arthur Michael (F'nham)

Williams, Charles (Devon, Torquay)

North, Captain Edward T.

Samuel, Samuel (W'dsworth, Putney)

Williams, Herbert G. (Croydon, S.)

Nunn, William

Sandeman, Sir A. N. Stewart

Wills, Wilfrid D.

O'Connor, Terence James

Sanderson, Sir Frank Barnard

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

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

Savery, Samuel Servington

Windsor-Clive, Lieut-Colonel George

Palmer, Francis Noel

Scone, Lord

Winterton, Rt. Hon. Earl

Patrick, Colin M.

Selley, Harry R.

Wise, Alfred R.

Peake, Captain Osbert

Shaw, Helen B. (Lanark, Bothwell)

Womersley, Walter James

Pearson, William G.

Shaw, Captain William T. (Forfar)

Wood, Sir Murdoch McKenzle (Banff)

Peat, Charles U.

Shepperson, Sir Ernest W.

Worthington, Dr. John V.

Penny, Sir George

Shute, Colonel J. J.

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

Percy, Lord Eustace

Slater, John

Perkins, Walter R. D.

Smiles, Lieut.-Col. Sir Walter D.

TELLERS FOR THE AYES.—

Petherick, M.

Smith, Louie W. (Sheffield, Hallam)

Mr. Boulton and Sir J. Wardiaw-

Peto, Sir Basil E. (Devon, Barnstaple)

Smith-Carington, Neville W.

Milne.

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

Somervell, Donald Bradley

NOES.

Adams, D. M. (Poplar, South)

Grenfell, David Rees (Glamorgan)

McGovern, John

Attlee, Clement Richard

Grundy, Thomas W.

Maclean, Nell (Glasgow, Gcvan)

Banfield, John William

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

Mallalleu, Edward Lancelot

Batey, Joseph

Hall, George H. (Merthyr Tydvll)

Maxton, James

Bevan, Aneurin (Ebbw Vale)

Harris, Sir Percy

Milner, Major James

Buchanan, George

Hicks, Ernest George

Nathan, Major H. L.

Cape, Thomas

Janner, Barnett

Parkinson, John Allen

Cocks, Frederick Seymour

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

Price, Gabriel

Cove, William G.

Jones, Morgan (Caerphllly)

Rathbone, Eleanor

Crlpps, Sir Stafford

Klrkwood. David

Salter, Dr. Alfred

Daggar, George

Lansbury, Rt. Hon. George

Tinker, John Joseph

Davles, David L. (Pontypridd)

Lawson, John James

Williams, Edward John (Ogmore)

Edwards, Charles

Llewellyn-Jones, Frederick

Williams, Dr. John H. (Llanelly)

Foot, Dingle (Dundee)

Logan, David Gilbert

Williams, Thomas (York, Don Valley)

George, Major G. Lloyd (Pembroke)

Lunn, William

Graham, D. M. (Lanark, Hamilton)

McEntee, Valentine L.

TELLERS FOR THE NOES.—

Mr. C. Macdonald and Mr. Groves.

Question put, and agreed to.

Resolved,
" That this House views with anxiety the existing high level of taxation and diminishing revenues in this country, believes that this creates an intolerable burden on industry, and urges His Majesty's Government to consider means by which this burden may be lessened at the earliest possible moment."

MINING INDUSTRY.
7.38 p.m.
Mr. DICKIE: I beg to move,
" That, in the opinion of this House, it is essential in the national interest and the
448
interests of the coal-mining industry that the coal export trade should be freed as speedily as possible from the restrictions imposed by Part I of the Coal Mines Act, 1930."
It is safe to say that no industry has occupied a greater share of the attention of this House than the mining industry. Commission after Commission has been appointed to inquire into the state of the industry, Act after Act has been placed upon the Statute Book, to regulate and control it, and even in the brief lifetime of this Parliament the subject has been debated on several occasions. In every Vote of Censure moved from the

449
other side of the House a great deal of time has been devoted to what I might call the tottering throne of old King Coal. Despite these facts, I and my friends who were associated with me, who represent mining constituencies, who are very gravely concerned as to the position in those constituencies and who view the future with general alarm, make no apology for directing the attention of the House once again to the steady decline in our export trade in coal, to the position which is created by that steady decline and the manner in which it affects the national interests.
Next to agriculture the mining industry remains still our greatest industry. It is the foundation of all our heavy industries. In the domain of domestic industries it is perfectly safe to say that, no matter what may be the scientific development in the utilisation of other forms of fuel, for us for many years coal must remain the foundation on which the whole structure of our industrial edifice must rest. It is equally true to say that if we are to maintain our position as the greatest exporting nation in the world it is vital that we should maintain our exports of coal. In bulk they are the greatest of our exports. The shipowners depend on the outward freight to cheapen the inward freight and thereby enable us to purchase more cheaply the food and raw material that we need for our sustenance, the raw material of our industry, a matter of primary importance in a country which must draw its supplies from the ends of the earth, and upon which it depends as a competitive nation in maintaining its position in the markets of the world.
The coal industry must, therefore, remain as a fundamental factor in our economic life. Its effect upon our national life is not to be judged by the state of prosperity or depression in the mining industry alone. The prosperity which is derived from the mining industry finds its way into the broad stream of our national life. It percolates into the thousand channels of the national life and enriches and benefits the whole. Similarly, the severe depression in the coal exporting areas, which reduces them, as they have been reduced during the last few years, to a state of beggarly demoralisation, with its consequent loss of purchasing power, due to the poverty of those producers of wealth, is reflected
450
in every industry catering for the home market, apart altogether from its effect upon our international trade. I bring forward the Motion in the hope that it will appeal not only to those who represent mining constituencies, and who are directly interested in the industry, but to the general body of hon. Members, and that the Government will accept it and proceed at once to implement it, for the situation in those areas is becoming really desperate.
Every time that I am asked what are my objections to the Mines Act in its application to the export trade, I am reminded of an episode in the life of the great Dr. Johnson. It is said that on one occasion when he was on one of his trips to Scotland he stayed for dinner at Oxford, celebrated then for its learning, famous since for its Union, and now notorious for its patriots. On that occasion he dined on chicken. The dinner does not appear to have been a remarkable success, for when he was asked about it afterwards he said that the chicken was badly hatched, badly reared, badly Tilled, badly dressed, badly cooked and badly served, otherwise it appears to have been quite a good chicken. So it is with the Act of 1930 and its application to the export trade. Whatever may be said of that Act as far as inland trade is concerned, I submit that it is impossible to bring forward any valid arguments for a continuance of that part of the Act which inflicts a stranglehold on the export section of the industry by regulating the output and imposing the fixation of prices.
The disastrous effect of the application of the provisions of the Act to the export industry was foreseen by hon. Members who opposed it during its passage through this House, and by many people outside who were well qualified to speak on behalf of the industry. Almost every one of the Ministers of the present National Government opposed this Act during its passage through this House, including the two hon. Members who have been Secretary for Mines, and they opposed it particularly in its application to the export section of the industry. I will not weary the House with long quotations from speeches, they can be found in the records of the House and hon. Members can read them for themselves; but I say quite frankly that I

451
am astonished that members of the present Government should have allowed this Act to remain on the Statute Book unamended for 18 months, when month after month was clearly revealing that their own fears were well founded and their own phophecies well justified. As far as outside opinion is concerned I could quote many authorities as to the effect of the application of its provisions to the export trade, but I will content myself with one from a colliery in my own constituency. The relevant portion of the letter is this:
" The present Government has definitely stated that if any district fails to produce a scheme the Government would force one upon them, and it was undoubtedly this threat which intimidated many into voting in favour of a so-called voluntary scheme of their own making, although they had little or no confidence that it would work without inflicting serious loss both on owners and workmen throughout the county, as, owing to the fact that the Durham coal trade lives largely by its exports, any control, with its resultant restriction of output, will increase costs, while price fixing will almost inevitably lead to the loss of orders in foreign markets."
That is a letter from the chairman of a colliery in my own constituency—Mr. Sydney Wilson.
Mr. BATEY: That is a tin-pot place.
Mr. DICKIE: The hon. Member, as on a previous occasion when I was speaking, is a little premature. He will hear something about the bigger concerns before I have finished. But the same thing runs right through the exporting districts. The hon. Member for Spennymoor (Mr. Batey) knows the county of Durham as well as I do, and he knows the disastrous state of things prevailing there partly as a result of the 1930 Act. That Act came into operation on the 1st January, 1931, and it was not long before the dismal forebodings of those who had foretold what was likely to happen were fully justified. The matter was raised in this House and on the 19th March, 1931, the present Secretary for Mines expressed grave apprehension as to the effect of the Act upon our export trade. He concluded his speech on that occasion with these words:
" Those who attribute the fall in shipments to the quota system say that the quota system is the worst that could possibly be adopted, for it takes no account of the varying classes of coal nor of the fluctuating
452
demand which has always existed and always will exist in the coal trade. It is also held by some of the shippers that the coal market can only be maintained by full production and low costs, and it is the opinion of some coal traders that this particular system has meant higher costs. I hope the Minister will believe me when I say that evidence comes to us from all parts of the country that there is grave disquiet at the working of the quota."
There is even greater disquiet to-day. The hon. Member for Leith (Mr. E. Brown) concluded by saying:
" I beg him not to take merely the departmental view that the Act is all right and must be all right for everybody, merely because some central committee says so."—[OFFICIAL REPORT, 19th March, 1931; Col. 2241, Vol. 249.]
That speech was made by the Secretary for Mines when he was a private Member of the House. He is now Secretary for Mines and I am a private Member; and I am making the same appeal to him as he made then to the then Secretary for Mines. This Act is not all right. As far as the export trade is concerned it is all wrong, and its effects must be remedied at once unless we are prepared to face a still further decline in our sales to foreign countries, with disastrous results to our industries, our shipping, to the balance of trade and to the nation as a whole. Before I deal with the question of minimum prices may I remind hon. Members of the figures relating to production and export? In 1913 we produced 287,000,000 tons of coal, and of that we exported as cargo 73,000,000 tons, and as bunkers 24,000,000 tons; making a total of 97,000,000 tons. That 97,000,000 tons—and this is the point to which I want to draw special attention—represented 33.8 per cent. of our total production. In 1932 our total production had fallen to 209,000,000 tons, our exports of cargo coal to 39,000,000 tons and our exports of coal in bunkers to 14,000,000 tons, a total of 53,000,000 tons. But that 53,000,000 tons represented only 25 per cent. of our production. We have lost in 1932 as compared with 1913 no less than 44,000,000 tons of coal; and we are actually exporting 8.8 per cent. less of the diminished production.
It must be remembered that a million tons of coal represents employment for 4,000 men. We have lost 44,000,000 tons of coal, and that represents a loss in employment of 176,000 miners. That is something which should give every hon.

453
Member cause for deep thought. But that is not all the loss in employment, because it must be remembered that there is a loss of employment to those engaged in shipping, on the railways, in our docks and harbours; and all the ancillary trades. In addition there is the value of these 44,000,000 tons of coal which we have lost, and the House will realise the serious effect which this has upon the balance of trade. I do not quote these figures as evidence against the Coal Mines Act of 1930, but merely to draw the attention of the House to the importance of our export trade in coal. Coming to the position during the last few years I want to point out that by 1929 we were recovering steadily from the effects of the long drawn-out stoppage of 1926. Our exports, I am speaking of cargo alone, had risen again to the substantial total of 60,000,000 tons.
Mr. CURRY: Can the hon. Member give us the percentage which the figure of 60,000,000 tons bears to the total production in 1929?
Mr. DICKIE: I brought a mass of figures with me but I cannot put everything into terms of percentages. If I did I should occupy too much of the time of the House. The point I want hon. Members to remember is that when the Act came into force in January, 1931, there were no quotas or exchange restrictions, or licensing regulations, in operation against our coal, hut the very moment it came into force our exports began to fall, and to fall heavily indeed. Whereas in 1930 we only lost 5,000,000 tons in 1931 we lost no less than 12,000,000 tons, and in 1932 we lost another 4,000,000 tons, so that our exports now stand at the phenomenally low figure of only 39,000,000 tons, or little more than half of our exports in 1913. This tremendous decline was no doubt due to a number of causes, not entirely to the Coal Mines Act of 1930, but it is difficult to determine how much of the decline to attribute to each. There is the world depression and the greater use of other forms of fuel, oil, electricity, white coal, tariffs, licensing systems, quota restrictions and, of course, the Act of 1930, all of which played their part.
Some of these things are imponderable, but two of them we can at least weigh roughly, the restrictions imposed by other
454
nations and those which we have imposed upon ourselves. I ask the House to look at foreign restrictions, for it is no part of my case that the whole of this decline is due to the Act of 1930. The countries where the quota system is in operation are France, Germany and Belgium. Take France. The quota was imposed by the French Government in July, 1931; that was the first evidence of a quota restriction by foreign countries. In two years, from 1930 to 1932, the imports into France declined by 7,000,000 tons, from 25,000,000 to 18,000,000 tons, and our share of that decline was from 14,000,000 tons to 9,000,000 tons. That is to say, out of a total reduction of 7,000,000 tons in the imports into France our share of that loss was no less than 5,000,000 tons. Expressed in terms of percentage, as far as total losses are concerned our reduction was 6 per cent., whilst every other country, Germany, Poland, Holland and Belgium, showed an increase of imports into France. That is something which gives cause for thought and should give the Government cause for grave concern.
Mr. GODFREY NICHOLSON: Is it not a, fact that we always exported to France up to the full amount that the French allowed up to export, and that their system of licensing has caused that discrepancy?
Mr. DICKIE: There was then no system of licences. That system did not come in until later. The case which is sometimes attempted to be made against the National Government, that the decline in our export of coal is due to tariffs and retaliation, is a case which will not bear a moment's examination. [HON. MEMBERS: "But it is true."] I hope that the hon. Member for Chesterle-Street (Mr. Lawson) will prove that it is true, and I shall be very much surprised to see bow it is done. Then look at Germany. In Germany the quota was not imposed until February, 1932. We were not even considering tariffs in this country at that time. It is idle and foolish to say that a restriction of this kind was a form of retaliation when we had no tariffs of any kind and were only beginning to consider the use of that particular weapon. We had to share the brunt of the loss as far as Germany was concerned. We lost 2,564,000 tons. France and Holland increased their exports to Germany, while the Saar and

455
Czechoslovakia decreased only very slightly. Belgium did not impose a quota until October, 1931. In the same two years the imports into Belgium declined by 3,600,000 tons. We lost 1,340,000 tons—not so bad in total, but in percentage we actually suffered a loss of over 50 per cent. in the quantity supplied to Belgium.
These are quota countries. The restrictions that they imposed have undoubtedly restricted our exports to those countries, but I do not believe that they account for the whole of the reduction. Restrictions imposed by foreign countries make trading somewhat difficult for coalowners and exporters. I cannot see that that is any reason why this House should add to their difficulties by legislative enactments which are almost impossible of application to a difficult and complex business like the export of coal, and only hinder and hamper our exporters and coalowners in their endeavour to secure business. Over the first we have no control, but the second, the combination of quota and price restrictions, I regard as a double-headed Frankenstein of our own creation, which is threatening to destroy our export trade. If we do not destroy it, it will destroy us so far as that particular section of the industry is concerned. I have always found it exceedingly difficult to understand why these restrictions were imposed on the export trade.
We have had an extremely interesting speech from the Lord President of the Council. As I listened to him I wondered whether the Cabinet was embarking upon an experiment based on the theory which the right hon. Gentleman propounded a year or two ago, that the solution of our industrial problems was to be found in a restriction of our exports. I could never see how it was to be done. Why these restrictions should be imposed by ourselves on one of our vital industries I am really at a loss to understand. I believe in freedom from these restrictions. But part at least of this lost business is recoverable, despite the quotas and the licensing system. Part of it has been lost on account of a feeling of resentment against the fixation of prices, and that despite the well-known fact that a very large quantity of coal is being purchased below the minimum
456
price and also because of the uncertainty of being able to obtain supplies, owing to the quota.
There is a very powerful opposition in every one of these countries to the system of licensing and quotas which has been established there, and if we remove the objectionable features over which we have control we could immeasurably strengthen the opposition in those countries and perhaps succeed in having these things swept away altogether. We are not holding our own. That is the main feature that we have to visualise. The whole of the other big exporting countries, grouped together in those three particular years of which I have spoken, lost in their export trade in coal only 28 per cent. This little country lost 35 per cent. The total loss of the quota countries is something like 9,000,000 tons. A fair proportion of that is recoverable, and I regard it as pure defeatism to regard those orders as an irrecoverable loss. They can be regained, but the only way to regain them is to give our coal-owners freedom to produce and our exporters freedom to go out into the markets of the world and seek orders.
Mr. MARTIN: What does the figure of 9,000,000 tons represent?
Mr. DICKIE: The 9,000,000 tons is the total which we have lost in those three years, in what I call the quota countries. These restrictions of the minimum price and a quota have made it very much more difficult to get business. As orders became scarcer production decreased, naturally, and as production decreased the cost per ton increased. Irregularity of working always leads to an increase of cost. In the case of the average pit producing 500 to 1,000 tons a day one single day lost during a fortnight will put up the cost for the whole of that period to anything ranging from 7d. or 8d. to 1s. a ton—a very serious charge on the industry, and more serious than the royalty charge of which we hear so much from hon. Members opposite. Output and production costs are very closely related. But our coal can only sell at world prices. That is one of the things of which we are losing sight. We are deliberately choosing to pursue a policy of handicapping, ourselves in our attempt to meet competition in the markets of the world. If persisted in it can only lead to a still further decline, to a point

457
where the purchaser will buy only from us those classes of coal which he cannot obtain elsewhere.
Despite the world depression and the diminished demand, I consider that there is still a very wide field in which we can recapture lost trade. It must also be remembered that when you have greater freedom and keener prices you will open up new avenues to business. There are still new avenues. But the objections to the quota. and the minimum price have been reiterated so often that I do not want to go into them in detail. So far as the quota is concerned, I regard it as altogether an evil. In the way it works it is a premium on inefficiency. The call everywhere to-day is for efficiency in industry, as in every other walk of life, yet here in this important industry we are actually keeping alive pits which ought to be closed, many of which ought to have been closed years ago, and in some of which no miner ought to be allowed to work at all to-day. These pits are being kept alive at the expense of the economic pits and at the expense of the miners' wages, for that is how it works out.
Let me say a few words about the method of allocating a quota. It is both cumbersome and slow, and in the export trade it is a positive hindrance to business. The very existence of the quota prevents the making of long-term contracts, and the uncertainty as to what quota it will get deprives the whole industry of anything in the way of security or stability. In the districts the quota is allotted on the standard tonnage of 1929. That was a good year for some pits, but a bad one for others, and a moderate one for still others. No allowance is made for the change in circumstances since. The allocations are made, and every pit which was allotted a standard tonnage in 1929 can claim its share of the allocation now. The quota falls like the gentle rain from heaven upon the efficient and upon the inefficient alike. A demand may arise for some particular class of coal, as in the case of Northumberland steam coal some time ago. The demand cannot be met unless the collieries which are actually supplying that coal are prepared to face the possibility of having to pay a fine of 2s. 6d. for every extra ton of coal that they produce, or unless they are prepared to pay, not what was in-
458
tended under the Act, but an exorbitant figure, Is. 6d., 1s. 9d. or even in some cases as much as 2s. 6d.
The colliery which pays the best wages is thus penalised. The collieries which run uneconomic pits are allowed to continue, and some of them in June of last year, though actually bankrupt were living upon the quota. In an age when we have pleading in every direction for efficiency, that is an outrage and a scandal. It is something that in my judgment ought to be abolished altogether. A very important point is this: What happens when this transfer of quota takes place? The efficient colliery which has exhausted its quota has need of additional quota. It seeks to buy from its neighbour which may have quota to dispose of. The owner of the neighbouring colliery knows that the other fellow is in a tight corner. Accordingly, he puts up his price and asks for an additional 1s. 6d. or 1s. 9d. per ton. In order to keep his pit going in the national interests, and keep his men employed, rather than be fined 2s. for overproducing, the owner of the efficient colliery which has exhausted its quota consents to pay the additional 1s. 6d. or 1s. 9d. That is a charge against his production costs. It enters into his ascertainment and affects wages. What happens at the other end A man sitting in his office drops the telephone, lights a cigar, touches a bell, tells a junior clerk to make an entry in his ledger and he makes a clear profit of 1s. 6d. or 1s. 9d. per ton. That is the condition of things in the mining industry to-day and I tell the Secretary for Mines that it is high time it was stopped. In some cases the sale of quota has been refused altogether or has only been made under pressure.
Now I come to the question of the minimum price. [Hog. MEMBERS: "What about the minimum wage?"] I am prepared to deal with that subject also on the proper occasion. At the moment I want to deal with the minimum price, which, I may remind hon. Members opposite, affects the wages of the miner. That is a fact too often forgotten on the other side of the House. There is far too great a tendency for hon. Gentlemen opposite to talk as though nobody but themselves knew anything about the mining industry or had any interest in the miners. [HON. MEMBERS: "Hear, hear !"] I am very glad to hear that

459
approval from the hon. Member for Chester-le-Street (Mr. Lawson). He at any rate knows that it is not right—
Mr. BATEY: That your statement is not true?
Mr. DICKIE: The hon. Member knows perfectly well what I mean. He knows as well as I do that many of us here have the interests of the miners at heart as much as any hon. Member opposite. Many of us have lived among the miners and know all about their daily difficulties and the troubles which they have to face and the hunger and the privation which both miners and miners' wives are suffering. We know these things as well as any man who calls himself a miner's Member, and we are anxious to do something practical here and now to help them to better conditions. In my judgment the minimum price is worse than the quota. It may be possible to make out a case for the fixation of prices in the inland trade, but it is utterly impossible to make out any case at all for the fixation of prices in the export trade. The House should remember that we are only one seller. We are trying to sell and to make world prices. We are trying to compel the buyer to buy at onr figure although there are other willing sellers in a free market. That is what is happening under the minimum price. The principle is so unsound that I wonder how on earth it was ever accepted.
It is quite impossible to keep these prices secret. They are known to our foreign competitors. The moment the executive board in any district settles prices, the wires are busy and the prices are known in Hamburg, Antwerp, Oslo, Berlin, and everywhere else, in some cases, before they are known to the owners in the district itself. That is a state of things which would be tolerated in no other industry and which no other industry could survive. Under this Act, too, we deny the privilege which is always accorded to the buyer who places a large order. If the minimum price is observed—I say if it is—the seller must quote to the purchaser the same price per ton for 1,000 tons as for 100,000 tons. It is little wonder that the large buyers on the Continent should look elsewhere for supplies. What would happen in the engineering industry, for example, if
460
some of our big engineering firms were asked to tender through the Overseas Trade Department, let us say, for locomotives for a. foreign Government, and were told that they had to tender at the same rate for 10 locomotives as for 100 locomotives; and if, as soon as the tender had been received, the prices were forwarded to their Belgium, Japanese, American and other competitors. Yet that is the actual position in the coal export trade. It is sheer folly to advertise the prices to the world in this fashion.
During the debates on this subject at the end of May and beginning of June last year, I touched on the question of evasion. I said then that it was a, subject which had to be treated with great delicacy. At the present time it needs to be touched upon with even greater delicacy. The hope expressed by the President of the Board of Trade that the longer this went on the stronger would be the power of the owners and the better they would be able to deal with that sort of thing, has not been justified. Evasion has grown steadily worse, until, to-day, it is not too much to say that the export section of the industry is in a state of utter and absolute demoralisation. This Act of Parliament is undermining British commercial morality and driving honourable business men to do things which they loathe and detest. In a difficult technical and complex business of this character—and this disposes of the Amendment which I see on the Order Paper—neither the Commons House of Parliament nor any other form of tribunal can stop these evasions. Those who are evading the Act know that perfectly well. The hon. and learned Member for East Bristol (Sir S. Cripps) knows that however strong a law may be there is always a means of evading it. This law is being evaded every day and there is no power in the House of Commons or the owners to stop the evasion. The only way to stop it is to uproot the causes which have led to it.
Separately, I contend, that these two things to which I have referred are bad. Jointly they form an unholy combination which is having a terrible effect upon our export trade and our export trade will never recover until we get rid of them. I wish to deal with some of the arguments which have been used in favour of the retention of the quota. The

461
most illogical is one which has been used, both from the Government Front Bench and from the other side of the House. That is the argument "Oh, you have not exhausted your quota for the last quarter." What is the position? You impose a quota on a district and on the individual collieries in that district which definitely restricts their output, which prevents them under penalty from producing more. This restriction causes irregularity of working and irregularity increases the cost of production. They cannot get a higher price and you debar them from taking a lower price, which they could do if they were working at full capacity. When they complain you say, "But you have not exhausted your quota for the quarter just concluded." That is the most illogical argument that could be used.
Another argument is that our potential capacity is 300,000,000 tons, that last year we produced 210,000,000 tons, and that we ought to be content with our share of the world's production. I do not agree with that. Our potentioal capacity may be 350,000,000 or 400,000,000 tons and the actual output ought to be regulated only by the amount of coal that we are able to sell in the markets of the world. I ask is that principle to be applied in other industries such as the iron and steel industry, the cotton industry and the motor ear industry Their potential capacity for production is greater than the demand at the moment. Is that to be made a reason for Government interference and for imposing regulations which hinder and hamper their efforts to secure orders?
The third argument which I have heard is that if there is a repeal of Part I prices will slump. I do not believe it. I remember that when the Act was passing through this House people, both inside and outside the House, said that as soon as it was placed on the Statute Book it would have the effect of increasing prices enormously. Nothing of the sort happened. It was pure speculation then, and it is pure speculation now. There is nothing to show that there is likely to be any slump in the price of coal, even if Part I of the Act is repealed. I would remind the House that as far back as the 2nd June the ex-Secretary of Mines promised that he would give this matter his immediate consideration. In reply to my hon. Friend the Member for Bishop
462
Auckland (Mr. Curry), who asked if some assurance could be given that immediate steps would be taken to inquire into and amend the operation of Part I, the Minister said:
" I need not dwell upon it now, but I gave a definite and categorical assurance on that point. I said that we were awaiting from the Mining Association the amendments that they had under consideration, and that, as soon as those amendments had been notified to us, they would be correlated with the amendments that we had in our own minds, and the Government would decide what Amendments would then be brought forward.—[OFFICIAL REPORT, 2nd June, 1932; col. 1376, Vol. 266.]
A little later in the Debate he gave me a similar categorical and definite assurance which wound up with this:
" It is our business to do all that is humanly possible to recover those markets, upon which our export trade depends."—[OFFICIAL REPORT, 2nd June, 1932; col. 1465, Vol. 266.]
Now we are in the position that things have been going from bad to worse, and nothing has been done. I suggest that the only cure for this sort of thing is either to amend the Act so drastically as to give complete freedom to the export areas, or, failing that, to repeal Part I of the Act altogether. It may involve legislation and setting up some scheme of co-ordination of prices between districts and co-operation within the districts, particularly in the inland section of the trade, but, so far as we in the export areas are concerned, we are not prepared to be debarred from those markets which we have built up and which we enjoy to-day. We ate a maritime nation, and we have a very big coasting trade. The first coal that was borne to London or to the South of England came from Newcastle, and that is why it was called sea coal. We have captured these markets because the freight from the North of England to the South is only 4s., while the railway rate is 19s. Does anyone contend that the proposition of the ex-Minister of Mines that we should pay 15s. extra for coal in order to bolster up the railway transport is a serious business proposition It is a question of transport, and all that we ask for in those markets is that we shall have a fair field and no favour.
A few weeks ago the Minister of Mines opened some estates on the River Tyne. We have been very badly hit there, but we have not lost our courage. We have

463
spent £120,000 in building those estates, and they are to-day in all probability the most modern in this country. The Minister then gave us some good advice, which was that we should throw away despair. We are throwing it away, and we ask him to help us to get rid of it entirely. I will not say anything about bunkers, but I hope the Minister will consider that important aspect of the mining problem, as we are losing in that direction as well. In so far as the export trade is concerned, the Government and the Minister of Mines should do everything they can to give us back our freedom, in order that we may fight in the markets of the world for the orders on which the industry depends. This matter was placed before the House very much more eloquently than I can place it by the present President of the Board of Trade in March, 1930. What he said hits the situation exactly now, as it did then, because the position is precisely the same except that it has got a great deal worse. The right hon. Gentleman then said:
" It seems to me that, the more one looks into the question of the export trade, the more essential it is that it should be given the utmost elasticity, that no checks should be placed upon it in the interests of all concerned, but that it should have complete freedom to meet the demand as and when it arises. Do not let it be imagined for one moment that those who control the coalfields of foreign countries are going to be so merciful to us. They want to get business, and so do we, and it is our duty to capture it for the sake of the national trade and of the miners employed in it. Anything that we do to take away our freedom in the foreign export trade to capture those contracts, will be throwing away much of our present organisation for the sale of Coal."—[OFFICIAL REPORT, 11th March, 1930 col. 1167, Vol. 236.]
The position is getting steadily worse, and last week was the worst week the Tyne Improvement Commission has known since the general stoppage of 1926. On Saturday last one of the pits in my district closed down, and over 200 men were dismissed. On the same day another colliery issued notices involving the dismissal of another 700 men, and only yesterday in my constituency, the largest producing concern, owning a large number of collieries and employing 6,000 men—each and every one of those collieries was idle, and may be idle to-day, on account of the loss of trade.
464
I submit that this is a very important matter, and I would—
The SECRETARY for MINES (Mr. Ernest Brown): Do I gather that the hon. Member attributes all that to the operation of Part I of the Act?
Mr. DICKIE: No, and I think the House will agree that I have been perfectly clear in saying that I do not attribute all this to the Act. I am calling attention to the very serious and grave position, and I put this Motion on the Paper because I want to see something done in the interests of these miners and their wives and families. I have dealt throughout with this matter as a business proposition primarily, but I know perfectly well that it is not entirely a business proposition, that there is a human side to it; and a very tragic human side it is. I know something about the sufferings which have been caused by unemployment, by irregular employment, and by low wages. This problem of the export of coal is one of the problems of the devastated areas, which are nearly all in the districts where we export coal, and I ask the Government to consider this matter, because it arises not only in our constituencies; in the very constituency of the Prime Minister himself the pits are working most irregularly, little more, I am told, than half-time, and I ask the Government to consider the matter, not only as a business matter, but to visualise the great mass of suffering in those areas and, by prompt and effective action, to do something to alleviate the situation.
8.34 p.m.
Mr. CLARRY: I beg to second the Motion.
I think the thanks of the House are due to my hon. Friend the Member for Consett (Mr. Dickie) for bringing this vital matter forward for discussion, and we very much appreciate the detailed and forceful manner in which he has put his case. I do not propose to speak at any great length, but I would like to crystallise the position and the seriousness of it. Coming from one of the largest exporting areas in the country, South Wales and Monmouthshire, and representing Newport, which is the port of shipment of the Monmouthshire coalfield, it is a matter of very vital and urgent importance to us, and representa-

465
tions have been made to me which, in passing on to the Minister, I cannot urge with too much forcefulness. When Part I of the Act was originally discussed, its purpose was stated to be to adjust the supply of coal to the current effective demand and to deal with the dead weight of from 60,000,000 to 80,000,000 tons excessive capacity available in the country. At the same time, the Minister made it clear on the subject of prices that, in granting to the coal industry the power to impose minimum price schedules, it would provide the industry with the necessary revenue to maintain wages and to secure a reasonable profit to the owners.
It will not be denied that these two objects have not been achieved. It is true that progress has been made in the stabilisation of prices, although the effect of the Act in this respect is controversial. The fundamental point is that pithead prices during the operation of Part I are actually lower than in 1930–31. Meantime, the costs of production, in which the cost of the administration of the scheme bears some important part, have helped to keep up costs when other competitive industries have been able to reduce their costs of production. With regard to exports, which is the real subject of this Motion, during the three years our exports have fallen from 60,000,000 tons to nearly 39,000,000 tons. Of that quantity, South Wales and Monmouthshire exports have fallen from 24,000,000 to 16,000,000, or by 331 per cent. It is idle for anyone to argue that this is entirely due to the operation of this Act. There are many other causes. There is the much fiercer competition by foreign exporters. There is a world depression, and of course there is the operation of quotas from three countries—France, Belgium and Germany—while Spain is endeavouring to enforce some form of quota but the rest of the world is free and unrestricted.
If we make comparisons in the realm of the world export trade, we find that Great Britain has suffered more during the operation of this Act than the other five important exporting countries. Great Britain's exports during this period have fallen 35 per cent., while the exports of the other five countries have fallen only 28 per cent. This is a very serious matter, and, if we were to calculate the
466
quantity of coal we should have exported last year if we had been able to maintain the same pro rata export as our foreign competitors, it would represent 5,000,000 tons of coal, and it is not too much to say that this loss is mainly due to the operation of Part I of this Act. It might be argued that if we had to sell this 5,000,000 tons of coal, it would have to be sold at a lower price than the present prices, which in some cases are uneconomic; but against that we have to offset the lower cost of production due to the larger outputs of the collieries.
I have no need to stress the necessity for exports from this country in order to assist our trade balance and the importance of coal to shipping, because, in spite of the reduction in the tonnage of shipping, coal still forms four-fifths of the total weight of tonnage exported from this country, and approximately two-fifths of our ships are bunkered by our coal. When we came off the Gold Standard it was felt that it would be a great opportunity for our exporters, particularly coal exporters, but the operation of the quota and price fixation has practically nullified that advantage. Foreign exporters are aware of the quotations which are made in competitive markets and are able to quote only a fraction of a penny less than we quote in order to obtain our business.
Coal is very often sold, particularly abroad, because of its description and fitness for special purposes, and numerous cases can be cited where exports of coal have been lost to this country because the particular colliery that can supply the customer's particular requirements has used up its quota. While these points apply to all exporting areas, I submit that it has a particular bearing on South Wales and Monmouthshire, which is a very distressed area, and the indirect operation of this Act has been a, means of diverting Monmouthshire coal, which would be normally shipped at Newport, to other ports. This is a subject of strong representation from the Newport Chamber of Commerce, together with the condemnation of Part I of the Act. Strong representations have also been made by the Association of British Chambers of Commerce and the Chamber of Shipping to end export restrictions. In the search for measures to find work to relieve the

467
heartbreaking unemployment in our distressed areas, I submit that we have a means here at hand for increasing work in our coalfields, railways, docks and shipping by giving back to the exporting and bunkering coal trade the freedom which was taken from it by the operation of this Act.
8.43 p.m.
Mr. GEORGE HALL: I beg to move, in line 1, to leave out from the word "That" to the end of the Question, and to add instead thereof the words:
" This House approves the action taken to continue Part I of the Coal Mines Act, 1930, for a further five years, and urges the necessity for a strict supervision of the operations of the district committees in order to ensure the effective administration of the law."
Like my hon. Friend who moved the Motion, I represent a mining division, but, unlike him, I ask for a continuation of Part I of the Act. I ask that because I think that it is in the interests of the mining industry that it should be continued. My hon. Friends and I are not going to argue that Part I of the 1930 Act is perfect. It is not perfect, and we should like to see some alteration, but we think that the people who should bring forward suggestions for the alteration of that Act are the people who are directly connected with the industry. I am tempted to ask my hon. Friend on whose behalf he is speaking. Is he speaking on behalf of the Mining Association of Great Britain?
Mr. DICKIE: Most assuredly not, and I very much resent the insinuation. I am speaking here as a Member of Parliament representing a mining division—the owners, the miners, the railwaymen, the postmen, the grocers, and everybody else in the constituency.
Mr. HALL: I have no desire to impute motives to my hon. Friend, but on a Motion of this kind I think it is only fair that we should know whether representations had been made to the hon. Member by the various associations connected with the industry asking him to advocate the repeal of Part I.
Mr. DICKIE: I have had the usual things which are sent to every Member of Parliament when a Motion of this kind is to come before the House—from coalowners, from exporters and from
468
chambers of shipping and other organisations which are interested; just the same as every other hon. Member has.
Mr. HALL: I also have received the usual circulars, but not one from the Mining Association, not one from the Miners' Federation, not one from a large producer of coal. From exporters—yes; from chambers of shipping—yes. We say that while the machinery of the Act is not perfect it embodies means whereby representations can be made for the purpose of tightening up the Act. My hon. Friend suggests that there are evasions of the Act. There are evasions, but that is not the fault of the Act but of the people who carry on the evasions. For my hon. Friend to suggest that Part 1 is driving honest business men to practices which they detest does not speak very well for the honesty of the mineowners of this country.
Sir ROBERT ELLIS: The hon. Member did not say that of business men.
Mr. HALL: But that must be the inference. It is the mineowners who are responsible for administering the Act. The whole machinery of the Act is entirely in the hands of the owners.
Mr. McKEAG: Surely the hon. Member realises that they have been doing whatever they could to find work for their own men.
Mr. HALL: If they deliberately break an Act of Parliament instead of endeavouring to fix the minimum price at which coal can be sold, it does not speak too well for them or the way in which they conduct their business. The point I want to make is, that if there are complaints against the Act, the whole machinery of the Act is in the hands of the owners themselves. That applies to the central committee and the district committees. No other body or organisation has any representation upon district or central committees. The number of complaints received about the administration of the Act is almost negligible. I will deal with the question of the quota. In the excellent report by the Mines Department on the working of the Act, issued towards the latter part of last year, they state, with reference to quota allocations:
" In only comparatively few cases has it been necessary for applications to the central council for increases in allocations to

469
be referred to arbitration. During the first three months of 1932 there were only two such references."
Where are all the complaints about difficulties arising as the result of the allocation of quotas? My hon. Friend suggested that it is hardly logical to refer to allocations and output. It is interesting to note, according to this report, that in the first quarter of 1932 the actual output of coal was 15.7 per cent. less than the quotas allocated. In the county of Durham in the same quarter the coal output was 19.3 per cent. less than the quotas. In the June quarter the output was 8.6 per cent. less than the quotas and in the September quarter 16,23 per cent. less. Where are the mineowners sitting in their offices making 1s. 6d. a ton as the result of selling their quotas—just sitting at the telephone? Some of the statements made by my hon. Friend were almost unbelievable.
Mr. DICKIE rose—
Mr. HALL: My hon. Friend took 50 minutes for his speech, and as this Debate will have to close at 11 o'clock he might give me an opportunity. As far as I know, my hon. Friend is not representing any organised body, either the Mining Association, the Durham Mining Association or the Miners' Federation of Great Britain. He may pay lip service to the question of the minimum wage for miners, but those of us who have had experience in negotiating the wages of miners know that without minimum prices they cannot get minimum wages. My hon. Friend is asking for unrestricted competition, yet we know that right along from 1921 until 1930, when the mineowners had unrestricted competition, the price of coal fell to 50 per cent. of what it was and the wages of miners fell to the same extent. The condition of the industry became very much worse under unrestricted competition, yet my hon. Friend is asking for a return to unrestricted competition. That would inevitably mean wages very much lower than those which are being paid at the present time.
We have had a shrewd suspicion, as the hon. Member for Newport rightly said, that chambers of shipping and exporters are, of course, pressing for the repeal of Part I of this Act. If there is any body of people who have made money out of the export of coal it is
470
exporters and chambers of shipping. The exporters can always live and the producers can always starve. The late Lord Rhondda, who was not only a coal producer but was an exporter, always maintained that he could make more money out of selling coal than out of producing it, and what exporters are concerned about at the present time is not so much the price at which coal can be produced as the commission they can get out of the selling of the coal irrespective of the price at which it is being sold.
As I have already pointed out, the organisation of the industry under Part I of the Act is entirely in the hands of the coalowners. They control the whole machinery, district and central. Mr. Archer, the chairman of the Export Committee of the Midland Amalgamated District, said recently that it was the duty of owners to operate Part I honestly and sincerely, and after they had tried to operate it in that way then, if they failed, they could inform the Government that they had been set a task which could not be performed. The coal-owners, however, were obviously unable to take that line. Despite some of the criticism, the majority of them would regard the repeal with dismay. That is the attitude of the Mining Association—not that I want to appear here this evening as an advocate on behalf of the Mining Association. That is the attitude of the Miners' Federation. I am speaking on behalf of the Miners' Federation. This Bill does not satisfy us entirely, but it is better than the unrestricted competition which would arise if the Motion of my hon. Friend the Member for Consett were carried. Mr. Lee, Secretary of the Mining Association of Great Britain, put the position of the coal industry from the owners' point of view quite clearly, in the article which he wrote in the "Colliery Year Book" for 1928. He said:
" The surplus of productive capacity over present demand, both in the inland and export market, has brought down coal prices far below the general level of prices. They have reached a point at which the economic operation of collieries is impossible and the capital resources of the industry are being gravely impoverished. As is well-known, schemes for co-ordinated action with a view to securing more economic relationships between costs of production and prices, are already under consideration in most of the large coalfields."

471
That was under a Tory Government in 1928, before there was any suggestion of the introduction of the Bill which brought about the Act of 1930. Mr. Lee further said:
" Concerted action of this character is vitally necessary, not only to maintain the rates of wages of the mine workers in fair relation to those in other industries, but to avert the most serious danger to the very fabric of the industry during the abnormal period through which we are passing."
Those were the words of Mr. Lee. It can be said of Mr. Lee that he knows his job. He knows the industry very well. We say that the condition of the industry is very much what it was in 1928, when Mr. Lee penned those words. The hon. Member for Consett referred to the fact that the present Secretary for Mines opposed the Act when it was passing through the House in its early stages. The President of the Board of Trade did likewise, and so did the late Secretary for Mines. When they were brought close up against the problems with which the mining industry was and is confronted, they saw that their attitude during the period when the Bill was passing through the House was wrong.
Mr. E. BROWN: If the hon. Gentleman will search the Official Debates, he will find that my objection was not so much to the case made out, but to the machinery which is now being discussed.
Mr. HALL: I remember the Debates and some of the speeches. I have here some of the speeches of the hon. Gentleman the Secretary of Mines. He will have an opportunity to deal with them later. I well remember some of the speeches which were made with regard to the tremendous increase of prices which was going to take place as a result of the operation of Part I of the Act. The increase of prices has not been brought about. There is a stability of price for which the mining industry is profoundly thankful. I am not going to quote figures other than from the export prices in 1929, to show that the price for coal exported from this country was 16s. 14d. per ton. The average price in 1932 was about 15s. 11d. per ton. There has been very little fluctuation. I am surprised that hon. Members who support this Motion are always asking, not only for stability of price, but for an increase in the price, to deal with unemployment.
472
The hon. Member for Consett is asking that we shall not have this stability of price in the mining industry, but that we shall have a reduction of price so that we can capture the market. That has been tried, and it has failed. I have already referred to the statement which was made by Mr. Archer, who knows questions of marketing. I am not going to take up the time of the House in quoting some of the statements that were made in the course of Mr. Archer's speech. I ask hon. Members to take the trouble to read the speech, which is published in some of the technical journals. The case for Part I and for some of the Amendments to Part I of the Act has been very well put.
The hon. Member for Consett really asks for the repeal of Part I of the Act, as far as the export trade is concerned. He, like myself, represents an exporting area in this House. He represents Durham and I represent South Wales, two districts which are, we can say without exaggeration, almost entirely dependent upon the export of coal. I take a good deal of interest in the export trade. It is, as the hon. Member for Consett rightly pointed out, a vital part of the trade and industrial life of this country, from the point of view of employment. If you destroy your coal export trade, you at once throw 200,000 workers out of employment and, in addition, all those who are engaged in the ancillary occupations upon railways or docks, or as seamen. My hon. Friends who come from the mining districts would not do a thing in any way to injure the export trade of this country. We are of opinion that the nation does not take the interest that it should take in the export trade. We hope that the coal industry, that portion which is producing for inland purposes as well as that which is producing for export, should be treated as one economic unit.
The hon. Member for Consett is asking in his Motion to give all the advantages, if there are any, of Part I of the Act, to inland districts, and to take away from the exporting districts any advantage that there may be. That is making the gulf very much further, instead of endeavouring to bring the exporting and the inland areas very much nearer. What a contrast to what is taking place in Germany, one of our main competitors, where the whole industry is organised for

473
the purpose of competing with us in those neutral markets. Not only are the inland and export coal industries in Germany and Poland acting together, but they have the support of the Government, which is very heavily subsidising the export of coal. Those Governments realise the importance of the export trade to the national life of the country. Figures have been given by the hon. Member for Newport (Mr. Clarry) and the hon. Member for Consett as to the loss of export trade. They did not give the figures for last year, and they made no comparison between the percentage loss of export trade in this country with the percentage loss of export trade of other countries which are our main competitors. I will give the figures.
Mr. CLARRY: I gave those figures, namely, 33 per cent. for this country and 25 per cent. for the other five countries.
Mr. HALL: I understood that those figures covered a period of three years.
Mr. CLARRY: Yes.
Mr. HALL: I want to speak about last year as compared with 1931. The loss of export trade by Great Britain to foreign countries last year was less than 9 per cent., whereas in the case of Germany it was about 22 per cent., of Poland 28 per cent., Belgium 32 per cent., Holland 28 per cent., and the United States 27 per cent.
Mr. CLARRY: That was in one year only.
Mr. HALL: Yes, but it was last year, in reference to which my hon. Friend deplored the fact that there has been this terrible loss, which we all deplore. May I call the attention of my two hon. Friends and of the House to the real cause of the difficulty with which the export coal trade of this country is confronted? Reference has been made to restrictions, which have been aggravated very largely as the result of the fiscal policy of the present Government. Coal has been the pawn in the fiscal war that is being waged at the present time. I shall endeavour to prove that statement.
Which are the best customers of this country for export coal? There is an idea that coal exported from this country is being sent to the furthermost parts of the earth, but, instead of that, it is our near European neighbours that are our
474
best customers. In the year 1930, when we exported 54,800,000 tons of coal, one ton out of every four exported from this country went to France; 12,969,000 tons of coal left these shores for France. Italy took over 7,000,000 tons; Germany nearly 5,000,000 tons; and Belgium nearly 3,500,000 tons. These four countries, in 1930, took more than half the total amount of coal exported from this country, and, if we add the Irish Free State—where there is a very heavy duty at the present time—and Spain, 32,500,000 of the 54,000,000 tons went to these countries, which have now restrictions and duties against us. The same thing happened in 1931. Of the 42,000,000 tons of coal which we exported in 1931, nearly 26,000,000 tons went to these five countries. In 1932, of the 38,000,000 tons of coal that we exported, 20,800,000 tons went to these countries. All of these nations now have restrictions in the form of quotas or very heavy duties, and that is, to a large extent, the cause of the suffering in the exporting areas of this country.
Mr. SLATER: May I ask the hon. Member if these countries are justified, in view of their favourable balance of trade with this country, in imposing restrictions against our export coal?
Mr. HALL: I am not going to justify anything; I am simply stating facts, and I am sure the hon. Member does not doubt the facts. In the year 1931, our export trade suffered a reduction of nearly 16,000,000 tons as compared with 1930. The reduction in our exports to France, Italy, Germany, and Belgium accounted for 10,500,000 of the 16,000,000 tons, and, again, adding Spain and the Irish Free State, the loss in the case of these countries amounted to nearly 12,000,000 tons. Last year, as compared with 1931, showed a reduction of nearly 4,000,000 tons in our export coal trade. The reduction in the case of the four countries France, Italy, Belgium and Germany, accounted for 4,500,000 tons, or 500,000 tons more than our total loss of export trade for that year. Adding again Spain and the Irish Free State, we account for losses of over 5,000,000 tons, or almost 1,500,000 tons more than our total loss during that year.
My hon. Friend spoke about further reductions in prices. Does he or anyone else imagine that it is only a question of reducing prices in the face of the re-

475
strictions which exist at the present time? He may refer to the Scandinavian countries; he may refer to the market in Poland, and in Denmark, Norway and Sweden. I know that those countries took a larger percentage of coal from Poland and Germany during last year and recent years than they did previously, and there is no justification for that in view of the trade balance between them and this country; but, if we had the whole of the trade which Germany and Poland now have in those three countries, Denmark, Norway and Sweden—if we had sent them the whole of the coal that they required last year—it would not make up for the loss of our export market in the four countries to which I have already referred.
I am not going to deal with the question of restrictions, although it has been referred to—French, Belgium and German restrictions—but I would like to ask the Secretary for Mines if he will, when he comes to reply, give, not only the House of Commons, but the coal industry generally, an idea of how the negotiations with these other countries are proceeding. We heard some time ago that tariffs were to be used as a bargaining weapon. I want to say—I do not mean it in a personal sense at all—that, if any industry in this country has been treated in a brutal and callous fashion by the present Government, it is the coal mining industry, and especially the export trade. It is no use those who went-to Ottawa and negotiated the Ottawa Agreements coming here and saying that they brought back orders for an additional 100,000 or 200,000 tons of anthracite coal. The quality and price of Welsh anthracite coal almost demand a market for it. It is the one bright spot of the British coal industry, and it was so before the Ottawa Conference, because it was the one part of the British coal mining industry whose post-War output exceeded the pre-War output. I would also ask the Secretary for Mines to give us an idea when the Italians are likely to place the additional order for 1,000,000 tons of coal under The Hague agreement, from which South Wales has benefited so much. Already 2,000,000 tons have been sent, and there is an additional 1,000,000 tons waiting; and we are anxious that that order should be placed in South Wales as soon as possible.
476
We say quite frankly that there are defects in Part I of the Act. It has been shown that the Act has succeeded in maintaining some degree of stability in particularly difficult circumstances, but it has not succeeded in its main object, which was to fix such a price for coal as would give a proper standard of living for the miners, and, may I say, a fair margin of profit to the owners. Its failure must be attributed to some extent to the absence of proper co-ordination of prices between the districts. The mere fixing of minimum prices on a district basis tends only to substitute inter-district competition for individual competition, and it has been proved that this inter-district competition can be as severe as it was before the Act came into operation. The owners have endeavoured to co-ordinate district prices, but up to the present they have not succeeded. I understand that they have, at the request of the hon. Gentleman, who invited them to consider the defects of the Act, made representations that there should be some co-ordination on this question of district prices. The Miners' Federation also asked that this should be done, and I am sure my hon. Friend has read the very excellent memorandum issued by the Miners' Federation in the early part of last year. May I ask what the Minister is doing in regard to this matter. It is a long time since the owners made the representation to him. The Central Council has no power to fix prices itself, nor can they amend the prices fixed by a particular district. We claim that the central body should be given statutory powers to regulate the level of prices on a national basis. Unless this is done, there can be no assurance of effective co-ordination throughout the industry.
Then those of us who come from the exporting areas—we mention this question of the national levy with fear and trembling—believe that there should be complete co-ordination between the inland and the export trade. That is being done in those countries which are our chief competitors. Take, if you like, Poland. It can truly be said that Poland has virtually nationalised her coal-mining industry to enable her to deal effectively with the question of her export trade. She is able to compete with us for that reason, that the Government are heavily subsidising her export trade as they

477
recognise the importance of that branch of the trade. Then, if amendments are to be made in Part I, we claim that, in the interests of the industry and of the workmen, representatives of the workmen should be allowed to share with the owners the responsibility for the control and the direction of the schemes, for the wages and conditions under which the workmen are employed almost entirely depend upon the price that is paid' for the coal produced, and, therefore, it is but natural and equitable that they should have a voice in the fixing of those prices. We think that the participation of the representatives in the direction of the industry would prevent unnecessary controversy and delay and give that rapidity of decision and action upon which business so largely depends. After all, the representatives of the workmen are men of knowledge and experience of the industry who would be able to make a genuine contribution to the solution of the difficulties with which the industry is faced.
We think the Act could be strengthened so that in the inland trade a minimum delivered price should be fixed for various classes of coal in prearranged zones and so that coal is not sold in any zone below the price fixed for the particular class of coal in that zone. If properly co-ordinated and carried out, this would ensure that, as far as possible, each zone would supply its natural market and that collieries outside a particular zone would supply that zone only with coal which could not be produced from collieries within that zone. Part I has been in operation for two years of exceedingly great difficulty in the mining industry. We think it has more than justified itself. It could be strengthened as I have suggested. It should then be continued. To-day more than ever before the circumstances of the industry require that the principles of regulation and co-ordination should be rigidly applied, for to-day the surplus of productive capacity over present demand is greater than ever before. We claim that a return to the old conditions of free competition would be disastrous to the coal industry and to the country. We go further and claim that it is only by the European application of some such organisation that the coal export trade can be saved and a strong national organisation in this country, which is
478
after all the chief producing country in Europe, will be a preliminary and necessary condition of an international or European organisation.
9.20 p.m.
Sir ADRIAN BAILLIE: I desire to support the case against the continuation of Part I of the Coal Mines Act. I have listened with considerable interest to the speech which we have just heard, and I am sure that many of the arguments that the hon. Member used for the continuation of Part I and its application to the export trade will have impressed the House, and possibly even the Secretary for Mines. He suggested, however, that the hon. Member for Consett (Mr. Dickie) was proposing the abolition of Part I in order to allow of unfettered competition in the industry. If that is the hon. Member's intention, it is not mine. I merely suggest that the restrictions imposed by Part I are not the right sort of restrictions. We were told by the Lord Privy Seal that we should not be surprised, but I was surprised until I heard the hon. Member, representing a constituency chiefly employed in the export of coal, drop the remark that Welsh anthracite demands a market. If you happen to be favoured, it is suggested that Welsh anthracite demands a market.
Mr. CLARRY: It is 40 miles away.
Sir A. BAILLIE: I shall be excused for not knowing the geography of that part of the country. It will be sufficient to recall the situation that occurred in the December quarter of last year, affecting the Lothian Coal Company, which had to post up notices restricting the working week to three days when all the time they had on their books orders for coal for Scandinavia. The only reason why they could not fulfil them was because they had exhausted their quota. The Scottish district had exhausted its quota, and there was not a quota available to purchase. West Fife was in the same position. To pile up injury upon injury, the company had to pay a fine for failing to fulfil their obligations. An example such as that ought to have been sufficient to convince even the most ardent supporters of the regulation of the output of coal in. this country that the particular form of regulation contained in Part I of the Coal Mines Act, 1930, is at least no better than the

479
curate's egg. When the Government interferes in such an industry as the coal mining industry, with its ramifications and its variety of conditions, interests, and requirements, then that Government or its successor should not rest content with legislation which, while admittedly satisfactory to a large part of the industry, is certainly most unsatisfactory to a minority of that industry, and a very important minority in that it is engaged in the export trade of this country.
By whom was the Act drawn up? By the late Socialist Government. Why was the Act framed and what were its objectives? I find them stated in the memorandum, which has already been referred to, which was drawn up by the Miners' Federation explaining away the Act. It states in the opening paragraph the objectives as follow:
" Part 1 of the Coal Mines Act, 1930, was designed to check the evils of unrestrained competition between the numerous units of the coal mining industry. Such competition has always been a source of weakness to the industry and a big factor in lowering its economic position."
I have very little doubt that the framers of the Coal Mines Act, 1930, might have hoped that the Act would be a steppingstone towards nationalisation, which they always advocate on every platform but which, thank God, they have never yet been able to reach. As to their reference to unrestrained competition as a big factor in lowering the economic position, then, if nationalisation is to be the only alternative, experience shows that nationalisation has never succeeded in raising the economic position of the coal mining industry. Hon. Members will all agree that cut-throat competition is to be deprecated. If, however, it is a question of supplying co-operation instead of cut-throat competition, of supplying lubrication instead of friction, I agree, but I say that that co-operation must be based on common-sense principles, must have the willing consent of the co-operators, and must bear in mind the real interests of those concerned.
My claim and my indictment are that Part I and Part II of the Act of 1930 entirely ignore the conditions which are pre-requisite to healthy co-operation. I am supported in this, as far as I can make out, by Sir Ernest Gowers, the Chairman of the Coal Mines Reorganisa-
480
tion Commission. Speaking recently in Cardiff, he expressed considerable doubts as to the proved value of recent large amalgamations and combines, and added:
" Voluntary amalgamation represents an organic growth, whereas compulsory amalgamation is a surgical operation."
It is an operation which unless the Ministry of Mines or this Government will intervene, will shortly take place in Scotland. It may be termed a surgical operation, but where is the anaesthetic? It will be vivisection by surgeons who, while very highly paid, are, so far as I know, inexperienced if not inexpert. I hope that, if the Government cannot intervene to stop this form of industrial brutality, they will at least see that these surgeons will only use the knife of fair play and common sense.
To return for a moment to the framers of the 1930 Act, it will not be uncharitable to assume that they and the Socialist Government were imbued with the laudable desire to protect the wages and the employment of the men in the coal mining industry. Let us see how far they have been successful. I agree with the hon. Member for Consett that all the recent troubles in the coal mining industry cannot properly be put down merely to the Coal Mines Act, 1930, but has that Act been successful in protecting the wages and conditions of employment in the industry? Speaking as to the export situation alone, I cannot give a single case where, as a result of the provisions of that Act, one miner has benefited. On the contrary, we have had the case of the Lothian Colliery Company which I quoted in my opening remarks. I am not exaggerating when I say that, since the Coal Mines Act, 1930, was introduced, 150,000 miners have lost employment. In December, 1932, there were 53,000 fewer miners on the colliery pay rolls than at the beginning of 1932, which again supports my argument. In the December quarter of 1932, on the other hand, the Scottish district was short of quota—and I would draw the attention of the hon. Member for Aberdare (Mr. G. Hall) to this—by 450,000 tons.
Mr. G. HALL: May I call the hon. Member's attention to the fact that almost every other coal-producing district in the country is at variance with Scot-

481
land because the Scottish owners are fixing the minimum price of that coal so that they are able to bring coal, which really ought to be used for export, inland arid sell it there? They bring it into Lancashire and Yorkshire. If Scotland would export their coal, which they ought to export, at a proper price, then they would not compete and take the coal from some of the other localities.
Sir A. BAILLIE: I am entirely unimpressed. My whole argument is—
Mr. KIRKWOOD: Is it true?
Sir A. BAILLIE: If in Scotland, as I believe to be the case, the Scottish collieries are so efficiently organised that they can sell their coal in Lancashire at a lower price than the Lancashire collieries, I have no objection. If my hon. Friend's complaint is that the minimum prices are so low in Scotland that they affect the miners' wages, then one has to look a long way to find a higher level of earnings than that in the Scottish coal mining industry.
Mr. DUNCAN GRAHAM: I ask the hon. Member if he will be good enough to give any evidence to justify the statement that he has now made, that the wages in Scotland are higher than they are in any other part of the country? May I further call his attention to the fact that, because of the black-legging tendencies of the Scottish coalowners, they have to work a considerable number more days per year than in any other district in the country. Take the day wage—
HON. MEMBERS: Speech !
Sir A. BAILLIE: Again, that interruption only goes to confirm what I was saying. I was talking very specifically about the annual earnings, and if the hon. Member who chose to intervene just now likes to put forward the case that it is better to work fewer days in the year than more days in the year, I will give him a present of his own argument. As I was saying before I was interrupted, in the December quarter of 1932 the Scottish district was short of quota by 450,000 tons. With this position facing them, Scottish coal exporters were obliged to withold quotations. There was a definite loss of orders, but what was much worse than the loss of orders was
482
the loss of confidence of the foreign buyer in the ability of the Scottish coal owners and exporters to deliver the goods. It has been argued to-night—it is very often put forward by the protagonists of what I consider is a monstrous piece of legislation—that a district can quite easily apply to the Central Council for an extra allocation. But hon. Members must realise that in order to obtain an extra allocation a district has to put forward a very good case, and that takes time, and when that time has elapsed the damage has been done. That was the case in the December quarter of 1932 in the Scottish district. On 17th November they made application to the Central Council for an extra allocation of 450,000 tons. Consideration of the application was deferred until 24th November, when only after severe opposition from the Midland districts they were allocated 300,000 tons. As I say, by that time the damage had been done and orders had been lost. It is this lack of elasticity in the operation of those restrictions which is one of the most vicious features of this legislation. I submit that it is not beyond the perspicacity of the Secretary for Mines and the Government to realise that the operations of the quota, as far as exports are concerned, have been, and inevitably must be, to the detriment of that part of our great industry.
There is only one other point I desire to make. Reference was made just now to the question of costs. I am entitled, I think, to assume that it was hoped, through the provisions of Part I of the Act, to raise the price of coal to the consumer. I make no objection to that at all. But what happened in point of fact? In the month of October last year the average cost of production had gone up as a result of those restrictive provisions by 1s. a ton, and the average selling price in October was down by 1s. ld. a ton. There is a colliery very near to my home in Scotland, a young and efficient colliery, where they have a capacity output of 3,000 tons a day. Their standard tonnage is estimated at 2,000 tons per day. Even with the extra allocation which was accorded tc Scotland in the last quarter of 1932, that colliery is given only 77 per cent. of its standard tonnage.
Mr. D. GRAHAM: Will the hon. Member name the colliery?
Sir A. BAILLIE: I will. The colliery is called Polkemmet.
Mr. GRAHAMrose—
HON. MEMBERS: Order!
Mr. KIRKWOOD: It depends who is speaking. If we happen to make an interjection we are out of order.
Mr. DEPUTY-SPEAKER (Captain Bourne): The hon. Gentleman has not given way.
Mr. KIRKWOOD: They do not know the Rules of the House.
Sir A. BAILLIE: Perhaps I may proceed, with my hon. Friend's permission. I have named the colliery. I am only desiring to prove that even with 77 per cent. of its standard tonnage it really means that that colliery is limited to the production of 1,540 tons a day when it has a capacity of 3,000 tons. In other words, it is very little over 50 per cent. of its capacity.
Mr. D. GRAHAM: Is it true?
Sir A. BAILLIE: Is it reasonable to ask a new, developing, efficient colliery like that to be restricted to 50 per cent. of the capacity of its production? I am supported by the Chairman of the Reorganisation Committee, Sir Ernest Gowers. Referring to quotas, he says:
" A quota system which swells the costs by making every mine work below capacity cannot be a lasting remedy.
My personal feeling is that coal for export markets should, as far as possible, not be subjected to the quota. I entirely agree that there must be regulation of the output of coal for the home market, but I suggest that the quota system is not the right way to restrict output. I submit to the Minister that if curtailment is required—and I believe curtailment of production is required—it should be effected, again as hinted at by Sir Ernest Gowers, by the closing down of pits where the costs are uneconomic. That having been done, the pits with low costs should be allowed to produce to capacity. Finally, I believe that it would well repay coalowners in this country to get together and subscribe to a fund for the temporary closing down of pits with uneconomic costs. Whether they were closed permanently or temporarily would be of no real importance.
484
I said "temporarily" because of the possible increase in the demand for coal in the future. I beg of the Secretary for Mines to reconsider the case we are putting before him. I ask him to reconsider it, advisedly, because we have knocked at the door of the Secretary for Mines for many months now. We are entitled, at least, to some form of reconsideration of the case we are putting before the House to-night.
9.45 p.m.
Mr. ROBINSON: I do not rise to Debate the general question but to refer to a matter raised by the hon. Member for Aberdare (Mr. G. Hall), namely, the determination of minimum prices under the Coal Mines Act, 1930. The hon. Member for Linlithgow (Sir A. Baillie) was not impressed by what was said by the hon. Member for Aberdare, but if he will be so kind as to listen to the remarks I have to make on the subject he may perhaps get a better impression of one of the great difficulties of the coal-mining industry. As I see it, the position is this. By Section 3 (2) of the Coal Mines Act, minimum prices are to be fixed in respect of each class of coal produced in a district. There, I think, is a fault, because the executive boards administering the district schemes can fix those minimum prices at whatever levels they wish. It seems to me that very grave difficulty arises here, because unless there is a very great amount of good will between the districts a very complex problem is bound to arise.
Right from the first there was a certain amount of difficulty with the Scottish Board. The Scottish Board failed to prepare any schedule of minimum prices, and there is no doubt that considerable pressure was required from the Central Council before a Scottish minimum price was determined. There has been still more difficulty. The Scottish people had lost a good deal of their export trade, and they looked around to find some other place where they could make up for it. In order to back themselves up in this matter they fixed their minimum prices at a level which had absolutely no relation whatever to the actual values or to the cost of production.
I wish to urge upon the Government and upon the Minister the necessity for providing some scheme whereby minimum

485
prices in the several districts can be co-ordinated, in order to eliminate unfair competition. I will bring to the attention of the House one concrete case to show what can happen. For many years the Lancashire coalfield have supplied the electricity department of the city of Liverpool with its coal. The Lancashire coalfield is, of course, at the very gate of Liverpool and anxious and eager to supply it with the whole of its requirements. Last year, however, the city of Liverpool went to Scotland and bought her coal. She got 200,000 tons of coal for her electricity department from Scotland. Our complaint is that the price which Liverpool paid for that coal was actually less than the minimum price fixed by the Lancashire district. Not only that, but the price paid must have meant a loss of shillings per ton to the coalowners who sold that coal. If you add the cost of the freightage from Scotland to Liverpool, much more loss must have resulted. I am certain that if such a situation had arisen owing to the action of a foreign country and coal or any other commodity had been sold here at a heavy loss like that, every Member of this House would have been up in arms against a flagrant case of dumping.
I want to take this opportunity of considering what this situation means to the city of Liverpool. They saved £20,000. They saved one-fiftieth of a penny per unit on the electricity they sold—a very small amount—and what is important is that it did not save them from any deficit, because the Liverpool Electricity Department has been making money for years, but that they were just seizing this opportunity of making an extra profit at the expense of the Lancashire coal mines. This action of Liverpool meant that the Lancashire district lost £102,000 more in wages last year, 880 miners were put out -of work, and 220,000 working days were lost, while the authorities of the Lancashire district had to pay out an extra £50,000 in unemployment pay. I think it is a very shortsighted policy not only from the Scottish point of view but from the point of view of the city of Liverpool.
It seems to me a very significant fact that to-morrow that same City of Liverpool is sending a deputation to this House to the Minister of Health asking that the hinterland of Liverpool, the county districts of Lancashire, should
486
join in trying to find some of the money necessary to maintain the unemployed of Liverpool. It is a very short-sighted policy on the part of the Liverpool Corporation to ruin an industry and to impoverish the people whom they are now asking to support them. I know that they are considering contracting for a further three years' supply from Scotland, and I would ask them very carefully to consider the true position and to realise what their benefit is in the matter. A similar situation has taken place in regard to Southport. Southport has taken 32,000 tons of coal from Scotland, and there has been a corresponding loss of working days in the Lancashire coalfield. Southport depends for 80 per cent. of its income on the very working men in Lancashire whom they are depriving of their jobs. At the present time in Lancashire we are starting efforts to create a better industrial situation and the miners and the coalowners are uniting in a propaganda campaign with the slogan: "Lancashire coal for Lancashire people." Why not "Lancashire coal for Liverpool people?"
Mr. DENVILLE: Will the hon. Member explain to the House whether Liverpool went to Scotland to get her coal, so that she could break the ring of Lancashire coalowners?
Mr. LOGAN: Will the hon. Member explain to the House that Liverpool is controlled by Members of the National party?
Mr. ESSENHIGH: Including the hon. Member for the Scotland Division (Mr. Logan).
Mr. ROBINSON: That campaign of propaganda alone is not enough. The intention of Part I of the Act was to keep up the price of coal so that the industry could be run on a remunerative basis and that revenue might be made to provide decent wages for the men. I would plead with the Government to complete the purpose of the Act by so amending it as to provide means for the co-ordination of prices between the districts and to stop the useless, wasteful, cut-throat competition that is ruining the industry.
9.53 p.m.
Mr. PARKINSON: The hon. Member for Widnes (Mr. Robinson) has brought

487
the Debate down to actual realities and has dealt with one of the points with which I propose to deal in the course of my remarks. The Coal Mines Act, Part I, was put into operation in order to overcome difficulties which were then operating in the national field. It was designed to check the evils resulting from unrestrained competition between numerous districts of the coal-mining industry, but we have heard sufficient to-night to realise that there are a large number of different units among the coal-owners who are acting with a view to securing their own individual prosperity. Such competition has always been a source of weakness to the industry and has had the effect of lowering the wages of the workers and weakening the structure of the industry.
We seem to forget the fact that the whole of the power with regard to the allocation is in the hands of the Central Council. We find Members of this House railing against the Government for not increasing their quota or doing something in that direction while, at the same time, the Government have not the power to do it. The power rests with the Central Council to do what they think is right in regard to the question of altering the quota. Since the War, new forces have arisen to cause a decline in the consumption of coal for heating, lighting and power, and markets have been completely reversed. Many countries have increased their own production of coal because they think it is best in the interests of their own countries to do so, instead of importing coal from other countries. I have a quotation here from a speech made by the Chairman of the Coal Mining Association of Great Britain, Mr. Evan Williams, who may be looked upon as one of the biggest figures in the coalowners association. He made a very pessimistic statement at the Central Council on 6th October. He said:
" We all know that instead of getting better prices than we did when we began to function under this Act, we are really getting lower prices. This is due to the facts that we have placed more coal on the market than there was a demand for, that we have not been able to co-ordinate the regulation of price as between district and district, and that we have not been able to prevent in the districts the evasions of the
488
provisions of the schemes which were designed for maintaining prices at a remunerative level."
A more depressing statement could not possibly be made by a man of the standing of Mr. Evan. Williams. It shows the failure of the owners to look beyond individual interests to the well-being of the industry as a whole. It also shows the folly of placing too much coal on the market, and deals with the failure to coordinate prices or to remedy the evasions of the Act. The outstanding fact is that the predatory instincts of individual owners, or of districts, is the predominating feature. Are the coalowners not able to rise above individual interests? Are they not able to develop a collective mind? Cannot they look at the industry as a whole? Powers were given to them under the Act to enable them to restore the industry, to enable it to pull through a, very difficult period. In contradistinction to the statement of Mr. Evan Williams we have a statement from Mr. Archer, the vice-chairman of the West Yorkshire Coalowners. He says:
" The majority of coalowners would, think, regard the repeal of Part I with dismay, and if they do not do so initially they would eventually. The facts prove that the districts which have been really trying to work Part I have benefited, whereas those which have not done so have hurst themselves."
We have heard a great deal about the difficulties which have arisen from the coalowners' point of view and from the exporters' point of view, indeed from almost every point of view. The hon. Member for Consett (Mr. Dickie) told a very dismal story. I do not know whether he was speaking on behalf of his constituents, or whether he was satisfied that the statement sent out by the exporters was meant to be a kind of manifesto for his political extinction at the next general election. I am sure that during the period during which the Coal Mines Act has been in operation we have had a steadier and stronger tendency in the trade than before. We must look at the profits which have been made on the sale of coal during the last few months. I am speaking in support of the retention of Part I. I say that it has been of service to the coal industry and to the country as a whole.
The profit on saleable coal raised in 1931 was 3.2 pence per ton; and it was

489
practically the same for 1932, though, of course, we have only the returns for the first nine months of that year. The tonnage of saleable coal was 241,000,000 tons in 1927 and 213,000,000 tons in 1931. The hon. Member for Consett tried to make out that a lower output of coal was an offence or crime against the nation. If we produced coal during one year at our maximum capacity we could not export the coal or sell it, and we should find what we used to see 25 years ago, huge stacks of coal at every pit bank.
Mr. DICKIE: The hon. Member must surely know that we have this state of things now. There are millions of tons of small coal lying on the ground, unsaleable.
Mr. PARKINSON: It is in a minor degree to what it was 25 years ago. Then, in every colliery in Lancashire you would find huge stacks of coal waiting for the highest bidder. The costs of production in 1931–32 were practically the same as in 1929–30, but they were substantially below the figures for 1927–28. The average selling price for 1931–32 was in keeping with the price for 1929–30, there was practically speaking only a few coppers difference. The output per man in 1932 increased. The production of coal in 1931 was no less than 13,000,000 tons short of the quota allowed, and in the first nine months of 1932 it was 22,000,000 less. That disposes of the question that it is necessary to have a greater quota in order to meet the difficulties of certain exporters. Workmen's wages, including allowances in kind, were practically the same as they were prior to the agreement.
The hon. Member for Consett made one or two insinuations against hon. Members on this side of the House, but I should like him to realise that, no matter what his experience may be of the coal industry, there are people on this side with equal experience, perhaps a greater experience. The Act was passed in.1930 and the allocations were made to districts. These have been varied on several occasions. Let me quote from a report issued by the Secretary for Mines. On page 5 is stated:
" In fixing total allocations in excess of those in any other quarter when regulation of output was operative, the Central Council doubtless desired to enable the districts to take advantage of any increased demand for coal. Demand continued to decline, however, and output, which fell short of alloca-
490
tion by 10,111,745 tons (15.07 per cent.) was 1,389,115 tons less than in the corresponding quarter of 1931, and 1,818,756 tons less than in the December quarter, 1931."
The deficiency of the output as compared with the quota in the June quarter was 5.56 per cent., and in the September quarter it was 14.03 per cent. It will be understood, therefore, that. it is not a question as to the amount of coal which has been brought to the surface. There have been opportunities for these people if they had cared to utilise them. 1n connection with price regulation and coordination between districts there has been one of the glaring misapplications of the spirit of the Act. The hon. Member for Linlithgow (Sir A. Baillie) has been speaking about the position in Scotland. I would like to read a short paragraph from page 9 of the same report:
" Before Part I of the 1930 Act was passed, and before minimum prices were fixed, Scottish coal never came into Lancashire. Since the Act was passed, however, the Scottish coalowners or Scottish merchants have exploited the position, and large tonnages of coal from Scotland have been sold in parts of the Lancashire coalfield, depriving Lancashire collieries of valuable orders which they have enjoyed for many years. It would appear to be obvious that the minimum prices of the Scottish coal must have been fixed at a ridiculously low figure. The Lancashire owners feel very strongly that there should he amendments to Part I of the Act to enforce inter-district co-operation."
Lancashire during the last year seems to have been the tipping ground for all the cheap coal of Britain. An hon. Member behind me spoke about a campaign that was being launched. I would tell the House that as much coal is coming into Lancashire from other counties and Scotland as would provide work for 4,000 miners in the Lancashire district. Though the Scottish owners may be absorbing more people in their own area, they are encroaching over the border and causing a large number of our people to be unemployed. The hon. Member for Linlithgow on two or three occasions mentioned the name of Sir Ernest Gowers. I am one of those who think that Sir Ernest Cowers would be doing a better service if he was minding his own business, and if he cannot mind his own business he had better resign his position. We know the circumstances of the appointment, but we do not want the ridicule which he is trying to pour on Part I of the Act to be continued. Really, it is unfair for

491
such a thing to take place, for a man in his position to publish such statements to the Press or to make them to individuals, and this sort of thing ought to be discontinued.
There will have to be inter-district agreements of a stronger character, and greater morality among the coalowners. It must not be a case of cut-throat competition, but of the widest co-operation possible. The hon. Member for Linlithgow spoke about Scotland being 450,000 tons over the quota during the last quarter of last year. Here are the figures I have: In the first quarter, ended March, 1932, they were 9.25 below the quota in production; in the quarter ended June they were 5.56 below; and in the September quarter they were 10.74 per cent. below the quota granted to them. It is very unfair for anyone to try to lead the House to believe that the Act has undermined the stability of a section of the industry. It has consolidated the industry. It gave to the owners all that they asked for to make their position secure, but they have so little faith in themselves or in each other that they believe they ought to continue a cut-throat competition which will lead them to the end of a very dark career. What is wanted is a better spirit in the industry. The selling side ought to have constant supervision and further reorganisation. Sound schemes for all these problems can be formulated, given the spirit of co-operation and good will among the owners. The only alternative is to drift back to the old bad conditions. The industry needs clear direction, unity of purpose and co-operation for the good of those engaged in it. Failing that, we shall be as we have been before. A return to the old conditions of free competition would be disastrous to the industry and to the country. Let me quote a few words from the League of Nations Report of January, 1932. There it is stated:
" National organisation is the preliminary and necessary condition of international regulations. In 1929 one of the chief obstacles to this idea was the absence of national organisation, notably in Great Britain, the chief producing country in Europe."
We must either go forward with the reorganisation given under the Mines Act, or we must slide back into the abyss of which I have spoken.
10.14 p.m.
Mr. CURRY: In the few minutes that remain I wish to express a point of view which I think has not been expressed so far in this Debate. I find myself not quite in agreement with either the hon. Member for Consett (Mr. Dickie) or the hon. Member for Aberdare (Mr. G. Hall). The hon. Member for Consett has placed us all under an indebtedness by giving us the opportunity for such a valuable discussion on such an important subject. The facts which he brought out and the views to which he and those supporting the Motion have given expression, cannot be brushed aside as the hon. Member for Aberdare tried to do by the simple statement that the administration of the Act is in the hands of the owners. It is a great surprise to me that in the case of an Act which was passed by the Labour Government we should now be told that the men have no voice in its administration. I think that position ought to be noted, because I am firmly of opinion that we shall never have permanent peace in this industry until we give those employed in it an effective voice in the fixation of quota and prices, if we are to go on fixing them.
The hon. Member for Aberdare said that we must move forward to the coordination of the export and inland areas in the country and try to get them to co-operate—as has been done, I understand, in Germany—but he rather misrepresented the hon. Member for Consett by saying that he wanted to take away some of the advantages which exporters were enjoying. The view expressed by the hon. Member for Consett was that the Act is not an advantage, but a disadvantage to the exporting industry, and the facts which have been brought out in this Debate point to the necessity for a proper Government inquiry into the working of this part of the Act. It was with that in view that I put upon the Paper an Amendment which it has not been possible for us to discuss. Much has been said on the benches opposite about the coalowners, and I detected in one or two speeches a note of cynicism in references to the coalowners. But they are not indulging in these evasions out of choice. When we were debating the Coal Mines Act last summer I called attention to a conversation which I had had with a well-known coalowner in the county of Durham who told me that that

493
week he was writing notices for some hundreds of men, not because he could not sell his coal, but because he would not attempt to sell it underneath the fixed price. All honour to that man. But in that type of man the sense of trusteeship for those whom he employs is highly developed, and it is hard on those men if they have to suffer unempolyment because of their employer's high standard of moral integrity.
Mr. LAWSON: Somebody else would get the contract.
Mr. CURRY: Yes, but if we lose from British industry that sense of honour which is the fine gold of commerce, whether we lose it through the operations of this Act or in any other way—
Mr. LAWSON: Somebody in Durham got the order.
Mr. CURRY: Certainly, but as I say if we allow to be undermined that sense of honour which has been the pride of British industry ever since ships sailed to sea—if we once lose that out of British industry, we shall have lost the foundation upon which our Imperial and commercial greatness rests. If there is even a suspicion of such a loss, then it is no answer—and I am surprised that the remark should come from the quarter from which it has come—to say that somebody else got the order. The fact that a man of the calibre of that owner should suffer economic loss because of the faults of this Act is a mandate to this House and is the strongest reinforcement possible for the request that we should have an inquiry into the working of this Act and discover the facts, and then legislate in the full light of knowledge. We should do away for ever with the sort of debate which we have had to-night in which speakers in different quarters of the House and from different parts of the country, have been giving us contradictory statements of their opinions and of the facts. We can only do it by an inquiry.
I would remind the hon. Member for Aberdare that he pointed out at great length the changes in the world conditions which have sprung up since this Act began to operate. An Act which was passed in 1930 may not be applicable to the condition of things existing in 1933. The year 1931 altered a tremendous lot of the relationships between one market
494
and another, and we should not go on, in a great industry like this, continuing an Act simply because somebody passed it or simply because it happens to fit in with a certain political faith, when we have direct evidence that it is lowering the moral standard of our commercial people, bringing unemployment in certain areas, leading to inequalities between one county and another, and generally playing ducks and drakes with an industry which is the very foundation of our commercial and industrial greatness.
10.21 p.m.
Mr. E. BROWN: I am sure the House will agree that the hon. Member for Consett (Mr. Dickie) has raised a live issue and an issue of great interest, not merely to this House, but to the country as a whole. The only regret that the House will have is that the time has been so short that a number of Members who would wish to have made their varying contributions, for they would have been varying, have not had that opportunity. I will do my best to be as brief as I can in covering the ground, so that, if possible, when I have done, there may yet be time for some others to speak, but that I cannot promise; I will do my best. The reason I cannot promise is very obvious. My hon. Friend the Member for Linlithgow (Sir A. Baillie) said he was knocking at the door. It might be very simple if all who knocked at the door of the Minister of Mines at this time wanted the same thing, but he wants one thing, another hon. Member wants another thing, a third wants quite a different thing, and a fourth another yet again. They all knock at the door, and they all want different things; and what makes it more complicated is this, that some of them agree with each other about one thing, or two others may disagree with each other about another thing or another two things.
The result is, as the Debate has shown to-night, that this is a very difficult and complicated question, and, as I say, it is a regret that we have not had longer to consider it. Still, we must be grateful to the hon. Member for Consett for seizing the opportunity and, in his own vigorous way, putting his case. He made a quotation from a speech by me, but I think, if he re-reads it, he will see that he does me an injustice, for in that speech, so far from making the point

495
which he was making, I deliberately stated that I did not make the claim that the quota has anything to do with it. I remember the speech very well. It was the only one of that kind that I made in the course of the discussions upon that Bill, for my objections to that Bill were not objections held by many of my hon. Friends. As a matter of fact, one or two of the objections that I lodged in the course of the Debates on that Bill were sustained, and it is the fact to-day that it is possible to give adequate standard tonnages so that the developing pit can be met, because I proposed an Amendment to the Bill which in substance was accepted and is now part of the Act.
That quotation comes from a discussion two and a-half months after the Act had begun to operate, when there was the initial difficulty affecting every port in the land and, more than that, a particular colliery in South Yorkshire that had a real grievance. The committee of investigation set up to inquire into the change upheld the colliery, and so the Act was found to have the remedy for the objection then raised. If the hon. Member for Consett will re-read the whole speech, instead of looking at one quotation only, he will find that he has done me, of course without any intention, an injustice in that matter. I think, if he will also study the particular speech of the President of the Board of Trade from which he quoted, he will find that it was given in circumstances which are very interesting in view of some of the issues which are now being raised.
Now let me deal with some of the points that have been raised in this Debate. It is true, of course, that we are dealing with the operation of this Act in the present state of the coal industry, and we have to regret that we have seen a contraction in this country. Part of the troubles that we have been discussing to-night do not arise from the structure of the Act at all. They arise from the circumstances in which the Act has to be applied. Most of the Members who have discussed the operation of the quota regulations under the Act have admitted that they do not want to see the abolition of the whole of Part I. It is interesting to notice that the hon. Member for Consett himself is one of those who are inclined to say that there
496
is a case for the regulation of output and price in the inland market.
I will come back to that a little later, but I point that out now because much of the propaganda that is made against the Act is not based on any discrimination in the operation of either the regulation of output or the minimum price. It is based on the idea that all you have to do if you want to bring back health to the coal industry is to wipe the whole of the Act away. I am glad to have noticed in the Debate that that opinion does not seem to be largely adopted. That atmosphere is sometimes created even by speakers who say in the course of creating the atmosphere that they do not want to sweep Part I of the Act away. Hon. Members will have noticed that in the replies to questions which I have made I have continually told the House that every question asked about a difficulty under the operation of this Act has been analysed in my Department. Every letter that has appeared about the Act, for and against it, containing any material facts, has been analysed, and we have tried as far as we can to trace the allegations made to their sources.
It must have been borne upon the Members who have listened to this Debate that allegations are many, opinions are many, but facts are very few. We had one fact in the course of the Debate in the admirable and eloquent speech of my hon. Friend the Member for Linlithgow. It is a fact concerning a particular group of collieries. It is true, as he says, that there was a short allocation in December, 1932, but I would ask him to notice that there have only been two quarters in the whole period of the operation of the Act when there has been anything like a short allocation, and that was in each case the final quarters of the years 1931 and 1932. In the case he quoted, the case of the Lothian Coal Company, notices were issued. I took some personal interest in it, and I saw the owners concerned. The hon. Member knows quite well that 300,000 tons were first allocated, and then an additional 150,000 tons. I took the trouble to follow the thing up in regard to both West Fife and East Fife, and in regard to Lothian, and I found—[Interruption.] the particular area was concerned with the operations of the Wemyss Coal Company; that is a case which ray hon.

497
Friend had in mind. He mentioned a case that was in his own area, and I took the trouble to go into the facts. Notices were issued, the propaganda was started, the atmosphere was created, and these are the facts. The number of days worked during the week ending the 10th December in the Whitehill Pit of the Lothian Coal Company were five; for the 17th December, six; and the 24th December, six. In the week in question for which notices had been published, the number was five. For the Polton Pit, in the week ending 10th December, five days; 17th December, six days; 24th December, six days; 31st December, five days. So the notices and the facts do not agree.
With regard to the Newbattle Pit the case is rather different. In the week ending 10th December, five days, one stop day; 17th December, four days; 24th December, six days; 31st December, five days, one stop day. The stoppages came as normal in the first week in January, the New Year Scottish holidays. The practice at this undertaking was to work 11 days a fortnight, six days in one week and five in the other. Apart from the week ending 17th December, when one pit, Newbattle, worked four days, full time, allowing for holidays, had been worked during the period in question. With regard to the export trade, there is not a Member of this House, or a member of the Central Council of Coal Owners, who would put any obstacle in the way of the expansion of the export market or the fulfilment of a single order for export. I am bound to admit that in the course of my inquiries I have had a few cases put before me—cases, not assertions, which I have been able to verify. It so happens that of all the Members of the House I have been most successful in finding them. Two of about 10 were found by me in my own constituency. But when we take these dozen lost orders and compare that figure, which has been proved, with the assertions made in this Debate, the issue is a very different one. My hon. Friend the Member for West Lothian did put his finger on what is a very real difficulty when he referred to the loss of confidence among foreign buyers. There, I am bound to tell the House, he was on firmer ground, for I have got evidence that there is a feeling, whether it be justified or not, in the minds of some foreign
498
buyers that when the negotiations which are now proceeding have come to a successful conclusion, as I trust they will, it may be that they will not be able to get delivery if they place extra orders. Let the House bear that in mind in the discussion of this problem.
The hon. Member for Consett raised the very difficult question of evasions. I would point out to him that there is more than one way of looking at the problem of evasions. There are those who take the view that the way to deal with evasions is to scrap the whole Act. Others take the view that to stop evasions the thing to do is not to have fewer regulations but more regulations. The fact, alas, is a serious one, and the point put by the hon. Member for Bishop Auckland (Mr. Curry) is a serious one, too, because there can be no doubt whatever in the mind of anyone who has examined the question as to what is going on, and in a moment or two I will go so far as to give the House some instances of the methods which are adopted for evading the regulations of the Act. It is having a bad moral effect on the industry, and those responsible, the Central Council of Coal Owners or the Government—if the Government have to take action—may be led to draw very different conclusions from those drawn by people who say that what we have to do is to scrap the Act.
Let me for a minute or two deal with the problem of the foundation of the Act itself. The Act was passed for a very simple reason. I do not understand one or two of the complaints of the hon. Member for Aberdare (Mr. G. Hall) for if there are not representatives of the Miners' Federation on the board the responsibility does not lie here; it lies on the benches opposite. The Bill startled me when I saw it and for many reasons I was strongly against it in its passing. The title of the Bill said:
" An Act to provide for regulating and facilitating the production, supply and sale of coal by owners of coal mines; "
It is now too late for complaints to be made from the Opposition Benches that there is not a joint body of some kind to operate the Act. The hon. Member for Aberdare will know that it is a perfectly fair point that I am making. Responsibility is with the owners of coal, and there are often reminders of that.

499
The basis of the Coal Mines Act was a production from British mines of about 300,000,000 tons a year. At the moment there is an actual market of 209,000,000 tons a year. Up to the month of November, we feared that it would not actually reach 200,000,000 tons, but the last quarter brought the figure up to 209,000,000 tons. That is the reason why many who objected to some of the provisions of the Act do not find it possible to advocate the abolition of the Act, and do not join in the propaganda put out by some of the organisations that have been circularising hon. Members in the last two or three days.
In dealing with the Act this House has to topsider the industry as a whole—and I mean by that the miners who hew the coal and bring it to the surface, the owners who have to dispose of it and the sellers of it, either at home or abroad. More than that, the House has to bear in mind the interests of the community as a whole. I was taught when very young that when coal was sick, Britain was sick. I told some of my Danish friends the other day that when Britain is sick she does not eat bacon. Coal is sickening in this country and we cannot hope to get coal well again if we take our own point of view and try to attribute to certain things in the Act every ill that has come upon coal since the passing of the Act. It is grossly unfair to suggest that the drop in the export of coal has anything to do with the structure of Part I of the Act, excepting perhaps in a very minor degree. The hon. Member for Consett made it quite plain that he did not do that. I am now referring to certain propaganda that has gone very far and very fast in recent days. The charge that the Act is responsible for the reduction of coal exports is not only grossly unfair, but, to anybody who knows the Act, the charge is ridiculous.
What was the purpose of the Act? It was to meet a situation in which the industry does not respond to the ordinary economic test. The ordinary economic test is this: that if you produce coal, and if you can meet the demand of the consumers both in quality and in price, you can get any market in the world. Is there anybody, in this House or outside, who will contend that a mere price-cutting campaign in the export market
500
will win us back any proportion of what we have lost? The facts that have been brought forward to-night will prove the contrary. In the way he spoke of the restrictions in Germany, in France and in Belgium, I do not agree with the hon. Member for Aberdare. Hon. Members are just as unfair to the countries concerned when they say that those restrictions are due solely to tariff measures taken by this Government as are those who say that the drop in the export trade is due to the Act. I do not agree with that. I am not going to say that there may not be an element of truth in it, but I say that anyone who studies the structure of those countries will know that they are themselves coal-producing countries as well as coal-importing countries; and the real reason for the major part of these restrictions has nothing to do with the fiscal system of this country, though it may be that the fiscal system of this country will enable us in the course of our arguments to overcome that difficulty partially.
Sir HERBERT SAMUEL: It may not.
Mr. BROWN: We can only do as our mutual Leader used to say: we can only wait and see; and I should think that the right hon. Gentleman will be quite willing to do that, for I remember him standing in this House, not very far from where he is now, and asserting that, if we went in for a tariff, there would be a rise in the cost of living to the poorest of the poor. I think we can afford to wait and see; but I assert that, when you are dealing with restrictions in Germany, France, Belgium and Spain, you are not dealing with restrictions that have been mainly imposed for fiscal or any other reasons connected with the policy of this country. Those countries are themselves in possession of coal industries that are sick. They are coal-producing countries and they have their own difficulties. We have realised that fact, and for any person outside or inside this House to assert that merely destroying the regulations with regard to price in Part I of the Act of 1930 will win us back those markets is to assert what they will find it very difficult to prove.
Mr. REMER: I think that the hon. Gentleman will also find that there are subsidies in Poland.
Mr. BROWN: I am not unaware of that fact, but let me go a little further. Let me point out that the working experience of the Act has shown many things. It has shown, first of all, that it might have been good if more power had been given to the central board than was given in certain directions. I need not deal with the question of allocation except to quote one set of figures for the purpose of comparison. The allocations as regulated for the last two years have on the whole, with the exception of certain areas in. the last quarters of 1931 and 1932, been ample to meet the demand. There has been a margin, at the smallest, of 1,700,000 tons, and, at the largest, of 10,000,000 tons.
I now want to deal with the question of evasion, because this is one of the gravest issues that can be raised, and the one which, I am sure, is exercising the minds of all those concerned with the operation of the Act. Let me, without passing any comments, quote a series of the types of evasion which have come to our notice. These are examples of the evasions of the minimum price provisions that are operated in different districts. I will give the principal and most artful first. They are as follow:

1. The formation of subsidiary companies to which coal is sold at the statutory minimum price, the subsidiary companies in turn selling it at less than the minimum price, their losses being borne by the parent company.

2. Selling coal at prices below the minimum price ruling.

3. Selling more than one kind of coal at a time to one consumer, one kind at the minimum price and the other at a discount.

4. Selling a parcel of coal to a customer the greater part at the minimum price and the balance invoiced at a nominal price of a few pence per ton.

5. The payment of exorbitant remuneration to selling agents whose functions are purely nominal, to sell at prices below the minimum, making good their losses from their remuneration.

6. The purchase of stores from customers at inflated prices.

7. Coke is outside Part I of the 1930 Act.. Selling of coal and coke together,
502
the former at a minimum price, the latter at a substantial discount on the current market rate.

There are others. I have put these on record to show to hon. Members concerned that we are not without knowledge, and to show the hon. Member that we do not need an inquiry into the matter. The only inquiry I want to have is one in every ease where anyone makes an assertion about a lost order as to where, when and how that order was lost, and I should like to have that whenever the assertion is made, because it would be very helpful in any discussion that may be forthcoming about the defects which it has been admitted in all parts of the House that the Act has.
Mr. SLATER: Legislation would certainly be required to deal with those matters.
Mr. BROWN: The hon. Member wilt understand that I am not entitled, nor is anyone, to discuss legislation. That is why I put my speech in the form that I put it. Let me tell the hon. Member precisely what we have done. We have consulted all sections of the coal trade. The Mining Association informed the Government that the majority of the coalowners are in favour of the continuance of Part I and that a sub-committee has under consideration those amendments to the scheme which can be effected without fresh legislation which will secure general agreement among the coalowners to the continuance of Part I.
Sir H. SAMUEL: If my hon. Friend is passing away from evasions, can he tell us whether any of those evasions are legal?
Mr. BROWN: Some of them are evasions of the letter and some of the spirit, but it is not as easy under the structure of the Act to stop even illegal evasions as it would appear. It is one of the problems that are now exercising the minds of the Central Council. Let me make the point about the inquiry. The Miners' Federation unanimously recommended that Part I, amended and strengthened in certain directions, should continue. The Coal Merchants' Federation said it would view with regret a decision to allow the Act to lapse. The Coal Exporters' Federation urged that coal for export and bunkers should be free from the operation of the quota and

503
minimum prices. Another body representing wholesale coal merchants recommend that Part I should lapse in December 1, 1932. We have done our best to make inquiries and, more than that, the Central Council has been busily engaged discussing this issue. I think, therefore, there is no need whatever for a new inquiry in the matter.
I should like to say a word or two further about the export trade. As distinct from wild statements made in some propaganda, the Chamber of Shipping have put their view in a very moderate way. They say they are of opinion that the quota and minimum price restrictions of the Coal Mines Act had tended to hamper the export of coal and had contributed to the grave loss of employment in the coal and shipping industries. We have had a lot of figures about exports. It is true that we have lost 4,500,000 tons in 1932 as compared with 1931, but there is another remarkable fact. While in the markets to which the hon. Member referred, the coal-producing coal-consuming markets, we have losses, 1932 saw a gain in quite a number of our other markets. That is a point which, I think, the House should take into account in discussing this matter. For instance, Denmark increased her demand last year over 1931 by 505,000 tons. There were increases from Sweden, Norway, Finland, Latvia and Lithuania—none of them large, but all of them showing the new tendency in the North-West European market, and a very remarkable one.
Mr. D. GRAHAM: And from Russia?
Mr. BROWN: Not from Russia. Russia is one of our competitors in some of the markets in the Mediterranean, and a very serious competitor. That is the answer to some of those who say that by mere price cutting you can get markets all over the world. I think this point is one of instruction, and throws a ray of light on what can be done under the present regulations. There is a small increase in certain South American countries—in Brazil, for instance, and in Cuba. There is a very remarkable increase in Canada of 760,000 tons. The year 1932 is the largest year we have ever had in exports to Canada—1,671,000 tons. When we add these together we find that while
504
there is a loss in the markets to which the hon. Member for Aberdare referred, there is a gain of 2,579,000 tons in these other markets in 1932 over 1931. I am entitled to point out to the right hon. Member for Darwen (Sir H. Samuel) at any rate, that while there has been no agreement in the matter, and it is much too early for me to discuss the details while our customers are still in this country and we are still talking, it is quite obvious that there is a new mind in North Western Europe, and we are getting some fruit from the discussion.
Let me say a word or two on another point before I sit down. It is obvious than hon. Members in all parts of the House are uneasy lest anything should be done to hinder the export of coal. The Central Council of Coalowners have been working since the summer on Amendments to schemes which it is expected will remove, or at least reduce, some of the difficulties which schemes of regulation involve. They have not yet reached conclusions which they can place before the Government, but I wish to emphasise the point made in June by the President of the Board of Trade and my predecessor, that the administration of the schemes must be put right. That has been, in fact, the condition of the continuance of the scheme for five years. In regard to tariff negotiations with foreign countries, assurances have already been given that if there is agreement to take additional quantities of British coal, the necessary supply will be available. If those negotiations result in increased trade for British coal, I think the whole House will agree with me that it is unthinkable that the trade should be hindered through want of flexibility in the machinery of the Act. May I point out, as I did in the course of the short speech I made on the Adjournment in December, that district schemes now have the power to separate inland from export coal as a class of coal. That is now part of the machinery of the Act, and they can do it if they wish.
I would point out that one of the difficulties is that some of those who are most clamant for the removal of the restrictions on the allocation for export are just those who would most violently oppose it if it were done. The real trouble is that the knot is tied when those who have allocations for export desire to use them coastwise in the in-

505
laud market. That is the crux of the whole problem. That is why it is not as easy to solve the problem as some of our hon. Friends would suggest. It is not because it is not in the power of a district to do it, but for reasons best known to themselves and to those who have studied the structure of the Act, owners in every district have decided not to use that particular machinery.
Lancashire may have bought Scottish coal. The illustration of coal being brought from Ayrshire to Liverpool is a perfect illustration of one of the reasons why it is difficult at times to get an extra allocation for certain districts. It is very difficult to expect the representative of the inland district to vote excess allocation if he thinks that it is not to be used to send abroad, but used in competition with him in his own market at a price which may be—as I believe in this case is the fact—below the local minimum price. If you put powers into the hands of the Council to make separate allocations for inland and export coal it would then be possible to ensure that the requisite amount of coal for export could be available. I hope that the coalowners will come to an early decision on this matter. I can assure the hon. Member interested in this particular side of the subject and the House that unless the Central Council reaches a conclusion in the near future as to steps to be taken to ensure that coal for export is available, it will then be of course a question for the decision of the Government as to whether they will themselves take action in that matter.
Mr. MARTIN: How long is "the near future"?
Mr. BROWN: Shorter than six months, which I think the hon. Member regards as a reasonable period. In view of what is happening, I should think six months too long. With regard to the Motion and the Amendment on the Order Paper, the House will see from what I have said that I am in sympathy with elements in all of them, but I cannot accept any of them on behalf of the Government. I would, therefore, suggest as the wisest thing after this interesting and very valuable Debate, in which I regret that so many of the Members who wished to speak have been unable to take part, either the Motion should be withdrawn or we should exer-
506
cise the two minutes left for another Member to see his way to talk out the Motion.
10.58 p.m.
Mr. MILNE: I venture to intervene in the Debate because I represent the mining constituency of West Fife which is the centre of all the trouble and has suffered more than any other district. I think I heard an hon. Member ask, "Where is West Fife?" I can tell him. West Fife is the principal exporting county in Scotland. There are collieries there mainly concerned with the export trade. They are the best equipped in the country, and the management is second to none. In spite of the facts to which I have referred, at the end of the year hundreds of men were thrown idle, not through lack of work, but as a result of the operation of an Act of Parliament. I address the House upon a mining topic with very real diffidence, because I feel that I am addressing Members, many of whom are equipped with a knowledge which I do not possess, but which I envy and respect. On the other hand, I have the advantage that I am entirely free from any prepossessions. When I entered Parliament I found the Coal Mines Act upon the Statute Book and I regard it neither with favour nor ill-will. Amidst all the welter—
It being Eleven of the Clock, the Debate stood adjourned.
The Orders of the Day were read, and postponed.

IMPORT DUTIES ACT.
Motion made, and Question proposed, "That this House do now adjourn."—[Sir F. Thomson.]
11.2 p.m.
Sir B. PETO: I put a question to-day to the President of the Board of Trade, on which I wish to say a few words. It will be for the convenience of hon. Members if I first read the question, and the answer I received, which made me give notice that I would raise the matter on the Adjournment. I asked the President of the Board of Trade:
" whether he can give any date by which an order may be expected, in accordance

507
with the recommendations of the Import Duties Advisory Committee, on the application of the fabric glove industry; whether the commercial negotiations with foreign countries, which are delaying the decision, relate to the glove industry or other industries; and whether, in view of the depression in the fabric glove industry in this country, due to the dumping of surplus foreign produce at prices below cost of production, he will arrive at a decision at the earlist possible moment."
The reply that I received was as follows:
" I cannot give a date by which a decision will be reached on the Committee's recommendations, but the hon. Member may rest assured that there will be no unnecessary delay. As regards the second part of the question, it would not be expedient to make detailed announcements as to the scope of negotiations which are in progress."
I do not desire, indeed it would be out of order, to go into any question as to why the Import Duties Advisory Committee have made a recommendation to the Treasury, or the nature of that recommendation or the evidence that produced that recommendation. What I am concerned with is the position of this House in relation to this new method of procedure in dealing with tariff questions. The only information that has been vouchsafed was a communique which appeared in the Press, in a few lines, on the 23rd February. I will read it. I am quoting from the "Times." It is headed:

DECISIONS DELAYED.
" The Treasury state that they have also received from the Import Duties Advisory Committee recommendations relating to Customs duties on the following commodities:

Yeast,

Pottery and clay products,

Baskets,

Fabric Gloves,

but that in the present stage of the commercial negotiations and discussions which are in progress with various foreign countries they have deferred a decision whether or not to make Orders in pursuance of these recommendations."
It is necessary for my purpose to show that this question of duties upon fabric gloves is not a question of a new duty. There has been a history of duties in relation to that particular industry. They have had varying duties, sometimes on and sometimes off, for 15 years. In 1918 they came under the Safeguarding Duties Act, which operated against imports from enemy countries, mostly imports from
508
Germany, as these imports practically are all made in Saxony. There has been more general legislation since. There was a duty of 33½ per cent. for five years, but when the Labour Government came into office for the first time, that duty was allowed to lapse in 1923. It was reimposed two years later, in 1925, and continued for a further five years when it lapsed again under the Labour Government in 1930. Then we come to the present Government. They began with no duty at all. Just before Christmas 1931 we had the Abnormal Importation Duties Act, which imposed a duty of 50 per cent. In April that was changed to a duty of 20 per cent. There have been several applications since. We now learn that a recommendation has been made, and obviously it must be for an increase in the duty. I want to point out in the first place that this is no new duty. The industry has had a duty and has been without a duty, and under the present Government there has been a Duty of 50 per cent., and one of 20 per cent. Therefore I ask hon. Members to consider the position of this House in regard to the Import Duties Advisory Committee and the Government. The Committee is inacessible to hon. Members. When we go to the Department we are told that the duty of the Advisory Committee is to advise the Government, and that no Government Department exercises any control over them. Now we know that when they come to a decision it may be delayed for weeks and months while negotiations go on with foreign countries dealing perhaps with industries which had no relation whatever to the industry which has been the subject of the recommendation.
I want to know when this recommendation was made. Was it this year; since Christmas? I was under the impression the other day that the Board of Trade were waiting for the recommendation of the Advisory Committee. I want to know why workpeople should be thrown out of work, as in this case, and why this industry should be sacrificed in the supposed interests of other work-people? Is it a question of the greatest goods to the greatest number. The fabric glove industry is practically destroyed in this country. Only one or two little factories are operating at all, and only a minute fraction of those employed a few years ago are now in employment.
It is only in one special line, fabric gloves made from artificial silk that any business at all is done. This industry had protection under the Abnormal Importation Duties Act, because there was an abnormal flood of dumped goods into this country. The position in January was worse than it was 12 or 13 months ago. In January, 107,000 dozen fabric gloves were imported from abroad, and in one case an order has been placed by a firm of wholesale glove buyers in London for the purchase of 24,000 dozen simplex cotton gloves in a single line which had been bought by a firm in America. They were sent to this country because there was no demand for them in New York, and were sold at 7s. 6d. per dozen pairs, which is about half the price of the cost of production in Saxony and about one-third of what they would cost to produce in this country.
There is every evidence therefore, that as far as the abnormal importation of dumped goods is concerned, the position is worse now than when there was a 50 per cent. duty. The condition of the industry is deplorable. The industry is practically wiped out. There were considerations that related to Lancashire yarn. Now, far from Lancashire yarn being used in the production of these Saxony fabric gloves, the yarn that is being used in Germany is almost exclusively German-spun cotton yarn, which is very much cheaper than anything which could be imported from Lancashire.
I want to know when this recommendation was made, and with what country these negotiations are taking place. If the Minister cannot tell us that, let him tell us whether the negotiations relate to any industry connected with glove-making. The industry in this country lately employed 1,000 hands, at another time 2,000 hands, and if we made here all the fabric gloves that we use it would employ 6,000 hands. Is the Minister sure that in keeping us waiting until the industry is finally destroyed, for some hypothetical advantage we shall get for some other industry, he is not grasping at the shadow and dropping the bone?
11.12 p.m.
Mr. HALES: I want to put before the House the very desperate condition of the pottery industry of North Stafford
510
shire. To a large extent the pottery industry is affected similarly to the glove industry, inasmuch as the Abnormal Import Duties Act resulted in a duty of 50 per cent. From that moment a new era of prosperity dawned on the district. Factories were employed on full time, more hands were engaged and machinery was ordered for the increase of business which rapidly came in. Then, to the consternation of the district, the Advisory Committee was appointed. It adopted a course which to every business mind seemed amazing. Instead of allowing the existing duties to remain until they had had an opportunity of going into matters in detail, and seeing whether the duties were ample or insufficient, they adopted the course of making a 20 per cent. datum line, raising the duty by 10 per cent. up to 20 per cent., and reducing the 50 per cent. to that 20 per cent. level.
The results were disastrous. Immediately the new duties came into force many orders from the Continent and home buyers were cancelled, and to-day in Staffordshire you can see thousands and thousands of tea sets lying unsaleable in the warehouses.
I am very pleased indeed to find that there is some possibility of the duties being enhanced. After 10 months of weary waiting, during which time the whole district has been on tenter hooks, not knowing what was to happen, we find that after a recommendation has been made which means the enhancement of the existing duties, we are told that for some mysterious reason of international bargaining the duties are not to be divulged, and we are still in uncertainty. I demand on behalf of the potters and manufacturers in North Staffordshire that we should not be victimised, that this industry should not be made a counter in some bargaining business abroad and brought to the verge of ruin. The situation is desperate, and I hope that the Government will see the importance, at this time, when everybody is asking for more employment, of not taking away the livelihood of these people, who have been waiting for 10 long months for the restoration of their prosperity. I hope the Government will at once carry out what the committee have advised.
11.16 p.m.
Mr. HOLDSWORTH: To those of us who never believed in tariffs as a bargaining power, some of the statements made during the last two or three weeks by different Ministers have been very interesting. Only a week ago, the Chancellor of the Exchequer referred to the use of tariffs as a bargaining weapon. This afternoon, the Lord President of the Council made the point that, if the world was to recover, there must be a lowering of tariff barriers. The Prime Minister last week said that at the World Economic Conference the opportunity would be taken of pressing home the necessity for lowering tariff barriers, and that our tariff would be used to that end. Members of the Conservative party have told us repeatedly that the purpose of placing tariffs on the Statute Book was that they should be used to bring in Free Trade throughout the world. We desire to impress that point of view on the Minister to-night. All these questions that are being raised show how little sincerity there is in many of the statements about the use of tariffs as a bargaining weapon. But I assure the Minister that so long as tariffs are used, in order to restore world trade, we shall give them every support in our power. We would like the Minister to-night to reassure us that the statements of the Prime Minister, the Chancellor of the Exchequer and the Lord President of the Council can be accepted as positive proof of the intention of the Government to use tariffs and promote freedom of trade among all the nations of the world.
11.19 p.m.
Sir FRANK SANDERSON: It was not my intention to take part in this Debate but the point raised by the hon. Member for Barnstaple (Sir B. Peto) is so important that I would like to mention the case of the duty upon linseed in this connection. A few weeks ago I raised the question of the import duty upon linseed and the seriousness of its effects. I pointed out that the result would be that we should be inundated with linseed oil from abroad and what I then intimated has proved correct. During December and January no less than 5,000 tons of linseed oil—
Sir B. PETO: May I make an appeal to my hon. Friend? The point that I
512
raised has nothing to do with the question of linseed oil and it is unfair when a question has been raised on the Adjournment that the Minister should not be given time to reply.
Sir F. SANDERSON: I was under the impression that my hon. Friend's point was in regard to delay both by the Treasury and by the Advisory Committee in coming to a decision in regard to import duties. If I am wrong, I will give way.
11.20 p.m.
Lieut.-Colonel COLVILLE (Secretary, Overseas Trade Department): I am glad the hon. Baronet the Member for Barnstaple (Sir B. Peto) has raised this question, because it gives me an apportunity of dealing with a point of importance, which refers not only to fabric gloves, but to the general position of industry in this country, in relation to reports from the Import Duties Advisory Committee and commercial negotiations. The word "hypothetical" has been used tonight, but I can assure hon. Members that there is no question of jeopardising industries in this country in order to obtain hypothetical benefits. It is recognised that we are in this country, and have been for many years, the greatest individual market in the world for foreign goods, and that we are entitled to use our bargaining power, and the argument it has given us, in our discussions with other nations; in other words, that the British tariff is not only for the purpose of giving stability and strength to our industries internally, but that we should be neglecting our duty if we did not make use of it also, as far as we can, in order to obtain better opportunities for the United Kingdom export trade.
The position is that the Import Duties Advisory Committee make reports based upon their views as to the need of industries in this country for Protection, in order to enable them to compete in the home market. That is the function of the Advisory Committee, which they carry out independently, as hon. Members know, and they make their report. It is not their function to consider the repercussions which their recommendations may have on negotiations which may be in progress, or immediately pending, with foreign countries, but His Majesty's Govern-

513
ment must clearly retain the right to take into account these wider questions when they decide whether or not to publish or to put into force the recommendations of the Advisory Committee. Let me explain the reason for that. Publication of a negative report, a report saying there was to be a decrease of duty, at a particular juncture might very well weaken our hands in negotiation, while equally action on a positive report, to increase a duty, at a particular juncture might have an effect on current negotiations which would damage British trade generally out of all proportion to the value of the duty to the particular trade concerned. That is a consideration which His Majesty's Government must have before them in dealing with the question.
My hon. Friend raised, very properly, the point, Who takes this responsibility, when the Import. Duties Advisory Committee have made their report to the Treasury, of that report not being immediately acted upon? I answer that by saying that the Government take that responsibility. They must do so, and they must do it with the knowledge, which only they have, of the reactions which this would have on trade as a whole. Therefore, we do not in any way seek to shirk the responsibility of delaying, in a particular case, the action recommended by the Committee, or of delaying publication of their report. I was asked the specific question, which I think I can answer, in relation to fabric gloves, When did the Treasury receive the report from the Advisory Committee? I find that in that case the report was received on 26th January. It was published in the Press later after consideration by the Government, and there was a delay.
Mr. HALES: Can the hon. and gallant Gentleman say anything about pottery?
Lieut.-Colonel COLVILLE: I cannot answer that without notice. In the case of fabric gloves I ascertained the position because it was on that particular matter that the hon. Baronet gave notice. It is obvious it is not possible to debate in the House the reasons which may have been in the minds of the Government in taking a decision on any particular kind of goods, for these reasons. Hon. Members who have been engaged in any
514
negotiations of any kind will realise that to disclose information might very well be an embarrassment to them, and, of course, anything that I shall say to-night would have very wide publicity. Therefore I will ask my hon. Friend not to press his point as to the particular countries to which this bas relation. The trades which he and the hon. Member for Hanley (Mr. Hales) have raised are very closely before the Government. In determining what action they will take, they are having full regard to the variations in duty in those trades. My hon. Friend the Member for Barnstaple has outlined, in the case of fabric gloves, the ups and downs of the movements in regard to duties over a long period of years, but we are well aware of that, and we have fully in mind the desire of the fabric glove industry to know what future is in front of them. I can assure the hon. Baronet that we have that fully in mind. I would also add that I hope that an early decision will be possible on this matter.
My hon. Friend the Member for Hanley also raised the question, in relation to pottery, of the variation of duty. I would make it plain that the abnormal import duties which were applied at the rate of 50 per cent. were for a specific purpose. They were applied to prevent forestalling while the tariff was being more carefully developed. Therefore, it was made plain at the time that it was not intended that it should be a continuing rate of duty, and the machinery which was set up in the form of the Import Duties Advisory Committee was for the purpose—and I think hon. Members will agree that it was wisely set up—of having an independent committee to examine all the aspects of the questions put in front of them. At this stage I can say no more except to assure the House of two things. One is that there will be no question of jeopardising British industries for the sake of hypothetical advantages. We shall make certain in any negotiations in which we are engaged that there must be real and definite advantages before any concessions can be given. But we shall also have in mind the value of the industries spoken of to-night from the point of view of employment. Lastly, I would like to say that from the time the Import Duties Advisory Committee makes its report His Majesty's Govern-

515
ment assumes full responsibility for action in regard to that report, both as to publication or the Order which is made as regards increase of duties.
Sir B. PETO: May I know whether these negotiations relate to industries which have any connection with the fabric glove industry or are totally different industries?
Lieut.-Colonel COLVILLE: I have answered that in a phrase which quite purposely was a little vague and that was "the repercussions of the result of action on the recommendation." I ask
516
my hon. Friend not to press me beyond that point. There are negotiations going on over a fairly wide range of goods, and the repercussions spoken of may not be taken to mean that a particular industry is being negotiated with, but it may be that the country with which we are dealing has a special interest in a trade, and that repercussions would have an effect. I hope my hon. Friend will not press me further.
Adjourned accordingly at Twenty-nine Minutes after Eleven o'Clock.

  CAPE-CAIRO AIR ROUTE.
  CAPE-CAIRO AIR ROUTE.
  IMPERIAL PREFERENCE (PALESTINE).
  IMPERIAL PREFERENCE (PALESTINE).
  ROYAL NAVY (SOUTH AFRICA).
  ROYAL NAVY (SOUTH AFRICA).
  UNEMPLOYMENT (TRANSITIONAL PAYMENTS).
  UNEMPLOYMENT (TRANSITIONAL PAYMENTS).
  AREA EXTENSION, CHEPPING WYCOMBE.
  AREA EXTENSION, CHEPPING WYCOMBE.
  CUSTOMS AND EXCISE DEPARTMENT (STAFF).
  CUSTOMS AND EXCISE DEPARTMENT (STAFF).
  CORONERS.
  CORONERS.
  INDIA (BUDGET).
  INDIA (BUDGET).
  BRITISH BROADCASTING CORPORATION.
  BRITISH BROADCASTING CORPORATION.
  RHINELAND (MRS. TEBBITT, CLAIM).
  RHINELAND (MRS. TEBBITT, CLAIM).

Preamble
The House met at three of the clock. The LORD CHANCELLOR on the Woolsack.
The Lord Brabourne—Sat first in Parliament after the death of his father.

LYME REGIS DISTRICT WATER BILL. [H.L.]
Read 2a
MINISTRY OF HEALTH PROVISIONAL ORDER (BUCKING HAM AND OXFORD) BILL.
Read 2a.

MINISTRY OF HEALTH PROVISIONAL ORDER (LEEK) BILL.
Read 2a.
MINISTRY OF HEALTH PROVISIONAL ORDER (RUGBY JOINT HOSPITAL DISTRICT) BILL.
Read 2a.
MINISTRY OF HEALTH PROVISIONAL ORDER (TAUNTON AND DISTRICT JOINT HOSPITAL DISTRICT) BILL.
Read 2a.
PUBLIC WORKS FACILITIES SCHEME (TORQUAY CORPORATION) CONFIRMATION BILL.
Read 3a, and passed.

LONDON PASSENGER TRANSPORT BILL.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR AIR (THE MARQUESS OF LONDONDERRY): My Lords, I would venture on this occasion to ask your Lordships' indulgence in the task which is before me to-day. I cannot plead that this is the first occasion on which I have addressed your Lordships, but I certainly feel that this is one of the most important occasions on which
898
I have had the privilege of addressing you. I think it may be convenient that in moving the Second Reading of the London Passenger Transport Bill, I should spend a few minutes at the outset upon the Parliamentary history of the Bill itself. It originated, as I think your Lordships are aware, as a Hybrid Bill, and in accordance with the Standing Orders of Parliament notice was given in the Gazette of the intention to promote the Bill in December, 1930. The Bill was duly introduced and read a second time in another place on the 23rd March, 1931, and again in accordance with the usual procedure applied to Hybrid Bills, was referred to a Joint Select Committee of both Houses. The Committee was presided over by Lord Lytton. After 35 days, during which many learned Counsel were heard, and transport and financial witnesses were examined, the Committee passed the Bill, with a number of important amendments. This was the position when Parliament rose for the summer recess in 1931.
The Bill, as it left the Joint Committee, was very largely an agreed measure. It embodied agreements with the various companies forming the great organisation of underground railways, omnibuses and tramways, popularly known as the Underground, which by themselves represent over 75 per cent. of the capital to be merged in the co-ordinated undertaking; with the London, Middlesex and Hertfordshire County Councils and the other local authorities owning tramways in the area; with the four main line companies; with the principal omnibus undertakings operating on the fringe of the area; and with the organisations representing the staffs of the undertakings to be transferred. Clauses had also been inserted to safeguard the interests of various statutory gas, water and electricity undertakers, while the interests of the manufacturers of rolling stock and plant had been protected by a drastic limitation of the Board's powers of manufacture.
When, in the autumn of that year, 1931, the National Government was formed, it was decided that having regard to the pressing nature of the problem with which the Bill deals, the large amount of effort and money which had been spent on it, and the unprecedented measure of

899
agreement. which it embodied as it emerged from the Joint. Committee, the Bill ought to be carried forward into the new Parliament. Both Houses of Parliament assented to the adoption of this course without a Division. But the pressure of business arising directly out of the financial crisis made it impossible to proceed further with the Bill during the first Session of the new Parliament, and the Bill was again carried over, by Resolutions of both Houses, to the present Session.
Meantime, however, the Government had not been idle in the matter. The Bill was overhauled with a view to the removal of any objectionable features still remaining after the thorough revision to which it had been subjected by the Joint Committee, and in July last a White Paper was issued indicating certain substantial further modifications which the Government proposed to ask Parliament to make in the Bill. Moreover, the late Minister of Transport (Mr. Pybus) with the full approval of the Government, had effected a settlement with the Metropolitan Railway Company, the principal parties affected who were still opposing the Bill. I am sure I am voicing your Lordships' opinion when I say how much we regret that my noble friend Lord Aberconway, for reasons which are too well known to us, is not able to be present to take part in this debate this afternoon. The details of this agreement were also included in the White Paper. These modifications and the terms of settlement with the Metropolitan Company were embodied in the Bill during the course of its passage in another place, and it is now my duty to recommend the Bill with these changes and additions to your Lordships' House.
So much for the history of the Bill; but the history of the problem with which it seeks to deal is very much longer, and some knowledge of that history is essential to a proper appreciation both of the problem and of the importance of finding a solution without further delay. Since the early part of the nineteenth century, numerous Royal Commissions, Select, Departmental and other Committees have considered the problems of London transport and have from time to time made innumerable specific recommendations, very few of which have so
900
far been carried out. To come to more recent days, between the years 1903 and 1920, no fewer than four bodies of inquiry investigated the subject. The Royal Commission on London Traffic reported in 1905; in 1913, a Select Committee of the House of Commons reported on motor traffic in the Metropolis; a Select Committee of the House of Commons reported on transport in the Metropolitan area in 1919; and in 1920 an Advisory Committee, appointed by the Minister of Transport, reported on London traffic.
While their Reports differed to some extent in their recommendations, they all contained common elements. These common elements were: firstly, that the transport services of the Metropolis could not be efficiently administered by any existing organisation of local or central Government; secondy, that they ought to be placed as far as possible under the control of a single authority; thirdly, that the single authority should be a small and expert body; and fourthly, that that authority should be empowered to control and co-ordinate in the public interest all passenger transport agencies in the Metropolis. In 1921, a Royal Commission was appointed under the Chairmanship of my noble friend Viscount Ullswater to enquire and report what, if any, alterations were needed in the local government of the administrative County of London and the surrounding districts. The inquiry of the Commission extended to the Metropolitan Police District and the City of London (which areas taken together are known as "Greater London") and embraced the question of transport services in these areas. They reported in 1923 and recommended, inter alia, the setting up of a small statutory Advisory Committee to be called the London and Home Counties Traffic Advisory Committee to advise the appropriate Ministers upon questions affecting London and a large surrounding area in relation to transport, town planning, housing and main drainage.
The Conservative Government of the time prepared a Bill providing for the setting up of an Advisory Committee on the lines suggested by the Ullswater Commission, but limiting the functions of the Committee to those connected with transport. But, before this Bill could be introduced, the first Labour Government

901
came into office. In March, 1924, as your Lordships will remember, the tramway-men in London came out on strike, as the result of the employers' refusal to grant them an increase in wages. The omnibus men ceased work in sympathy. The Minister of Labour (Mr. Shaw) appointed a Court of Inquiry into the cause and circumstances of the threatened stoppage of the tramway and omnibus services in and around London. The Court reported that a definite undertaking by the Government to introduce and press forward legislation placing the passenger traffic of the Metropolitan area under some co-ordinated control, afforded in their view, the basis, and the only one at that time suggested, for re-opening negotiations between the parties. As a resift the London Traffic Act was passed in August, 1924.
Following the recommendations of the Ullswater Commission the London and Rome Counties Traffic Advisory Committee set up under that Act were charged with the duty of considering and reporting to the Minister of Transport on: (1) the co-ordination of all or any of the various forms of transport services and co-operation between the persons operating the same or different forms of transport with a view to the combined operation of all meant of transport in the London Traffic Area in the best interests of the public; and (2) new transport systems or developments or extensions of existing systems proposed to be established or carried out within the London Traffic Area. Soon after its appointment, the Advisory Committee instituted a series of public inquiries with a view to ascertaining the main defects in the then existing means of providing transport for the millions of persons who required to travel daily between their work places in Central London and their homes in the outer parts of the area, and the means by which these defects could best be remedied. Their inquiries were held over a protracted period, during which they collected a large amount of evidence from local authorities and members of the public, and also from the railway, tramway and omnibus companies. After reviewing the whole of the evidence, the Committee submitted a Report to the Minister in 1927, which embodied recommendations for a "scheme for the co-ordination of passenger transport facilities in the London
902
Traffic Area." This Report has become known as the "Blue Report," with which a great many of your Lordships are familiar.
An essential feature of the scheme proposed in the Blue Report was the establishment of a Common Fund to embrace all the local passenger transport undertakings operating in the London Traffic Area. The Committee fully realised that this would involve compulsory powers, as will be gathered from an extract I shall give from their Report. This is in the Blue Report:
"Whilst it is hoped that this will be effected by agreement, such powers must be conferred on the appropriate authority by Parliament as would ensure that all the undertakings concerned become parties to the Common Fund."
The passage of the London Traffic Act, so far as the major problems of London passenger transport are concerned, was obviously merely a preliminary step to the solution of these problems and merely ensured that they would be considered and reported upon by a statutory body set up for the purpose. The Advisory Committee themselves, in the introductory paragraph of the Blue Report state:
" Experience has shown that the powers conferred upon the Minister by the London Traffic Act, 1924, are quite inadequate as a means of eliminating the existing wasteful, uneconomical and unnecessary competition between the several transport agencies."
The scheme could not, therefore, be put into operation without further legislation, as the Act of 1924 conferred no powers upon the Minister to bring any part of such a scheme into operation.
The Bill which I have the honour to recommend to your Lordships to-day is not only the logical sequence of the London Traffic Act, but also the realisation of the scheme contained in the Blue Report. The existing public means of passenger transport within the area covered by the Bill consists of railways (surface, subway and tube), tramways, omnibuses and motor coaches. The ownership of these various agencies is distributed over seventeen railway undertakings, seventeen tramways and sixty-three omnibus undertakings, exclusive of a large number of small omnibus undertakings operating outside the Metropolitan Police District, but inside the London Passenger Transport Area.

903
Finally, we have the motor coaches, comprising the Green Lines coaches and other companies operating motor coaches, which pick up and set down passengers in the London Passenger Transport Area. I have given the details of all these agencies to show the imperative need for the Bill which I am venturing to put before your Lordships this afternoon.
The establishment in 1915 under the sanction of Parliament of a Common Fund (to which the London General Omnibus Company and the four railway companies controlled by the Underground Company are parties) has enabled these companies to be worked as one unit, to pool their resources and to effect considerable economies without loss of efficiency. The Common Fund has furthermore enabled the companies concerned to provide facilities which could not otherwise be provided. A notable example of this is the reconstruction within the past few years of the City and South London Railway, a work which could not have been undertaken without substantial financial assistance from the Government or other external source, but for the existence of the Common Fund. Even with the existence of the Common Fund the companies were unable to proceed without a guarantee from the Government under the Trades Facilities Acts in respect of the interest and principal of the capital raised for this work. More recently, an extension of the Piccadilly Railway northwards from Finsbury Park to Cockfosters has been undertaken, but only with the assistance of a substantial grant from the Government of 3 per cent. on the capital involved for a period of fifteen years. The Common Fund has also considerably facilitated a re-arrangement of the omnibus services of the London General Omnibus Company and associated omnibus companies, so that they should be complementary to, and not competitive with, the railway services controlled by the group.
In spite of the amalgamation of the main line railways under the Railways Act, 1921, the measure of unified management of local railways, tramways and omnibuses achieved by the Underground group, and the "through running" of other working agreements between various tramway undertakings, there still remain, even if we regard the Under-
904
ground group of companies as merged into one, which, strictly speaking, is not the case, over one hundred separate managements concerned with the operation of means of passenger transport in the London Passenger Transport Area. Each of these, of course, has its own separate financial and other interests, frequently in conflict with the interests of one or more of the other passenger transport undertakings.
Notwithstanding the multiplicity of services provided by the several managements a series of public inquiries, held by the London and Home Counties Traffic Advisory Committee in 1925 and 1926, clearly established that the travelling0 facilities between Central London on the one hand, and North, North East, East and South East London and adjacent areas on the other, were quite inadequate, and that a considerable proportion of the population who require to travel to and from their place of work do so under crowded, uncomfortable and inconvenient conditions. In the words of Counsel who appeared for the London and North Eastern and London, Midland and Scottish Railways at these public inquiries:
" There can be no question that at the present time more persons are seeking to travel in rush hours in and out of London than, speaking broadly, there are facilities either on the surface or in railway trains to carry them."
Apart from the extension of the Piccadilly Railway northwards from Finsbury Park to Cockfosters, a work which has been partly completed, no additional facilities or improvements commensurate with the needs of the situation have since been provided in the areas covered by these inquiries.
The urgently required improvements in the travelling facilities in and out of London can only be adequately provided by further electrification of the suburban railways of the main line companies, extensions of the Underground railways and other works calculated to increase the carrying capacity of the railways. Additional omnibuses and tramcars, while adding to the congestion and danger of the streets, will provide no solution of the difficulty. In the Reports based on the public inquiries referred to, the London Traffic Advisory Committee made a number of suggestions which, if carried out, would effect substantial im-

905
provements in the railway services. The companies concerned admitted the need for the improvements suggested by the Committee, but were practically unanimous in contending that, so long as the existing competitive conditions continued, they could not contemplate in-caring the capital expenditure involved without substantial assistance from the taxpayer or the ratepayer. In the opinion of the Traffic Advisory Committee, an opinion which is shared by those who have most experience in the matter, given unification there is enough money in the London passenger traffic not only to render the undertakings self-supporting but to provide the necessary credit and revenue to support a policy of development and expansion to meet the needs of the travelling public without either State or rate aid.
My Lords, unified ownership is necessary to ensure that the existing competition between the various forms of passenger transport shall disappear and be replaced by a co-ordinated system. under which railways, tramways, omnibuses and motor coaches shall each be operated so as to provide the particular service to which it is best adapted having regard to the public needs. At present the London tramways, both municipally and company owned, are, to some extent, protected against excessive omnibus competition by limitations placed on such competition by the Minister of Transport under the London Traffic Act, 1924. This form of regulation, as your Lordships will recognise, is unsatisfactory owing to its inflexibility. It prevents the omnibus services being really adapted to meet public requirements, and helps to maintain tramways in operation on routes which could be more economically and conveniently served by omnibuses with advantage to the public.
The control established over motor coaches under the Road Traffic Act, 1930, is open to the same objection and affords no real solution to the general problem of London passenger transport. Even with the existing control and regulation of omnibuses and motor coaches, large numbers of tramcars and omnibuses are being run almost empty at certain times of the day, and empty seats are in the long run paid fm by the public. Only under unified ownership can overlapping, wasteful, and uneconomic services be
906
eliminated, and the maximum opportunities afforded to the public for through services, through bookings and interchange between one service arid another, without the need for cumbersome and expensive divisions of receipts between a number of separate undertakings. The fullest use of the existing means of transport can only be made when the obstacles of separate ownerships and competitive interests have been removed. The substantial economics effected under the unified management of the existing Common Fund companies can be extended to the whole field of London local passenger transport. The basis of the credit of London passenger transport will be considerably widened, and raising of fresh capital on reasonable terms for new developments will thereby be considerably facilitated.
The object of this Bill is to provide for the efficient conduct of the vast and intricate network of passenger transport in. the London area, for the progressive development of existing travelling facilities, and for the provision of new or improved facilities. As I have endeavoured to show, the problem of internal communication in the inner part of the area, and of transporting the millions who must journey daily between their work in the City and the West End and their homes in the dormitories which surround the Metropolis, is one unique in itself, colossal in its dimensions and unparalleled in its complexities. It has been the subject of anxious consideration by successive Governments and Committees for very many years. It concerns intimately the comfort and health of a vast population of some ten millions of people. It concerns the congestion and safety of our streets, and also the great problems of housing. It concerns the security of the millions of capital sunk in the provision of railways and other means of transport in the area. It is, in short, an essential public service, to the efficiency and stability of which no Government of this country can remain indifferent.
This Bill seeks to ensure that the needs of the travelling public in the area shall be the care of a body charged with the duty of providing for these needs, by a properly co-ordinated system of transport —a system which, while avoiding unnecessary or wasteful competitive services, shall be constantly concerned to

907
extend and improve the facilities available, as and when required by the most efficient and convenient means. To this end the Bill proposes the unification of the ownership and management of existing means of public passenger transport in the hands of a Board of seven persons. For the first time there will be a body whose statutory duty it shall be to provide adequate passenger transport facilities throughout this densely populated area. This Board will be a, public authority, of a type already familiar in the legislation of this country in connection with other essential public services. I need only mention the Metropolitan Water Board, the Port of London Authority, and the Central Electricity Board, as bodies of the type which we have in mind.
What were the alternatives? There is no one local authority with jurisdiction over even the greater part of the area involved. The number of local authorities in the area, nearly 200, precludes the possibility of any sort of joint board of local authorities. Nor is it clear that a body of this kind, even if it were practicable, would be possessed of the qualifications necessary to the successful conduct of so intricate a business as London passenger transport. On the other hand, we had to take into consideration that there are in the area no fewer than fourteen municipal tramway undertakings, some of them—and notably that of the London County Council—of great importance, working side by side with a variety of private undertakings. It would not be practicable to hand these great public undertakings over to the ownership or control of a private association. Clearly, then, a new public Board, of the type which the Bill proposes to establish, is the only practicable solution.
Before proceeding to a more detailed exposition of the proposals of the Bill, it may be to the convenience of your Lordships that I should briefly summarise the means by which it is sought in the Bill to provide for bringing into London passenger transport that unity of direction and outlook which we feel to be a fundamental condition of its ability in future to perform efficiently its essential service to the public. The Bill provides for the establishment of a London Passenger Transport Board; for the transfer of existing passenger transport under-
908
takings to the Board; for co-ordination of the Board's services with those of the main line railways; for safeguards for the public in the matters of fares and facilities. The Bill is a long one; it contains 107 clauses and sixteen Schedules; much of it is concerned with the necessary machinery involved in a unification of so many different and differing interests, and your Lordships will not desire me to embark upon a detailed exposition of the clauses and Schedules, a course more proper to the Committee stage of the Bill. I propose, therefore, to confine myself to the more important features of the Bill.
I come now to the constitution and general duty of the Board. Part I of the Bill is concerned with the constitution and general powers of the London Passenger Transport Board. The Bill in its original form provided for the appointment of the members of the Board by the Minister of Transport. The proposal to vest this power in a Minister, with all the risks of political influence entering into the appointments which it involved, was one of the principal criticisms directed against the Bill by the Conservative Party, and the vesting of the power of appointment in a body of five Appointing Trustees, instead of in the Minister, is one of the most important alterations which the present Government have secured in the Bill. Provision is therefore made for the appointment of the members of the London Passenger Transport Board by a body of Appointing Trustees consisting of the Chairman of the London County Council, a representative of the London and Home Counties Traffic Advisory Committee, the Chairman of the Committee of London Clearing Bankers, the President of the Law Society; and the President of the Institute of Chartered Accountants.
The five persons to constitute the Appointing Trustees have been selected after very careful consideration as being persons who, with the exception of the representative of the Advisory Committee, hold important office in local affairs or in a high professional capacity. Such a body constitutes at once a guarantee that the selection of the Board will be removed from the political arena and from any improper influences, and that the persons selected will be such as

909
will show due regard, on the one hand to the interests of the travelling public, and on the other hand to the interests of the stockholders, and will ensure the conduct of the Board's affairs on sound financial lines. The Appointing Trustees are to make their appointments after consultation with such persons as they think fit.
The members of the Board are to be seven in number, and are to be persons who have had wide experience and have shown capacity in transport, industrial, commercial or financial matters, or in the conduct of public affairs, and, in the case of two members, must have had not less than six years' experience in local government within the London Passenger Transport Area. A member of the Board is to hold office for not less than three or more than seven years, as may be determined by toe Appointing Trustees at the time of the appointment. A Board so constituted can be confidently expected to approach its task with businesslike efficiency and with a full appreciation of the needs and wishes of the inhabitants of the area for which it will be responsible. We have thought it desirable to leave certain matters, such as the fixing of the salaries of members of the Board and the removal of members for inability or misbehaviour, to the Minister, but he is to act only after consulting the Appointing Trustees. I have already described the general duty of the Board which is found in Clause 3 of the Bill, and your Lordships will note that, in addition to their general duty to the public, the Board is expressly required to conduct its undertaking in such a way as to secure that its revenues are sufficient to meet all charges, including interest on its stocks. We regard it as an essential principle of the Bill that the Board is to be financially self-supporting without State or rate aid.
Part II of the Bill contains a number of its most important provisions. Here, and in the relevant Schedules, will be found the names of the undertakings to be transferred to the Board, the terms of transfer, where already agreed, and the provisions for fixing those terms in other cases. It is, of course, an assential feature of any effective scheme of coordination that there shall be a measure of compulsion. I have already shown to your Lordships that the scheme of the Blue Report rested on compulsion, and
910
indeed expressly provided for it. Compulsory powers are a feature of innumerable Private Bills, which every year come before your Lordship's House, as well as of public legislation. The word "compulsion" is indeed something of a bogey; it is of the essence of the organisation of the State. In this case, however, agreement has been reached with the owners of over 95 per cent. of the capital involved, and these agreements have been embodied in the Bill. In those cases in which no agreement has been reached, the terms of transfer will be settled by an Arbitral Tribunal of three persons appointed by the Lord Chancellor, one a person of legal experience, one of experience in business and one of experience in finance.
Clause 14 of the Bill contains the instructions to the Arbitration Tribunal as to the basis on which they are to determine the consideration payable for undertakings for which terms are not embodied in the Bill. This clause was drafted on behalf of the Joint Committee itself after very prolonged discussion between the parties, and after the Committee had expressed themselves as not satisfied with the solutions propounded on either side. The clause directs the arbitrators to secure a fair and equitable standard of consideration as between the different undertakings, due regard being had to the terms already settled and embodied in the Bill.
It is the general aim of the Bill to ensure co-ordination by concentrating in the Board the ownership and management of passenger transport undertakings operating in the area for which it is responsible. The only exceptions are: (a) The main line railways whose suburban lines cannot be severed from the main lines proper; (b) long-distance coach services between places in the area and places outside; (c) coach and omnibus services operating wholly outside the central area (the Metropolitan Police District and the City of London) to which the provisions of the London Traffic Act, 1924, respecting the regulation of omnibus services, apply. I shall deal later on with the position of these three classes of undertaking proposed under the Bill.
The undertakings to be acquired are set out in the Second Schedule to the Bill. They are: (1) The Underground' group of railways, tramways and omni-

911
bus undertakings; (2) the Metropolitan Railway; (3) all the local authority tramways in the area; (4) all the regular short-stage omnibuses operating wholly or partly within the central area. The terms of acquisition agreed with the Underground and Metropolitan companies are embodied in the Third and Fourth Schedules respectively and confirmed by Clause 7. Terms have also been agreed with the London, Middlesex and Hertfordshire County Councils for the acquisition of their respective tramway undertakings in return for an issue of a special prior charge stock, called "L.A." stock, to an amount representing the outstanding debts of the undertakings. These are set out in the Sixth Schedule and confirmed by Clause 9. In all these cases, the transfer is to be effected, with some trivial exceptions, by exchange or issue of stock.
As regards undertakings with whom the terms of transfer have not been agreed, it is provided (in accordance with the desire of the owners) that the consideration payable to the Tillings undertakings shall be in stock and that to the independent omnibus undertakings in cash or stock at their option. Thus one of the most serious objections to the Bill in its original form—namely, that the owners were being compelled to sell their undertakings in exchange for stock and without the option of payment in cash—has ceased to be valid; for under the Bill as it now stands none of the parties will be compelled to sell their undertakings otherwise than for cash, unless they have already agreed the consideration in stock or have expressed a preference for payment in stock.
The remaining local authority undertakings, with the exception of those of Bexley and Ilford, will be acquired in return for the payment by the Board from time to time of the sums necessary to enable the authority concerned to settle its outstanding tramway debt charges as they fall due, after taking into account the sums available in existing sinking funds. The effect will be to relieve the ratepayers of these authorities of all further charges in respect of their tramway undertakings and the proposal has been accepted by the authorities to which it applies, though the amount to be payable will have to be agreed by the Board, or failing agreement, settled by the Arbitration Tribunal.
912
Those of your Lordships who are inclined to regard trams as an anachronism and an obstruction may perhaps be disposed to take the view that the terms on which the local authorities' tramways are to be acquired are unduly generous. But it must be remembered that electric trams still perform a valuable and even essential function in transporting great masses of people, particularly at the rush hours. The tramways of the London County Council alone carry nearly two million passengers a day, and there is at present no other means available of dealing with this vast traffic. Moreover, the authorities who provided these systems pledged their ratepayers' credit, with the authority of Parliament, in the interests of their own public, and of a public wider than that resident within their own boundaries.
While the undertakings have not all been equally prosperous, and while some have been a charge on the rates, it does not seem unreasonable that, when the local ratepayers are required to hand over their undertakings into the hands of a new authority, they should be relieved of their outstanding liabilities. In all the circumstances, the outstanding debt is considered a fair measure of the value of the tramways, viewed not only on the basis of their earning power but also having regard to the cost of supplying any practicable alternative means of transport. I may perhaps remark, in passing, that the question of whether the tramways in a co-ordinated system of transport are obsolete is one on which the Board will require to make its own decision. A clause is included in the Bill to facilitate the abandonment of any tramways which the Board considers should be replaced by other means of transport. The Board will obviously be in a better position to deal with the question of obsolescence than are the existing owners of the tramways.
May I now turn for a few minutes to the settlements set out in the Bill with the Underground group and the Metropolitan Railway Company? I do not propose to go into these settlements at great length. The terms of acquisition of the Underground undertakings will be found in the Third Schedule. Broadly speaking "A" stock, yielding an equivalent income, is to be issued in exchange for the well secured debenture stocks of the companies, and, similarly, "B"

913
stock is to be issued in exchange for preference stocks. Many of these stocks are already trustee securities. The "C" stock of the Board will replace the existing ordinary stocks and, in one or two eases, preference stocks, on which the companies concerned have not been able to pay a dividend.
The Common Fund companies—namely, the London Electric, Metropolitan District, Central London, and City and South London Railway Companies, and the London General Omnibus Company —who pool their receipts under special statutory authority granted by Parliament in 1915, were necessarily and properly treated as a single entity, operating both railways and omnibuses as a single system. The consideration in "C" stock was assessed for the joint under-taking as a whole, and not for five separate undertakings. The consideration was then apportioned among the five companies on the same basis as these companies share in the Common Fund. Thus it comes about that the London General Omnibus Company, which takes a double share from the receipts available in the Fund, will receive quite as much "C" stock for £100 of ordinary capital as the tube railways. This does not, however, affect the total amount of the consideration for the joint undertaking of the companies, but only its distribution within the group. Furthermore, those who seek to express the consideration to be paid for the Underground Company in terms of so many years purchase of profits ignore the fact that the consideration for the equity of these undertakings is a stock with a variable rate of return dependent on earnings. The expression of the consideration in terms of a capitalisation of profit is only appropriate when the consideration is paid in cash or entirely in fixed interest bearing securities.
The tramway companies are not parties to the Common Fund and the rates of exchange reflect the relative security of the prior charges and, in the case of stocks on which no dividends have been paid in recent years, had regard to the market prices of such stocks and to factors affecting their future prospects. These arrangements were reached after the fullest investigation and, we believe, are fair both to the public and to the interests concerned. Similar principles
914
were adopted in the settlement with the Metropolitan Railway, which will be found in the Fourth Schedule and on which Sir William McLintock also advised.
There is, however, a special feature about this settlement which I should perhaps explain. As an alternative to taking £67 10s. of "C" stock for every £100 nominal of their present holding, the Metropolitan ordinary stock holders, together with the holders of certain convertible preference stocks, will have the option of taking, in lieu of "C" stock, what is called an "assented" stock carrying a guarantee from the main lines —not from the Board. The main lines will guarantee a return of 3¼ per cent. for 15 years, and of 3 per cent. for another 10 years, on every £100 nominal of existing Metropolitan stock coming within the terms of the arrangements. The guarantee is, however, subject to termination at an earlier date than the expiration of 25 years in certain contingencies. It may be asked why the main lines thought it worth their while to give such a guarantee. While recognising that the Metropolitan Railway in some respects occupied a special position, the main lines always took the view that the Metropolitan Company should be fully merged in the undertaking of the Board, and not left merely a separate party to the pool. An additional and separate interest, if retained, would almost inevitably have complicated and delayed all questions of development. Its removal, and the opportunity for more far-reaching economies to be secured by amalgamation, give greater security and stability to the fabric of London transport as a whole.
There will follow substantial advantages to the main lines as well as the Board, whose interests will, if this Bill becomes law, be largely mutual instead of conflicting as they can be said to be now. In providing this solution, which cannot in any way prejudice the public, and which must assist both themselves and the Board, the main lines have not acted imprudently. They have, on the contrary, taken a broad and statesmanlike view of the matter, in their belief that this Bill is necessary if London passenger transport is to be put on a sound basis. I may perhaps give your Lordships some figures to illustrate the scope of the companies' liability under the

915
guarantee. Supposing that all existing stockholders entitled to do so took the assented stock, then there would actually be a margin in favour of the main lines jointly of about £10,000 when the "C" stock paid 5 per cent., and a call of somewhat about £105,000 to bb met if, for example, the "C" stock paid only 3 per cent. This liability would naturally be distributed among the main lines in their pool proportions, and your Lordships will see how limited the arrangement is both in scope and in duration.
This brings me to the next point with which I wish to deal, the scheme for the pooling of receipts of the Board and the main line companies from their suburban traffic, which will he found in Clause 31 and the Tenth Schedule. It was recognised by the Government, from the first, that any scheme of co-ordination of London passenger transport must take account of the position of the suburban traffic of the main line companies. It was agreed on all sides that there were insuperable difficulties in attempting to effect a physical severance of the suburban lines from the remainder of the main line systems, and that they must therefore be left out of any scheme of common ownership. The Bill, as originally presented, proposed the establishment of a Standing Joint Committee of the Board and the four amalgamated companies, with the duty of considering proposals for co-operation between the parties and other matters of common interests. The parties were to be empowered to carry out agreements and to adopt a scheme for the pooling of their traffic receipts.
The attitude of the main lines was that they were not in any way opposed to the principles of co-ordination as embodied in the Bill, provided that adequate provision was made for bringing their suburban traffic into the scheme, and that their interests were in other respects safeguarded. They expressed dissatisfaction with the provisions of the Bill as presented, on the ground that they were merely enabling, and did not ensure that there would in fact be a pooling of receipts between the Board and the main lines. While the Bill was before the Joint Committee a scheme of pooling was evolved which was embodied in the Bill and was made obligatory upon the parties. As a result, the opposition of
916
the main lines to the Bill was withdrawn, and they have since strongly supported the measure.
The Bill, in its present state, guarantees the closest co-operation between the Board and the main line companies. Clause 31 provides for the setting up of a Standing Joint Committee of eight, consisting of four representatives of the Board and of one representative from each of the four amalgamated companies. This Joint Committee is charged with the duty of considering and reporting to the parties upon proposals for co-operation between them in the provision or working of services, including such matters as through bookings, running powers, interavailability of tickets and apportionment of receipts. Upon a. report by the Joint Committee, the Board or the amalgamated companies concerned may enter into agreements, and may apply their funds to the provision of facilities, and any of them may assist the others financially in the provisions of such facilities. Under the new arrangement, the main line companies will be enabled to -embark on the further electrification of their suburban lines and to carry out other necessary improvements which I think it will be agreed are long overdue.
I have already shown that the framers of the Bill in its present form have taken considerable pains to ensure that the Board itself shall be so constituted as to be in direct touch with local opinion, as expressed by the local authorities of the area. This in itself will afford a guarantee that the. needs and interests of the travelling public will not be subordinated. But the Bill provides other safeguards, both as to the level of fares charged and as to the facilities to be provided in the area, not only by the Board, but also by the main lines. Clauses 25 to 29 are concerned with the fares and charges which the Board will be authorised to make to the public. At the present moment there is no uniform procedure or jurisdiction in relation to the fares which may be charged by the various transport agencies in London. A proper co-ordination requires that all the varying controls and jurisdictions at present existing should be merged into one jurisdiction applicable to all the various forms of transport operated by the Board.

917
The Railway Rates Tribunal was selected as the most expert and suitable body in which to vest jurisdiction. For the purpose of exercising this jurisdiction, and indeed all other jurisdictions conferred on it by the Bill, the Railway Rates Tribunal is to be reconstituted by the addition of two members. One is to be a person of experience in matters relating to London local government and is to be appointed by the Minister, after consultation with the London and Home Counties Traffic Advisory Committee. The second is to be a person of experience in financial matters and is also to be appointed by the Minister. At the same time it is proposed to confer on the local authorities in the London Passenger Transport Area an entirely new right to make representations with a view to the improvement of services or facilities or the prevention of the withdrawal of Existing facilities. For the first time the local authorities will be able to bring effective pressure to bear on the operating body in this matter. Originally, jurisdiction in this matter was to have been conferred on the Minister of Transport, but this is another of the cases where powers of interference by the Minister have been expunged from the Bill, and it is now proposed that this jurisdiction shall be vested in the Railway Rates Tribunal.
Where an application is made, the Tribunal may make an order prohibiting the withdrawal or reduction of the service or facility in question or permitting such withdrawal or reduction subject to conditions, as for example, the provision of alternative facilities, or may require the Board to provide a new or improved service or facility. It may be noted here that there are provisions in Clause 59 which put on the Advisory Committee (which will consist predominantly of representatives of the local authorities) the duty of making representations to the Board with respect to any matter connected with the services or facilities provided by the Board in the London Traffic Area and for joint meetings of the Committee and the Board, or of their representatives, at least three times a year, to facilitate interchange of views on any such. representations or other matters of common interest. This may in practice prove the course normally
918
followed, in preference to recourse to the Rates Tribunal.
It remains to be added that the main line companies have agreed to come under a similar jurisdiction in regard to the charges to be made, and the facilities to be provided, in connection with their suburban services. Thus the local authorities will obtain very much more effective rights than they have ever had of appeal in relation to charges made or facilities provided by the main line companies. The Tribunal must not, however, make an order on any of the companies which would prejudice its financial position, or would necessitate the raising of additional capital, without its consent, or involve the promotion of legislation.
In connection with the constitution of the proposed London Passenger Transport Board it became necessary to consider the area for which it was to be held primarily responsible for the provision of adequate travelling facilities. The extent of the area was in some respects predetermined by the operations of the various London passenger transport agencies to be transferred to the Board. The growth and expansion of dormitory towns and suburbs around London has necessitated the continual expansion of the services necessary to carry the working population of London to and from their homes. In the Bill as introduced, the area for which the Board was to be responsible and within which it was to have a monopoly of local road transport services, was the London Traffic Area. During the proceedings before the Joint Committee Counsel who appeared on behalf of certain undertakers operating on the fringe of the London Traffic Area pointed out that the boundaries of that area were defined to accord with the boundaries of local authority areas, and that. in a number of respects these boundaries do not conform to the actual operations of the various undertakings providing road transport services.
After full discussion before the Joint Committee a new area was defined which is referred to in Clause 15 of the Bill as the London Passenger Transport Area. This area extends a few miles beyond the London Traffic Area on the North and South, but is well within that area on the East, and corresponds closely with the existing division of spheres of operation between the omnibus undertakings

919
which will be taken over by the Board and those which will remain outside. Consequential upon this change of area the exclusive right of the Board to run omnibus services was limited by Clause 16 of the Bill to what is termed the "Special Area," that is so much of the London Passenger Transport Area as lies within the London Traffic Area.
With regard to the exclusive rights conferred on the Board to provide services of stage and express carriages within the "Special Area," I may remark that this right does not preclude any operator of services from places outside the Board's Area from continuing such service to any part of the area, including Central London, so long as he does not both pick up and set down the same passenger within the "Special Area." He is thus precluded by the provisions from catering for traffic local to the "Special Area," unless he obtains the consent of the Board in writing. If consent is refused he may require the Board to take over his undertaking if it is mainly in the "Special Area," or may obtain compensation. The provisions conferring upon the Board the exclusive right of providing stage and express road services within the "Special Area" is an essential part of the scheme of the Bill as it would be impossible for the Board to discharge, fully and effectively, their duties of providing an adequate and properly co-ordinated system of passenger transport for the London Passenger Transport Area unless they were in a position to control and, if necessary, to manage the whole of such services within the "Special Area."
There remains one other clause in Part II of the Bill to which I should like to direct your Lordships' attention. It is Clause 19, which provides for the transfer to the Board of the powers obtained by the London County Council in 1904 to run services on the River Thames between Chiswick and Plum-stead. Originally the transfer of these powers was to be by agreement between the Board and the County Council, but by an amendment accepted by the Government (in agreement with the County Council) in another place, the transfer is to be mandatory and the Board is directed, as part of its general duty, to consider and take such measures as it thinks fit to utilise the river for the purposes of
920
passenger transport. If the Board decides not to provide a service itself it may make arrangements with private persons willing to provide such a service.
Opinions may differ as to the commercial possibilities of regular services of passenger boats on the London reaches of the river, but there are many who feel it a reproach that so little use is made of the fine highway provided by the river. No doubt many of your Lordships have been stirred by the eloquence with which Mr. A. P. Herbert has championed the cause of river omnibuses and are familiar with a certain punning allusion to the name of the late Minister. At any rate the matter will, if this Bill passes, again become one of practical politics and its possibilities will be assured of thorough investigation by a body in a position to give such services their proper place in the system of passenger transport in London. We shall move certain Amendments to this clause in Committee with a view to making it more effective for the purpose at which it aims.
Part III of the Bill is concerned with the borrowing powers to be conferred on the Board, the various classes of stock to be issued by it, and a number of incidental and subsidiary provisions. The Board will be authorised to borrow money for capital purposes up to certain limits and subject to regulations to be made by the Minister with the approval of the Treasury. The total amounts which the Board may borrow under the Act arc Set out. First, there is the amount of the consideration payable in cash for transfer of undertakings. This is, of course, a figure which can only be ascertained when the awards to be made by the Arbitration Tribunal have been completed. Then there is the amount (about £1,200,000) remaining unraised out of the sums which the Underground companies were authorised to raise by their Act of 1930. This Act authorised the construction of the tube extensions to Cockfosters and North-fields and other improvements which were the subject of a Government grant under the Development (Loan Guarantees and Grants) Act, 1929. The balance of such grants unpaid at the date of transfer will enure to the Board. And, thirdly, £10,000,000. Except in the case of money raised by the issue of "C" stock all borrowings must be re-

921
paid within ninety years of the date of borrowing.
Provision is made for the issue of five different classes of transport stock ranking in a certain order of priority. First, "A" stock. This is in the nature of a first debenture, and will be issued in exchange for the best secured debenture stocks and similar securities of the companies. In so far as it is issued in exchange for existing securities of transferred undertakings, it will bear interest at 4½ or 5 per cent., according to the rate of interest attaching to the stock for which it is being substituted. "A" stock issued in consideration for the transfers of undertakings may be redeemed at par at the option of the Board after 1985 and must be redeemed at par within ninety years of the date of issue.
Secondly, Trade Facilities Act stock. This is a limited issue of 4½ per cent. stock in exchange for certain debenture stock issued by the Underground Railway Companies under guarantees given by the Treasury under the Trade Facilities Act. "T.F.A." stock will be issued only against these guaranteed stocks and will preserve all the conditions of those stocks including the Treasury guarantees. The total issue of "T.F.A." stocks will be just over £12,000,000.
Thirdly, we have "L.A." stock. This also is a limited issue, to be made only to certain local authorities, and to the amount set out in the Sixth Schedule. This class of stock was originally proposed to satisfy the London County Council who desired a stock which could be held against their sinking fund liabilities. "L.A." stock will bear interest at 4½ per cent., and may be redeemed at par at the option of the Board after 1975, and must be redeemed at par within ninety years of the date of issue. It is a special condition attaching to this stock that it shall not be put on the market or otherwise disposed of within ten years from the date of issue except with the consent of the Board.
Fourthly, there is "B" stock. This stock corresponds generally to the preference stocks of the companies, though it is also being issued in exchange for some of the less well secured debenture stocks. "B" stock issued in exchange for existing securities, or as the price of transfer, will bear interest at 5 per cent., and in
922
other cases at such rates as the Board, with the approval of the Treasury, may determine. It may be redeemed at par at the option of the Board after 1965, and must in any case be redeemed at par within ninety years of the date of issue.
Then "C" Stock. This, the junior security of the Board, is to be issued in exchange for ordinary stocks, and some preference stocks, of the companies. It thus reflects the equity interest in London passenger transport. While the interest paid on "C" stock will be dependent on the Board's earnings, the stockholders will be entitled to a standard rate of 5 per cent. during the first two years and 5½ per cent. thereafter, if the receipts, after meeting prior charges, suffice. After the first two years, holders of "C" stock will also be entitled to a moiety, up to an additional ½ per cent. (making 6 per cent. in all), of any balance of revenue available after paying the standard rate. The remainder of the balance is to be transferred to the Board's reserve fund. Six per cent. is the maximum rate which can be paid on the "C" stock. Interest on the "C" stock will not be cumulative. "C" stock may be redeemed at par after 1955, but there is no definite term for final redemption in the case of this stock. My Lords, all the Board's stocks other than "C" stock will be trustee securities. It is therefore necessary to ensure that a reasonable cover of "C" stock is always maintained behind the trustee stocks, and provisions to this end are included in subsections (10) and (11) of clause 39.
I understand that certain noble Lords feel anxiety as to the financial stability of the scheme of the Bill, and I therefore propose to turn aside from exposition of the Bill itself for a few minutes, in order to deal with this aspect of the matter. Let me say at once that the Government have always recognised to the full that finance is the essence of the scheme, and that if the Bill could not be shown to be founded on a sound financial basis it ought not to be proceeded with. Had we entertained doubts on this score we should not be commending the Bill to Parliament. No aspect of the matter has been subjected to so keen and searching an inquiry as this. Step by step it has been examined and re-examined and, at each stage, the Government and its financial advisers have

923
fully satisfied themselves that the financial stability of the scheme of the Bill remains unshaken. We feel that the doubts entertained on this score by certain noble Lords are due to misapprehension of the facts, and, in order to clear away these misapprehensions, a statement has been issued which will, I hope, have made abundantly clear the correctness of the view taken by the Government of this matter.
I should like, if I may, to emphasise certain salient points. In the first place, it has been alleged that events since the Bill left the Joint Committee have seriously undermined the financial scheme of the Bill, so that it is no longer solvent. Those who take this view suggest that the settlement with the Metropolitan Railway has weakened the position of the Board by increasing the charge on its revenues. At the same time the falling off of receipts during the last two years has seriously invalidated the estimates of revenue of the Board. That is what has been put forward. As regards the Metropolitan settlement, it can be definitely asserted that, so far from weakening the position, it has strengthened it, because the Board is now assured of having, as part of its undertaking, this valuable and essential part of the system of passenger transport in London, and is relieved of any uncertainties as to the outcome of arbitration proceedings. Moreover, the cost of the settlement has not exceeded the estimate of an arbitration price originally made, as the figures already published demonstrate. I would again emphasise that the guarantee given by the main lines to the Metropolitan ordinary stockholders in no way affects the financial position of the Board.
Then, again, much has been made of the falling off of receipts of the various transport undertakings as a result of the prevailing depression. Admittedly these undertakings, in common with all others throughout the country, I might almost say throughout the world, have suffered and are suffering from this cause, and the effect is reflected in the reduced dividends which they have been able to pay; but it is easy to exaggerate the position, especially if one looks only at the gross receipts. The undertakings have naturally retrenched their expenses and thus achieved very considerable economies, as a set off against the loss of traffic. In
924
framing his estimate of net revenue of the Board in a normal year, Sir William McLintock made the fullest allowance for the maintenance and renewal of the undertakings, but, very properly, refrained from embarking upon any estimate of the economies likely to result from the merger. Yet everyone with experience in these undertakings knows that such economies, though not immediately realisable to the full, must ultimately be very considerable. In such directions as centralisation of administrations and repairs, avoidance of unnecessary duplication of services and clearances of receipts between the different sections of the undertaking, and of bulk contracts, to mention only a few items, great economies will be realised.
However, even without allowance for further economies, and assuming a continuance of the abnormally depressed conditions, the Board will still be able to earn a return on its "C" stock at least equivalent to the return which the holders of the ordinary stocks of the existing companies could receive under like conditions. I make no apology for emphasising the essentially flexible character of the financial scheme of the Bill achieved through the nature of the "C" stock, for it is the omission to take this factor into account which is responsible for the misapprehension of the position from which the doubts of noble Lords arise. The holders of "C" stock, that is, those who hold the equity of the undertaking, will be entitled to receive only the balance of profits actually earned, just as they would have been had the present companies remained in existence. It is, therefore, quite misleading to speak of the margin of profit shown in Sir William McLintock's estimates as if it were the balance remaining after paying the standard rate of interest on the "C" stock. The true margin in the commercial sense is the balance after the interest charges on the prior stocks have been met and therefore consists of the whole of the earnings available for the payment of interest on the "C" stock,plus any margins remaining over after the standard rate has been paid. Those who take the figure of £159,000 shown in the pro forma statement issued last November as the balance of profits are misleading themselves. They should look higher up the page, where they

925
will find a figure of £1,620,000 which represents the true balance, on the basis of the estimate then made. Any comparisons made with the results of subsequent years must start from this point.
It cannot be too clearly recognised that, in this essential feature of flexibility, the financial position of the Board will differ fundamentally from that of such bodies as the Port of London Authority or the Central Electricity Board, all of whose stocks down to the most junior are fixed interest bearing securities. Finally, I would ask any who are tempted to question the settlements made with the existing undertakings, on the ground that they were made before the present depression, whether they consider that it would be either fair or reasonable to claim that these vast enterprises, in which great amounts of capital have been sunk, should be forcibly bought out on the basis of their earning capacity in a time of extreme depression. Surely that would be confiscatory action of the most unjustifiable description, a course to which no Government commanding the support of Conservative opinion would be a party.
The main purpose of Part IV of the Bill is to bring the provisions of the Road Traffic Act, 1930, in so far as they apply to the London Passenger Transport Area, into line with the conditions which will exist when the London Passenger Transport Board is set up and takes over the management and operation of the various omnibus and motor coach undertakings which are to be transferred to it under the Bill. The existing area of the Metropolitan Traffic Commissioner extends only to the City of London and the Metropolitan Police District, a combined area which is substantially less than the area for which the Board is to be made responsible for the provision of passenger transport facilities. It is considered to be an advantage from the point of view of administrative convenience that the area of the Metropolitan Traffic Commissioner should be extended so as to embrace the whole of the London Passenger Transport Area. With the concurrence of the Home Secretary it is proposed that the jurisdiction now exercised by the Police Commissioner over omnibuses, tramcars and trolley vehicles, should in future be exercised by the Traffic Commissioner
926
The London Traffic Act was passed as a temporary Act due to expire on the first day of December, 1928. It has, however, been continued in force from year to year by the Expiring Laws Continuance Acts. The Act has proved of great benefit in arresting the rapid and irregular growth of omnibus traffic in the streets of London, bringing that traffic under control, mitigating traffic congestion generally, and thus mitigating to some extent the danger of the London streets. In this respect the Act has fully justified itself and it is desirable, in the public interest, that the London and Home Counties Traffic Advisory Committee, established under the Act, which has done much valuable work, should be continued in existence. Clause 57 of the Bill therefore provides that the Act shall become a permanent Act.
Opportunity has been taken to reconstitute the Advisory Committee, in order to strengthen the local authority representation on that Committee. The Committee as at present constituted, consists of nineteen members, of whom eight are representatives of the local authorities in the area. It is proposed that the number of local authority representatives shall be increased from eight to twenty-three. Other changes proposed are to give the London Passenger Transport Board two representatives on the Committee, and also two members to represent the amalgamated railway companies. The representation of labour is also increased from three to five members. Of the total membership of forty, twenty-three will be representatives of local government and be appointed by the local authorities themselves. The clause further provides that the Chairman of the Advisory Committee is to be chosen annually from the local authority representatives on the Committee. Thus re- constituted the Advisory Committee will become preponderantly representative of the local authorities in the area.
Part VI of the Bill deals with wages and conditions of service and gives effect to a settlement with the unions concerned. The provisions of this Part of the Bill will apply machinery similar to the existing conciliation machinery under the Railways Act, 1921. Part VII of the Bill provides that the existing staffs shall be transferred to the service of the

927
Board with the undertakings in which they are engaged, and with their existing rights and conditions of service.
Part VIII of the Bill is concerned mainly with the carrying on of the various undertakings until the date of transfer to the Board, the financial adjustments upon the transfer of the undertakings, and the winding up of existing companies in accordance with agreements made and embodied in the Bill. It also contains certain protective provisions, provides for the valuation of the Board's railways for local rating purposes and includes a definition clause. These provisions are mainly of a provisional or transitory nature, and although some of the clauses are lengthy they merely set out the machinery, necessarily complicated, incidental to the transfer of the undertakings to the Board and the dissolution of the existing companies.
My Lords, some noble Lords may be tempted to look askance at this Bill, because they have been told that it is a nationalising Bill—a gigantic Socialist experiment. Let me examine this charge for a moment. It is based, I think, mainly on the fact that the Bill was originally introduced by a Labour Government and must ex hypothesi be socialistic. But whatever might have been said of the Bill in its original form, I claim that it has now been purged of any socialist character. It has indeed been denounced by members of the Labour Party as a "safeguard of capitalism?" I prefer, however, to accept the test applied by my right honourable friend the present Secretary of State for the Colonies who actually moved the rejection of the Bill on its Second Reading in another place in 1931. What were the grounds on which he attacked the Bill as it then was? Having stated that there were no two opinions as to whether there ought or ought not to he co-ordination of London traffic, and that no one would dispute the real necessity for legislation, he criticised the Bill on a number of grounds.
His first was that there was no measure of agreement with any of the parties concerned. To-day we have in this Bill agreement with over 95 per cent. of the capital involved. The second criticism was that the Bill conferred great bureaucratic powers in the hands of the
928
Minister of Transport and in particular empowered him to appoint the Managing Board itself. That, Sir Philip CunliffeLister said, would be Socialism because the Minister could appoint anybody he liked. It would be a Ministerial appointment, and he could appoint five Socialist Ministers to run the Board. Moreover the Minister was the arbiter as to the withdrawal or provision of facilities and the judge between the main lines and the Board. Well, all that has been swept away. The appointment of the Board is delegated to a body of persons removed from political influences and the Minister cannot interfere. Jurisdiction as to fares and facilities and as to questions arising between the main lines and the Board is to be vested in a judicial body—the Railway Rates Tribunal. The third ground of objection was that the owners of the transport undertakings were not to be bought out, but would have to take stock. As I have already shown, no one will be required to take stock in lieu of cash who has not agreed to do so or expressed a preference for stock. The fact is that this Bill, in its present form, is no more Nationalisation or Socialism than were the Metropolis Water Act of 1902, which set up the Metropolitan Water Board, the Port of London Act, 1908, or the Electricity (Supply) Act, 1926, which set up the Central Electricity Board.
The Board, which is to be created under this Bill, is a public utility corporation, just as are those other bodies which I have mentioned. Nobody ever thinks of the Port of London Authority as a socialistic creation. There are certain services, so vital to the life of the community, that they cannot be allowed to fall into a condition of inefficiency or financial bankruptcy. If an undertaking, operating an essential public service, is unable, whether by its own shortcomings or from circumstances which it cannot control, to provide for the needs of the public which it serves, one of two things must happen: either the State must step in and take it over, making it a State service, or provision must be made for such a measure of reorganisation as will ensure its future stability and efficiency. The first alternative is what is called nationalisation; the second is the answer of those who believe with us that industry is best kept free from political control, and allowed to be run on

929
business, rather than on bureaucratic lines.
That is the policy of this Bill; there is to be no acquisition by the State or reliance upon the taxpayer or the ratepayer. The body which it sets up is, both in its method of appointment and in its financial arrangements, even further removed from nationalisation or municipalisation than are its prototypes which I have mentioned. The Central Electricity Board is appointed by the Minister of Transport; the Governors of the British Broadcasting Corporation are appointed by the State; the Metropolitan Water Board by the local authorities; the Port of London Authority contains a number of nominees of State Departments and local authorities. The London Passenger Transport Board is to be appointed by a body of quite independent persons acting as trustees on behalf of the travelling public and the Board's stockholders.
The creation of this public utility corporation, to be known as the London Passenger Transport Board, is, therefore, not the triumph of nationalisation, but the alternative to it. I read in a Socialist publication called the New Leader, of January 22, 1932, a bitter cry that "the public utility corporation is capitalism rationalised and made secure" —in fact, a bulwark against the realisation of Socialist dreams. I would ask noble Lords to ponder, before giving a vote against this Bill, the words used by Sir Robert Horne in the course of the Third Reading debate in another place:
"I venture to say that if you do not have an arrangement for managing London traffic on the principle of complete coordination, you will inevitably lapse into real Socialism."
We have here a Bill, the product not of any one Minister, nor even of any one Government, but the result of years of experience and of advice from successive Commissions arid Committees, who have considered this long-standing problem. There is no room for doubt as to the necessity for this Bill. None of its critics have been able to suggest any practicable alternative scheme. The coordination Bills promoted by the London County Council and the Underground companies in 1928 afforded no solution; they were merely enabling Bills, purporting to deal only with a part of the problem, and fact accomplishing nothing.
930
I therefore commend this Bill to the approval of your Lordships' House for these reasons: It provides a practicable and comprehensive solution of the pressing problem of co-ordination of the various means of passenger transport in and around the Metropolis. It commands a measure of support such as has never before been achieved in connection with this matter and will sot up a controlling body with the consent of the major interests concerned. It provides the only practicable means of securing those improvements of the travelling facilities of London and its surroundings which are long overdue. It brings the main lines into effective partnership with the other means of public transport. It provides full and adequate safeguards, on the one hand to the travelling public and on the other to those who have invested their money in the provision of travelling facilities in the area. By the elimination of a multiplicity of competing interests it will tend to the relief of congestion in our streets and to make them safer for other users. And finally, it provides for placing London passenger transport on a self-supporting basis and ensures that it shall involve no further charge either upon the general taxpayer or upon the ratepayer of the area. I beg to move.
Moved, That the Bill be now read 2a.—(The Marquess of Londonderry.)
LORD BANBURY OF SOUTHAM,LORD BANBURY OF SOUTHAM, who had given Notice to move as an Amendment, That the Bill be read 2a this day six months, said: My Lords, in rising to move the rejection of the Second Reading of this Bill I would like to point out that though a good deal has been said about the supposed fact that everybody is agreed, I hold in my hand a Petition signed by forty-four people representing companies interested in this question—a Petition to your Lordships' House praying that the Bill may not be read a second time. That Petition, I believe, has already been presented. We are told that this is a Bill which is going to deal with congestion in the streets. I propose to prove that it will not deal with congestion in the streets, but that it will confer a monopoly upon certain people to run passenger omnibuses forty miles outside London.
My noble friend has said that there are certain bodies which are somewhat

931
similar to this proposed new body—the Metropolitan Water Board and the London, Docks Board—and that they have worked well. I am, unfortunately, old enough to remember all the circumstances connected with the making of the London Water Board and the London Docks Board; in fact I was a shareholder in both those companies. The result of the creation of the London Water Board —and I commend this to my noble friend below me—has been that the London householder has had to pay more for his water, and has no more water and no better water than previously. That is a fact which cannot be contradicted. The Port of London Board was in a very different position to that of the old London Water Company which was very prosperous. The Port of London Board was in a very bad condition. It had been very badly managed. What happened? The new London Port body was given power to impose rates which the old company could not do, and free water, which was a very great detriment to the old dock company, was abolished. Therefore we have this fact, that in regard to both those bodies which my noble friend has instanced the result to the public has been that they have to pay more for their accommodation. I venture to assert that there has never been a public board which has not increased expenditure. There may be public boards that have done well, but they have not the incentive that a private body has to run economically. As a matter of fact—and I challenge anybody to contradict it—there has never been a public board which has not resulted in increased expenditure.
My noble friend went at considerable length into the history of the Bill, and said that it was passed by the Joint Select Committee. But that was by a majority of one only, so that there was very great divergence of opinion in that Committee. I have the old Bill and I have the present Bill. The old Bill was a very different Bill from this one. It consisted of a reasonable number of clauses whereas this Bill consists of 107 clauses, and sixteen Schedules. I do not know whether the draftsman of the Bill is here, but if he is I would like to congratulate him, if his intention was to render the Bill incomprehensible, upon having drawn a Bill which nobody, unless he is a very learned member of the
932
law and sits for some hours with a wet towel round his head, can be certain that he understands. He has put in certain clauses which seem all right, but when you come to read a little further on you find that they are contradicted by other clauses which render the good clauses bad, while the bad ones are left in.
My noble friend said that one of the original objections to this Bill was that the Minister appointed the Board, and he told us that had been swept away. I venture very humbly to contradict my noble friend. I say it has not been swept away. The name of the Minister appears in this Bill fifty-seven times, and all that has happened is this. A body called the Appointing Trustees, consisting of very eminent men no doubt, appoint a small body who are to manage the new combination, but if my noble friend will read a little further on, he will find that the Minister, after consultation with the Appointing Trustees, may dismiss any of these members on the ground of inability—not with the consent of the Appointing Trustees but after consultation. "After consultation," I venture to say, means nothing. Therefore what has happened is that the Minister, though he does not appoint, may dismiss. As a matter of fact, the power of the Minister remains.
At this hour I do not wish to take up your Lordships' time unduly, but you will find, if you turn to Clause 61, what appears to be a proposal that more or less carries out the statement of my noble friend that the Minister has not much to do with the matter, and that the Board may run passenger omnibuses over certain parts. Yes, but if you read a little further you will see that a gentleman called the Traffic Commissioner can interfere with them, and can say: "You are not to run there; you are only to run where I tell you." Practically, therefore, the Board are under the thumb of the Traffic Commissioner. But there is an appeal from the Traffic Commissioner. To whom is the appeal? It is to the Minister and the Minister's decision is to be final. Who is the Traffic Commissioner? I took some trouble to find out, and I found that he is one of three gentlemen appointed by the Minister. Two of them are appointed by panels provided for him by certain local authorities, and the third is appointed

933
by the Minister himself. Therefore, instead of the Minister being eliminated he is camouflaged. On the face of it, if you do not read the Bill very carefully, you think that possibly he disappears, but as a matter of fact he remains, and has practically as great a power as he ever had.
Consider for a moment what this is going to do. First of all where is the traffic area'? It is not defined in the Bill in any kind of way that an ordinary person can understand. It is defined in this way. There are three maps; one is in your Lordships' House, one is in the House of Commons, and the third is in the office of the Minister of Transport. On those maps there is a line. These maps are signed by Lord Lytton, and they are to be the authority, and if the maps in your Lordships' House and in the House of Commons are lost the map in the Minister's office is to be the authority. This is all In the Bill. There is a clause in the Bill which extends the area ten miles beyond the line marked. That is, as far as I can make out, forty miles from London, and, therefore, in order to do away with the congestion in Oxford Street and Bond Street, you are going to arrange that somebody shall hive a monopoly of the traffic forty miles from London. Has anybody ever brought forward such an extraordinary proposition? I am sorry to say I can hardly believe so.
My noble friend says it does not mean nationalisation of the railways. Well, what is going to happen? All passenger traffic within forty miles of London is in the hands of this monopoly. What is going to happen if there is a strike I do not know, because all passenger traffic in London and fox forty miles out would stop. One knows perfectly well that a public authority is much more amenable to pressure. They will probably raise all the wages and all the salaries. Then they will be asked to do more and probably, in the end, they will turn and there will be a strike and be no means of getting about anywhere. The railway companies who first of all opposed the Bill have come into it and, as I understand it, the result will be that the Board will work and operate the suburban portion of the main line railways while the rest will be worked by the directors. A more complicated or absurd arrangement I
934
cannot Possibly conceive. It is said that the boards of directors are in favour of it. They were in favour of the 1921 scheme. They were not all in favour because the board of the Great Northern Railway was strongly opposed to the amalgamations of 1921. The other boards came round and I remember Sir Eric Geddes saying in the House of Commons on Second Reading that the economies had been put at £10,000,000 a year; he did not put them at so much as that; he put them at £20,000,000. I ventured to get up and say that there would be no economies. I was right on that occasion and the boards of the other railways were wrong, as events have proved.
Now I would like to draw your Lordships' attention to certain statements made in another place. We all know that Mr. Morrison made a statement in which he said that this was a very great measure. I do not know that I need trouble your Lordships with that, but I will just read to you a statement made by Sir Henry Jackson—a Conservative—on October 27 last year. He said:
" A settlement with the main lines, to my mind, constitutes a part of the Bill which is unique."
That is quite true, it is unique. Then Sir Henry Jackson went on—and I ask your Lordships' particular attention to this:
" I believe it is pregnant with tremendous possibilities, and if this London experiment succeeds over this great area, it may well be that an extension of it may be used to deal with the whole transport problem of the country."
As sure as I am standing here, if you pass this Bill the result will be—and it is a result which was intended by the original promoters of the Bill—that the whole transport of this country will be nationalised.
What is likely to be the effect of that? I have here a statement of what has happened in Australia? It is from The Times and it says:
" In the course of his survey this correspondent will show that nearly two-thirds of the total deficiency in the accounts of the States for the year 1930–31 is represented by losses on the railways, in which £336,000,000 of public money is invested. The railway deficits in the principal States, after allowing for capital charges and for amounts received as special subsidies from general revenue, were; New South Wales, £4,421,620; Victoria, £1,870,633; South Australia, £1,685,920; Queens land,

935
£1,6191,165; and Western Australia,.£379,992."
We all know that in France the railways —not all of them, but those which are operated by the State—are worked at a loss. Therefore, I view with apprehension the fact that the result of this Bill, as far as I can see, is a certainty of nationalisation.
Let me now for a moment draw your attention to the map which has been issued by the Railway Companies' Association. It will show you the enormous area, which is included in this Bill. You must remember that under the Bill you can go ten miles outside this area. Beaconsfield is included, Taplow is included, Slough is included, Virginia Water is included, Chertsey is included, Weyhridge is included, Woking is included, Bramley is included, and, on the other side, Sevenoaks is included, Nut-field is included and Three Bridges is included. And you are able to go ten miles beyond that.
Now I should like for a few moments only to draw your Lordships' attention to the finances of the Bill. That is a very serious part of it. The White Paper which has been issued—Command Paper 4204—gives the balance to the reserve fund as £159,000, not a very large balance on a capital, according to the White Paper, of 120,000,000. The figures have been founded upon the receipts of 1928, 1929, and 1930. I have here statements made last week by the noble Lord, Lord Ashfield, to his shareholders and by the gentleman who occupied the chair at the meeting of the Metropolitan District Railway last week. They show that the net result for 1932 of those two railways combined was a deficiency of £259,000. Where is the margin of £159,000? It has gone already.
And what is the prospect of profit from these lines? I have some knowledge of the history of the tube railways and the acquisition of a controlling interest in the Metropolitan District Railway by Messrs. Speyer Bros., an American house which then occupied a considerable position in the City. They interested themselves in some of the tube railways and at that time the Metropolitan District was doing badly—very badly financially, and not very well from the point of view of the convenience of the public. They managed to obtain a controlling interest
936
and asked me to become a director. For various reasons which I need not go into I declined, but I continued to be consulted by Messrs. Speyer on these matters. They appointed a gentleman as general manager who was by no means successful. Then they asked Mr. Stanley —as Lord Ashfield then was—to come over from America and become the general manager of the combine. I venture to say that no one could have done better than Lord Ashfield. I do not think many men would have done as well. Not only did he restore the financial position of the railways, but he improved the facilities and the accommodation for the public.
Lord Ashfield, I think everybody will agree, is an authority on these matters. What did Lord Ashfield say to his share-holders last week? I am quoting from The Times. He said:
" London transport, whether under private enterprise or under a public board, cannot remain solvent and progressive unless it is freed from the dead weight of taxation which it now carries."
Therefore, according to the greatest authority we have, these bodies and this Board cannot continue prosperous unless freed from the present great burden of taxation. If it is freed, where is the money going to be found—from the pockets of Income Tax payers, from further increase of the Death Duties, or how? It has to be found somewhere. Let me quote a little more of what was said on the same occasion by Lord Ash-field:
" There are other factors which have contributed to the loss of traffic. In recent years the suburbs have tended to become self-contained. The standard of shops has been improved and luxurious cinemas have been built, so that there is not the same need or incentive to go to the centre of London for shopping or entertainment. Then the motor-car has grown to be an important feature in passenger transport, and there are now well over 200,000 private cars registered in the London traffic area. They carry not only the family, but neighbours and friends, and therefore withdraw more people from the public means of conveyance than at first sight would seem possible. The parking places and garages in the centre of London are filled with these cars. The theatre traffic, which at one time was carried upon the railways and omnibuses, has now largely passed to the private car."
How can this public Board alter that? These are factors which remain.
Now I come to the question of finance. The finance is very curious. I received yesterday a letter from a friend of mine who is a holder of stock in the Metropolitan Company. It has been said—I think I am not misrepresenting my noble friend—that everybody had agreed to these arrangements, and I know it has been said that because of that neither this House nor the House of Commons has anything whatever to do with it. I venture to deny that. I say that it does not matter what is arranged outside; we have to decide whether a thing is good or bad and what has been arranged outside has nothing to do with the matter. But I venture to say that it has not been agreed. Let me read part of this letter from a friend of mine. It is dated February 27, 1933. He says he is a holder of Metropolitan 3½ per cent. debenture stock. £100 of that stock will be converted, not into another £100, but into £77 15s. 7d.
A NOBLE LORD: Of what?
LORD BANBURY OF SOUTHAM: Of "A" stock. It is true that though he will get his capital reduced he will get the same in interest because he will get 4½, per cent. instead of 3½ per cent. Yes, but what happens later? There is a clause which says that this stock must be redeemed and can be redeemed, and what at?—not at £100, but at £77 15s. 7d. My friend said he objected to this, naturally; and the result was that he protested not only to the Metropolitan Company, but to Mr. Pybus, as Minister of Transport, and as the Public Trustee held £5,000 of the 3½ per cent. debentures for his wife's marriage settlement, he also spoke to him. But Mr. Pybus was immovable and my friend sold his stock.
Look at my position. I have some 3 per cent. stock in the Metropolitan District. I have no recollection of ever being told that my £100 3 per cent. stock was going to be converted into £66, and certainly not that that £66 was going to be paid off at £66. I cannot understand how such a proposal could ever have been put before an English board. There is something worse than this. I have here a statement issued on behalf of the main line railway companies. The Railway Companies' Association, of which I was at one time Chairman, is a body composed of the various railways and the Council is composed of the Chair-
938
men of the various railways, and in my time there was an addition of three members of the House of Commons. What does this document say? It says:
" Many of these stocks are irredeemable and the substitution for them of a redeemable stock is distinctly to the public advantage."
Could anyone believe that respectable people would say—because this is what it implies—that, having entered into an agreement and bargained to borrow from a certain person certain sums of money on certain conditions, you can break those conditions to the advantage of one of the parties and to the disadvantage of the other if it is to the public advantage?
I do not know whether the Railway Companies' Association is following the Free State in Ireland or the Free State is following the example of the Railway Companies' Association, but I see in The Times to-day that Bills have been introduced in Dublin regarding railways and road transport, and The Times says:
" The Railways Bill's principal feature Is the drastic reduction of railway capital. The capital of the Great Southern Company will be reduced from £26.000,000 to £12,000,000. Holders of £100 stock will have their holdings reduced as follows:— Debentures from £100 to £85; four per cent. guaranteed preference stock, £100 to £50: four per cent. preference stock, £100 to £35; and ordinary stock, £100 to £10."
Whether this is in consequence of the arrangements made by the London companies or whether the London companies are following the example of the Irish Free State, I do not know.
But consider what the effect of all this will be; consider the precedent it is establishing; and do not forget that the debenture stocks in the Metropolitan Railway, and the rentcharge stocks and debenture stocks in the Metropolitan District are trustee stocks in which people have invested—in many cases marriage settlements—on the understanding that when they were given an irredeemable stock they were given an irredeemable stock. And that stock should not be taken away from them and redeemed at a lower price without compensation being given to them. What would happen if this precedent were gone on with? It is not impossible that we may have a Socialist Government in three years' time. What is to prevent their saying that Conversion 3 per cent.

939
stock shall be reduced, every £100 to £66—that 4½ per cent. stock should be given, and that it should be redeemed at £66. There is this precedent. There is nothing to prevent it, and I hope your *Lordships will not agree to this, which I cannot call by any name but "sheer robbery."
There is one other thing. I understood from my noble friend that the main lines have entered into a liability of £105,000 a year with regard to the Metropolitan Railway. Are the main lines in a position to take any more liability? They are not paying their dividends on some of their preference, as I know to my cost. Is it a time for them to enter into unknown measures of this sort? We are told that it is good to electrify. Is it? When I was chairman of the Great Northern Railway I went into this question of electrification, and I came to the conclusion that although, if you had not already steam trains and if you were going to start afresh, electrification might be useful, it would not pay if you had to scrap your steam trains and institute electricity. The Southern Railway have electrified down to Brighton. Whether that is going to be successful I do not know. My own idea is that it will not pay for the money spent. Electrification has been successful on the Underground for two reasons. One is the atmosphere and the other is that it was necessary on the Underground to run as many trains as possible within the hour, and especially during the rush hour. You can speed up much more quickly with an electric train than with a steam train and consequently can run more trains in the hour with electricity than with steam. Do the main lines want to run more trains within the hour? Except over short distances, in the rush hour, their trains are more or less empty at the present moment, and they do not want to run more trains which will be mostly empty. I apologise, my Lords, for having detained you so long, but it is really a very important question. I move that this Bill be read a second time this day six months.
Amendment moved—
Leave out ("now") and at end of the Motion insert ("this clay six months").—(Lord Banbury of Southam.)
* In the unrevised daily part this line reads as follows: "Lordships will not agree to this Bill." See cols. 1023 and 1024.
LORD MOUNT TEMPLE LORD MOUNT TEMPLE had also given Notice that he would move the rejection of the Bill. The noble Lord said: My Lords, in rising to support my noble friend Lord Banbury, I promise you that I will be as brief as possible, though it is not very easy to compress into a quarter-hour's speech all the different angles from which this very large measure can be regarded. We hear the argument that London traffic has been long under discussion; that this Bill has cost in its passage through Parliament perhaps £40,000; and that therefore you must pass the Bill. I dissent from that. London traffic is running very well indeed. It is the best in the world, and therefore there is no force in the argument that supposing this Bill does not pass chaos will arrive in London, or that chaos will continue. It is well known that, not excepting New York, we have the finest transportation system in this Metropolis of ours, and I gladly support Lord Banbury in saying that that is largely, if not mainly, due to Lord Ashfield, and long may he be spared to give the benefit of his advice to London traffic.
In any case it seems to me that there is no reason why we should pass a Bill which in its main structure is Socialism—that cannot be denied—in spite of the Amendments made in another place. When it was introduced it was denounced by the whole Conservative Party, and it was described by its fond parent, a Socialist Cabinet Minister, as the greatest Socialist transport scheme ever placed before Parliament. I submit, and will prove in a moment, that the comparatively small Amendments made since that statement was made have not altered it from a Socialist transport measure. That is because of the Socialist members of the Cabinet. This Bill sets up a State monopoly. No one can trade in the streets without the consent of the Board, and the Board will not consent because they want to have it all in their own hands. There will be no more competition between tramways and omnibuses of the General Omnibus Company. There will be no more independent omnibuses, and it is this competition which has enormously improved transportation in the Metropolitan area during the last thirty years.
This Bill means a rigid State monopoly, and, as is well known, a monopoly is

941
against all progress. The monopolist says: "Why should we trouble to improve our means of carrying on our business? There is no one to compete with us. We have a monopoly, and the public may take it or leave it." Why is there this craze for complete amalgamation of these huge combines? Are we not going too far in the direction of huge combines? There is one aspect which has not been alluded to by the noble Marquess. What will be the position of the country if a general strike occurs, such as occurred in 1926? The difficulties would have been enormously increased in 1926 if there had been no independent omnibus proprietors, and if you had had all your enterprises under one control. It usually follows that all the trade unionists who have been separated under different bodies when the employers are different bodies, come under one body when the employers become one body, and that makes it all the more difficult for the nation, through the Government of the day, to deal with any general strike. In such a case you would not have, as you had in 1926, quite a number of people engaged outside the unions and indeed hostile to the unions. You would have one solid trade union against you, and they would go out as one man and thus make your task as a Government immeasurably greater.
The London County Council Bill and the Bill of Lord Ashfield's group which attempted to solve the problem on a voluntary basis was killed in 1929. In that Bill brought in by the London County Council and Lord Ashfield's group of companies there was no compulsion. It was a purely permissive Bill. They aimed at common management and a common fund. They would, I believe, have brought in everybody except the independent omnibus proprietors and the Metropolitan Railway, but that Bill was in conformity with Conservative principles: you would have had a voluntary combination and, above all, the various businesses would have remained in the ownership of the people, the municipal authorities and the private companies, to whom they belonged. Here, on the other hand, we have a Bill which expropriates entirely all private interests and all municipal interests and hands over the whole of the transport system up to twenty-five miles from Charing Cross, and in some cases ten miles more,
942
to a State monopoly. That State monopoly will not allow any private enterprise or any municipal enterprise to interfere with it.
I was surprised at the noble Marquess, Lord Londonderry, who in his speech—I am sure unintentionally—gave a very erroneous view of the history of these London measures. He told us about the Blue Report which recommended compulsion, and then skipped all the intervening history and came down to the Bill introduced by the Socialist Government, which also had the feature of compulsion, giving the impression that the whole history of transport in the London area had been on a compulsory basis. As I have just shown, that is by no means the case, because Lord Ashfield's and the London County Council's Bill was entirely on a voluntary basis. I was instructed by the Conservative Government of the day to support that Bill in the House of Commons. It was intimated to the Conservative members in the House of Commons that they should support it, and it was so supported, and if the Dissolution had been delayed for another three days that voluntary Bill would have become law. We should never had had all this State Socialism and this compulsory obligation on people to give up their businesses. I hope that your Lordships in coming to a conclusion will not assume that the London traffic problem has always been approached by every Government, every Department, and every Committee from the point of view of compulsion, and that therefore this Bill is on those lines. No, the proposals that were supported by the Conservative Government were on a voluntary basis, and it was only by the purest bit of bad luck that they did not become the law of the land.
Then came this Bill, introduced in March, 1931, by a Socialist Government with compulsion and public ownership, and with a board of management appointed by the Minister of Transport. Sir Philip Cunliffe-Lister has been quoted by the noble Marquess in connection with this Bill. May I read what he said in opposing officially on behalf of the then Conservative Opposition, this Socialist Bill. During the debate on the Second Reading Sir Philip Cunliffe-Lister said:
"In this Bill we are getting Socialism in our time '… Anybody who votes for this Bill is, without any possible question,

943
voting for nationalisation, and for nationalisation in a very peculiar and extreme form."
He continued:
" Let us see what this Bill does. All are forced to transfer their property, whether they like it or not, to a public undertaking, the board of management of which is appointed by the Minister. It is a tremendous socialistic experiment, nationalisation and nothing else."
I have no doubt noble Lords will be thinking: "Well, there have been some changes made. What about those changes?" It is being said now that it is no longer Socialism because, instead of the Minister appointing the board of management a Committee of Appointing Trustees is set up. These five gentlemen indicated by the noble Marquess are to select the board of management.
I suggest that the Bill does not thereby cease to be Socialism. The Government or Parliament appoints a selection committee to select the managing body, but will anybody say that, because the Marylebone Cricket Club appoint a Selection Committee to choose the team to play Australia, therefore, if bad selections are made, the Marylebone Cricket Club can wash their hands of all responsibility and say: "Oh, it is the Selection Committee which has done it, not ourselves." Not at all. They would be justly held to be responsible for the acts of their Selection Committee, and I submit that if Parliament passes this Bill Parliament and the Government of the day cannot divest themselves of the responsibility for the appointment of this Board.
In the same speech Sir Philip Cunliffe-Lister, in moving the rejection of the Bill, gave as two of his reasons for rejecting it—(1) that it took the property of private owners out of their control; and (2) that it gave them no option for sale. These two provisions still remain in the Bill. The Conservative Party strongly opposed that Bill at the time, and I submit that it should do so now. Surely it cannot support a Bill which takes the property of private owners out of their control and gives them no option for sale. The noble Marquess, I think, gave us the impression that anybody who had his property taken away could demand cash unless he agreed to take stocks. With great deference, that surely is not the Bill. What the Bill says is that small omnibus proprietors
944
can demand cash, but all the other people are forced to take stocks in the new combine and cannot demand cash, as has always been done up to the present moment. That is a most important point and that alone, it seems to me, should kill the Bill. And it was one of the reasons given in the debate in another place a year or two ago why this Bill should not have a Second Reading.
No mention has been made during the debate of the views of London. I should have thought it was of some importance to know what were the views of the people who will be mainly affected by this Bill as far as traffic facilities are concerned. It is really very remarkable, if one probes a little to see what the views of London are, as expressed by its duly elected representatives, to see the practical unanimity that exists against this Bill. The London County Council, with its very large Conservative majority, has always been against this Bill. It has always fought against this Bill. In their municipal elections of 1931 the Municipal Reform Party, that is to say, the Conservative Party on the London County Council, fought the contest on three main issues—housing, public assistance, and transport; and I think my noble friend Lord Jessel will support me when I say that not the least important of the three was transport. One of the main subjects referred to at every public meeting on behalf of the Municipal Reform Committee was the detestation of this Socialist and Nationalising Bill of the Socialist Government. What was the result? Did London rise up in its wrath against the Municipal Reform Party and drive them from office? On the contrary, it added six more seats to their already large majority, so that we have in the County Council in the past, in the present, and I hope always in the future a detestation of this Nationalising Bill which we have before us.
Now, my Lords, take the Metropolitan Boroughs. I say it with bated breath, but if the County Council propose one thing the Metropolitan Boroughs go the opposite way. If the Metropolitan Boroughs propose something, the London County Council deem it their duty to take a different view. But in this case the Metropolitan Boroughs are as insistent in opposition to this Bill as the London Couny Council. Three weeks ago

945
the Metropolitan Boroughs Standing Joint Committee passed a resolution against the Bill, not as it was, but as it is at the present moment, by fifty-one votes to twelve. Thus we have the London County Council by a large majority, and the Metropolitan Boroughs by an overwhelming majority, refusing to have anything to do with this Bill. I think your Lordships' House, and Parliament generally, ought to pay very considerable attention to the views of the duly elected representatives of the people who will be most affected by this measure. Who have we for it? We have about six Socialist Boroughs, and three or four Boroughs like Croydon and West Ham, who are in favour for the simple reason they will sell their trams to the new combine on very excellent terms.
I am sorry to have kept you so long, but it is difficult to deal with this matter briefly. Do allow me to say a few words on finance. You may have different views on nationalisation and individualism and on who is best suited to drive a tram or drive a motor omnibus, but it is quite obvious that even if this Bill were the most perfect Bill ever devised by man in other respects, unless its finance, is sound it ought to be rejected. It is no use passing a Bill which is going to land the enterprise in bankruptcy or in very difficult circumstances. We have had some very illuminating statements on finance, and my noble friend Lord Banbury has given us excellent instances of what happened in individual cases, but I should like to put before you only four figures which deal with the net revenue of the undertaking during its first and second year.
Your Lordships have in your hands, no doubt, the White Paper giving the views of Sir William McLintock on the probable results of the working of this Bill in the first and second years. Sir William McLintock, as the White Paper indicates, was asked by the Minister of Transport, to report to him as to what is likely to happen. Sir William McLintock in November of last year, that is 1932, issued a revised pro forma statement of net revenue. He gave a sort of second view of what he thought would happen, and he estimated that the net revenue during the first two years would be annually £5,800,000. The Attorney-General, on the. Third Reading in the
946
House of Commons, estimated that the net revenue would be £5,700,000. Who shall say which is right when two such eminent people differ? But though £100,000 is not a very large sum in £5,800,000, yet it does show some small doubt in the mind of the Government when these two eminent protagonists for the Bill should not be able to arrive at the same figures on the net revenue during the first two years.
Then we have the very interesting statement—probably most of your Lordships have seen it—put forward by Sir Philip Dawson, M.P., as to net revenue. Sir Philip is known to be a very great expert in these matters, and he takes a much more pessimistic view. He says that the whole net revenue each year during the first two years will be only £4,800,000, and I humbly put forward the figure of 5,0190,000 instead of £4,800,000. The difference between these estimates is due to the accounts of the Underground Railways being issued this month, which I was able to put in and which Sir Philip could not put in because his estimate was printed before the accounts appeared. So we have this very great divergence of opinion. We have Sir William McLintoek and the Attorney-General showing a surplus over liabilities—a small gain. We have Sir Philip Dawson and the experts for whom I speak showing a large deficit. How does this difference arise?
I am not suggesting for a moment that Sir William McLintoek and the Attorney-General have not great authority behind them, and may perfectly genuinely be putting forward their figures; but the difference is this, that the Attorney-General and Sir William McLintoek have forgotten, as was mentioned by my noble friend Lord Banbury, that their estimates are based on the results of the various undertakings for the three years, 1928, 1929, and 1930 on an average, whereas the more up-to-date estimates are based, not on that, but on what is now the actual cost and what is unfortunately likely to continue for some time. There has been a general substantial shrinkage of revenue and last, but not least T think, since the date of their reports the cost of petrol has increased, which must add very much to the cost of the companies. To be perfectly frank with your Lordships, there are certain economies which

947
should be effected by amalgamation, but these are small in comparison with the increased expenses, and personally having gone a good deal into the matter it seems to me, taking the conservative view, that probably in the first two years of working there will be a deficit of £800,000 each year.
Supposing there is a deficit, what are the alternatives? What is the Board to do? The Board can take three courses. It can either default in its interest payments, or it can reduce facilities, or it can increase fares. Obviously at the beginning of its existence the Board is not going to default in interest payments; besides it must pay some regard to Clause 3, subsection (4), which says that it shall conduct its business with the greatest regard to making it pay. Reducing facilities, Lord Ashfield will agree with me, is not a thing you can do on a Monday morning, having decided on it on the Sunday. You have to dismiss men, to compensate them, and make many other arrangements, and that is not a thing the Board is likely to do. What it is likely to do is to increase the fares. Is it really necessary to throw aside all our Conservative principles, to vote what is virtually Nationalisation, in order that the inhabitants of London and surrounding areas may have the benefit of higher fares?
What I think we should do is to agree to the proposal which will be put forward by Lord Clanwilliam—it seems to me the sensible course—namely, possibly to give a Second Reading to the Bill, although I should prefer to vote against it and probably will, and then have a thorough, prompt, and not too long investigation into the finance of the Bill, because if the finance of the Bill is sound obviously the case of the promoters will be ever so much stronger than it otherwise would be.
THE EARL OF CLANWILLIAM: My Lords, it may be for the convenience of your Lordships if I intervene now and say the few words that I have to say with reference to the Motion which stands in my name, to refer the Bill to a Select Committee to examine and report upon its financial provisions. The Motion will not be moved now, but, to suit the convenience of the House, at the end of the debate. I wish first of all to make it quite clear that in moving the Motion which I will move later I have no in-
948
tention whatsoever of recommitting the whole of the Bill. My desire and intention is simply to see that the financial provisions of the Bill are reconsidered, and the Motion would be limited entirely to that.
I would like also to remark now, before I say anything further about the finance of the Bill, that I am not hostile to some of the principles of the Bill. I never have been; I was not on the Joint Committee, and I am not now. Many years ago, speaking in your Lordships' House from the other side—it was on some Motion connected with traffic—I said that if you wished to control the traffic of London you must control it from the outside; you must be ready to seize it outside before it gets into London. That is one of the principles of the Bill today. A year or two after that, speaking on this side of the House, I advocated that the Government should come forward and assist the Underground group to extend their tubes and improve them by giving financial assistance. I said it was up to the Government to decide what particular measures should be taken to provide the money, but I thought such assistance was very essential. I am afraid what I said at that time brought a very severe rebuke down upon my head from the noble Lord who is with us to-day and who, I hope, will long remain with us, my noble friend, if I may say so, Lord Banbury. He rose and said he was aghast at the idea of public money being utilised for the extension of tubes. Well, that has been done since. There have been two instances, I think, the case of Morden and the case of Cockfosters. I sat on the two Committees in reference to those extensions, and public money was used to facilitate the building of those railways.
I only mention these two points because I do not wish your Lordships to think that I am sailing under any false colours. I mean what I say in the Motion which I have put down, that I wish the financial provisions to be considered. I think that they are the important thing. This is the matter which has caused me anxiety ever since I sat on the Joint Committee, and it is the matter which I think now it is essential for your Lordships as trustees for the nation to consider. The financial provisions of the Bill, as your Lordships have already been told, were framed by Sir William McLin-

949
tock in or about the year 1930 and the accounts were brought up to the 31st December, 1930. As you have also been told, and as you will see in the pro forma statement, those accounts were framed on statistics for the years 1928, 1929 and 1930. Those three years were, comparatively speaking, prosperous years, more prosperous than we have to-day, and possibly more prosperous than we may have the pleasure of looking forward to in the next two or three years. Those accounts were submitted to us in the Joint Committee in the summer of 1931. We sat till Parliament rose, and two months after that the country was in the throes of the greatest financial crisis it bas ever known.
Since then a great deal of water has passed under the bridges. The financial conditions of this country have entirely changed. The financial conditions of the world are changed. They have been turned upside down, and nobody knows to-day where they are. Look at America, at France, at Germany. Look where you will, the natural conditions are all upset. In this country, thanks to the will of the people, thanks to that fine asset we possess of never knowing when we are beaten, and thanks to the leadership of the National Government, we are still en our legs. Nobody can deny that our little raft, which has been in this whirlpool of financial chaos, is a steady craft, but nobody can say that we may not slip back into that whirlpool. For those reasons I think this is the time in which we should take into very serious consideration any estimates which were made in those three prosperous years before the 31st December, 1930.
To reinforce what I have said, may I read some excerpts from the speech of my noble friend Lord Ashfield to his shareholders about a week ago. I could almost rest the whole of my case for a reconsideration of the finances of the Bill once again on those statements. The first one is as follows:
"Compared win 1930, the number of passengers carried has fallen by 75,000,000, or by over 3 per cent. This measures the extent to which your undertakings are affected by the generally changed circumstances of the time.
That is my whole case. The next quotation I want to make has already been referred to by my noble friend Lord Banbury. In this Lord Ashfield said:
950
"There is no way of creating casual or pleasure traffic when its disappearance is due to a lack of spending power, to the absence of a margin of earnings over the needs of the family. This lack of spending power is general throughout our area. Both those who live upon interest and dividends and those who live upon wages are alike affected. There are other factors which have contributed to the loss of traffic. In recent years the suburbs have tended to become self-contained. The standard of shops has been much improved, and luxurious cinemas have been built, so that there is not the same need or incentive to go to the centre of London for shopping or entertainment."
Again, Lord Ashfield said:
"We dare not assume that the restoration of our prosperity will be rapid."
I do not wish to exaggerate anything I have read. I have only read what Lord Ashfield, who is responsible for this great undertaking in London, tells his shareholders. Nothing could be simpler, nothing could be better than Lord Ashfield's statement.
Your Lordships have heard what I have read, and if you agree with what I have read from Lord Ashfield and what I have said, I ask, is it wise on your part, with your duties to the country, to part with this Bill until you are assured, by once more looking into the financial provisions, that they are sound in view of the change in the circumstances of the time? It will not be difficult to find five noble Lords in your Lordships' House eminent in financial affairs, who have been accustomed to figures from their youth up, to sit on a Committee, take these figures of Sir William McLintock and report whether the financial provisions are sound or not. It is a simple matter for noble Lords who are versed in financial affairs. I do not ask for a huge Committee with Counsel which will sit for weeks or, it may be, months. I simply ask for five noble Lords to be appointed to sit together to examine these figures. They can call evidence if they like, but that is a small affair. There is no necessity for them to have Counsel. They would not require it. After these noble Lords have examined these figures for, say, two or three days, they will report to your Lordships. If their Report is favourable, well and good, the Bill will proceed. If their Report is unfavourable the Government may very likely be saved a serious financial disaster.
Now may I go on? The main purpose of the Bill when it was introduced was

951
to enable the Underground group to go to the public and raise money. I think that is correct. That was the main purpose of the Bill. The Underground had taken over the London General Omnibus Company in order to swell their own revenues and to help the Underground railways to make two ends meet. They found that that was not sufficient, so they said: "We must embrace more transport, we must take the railways, omnibuses, trams"—everything, in fact, that carried passengers and that crawled either above ground or underground within a radius of twenty-five miles from Charing Cross. This, they said, would enable them, having a very much larger concern, to go to the public and raise money. Well, that carries the story so far.
We must now examine the actual financial position which would enable the Underground group, this great combine, to go to the public with a reasonable hope of raising fresh capital. May I ask your Lordships to look at the pro forma statement which was drawn up by Sir William McLintock and was sent to the Minister of Transport on November 25, 1932. Your Lordships' attention has already been drawn to the net revenue of £5,798,602. That, as I have already told your Lordships, is drawn up on the basis of the annual earnings in 192S, 1929, and 1930—three prosperous years. If your Lordships will look half-way down the column of figures you will see a figure of £403,069. That is the balance which the company will have at the end of the first and second years after paying interest on stock and also—I must refer to this—on the "C" stock. I refer to that particularly, although it is really nothing new. Those of us who served on the Joint Committee had more or less the same figures before us all the time. They have been altered a little bit but there was considerable discussion on the "C" Stock. It went on for days and days.
But the first time I have ever heard it mooted that interest would not be paid on it was to-day when my noble friend the Marquess of Londonderry told your Lordships that, after all, it was not absolutely necessary to pay interest on the "C" Stock. Well, here is a Paper which is 'almost a prospectus and anybody looking at it would say that they were
952
going to pay 5 per cent. interest on the "C" Stock. I really cannot believe that any Government would really undertake to be responsible for such a statement, absolutely gulling the public into the belief that they are going to pay interest, when my noble friend says there is no need to pay it for two years. If that is so, the margin of £403,000 might probably be increased to £1,403,000. That it a very easy way of managing a business if you wish to build up a reserve, but I really think it is breaking faith with the public to say such a thing as that. I cannot believe it. I take it that they will pay interest on the "C" stock for the first two years. After the third year and going on to the tenth year interest on the "C" stock rises from 5 per cent. to 5½, per cent. and then up to 6 per cent. There is a margin left of £159,679. Is that the sort of margin on which you could expect to be able to go to the City and raise large funds for extension? I hope my noble friend will succeed, but really I cannot think that that is the sort of figure on which you could go to the City and ask them to lend you money.
There is one other figure on page 4 of the pro forma statement to which I ought to refer and that is the capital of £111,000,000. That £111,000,000 has been increased since the Bill left the Joint Committee—I cannot tell you by exactly how many millions, but it is a few millions. Presumably this extra capital is provided to pay for the undertakings which have not yet been taken over. Nobody knows, there is nothing in the Bill and nothing here to show, how much these undertakings are going to demand for being taken over. Your Lordships know full well the amount of discussion which goes on when it is a question of an undertaking being taken over. We who served on the Joint Committee know how many weeks were passed in 'argument between the two parties as to how much should be paid. It is an unknown quantity. That is one of the figures which may well affect the balance of the undertaking.
The only possible safeguard that I can see is a paragraph in another White Paper called a "Statement as to certain modifications which it is proposed to make in the London Passenger Transport Bill." That was presented by the Minister of Transport to Parliament in

953
July, 1932. On page 5 there is a paragraph with reference to these undertakings which have not yet been taken over. This is what is said:
"The Minister of Transport has undertaken"—
these are the important words—
"so far as he is able, to see that the terms of settlement with other undertakings to be acquired by the new Transport Board shall not be such as to prejudice the financial stability the Board and thereby the position of the stockholders covered by the settlement."
I do not believe that that statement is worth the paper on which it is printed for the simple reason that in it is included the words "so far as he is able." It is obvious that if the Board have to pay more for the undertaking than they wish to, the Minister turns round and says: "I cannot help it; it is not my fault; I cannot stop you paying more and there is an end of it." As I say, I do not think it is worth the paper it is written on.
Then I come to the question of wages and fares. Lord Ashfield says with reference to fares that:
"Our present fares are adequate to meet Lie costs of the services we provide, but as taxation is increasingly imposed upon us we must ask ourselves how this burden is to be borne. Is it to be borne by the users of our services, by the shareholders, or by the employees?"
Put shortly: If fares are to be lowered or wages to be raised, where will the Board be? Your Lordships have already been told that Clause 3, subsection (4) provides that:
"It shall 'be the duty of the Board to conduct their undertaking in such manner, and to fix such fares and charges in accordance with the provisions of this Act, as to secure that their revenues shall be sufficient to defray all charges which are by this Act required to be defrayed out of the revenues of the Board."
A similar clause, Clause 29, relates to the Railway Rates Tribunal. The Board will be asked to consider a rise of wages or a reduction in fares and they will have to consider what effect that will have on the undertaking. You might well find that a. rise in wages or a reduction in fares would completely eliminate the balance of £ 159,000 odd.
With regard to the dividends in this pro forma statement, is it quite certain that you will be able to keep up this interest? Lord Ashfield has told us that
954
the rate of interest has fallen from 5½ per cent. in 1928 to 3.4 per cent, in 1932. I can quite understand that, and I ask whether these great rates of interest are supposed to be maintained. All these things which I have been referring to react immediately and directly in connection with the Underground group going to the City to raise more money. Those who are asked to subscribe will naturally ask what the balance is and what is the rate of interest that they have been paying. The main object of this Bill is to enable the Underground, instead of going to the Government to borrow money, to go to the City, and all these matters are consequently germane to the matter at issue.
There is one subject connected with "C" stock which I also consider a grave danger. If for any reason the interest is not paid a speculator representing half a million of stock can apply to the High Court for a receiver to be put in. It is true that the company has hedged itself round with certain safeguards. They say there must be a meeting of the debenture holders. But if the company got into such low water that they could not pay on the "C" stock, I do not suppose it would make much difference whether you had a meeting of the debenture holders or not. And what happens then? A receiver is put in. The whole of the transport of London within twenty-five miles of Charing Cross cannot stop. Whatever the Government is, whether Liberal, Conservative or Labour, it could not sit with folded arms. It would be bound to step in and take over the transport of London. It could not allow 10,000,000 people to have to walk to work. It would be bound to take over and the taxpayers would have to provide the money to run the business. Then the dream of Mr. Morrison would come true—nationalization!—nationalisation like an octopus all over the country, to be followed by the nationalisation of banks, land, shipping, anything you like. That is the danger I see. Perhaps your Lordships do not agree with me, but I think the danger a very possible one. Those who are responsible for this Bill are inclined to say that it is all right for five years. But I do not think that is quite the right view to take. At least I do not think it is the right view for your Lordships to take on behalf of the people outside this House.

955
May I say one word about the Metropolitan Railway and the four main lines? The Metropolitan Railway Joint Committee were strong opponents of this Bill. Led so ably by Sir Leslie Scott, they remained, like the rock of Gibraltar, absolutely immovable till we rose. They demanded nothing less than cash. Some time after the Joint Committee rose an arrangement had been come to between the Metropolitan Railway and the Underground Company. I understand the arrangement is that the four main lines of railways guarantee the Metropolitan Railway— an excellent thing for the Metropolitan Railway; I cannot imagine anything better. But when examining the finance of this Bill one wonders where the money is coming from to carry out this guarantee. My noble friend Lord Churchill is the Chairman of a great railway, but has no particular concern with the Metropolitan Railway. Why should he, and his friends, come forward and guarantee this Metropolitan Railway? I presume they expect to get a very good quid pro quo for doing it, but where can it possibly come from? It can only come from the coffers of the Underground group. I do not for one moment wish your Lordships to think that I am accusing anybody of doing anything. I only say what I think may have to happen, because we know nothing about the financial provision in this Bill at all. It is an entirely new business, and was never referred to, or discussed, for one second in Committee.
Lord Londonderry this afternoon informed your Lordships that this agreement was come to in Committee and embodied in the Bill. We never had anything to do with it in Committee. All that happened was that one fine morning, as is usually the case, someone, came along with a large sheaf of documents and put it before us, and so far as I remember somebody said that it had something to do with the railways. We never examined the documents for one second. No Counsel ever spoke, either for or against them. We knew nothing about the matter. This is an entirely new matter, and it is one of the things which may well upset the balance of the Bill. It is one of the reasons why I think, and ask your Lordships if you do not think, that it would perhaps be wise once more to spend a few days examining
956
these financial provisions. You cannot examine them on the floor of the House. That is impossible. You must have evidence. Noble Lords who understand finance could look into these things in a very few days and report.
That is all I have to say. I hope I have explained my point of view, and I hope I have not kept your Lordships too long. I only wish to add this, which is really not at all germane to the financial provisions of the Bill. We have had many critics of this House in the past. We have been told what we should do and what we should not do. Many have different ideas as to how we should conduct our business, and what are our duties, but there is one thing as to which all Parties are agreed, except perhaps those who are blinded by political bias, and that is that there rests upon this House the duty to revise and, if necessary, to delay. This, my Lords, I cannot help thinking, is eminently a case in which your Lordships should exercise your duty of delaying this measure long enough to look into its financial provisions and to report whether they are sound or not.
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords, it would perhaps be for the convenience of the House if I said one or two words on procedure and precedent, with reference to the proposal which has just been put before your Lordships by Lord Clanwilliam. In the first place I would observe that when your Lordships have agreed that a Private or Hybrid Bill— this is a Hybrid Bill—should be sent to a Joint Committee of both Houses, while the Bill is in another place, it has been the practice that the Bill should not be again referred to a Select Committee when it reaches your Lordships' House. I can find no precedent for the recommittal of such a Bill, but I would like to say most emphatically, and I think I have said it before, that the power of your Lordships' House to commit any Bill as often as you wish is perfectly clear. There is no bar to your action in that respect, although it is a very rare practice to recommit any Private or Hybrid Bill, and I do not think it has happened in the case of a Hybrid Bill.
There are, however, certainly precedents. For example, in 1859 the Thames Watermen and Lightermen Bill was re

957
committed, and again in 1882 the Wrexham, Mold and Connor's Quay Railway Bill was also recommitted, but I think your Lordships will agree that the recommitted of any Bill should be regarded as quite exceptional, because, obviously, if it were to become a common practice of the House the security which now is available to all Parties to a Bill would largely vanish. In the cases I have mentioned my predecessor, the noble Earl, Lord Redesdale, supported the recommitted of the Thames Watermen Bill in 1859, and as regards the Wrexham Bill he was unable to support the proposal, because he did not think the circumstances warranted it, but the House decided against him. Still it shows, I think, that those w ho have held the office which I now have the honour to hold have been careful to urge upon the House the necessity for having before your Lordships very special circumstances before recommitting any Bill.
With regard to this particular Bill, I have gone carefully into it, and it seems to me that its history is quite different from that of any similar measure, or of any Private Bill. As my noble friend Lord Londonderry has told your Lordships, it was introduced nearly three years ago, and Lord Clanwilliam told us that its finance is based on an even earlier date. It was introduced in 1930, and it was referred to a Joint Select Committee, and the Report of that Committee is now nearly two years old. The Government which introduced the Bill, and which was in power in 1930, was, of course, the Government of noble Lords opposite. Then the first National Government succeeded, and they adopted the Bill, and the present Government have taken it over. There are plenty of precedents for ore Government taking over a Bill from another Government. Instances will occur to your Lordships' memory. Then again there is this unprecedented circumstance connected with this Bill. It was Carried over twice from one Session to another, and has even been carried over from one Parliament to another, a General Election intervening. Then your Lordships have heard that important modifications have occurred since the Bill left the Joint Committee, and important modifications have occurred in the general financial situation, especially because the Com-
958
mittee reported before the financial crisis of 1931.
Taking all these circumstances into account it seems to me that the whole circumstances attending the history of the Bill are out of the ordinary, and in fact that there is no precedent for them. So I feel that should your Lordships decide to exercise your undoubted right of recommittal, I could not oppose such a course on the ground that it would be contrary to the previous precedents and practice of your Lordships' House. As regards precedent, therefore, I do not think there is any inconvenience in referring the matter to a Select Committee. It is a matter which this House must decide upon its merits. Of course further reference to a Select Committee will cause delay, and large expense has already been incurred by all concerned, in the various stages through which the Bill has passed. I must, however, say this, that if the course to be recommended by Lord Howe later on were adopted, it would cause more delay and expense than the course which is recommended by Lord Clanwilliam. I think your Lordships will agree that delay and expense are disadvantages. So it is a question for your Lordships to consider whether the advantages which will be gained by the further consideration recommended by the noble Earl behind me outweigh the disadvantages of delay and expense.
Now I come to another point, and that is the terms of the recommittal Resolutions. Your Lordships are aware that the ordinary course of a Private Bill when it is read a second time is that it should he automatically committed and then, if it is opposed, it is referred to a Select Committee, and the Select Committee considers the Petitions which have been deposited, hears Counsel and examines witnesses The personnel of the Select Committee is chosen by the Committee of Selection, and, by the custom of the House, though not actually under the Standing Orders, the same procedure is observed in the case of a Hybrid Bill. That is the procedure which is going to be recommended to your Lordships by the noble Earl, Lord Howe. Lord Jesse] and Lord Clanwilliam, who are supporting the Motion on which the noble Earl has just spoken, that is to say, that the Bill should be referred to a Select Committee to ex-

959
amine and report on its financial position, make a different proposal. In this case Counsel would not be heard against the Bill, and Petitions would not be deposited in the Private Bill Office, and the Committee itself would not be necessarily appointed by the Committee of Selection, but by the same means as the Committee which is now considering Lord Buckmaster's Bill for the protection of birds.
But I should like to say that that does not mean that the right of Petition is withdrawn from those who wish to make representation against the Bill. There is a constitutional right to everybody who petitions Parliament, and the recognised method for doing that is for the petitioners to entrust their Petition to a Member of your Lordships' House who will place the Petition on the Table. Doubtless, those who wish to petition against the Bill could adopt that course and their Petitions, when received, would stand referred to the Select Committee. That is a very usual procedure. So it would be possible to petition against the Bill and for the Petition to be considered by the Committee without the necessity of depositing in the Private Bill Office. This is quite a regular method and has been frequently adopted in regard to Bills which are opposed, and is familiar to the agents and others who serve your Lordships' House.
THE EARL OF KINNOULL: My Lords, I confess that it is with some trepidation that I address your Lordships at all. I am accustomed to being alone on the second Opposition Bench, but I am not accustomed to being left the sole occupant of these Benches. But the remarks I have to make will, in any case, be brief. The noble Marquess, Lord Londonderry, in the course of a very eloquent and lucid speech said that this Bill had been purged of Socialism, although the noble Lord, Lord Mount Temple, said that the alterations made in another place made small difference to it. I think the fact of the matter is that the Bill was really mangled in another place. Yet every thoughtful citizen in this country agrees with the principle of the Bill. All the big companies and corporations have welcomed it. And if this Bill does not become law you will have chaos; that is admitted by
960
everybody. There can be no expansion whatsoever without this Bill, and London traffic is going to expand— that nobody can deny.
The noble Lord, Lord Banbury, would, I think, like to go back to the days of his youth. He quoted the case of the Metropolitan Water Board, which I am afraid I cannot remember, and he said that after that Board was created water cost more. The noble Lord, however, cannot say that it was a Socialist Government that brought in that measure, and it is not the fault of a Socialist Government if water costs more. The noble Lord went on to say that this Bill embraced a range of 40 miles around London. I believe that is most necessary, though he thought it preposterous. I think that with the arterial roads stretching out as they do, and with traffic growing as it is, it is most necessary that a large radius round London should be taken in. I heard not long ago of a hold-up in the Strand which affected traffic as far out as Watford, which is, I think, only 15 or 20 miles, but I think it is most necessary that this Bill should go to a radius of 40 miles from London. Personally, I should like to see transport nationalised altogether. I should like to see the transport not only of London but of the whole country nationalised, whether it be by sea, by air, by train, or by road. I should like to see overlapping done away with. Every sane thinking man and every company wants this Bill, and for these reasons I beg your Lordships not to kill it, but to give it a Second Reading.
THE EARL OF RADNOR: My Lords, the Metropolitan Water Board and the Port of London Authority have been quoted as precedents for this Bill, but to my mind it bears a much closer relation to the amalgamation of the main railway lines. The Bill is much more on those lines than on the lines of the Metropolitan Water Board and other bodies, in this sense, that the railway amalgamations were designed originally to eliminate wasteful competition and wasteful expenditure and to improve facilities for the public. This Bill, as I understand, is designed to do that, and also to assist in clearing up all the muddle in transport in the Metropolitan area. The railway amalgamations achieved their object, I think, to a far greater extent than anybody

961
expected— a far greater extent than my noble friend Lore. Banbury at least expected. Elimination of competition was achieved and elimination of wasteful expenditure was also achieved, and is still being achieved.
My noble friend is very much afraid that the new London Passenger Transport Board will be an extravagant body, but if he looks at the main line railways and studies their figures for the past few years he will realise that the enormous saving made would; not have been possible had those railways not been amalgamated as they were. In addition to that, it has been possible in that way to form pools for the traffic where the main line railway companies come into direct competition with each other— pools which are of advantage to the companies concerned, and in no case, so far as I know, to the disadvantage of the travelling public. The net result in the case of the railway companies has been considerable saving in expenditure and improved facilities for the public, certainly at no greater expense, and in fact I think I am correct in saying travelling is actually cheaper to-day than it was before amalgamation.
The essence of this London Passenger Transport Bill is the pool arrangement that is embodied in it, certainly so far as the railway companies are concerned, and I think also as far as the other constituent bodies are concerned. It may be said that it might be possible to have a pool without this Bill, but if you will look at the Second Schedule you will see there are eighty-eight organisations which are to be included in the new transport organisation. Anybody who has any experience of pool organisations will realise it would be quite impossible to make any arrangements for a pool with that number of individual bodies, and therefore you must amalgamate them into one body and have your pool with the four main line railway companies. The result of that pool will be not poorer facilities for the travelling public but co-ordinating facilities for the travelling public, and possibilities for development and improvement, not only by the Transport Board but also by the amalgamated railway companies, which at the present time, in many cases, as
962
may be seen from the speeches that have been made at the annual meetings, are prevented by the possibility of undercutting competition from improving their facilities to the travelling public.
Now, my Lords, I do not propose to detain you at any length to-night, but I would like to say a word about the finance of the Bill on which Lord Clanwilliam has already spoken at considerable length. I do not propose to go into details as he has done, because the finance is extremely complicated, and I am afraid my brain is not capable of assimilating it in a short time. I will only touch on one detail, and that is his mention of the arrangement with the Metropolitan Railway Company and the guarantee by the main line railway companies. I would suggest to Lord Clanwilliam that that guarantee by the main line railway companies is the measure of their anxiety to obtain this Bill in its present form. One of the fears so far as the finance of the Bill is concerned is that the margin is very small, as shown in Sir William McLintock's memorandum — that either wages will have to come down or fares will have to go up in order to enable the Transport Board to pay dividends. But the position would be exactly the same if there was no Transport Board. If you study the finances of the bodies which are going to be incorporated you will find that their traffics are going down, and that if they remain as entities they will probably have to increase their fares in order to remain solvent.
It does not matter whether we have a Transport Board or whether we continue as we are; in any case, under existing circumstances, there is every probability that fares will have to rise. But the balance is in favour of the Transport Board, because if we go on as we are at present there is no hope of economy in the elimination of wasteful competition, but with a Transport Board there is every possibility of such elimination, and consequently much less chance of a rise in fares or a decrease in wages. I think I may quote once again, as I have done already, that the fact that the railway companies are still deriving benefit from their amalgamation suggests

963
that economies may accrue from the formation of a Transport Board. While they may not be apparent in the first year, they will undoubtedly be evident in the years to come.
There is only one other real criticism of the Bill, and that is it is socialistic in tendency and in fact. The noble Marquess in introducing the Bill said quite definitely that in his opinion it was a bulwark against Socialism, and he quoted words to prove that the Socialists themselves thought so too. I think that is the aspect we should look to. If we go on as we are going, and our existing transport facilities cease to be solvent, as is not without the bounds of possibility, somebody will have to carry oil transport, and that would mean Socialism; and in any case if they remain solvent and continue as at present, there is nothing to prevent a Socialist Government, if one came in, saying: "We shall follow the precedent set by the Irish Free State Government." If you leave things as they are you have no bulwark against Socialism. I do hope your Lordships will consider that this Bill is a practical proposition and is a necessity, not only to the railway companies but to the travelling public in the London area, and that you will not be led away by the false argument that the finance is unsound. I hope, further, you will not be led away by the fear of Socialism as portrayed by various noble Lords who have spoken.
VISCOUNT MONCK: My Lords, I must ask your indulgence, as this is the first time I have had the honour of addressing your Lordships' House, but I can promise that the remarks I shall make will have the virtue of brevity. In the first place there is opposition to this Bill on the ground that it is a Socialist measure. But surely what should weigh most with us is not whether the Bill bears the print of some particular creed or Party, but whether it is or is not a fitting solution, or even a fitting experiment, for the London traffic problem as it stands today. Secondly, the financial estimates have been criticised. We have been told that these estimates have been taken on prosperous years. I would ask your Lordships if, when passing through the years 1928, 1929, and 1930, we considered those years extremely prosperous. In comparison with 1931 and 1932 they were
964
very prosperous years; but are we to work on the basis that the present situation will continue? Surely that is rather a pessimistic view to take. As we all know, revenue has decreased enormously, but there again, is that not an unanswerable argument for immediate action to be taken? The policy of amalgamation and rationalisation has been adopted by industry for some years past, and I venture to submit that in very few cases has it proved a failure.
Centralisation of control should be responsible for enormous economies— central direction, central planning, and many others— and also I was going to say, last but not least (I think it is the most important) the arrangement of services solely with a view to public convenience and economic running, with no possibility of these desirable aims being hampered by a rival and overlapping system. With regard to the efficient running of this large concern doubts have been expressed, but can any one doubt that the gravest deliberation will precede the selection of those who will serve on the Board, if for no other reason than that the popular opinion of nearly one quarter of the population of the country will have to be faced in the event of the service falling short of the public requirements?
We have to admit there has been opposition of some strength to this Bill in various quarters. There may be even some persons alive to-day who agree with Sam Weller that the railways are unconstitutional and invaders of privileges, but at any rate it does appear that the majority have failed to take the broad view which the magnitude of this measure demands, though at the same time it must be admitted that they have made their voices felt. They remind one of Tennyson's lines:
"The tiny-trumpeting gnat can break our dream
When sweetest; and the vermin voices here
May buzz so loud— we scorn them, but they sting."
In this regard it may be well to call to mind the statements of three of the leaders in the transport industry which were uttered during the past week. In the first place I would like to take a

965
short sentence from a speech made by Sir Josiah Stamp on February 24. He said the scheme.
"is the only way out of the present deadlock so far as London is concerned."
Then my noble friend Lord Churchill, on February 22, said
"I do not think that anybody who has closely studied the traffic problem in and about London will disagree with the objects of the Bill, or deny that something should be done without delay to remedy the congestion and secure the better regulation of the competing services in that area."
Finally, Lord Ashfield, on February 23, said:
"I am convinced that the London Passenger Transport Bill offers the best present solution of London's traffic problems hope, therefore, that the present Bill will speedily complete its passage through Parliament."
The noble Lord, Lord Banbury, in his speech expressed qualms that the main line railway should take on more commitments when they had perhaps rather too many already; they were not paying dividends on their stock at present. But may I suggest that two eminent gentlemen who are both Chairmen of their respective railway companies would not have made those statements welcoming the Bill if they had thought a disastrous result would be likely to occur if it passed?
There is one other point I should like to make. It is said that when this Bill goes through fares will be raised. Can any one deny that if the present state of things continues fares are extremely likely to be raised, or else that subsidies from the rates will be called for? And is not one of the great safeguards of this Bill the fact that once it is passed London transport will not be in a position to be bolstered up by rates, but must gain an economic victory on its own? There is only one further point I would like to refer to. The noble Lord, Lord Mount Temple, said earlier in the evening that this great amalgamation would make matters very difficult in the event of another general strike. But surely if there is a scheme which should enable the traffic of London to be run more efficiently and economically the fear of a general strike, which we hope, and, may say, think we shall never see again, should not be allowed to stand in the way. Surely this is defensive action and
966
pessimistic action taken to an extreme. Lastly, are we to be responsible for thwarting a scheme which will enable the great traffic units of London— the railways, the Underground, the tubes, the omnibuses, the trams— to combine together in common endeavour to solve the lack of cohesion which exists to-day, and to simplify the problem of the nine million people who depend upon them for their daily transport?
LORD STANLEY OF ALDERLEY: My Lords, after the very stirring and able speech we have heard from the noble Viscount who has just sat down, who, I may say at once, has stolen most of my thunder, I hope not to detain your Lordships very long. However, there are one or two points to which I would draw your Lordships' attention. One of the chief things that comes out of this debate is that the opposition to this Bill has come exclusively from noble Lords who have little or nothing to do with railways. I see my noble friend Lord Banbury appears to question that.
LORD BANBURY OF SOUTHAM: I was for over twenty years a director of a railway, and for twenty years Chairman.
LORD STANLEY OF ALDERLEY: I know the noble Lord was. All I can say is that this Bill has been sponsored by those who are in active touch with transport affairs, and I think I am right in saying it is their unanimous opinion that this is the only solution that has yet been offered for this great problem of London traffic. Let us take this Bill in its most pessimistic form. Let us assume, if you like, that the finances are perhaps ill-advised, that interest on the capital which is to be found in exchange for the present capital -of the undertaking to be merged will not be earned. What then happens? Fares will rise. I think noble Lords in all parts of the House will say that a rise in fares will be better than that the present chaos should continue, and, if I may say so in direct contradiction to one noble Lord, the chaos will go on getting worse. It has been denied that there is any chaos in London traffic at the moment. I do not believe that any one can seriously say that the traffic problem in London is not one of extreme urgency. Secondly, we have been told that this Bill is Socialism. Well, we have heard with a. united and a single voice

967
from a Socialist himself that this is not Socialism, and if he does not know what Socialism is I do not know who does. I think, therefore, we may disregard this bogey of Socialism and the nationalisation of industries. I wish to support this Bill, and if I thought it was Socialism I should not be speaking in its favour.
Also our flesh has been made to creep on financial grounds. My Lords, I will not be panicked by that. I do not think that men of distinction in the transport world like Lord Ashfield— if he will forgive my bringing in his name— and Lord Churchill would sponsor a scheme which implied reckless finance at the back of it. I have seen no expert criticism against the financial provisions of this Bill which leads me to suppose that it will plunge us into the condition stated by the "fat boys" who have tried to make our flesh creep. I am a little diffident about expressing my views on this Bill because we have had a weight of expert testimony which I cannot hope to emulate, but if there is any value in the opinion of one who looks at the matter from the point of view of the travelling public— I should like to say that I do look at it from that point of view— then this Bill is designed to increase the services of the transport in London. If the noble Lord, Lord Ash-field, again will forgive me for quoting him, I will recall an interesting thing that he said to me some years ago. He said that his omnibuses were running along Oxford Street in competition with his tubes. I, being young and foolish, said: "That seems uneconomical and reckless." "No," said Lord Ashfield, "it is not so; if I take my omnibuses off someone else will put them on."
That is the sort of situation you have all over London. You have this reckless competition which means inefficient service to the public, and if you can unify the control of the traffic of Greater London then surely it will be possible for that controlling body to put on services to less congested areas which now might well be developed as homes for our working people. At the moment, quite rightly, boards of directors say: "We cannot undertake these schemes. They mean capital, and we have no assurance that if we do undertake them these schemes will be remunerative, on account of this insane competition." If you have control of all the traffic so that
968
it is illegal for little companies to spring up as soon as a route is developed and take away the profits of those people who have expended capital in developing it, then surely there is some possibility by decentralisation of population to open up new localities in which our workpeople may live, and so relieve the congested areas.
It is getting late and I do not want to detain your Lordships unduly long, but there is one other point I should like to refer to and that is the question of finance, which has been so heartily attacked this evening. I want to refer particularly to this "C" stock which people do not seem to take to with any cheerfulness. I cannot see that the noble Lord, Lord Banbury, for instance, has any cause for complaint that his £ 100 of stock is to be converted at a rate of £ 88 and some odd shillings. These stocks now stand at a very low value and if things go on as they are now they will quite certainly not recover any of their value. Holders of present stocks will get the same rate of interest and they will get a very much better security because of increased efficiency in administration. Exception has been taken also to the fact that the interest has been based on the income during the years 1928 to 1930. On that I would point out that the figures got out by Sir William McLintock do not take into consideration the possible savings which will be effected by increased efficiency in administration. Those savings may amount to a very considerable sum.
A good deal has been said about the small balance of £ 159,000. Figures of that kind must be simply estimates and I, personally, am quite content if they show a balance of £ 159,000 or even if the calculations only comes out all square, because we have this great asset, that by increased efficiency in administration we shall be able to get a very considerable surplus, a surplus which, according to my rough calculation, will amply compensate for any falling off in traffic that there has been during these years of depression. I think the period 1928 to 1930 is a very fair and normal period on which to base these figures. The criticisms against the finance of the Bill are ill-founded I think, and if criticism is pushed so far as to result in committing this Bill to further investigation

969
by a Select Committee, then I need hardly tell your Lordships who are much more versed in the practice of the House than I am, that it will be tantamount to Wing a Bill, on which, after all, there has been obtained a large measure of agreement. Agreement has been obtained, I think I am right in saying, on the part of hundreds of organisations with very varying interests and that is a thing which we ought not lightly to throw away.
VISCOUNT MERSEY: My Lords, on behalf of my noble friend Earl Buxton, I beg to move that the debate be now adjourned.
Moved, That the debate be now adjourned—(Viscount Mersey)
On Question, Motion agreed to, and debate adjourned accordingly.
House adjourned at quarter past seven o'clock.

LYME REGIS DISTRICT WATER BILL. [H.L.]
Committed: The Committee to be proposed by the Committee of Selection.

BIDEFORD AND DISTRICT ELECTRICITY (EXTENSION) ORDER, 1933.
Special Order in respect of part of the rural district of Torrington in the County of Devon:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

SUNDAY ENTERTAINMENTS ACT, 1932 (BOROUGH OF LEOMINSTER ORDER).
Order made by the Secretary of State for the Home Department extending Section 1 of the Act to the Borough of Leominster:
Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.

SUNDAY ENTERTAINMENTS ACT, 1932 (MERTON AND MORDEN URBAN DISTRICT ORDER).
Order made by the Secretary of State for the Home Department extending Section 1 of the Act to the urban district of Merton and Modern:
Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.

MINISTRY OF HEALTH PROVISIONAL ORDER (RUGBY JOINT HOSPITAL DISTRICT) BILL.
MINISTRY OF HEALTH PROVISIONAL ORDER (TAUNTON AND DISTRICT JOINT HOSPITAL DISTRICT) BILL.
Committed.

LONDON PASSENGER TRANSPORT BILL.
Petitions praying for amendment of, or for further inquiry into the Bill before a Select Committee; of the Motor Hirers and Coach Services Association, Limited, and the Association of London Omnibus Proprietors, Limited: Read, and ordered to lie on the Table.