Sitting of 6 July 1934

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Torquay Corporation Bill [Lords],
As amended, considered; to be read the Third time.
Ministry of Health Provisional Order Confirmation (Burnham and District Water) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Milford Haven) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Steyning and District Water) Bill [Lords],
Read the Third time and passed, without Amendment.
Glasgow Corporation Order Confirmation Bill,
Read the Third time, and passed.
Land Drainage Provisional Order (No. 1) Bill,
As amended, considered; to be read the Third time upon Monday next.
London Midland and Scottish Railway Order Confirmation Bill,
Considered; to be read the Third time upon Monday next.
Ministry of Health Provisional Order Confirmation (South Middlesex and Richmond Joint Hospital District) Bill [Lords],
Read a Second time, and committed.
Dundee Corporation Order Confirmation Bill [Lords],
Renfrewshire County Council (Eastwood and Mearns) Water Order Confirmation Bill [Lords],
Read a Second time; and ordered to be considered upon Monday next.

ORAL ANSWERS TO QUESTIONS.

  GREAT BRITAIN AND FRANCE (MINISTERS' VISITS).
  Mr. MORGAN JONES(by Private Notice): asked the Lord President of the Council whether he can inform the House of the object of the recent visit of the Secretary of State for War to France and of the visit of M. Barthou to this country; and whether His Majesty's Government contemplate the making of any arrangements, or have made any arrangements, with France without consultation in the League of Nations with reference to mutual action in the event of hostilities breaking out in Europe?
  The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): The recent visit to France of my right hon. Friend the Secretary of State for War was without any political implications and was undertaken in connection with an instructional tour of the battlefields of the late War, being made by certain of our officers as a matter of interest. Such tours have taken place on more than one occasion in the past. As regards M. Barthou's visit, I would refer the hon. Member to the answer which my right hon. Friend the Secretary of State for Foreign Affairs gave to the hon. Member for East Wolverhampton (Mr. Mander) on this subject on 27th June. The answer to the last part of the question is in the negative.
  Mr. JONES: I am obliged to the right hon. Gentleman for that answer. May I take it that not only has the visit of the Secretary of State for War to France recently no political significance, but that the same applies to the visit of General Weygand to this country; and whether I am to understand that there is no obligation of honour involved in any of these visits, such as was involved in the visits previous to 1914?
  Mr. BALDWIN: No. There is nothing in these visits beyond what I have said in answer to the question.

  ISLE OF MAN (CUSTOMS) BILL,
  "to amend the law with respect to customs in the Isle of Man," presented

  2207
  by Mr. Duff Cooper; to be read a Second time upon Monday next, and to be printed. [Bill 169.]

  PUBLIC WORKS LOANS BILL,
  "to grant money for the purpose of certain local loans out of the Local Loans Fund; and for other purposes relating to local loans," presented by Mr. Duff Cooper; to be read a Second time upon Monday next, and to be printed. [Bill 170.]
  COLONIAL STOCK BILL,
  "to provide, as respects Dominion stocks, an alternative to the third of the conditions prescribed by the Treasury under section two of the Colonial Stock Act, 1900," presented by the Chancellor of the Exchequer; supported by Mr. Duff Cooper; to be read a Second time upon Monday next, and to be printed. [Bill 171.]
  SELECTION (STANDING COMMITTEES).

    STANDING COMMITTEE D.
    Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Members from Standing Committee D; Mr. Smedley Crooke, Mr. Drummond-Wolff, Captain Elliston, Major Harvey, Sir Percy Hurd, Mr. Hamer Russell, and Mr. Skelton; and had appointed in substitution: Lieut.-Commander Agnew, Sir Alfred Butt, Mr. Hannon, Sir John Haslam, Captain Heilgers, Lieut.-Colonel Heneage, and the Solicitor-General for Scotland.
    Mr. William Nicholson further reported from the Committee; That they had discharged the following Member from Standing Committee D (added in respect of the Betting and Lotteries Bill [Lords]): Mr. Kenneth Lindsay; and had appointed in substitution: Mr. Palmer.
    Reports to lie upon the Table.

NATIONAL MARITIME MUSEUM BILL.
Reported, with an Amendment, from the Select Committee, with Minutes of Evidence.
Report to lie upon the Table, and to be printed.
Bill, as amended, re-committed to a Committee of the whole House for Monday next.

ORDERS OF THE DAY.

  PETROLEUM (PRODUCTION) BILL [Lords].
  As amended, considered.
  The following new Clause stood upon the Order Paper:

  PETROLEUM (PRODUCTION) BILL [Lords].

    NEW CLAUSE.—(As to rights of support.)
    A person holding a licence under this Act shall not acquire by reason of the execution by him of any works for the purpose of exercising the rights granted by such licence any right in law to require the owner of any lands or minerals to leave support for any such works otherwise than by agreement or than by obtaining such right of support under section three of this Act.—[Mr. Michael Beaumont.]
    Mr. SPEAKER: I notice that this new Clause is exactly similar to that which was considered when the Bill was in Committee. Therefore, I cannot select it to-day.
    Mr. MICHAEL BEAUMONT: On that point, Mr. Speaker, I understood that you had been informed that the Clause was put down again, because new information had been obtained which we desired to give to the Minister. I do not know whether you were informed of that and whether your decision now is in view of that fact?
    Mr. SPEAKER: I was informed that a new Clause had been drawn, but I understood—I may have misunderstood what was said—that there was some difference in it; but this Clause is the same as that which was moved in Committee.

    CLAUSE 2.—(Licences to search for and get petroleum.)
    11.10 a.m.
    Mr. M. BEAUMONT: I beg to move, in page 2, line 11, at the end, to insert:
    "( ) Every such licence shall contain such provisions as the Board of Trade may deem expedient for protecting the amenities of the locality to which the licence relates against injurious affection by reason of the exercise of the rights granted thereby."
    This is a point which was not raised in Committee, but is nevertheless of considerable substance. It is in no sense a hostile Amendment, but is intended to make the Bill more complete. There are in the Bill substantial provisions, whether effective or not, for the safeguarding of
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    amenities in cases where recourse is had by the concessionaires to the Railway and Canal Commission for the compulsory purchase of land. In those circumstances it is possible for all interested parties, whether the owners of the land, adjacent local authorities or the owners of adjacent land, to claim to make representations to the Commission; but in the event, which we understand the Government hope will be more frequent, of an agreement between the undertakers and the owners of the land, a voluntary agreement in which no recourse is had to the Railway and Canal Commission, there is no opportunity whatever given to other interested parties to put their case at any stage with regard to the granting of a licence for the work to be done.
    During the Committee stage we were precluded, I understood, from raising this point in connection with the publication of the grant of a licence before it was granted. That would have been one way of dealing with it, but as the Government were not prepared to consider that we have moved this Amendment now in order that there may be machinery by which those interested, other than the two primary parties, that is to say, the actual landowner concerned and the concessionaire, may have a chance of putting their point of view with regard to the amenities. The Minister at the beginning of this Parliament was interested in the introduction of a Town and Country Planning Bill. I then thought that that was the worst Bill that could be introduced into this House. I have since learned that I did the Minister an injustice; he has now produced a worse Bill.
    Under the provisions of this Bill, once the two principal parties are agreed, no local authority, no adjacent owner, no one outside has any say as to the setting up of oil works in a district. Such works may be entirely unsuited for the district; they may ruin amenities and be entirely experimental, may do incalculable harm and do no good from the oil point of view. We do not want to give powers to these people to stop production, but we do think that before work is started they should have the right to put their point of view for the amenities, just as much when it is an agreed purchase as when it is compulsory. I cannot see the logic of saying that if it is a compulsory purchase the outside interests should be considered, but

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    that in an agreed purchase they should have no opportunity of putting their case. I am aware that certain interests supposed to represent the landowning interest have opposed these provisions. Quite frankly that leaves me cold. The Bill seems to me illogical and unjust, and I think that if this power is taken for the public good the public ought in all cases to have the right to give their views as to whether the powers should or should not be used.
    11.15 a.m.
    Lieut.-Colonel ACLAND-TROYTE: I beg to second the Amendment.
    I suggest that this is a proposal which might be accepted by the Government. I would point out that, so far, they have not made a single concession in connection with this Bill although it has been opposed by a considerable number of Members on this side of the House. This Amendment would in no way interfere with the object which the Government say they have in view in the Bill, and I suggest that the question of amenities ought to be considered in all cases and not merely in some cases.
    11.16 a.m.
    The SECRETARY for MINES (Mr. Ernest Brown): I do not think that my hon. Friends have realised what would be the result of their Amendment. It would not carry out what they seem to desire. They ask that where there is a voluntary arrangement between a landowner and a a licensee the Board of Trade should take special powers to lay down special conditions about amenities. Surely when my hon. Friends talk as the hon. Member for Aylesbury (Mr. M. Beaumont) did, about "incalculable harm" being done, they must see that what they are doing here is to raise a very special plea, namely, the plea that particular landowners shall have special protection in special cases, as compared with neighbouring landowners when voluntary arrangements are made, notwithstanding the fact that they already possess rights in this respect under the common law. At present if a factory of any kind is erected and if it is likely to cause a nuisance or in the phrase of the hon. Member to do "incalculable harm" then those concerned have their rights under the common law.
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    If, on the other hand, the narrower point is taken that since in cases of compulsion the Government have said that one of the factors to be taken into consideration by a court in forming a judgment shall be the effect upon amenities, then in cases of private arrangements between private persons the Board of Trade should lay down special conditions for the protection of amenities, surely the place for that is in the regulations. If the point which hon. Members have in mind is just that the work should be carried out in a workmanlike manner, or to secure a regulated flow of oil, with the minimum of disturbance to the amenities, surely the proper place to provide for that is in the regulations which will be drawn up before the licences are granted and will be placed before Parliament. I understand the anxiety of my hon. Friend the Member for Aylesbury in regard to amenities and he has himself referred to a previous Measure in which this question was involved, but I would point out to him that the conflict between human activity and amenity is a very old one, and it is not merely an industrial but also a rural problem. There is a quotation on this point which I might recall from a very old Book:
    "Where no oxen are the crib is clean; but much increase is by the strength of the ox."
    Whether in rural or industrial life, wherever human activity takes place there must be a certain amount of soiling. The Government have done their best to protect amenities under this Measure, and I can assure my hon. Friends that the regulations will be drawn up in a manner which will secure, inside the common law rights, what both the Government and they desire namely the fullest protection for the amenities of the country.
    Mr. BEAUMONT: I understood the hon. Gentleman to say that this matter would be adequately safeguarded under the regulations, but as I read Clause 6 and as I have been informed, the subjects which the regulations may prescribe do not include this subject.
    Mr. BROWN: I have said that in so far as the regulations deal with the work and the regulation of the flow and so forth, all of which of course has a bearing on this matter, this question will be

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    covered by them. In so far as they do not deal with those matters, then everyone has rights under the common law equally. What my hon. Friends are asking is, that one partciular section of landowners should have an extra protection which their neighbours do not enjoy.
    Amendment negatived.

    CLAUSE 3.—(Provisions as to the compulsory acquisition of rights to enter on land, etc.)
    11.20 a.m.
    Mr. HERBERT WILLIAMS: I beg to move, in page 3, line 10, to leave out from "right," to the end of Sub-section.
    The words in question are
    "subject to any modification or adaptations specified in the order."
    That is to say, that an order under this Clause will give power to modify sections 19 to 28 and 30 to 34 of the Waterworks Clauses Act, 1847. I raised this matter on short notice in Committee, but I had not then fully studied all the sections concerned. I find that Sections 30 to 34 relate to the breaking up of streets while Sections 19 to 28 deal with a number of matters affecting the working of minerals, and it seems to me that if an order can be made modifying those provisions it may involve substantial changes in the existing law. When I raised this point previously the Solicitor-General had not been warned of it and presumably had not had an opportunity of studying the matter very carefully, and he gave an answer which did not seem to me at the moment to be adequate. For that reason I have put down this Amendment on the Report stage, in order to get a fuller statement as to why it is desired to modify or adapt these rather important sections of the Waterworks Clauses Act.
    Marquess of HARTINGTON: I beg to second the Amendment.
    11.22 a.m.
    The SOLICITOR-GENERAL (Sir Donald Somervell): The House will appreciate the fact that the Waterworks Clause Act, 1847, contains a number of Clauses which are not law by virtue of that Act, but only become law if embodied in private Acts of Parliament. The Act expressly contemplates, for obvious reasons, that in any such private
    2216
    Act using the machinery which is there set out, those Clauses may be expressly varied or excepted. They are general model Clauses, which in a private Act dealing with waterworks would likely require some modification or adaptation, having regard to particular local conditions. Under this Bill, insofar as it brings in and applies the Waterworks Clauses Act of 1847, the order which is to be made by the Railway and Canal Commission takes the place of the private Act of Parliament and the object of this proviso is that in dealing with the question of pipes being laid under the highway, the Railway and Canal Commission shall take the Waterworks Clauses Act as their guide, but, having regard to the difference of the subject-matter and the special local conditions, they will, of course, have to modify and adapt it.
    The necessity for modification and adaptation becomes apparent if one looks at any of these Clauses. I take for example Section 28. It starts with the words "the undertakers" and "undertakers" are defined as the persons operating a special Act authorising them to construct waterworks. Obviously in connection with the Measure with which we are dealing, there will be no persons authorised by any special Act to construct waterworks. There will be people who have licences to bore for and obtain oil, and therefore at the very outset there would have to be a modification in the language of that Section of the Act of 1847. Then there are references throughout the Act of 1847 to "the special Act" which means, of course, a private Act of Parliament, and that has no application in this case.
    This Clause says that the undertakers may do all other acts which the undertakers shall from time to time deem necessary for supplying water to the inhabitants of the district. Those words obviously require modification, because it is not contemplated to supply water to the inhabitants, but to obtain oil, and I am sure my hon. Friend will see at once that in applying the principles of this Act, it is obvious that modifications and adaptations have to be made. I am satisfied that I can relieve my hon. Friends of any fear that these words will entitle the Commission to drive a coach and horses through the principles of the Act. The words "modifications or

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    adaptations" occur in many other Acts passed by this House, and they mean what they say. They do not entitle the persons who have the power to introduce modifications to alter the fundamental principles of the Act concerned; they merely entitle them to introduce such necessary modifications or alterations as are proper having regard to the different subject matter with which the Commission will be dealing as compared with the subject matter contemplated by the Waterworks Clauses Act. I am grateful to my hon. Friend for giving me this opportunity of making a fuller explanation than I could in Committee, and I hope that with that explanation he will be able to withdraw his Amendment.
    Mr. H. WILLIAMS: With the permission of the House, may I ask one further question? Under Section 22 there is provision for the working of minerals lying near the works not to be worked without notice, and in Section 23 there are provisions with regard to compensation. Can the hon. and learned Gentleman assure me that in no case will people be deprived of their rights under those Sections?
    The SOLICITOR-GENERAL: If the works in question affect mines or minerals, quite plainly the mine or mineral owners will have the rights set out in the Clauses to which the hon. Member has referred, and the Railway and Canal Commission will have to apply the principle of the Bill, making the necessary modifications having regard to the different subject matter.
    Amendment, by leave, withdrawn.

    CLAUSE 11.—(Short title, repeal and extent.)
    11.27 a.m.
    Marquess of HARTINGTON: I beg to move, in page 6, line 9, at the end, to insert:
    "(3) The provisions of this Act shall continue in force until the thirty-first day of December, nineteen hundred and forty-six, and no longer, unless during the twelve years ending on that date not less than one thousand two hundred tons of petroleum shall have been gotten from wells or boreholes operated in exercise of rights granted by a licence granted under this Act, in which event the said provisions shall continue in force until other provision is made by Parliament."
    This Amendment, though different in detail, is based on the same principle as
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    one which I moved during the Committee stage, and it is designed to secure that if this Bill fails to realise the hopes which the Government and the House base upon it, it shall cease to be the law of the land. I hope very much indeed that my right hon. Friend will see his way to accept it. The Amendment which I moved in Committee, he regarded as a wrecking Amendment, but it is intended to be nothing of the kind. Surely 12 years gives ample time for this Bill to be tried, if it be the case, which I deny, that it makes it easier for petroleum to be searched for in England, and the quantity of oil that we have put in the Amendment, namely, 1,200 tons, during that period of 12 years, is a quantity so small that what the Amendment really means is that if any success whatever is achieved by the Bill, then the Amendment will never become operative. Only if it is a complete and absolute fiasco and fails to realise any of its objects, can the Amendment succeed. I think it a very desirable Amendment, because really, if the Bill does not succeed, it will be very difficult for any repeal of the Bill to be secured. It would be as hopeful to get butter out of a dog's mouth after 12 months as to get oil out of the hands of a Government Department after 12 years.
    The Amendment will give private enterprise a chance once more, which they are deprived of by this Bill, to search for oil. This Bill, far from making it easier to search for oil, will, I am convinced, make it more difficult. There is only one way in which the present private ownership of oil could operate to hinder the search for oil, and that is if it could be proved that oil was being drawn from under the land of one man into a well owned by another. If that could be proved, I should fully agree with the Government that legislation was necessary, but I am advised that that contention is absolutely incapable of proof, and that even in countries where there are adjacent boreholes belonging to different properties, it never has been proved or sought to be proved that oil is being drawn from one man's land to that of another. In England, under our licensing system, it would be quite impossible to prove it, because you would have to prove, first, that there was oil under your land. If a landowner conceived himself to be aggrieved by oil being drawn from his

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    land, he would have to prove that there was oil under his land, which he could not do unless the borehole were sunk in his land. If it were, his grievance would disappear, and if no such borehole were sunk, he would have no possibility of proving damage.
    While this Bill will not facilitate the search for oil, it will hinder it to a considerable extent by adding enormously to the complications of anyone who wants to search for oil. In every case he would have to go to the Railway and Canal Commissioners, and he would have to fight every inch of his way instead of meeting with willing support from the landowner. Further, under this Bill a person desiring to search for oil would be a monopolist, and he would not be satisfied with the very large royalty of 10 per cent. of the gross value of the oil he gets. Those two added difficulties which the Bill imposes on everyone wishing to search for oil will make it almost impossible for anyone to undertake the search for oil in future. Although the House is fully decided to give the Bill a chance, I contend that 12 years is ample time for it to operate, and if at the end of that time it is proved a complete failure—and this Clause would never operate unless the Bill was a complete failure—it should then cease to remain on the Statute Book.
    11.33 a.m.
    Mr. M. BEAUMONT: I beg to second the Amendment.
    This is in no sense a wrecking Amendment. Hon. Members opposite may laugh at that, but I do not yield a bit in my opposition to the Bill. If I could stop it becoming law now, I would do so, but that does not preclude us from endeavouring to insert provisions in it which will improve it, and I maintain that this is one of them. As my noble Friend has said, if this Bill is any success at all, if there is any value in it, then this proposal cannot do it any harm. If it is not a success, if we are right, if it is in point of fact a harmful Measure, then, after a very considerable time and after such harm has been fully proved, this House can have a clean sheet to legislate again on the subject. I do not think that that is an unreasonable thing to ask. If there was any provision in either the time or the amount of oil
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    which was such that the very smallest success would not entirely cover it, then I could see an objection. As it is, I think it is a small concession to ask. It may be beneficial, and I do not think it can possibly be harmful to the Bill, and I hope the Government will be able to see their way to accept it.
    11.36 a.m.
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): My Noble Friend and his colleagues dislike the Bill now as much as they did earlier in the week. They now propose to amend it a little differently than they proposed earlier in the week, but their Amendment is substantially the same proposal as we had in Committee, except that the figures are slightly altered. I do not think those who have been opposing the Bill will be impressed by our arguments. It is true that they are acting under advice, as we are. Their advice is one thing and ours is another, but, if they will not mind my saying so, I attach more value to the advice given to us than to the advice given to them. What is the view of my noble Friend? It is that if this Bill does not produce oil in commercial quantities by the end of 12 years it ought to be brought to an end. It is well known to the House, however, that if Parliament wishes to bring this Measure to an end, they can do so in the ordinary way. They can terminate the whole Act or part of it. One of the reasons why in this case it would be detrimental to the interests which we are wishing to encourage is that nobody knows how long the oil supply of the world is going to last. Not even the advisers of my noble Friend would give a firm figure of that period. Nobody knows how valuable oil is likely to become. We cannot tell, and it is impossible to prophesy.
    We do know one thing. As the fields are exhausted one by one it becomes necessary to bore deeper and deeper, and the deep borings are obviously more expensive than the shallow borings. They go to well over 10,000 feet in depth, a remarkable engineering achievement, and it may be that borings of that size and of that cost will be inherent in this scheme once it gets going. In these circumstances, I think those who will be invited to spend money on these ventures will be very cautious; certainly, if they are to be told that at the end of 12 years the whole thing will come to an end. It

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    will mean that at any time during that period the enterprising company or individual will be faced with the fact that they will be working on a comparatively short lease. I do not know whether there are even any coal leases being dealt with in that way. The parallel may not be complete, but I am sure that if 12 years were to be the lifetime of this Act it would lose part of its usefulness in inducing companies or individuals to embark on boring for oil. It is because it is one of the objects of this Bill to induce those who will make these explorations to embark on them as soon as possible that naturally I want to see no obstacle put in the way, and that there should be no doubt as to what their rights are to be in future. If I may sum up, one of the objects of this Bill is to set doubts as to ownership and as to period at rest, and, if we bring new doubts into the Measure, they will undo much of the good that will be done.
    11.40 a.m.
    Mr. TINKER: The noble Lord and his friends have given us a lesson in pertinacity in opposing a Measure with which they do not agree. When we on these Benches make our stand against a proposal, we accept the position for the time being when it is put to us by the other side. In spite of the position which the Government have stated in regard to this Bill, however, the Noble Lord and his friends are still persistent this morning. It would not be wise to limit the Bill for 12 years because during that time oil may not be found and certain things may happen to deter the search. If Parliament feels in 12 years' time that the Measure has been ineffective, it can in its wisdom alter it. When we on these Benches come into power there are many Acts of Parliament which we shall tackle and put right. The fact that they are on the Statute Book will not be a barrier to us. If in 12 years' time this Bill is not working as it ought, Parliament can alter it, but let us give the Measure a chance. Let us see if by public control we can do better than private control has done in the past. It is a step in the right direction to say that what is in the ground should belong to the State.
    Amendment negatived.
    Motion made, and Question proposed, "That the Bill be now read the Third time."
    11.42 a.m.
    Mr. M. BEAUMONT: I do not propose to detain the House long on this subject. Like the hon. Member for Leigh (Mr. Tinker), we know when we are beaten and when we have not an earthly chance to stop this Bill getting into law. Therefore, it is not the present intention of those with whom I am associated to waste a long time on Debate or to challenge a Division, because the opinion of the House has been tested and a decision—a wrong decision, in my view—has been taken. For all that, we cannot let the occasion pass without registering our unaltered and unalterable opposition to this Bill in principle and in detail. We are still entirely in the dark and unsatisfied as to the reasons which have led the Government to take this very drastic step and this divergence from principle. We are still in the dark as to why they have resolutely declined to accept any compromise or any alteration whatever. We know that at this stage, if the heavenly choir came down and moved the rejection of the Bill, the results would be exactly the same; the bells would ring and the cohorts from outside would come in, and, in answer to the blandishments of the Whips, would see that the Government had their triumph.
    That does not alter the fact that in our view this Bill is confiscation without compensation imposed by Parliament for the first time. I take no exception to the support given to it by hon. Members opposite. It is a logical conclusion of their policy, and they stand up for their policy as we stand up for ours. I still cannot fail, however, to express my regret that a Government which is out to oppose the principles of Socialism and to uphold justice should have seen fit to bring forward a Measure which I am convinced is unjust, which is opposed to the principles of private property in which we believe, and which, in our submission, will act adversely to the industry which it is supposed to help. We have been unable to ascertain from the Government what exactly their advice was, beyond the fact that this Bill was necessary. A Government with a large majority behind them are in a position to say, "We believe this is the only way," and to leave it at that, but we must be forgiven if we do not find that assertion particularly convincing; and even though we shall not divide on the

    2223
    Third Reading we wish to state publicly in this House that we, at least, stand up for what we believe we were elected for, to defend the rights of the individual and to defend the rights of property, which in our submission are being attacked, and to see that such action as the Government take to develop the national resources is taken in the way that is best calculated to affect them beneficially.
    By this Bill the owners of the soil will be made hostile; the number of people with whom undertakers will have to deal will not be diminished by one person; Government departments will be given increased power; ownership will be vested in the Crown—and, as we have reason to know, the Crown has proved in the past and is likely to prove in the future a very harsh landlord and difficult to deal with; and on all those grounds we believe that, in addition to its violation of a principle, the effect of this Bill will be to increase rather than reduce difficulties in the way of working oil. For those reasons, and above all on the question of principle, though we do not divide against it we are as unalterably opposed to the Bill now as we were when we first started.
    11.48 a.m.
    Marquess of HARTINGTON: I trust that I may be allowed on the Third Beading to call the attention of my hon. and learned Friend the Solicitor-General to the very serious position which may arise in the event of oil borings going through coal measures. Those borings may acquire, by the lapse of 20 years, rights of support which are very much more serious than had occurred to me during the Committee stage. Instead of 2½ acres of coal, as I then thought, being sterilised, possibly, by the existence of a bore hole, the area may be very much wider. A bore hole of considerable depth, say 3,000, 4,000 or 5,000 feet, which is nothing out of the common, if passing through deep coal measures, may require a support which may sterilise a very much larger area than 2½ acres of coal, and, as hon. Members opposite will be aware, that means a tonnage of gigantic proportions. It is possible that the Bill as it stands, and the rights of support which under the Common Law these undertakings will acquire, will have a damaging effect, and I urge my hon. and learned
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    Friend to see whether, even at this late stage, some provisions similar to those in the Public Health Act dealing with the support of sewers cannot be inserted which would provide a certain measure of security for mineral workings in the vicinity of an oil well. I have had the opportunity of discussing this matter with my hon. and learned Friend, and I hope he does realise that there is a really serious risk of this Bill doing damage to the coal industry. I regard the Bill as quite certain to do irreparable damage to the petroleum industry—though we are not certain that we have got one—and it would be disastrous if the Government not only destroyed an unborn petroleum industry but also did serious damage to the coal industry. I think my hon. and learned Friend is familiar with the point, and I hope he will consider it, possibly in another place, because it is a point of very great weight.
    With regard to the Bill itself, I agree with my hon. Friend the Member for Aylesbury (Mr. M. Beaumont) that it is of no use to go on opposing the Government, although I remain entirely unconvinced, and we have put up a certain amount of evidence in support of our view that this Bill will do harm. We have not heard from the Government any explanation of why they believe people will be willing to look for oil if they have to get leases from the Government, which will charge them more than 10 per cent. royalty, when they would not look for it when they had only to deal with a landlord who, not being a monopolist, would in all probability be very much more reasonable than a Government Department. There will be no inducement to people to look for oil if they did not do so when dealing with landowners who, for the best of reasons, would be anxious and willing to negotiate agreements.
    I want to say that I should be very sorry indeed if my right hon. Friend the President of the Board of Trade, in his concluding remarks on the Committee stage, indicated that I had thought there was something "fishy" about this procedure. If I gave that impression I am sincerely sorry. It was far from my desire to indicate that anything in my right hon. Friend's conduct ever had been or could be "fishy." I do think, however, that he has been exceedingly badly advised, and I am sorry that he

    2225
    has not given the source of his information, because it must have come from one of two sources: either a convinced Socialist and, with all respect to hon. Members opposite, in my view that means a fool; or from someone who has, in my view, some reason for not wishing oil to be developed, in other words, a knave. I have never felt that he could have been actuated by anything but the best motives, and he is no doubt genuinely convinced as to the necessity for this Bill; but our reasons against it remain valid. We believe that the Bill sets up a damaging precedent, that it is not a good thing for a National Government to set the precedent of expropriating without compensation. That will do damage to the whole principle of property on which ordered progress depends. This Bill, by addng enormously to the complications in the way of anyone wanting to bore for oil, will hamper and impede any search for oil, such as would probably have been made if the Bill had not been passed.
    11.52 a.m.
    Mr. RHYS: I do not think I have taken quite so strong a view about this Bill as my noble Friend the Member for West Derbyshire (Marquess of Hartington), but I regard some of its provisions as being a very remarkable departure from established precedent and custom and the protection of the individual. I imagine, from one or two remarks made by my hon. Friend the Secretary for Mines in the course of the Debate, that there must be some reason for hastily bringing in this Bill, even though we have not been able to extract from him what it is. I do not think that any hon. Member who is told that it is urgently necessary in the national interest to have this drastic national control of oil would be prepared to cavil at it very much, but I am afraid the Treasury Bench took a good deal of exception to the request for information on this point and attributed motives to us who asked for this information which, in point of fact, are not there. I thought the House was genuinely interested to know why, at this moment, when there are many other things to engage the attention of the administration, this nationalisation of oil Bill should have been thrust through Parliament. We have not been able to extract the in-
    2226
    formation, and we shall have to rely, and properly so, upon the good faith of the administration when they tell us that they have good reasons for introducing it at this moment.
    The week-end is upon us, and hon. Members will scatter to the countryside, and I cannot help feeling a slight sentiment of regret that one more industry will shortly be upon us to invade the countryside. To-day landlords suffer a great deal of abuse, no doubt well merited in certain instances but if there is any unearned increment which the people of this country enjoy solely as a result of the efforts of the landlords it is the beauty of England. I fear that the shadow is creeping still further over our countryside. Perhaps it cannot be helped and is inevitable in this age of scientific progress—so-called. We shall have to let that go.
    I would like to urge one or two points upon the administration. One is that if we do not divide upon the Third Heading of this Bill, neither this Government nor any Government must take it that we acquiesce in the principle of confiscation or nationalisation without compensation. We wish to enter our protest at this moment. The other point which I regard as of very great importance and to which I think not nearly enough attention has been paid is that Parliament is parting with its control over the granting of licences. It would be perfectly possible for an administration to grant monopoly rights to search for oil to foreign interests; there is nothing in the Bill to stop that. Hon. Members may say that that is a far-fetched submission and that no Administration would do such a thing; I sincerely hope that they would not. My object in addressing the House on this point is to call attention to Parliament nationalising an industry and then parting with control.
    We are only entitled to discuss the regulations under which licence may be applied for. The Board of Trade may grant a licence, and there is no power whatever short of another Act of Parliament, to revoke that licence. It may be said that if it is an unjust licence or a wrong licence, we have power to call attention to it, and if we want to discuss it in Parliament we can put down the Board of Trade Vote upon a Supply day. Neither of those courses revokes the licence. The licence remains, and I very much question the wisdom of the House

    2227
    of Commons in parting with control in regard to licences, as we are asked to do in the Measure now before us.
    I am also interested in the example which the Government have set in stating that a 10 per cent. royalty, or greater, is not excessive. If any private landowner charged that royalty, the public opinion in his own locality would very soon see that it was reduced, even if he could let any minerals at such a charge. We all agree that some control of the oil industry is necessary, but I take leave to doubt whether some of the provisions of this Bill are necessary. Although I have never voted against Clause 1, which vests the ownership of the oil in the Crown, and although I shall not vote against the Bill on Third Reading, I hope that that will not be taken to mean that we acquiesce in any way in the Bill as a precedent.
    11.59 a.m.
    Mr. T. SMITH: The attitude of the Labour party can be described in two or three sentences. We believe that the Government have done the right thing in preserving for the State any petroleum there may be in this country, and we supported Clause 1 through the various stages from that point of view. If there be any petroleum, we believe that it ought to be vested in the State. The Noble Lord the Member for West Derbyshire (Marquess of Hartington) believes in private ownership of royalties. He states, because a certain court decision was given in 1568 that all minerals except gold and silver should belong to the landowner, that the landowner ought to have any petroleum that may be found in this country. The only thing that I can say is that the Noble Lord ought to be glad that that court decision was given in 1568. He has done well enough out of it. He has lived upon royalties. When I hear the Noble Lord and his colleagues talking about the amenities of the countryside, I think it is nothing more nor less than sheer hyprocrisy.
    You have drawn excessive royalties from pits. You have not cared a tinker's curse about the pit heaps in colliery villages. You have left people to live in some of the worst houses in the ugliest districts, and you have gone on year after year taking money out of the hard earnings of the miners. You believe, be-
    2228
    cause in 1568 a court decision was given, that for all time you shall possess all that is under the surface of the earth except gold and silver. When you talk about amenities, what do you do? You have some of the finest amenities in the world where you reside, some amenities that I have spent—
    Mr. SPEAKER: I must remind the hon. Member that he must please address his remarks to me.
    Mr. SMITH: I have spent many pleasant hours in the districts surrounding where the Noble Lords reside. They have excellent amenities. They have talked about this Bill destroying the amenities of the countryside, and I remember what has taken place in mining districts. The only thing that I can say, Sir, it that to me it is sheer hypocrisy. So far as ownership is concerned, we are glad that the Government have taken it. With regard to Clause 2, the Government have made a sad mistake in not exploiting the petroleum as a State undertaking. We believe that it could be done. This is not nationalisation of industry in the ordinary sense of the term, because at the moment no industry exists. There would be no question of compensation in taking over an existing undertaking. In our opinion, the Board of Trade could successfully exploit it. On the whole, we agree to the Third Reading of the Bill which is, we believe, in the national interest.
    I do not know whether I shall be in order in the next few words I have to say, but they appear to be relevant to the Debate. The hon. Member for Aylesbury (Mr. M. Beaumont) and the Noble Lord the Member for West Derbyshire have made some very strong statements in the course of the Debates. The hon. Member for Aylesbury talks about what he was elected for at the last election. He was elected—so he told the House a few minutes ago—to defend private property. He was elected for nothing of the kind; he was elected to support the National Government. Let me say this to the hon. Gentleman and to the Noble Lord: In the course of the Debates on this Bill, they have not put their constituencies' point of view forward, but they have put their own point of view forward as landowners, and they have used language which is unworthy of them. I was always taught, as a

    2229
    simple country lad, to look up to the nobility. I was always told that they were our betters. I have often heard it said that Members of the Labour party use unfair methods in Debate. Will the Noble Lord remember some of the things that he said to Ministers the other day? Does he take pride in the fact that he likened them to dogs? Does he take pride in the fact that he referred them to a meeting that was taking place somewhere in Regent's Park in connection with the Dumb Friends' League? The Noble Lord may have the income and the tastes of a duke, but he has used the methods of the gangster in his speeches in this House during the progress of the Bill.
    I challenge the Noble Lord to dispute the statement that when he has been referring to the private ownership of mineral wealth he has not been representing the view of his constituents, and that on this matter he has been defending his own private interests. He has shown a selfish and mercenary point of view. I beg the Noble Lord to remember, when members of these benches are sometimes charged with being interested because they are members of a co-operative society, that a co-operative society is a collective institution, and that when a man speaks for a co-operative society he does not speak for his own selfish ends. In this particular case the Noble Lord does not represent Chatsworth in this House; he represents a constituency.
    Mr. M. BEAUMONT Mr. M. BEAUMONT rose—
    Mr. SMITH: The Noble Lord must take his medicine; he has been given it long enough; and the hon. Member for Aylesbury may take his as well; I shall not give way. I say to them both, when they talk about the mandates at the last election, that there was no question of a mandate for the support of private mineral wealth, and I say to this House, through you, Mr. Speaker, that, while I believe that the Government have done the right thing in bringing in this Bill, and while I believe they have been courageous in resisting the demands made of them, I think that the Noble Lord the Member for West Derbyshire cannot be proud of the manner in which he has argued this matter. I say again that he has put the personal point of view lather than the point of view of the constituency which he represents.
    12.7 p.m.
    Viscount CRANBORNE: The hon. Member for Normanton (Mr. T. Smith) perhaps ranged a little wide in his remarks. I propose, if I may, to return to the subject under debate. I should like to appeal once more to the President of the Board of Trade to give us just a little more information about the genesis of this Bill. I listened to his reply on Clause 1 during the Committee stage with my usual admiration, and at the same time with some entertainment. I expect that nearly all Members of Parliament have had in their time the experience of rounding on someone whom they believed to be a mischievous heckler, only to find at the end of the meeting that he was an earnest supporter anxious for information. It seems to me that the right hon. Gentleman was in that melancholy position the other day. We are quite genuinely seeking information; that is what we want. We are not in the least anxious to embarrass the Government in any way whatever; and, after all, I do not think that the question we ask is an illegitimate one.
    There is this difference between the present Bill and other Bills that the Government have introduced lately: Everybody understands why those Bills have been introduced. Take the Unemployment Bill. I do not suppose that hon. Gentlemen opposite would agree with all the provisions of the Unemployment Bill, but they would agree that something needed doing. Again, take the Betting Bill. Everyone knows why that Bill was brought in. It was because greyhound racing had introduced new difficulties, and some anomalies had arisen out of decisions of the Courts; so that something had to be done. Take the case also of the Debts Clearing Offices Bill which we had last week. That Measure arose out of the German crisis, now happily solved. But, as regards this Bill, no one knows exactly why it has been brought in.
    The right hon. Gentleman, in his speech the other day, said that applications for licences up to the present time had been trivial. Yet there must have been some reason for the introduction of the Bill. I want to know whether it was the right hon. Gentleman's own brilliant idea, or the idea of someone at the Board of Trade, or of someone who was interested in the matter. We only want informa-

    2231
    tion, and we have a perfect right to information. We are not accusing the right hon. Gentleman of a criminal conspiracy with any outside interests; no one in the world thinks that the right hon. Gentleman or the Secretary for Mines is capable of anything of that kind; but the Bill does introduce a principle which is resented by, or which, anyhow, causes anxiety to, a large number of Members of this House—not merely those who have opposed it in the Division Lobby, but to many who thought it would be disloyal to oppose it in the Division Lobby. Many Members of the House are uncomfortable about the Bill. I think there is a real reason why the right hon. Gentleman should give us more information, and I hope that in his reply he will be so good as to do so.
    12.11 p.m.
    Lieut.-Colonel ACLAND-TROYTE: I do not want to allow this Bill to leave the House without making one final protest. We have heard from the benches opposite a very fierce attack on my Noble Friend, but I think that, when the hon. Member reads the account of what he said, he will think it rather unworthy of him. May I say for myself that I have no interest whatever in royalties? I live in the most beautiful county in the whole country, and I want to see the amenities of that county protected. I hope that no oil will ever be found there, because, if it were, it would ruin the amenities of the county.
    The President of the Board of Trade has said on more than one occasion that this Bill is of greater industrial than political significance, but I am afraid I cannot agree with him on that point. I do not oppose the Bill on account of its industrial significance, but because it has a political significance. The Bill introduces a new principle into our law, and it is a principle against which we who are opposing the Bill propose to fight. It is the principle of confiscation without any compensation. It is for that reason that I am opposing the Bill, and for that reason only. We have been given no real reason why the Bill has been brought in. It is said that one reason is the great difficulty of the problem, but I am sure that there must be other methods of solving it. One method, to which I can only refer now, was set out in an Amendment dur-
    2232
    ing the Committee stage. We do not know whether this method in any other less Socialistic plan for securing the development of petroleum which I understand the right hon. Gentleman desires to secure has been considered by the Government. In any case this Bill is Socialism pure and simple. It has received the support of the Socialist party, and it has received the support of the Liberal party, but there is no doubt that Conservatives all over the House, whether they have voted in the Lobby for the Government or not, have regarded the Bill with considerable anxiety—I put it no higher than that—and Conservatives in the country also regard it with considerable anxiety. I would like to know a great deal more about the reasons why the Bill has been introduced.
    Some people have said that the Government are carrying out a Conservative policy, but my complaint is, not that they are carrying out a Conservative policy, but that they are always tending to move too much to the Left; they have listened to the Left wing of the party rather than to the Right. I cannot help feeling that that has had something to do with the introduction of this Bill. I believe some members of the Government said: "We will show them that we are not a Conservative Government. We will press through a real bad Socialistic measure." Let us remember at any rate in the future that no one can possibly accuse the Government of having carried out a Conservative policy. It will only be necessary to say to them, "Look at the Petroleum Bill. There is Socialism pure and simple, supported by the Conservative party."
    12.14 p.m.
    Lord SCONE: I trust that by this time the President of the Board of Trade realises that, in the admittedly fierce attacks which we have made upon the Measure which he has sponsored, no personal attack on him or his colleagues is intended at all. We have never for one moment questioned his sincerity or the purity of his personal position, nor do we desire to make any attack upon Liberal Members of the Government as such. But, at the same time, the right hon. Gentleman must surely realise that, when a National Government introduces a piece of Socialist legislation, with the

    2233
    almost whole-hearted approval of the Socialist Opposition, the Right wing of the largest party supporting the National Government can scarcely be blamed if they look with a certain amount of suspicion, or rather doubt, upon their colleagues, and murmur to themselves:
    "The stranger within our gates,
    He may be evil or good;
    But who can say when his ancient gods
    Shall re-possess his blood?"
    The present Government were certainly returned for the express purpose of wiping out Socialism and all its works. The electorate gave a most emphatic mandate on the point at the last Election. Their attitude towards Socialism, and Socialists may be best stated, also in the words of Kipling:
    "Veil them, cover them, wall them round—
    Blossom and creeper and weed—
    Let us forget the sight and the sound,
    The smell and the touch of the breed!"
    But now the right hon. Gentleman allows the Socialists to have their first snap at private property, and he must not expect those of us who are Conservatives and believe in Conservative principles to welcome such a procedure in any way at all. There is just one reply I should like to make to the hon. Member for Norman-ton (Mr. T. Smith), who waxed very eloquent about the unjustifiable defence of landlords for their own property. They are, it seems, wicked animals who defend themselves when attacked, but the hon. Member seems to be entirely oblivious of the fact that my noble Friend the Member for West Derbyshire (Marquess of Hartington) is specifically exempted from the effects of this Bill, and that therefore he is not speaking on his own behalf, while the rest of us, to the best of our knowledge and belief, have no property on which oil is ever likely to be got. That is to say, we are not speaking from a selffish point of view. Furthermore, the hon. Member for Normanton apparently thinks that it is all right for representatives of the miners to get up in this House and claim better conditions for the men—and on that we all agree—but at the same time it is absolutely wrong for the landowner to get up and defend himself or his friends when they are being unjustly attacked. The hon. Member and his colleaugues cannot have it both ways. I am glad that the right hon. Gentleman the President of the Board of Trade and the Secretary
    2234
    for Mines have at least recovered to some extent from the unfortunate attack of lockjaw which incapacitated them so much during the Committee and Report stages. It may be, however, that their vocal faculties are not yet in proper working order, and as I do not want to strain them too much, I would only press for an answer on the one really vital question which concerns this Bill, and that is the question of the extent, if any, to which oil travels underground. It is obvious that if, as my noble Friend has stated, the evidence goes to prove that oil travels only a very short distance, then the whole raison d'etre for the introduction of this Bill goes by the board, because if oil does not move more than a few hundred feet, or 200 or 300 yards, then the question of deciding the ownership of the oil would not be a matter of very great difficulty, although certain minor difficulties might arise in special cases.
    I think that the House is entitled to ask the right hon. Gentleman to give us some idea—I do not ask him to go into details, or to say anything which would prejudice himself or the licencees in future—but to give us some of the information which leads him to suppose (a) that there is a large quantity of oil untapped in this country, and (b) that this oil is capable of running a Grand National underground. Unless he can bring forward some such proof, really there is no justification for the introduction of this Bill. The various suspicions which have arisen in regard to it have been almost entirely due to what I can only term a conspiracy of silence as to all the facts and authorities relative to oil in this country, which, unfortunately, has been the method of procedure of the Government throughout. We were returned to support the National Government, but some of us at least throughout the Election said that we were not necessarily prepared to support everything the National Government did. Some of us maintained that we would endeavour to prevent them from passing any Socialist legislation. I was one of those, and no taunt can be thrown against us that we are in any way false to our election pledges or our constituents.
    I would most respectfully urge the right hon. Gentleman that he should at least take the House to some extent into his

    2235
    confidence, because to bring forward a piece of legislation practically unexplained and to throw it at the House is, with all respect to him, hardly respectful to this House. If we are to be turned into a rubber stamp, he might as well follow the example of Guy Fawkes and blow us up, or that of General Goering and burn us down. Although it is true that we should like to destroy the Bill, if we must have it, we still want to make it a better Bill than it is, and we hope that the right hon. Gentleman at this stage will at least condescend to give us some information about the genesis of this Bill, and thus put an end to all rumours which may have been engendered by what I have already truly described as a conspiracy of silence.
    12.22 p.m.
    Mr. TINKER: The wigs are on the green this morning, and it is a battle between the noble Lords here and the other members of the House of Commons. What surprises me is that some of the Lords in the other Chamber should be asking why this Bill was brought in. It comes from the other place, so if they were to ask their fathers they would be told why they had thought it necessary to bring it in. This morning I am supporting the Bill, though it is not the whole-hearted support I would like to give to the Measure. There are two chief points in the Bill: one is the acquisition of the mineral rights, and the second is the handing over of those rights to another body of people. On the whole, I shall give support to the Bill, because it is admittedly a principle which has not been admitted in this country for many hundreds of years. It has always been understood as was said by the noble lord the Member for Rutland (Lord Willoughby de Eresby), who spoke on the Second Reading, that the owners of the land had always thought they had the right to everything above the land up to heaven and everything below the land down to hell. Now the Government of the day, for some cause or other, has said "No, we cannot allow that to go forward," and we have to try to find out the reason of that.
    The President of the Board of Trade said that it was not political but economic, but I have been trying since then to find the difference between
    2236
    politics and economics, and in this day and generation of ours I do not see how we can divide the two. When the right hon. Gentleman said it is economic, to my mind he meant for the welfare of the community, and so politics and economics must come together. If it is for the welfare of the community that we have taken something over from the landlords, then I say that all who are sent here by the vote of the people are bound to admit that the Government are right in what they have done. Here is a certain mineral wealth. The President of the Board of Trade said that we have at the present time to get our supplies from overseas. He had in mind what happened from 1914 onwards. If it had not been for the special protection of convoys, which did their work so thoroughly, this country might have been in great danger during the War, and because of that the right hon. Gentleman said the Government now are taking over those rights, so that they may be prepared for any emergency which can arise, and acquire this particular commodity for the workshop and the mill, and all things essential for our economic success. So the Government, realising that, have determined to acquire those rights.
    No landowner has ever expended any money up to the present in buying that which we claim ought to belong to us. Land has been bought because there was an idea that there was coal underneath it, and an extra price has been paid, and, if you take that land, you have to have regard to the price that was paid in respect of what was underneath. There is no ease that I know of in which the value has been enhanced owing to the presence of petroleum, so that the State in taking over the land has not confiscated. I differ from the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps). Confiscation means that you are taking a value from someone who knows that the value is there. No landowner knows what is underneath the land in regard to petroleum and, therefore, he cannot claim that we are confiscating anything at all.
    Having got as far as that the Government become hesitant. They say, "We are going too far forward now. We have put the landowners in their place and taken away from them what ought to belong to the people. Now we had better

    2237
    be careful. We must try to put the industrialists and the middle-class in possession of something. The Secretary for Mines gave an example on the Second Reading when he said they were going to give private enterprise an opportunity of developing this kind of thing, proving to me that the Government had not the courage to go the whole hog. Having taken from the landowners that to which they claimed they had a right, the State ought to take the whole thing and work it for the benefit of the State. They have not done that, and it make me hesitate in giving the whole-hearted support that I should like to give.
    The Bill gives the National Government the opportunity to say that the times are changing. We see all over the world what has been done by private enterprise. It has led to section fighting against section and people believing they are not getting their rights. Then we get the hesitant Government not prepared to go the whole hog. They might have staved off their evil day for a considerable period had they set out to nationalise and control the means of life and put themselves in the position that they ought to be in as a National Government for the welfare of the people as a whole. Though I shall support the Third Reading, I do so with extreme regret as they have not taken the opportunity of fulfilling one of the visions that I have had ever since I came into Parliament of public control for the public welfare.
    12.30 p.m.
    Mr. DENMAN: It seems to me time that a supporter of the Government should support the Bill. We have had very half-hearted support from the other side and a continued fire of opposition behind the Front Bench and it is time one said a few words to show that there are supporters of the Government who really believe that this is a good Bill. May I express the regret of, I am sure, all supporters of the Govt. at the attack made from the benches opposite on the Noble Lord who is not at the moment in the House. Perhaps, as he is not present, I may say a few words that I should feel rather embarrassed in saying if he were here. I do not agree in the least with the point of view that he has put forward. He has always been on the side opposite to myself, but we all know his particularly lucid and forcible exposition
    2238
    of principles in which he sincerely believes. I am sorry that an hon. Member opposite should think him an appropriate person to accuse of particularly mean and sordid motives, and I think he has selected a particularly bad victim for that purpose.
    The hon. Member who spoke last dealt admirably with the point of confiscation. There can be no effective confiscation where there is no effective value. No one, as far as we know, has yet given a higher price for land because he thought there was petroleum under it which would be his, and until that has taken place on some substantial scale there is really nothing to confiscate. It has never been part of the Labour policy that, when the State requires anything for its own use, it should confiscate it. The official Labour policy has always been that where the nation requires anything it should pay a reasonable, though never an excessive compensation. It really is not fair to us to say that the Front Bench is taking a piece of the Labour programme and being guilty of confiscation.
    I welcome very much the protest which the Noble Lord and his friends have made. There was a Bill which received its Second Reading in another place, and which I was afraid might come here, which did take property rights from one set of persons and hand them to another. It did not even confiscate them for the good of the State. Had that Bill come here, I should indeed have welcomed the support of the Noble Lord and his friends in very hot opposition to it. This is one of those planning Bills—one of those Bills which foresee possibilities and make provision for them in time. That, in my judgment, is particularly the function of a National Government, and I welcome the Bill.
    12.34 p.m.
    Mr. JAMES STUART: I have not taken part up-to-date in the proceedings on this Bill, and I am not supporting the Government on it. I have been in Scotland. If I had been here, I should have voted against the Government. I should like to press them for some explanation as to their reason for bringing the Bill forward. The hon. Member for Normanton (Mr. T. Smith) said that we who are supporters of the National Government were not elected to support private property and rights. I agree that we were

    2239
    elected to support the National Government but we were not elected in any degree to support the National Government if they decide to go messing about dealing with things for which nobody ever asks, and without giving us any proper explanation as to why this sort of thing is being done.
    My reason for speaking to-day is the fact that I spent some time working in the oil fields of America. I do not know whether any hon. Members have seen an oil field or the havoc which it causes to the countryside. It worries me, in looking through the Bill, to see the form of compensation to be given to the people on whose land oil is produced. I can assure the right hon. Gentleman that the fact that you may have, say, four producing wells on an area of a few acres does not mean that it is only those few acres which are affected. I can assure him that the havoc which is wrought is considerable, and I should like an assurance that adequate compensation can be claimed under the Bill for the damage which will be caused.
    I am at a loss to understand why—I am not going to discuss whether it be a good or a bad thing to vest royalties and rights in His Majesty's Government—the Government have decided to do this sort of thing. If the right hon. Gentleman will look at the oil industry of the United States of America, he will find that the development of the industry has not been held up in any way owing to the fact that royalties are in the possession of the owners of the land. Every endeavour is made there to develop the industry, and an enormous amount of prospecting goes on all over the country. The person who intends to drill approaches the landowners or farmers concerned and arranges to lease from them the rights to drill for oil, and then, in the event of oil being produced in commercial quantities, the landowner is compensated by the fact that he receives a royalty on the production. The royalties in America are considerable. They are very high indeed, much higher than would ever be contemplated in this country. I should like very much to hear some explanation from the Government as to why this Bill has been produced at all. As I have said, the development in America has not been hampered under
    2240
    the conditions which exist there. In fact, I think it would be agreed that the development has been very rapid and that there has been no hindrance placed in the way of those who wish to drill for oil. The House is entitled to some further explanation than that which they have received up-to-date. I rather regret the fact that those who are opposing the Bill have decided not to divide the House on the Third Reading. If they should alter their opinion, I can assure them that it will me very great pleasure to join them in the Division Lobby in opposing the Government.
    12.40 p.m.
    Mr. MACQUISTEN: The hon. Gentleman the Member for Leigh (Mr. Tinker) pointed out that this Bill has come from another place, and I cannot believe that a Bill of this kind coming from another place would be a confiscatory Bill or one making an attack on the owners of property. It would be inconceivable unless the other place were acting contrary to its past history. As he pointed out, the sons of the Lords might ask their fathers why the Bill has been introduced. It seems to me that their fathers are in favour of it. I should be very pleased to hear the hon. Member for Moray and Nairn (Mr. Stuart) say that he was satisfied that there was no confiscation under this Bill. I am fully satisfied upon the point. If I thought it were a confiscatory Measure, I would not support it. I do not think anyone would support it. We have had no Communists in this House since Saklatvala, and there is no confiscatory intention in the minds of any hon. Members. The real position, as has been pointed out, is that the existence of oil had never been, dreamed of in this country. Nobody had ever thought of it. Many people do not believe it. It is true that there has been a small operation on the estate of the Noble Lord, but the production of oil has not been a serious commercial enterprise in this country. If we had gone ahead with a great number of oil wells and we had had a very large industry with all the usual appurtenances, which, as the hon. Member for Moray and Nairn has said, devastate the surrounding landscape, and the Government had proposed to come in and take possession of these things, it would have been a very different matter.

    2241
    But here is a fluid substance which is obviously very similar to the brine of which an hon. and learned Member spoke the other day as flowing about. I cannot accept the contention from anyone that oil is a thing which moves only a few hundred yards. It is notorious from the history of the American oilfields that that is one of the reasons why in the United States there has been over-production of oil, and the American legislature has had to legislate against it because everybody has been in such a hurry to "get down" in order to raise the oil before others could get it. In Texas and in other places it has been necessary to have most drastic legislation interfering not with the rights of ownership, but with the rights of production because oil is supposed to travel considerable distances. It depends upon the size of the oil-field. In a comparatively small oil-field, the oil will not go far, because it is limited to the boundaries of the particular field, but in a large area of oil producing country it is all more or less joined together, and the owner of a well may take away all the productivity of another well. But here oil is a substance which is just like the air.
    I do not say that I welcome the Bill, because I am mystified as to why it should be introduced. I wish I knew whether there was the likelihood of some great productivity of oil. Nothing could be better for this country than that we should be able to produce oil and not have to pay tribute to the United States and to other people. There could be nothing finer than firms to produce the oil necessary for this country, whether out of coal processes or out of the ground itself. It would do a great deal to redress the balance of trade. The Government at least have had the good sense to refuse to take over and themselves develop the industry, as some hon. Gentlemen on the other side of the House want them to do. It would be as reasonable of them to say that because they have suddenly resolved to extract the most extortionate rents from the poor shopkeepers in Regent Street, they should take over all the dressmakers' shops. It would be an impossible position. They are very wise in realising that the limitations of all Governments are simply to extract money. It is very largely for that purpose that Governments exist. We have royalty owners receiving royalties
    2242
    from coal, but, in the main, the Government are the senior partner in royalties extracted from this source. If an examination were made, it would be found that the Government themselves are the main royalty owners by means of taxation.
    That is always the much more satisfactory way. It is a case with the Government of "Heads you lose, tails I win," everytime. They take the cream of the profits and none of the risks. That is what they are proposing here. I do sincerely trust that they will not display the same rapacity that they have displayed as the owner of property, and that they will treat the industry in a proper way. It is a mere question of taking royalties, which will only begin from the passing of this Bill, in respect of a substance which hitherto has not been held capable of appropriation. They say, "Here is a substance which we think will be better worked if it is in the State's hands." That clears up the allegation that there is any principle of confiscation involved. I support the Bill because there is in it no case of confiscation or wrong doing.
    12.46 p.m.
    Mr. GEORGE GRIFFITHS: As a new Member, I have during the past fortnight learned some lessons from the opposite side of the House. I came here to fight for Socialism, and the attitude that has been taken up by hon. Members opposite on this Bill has inspired me with a determination to put forward every effort in the future to try and get the principles of Socialism adopted in this House. I do not expect to get them under the present conditions [HON. MEMBERS: "You are getting them in this Bill"]. This is a piebald piece of legislation, and those who say that it is Socialism do not understand Socialism. They need a few evening classes on Socialism if they say that this is Socialism. There is nothing in the Bill that gives any inkling towards Socialism.
    I have sat for hours listening to the Noble Lord the Member for West Derbyshire (Marquess of Hartington), the hon. Member for Aylesbury (Mr. M. Beaumont) and their colleagues, the noble Lord the Member for Perth (Lord Scone) and the hon. Member for Guildford (Mr. Rhys). When I heard the hon. Member for Aylesbury say that if a heavenly

    2243
    choir came down to ask for some concession from the cold-hearted, hard-as-stone persons on the Front bench, they would not get it, I thought that if we had not got a heavenly choir we have at least got the royalty twins. The hon. Members for Aylesbury and West Derbyshire have fought most tenaciously against the Bill and have put forward the allegations of confiscation.
    The hon. Member for Leigh (Mr. Tinker) has declared that Clause 1 appears to be a plunging Clause, in that Clause the Government say: "we will do this, and the royalty shall belong to His Majesty." But in Clause 2, although the royalties are to belong to the State, we are going to allow somebody else, by licence, to work them. That fact ought to convince hon. Members opposite that the Bill is not Socialism. You cannot have private enterprise in a business if it is going to be a Socialistic Measure. Licences are to be granted, so that although the royalties belong to the State there will be hope for the hon. Members for West Derbyshire and Aylesbury. They will still have a finger in the pie and be able to make their profits.
    There has been a great deal of talk about Clause 3, which deals with amenities. Candidly, I do not think that you can retain the natural amenities of the land if you are going to develop industrially. One hon. Member said that his was a beautiful county. I believe he referred to Devonshire. Yorkshire was as beautiful a county as any in the British Isles until industry was developed. Take the valleys of South Wales. Was there anything more charming than the valleys of South Wales until industry started to extract coal? Now, almost in a night you can see a most hideous mountain arise because of industry. You cannot develop industry unless the countryside is marred to some degree, but I am very pleased that in Clause 3 an attempt is made to prevent unnecessary marring of the landscape in this country.
    I have supported the Government in almost every Division because I feel that this Bill is the best that we can get for the time being. I come from the mining industry. Before I came to this House I had been for weeks in the unemployed queque, getting my chit and drawing part time unemployment pay. I was told as a
    2244
    boy:" George, if you cannot get the whole loaf, get half of it." This Measure does not give the whole loaf but we can see a little bit of it and, seeing a little bit of it, we are prepared to support it. I have been a little surprised, after the tenacious way in which the opponents of the Bill started to note their attitude to-day. They said that they would press matters to divisions and that they were going to fight all the way, but this morning they have thrown in the gloves and the towel and say: "We have finished." We on our part stand by the Bill and we hope that it will become an Act of Parliament.
    12.52 p.m.
    Mr. RUNCIMAN: The discussion that has taken place on the Third Reading of the Bill has covered most of the ground covered in the Committee stage, and I need hardly say that there is nothing new to be said about the Bill. One or two of my hon. Friends behind me have repeated the questions which they put over and over again in Committee and I think they must be content with the same answers now. I would, however, point out that the object of the Bill is a very sinple one. It is to set doubt at rest. The House can judge for itself whether doubts exist. It is clear from discussion in Committee that doubts exist. The view was put forward by my hon. Friend the Member for County Down (Mr. D. Reid), and the hon. and learned Member for Ashford (Mr. Spens) who have had considerable experience in dealing with this branch of the law, that there is no such thing as private property in oil. They have held that view most tenaciously and have argued it on more than one occasion. There are others who hold the same view—that view is not accepted by my Noble Friend the Member for West Derbyshire (Marquess of Hartington) and other hon. Members who support him. These conflicting views show the doubts that exist. So long as there are any of those doubts it is impossible to secure that readiness to step into what is an unknown field which we all desire, not on political grounds but on industrial grounds. It is to set those doubts at rest that the Bill has been introduced, and the Bill will achieve that end.
    I hope that none of my hon. Friends will imagine for a single moment that

    2245
    there was anything political in the inception of the Bill. It came down from another place, where it was introduced by the Noble Marquess, the Marquess of Londonderry, and it passed through the other House in exactly the form in which we received it here. It will, I hope, secure the approval of the House to-day and receive the Royal Assent shortly. When it does, there will no change in private property as conceived by the hon. and learned Member for Ashford or the hon. and learned Member for County Down, although there will be a considerable change, in the view of the Noble Lord the Member for West Derbyshire. There is no reason for the Noble Lord to be anxious about the political views of the Government as a whole. I was glad to hear him acquit me, and also the Secretary for Mines who I presume is included, of any underground transactions of an improper character in the inception of the Bill. I felt sure that he did not mean to do so, and I am glad to hear that that really is his view. He realises that what we have done has been done in good faith and mainly with the object of securing the utilisation of one branch of our national wealth, as to which we have little information, to the best advantage. A point was raised by the hon. Member for Smethwick (Mr. Wise) on the Second reading of the Bill, and it is one which should be made clear at this stage. The hon. Member asked:
    "Where, until recently, was there an incentive to do anything? Until recently there was no question of a protective duty on oil supplies."—[OFFICIAL REPORT, 19th June, 1934; col. 292, Vol. 291.]
    In case anyone imagines that there is anything doubtful on this point let me make it clear that there is nothing in the Bill which prevents the levying of Excise on oil products obtained from petroleum produced in this country, if Parliament approves. That is a matter which the Government must reserve the right to consider, should oil be discovered in commercial quantities in this country. That is a statement I make on behalf of the Chancellor of the Exchequer. I do not think there is anything more to be said in summing up the Debate. We have not looked to the right or to the left; we have shown that kind of intiative which is demanded from a National Government, and I ask the House to support us.
    Question put, and agreed to.
    Bill read the Third time, and passed, with Amendments.

  SILK DUTIES.
  The following Motions stood upon the Order Paper:
  "That the Silk Duties (No. 1) Order, 1934, dated the twenty-eighth day of June, nineteen hundred and thirty-four, made by the Treasury under the Finance Act, 1933, a copy of which was presented to this House on the said twenty-eighth day of June, nineteen hundred and thirty-four, be approved."
  "That the Additional Import Duties (No. 22) Order, 1934, dated the twenty-first day of June, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-first day of June, nineteen hundred and thirty-four, be approved."
  "That the Additional Import Duties (No. 24) Order, 1934, dated the second day of July, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said second day of July, nineteen hundred and thirty-four, be approved."—[The Chancellor of the Exchequer.]
  Mr. SPEAKER: I think it will be for the convenience of the House if these three Ordere are taken together.
  Mr. DAVID GRENFELL: That will suit the convenience of Members of the Opposition.
  1.0 p.m.
  Mr. RUNCIMAN: I beg to move:
  "That the Silk Duties (No. 1) Order, 1934, dated the twenty-eighth day of June, nineteen hundred and thirty-four, made by the Treasury under the Finance Act, 1933, a copy of which was presented to this House on the said twenty-eighth day of June, nineteen hundred and thirty-four, be approved."
  I am afraid that I must give a brief explanation of the Silk Duties Order and the facts which have led up to the present situation. The Silk Duties were first imposed when the right hon. Member for Epping (Mr. Churchill) was Chancellor of the Exchequer, in 1925. They were primarily revenue duties, and accordingly imported raw natural silk was made subject to a Customs duty, and artificial silk manufactured in this country was made the subject of an Excise duty. In arriving at the exact rates which were to be paid the Chancellor of the Exchequer said that he

  2247
  wished to give a "protective turn." The Import Duties Act, 1932, did not directly affect the silk duties, as in general goods already subject to duties under other Acts were exempted from the scope of this Act. The Silk Duties were in the main on a specific basis, and whatever the degree of protection was afforded to the home industry in 1925 it was clear that a change in the level of prices since that date had introduced a new element; the whole range of duties in fact required re-examination and possibly revision.
  In order to meet these circumstances a temporary increase in the duty of 10 per cent. on manufactures of silk and artificial silk was imposed, and the whole problem was referred to the Import Duties Advisory Committee for investigation. They began their investigations in 1932, and in the Finance Act of the following year provision was made for any necessary readjustments of the duties in a manner similar to that adopted under the Import Duties Act. The Committee's investigation covered a wide field, and it is not surprising that they took a considerable amount of time to study this complicated problem. In September, 1933, the Government asked the Import Duties Advisory Committee to suspend their inquiries for a time. It is only right that I should explain that conversations were then being arranged between United Kingdom and Japanese industrialists regarding the trade in cotton and artificial silk goods, and it was felt that the possibility of good results from these discussions would be prejudiced so long as the fear existed that at any moment during our conversation our duties on silk and artificial silk goods from Japan might be increased. On the 7th May, 1934, that is this year, negotiations with Japan having proved fruitless for the time being, the Government asked the Import Duties Advisory Committee to resume their investigations, and the Committee promptly replied by making, on the 16th May, the recommendations which are printed in the White Paper, Command Paper 4633.
  There are two features in this Report to which attention should be directed. The Import Duties Advisory Committee proposed that the form of the duties should be amended in general by reducing
  2248
  the amount of the specific duty on the more important classes of goods—silk tissues—and by increasing from 10 to 25 per cent. the level of the ad valorem duty. No doubt these proposed duties represent a substantial increase in the protection for the home industry, and also an increase in the actual level of the import duties charged on foreign goods. In paragraphs 6 and 7 the Committee refer to the duty on raw materials and say that these duties appear to them to be anomalous and should be abolished as soon as circumstances permit. As it was understood, however, that no reduction of the duties on raw materials could be contemplated, the Committee made their recommendations on the lines of a continuance of those duties at their existing level.
  I need hardly point out that the silk trade of this country is of special importance not only to this country but to a number of other countries, to France, Italy, and Switzerland. It had been made clear to us early in the year how much importance the French Government attached to these Silk Duties, and they have played a considerable part in the negotiations, which I am glad to announce ended happily a fortnight ago. In these circumstances it became necessary for us, while conducting these negotiations, to consider whether the object at which we were aiming, that is an improvement in the position of the United Kingdom industry, could be attained in any other way, and the result of this consideration is set out in the correspondence to which I need not refer. The Chancellor of the Exchequer asked the Import Duties Advisory Committee what scale of duties they would be prepared to recommend on the assumption that he was prepared to agree to a reduction in the Customs Duty on raw silk and the Excise Duty on artificial silk, by one-half.
  When this information had been furnished by the Advisory Committee it was possible for us to enter into negotiations with the French Government on a new basis. The Chancellor of the Exchequer agreed to the sacrifice of revenue involved in these transactions and adjustments, and the Advisory Committee were asked, on 22nd June, to make their formal report. It is on that Report that the Order now before the House is based. It will be observed from

  2249
  the Report that the Committee have endeavoured to retain the higher level of protection contemplated in their earlier Report, the reduction of the duties on raw material having enabled them to reduce the duties on most classes of manufactured goods.
  There are two points to which I would direct attention. The main feature of the earlier Report of the Advisory Committee is a reduction of the duty by weight and an increase in the ad valorem duty. For certain classes of tissues an alternative to the ad valorem duty was proposed in the form of a duty per square yard, the actual rate being 7½d. per square yard in the case of silk goods, and 5d. in the case of artificial silk goods. The effect of these provisions will, of course, be to increase the duty on goods imported at abnormally low prices, which was one of the objects we had in view. The Committee's new report has enabled us to improve our relations with other countries without in any way infringing the interests of the Home silk industry. The reduction of the duties on raw materials is a reform which the Committee recommended as being in the interest of our own silk trade, and in making their recommendations for a new scale of duties on silk and artificial silk, as they say in their letter of 24th May on page 16 of the White Paper:
  "We must be guided solely by our statutory duty to consider the interests of trade and industry in this country."
  There need be no doubt that the Committee have been able to reach conclusions which should affect a real improvement in the form of the duties, which were confusing and complicated. The duties they have recommended and which are now put into effect are those calculated to be of the greatest advantage to the industry in this country. The fact that they have also effected an improvement in our relations with other countries is a happy coincidence. It is in these circumstances that I recommend the Order to the House. As regards the other two Orders, I need not detain the House. One imposes an additional duty upon certain component parts of some kinds of gauges and measuring instruments of precision, which it is in the national interest should be produced in this country. The other provides for an adjustment of the duties on manufactured granite.
  1.8 p.m.
  Mr. D. GRENFELL: We are quite prepared to discuss the Order relating to silk. The other two Orders we do not propose to discuss. But that is not to be taken as implying approval, for it is well known that we disapprove in general of all these Orders and the way in which they come before the House. We have had an unusually long and clear statement of the proposed Silk Duties and an exposition of the considerations which led to the change in the method of imposing the duties on silk and silk products. We are grateful for the publication of the letter to the Lord Commissioners of the Treasury from the Advisory Committee, in which the general case is made out. It gives us the various elements for consideration of the whole problem. The President of the Board of Trade has told us that since the matter was first referred to in the investigation in 1932 there have been various changes, and there have been communications between the Chancellor of the Exchequer, himself and the Advisory Committee.
  If we have any criticism of the Order before the House and the machinery which lies behind it, it is on the ground that much of that communication and much of the considerations have hitherto not been revealed to the House as fully as they are now revealed. I refer to the communication made by the Chancellor of the Exchequer, dealing with statements made by him on 9th and 10th May on the subject of silk and artificial silk duties, and conveying his request that investigations should be undertaken, and adding:
  "In any revision of the duties which may result from the Committee's investigations, the Chancellor would wish to secure not less revenue from silk and artificial silk than is yielded by the present duties."
  That is a new feature which we welcome on this side of the House. It is an intimation that the Chancellor of the Chancellor of the Exchequer does not wish to add to the very heavy duties that are imposed on silk and other commodities entering this country. As an augury for the future we welcome it very much indeed. The communication now made public shows that the Chancellor does not wish, for revenue purposes, to impose heavy duties on silk and possibly on other commodities which are now subject to taxation. Then the Chancellor

  2251
  goes on to refer to the negotiations between ourselves and Japan. That is all set out in the letter from the Advisory Committee to the Lords Commissioners of the Treasury. Then we come to the next point, which is very important. In paragraph (4) of the letter it is said:
  "An examination of the statistics of imports and home production, so far as such are available, indicates the substantial developments which have taken place since 1925 in the case of artificial silk and manufactures thereof."
  That is very encouraging indeed. It is noteworthy that the Excise Duties have increased four times from 1925 to 1933. In 1925 they were £607,973, and £2,390,074 in 1932–1933 on the home production of artificial silk. I would like to know whether the taxation of real silk is responsible for the whole of this increase in the production of artificial silk. That has a bearing on our attitude towards all these problems. The answer to that question will help the House and the country to adjudicate on the merits of Measures of this kind. Then we come to the third point:
  "To a large extent the articles produced by these industries have ceased to be luxury goods, and the duties on their raw materials appear to us to be anomalous."
  It is encouraging to find that our habits have changed and that taste in dress has changed very much indeed. One of the most cheering things on a day like this is to see the charming pictures that present themselves to us outside the House in the dress of the people. It is obvious that silk and artificial silk goods are being brought within the reach of larger numbers of people. Then we come to the next point. The Committee state:
  "We propose also the continuance of drawback for entrepôt goods."
  Finally they state:
  "We are confident … our recommendations will place the silk and artificial silk duties upon a footing more suited to present needs."
  One now feels some assurance that this Committee has had before it, not only the considerations put forward by interested parties such as the manufacturing interests concerned, but other considerations which cannot be divorced from the idea which appears to be dominant in the minds of certain Members of this House. We are glad to know that some weight is being given to those other
  2252
  considerations and to that extent we are somewhat reassured. Then we come to the Schedule setting forth the duties in detail and showing that in a large number of cases no change is proposed. Those hon. Members who take an interest in this matter will find that the particulars are clearly set out there and we make no complaint at all on that score. Although this is a highly technical matter I think the ordinary Member is given every opportunity of clearly seeing the nature of whatever change has been achieved. In his letter of 17th May the Chancellor of the Exchequer says:
  "It is quite impossible to foresee when I might be in a position to accept the recommendations which you would desire to make if revenue considerations did not stand in the way."
  It is highly important that the House and the country should know what weight is given to the several factors which enter into this problem such as the question of how far these duties are a source of revenue and therefore attract the Chancellor of the Exchequer, and how far they are justified by the requirements of trade and the public interest. We find the Chancellor in this letter referring to the concession that he is prepared to make and also to the necessity for preventing any interruption of international trade. He says:
  "I feel that it is incumbent upon us to make every effort to prevent the further interruption of international trade which would follow from a breakdown of the present negotiations to the grave injury of all concerned."
  I take it that on some future occasion when the activities of his Department are reviewed in the House, the President of the Board of Trade will give us in more detail a statement of the many considerations involved in this agreement which are of importance, not only to the Chancellor of the Exchequer and the Advisory Committee, but to this House. As I say, we welcome the evidence that all these considerations have not been ignored. We would have despaired altogether of this ad hoc system of assessing imports on imported goods had we not some assurance that vital national and political considerations were not being entirely overlooked. I consider that in the pages of this correspondence and in this Order the nature of the case has been revealed to the House with a great frankness.

  2253
  There is something else to which I ought to refer before leaving this subject. The great demerit of this system is that the Advisory Committee is removed from the House. I do not know whether other hon. Members are more fortunate than I am, but I do not know where the Committee meets or where its offices are situated. One sees and hears of the names of the chairman and the other members from time to time, but the procedure of the Committee, the system by which it operates—these things are not known to the House. There is not that degree of publicity or that intimate knowledge of its proceedings to which the House and the country are entitled when these various duties are under consideration. We know that the Committee hold consultations with the representatives of the Treasury and of the trade interests concerned but in connection with these discussions Members of this House are entitled to as much information as the trade interests and the people who apparently have access to the Committee from time to time. I do not think that this system should be worked in secret It may be that when the President of the Board of Trade is conducting negotiations or trying to obtain agreements involving revision of duties that there are reasons for secrecy but if we embark upon a policy of Protection the people of this country ought to be taken as much as possible into the confidence of those who are applying that policy.
  We find that in the Orders which come before the House from time to time there has been an attempt to balance the pros and cons of the case and to weigh the consequences but the Orders do not give sufficient information. I am sure that the House and the country do not yet appreciate the heavy accumulation of duties which has been piled up by these piecemeal Orders. I think we have to-day the 25th or 26th. They come here one after another and occasionally complaint is made that we have not time for debating them. We are not so much concerned this afternoon with debating the details of this Order which are set out here with such fullness and precision. Our opposition is based on the fear that this machinery does not give the country an opportunity of assessing the merits and demerits of the system upon which we embarked two years ago. As I already have said it is not merely a question of
  2254
  trade interests and import necessities Political considerations are also involved and I think that this House ought to be given the gist of those considerations which come before the Committee from time to time and that there should be the fullest opportunity of discussion before we are involved in any commitments or before Orders are imposed which may require variations of important agreements with other countries.
  I suggest that the present system might secure a greater measure of agreement and might even secure concurrence from this side of the House if the Advisory Committee were to take into their confidence not only the Chancellor of the Exchequer and the President of the Board of Trade but also this House. I suggest that there should be a committee of this House which would have all these considerations put before them and would have an opportunity of expressing an opinion before the country is committed to any great changes involving burdens upon our people, and possible political and economic repercussions. We shall divide against this Order as a gesture and without exhausting the arguments which we have brought forward against it we hope that the suggestions we have made will receive the consideration of the right hon. Gentleman and his colleagues.
  1.25 p.m.
  Mr. REMER: I can, from my own experience, endorse that portion of the hon. Gentleman's speech in which he complimented the Government and the Import Duties Advisory Committee. During the long period during which these Silk Duties have been before them, as the right hon. Gentleman knows, I have been at times very impatient, but knowing, as I do, how they gave consideration to all sorts of people, some of whom have really been representatives of foreign firms, and that they came to this decision after considering all interests, I thing it is a great tribute to their work. I should like to preface my remarks by thanking the right hon. Gentlemen for the clear way in which he introduced this Motion, and that at long last there is a sense of permanency, which I believe in the long run will be beneficial to our country. To the right hon. Gentleman, it may be some satisfaction to know that the Order Paper at Question time will not be so full of

  2255
  questions from myself and some of my friends in regard to the Silk Duties, and to myself there is some satisfaction that some newspapers which are friendly to the Government may not be writing about myself and some of my friends as unmitigated nuisances. But while there is satisfaction that there is some permanence in this matter, there are some matters in regard to which we are left with regret. It is well known that the Import Duties Advisory Committee would like to have given a greater protection to the silk industry than is included in these Orders, that political influences intervened in the form of the French negotiations, and that their final recommendation was of a lower nature than it would have been but for those political influences.
  I am not making much of that point, but there is no doubt that the duties are lower than was generally expected by the silk industry. There is, however, one very big fly in the ointment, and that is that through the reduction of the Excise and the raw material import duties there are going to be made huge losses. That decision by the Government was a great surprise to myself and certainly to the silk industry as a whole. There are in this country huge stocks of silk goods, both in the raw material and in the manufactured state, which have actually paid the higher rates of duty and of Excise. I am told on very reliable authority that there are three wholesale houses in Manchester alone which have £50,000 of silk goods on hand upon which duty has been paid, and I have a letter from one friend saying he is making a loss of £5,000 on the artificial silk which he has in stock upon which he has paid Excise. Another manufacturer has actually written off his balance sheet, which ends at the end of June, £10,000 of his stock, and I am informed that one of the leading manufacturers of artificial silk yarn will actually lose nearly £500,000 on the stock on which he has paid Excise.
  It is not merely ending in this way, but contracts have been made on the basis of the higher rate of taxation, and these are being repudiated. Particularly may I emphasise that I have heard of a case in the Argentine Republic where prices which have been given for export are now at a lower rate, and the result is that
  2256
  these old contracts are being repudiated; and, of course, they will only be accepted on the new rate of prices. I am not going to press the right hon. Gentleman, though I myself have been pressed to ask, for concessions on this matter. I know the difficulties of the Chancellor of the Exchequer and that he is bound to have regard to the amount of revenue which he receives, and I know that he cannot spare anything in his budget to deal with the compensation for which my friends are asking, but I think he can help in this matter and in other ways. I understand that certain discussions are taking place during next week between the trade and the officials of the Treasury or of the Customs and Excise on the question of how this difficult matter can be alleviated or settled without loss of revenue to the Exchequer. I have heard certain suggestions made, and I only hope—in fact, I know—that the right hon. Gentleman and the Chancellor of the Exchequer will take very carefully into consideration those suggestions as to how the trade can be assisted sympathetically in this matter.
  The further point which I would like to bring before the right hon. Gentleman is that in this Report of the Import Duties Advisory Committee it is clearly laid down as their opinion that eventually the raw material taxes will disappear altogether. I agree entirely. I was never in favour of the original imposition of the raw material taxes. They were imposed, as the right hon. Gentleman has just said, by the right hon. Member for Epping (Mr. Churchill) when he was Chancellor of the Exchequer, and they were only accepted by myself and by the silk industry as a whole because we regarded that small compensation for the inconvenience which they were suffering, to use the picturesque language of the right hon. Member for Epping, or that element of protection, as just that small turn in our favour which was of advantage to our people. I am desperately afraid of what the position of the trade will be between now and next April. Next April there will be consideration by the Chancellor of the Exchequer of his new Budget. The silk trade has been caught with a very heavy loss on this occasion, and they are going to take very good care not to lose on the next occasion. It is going to lead to friends of mine buying only sufficient for

  2257
  the day, until they know finally what their fate is to be as far as this raw material tax is concerned.
  Therefore, on this matter I appeal to the right hon. Gentleman that he should have the closest consultation with the silk industry in the meantime, and, speaking on the assumption that the raw material taxes are eventually to go, that the methods, the dates, and the times should be arranged after the closest consultation with the trade. After all, the new duties which we are now passing were known in Lyons three weeks ago. I do not say that the British Government are to blame for that, but these duties were communicated to the Lyons manufacturers by the French politicians. Lyons, which is the great centre of silk manufacture, knew all about these things, but Macclesfield knew nothing, and it was a great disadvantage. I say, therefore, that if and when the present raw material taxes are dealt with either a certain amount of notice should be given or they should not be removed altogether, but spread over a series of months.
  These Orders deal only with European competition. It was clearly stated by the Silk Association, when they placed their case before the Import Duties Advisory Committee, that it was based only on dealing with European competition; it had nothing whatever to do with dealing with Japanese competition. They stated clearly in their case which was put before the Committee that the question of Japanese competition had to be dealt with by other methods. I hope, now that the Government (have got this matter free from negotiations with foreign Governments, that some system of quotas for silk will be brought into operation in exactly the same way as it has been done for cotton. While thanking the right hon. Gentleman for at last taking action and for at last granting fiscal justice, though of a limited character, to the silk industry, I hope he will take into consideration the difficulties which have been raised by this Order and do everything possible to alleviate the losses and hardships which will be caused by the removal of the raw material duties.
  1.37 p.m.
  Mr. O'CONNOR: The hon. Member for Gower (Mr. D. Grenfell) voiced the feelings of a good many of us when he congratulated my right hon. Friend on
  2258
  the fullness of this particular report, which puts us in possession of a good deal of the skeleton working of the processes which led to the production of these Orders. I am sure the House will join with me in hoping that he will give the House material of this kind in advance so that when we discuss similar orders in future we shall have the bare bones of reasoning which lead up to Orders. I cannot join with the hon. Member in hoping that there will be any closer contact between the Import Duties Advisory Committee and Members of this House. That is a proposition which the hon. Gentleman will realise when he reflects on it soberly, will not commend itself, especially to those who have for so long said that the operation of a Committee of this kind must always be in danger of political influence. The great advantage of this Committee is that Members of this House have no access to it, but that trade has access to it, as it properly should, and that it is free from those political contacts which have destroyed bodies of this kind in several other countries in which they have been set up.
  I join with the hon. Gentleman in congratulating the President of the Board of Trade on this Order, subject to one or two qualifications. Those who have always said that we cannot operate a protective system and at the same time use that system to obtain political advantages are confuted by this Order, because by it we are doing something to improve the whole of the political and trade position with France. That is what was always said with regard to these duties when they were put on, and this is an instance in which a duty is being lowered to improve trade relations with another country. My right hon. Friend will be the first to agree that we cannot reduce a duty which has been in operation for a considerable time without causing considerable dislocation of the business of people who are engaged in the article under consideration. That must be so, and perhaps, now that we are living under a particular system, they have to face that fact. They may find of a sudden that their stocks have been considerably reduced in value owing to the fact that the duty has been reduced, but in this particular case I want to call my right hon. Friend's attention to what is a very serious hardship in

  2259
  regard, not to the lightening of the duty, but to the proposals as to the rate of drawback. The Order, as far as drawback is concerned, proposes on the recommendation of the Committee that
  "the drawback to be allowed shall be an amount equal to the aggregate amount of the duty or duties chargeable as aforesaid which is proved to the satisfaction of the Commissioners of Customs and Excise to have been paid."
  That, I presume, is in pursuance of the recommendation which appears on page 21, the last sentence of which suggests:
  "that the present drawback rates should be continued for a time."
  The Committee has also dealt with the subject of drawbacks on page 27, where, in paragraph 4, it says:
  "Generally, we think that the existing drawbacks allowable as respects the existing duties should be continued for the present."
  I speak with great diffidence on the interpretation of the Orders that are before the House, because it is an extremely complicated and difficult subject. I have done my best to get into touch with the Treasury and the Board of Trade, and I am informed that the Order does no more than carry out the recommendations of the Committee, that, of course, the Order could not do more than that, and that they are in fact advised that it does not do so. So far as the trade is concerned, a great difficulty arises at once in the case of certain holders of duty paid stocks. The people who are affected are those who have made forward contracts. Under this recommendation, which is that the present rate of drawback should be maintained for a short time—the time is not defined and it may be two, three or six months—they are in the position that, having forward contracts for delivery, they are entitled to a certain rate of drawback. In the case of certain processed goods it is 1s. 7d., and those who can make contracts to-day or to-mmorrow are entitled to the same drawback, although the duty paid is 6d. less. It is a complete bonus for somebody.
  The position really, therefore, presents very great difficulties to those who hold stocks of duty paid goods at the present time. I want to give a concrete example. One of my constituents, who is an important dealer in artificial silk, has sold forward artificial silk knit yarns at
  2260
  1s. 5d. That price is arrived at in this way. The yarn price is 3s., which is made up on the old rate of duty, and from that 3s. he takes 1s. 7d. drawback and quotes the net figure of 1s. 5d. He has quoted that for some considerable time ahead. To-day he can sell the identical yarn at 6d. cheaper, at 11d., because he can sell his yarn at 2s. 6d. and take off 1s. 7d. drawback as though he had paid the old rate of duty. He or any body else is in a position to sell in the market at 6d. less than he has sold under his forward contract. My right hon. Friend may say that the trader is entitled to enforce his contracts at the old rates, but is he, in practice, in a position to do so? Does anybody imagine that a man who had sold forward to the Argentine or South Africa or elsewhere under a contract and forced the buyers to take delivery at 6d. above the market price could do business? Does anybody imagine that if he did business on those terms he would keep his customers? Of course he would not. The net result is that the people with forward contracts will have to stand the loss of a very considerable amount, owing to the fact that the person who is paying the new rate of duty is getting a quite unexpected bonus of 6d. That is something which I cannot justify in any way on theoretical grounds.
  What I imagine is said is that although this cannot be justified on any ground of principle—because it is a sheer gift of 6d. to somebody and a sheer handicap of 6d. to somebody else—administratively it is impossible to have differential rates of drawback. But is that right? I have here notice No. 99 which has been issued by the Commissioners of Customs and Excise for the guidance of traders. That divides goods into two classes, Class 1 and Class 2. In the case of Class 2 goods, which are, roughly speaking, raw materials, cocoons, artificial silk yarns and the like, I find that they are to be allowed drawback equal to the amount of the duty payable. It is carefully explained in a footnote on page 4 that that drawback will be proportionate to the rate of duty which has been paid. The man who has paid the lower rate of duty naturally gets the lower rate of drawback, and the man who has paid the higher rate of duty gets the higher drawback. Therefore, as regards Part 2 goods, it appears that there is no administrative

  2261
  difficulty about a differential rate of drawback corresponding to the two rates of duty on stocks in existence. But Class 3 goods, which in the main are processed goods, goods more fully manufactured, have a dead level of drawback, and in the particular case in which I am interested at the moment, that is to say processed knit yarns, the rate of drawback is 1s. 7d. This position seems to put traders in a difficulty. It may very well be that my hon. Friend will be in a position to say that by the Order he has merely carried out the recommendations of the Advisory Committee, though a layman finds it a little difficult to reconcile the words in the Order
  "The drawback shall be equal to the aggregate amount of the duty paid or the duties chargeable "
  with the condition I have been describing, in which the drawback is uniform whatever the rate of duty has been; but I must accept it that reconcilation can be made. Whether it be so or not, ought not the right hon. Gentleman to try to get another recommendation from the Import Duties Advisory Committee dealing with this point, in order that those who hold large duty-paid stocks—I am told they amount to thousands of pounds—and who have forward orders should be in a position to deal with them without unnecessary loss?
  Then there is this further matter. Nothing is said as to the duration of the existing rights of drawback. It may be three months, four months or any time. I gather that what is in the minds of the Government and the Import Duties Advisory Committee is that it should be long enough to enable the existing duty-paid stocks to be disposed of. That is a laudable object and a perfectly reasonable one, but it does create a difficulty as regards future quotations. So long as we have the 1s. 7d. rate of drawback—to refer to the instance I have given—so long as the merchant knows that he can quote his price on the basis of a 1s. 7d. drawback, he can make his forward contracts, but when he is told, "This drawback is to be reduced, but we cannot say when," it becomes exceedingly difficult to book forward delivery orders for October, November or December. I am told that many Manchester merchants
  are advising their overseas customers that they cannot make a forward quotation at the present time.
  I suggest to my right hon. Friend, while recognising that the proposal has been put forward in the interest of fairness, that the period ought not to be unduly long, and that some notice ought to be given within a reasonable time as to the duration of the existing rate of drawback. I hope I have made my point clear. It is the difficulty of reconciling two difficulties, one of which the right hon. Gentleman has dealt with in the Order and the other with which I hope he will deal. I hope the point I have made as regards the possibility of a differential rate of drawback on processed goods may be borne in mind, and that if it is only a matter of administration the present position will be put right in the interests of those people who hold these duty-paid stocks.
  1.53 p.m.
  Mr. CAPORN: I wish to support the argument which has been put forward by my hon. and learned Friend the Member for Central Nottingham (Mr. O'Connor) and to express the hope that the right hon. Gentleman will consider whether it is not possible to do something in the interests of the Treasury itself. To take an illustration, a parcel of silk might be passed backwards and forwards between this country and, say Antwerp, drawing drawback at the old rate of duty, and brought into this country at half the duty and it seems to me that a system which does not make any allowance for the rate of duty which was originally paid provides opportunities for fraud upon the Treasury itself. In the interest of justice as between two manufacturers, one of whom is, by mere accident, put in a position to make a considerable profit while the other will incur a considerable loss, as well as in the interest of the Treasury itself, some further consideration ought to be given to this matter, and some means devised whereby the drawback is only paid at the rate at which the duty has in fact been paid.
  Question put:
  The House divided: Ayes, 104: Noes, 23.

  Division No. 325.]

  AYES.

  [1.55 p.m.

  Acland-Troyte, Lieut.-Colonel

  Balfour, Capt. Harold (I. of Thanet)

  Bower, Commander Robert Tatton

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

  Barrie, Sir Charles Coupar

  Bowyer, Capt. Sir George E. W.

  Baldwin, Rt. Hon. Stanley

  Beauchamp, Sir Brograve Campbell

  Broadbent, Colonel John

  Brown, Ernest (Leith)

  Llewellin, Major John J.

  Runciman, Rt. Hon. Walter

  Buchan-Hepburn, P. G. T.

  Loftus, Pierce C.

  Runge, Norah Cecil

  Burnett, John George

  Mabane, William

  Russell, Hamer Field (Sheffield, B'tslde)

  Caporn, Arthur Cecil

  MacAndrew, Capt. J. O. (Ayr)

  Rutherford, John (Edmonton)

  Cochrane, Commander Hon. A. D.

  McCorquodale, M. S.

  Sandeman, Sir A. N. Stewart

  Conant, R. J. E.

  Maclay, Hon. Joseph Paton

  Scone, Lord

  Cooke, Douglas

  McLean, Major Sir Alan

  Selley, Harry R.

  Cranborne, Viscount

  Macqulsten, Frederick Alexander

  Shaw, Helen B. (Lanark, Bothwell)

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

  Maitland, Adam

  Sinclair, Col. T.(Queen's Unv., Belfast)

  Cross, R. H.

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

  Sotheron-Estcourt, Captain T. E.

  Dickie, John P.

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

  Stanley, Rt. Hon. Lord (Fylde)

  Doran, Edward

  Mayhew, Lieut.-Colonel John

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

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

  Moreing, Adrian C.

  Strauss, Edward A.

  Edmondson, Major Sir James

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

  Tate, Mavis Constance

  Emmott, Charles E. G. C.

  Morrison, G. A. (Scottish Univer'ties)

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

  Ford, Sir Patrick J.

  Morrison, William Shephard

  Thomson, Sir Frederick Charles

  Fuller, Captain A. G.

  Moss, Captain H. J.

  Tufnell, Lieut.-Commander R. L.

  Goldle, Noel B.

  Nation, Brigadier-General J. J. M.

  Wallace, John (Dunfermline)

  Grattan-Doyle, Sir Nicholas

  North, Edward T.

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

  Gretton, Colonel Rt. Hon. John

  Nunn, William

  Ward, Sarah Adelaide (Cannock)

  Grimston, R. V.

  O'Connor, Terence James

  Wardlaw-Milne, Sir John S

  Hales, Harold K.

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

  Warrender, Sir Victor A G.

  Hanley, Dennis A.

  Orr Ewing, I. L.

  Wedderburn, Henry James Scrymgeour

  Hannon, Patrick Joseph Henry

  Percy, Lord Eustace

  Whiteside, Borras Noel H.

  Howitt, Dr. Alfred B.

  Petherick, M

  Whyte, Jardine Bell

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

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

  Wills, Wilfrid D.

  Hume, Sir George Hopwood

  Raikes, Henry V. A. M.

  Windsor-Clive, Lieut.-Colonel George

  Hunter, Capt. M. J. (Brigg)

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

  Wise, Alfred R.

  Hurst, Sir Gerald B.

  Reid, David D. (County Down)

  Womersley, Sir Walter

  Kimball, Lawrence

  Remer, John R.

  Leighton, Major B. E. P.

  Rhys, Hon. Charles Arthur U

  TELLERS FOR THE AYES.—

  Levy, Thomas

  Rickards, George William

  Major George Davies and Commander Southby.

  Lindsay, Noel Ker

  Rots Taylor, Walter (Woodbridge)

  NOES.

  Adams, D. M. (Poplar, South)

  Hall, George H. (Merthyr Tydvil)

  Smith, Tom (Normanton)

  Bernays, Robert

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

  Tinker, John Joseph

  Daggar, George

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

  White, Henry Graham

  Davies, David L. (Pontypridd)

  Macdonald, Gordon (Ince)

  Williams, Dr. John H. (Llanelly)

  Dobbie, William

  McEntee, Valentine L.

  Wilmot, John

  Foot, Isaac (Cornwall, Bodmin)

  Maclean, Nell (Glasgow, Govan)

  Gardner, Benjamin Walter

  Mason, David M. (Edinburgh, E.)

  TELLERS FOR THE NOES.—

  Greenwood, Rt. Hon. Arthur

  Maxton, James

  Mr. John and Mr. Groves.

  Grenfell, David Rees (Glamorgan)

  Rea, Walter Russell

  Resolved,
  "That the Silk Duties (No. 1) Order, 1934, dated the twenty-eighth day of June, nineteen hundred and thirty-four, made by the Treasury under the Finance Act, 1933, a copy of which was presented to this House on the said twenty-eighth day of June, nineteen hundred and thirty-four be approved."

  SILK DUTIES.

    IMPORT DUTIES ACT, 1932.
    Resolved,
    "That the Additional Import Duties (No. 22) Order, 1934, dated the twenty-first day of June, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-first day of June, nineteen hundred and thirty-four, be approved."
    Resolved,
    "That the Additional Import Duties (No. 24) Order, 1934, dated the second day of July, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said second day of July, nineteen hundred and thirty-four, be approved."—[Mr. Runciman.]
    The remaining Orders were read, and postponed.
    Whereupon Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 2.
    Adjourned at Two Minutes after Two o'Clock, until Monday next, 9th July.

  ROYAL NAVY (SHIPS, COSTS).
  ROYAL NAVY (SHIPS, COSTS).
  POOR LAW RELIEF (TEST WORK).
  POOR LAW RELIEF (TEST WORK).
  DISARMAMENT CONFERENCE (CHAIRMAN'S ALLOWANCES).
  DISARMAMENT CONFERENCE (CHAIRMAN'S ALLOWANCES).