Sitting of 19 May 1936

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

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders riot previously inquired into, which are applicable thereto, have been complied with, namely:

Foundling Hospital Bill [Lords].

Mortlake Crematorium Bill [Lords].

Bills to be read a Second time.
Provisional Order Bills (No Standing Orders applicable),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, no Standing Orders are applicable, namely:
Marriages Provisional Orders Bill.
Bill to be read a Second time Tomorrow.
Dalton-in-Furness Urban District Council Bill (by Order),
Read the Third time, and passed.
London and Middlesex (Improvements, &c.) Bill (by Order),
Consideration, as amended, deferred till Thursday, at half-past Seven of the clock.
London County Council (Money) Bill (by Order),
Second Reading deferred till Monday next.
Swansea and District Transport Bill [Lords,]
Ordered,
"That in the case of the Swansea and District Transport Bill [Lords,] notwithstanding that the Clause required to be inserted by Standing Order 180 is not in the Bill, having regard to the Report of the Committee the Bill be now taken
974
into consideration."—[The Chairman of Ways and Means.]
Bill, as amended, considered accordingly; to be read the Third time.
London and North Eastern Railway Order Confirmation Bill [Lords] (by Order),
Consideration deferred till Wednesday, 27th May.

GRIMSBY CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL,
"to confirm a Provisional Order made by the Minister of Transport under the Grimsby Corporation Act, 1921, relating to Grimsby Corporation Trolley Vehicles," presented by Captain Austin Hudson; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 119.]
ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE

    OIL
    Mr. ELLIS SMITHasked the Secretary for Mines whether he can make any statement as to the negotiations which have taken place between representatives of oil interests in Great Britain and the German Government or oil interests in Germany during the last three years; and what have been the results of these negotiations?
    The SECRETARY for MINES (Captain Crookshank): I do not know to what negotiations the hon. Member refers. If he will give me some further details, I will see whether I can furnish him with any information.
    Mr. SMITH: Is the Minister aware that statements have appeared in the German Press to the effect that negotiations have been conducted between well-known oil interests in this country and representatives of the German Government, with a view to organising an oil monopoly?

    OTTAWA AGREEMENTS.
    Sir PATRICK HANNONasked the Secretary of State for Dominion Affairs whether an invitation has been, or will be, issued to the Governments of those countries concerned in the Ottawa Agreements to attend a further conference of the same nature with a view to continuing those Agreements in the same or another form?
    The SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): As the House is aware, the Agreements between the United Kingdom and the Dominions concluded at the Imperial Conference at Ottawa in 1932 do not terminate on any fixed date, but each Agreement continues in force unless, at any time after 19th February, 1937, six months' notice of denunciation is given by either party to it. The most convenient method of dealing with questions arising out of the Agreements which any of His Majesty's Governments may wish to raise is now under discussion between the Governments affected. In the view of His Majesty's Government in the United Kingdom, it would be most appropriate to proceed by way of discussions with the individual Governments affected as occasion offers, and they have brought this view to the notice of the Dominion Governments.
    Sir P. HANNON: In the discussions to which my right hon. Friend refers, will favourable consideration be given to the interests of this country in relation to any new agreements that may be made?
    Mr. MacDONALD: Certainly.

    EMPIRE TRADE.
    Sir P. HANNONasked the President of the Board of Trade the total amount of imports from those countries which concluded Ottawa Agreements with the United Kingdom in the years 1932 and 1935, respectively; and the amount of exports of United Kingdom goods to those countries in the same periods?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): Imports of merchandise consigned from countries which concluded Ottawa Agreements with the United Kingdom were valued at £177,144,000 in 1932 and £207,419,000 in 1935. The exports of United Kingdom goods to these countries during the same years amounted to £100,840,000 and £138,479,000.
    Sir P. HANNON: Are not these figures striking evidence of the importance of concentrating the statesmanship of this country on the development of our inter-Imperial relations?

    CANADA AND UNITED STATES (MOTOR CARS).
    Sir P. HANNONasked the President of the Board of Trade whether he has any information as to the increase in imports of motor cars and parts into Canada from the United States of America since the agreement was made between those two countries; and whether there is any indication that the Canadian motor car trade with this country is likely to be affected?
    Mr. RUNCIMAN: Sufficient time has hardly elapsed since the coming into force of the agreement in question to enable any definite conclusions to be drawn from the figures available. I may say, however, that during the first quarter of 1936 the value of motor cars and parts imported into Canada from the United Kingdom was greater than in the corresponding period of the previous year, whereas such imports from the United States declined in value.

    RABBITS (IMPORTS).
    Mr. T. COOKasked the President of the Board of Trade the number of rabbits imported for consumption during the latest available period?
    Mr. RUNCIMAN: During the first four months of this year e imports of fresh rabbits into the United Kingdom, less re-exports, amounted I o 24,436 cwts. and of frozen rabbits to 54,453 cwts. The number of rabbits imported is not recorded in the trade returns.
    Mr. LAWSON: Were these live or cooked rabbits?
    Mr. RUNCIMAN: Some of them were frozen rabbits.
    Mr. MUFF: Can the right hon. Gentleman say where all the Australian canned rabbits have gone? There are none on the market.

    ARGENTINA.
    Sir CYRIL COBBasked the President of the Board of Trade whether he will terminate the subsidies to Argentine agriculture conferred by the Roca Agreement, seeing that a revenue yield of less than 2 per cent. arises from the nominal amount of Anglo-Argentine investments, and that much of this yield fails to reach Great Britain as goods, services, or cash?
    Mr. RUNCIMAN: My hon. Friend is under a misapprehension. The Roca

    977
    Agreement does not deal with subsidies to Argentine agriculture. The position of British companies is not being overlooked in the present discussions with the Argentine Government.

    YUGOSLAVIA AND CZECHOSLOVAKIA (POULTRY).
    Mr. PERKINSasked the President of the Board of Trade whether there is in operation at this moment a duty against poultry imported from Yugoslavia and Czechoslovakia and, if so, what is the amount of the duty; and whether there has been any recent increase in imports from these two countries?
    Mr. RUNCIMAN: Under the Treaty of Peace (Covenant of the League of Nations) (No. 4) Order, 1935, certain quantities of dead turkeys and fowls, the produce of Yugoslavia, may be imported into this country at a duty of ld. per lb. The import duty on any other dead poultry imported from Yugoslavia and on all poultry imported from Czechoslovakia is 3d. per lb. As regards the last part of the question, the imports of poultry from these two countries in the first four months of this year were substantially less than in the corresponding period of 1935.
    Sir JOSEPH LAMB: Is there any other country that gives corresponding advantages against agriculture?
    Mr. RUNCIMAN: I cannot say without notice.
    Mr. GEORGE GRIFFITHS: Can the right hon. Gentleman say who it is that eats these chickens? Our people get very few of them.

    CURRENCY RESTRICTIONS (GERMANY).
    Colonel ROPNERasked the President of the Board of Trade whether he is aware that, on account of German eurrency restrictions, British firms are frequently unable to obtain payment for goods which have been sold in Germany, except by arranging to take German goods; and, if so, whether the Government will take the necessary action to prevent the German Government from compelling British creditors to place orders in Germany?
    Mr. RUNCIMAN: I assume that my hon. and gallant Friend has in mind the placing of shipbuilding orders in Germany by British firms for the purpose of
    978
    liquidating frozen balances. This matter has been the subject of a number of recent questions in the House, but, as I have previously explained, I regret that there is no action which the Government could take to secure that these orders should be placed in British rather than in foreign shipyards.
    Colonel ROPNER: Does the President of the Board of Trade consider it possible for private individuals to compel the German Government to remove currency restrictions, when our own Government are either unwilling or unable to take that action?
    Mr. RUNCIMAN: I do not think it is possible, but payment for United Kingdom goods sold to Germany is available in sterling under the Anglo-German Payments Agreement, 1934, and does not come under the heading of frozen balances.
    Mr. THORNE: Will not the right hon. Gentleman endeavour to find out the names of firms who are having ships built in foreign countries?
    Mr. RUNCIMAN: I have answered questions on that subject several times.
    Mr. THORNE: Does the right hon. Gentleman mean to tell me he cannot find out?

    INDIA (JAPANESE POTTERY).
    Mr. E. SMITHasked the Under-Secretary of State for India whether his attention has been directed to the large amount of pottery manufactured in Japan and imported into India; and what steps it is proposed to take in the matter?
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): I am aware that considerable quantities of pottery are imported into India from Japan. The duty on such imports is 30 per cent., whereas imports from the United Kingdom pay 20 per cent. I have not heard that the Government of India contemplate taking any further action.

    CINEMATOGRAPH FILMS (DOMINIONS, LEGISLATION).
    Mr. DAYasked the Secretary of State for Dominion Affairs, what has been the result of the correspondence passing between his Department and the

    979
    Dominions who had agreed to pass legislation on similar lines to that contained in Part I of the Cinematograph Act, 1927?
    Mr. M. MacDONALD: There has been no question of specific agreement on the part of any of the Dominions to legislate on the lines of Part I of the Cinematograph Act, 1927. I understand, however, that legislation on similar lines has been passed in New Zealand.
    Mr. DAY: What has been the result of the inquiries of the right hon. Gentleman's Department, which were promised some time ago, of Dominions which have agreed to pass legislation on these lines?
    Mr. MacDONALD: The result is contained in the latter part of my answer.
    Mr. DAY: May I point out that the latter part refers only to New Zealand, whereas a previous answer given in the House referred to New Zealand and Canada, and stated that the other Dominions had promised to introduce legislation on these lines?
    Mr. MacDONALD: No promise was given at any time to legislate on these lines. I think the previous answer to which the hon. Gentleman refers was concerned with another part of the Cinematograph Act, 1927.
    Mr. DAY: Will the right hon. Gentleman make inquiries?

    GERMANY AND HUNGARY (BRITISH NATIONALS' CLAIMS)
    Mr. DAYasked the President of the Board of Trade whether all the proved and admitted claims of British nationals against Hungary and Germany have been liquidated and cleared off; and what was the total gross amount paid to British nationals through this Department?
    Mr. RUNCIMAN: The answer to the first part of the question is in the affirmative, except for certain interest payments, under the provisions of the Anglo-Hungarian Convention of 1921. The gross amount paid to British nationals through the Clearing Office (Enemy Debts) in respect of claims against Hungary and Germany is £91,400,000. The total gross amount paid
    980
    through the office in respect of claims against ex-enemy countries is £97,000,000.
    Mr. DAY: Has the staff that was dealing with this matter been finally disbanded?
    Mr. RUNCIMAN: I could not say without notice.

  IMPORTATION OF PLUMAGE (PROHIBITION) ACT, 1921.
  Mr. MATHERSasked the President of the Board of Trade (1) the names of the museums on behalf of which permits are at present granted under Section 2 (4) of the Importation of Plumage (Prohibition) Act, 1921; and for what periods these permits are operative;
  (2) the names of the persons who hold licences to import plumage for restricted purposes under Section 2 (4) of the Importation of Plumage (Prohibition) Act, 1921?
  Mr. RUNCIMAN: With the hon. Member's permission I will circulate in the OFFICIAL REPORT statements giving the desired information.
  Following is the information
  Names of museums which hold licences to import plumage issued under Section 2 (4) of the Importation of Plumage (Prohibition) Act, 1921, and outstanding on 19th May, 1936:
  The British Museum (Natural History), Cromwell Road, London, S.W.7.
  The Royal Scottish Museum, Edinburgh.
  The National Museum of Wales, Cardiff.
  Lord Rothschild's Museum, Tring.
  The licences granted to the above-mentioned museums are valid for an indefinite period but may he revoked at any time by the Board of Trade without reason given.
  Names of holders of licences to import plumage issued under Section 2 (4) of the Importation of Plumage (Prohibition) Act, 1921, as at 19th May, 1936:

  E. C. Stuart Baker. Esq., O.B.E., J.P., F.L.S., F.Z.S., M.B.O.U.

  Dr. C. B. Ticehurst, M.B.O.U.

  Colonel R. Meinertzhagen, D.S.O., F.Z.S., M.B.O.U.

  Hugh Whistler, Esq., F.L.S., F.Z.S., M.B.O.U.

  981

  Herbert Christopher Robinson, Esq., F.Z.S., M.B.O.U.

  H. F. Witherby, Esq., M.B.E., F.Z.S., M.B.O.U.

  W. F. H. Rosenberg, Esq., F.Z.S., F.E.S.

  Dr. James M. Harrison, D.S.C.

  Gregory M. Mathews, Esq.

  Lieut.-Colonel W. A. Payn, M.B.O.U.

  Thomas Murdoch, Esq.

  Messrs. White Bros.

  Messrs. A. E. Rudge and Son.

  Messrs. Hardy Bros. (Alnwick) Ltd.

  Messrs. J.J.S. Walker, Bampton & Co.

  Messrs. S. Allcock & Co., Ltd.

  Messrs. A. & A. Locke.

  Messrs. "Fli-Tac."

  Messrs. The English Needle & Fishing Tackle Co., Ltd.

  Messrs. C. Farlow & Co., Ltd.

  Messrs. Edward Gerrard & Sons.

  Messrs. Reeves & Sons, Ltd.

  MERCANTILE MARINE.

    PACIFIC TRADE
    Mr. BARCLAY-HARVEYasked the President of the Board of Trade whether he is yet in a position to make an announcement of the result of his consultation with the representatives of Australia and New Zealand on the position of British shipping in the Pacific?
    Mr. RUNCIMAN: Consultations are proceeding with the Governments of Canada, Australia and New Zealand, but I am not yet in a position to make any statement.

    MOTOR SHIP "FRANQUELIN" (WIRELESS).
    Mr. NEIL MACLEANasked the President of the Board of Trade whether the "Franquelin," the new all-welded motor ship which left Grangemouth on 11th May for Montreal, is fitted with wireless and carries the necessary wireless operators, or whether permission has been given by the Board of Trade for such equipment to be dispensed with on this voyage?
    Mr. RUNCIMAN: The "Franquelin" is fitted with a wireless telegraph installation and carries a qualified operator in full compliance with the requirements.

    BRITISH SHIPS (PURCHASES, JAPAN).
    Mr. MACLEANasked the President of the Board of Trade how many
    982
    ships sold to Japan by British shipowners in the past 10 years are now sailing under the Japanese flag and used in the Siamese trade?
    Mr. RUNCIMAN: I regret that the information for which the hon. Member asks is not available.
    Mr. MACLEAN: As Board of Trade officials have already supplied information, what is to prevent it being circulated?
    Mr. RUNCIMAN: If it had been available, I should have given it to the hon. Member.

  BRITISH ARMY.

    MEAT SUPPLIES.
    Mr. DAYasked the Secretary of State for War what quantity of beef and mutton was supplied to the Army at home for the 12 months ended to the last convenient date; and how much of this meat was home-produced?
    The FINANCIAL SECRETARY to the WAR OFFICE (Sir Victor Warrender): I would refer the hon. Member to the answer given on 12th May to a similar question by my hon. and gallant Friend the Member for Sudbury (Colonel Burton.)

    SENTENCE (PRIVATE VENTEE).
    Mr. CASSELLSasked the Secretary of State for War whether he is prepared to recommend the remission of the sentence of three years' imprisonment passed upon Robert Venten, No. 3310629, late private of the 2nd Battalion Highland Light Infantry, while on service at Nowshera?
    Sir V. WARRENDER: My right hon. Friend regrets that he is unable to grant auy remission in this case at present.
    Mr. CASSELLS: In considering this decision, did the hon. Gentleman have regard to any representations as to character from the commanding officer of the regiment?
    Sir V. WARRENDER: I can assure the hon. Member that the decision was come to after full consideration.

    CADET CORPS (SCHOOL PREMISES, LONDON).
    Major-General Sir ALFRED KNOXasked the Secretary of State for War

    983
    whether his attention has been drawn to the decision of the London County Council to refuse permission to cadet corps to use school premises for training purposes after school hours; and whether, in view of the importance of encouraging all defence organisations, he will make representations to reconsider this decision as being contrary to the national interest?
    Sir V. WARRENDER: My right hon. Friend's attention has been drawn to the decision, but the matter is one in which he fears that any intervention on his part would be ineffective. I can only hope that, despite the discouragement given thereby to the cadet units affected, they may still be able to continue their activities, which are highly desirable in the national interests.
    Sir A. KNOX: How does my hon. Friend expect these units to continue their patriotic action if the Government do not put pressure on unpatriotic local authorities to force them to give them facilities for their work?
    Sir WILLIAM DAVISON: Is it not a fact that the Government give the London County Council very large grants from Imperial funds, and could they not in that way bring immense pressure to bear on the county council so that they should not interfere with Government policy?
    Sir V. WARRENDER: MY hon. and gallant Friend must know that our powers are very limited and, where you have no power, it is difficult to exert pressure.
    Sir A. KNOX: Is it not possible o consult with the Minister of Education to stop grants to these unpatriotic authorities?
    Mr. SANDYS: Will the hon. Gentleman consider asking Parliament for powers to prevent local authorities from obstructing the essential defence services of the country?
    Mr. J.J. DAVIDSON: Will the hon. Baronet consider issuing a financial appeal to these people who are so anxious for this form of training for young people to be carried on?

    TERRITORIAL CAMPS (SOUTHWARK BOROUGH COUNCIL).
    Mr. BULLasked the. Secretary of State for War whether his attention has been drawn to the decision of the Southwark Borough Council that those of its employés who are members of the Territorial Army who attend Territorial camp shall no longer receive a week's pay which had previously been granted during their absence from duty; and what steps he is taking to remove such discouragement to recruitment for the Territorial Army?
    Sir V. WARRENDER: My right hon. Friend's attention has been drawn to the decision, but he regrets that he is unable to take any action in the matter. I am glad to say that many individual employers are showing a greater appreciation of the urgent necessity for encouraging enlistment into the Territorial Army in a practical manner, by giving just those concessions that the Southwark Borough Council are now withdrawing.
    Sir WALDRON SMITHERS: Will the hon. Baronet consider publishing the names of the organisations that give these concessions?
    Sir V. WARRENDER: Perhaps my hon. Friend will put that question down.

    RECRUITING (BOYS)
    Mr. THURTLEasked the Secretary of State for War when he expects to be in a position to make a statement regarding the nature of his plans for recruiting boys into Army service; and whether he will bear in mind the undesirability of inducing boys to contract for a long period of service, in view of the immature state of their minds?
    Sir V. WARRENDER: I cannot say at present when I shall be able to make a statement. All aspects of the question will receive full consideration before a decision is reached.
    Mr. THURTLE: Will the hon. Baronet impress upon his right hon. Friend the undesirability of inducing young boys who do not know their own mind to engage in a long period of service?
    Captain MACNAMARA: What is wrong in training boys to be prepared to assume the responsibility of manhood service?

  SCOTLAND.

    SPECIAL AREAS (GLASGOW).
    Mr. T. HENDERSONasked the Secretary of State for Scotland on what grounds the city of Glasgow is not scheduled as a special area under the Special Areas Act, 1934; and whether it is the intention of the Government to include the city of Glasgow as an area which will be entitled to operate the provisions of the Special Areas Reconstruction (Agreement) Bill?
    The UNDER-SECRETARY of STATE for SCOTLAND (Lieut. - Colonel Colville): It was decided by Parliament that the experimental treatment provided for in the Special Areas Act should be concentrated upon the areas specified in the Schedule thereto, which cannot be extended without legislation. It has been made clear in the House that it is not. proposed to apply the further experimental scheme provided for by the Bill to which the hon. Member refers outside those areas at present.
    Mr. HARDIE: Is the hon. and gallant Gentleman not aware that, although Glasgow is not scheduled, it is much worse than areas that are scheduled, and will he not see that legislation is brought in to bring Glasgow within the Schedule?
    Lieut.-Colonel COLVILLE: I cannot promise legislation, but all relevant factors are taken into account.
    Mr. HARDIE: Is the hon. and gallant Gentleman not aware that the whole report shows that things in the Western area of Scotland are worse even than they are in Wales, and is he not ready to do something in the matter?
    Lieut. - Colonel COLVILLE: The matter was very fully debated when the Act was passed, and all circumstances were taken into account. It was decided to concentrate in the first instance on certain areas.
    Mr. N. MACLEAN: Will not the hon. and gallant Gentleman consider the publication of the appendix of the report of the Special Commissioner in order that the House may know exactly what the circumstances were in Glasgow at the time the investigations were made, and whether or not Glasgow ought to be included in the Schedule?
    Lieut.-Colonel COLVILLE: That is a separate question which I cannot answer without notice.

    SEA FISH COMMISSION (REPORT).
    Sir ARCHIBALD SINCLAIRasked the Secretary of State for Scotland whether the Government are now in a position to announce the action which it is proposed to take on the report of the Sea Fish Commission?
    Lieut. - Colonel COLVILLE: It is desirable that the views of the different sections of the white-fish industry should be available before the Government reach a decision on the recommendations contained in the report as to the organisation of the industry, and steps have been taken to obtain these. The recommendations cover a wide field, and some time must elapse before the views of all the sectional interests concerned can be received and considered.
    Sir A. SINCLAIR: In view of the grave depression in the fishing industry, can the hon. and gallant Gentleman assure the House that this procedure will be accelerated as much as possible?
    Lieut.-Colonel COLVILLE: Yes, Sir.

    HERRING INDUSTRY BOARD (ANNUAL REPORT).
    Sir A. SINCLAIRasked the Secretary of State for Scotland when the annual report of the Herring Industry Board is going to be presented to Parliament?
    Lieut.-Colonel COLVILLE: I am informed that the board expect to forward their report to the Ministers at the end of this month. It will be laid before Parliament as soon as possible thereafter.

    PRISON MAINTENANCE CHARGES.
    Mr. GALLACHERasked the Secretary of State for Scotland whether he is aware that Charles Curries of Oakley, West Fife, was arrested and imprisoned for non-payment of rates; that after he had been in prison several days his son took on the responsibility for payment of his father's debt and thereby secured his release; that the amount originally owed for rates has now been paid by the son, but he is still being forced to pay a further sum for the maintenance of his father while in prison and for expenses incidental to his arrest; that the charge for prison accommodation is higher than

    987
    the charge in the average hotel; and will he take steps to stop this additional charge?
    Lieut.-Colonel COLVILLE: The records of the Prisons Department for Scotland show that Mr. Charles Currie was lodged in Edinburgh Prison on 4th November, 1935, for failure to pay rates due by him to the Fife County Council; that he was released on 20th November, 1935, on notification being received from the county clerk that satisfactory arrangements for making payment of arrears of rates had been made; and that the amount charged to the county council in respect of Mr. Currie's aliment while he was in prison was at the rate of 9d. per day. I have no further information as to these matters, and, as my right hon. Friend has already informed the hon. Member, he has no authority to intervene.
    Mr. GALLACHER: In view of the charge of 9d. per day by the prison authorities, can the hon. and gallant Gentleman explain why the local authority charged Currie over £5 for maintenance while in prison, and will the Department see that the son, who paid the original debt for rates, is entitled to refuse any further payment over and above the 9d. per day charged by the prison authorities?
    Lieut.-Colonel COLVILLE: So far as the rate for maintenance is concerned, my information from the Prisons Department is that he was charged 9d. per day only.
    Mr. GALLACHER: Is the hon. and gallant Gentleman aware that, while the local authority is charged 9d. per day by the prison authorities, it charges over £5 for the cost of Charles Currie's maintenance in prison?
    Mr. MAXTON: Is it not the law of Scotland that the authority who puts the debtor into prison has to pay his maintenance, and not the debtor?
    Lieut.-Colonel COLVILLE: I understand that the arrangement was made between the son and the local authority, and that these payments are being collected from him, but, as I have stated, it is not a matter in which ray right hon. Friend can intervene. If the hon. Member has any information to lay before
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    me as regards the question of payment, I shall be glad to see it, but my information is that the prison authority charged at the rate of 9d. per day.

    POLICE (MARYHILL DIVISION, GLASGOW).
    Mr. DAVIDSONasked the Secretary of State for Scotland the number of uniformed policemen and the number of plain-clothes officers attached to the Maryhill Division of Glasgow?
    Lieut.-Colonel COLVILLE: I am informed that the total number of police officers attached to the division referred to is 213. Of this number 23 do duty in plain clothes.
    Mr. DAVIDSON: Can the hon. and gallant Gentleman say how this percentage of plain-clothes officers in Maryhill compares with other districts in Glasgow?
    Lieut.-Colonel COLVILLE: Not without notice.
    Mr. DAVIDSON: May I have an assurance that it will be looked into?
    Lieut.-Colonel COLVILLE: If the hon. Gentleman would like information on that point, I would suggest that he should put down another question.

    JUVENILE COURTS, GLASGOW (FINES).
    Mr. DAVIDSONasked the Secretary of State for Scotland the total amount of money received by fines inflicted in each of the juvenile courts in the various divisions of Glasgow for 1935?
    Lieut.-Colonel COLVILLE: As the answer involves a table of figures, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
    Mr. DAVIDSON: Is the Department or the right hon. Gentleman himself making any investigations into the unrest caused by big fines inflicted upon children in Glasgow for perfectly trivial offences?
    Lieut.-Colonel COLVILLE: I suggest that that is a separate question. If the hon. Member will read the Table which I am sending him, he will be able to gauge the extent of the matter.
    Mr. DAVIDSON: I raised this question before, and the right hon. Gentleman made several replies indicating that some inquiry would be made, and I am asking if that has been done?
    Lieut.-Colonel COLVILLE: That is a separate question, and I suggest that the hon. Gentleman should first read the Table.
    Following is the Table:

    Court.

    Amount of fines received.

    £

    s.

    d.

    Central Division

    …

    89

    17

    6

    Marine Division

    …

    10

    3

    0

    Eastern Division

    …

    16

    3

    0

    Southern Division

    …

    10

    15

    0

    Northern Division

    …

    16

    12

    0

    Maryhill Division

    …

    44

    13

    6

    Govan Division

    …

    19

    6

    6

    Sheriff Court

    …

    6

    0

    0

    Total

    …

    £213

    10

    6

    PRISONS (WORK, PRIVATE FIRMS).
    Mr. DAVIDSONasked the Secretary of State for Scotland whether any steps have been taken by the Scottish Office to assist employment in Scotland by abolishing the system of work being done for private firms in Scottish prisons?
    Lieut.-Colonel COLVILLE: As explained in my right hon. Friend's reply to the hon. Member on 2nd March, work in Scottish prisons for private firms is gradually being discontinued in favour of work for Government Departments. Meanwhile it is not practicable to abolish entirely work for private firms.
    Mr. DAVIDSON: Why is it not practicable to abolish work done in prisons for private firms who are competing with other private firms paying trade union rates?
    Lieut.-Colonel COLVILLE: The hon. Member will be aware of the report of the Departmental Committee on the subject of the employment of prisoners in which it is clearly stated that it is to the benefit of the prisoners that they should be given work to do. If Government contracts are not available to take up the total amount produced it is necessary at present still to allow some to go to private persons, but it is the deliberate policy of the Government to reduce that as soon as possible.
    Mr. DAVIDSON: Does the hon. and gallant Gentleman really mean to infer that there are no Government work and Government contracts for prisoners in Scottish prisons, and that, therefore, you
    990
    have to go outside to private firms, and is this consistent with the hon. and gallant Gentleman's own speech to the Scottish Development Council?
    Lieut.-Colonel COLVILLE: Yes, Sir; the Government contracts are certainly a source of employment, and at present Government contracts have not absorbed all the work at the prisons. As far as the effect on outside employment is concerned, I would add that, at the most, 500 prisoners are affected by this system.

    FARM WORKERS (COMMITTEE'S INQUIRY).
    Captain McEWENasked the Secretary of State for Scotland at what stage the proceedings of the committee set up last December to inquire into the employment and remuneration of farm workers in Scotland have now arrived and how soon a report may be expected?
    Lieut.-Colonel COLVILLE: I understand that the committee have completed the hearing evidence, except some evidence of a specialised character, and are now engaged on the preparation of their report. It is not yet possible to indicate precisely when the report will be available, but I am assured that here will be no avoidable delay.
    Captain McEWEN: Is my hon. and gallant Friend in a position to give the approximate date of the report?
    Lieut.-Colonel COLVILLE: I hope that the committee may find it possible to submit the report during next month.
    Mr. DAVIDSON: Can the hon. and gallant Gentleman inform us whether the trade unions affected by the farm workers were considered in regard to this report?
    Lieut.-Colonel COLVILLE: I understand that a very wide number of people were consulted, but I cannot, without notice, say exactly who were brought before the committee.

    COMMERCIAL COLLEGES.
    Mr. MAXTONasked the Secretary of State for Scotland whether attendance at classes in shorthand and typewriting in commercial colleges by children of school age is accepted by his Department as efficient education within the meaning of the Scottish Education Acts; and, if so, will he state the number of pupils in Scotland who are at present receiving this type of instruction?
    Lieut.-Colonel COLVILLE: From inquiries I have made I understand that a course embracing shorthand and typewriting only would not be accepted by the education authorities in Scotland as efficient education for a child of school age. Other essential subjects are required in the small number of cases which arise. It is for the education authority and not for the Department to decide whether a parent is providing efficient education for his child, and any appeal from that decision is to the Sheriff.
    Mr. MAXTON: Cannot the hon. and gallant Gentleman answer the latter part of the question as to the number of pupils?
    Lieut.-Colonel COLVILLE: I have no statistics available, and I have no reason to believe that there are any attending colleges in which only these two subjects are taught.

    SMALL HOLDING (WOODHOUSE, TARBERT).
    Mr. HARDIEasked the Secretary of State for Scotland at what date the small holding of Woodhouse, Tarbert, Argyll, which was let to Angus Shaw as from Whitsunday, 1935, ceased to be a small land holding under the Acts of 1911 to 1918; and under what section of these Acts did the proprietor resume possession?
    Lieut.-Colonel COLVILLE: According to information supplied by the proprietor on 31st July last, Angus Shaw had then renounced the tenancy of Woodhouse, Tarbert, to which he had previously agreed to enter at Whitsunday, 1935. In November, 1935, the landlord represented that the holding had been vacant for six months and on 31st December, 1935, consent was given, under Section 17 of the Act of 1911 as amended, to let outwith the Small Landholders (Scotland) Acts.
    Mr. HARDIE: Is it not the fact that the statements which were made with regard to the tenant, who understood that he was taking over the holding, were twisted about in order to allow the proprietor to have this area for breeding pheasants for the shooting season, and is that not the basis on which the whole thing rests?
    Lieut.-Colonel COLVILLE: I have no information to lead me to believe that that is the case.
    Mr. HARDIE: If I can provide the information, will the hon. and gallant Gentleman take up the matter again; and can he say now whether or not the local court and the court in Edinburgh were consulted in regard to this change at the time?
    Lieut.-Colonel COLVILLE: I shall be glad to look into any fresh information which the hon. Gentleman can give, but the proceedings, as far as my information goes, have been quite regular.
    Mr. MACLEAN: Were there no other applicants for small holdings in Scotland who could have been allowed to obtain this particular small holding; and why was it necessary for it to be transferred to the proprietor?
    Lieut.-Colonel COLVILLE: The question of the accessibility of the holding, I understand, entered largely into the matter and it remained unlet for a certain period before the change was made.

    ADMINISTRATION OF JUSTICE (APPEALS).
    Mr. CASSELLSasked the Lord Advocate whether he is prepared to bring in legislation rendering competent in Scotland appeal in court actions where the judgment of the first instance has been obtained upon evidence which ultimately proved to be perjured?
    The LORD ADVOCATE (Mr. T. M. Cooper): The conditions regulating the review of decisions pronounced by Lords Ordinary or Sheriffs now fall within the jurisdiction of the Rules Councils set up under the Administration of Justice (Scotland) Act, 1933, and can be amended, if any change in procedure is deemed advisable, by Act of Sederunt without the necessity for legislation. I am therefore sending a copy of the hon. Member's question to the Rules Council for their consideration.
    Mr. CASSELLS: May I take it from the right hon. and learned Member that he has applied his attention to the article in the Scottish Law Gazette of March, 1936?
    The LORD ADVOCATE: Yes, Sir, and I shall bring that to the attention of the Rules Council.

    LONDON PARKS (DEFENCE TRAINING).
    Miss CAZALETasked the Secretary of State for War whether he is aware that the London County Council has refused a Territorial anti-aircraft unit permission to use a public park for their legitimate training; and whether he will take steps to remove this interference with the training of London's defence forces?
    Captain MACNAMARAasked the Secretary of State for War what action he proposes to take in view of the refusal of the London County Council to allow an anti-aircraft unit of the Territorial Army to train in a park?
    Mr. SANDYSasked the Secretary of State for War whether his attention has been drawn to the refusal of the London County Council to allow Battersea Park to be used on 24th May for a recruiting display on behalf of antiaircraft units of the Territorial Army; and whether, in view of the importance of recruiting in the interests of national defence, he will make representations to the London County Council with the object of obtaining the reversal of this decision?
    M. Mr. EMMOTTasked the Secretary of State for War whether, in view of the refusal of the London County Council to grant permission for the holding of a recruiting display in Battersea Park on 24th May, he will consider drawing the attention of all local authorities to the importance of affording all possible facilities for recruiting?
    Sir V. WARRENDER: I understand that statements which have appeared, to the effect that this application for authority to stage a recruiting display in Battersea Park had been refused, are premature, and that a final decision on this matter has not yet been taken by the London County Council. I am, in fact, informed that they are considering the question at this moment.
    Miss CAZALET: Does the hon. Baronet not think that in matters of national security and safety the Government ought to be the supreme authority?

  UNEMPLOYMENT.

    AFFORESTATION.
    Mr. SEXTONasked the hon. and gallant Member for Rye, as representing the Forestry Commissioners, what progress has been made in the scheme for additional tree planting in or near Special Areas to help in reducing unemployment?
    Colonel Sir GEORGE COURTHOPE (Forestry Commissioner): Forestry nursery operations have started in the English and Welsh Special Areas, negotiations for plantable land are proceeding, a number of forest workers' holdings have been planned and the erection of the houses and outbuildings will now be proceeded with. The planting season does not begin until November, but draining and fencing will be undertaken as soon as possession has been secured of new land.
    Mr. SEXTON: Can the hon. and gallant Gentleman say how many unemployed have been set to work on this scheme?
    Sir G. COURTHOPE: I am afraid that I cannot answer that question, but the number must be considerable. Over 5,000,000 plants have been lined out in Wales alone.
    Mr. MATHERS: Are similar developments being contemplated in Scotland?
    Sir G. COURTHOPE: We have not received instructions.

    REGISTER (UNFIT PERSONS).
    Mr. CRAVEN-ELLISasked the Minister of Labour whether he will have made a complete investigation of the unemployment registers to find out how many of those on the registers at the date of the next monthly report are for any reason unfit for regular employment; and will he consider deleting from the live register those who are found to be unfit for work?
    The MINISTER of LABOUR (Mr. Ernest Brown): It is a condition for the receipt of unemployment benefit or unemployment allowances that claimants shall prove that they are capable of, and available for, work. Subject to this, I have no power to require persons registering as applicants for employment to satisfy a test in order to determine

    995
    whether they are unfit for regular employment, even if it were possible to define that expression with sufficient precision. As regards the second part of the question, I have no reason to suppose that persons who are completely unfit for work remain on the register. There are always a number whose capacity for work is for various reasons very limited, but it is very difficult to identify them accurately, and in any event I have no authority to strike their names off the register or to refuse them such assistance in finding employment as the exchange may be able to give.

    BOYS (EMPLOYMENT).
    Mr. W. JOSEPH STEWARTasked the Minister of Labour, seeing that there are a number of persons unemployed from 16 years of age and upwards, single and married, daily seeking work, what steps he is taking to carry out the recommendation of the Commissioner for the Special Areas to take those from 14 to 16 years out of the labour market?
    Mr. E. BROWN: The policy of the Government in regard to this matter is embodied in the Education Bills now before Parliament.
    Mr. STEWART: Is the right hon. Gentleman aware that in the Special Areas there are many thousands of young men between the ages of 18 and 21 who are unemployed, and who will never have an opportunity of work as long as boys between 14 and 16 are allowed to be absorbed into industry?
    Mr. BROWN: I cannot accept that statement. There are numerous opportunities for training, and if the hon. Member and his friends will help me to persuade them to volunteer for them, we will do what we can to place them in employment.
    Mr. SHINWELL: If the employment policy of the Government is contained in the Education Bill now before the House, does the right hon. Gentleman mean to say that we are expected to wait for three years before anything is done?
    Mr. BROWN: I mean exactly what I say in my answer.
    Mr. DAVIDSON: Has the right hon. Gentleman any experience of these training camps?
    Mr. BROWN: I did not mention training camps. We have many varieties of training efforts, and most successful they are at the moment.

    TRANSITIONAL PAYMENTS AND ALLOWANCES.
    Mr. LAWSONasked the Minister of Labour the average cost per person relieved through transitional and unemployment assistance for each year since the Order in Council of 1931?
    Mr. E. BROWN: The average cost per person relieved of transitional payments under the provisions of the Unemployment Insurance (National Economy) (No. 2) Order, 1931, and on unemployment allowances, cannot be stated, as information is not available as to the number of dependants in respect of whom payment was made. The average weekly payment in each year since the Order came into operation has been at the annual rate of:—

    Annual rate.

    Year ended.

    £

    31st March, 1932 (from November, 1931)

    49

    31st March, 1933

    50

    31st March, 1934

    51

    31st March, 1935

    55

    31st March, 1936

    60

    Comparison of the figures is affected by the legislation of 1934 and 1935 regarding unemployment insurance and unemployment assistance.

    OVERTIME WORKING.
    Mr. BATEYasked the Minister of Labour whether any progress is being made towards the reduction of overtime working?
    Mr. E. BROWN: In the discussions my predecessor and myself have had with the representatives in the various industries we have emphasised the necessity of restricting overtime working to a minimum and my information is that increasing efforts are being made to this end. The hon. Member will appreciate, however, that when industry is on the upgrade it becomes more difficult to avoid the working of overtime to a certain extent. I regret that I have no comprehensive statistical information concerning the amount of overtime worked.
    Mr. BATEY: When may the House expect a report of the negotiations with the employers?
    Mr. BROWN: I cannot say yet.
    Mr. BATEY: Is it not the intention of the right hon. Gentleman to let the House have a report?
    Mr. BROWN: Naturally, but the hon. Member will understand that we are carrying out a very extensive series of consultations with all sides of the industries, and they reveal a very complicated situation.
    Mr. LAWSON: Is the right hon. Gentleman aware that about the only place where there is any belief that there is a reduction of overtime working in this country is on the Ministerial benches, and that so far as employers and workers are concerned there is no doubt that there is excessive overtime working?
    Mr. BROWN: The hon. Member is under a complete misapprehension.

    TRAINEES.
    Mr. MESSERasked the Minister of Labour whether he is aware of complaints which have been made by trainees at the working conditions in operation at Briggs Bodies, Limited, of Dagenham; and whether he is satisfied that trade union conditions are being observed at this firm?
    Mr. E. BROWN: I am not aware of the complaints to which the hon. Member refers; with regard to the latter part of the question, conditions of employment are, subject to the provisions of the law, a matter for arrangement between the employers and workpeople concerned.
    Mr. MESSER: Do I understand that the right hon. Gentleman does not remember receiving a letter from me some time ago and also more recently a letter from another hon. Member?
    Mr. BROWN: I have answered the question on the Paper. If the hon. Member desires an answer to the point he has put, I will give it to him.
    Mr. MESSER: I have asked whether the right hon. Gentleman has received any complaints; and I am now asking whether he did not receive a letter from me regarding these complaints?
    Mr. BROWN: The question does not refer to complaints from hon. Members, but from trainees.

    HOURS OF WORK AND WORK-SHARING.
    Mr. LYONSasked the Minister of Labour the number of firms in this country where the system of the five-day week is in operation and the number where a scheme of work-sharing obtains?
    Mr. E. BROWN: As regards the first part of the question, I would refer my hon. Friend to the reply which I gave on 26th March to the hon. Member for West Leyton (Mr. Sorensen). As regards the second part of the question, I regret that information is not available as to the number of firms operating work-sharing schemes; in this connection I would refer to the reply given by my predecessor on 3rd April, 1935, to the hon. Member for Leigh (Mr. Tinker). I am sending my hon. Friend copies of these replies.
    Mr. LYONS: Are the right hon. Gentleman's consultations with representatives of industry taking place on all relevant matters, including the shorter working week and work-sharing generally?
    Mr. BROWN: All the subjects coming under those heads are under discussion.

    DEFENCE (EXPENDITURE).
    Sir ROBERT YOUNGasked the Chancellor of the Exchequer whether he has any information as to what is the money value of the contributions per head of the population made by Great Britain and each of the Dominions towards the costs of the defence of the Empire?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I would refer the hon. Member to the Armaments Year Book, published by the League of Nations, which contains particulars of defence expenditure and population for each of the countries referred to. As regards the United Kingdom, a statement giving particulars of defence expenditure over the last 10 years is being circulated in the OFFICIAL REPORT.
    Mr. A. V. ALEXANDER: Are any conversations proceeding with the Dominions as to contributions to the new armaments programme?
    Mr. CHAMBERLAIN: Perhaps the right hon. Gentleman will put that question on the Order Paper.
    Mr. H. G. WILLIAMS: Will the right hon. Gentleman be good enough to

    The figures for 1926–1934 show net expenditure taken from Defence Votes. The figures for1935 are Estimates.

    Year.

    Navy.

    Army.

    Air.

    Total.

    £

    £

    £

    £

    1926

    …

    …

    …

    57,142,862

    43,247,625

    15,355,309

    115,745,796

    1927

    …

    …

    …

    58,123,257

    43,645,735

    15,112,414

    116,881,406

    1928

    …

    …

    …

    57,139,146

    40,796.661

    16,091,935

    114,027,742

    1929

    …

    …

    …

    55,987,770

    40,855,860

    16,880,564

    113,724,194

    1930

    …

    …

    …

    52,274,186

    40,072,677

    17,631,673

    109,978,536

    1931

    …

    …

    …

    51,014,752

    38,445,496

    17,868,948

    107,329,196

    1932

    …

    …

    …

    50,164,453

    35,978,239

    17,057,371

    103,100,063

    1933

    …

    …

    …

    53,443,545

    37,468,970

    16,700,794

    107,613,309

    1934

    …

    …

    …

    56,616,010

    39,603,545

    17,670,893

    113,896,448

    1935

    …

    …

    …

    64,900,000

    44,900,000

    27,596,000

    137,396,000

  MALTING BARLEY.
  Mr. BURKEasked the Chancellor of the Exchequer whether he is aware that the percentage of home-produced barley used in brewing increased from 60 per cent. in 1929 to only 66 per cent. in 1934–35; and whether any better percentage is indicated in the Returns for the financial year just closed?
  Mr. CHAMBERLAIN: I do not know what is the basis of the figures quoted by the hon. Member, but the Import Duties Advisory Committee have stated that 7,500,000 hundredweights of barley, which is approximately the quantity of home-grown barley purchased or contracted to be purchased by brewers in the year ended June, 1935, is estimated to be the equivalent of some seven-tenths of the total quantity of barley used for brewing purposes. No later figures are available.

  FINANCE BILL.
  Mr. LEWISasked the Chancellor of the Exchequer whether, in view of the difficulty experienced in understanding the meaning of the technical language of parts of Clause 19 of the Finance Bill, he will allow a paraphrase in simple language of Sub-sections (1) to (7), inclusive, of Clause 19 to appear among the written replies published in the OFFICIAL REPORT prior to the Second Reading of the Bill?
  Mr. CHAMBERLAIN: I am afraid that I cannot see my way to adopt my
  arrange that a copy of the Armaments Year Book be placed in the Vote Office?
  Following are the statistics:
  hon. Friend's suggestion. There would be serious disadvantages in starting a practice of issuing paraphrases in simple language of clauses in Bills dealing with complicated matters, and I must ask my hon. Friend to be content with the usual procedure under which, if difficulties of interpretation arise, explanations are given by the Government spokesman during the course of debate.
  Mr. LEWIS: Am I to understand that the purpose that the right hon. Gentleman has in mind in Clause 19 of the Finance Bill is so complicated that it is impossible for him to put it in more intelligible language than it appears in the Bill?
  Mr. DAVIDSON: Are we to understand that the hon. Member is not satisfied with the explanation of the Treasury official?

  GERMANY (BRITISH CREDITS).
  Mr. VIANTasked the Chancellor of the Exchequer whether his attention has been directed to the latest report of the Bank for International Settlements at Basle, wherein it is shown that between December, 1934, and December, 1935, French bankers reduced their German credits by 54.4 per cent., Dutch bankers reduced theirs by 36.6 per cent., American bankers by 14.9 per cent., and Swiss bankers by 32 per cent., whereas British credits rose by 5.4 per cent.; and whether he will take further steps to put a stop to this?
  Mr. CHAMBERLAIN: My attention has been drawn to the figures contained in the report of the Bank for International Settlements and to the fact that in certain quarters an inference has been founded on these figures that British bankers had increased their German credits during 1935. The Committee of British Short-Term Creditors have published a statement in the Press this morning, which shows that this inference is based on a complete misapprehension. The total British credits (both used and unused) decreased during the year 1935 by just over £1,000,000. The larger reductions in the credits of other countries are mainly due to the willingness of creditors there to accept repayment in German currency with the heavy capital loss which such repayment involves.
  Sir JOHN WARDLAW-MILNE: Is my right hon. Friend entirely satisfied with the explanation that appears in the newspapers this morning, and will he give the House any idea why even under the conditions set out in that statement, British bankers' advances have been reduced by only £1,000,000?
  Mr. CHAMBERLAIN: I think a careful study of the statement will show why British bankers' advances have been reduced by only £1,000,000. As to whether I am satisfied with the report, I have no reason to believe that the statement made in any way misrepresents the actual fact.
  Mr. VIANT: In view of the report that at least there has been a £2,250,000 increase of British credits to Germany, will the right hon. Gentleman give the matter further consideration?
  Mr. CHAMBERLAIN: The hon. Member has evidently not read the report to which I have referred.
  Mr. GARRO JONES: Is the right hon. Gentleman aware that the report of the Committee to which he has referred only covers the credits given by certain kinds of financial organisations, and is he satisfied that every kind of financial organisation which may establish these credits has come under his observation?
  Mr. CHAMBERLAIN: It is very difficult to deal with this subject by question and answer, because hon. Members seem determined to believe that British bankers have increased their credits to
  1002
  Germany, and continually make statements to that effect, and when it is proved that it is incorrect, they suggest that it is due to someone else.

  NON-EMPIRE TOBACCO (DRAWBACK).
  Mr. LEONARDasked the Chancellor of the Exchequer the amount of drawback paid in respect of re-exports of non-Empire tobacco during the last complete year for which figures are available; and to what extent this sum exceeds the amount which would have been paid if allowances for loss of interest and losses incidental to manufacture had been made on a basis of calculation exactly proportionate to those allowed on Empire tobacco?
  Mr. CHAMBERLAIN: Separate figures in respect of re-exports only of non-Empire tobacco are not available; but the amount of drawback paid in respect of non-Empire tobacco during the year ended 31st March, 1936, inclusive of offal and other refuse of tobacco whether exported or not was £24,552,343. I am not altogether clear as to the precise calculation desired by the hon. Member, but, if the drawback on non-Empire tobacco bore the same exact mathematical ratio to the duty on non-Empire tobacco as the drawback on Empire tobacco bears to the duty on Empire tobacco, the drawback paid on non-Empire tobacco in that year would have been approximately £24,319,291.
  Mr. LEONARD: Will the right hon. Gentleman take steps to see that the statistics he mentioned shall be made available to hon. Members?

  NATIONAL GALLERY.
  Mr. LEWISasked the Financial Secretary to the Treasury whether he will consider the advisability of keeping the National Gallery open until 8 p.m. every week-day and, in order to defray the extra cost so incurred, of making a small charge for admittance on three days in the week during the normal hours of opening only?
  The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): The National Gallery could not be kept open until 8 p.m. every week-day without an

  1003
  increase of the Exhibition Rooms staff which would amount to at least 50 per cent. even if a shift system—in regard to which there are difficulties—were to be introduced. An admission charge during the normal hours of opening on three days a week, instead of two days as at present, would not be likely to increase the receipts by more than about £550 a year, and, as was stated in the answer given to my hon. Friend on 27th April, I think it would be undesirable to reduce the number of free days.

  CIVIL SERVICE.
  Lieut. - Commander FLETCHERasked the Financial Secretary to the Treasury the salary and allowances attached to each of the posts held by Sir Maurice Hankey; whether any other civil servants are holding a plurality of posts; and, if so, what are their names and the posts held and what are the salaries and emoluments of such posts?
  Mr. W. S. MORRISON: The salary attaching to the post of Secretary of the Cabinet and of the Committee of Imperial Defence is £3,000 a year. This officer is also Clerk of the Privy Council without additional remuneration. As regards the second part of the question, I would refer the hon. and gallant Member to the Estimates, the notes to which give particulars of cases in which civil servants hold more than one office. For instance, on an earlier page in the Treasury Vote he will notice that the Permanent Secretary to the Treasury is also Auditor of the Civil List.

  HIS MAJESTY'S CORONATION (POTTERY ORDERS).
  Mr. E. SMITHasked the President of the Board of Education whether he will endeavour to arrange that the orders for pottery for distribution by schools to commemorate the Coronation are given out as early as possible so that the employment may be spread over as large a number of workpeople as possible?
  The PRESIDENT of the BOARD of EDUCATION (Mr. Oliver Stanley): I have no information at present as to the intentions of local education authorities in this matter, but I will certainly bear the hon. Member's suggestion in mind.

  RABBITS (DAMAGE).
  Mr. T. COOKasked the Minister of Agriculture whether he has any statement to make concerning damage done by rabbits in rural areas; and whether he proposes to take any action in the matter?
  The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Mr. Ramsbotham): As my hon. Friend is no doubt aware, it is now proposed to appoint a Select Committee in another place to inquire into this matter.

  BRITISH BROADCASTING CORPORATION.
  Lieut. - Colonel Sir ARNOLD WILSONasked the Postmaster-General whether, when reviewing the charter of the British Broadcasting Corporation, he will include provisions to ensure that, in giving effect to the recommendation contained in paragraph 39 of the Report of the Committee on Broadcasting, members of the staff of the Corporation will not, directly or indirectly, be prevented or dissuaded by the board of governors or the director-general from having recourse to the courts of justice in any matters which concern them personally?
  The POSTMASTER-GENERAL (Major Tryon): Until I am in a position to announce the decisions of the Government on the report of the Ullswater Committee, I cannot suggest what provisions could properly be contained in any new charter.
  Sir A. WILSON: Is the Postmaster-General aware of the great importance that is attached to this question both in Broadcasting House and elsewhere?
  Major TRYONI am aware that the matter is sub judice and, therefore, that I cannot comment upon it.

  INTERNATIONAL COMMUNICATIONS.
  LEWISasked the Under-Secretary of State for Air the names of the present members of the interdepartmental committee on international communications, stating in each case which department they represent?
  The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): In the

  1005
  case of inter-departmental committees it is not usual to publish the names of the civil servants chosen to serve in the ordinary course of their duties, and I trust I shall sufficiently meet my hon. Friend's desire for information by stating that the committee consists of high officials of the Treasury, Air Ministry, Admiralty, Colonial Office, Dominions Office, Foreign Office, India Office, General Post Office and Board of Trade.

  TRANSPORT.

    OMNIBUSES, LONDON.
    Mr. MESSERasked the Minister of Transport whether he is aware that on the London omnibus services Nos. 29, 69, 124, and 129, only the NS type of omnibus is used; and will he, in view of the speed at which these vehicles have to travel in the Tottenham area, consider taking steps to have them replaced by a more modern type of vehicle?
    The MINISTER of TRANSPORT (Mr. Hore-Belisha): I have ascertained from the London Passenger Transport Board that replacement of the NS type of omnibus is being carried out at the minimum rate of 10 per week.
    Mr. MESSER: The right hon. Gentleman gave me a reply some weeks ago, but will he see that some of these additional 10 vehicles per week get into the districts which are represented by the hon. Member for North Tottenham (Mr. R. C. Morrison) and myself?
    Mr. HORE-BELISHA: If I gave a reply some weeks ago, then there have been 10 omnibuses per week since then.
    Mr. MESSER: Yes, but none in Tottenham.

    ROAD SAFETY (CHILDREN).
    Mr. LOVAT-FRASERasked the Minister of Transport (1) whether he has observed that the recently issued report of the committee on road safety among school-children has stated that the killing of over 1,000 children a year in road accidents is too heavy a price to pay for the advantages of mechanical transport on the road; and whether he proposes to take steps to reduce this toll of life;
    (2) whether he has observed that in the recently issued report of the committee
    1006
    on road safety among schoolchildren the committee has commented on the inadequacy of the penalties imposed by the courts on drivers of motor vehicles for breaches of the law involving death and injury; and whether he will take steps to remedy this mischief;
    (3) whether he has observed that, in the recently issued report of the committee on road safety among schoolchildren, the committee advocates a more general use by the courts of their power to disqualify drivers who have been guilty of dangerous or inconsiderate conduct; and whether he will take steps to get this recommendation adopted?
    Mr. HORE-BELISHA: Certainly. I will send my hon. Friend copies of the circulars sent to all local authorities with copies of the report, and I hope that in every appropriate quarter due weight will be attached to the committee's observations.

    CENTRAL EUROPE (NON-AGGRESSION PACT).
    Lieut. - Commander FLETCHERasked the Secretary of State for Foreign Affairs what steps he is taking to implement the decision taken at Stress, in April, 1935, that representatives of the interested Governments, including all those bordering on Austria, should meet in Rome at an early date with a view to concluding a pact of non-aggression and non-interference for Central Europe?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Viscount Cranborne): As far as I know, no steps arising out of the decision in question are at present contemplated.

    LOCAL GOVERNMENT (SOUTH WALES AND MONMOUTHSHIRE).
    Sir W. SMITHERSasked the Minister of Health what steps he is taking to deal with the present situation in South Wales and Monmouthshire, where conditions render a breakdown of local government almost inevitable?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My right hon. Friend cannot accept my hon. Friend's suggestion that a breakdown of local govern-

    1007
    ment in South Wales is almost inevitable, and it would be premature to take steps to deal with a situation which has not arisen.
    Sir W. SMITHERS: In view of the fact that the Ministers information appears to be incomplete, will he kindly institute a public inquiry into the whole situation?
    Mr. GEORGE HALL: Has the Parliamentary Secretary any information other than that local authorities in South Wales are carrying out their duties with very great courage, considering the great difficulties with which they are faced?
    Mr. SHAKESPEARE: I think it is true to say that the situation has materially improved during the last three or four years.
    Mr. HALL: May I ask the hon. Member to reply to my question—whether he has information other than that local authorities in South Wales are carrying out their duties satisfactorily and with great courage considering the difficulties with which they are faced?
    Sir CHARLES EDWARDS: May I ask what steps the Parliamentary Secretary proposes to take to deal with nosey Parkers who will not mind their own business?
    Sir W. SMITHERS: On a point of Order. Is the hon. Member entitled to call me a nosey Parker?
    Mr. SPEAKER: I think we had better get on to the next question.
    Sir W. SMITHERSasked the Minister of Health whether he is satisfied with the manner in which members of the public assistance committees in Monmouthshire are carrying out their duties; and can he state on how many occasions the relief committees have transacted business although a quorum was not present?
    Mr. SHAKESPEARE: My right hon. Friend is informed that 541 meetings of relief committees were held in the county during the year ending 31st March last and that at 225 of these a quorum of members was not present. My right hon. Friend does not think that this can be regarded as a satisfactory state of affairs.
    Sir W. SMITHERSasked the Minister of Health on how many occasions in the last three years have surcharges been made on local authorities of South Wales and Monmouthshire in respect of irregularities in their accounts?
    Mr. SHAKESPEARE: Forty-one surcharges have been made under Section 228 of the Local Government Act, 1933, during the last three years in the accounts of the local authorities referred to.
    Sir W. SMITHERS: In view of the fact that it has been found necessary to hold an inquiry about the Budget, does the hon. Gentleman not think it equally necessary to hold a public inquiry into the administration of local government in South Wales?
    Mr. G. HALL: How many of the surcharges were remitted by the Minister after appeal made to him?
    Mr. SHAKESPEARE: I should require notice of that question.

    HOUSING (SALFORD).
    Mr. EMERYasked the Minister of Health whether he is aware that, owing to a dispute between two trades unions, the construction of flats in Salford for the re-housing of people from a clearance area is being held up and what steps he proposes to take to have the clearance order carried out?
    Mr. SHAKESPEARE: The answer to the first part of the question is in the affirmative. As regards the second part, the carrying out of the clearance order is a matter for the local authority, and though my right hon. Friend is not in a position to intervene in the trade dispute, his officers are keeping close touch with the officers of the local authority so as to be able to assist in any way possible.
    Mr. EMERY: Is the Minister aware that this dispute has now extended over a period of six months, that the men decline to acknowledge the instructions of their own trade union leaders, and that 400 people are at present being debarred from enjoying decent living conditions? In view of that, will the Minister consider instructing the local authority to get on with the work and let the men settle the trouble afterwards?

    PUBLIC ASSISTANCE (STATISTICS).
    Mr. LIDDALLasked the Minister of Health how many persons in receipt of public assistance were, at the latest available date, also included on the live register of unemployed?
    Mr. SHAKESPEARE: The average number of persons in receipt of out-relief in England and Wales registered at Employment Exchanges during March, 1936, was 114,424.
    Mr. BATEYasked the Minister of Health the number of able-bodied persons in receipt of. Poor Law relief in the county of Durham during January, 1931, and the latest available date this year?
    Mr. SHAKESPEARE: The returns made to my Department do not distinguish the number of able-bodied persons in receipt of poor relief. The returns, however, show that in the administrative county of Durham the average number of persons ordinarily engaged in some regular occupation, including dependants, in receipt of out-relief was 21,765 in January, 1931, and 31,718 in April, 1936. Special returns obtained in 1934 showed that more than one-half of the expenditure on relief to persons in this category in the county was due to sickness, accident or bodily infirmity.

    BLIND PERSONS (MIDDLESEX).
    Mr. MESSERasked the Minister of Health how many registered blind persons there are in Middlesex; how many are in receipt of augmentation of income grant; and how many in receipt of a grant under the Middlesex unemployable grant scheme?
    Mr. SHAKESPEARE: My right hon. Friend is informed that on 31st March last there were 1,859 registered blind persons in Middlesex, of whom 198, comprising 83 workshop employés and 115 home workers, were in receipt of augmentation of earnings grant, and 925 were in receipt of a grant under the Middlesex unemployable grant scheme.

    BRITISH GUIANA (SUGAR INDUSTRY).
    Mr. G. GRIFFITHSasked the Secretary of State for the Colonies whether he can give any information regarding
    1010
    the Commission appointed in British Guiana to investigate the position of labour in the sugar industry; whether it has taken, or will take, evidence from organisations representative of Indian or Colonial labour; and when it will report?
    Mr. M. MacDONALD: I would refer the hon. Member to the replies which my right hon. Friend gave to questions by the hon. Member for Westhoughton (Mr. Rhys Davies) on 19th February last. The commission is expected to submit its report to the Governor of British Guiana towards the end of May.

BUSINESS OF THE HOUSE.
Mr. ARTHUR GREENWOOD: In the event of the Motion for the suspension of the 11 o'clock Rule being carried, how far do the Government propose to go?
The PRIME MINISTER: We hope to get the Financial Resolutions on the Air Navigation Bill and the Tithe Bill, and we hope that the time may be fairly evenly divided. We hope also to take the Financial Resolution, on which I do not think there will be much desire for discussion, on the Land Registration Bill.
Mr. GREENWOOD: I think there may be difficulty about dividing the time. In view of the importance of the Air Navigation Bill and in the event of it taking a long time, and considering that there is a large number of Amendments on the Financial Resolution on the Tithe Bill, will the Government insist on completing the discussion on the Tithe Bill if it appears that it will continue for a long time?
The PRIME MINISTER: I think the right hon. Gentleman knows that I am never anxious to keep the House unduly late, but I never like to commit myself in anticipation as to what the course of the Debate will be, and we can only hope for the best.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sitting of the House)"—[ThePrime Minister.]
The House divided: Ayes, 261; Noes, 122.

Division No. 189.]

AYES.

[3.47 p.m.

Acland-Troyte, Lt.-Col. G. J.

Fleming, E. L.

Mitchell, H. (Brentford and Chiswick)

Adams, S. V. T. (Leeds, W.)

Fox, Sir G. W. G.

Mitchell, Sir W. Lane (Streatham)

Agnew, Lieut.-Comdr. P. G.

Furness, S. N.

Moore, Lieut.-Col. T. C. R.

Albery, I. J.

Fyfe, D. P. M.

Moore-Brabazon, Lt.-Col. J. T. C.

Allen, Lt.-Col. Sir W. J. (Armagh)

Ganzoni, Sir J.

Moreing, A. C.

Anderson, Sir A. Garrett (C. of Ldn.)

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

Morris, O. T. (Cardiff, E.)

Anstruther-Gray, W. J.

Gluckstein, L. H.

Morris-Jones, Dr. J. H.

Aske, Sir R. W.

Goldle, N. B.

Morrison, G. A. (Scottish Unlv's.)

Assheton, R.

Goodman, Col. A. W,

Morrison, W. S (Cirencester)

Astor, Major Hon. J. J. (Dover)

Gower, Sir R. V.

Muirhead, Lt-Col. A. J.

Astor, Hon. W. W. (Fulham, E.)

Graham, Captain A. C. (Wirral)

Munro, P.

Baldwin, Rt. Hon. Stanley

Grattan-Doyle, Sir N,

Nicoison, Hon. H. G.

Balfour, Capt. H. H. (lsle ot Thanet)

Greene, W. P. C. (Worcester)

O'Connor, Sir Terence J.

Barclay-Harvey, C. M.

Gretton, Col. Rt. Hon. J.

O'Neill, Major Rt. Hon. Sir Hugh

Beaumont, M. W. (Aylesbury)

Gridley, Sir A. B.

Orr-Ewing, I. L.

Beaumont, Hon. R. E. B. (Portsm'h)

Grigg, Sir E. W. M.

Patrick, C. M.

Beit, Sir A. L

Grimston, R. V.

Peake, O.

Bennett, Capt. Sir E. N.

Guest, Capt. Rt. Hon F. E. (Drake)

Peat, C. U.

Bernays, R, H.

Guest, Hon. I. (Brecon and Radnor)

Perkins, W. R. D.

Blinded, Sir J.

Guinness, T. L. E. B.

Peters, Dr. S. J.

Bowater, Col. Sir T. Vansittart

Gunston, Capt. D. W.

Petherick, M.

Bower, Comdr. R. T.

Hacking, Rt. Hon. D. H.

Pickthorn, K. W. M.

Bowyer, Capt. Sir G. E. W.

Hannah, I. C.

Pilkington, R.

Briscoe, Capt. R. G.

Hannon, Sir P. J. H.

Piugge, L. F.

Brocklebank, C. E. R.

Harvey, G.

Ponsonby, Col. C. E.

Brown, Rt. Hon. E. (Leith)

Haslam, Sir J. (Balton)

Porritt, R. W.

Brown, Brig.-Gen. H. C. (Newbury)

Hellgers, Captain F. F. A.

Pownall, Sir A. Assheton

Bull, B. B.

Hepburn, P. G. T, Buchan-

Radford. E. A.

Bullock, Capt. M.

Hepworth, J.

Ramsay, Captain A. H. M.

Burghley, Lord

Herbert, Major J. A. (Monmouth)

Ramsbotham, H.

Burgin, Dr. E. L.

Herbert, Captain S. (Abbey)

Ramsden, sir E.

Burton, Col. H. W.

Hills, Major Rt. Hon. J. W. (Ripon)

Rathbone, Eleanor (English Unlv's.)

Campbell, Sir E. T.

Hoare, Rt. Hon. Sir S.

Rathbone, J. R. (Bodmin)

Cartland, J. R. H.

Holmes, J, S.

Rayner, Major R. H.

Gary, R. A.

Hope, Captain Hon. A. O. J.

Reed, A. C (Exeter)

Castlereagh, Viscount

Hore-Bellsha, Rt. Hon. L.

Remer, J. R.

Cautley, Sir H. S.

Horsnrugh, Florence

Rickards, G. W. (Skipton)

Cayzer, Sir H. R. (Portsmouth, S.)

Howitt, Dr. A. B.

Ropner, Colonel L.

Chamberlain, Rt. Hn. N. (Edgb't'n)

Hudson, R. S. (Southport)

Ross. Major Sir R. D. (L'derry)

Channon, H.

Hulbert, N. J.

Ruggles-Brise, Colonel Sir E. A.

Chapman, A. (Ruthergien)

Hume, Sir G. H.

Russell, A, West (Tynemouth)

Chapman, Sir S. (Edinburgh, S.)

Hunter, T.

Russell, S. H. M. (Darwen)

Christie, J. A.

Hurd, Sir P. A.

Salmon, Sir I.

Churchill, Rt. Hon. Winston S.

Jackson, Sir H.

Salt, E, W.

Cobb, Sir C. S.

James, Wing-Commander A. W.

Samuel, Sir A. M. (Farnham)

Colman, N. C. D.

Jarvis, Sir J. J.

Samuel, M. R. A. (Putney)

Colville, Lt.-Col. D. J.

Joel, D. J. B.

Sanderson, Sir F. B.

Cook, T. R. A. M. (Norfolk, N.)

Jones, L. (Swansea, W.)

Sandys, E. D.

Cooke, J. D. (Hammersmith, S.)

Keeling, E. H.

Sassoon, Rt. Hon. Sir P.

Cooper, Rt. Hn. T. M. (E 'nburgh,W.)

Klikpatrick, W. M,

Scott, Lord William

Courthope, Col. Sir G. L.

Lamb, Sir J. Q.

Shakespeare, G. H.

Craddock, Sir R. H.

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

Shaw, Major P. S.(wavertree)

Cranborne, Viscount

Leech, Dr. J. W.

Shepperson, Sir E. W.

Craven-Ellis, W.

Lees-Jones, J.

Simmonds. O. E.

Crooke, J. S.

Leighton, Major B. E. p.

Simon Rt Hon Sir J A

Crookshank, Capt. H. F. C.

Lennox-Boyd, A. T. L.

Smiles, Lieut.-Colonel Sir W. D.

Cross, R. H.

Lewis, O.

Smith, L. W. (Hallam)

Crossley, A. C.

Llddall, W. S.

Smith, Sir R. W. (Aberdeen)

Crowder, J. F, E.

Lindsay, K. M.

Smithers, Sir W.

Davles, Major G. F. (Yeovil)

Llewellin, Lieut.-Col. J. J.

Somerville, A. A. (Windsor)

Davison, Sir W. H.

Lloyd, G. W.

Southby, Comdr. A. R. J.

De Chair, S S.

Locker-l-ampson, Comdr. O. S.

Spender-Clay, Lt.-CI. Rt. Hn. H. H.

De la Bère, R.

Loftus, P. C.

Stanley, Rt. Hon. Lord (Fylde)

Denman, Hon. R. D.

Lovat-Fraser, J. A.

Stanley, Rt. Hon. Oliver (W'm'l'd)

Denville. Alfred

Lumley, Capt. L, R,

Strauss. E. A. (Southwark, N.)

Despencer- Robertson, Major J. A, F.

Lyons, A. M.

Strauss, H. G. (Norwich)

Donner, P. W,

MacAndrew, Colonel Sir C. G.

Strickland, Captain W. F.

Drewe, C.

MacDonald, Rt. Hon M. (Boss)

Stuart, Lord C. Crichton- (N'thw'h)

Duckworth, G. A. V. (Salop)

Macdonald, Capt. P. (Isle of Wight)

Stuart, Hon. J. (Moray and Nalrn)

Dugdale, Major T. L,

McEwen, Capt. H. J. F

Sueter, Rear-Admiral Sir M. F.

Duggan, H. J.

McKie, J. H.

Tasker, Sir R. I.

Duncan, J. A. L.

Maclay, Hon. J. P.

Tate, Mavis C.

Dunglass, Lord

Macnamara, Capt. J. R. J.

Taylor, Vice-Adm. E. A. (Padd., S.)

Dunne, P. R. R-

Macquisten, F. A.

Thomas, J. P. L. (Hereford)

Eckersley, P. T.

Magnay, T.

Train, Sir J.

Elliot, Rt. Hon. W. E.

Maitland, A.

Tree, A. R. L. F.

Ellis, Sir G.

Maklns, Brlg.-Gen. E.

Tryon, Major Rt. Hon. G. C.

Elliston, G. S.

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

Tufnell, Lieut.-Com. R. L.

Emery, J. F.

Markham, S. F.

Turton, R. H.

Emmott, C. E. G. C.

Mason, Lt.-Col. Hon. G. K. M.

Wakefield. W. W.

Emrys- Evans, P. V.

Mayhew, Lt.-Col. J.

Walker-Smith, sir J.

Entwistle, C. F.

Meller, Sir R. J. (Mitcham)

Ward, Irene (Wallsend)

Everard, W. L.

Mills, Sir F. (Leyton, E.)

Wardlaw-Millne, Sir J. S.

Findlay, Sir E.

Mills, Major J. D. (New Forest)

Warrender, Sir V.

1012

1013

Waterhouse, Captain C.

Williams, H. G. (Croydon, S.)

Young, A. S. L. (Partick)

Wayland, Sir W. A.

Windsor-Clive, Lieut.-Colonel G.

Wells, S. R.

Winterton, Rt. Hon. Earl

TELLERS FOR THE AYES.—

Wickham, Lt.-Col. E. T. R.

Wise, A. R.

Sir George Penny and Lieut. -Colone

Sir A. Lambert Ward.

NOES.

Acland, Rt. Hon. Sir F. Dyke

Griffiths, J. (Llanelly)

Owen, Major G.

Acland, R. T. D. (Barnstaple)

Hall, G. H. (Aberdare)

Paling, W.

Adams, D. (Consett)

Hall, J. H. (Whitechapel)

Parker, H. J. H.

Adams, D. M. (Poplar, S.)

Harbord, A.

Pethick-Lawrence, F. W.

Adamson, W. M.

Hardle, G. D.

Potts, J.

Alexander, Rt. Hon. A. V. (H'lsbr.)

Harris, Sir P. A.

Price, M. P.

Ammon, C. G.

Henderson, A. (Kingswinford)

Pritt, D. N.

Banfield, J. W.

Henderson, T. (Tradeston)

Quibell, D. J. K.

Barnes, A. J.

Holdsworth, H.

Richards, R. (Wrexham)

Barr, J.

Holland, A.

Riley, B.

Batey, J.

Hollins, A.

Ritson, J.

Bromfield, W.

Hepkin, D.

Robinson, W. A. (St. Helens)

Burke, w. A.

Jagger, J.

Rowson, G.

Cassells, T.

Jenkins, A. (Pontypool)

Seely, Sir H. M.

Charleton, H. C.

John, W.

Sexton, T. M.

Chater, D.

Johnston, Rt. Hon. T.

Shinwell, E.

Cluse, W. S.

Jones, A. C. (Shipley)

Simpson, F. B.

Cocks, F. S.

Jones, H. Haydn (Merioneth)

Smith, Ben (Rotherhithe)

Compton, J.

Kelly, W. T.

Smith, E. (Stoke)

Cripps, Hon. Sir Stafford

Kennedy, Rt. Hon. T.

Smith, Rt. Hon. H. B. Lees- (K'ly)

Daggar, G.

Kirby, B. V.

Sorensen, R. W.

Davidson, J. J. (Maryhill)

Kirk wood, D.

Stewart, W. J. (H'ght'n-le-Sp'ng)

Davies, D. L. (Pontypridd)

Lathan, G.

Strauss, G. R. (Lambeth, N.)

Davies, S. O. (Merthyr)

Lawson, J. J,

Taylor, R. J. (Morpeth)

Day, H.

Leach, W.

Thorns, W.

Dunn, E. (Rother Valley)

Lee, F.

Thurtie, E.

Ede, J. C.

Leonard, W.

Tinker, J. J.

Edwards, A. (Middlesbrough E.)

Logan, D. G.

Viant, S. P.

Edwards, Sir C. (Bedwellty)

Lunn, W.

Walkden, A. G.

Evans, D. O. (Cardigan)

Macdonald, G. (Ince)

Watkins, F. C.

Evans, E. (Univ. of Wales)

McGhee, H. G.

Watson, W. McL,

Fletcher, Lt.-Comdr. R. T. H.

MacLaren, A.

Welsh, J. C.

Frankel, D.

Maclean, N.

Whiteley, W.

Gardner, B. W.

MacNeill, Weir, L.

Williams, E. J. (Ogmore)

Garro- Jones, G. M.

Mander. G. le M.

Wilson, C. H. (Attercliffe)

George, Megan Lloyd (Anglesey)

Marklew, E.

Windsor, W. (Hull, C.)

Gibson, c. G.

Marshall, F.

Woods, G. S. (Finsbury)

Graham, D. M. (Hamilton)

Maxton, J.

Young, Sir R. (Newton)

Green. W. H. (Deptford)

Messer, F.

Greenwood, Rt. Hon. A.

Montague, F.

TELLERS FOR THE NOES.—

Griffith, F. Kingsley (M'ddl'sbro, W.)

Muff, G.

Mr. Groves and Mr. Mathers.

Griffiths, G. A. (Hemsworth)

Naylor, T. E.

STANDING ORDERS.
Resolution reported from the Select Committee;
"That, in the case of the London County Council (Housing Site), Petition for Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill."
Resolution agreed to.

TRIBUNAL OF INQUIRY (ATTENDANCE OF WITNESS).
Mr. SPEAKER informed the House that he had received from the Attorney-General a request that leave be given for Stanley Abell, a messenger of this House, to attend this day as a witness before the Tribunal of Inquiry established pursuant to the Resolution of the House of the 6th May.
Ordered, That Stanley Abell do attend the said Tribunal of Inquiry this day.

MESSAGE FROM THE LORDS.
That they have agreed to,
Sugar Industry (Reorganisation) Bill, with Amendments.
That they have passed a Bill, intituled, "An Act to enable the Postmaster-General to acquire lands in London for the purpose of the Post Office and for the purpose of executing certain street work in the Metropolitan Borough of St. Pancras, and to acquire lands in Manchester and Hereford for the purpose of the Post Office, and for purposes connected with the matters aforesaid." [Post Office (Sites) Bill [Lords]
And also a Bill, intituled, "An Act to confer further powers on the Lee Conservancy Catchment Board and the Lee Conservancy Board to amend Section 80 of the Land Drainage Act, 1930, and for other purposes." [Lee Conservancy Catchment Board Bill [Lords]

LEE CONSERVANCY CATCHMENT BOARD BILL [Lords]
Read the First time; and referred to the Examiners of Petitions for Private Bills.
SUGAR INDUSTRY (REORGANISATION) BILL.
Lords Amendments to be considered To-morrow, and to be printed. [Bill 120.]
BILLS REPORTED.

  WOLVERHAMPTON CORPORATION BILL.
  Reported, with Amendments; Report to lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

  LONDON AND NORTH EASTERN RAILWAY (GENERAL POWERS) BILL.
  Reported, with Amendments; Report to lie upon the Table, and to be printed.
  Bill, as amended, to lie upon the Table.

AIR NAVIGATION [MONEY].
Considered in Committee under Standing Order No. 69.
[Sir DENNIS HERBERT in the Chair.]
Motion made, and Question proposed,
"That, for the purpose of any Act of the present Session to amend the Law with respect to aviation and matters connected therewith, it is expedient—

(1). to authorise the Secretary of State to agree, with the approval of the Treasury, to pay subsidies to any persons and to furnish facilities for their aircraft, in consideration of undertakings entered into by those persons with respect to the carriage by air of passengers or goods (including mails and animals), and to authorise the payment out of moneys provided by Parliament of any sums required by the Secretary of State for the fulfilment of any such agreement; and

(2). to authorise the Secretary of State to contribute such sums as he may, with the approval of the Treasury, determine, to the payment of any expenses which may be incurred by any body to whom functions in connection with aviation are delegated or entrusted by the Secretary of State under the said Act, and to authorise the payment out of moneys provided by Parliament of any sums required by the Secretary of State for making such contributions.

Provided that—

(a) the aggregate amount of the subsidies payable under all the agreements made in pursuance of paragraph (1) of this Resolution and all the agreements which, before the passing of the said Act, may have been made under the Air Transport (Subsidy Agreements) Act, 1930, shall not exceed one million five hundred thousand pounds in any financial year; and

(b)no subsidy shall, after the thirty-first day of December, nineteen hundred and fifty-three, be payable under any agreement made in pursuance of paragraph (1) of this Resolution."—(King's Recommendation signified.)—[Sir P. Saswon.]

Colonel ROPNER: On a point of Order. With regard to the procedure this afternoon, is it proposed to have a general discussion on the Resolution before taking the Amendments?
The CHAIRMAN: The established practice is that the Debate on the Resolution proceeds in the ordinary way and that Amendments are not called until a later stage, because, directly an Amendment is called, the discussion is, of course, limited to that Amendment.
3.58 p.m.
The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): The Financial Resolution before the Committee provides the foundation of Clauses 1 and 2 of the Air Navigation Bill. Moreover, it so happens that it gives financial authority to the Secretary of State for action under those provisions of the Bill about which misunderstanding seems to have mainly centred and to which the comments of substance which have been made, from time to time, appear principally to relate. It, therefore, gives me an opportunity, which I am glad to take, of doing my best to clear away those misunderstandings and to deal with those comments and points in detail. That, I am sure, is what the Committee would wish me to do and I, therefore, ask for the indulgence of the Committee if my remarks are necessarily somewhat disjointed and occupy a considerable period of time.
The Resolution covers, in the first place, the proposed subsidy payments to air transport undertakings and, in the second place, the proposed financial contribution to the new Airworthiness Board. It is to the subsidising of air transport that previous discussions have been mostly directed. It has been suggested in some quarters that, in dealing with applications for subsidy from air transport undertakings there has been some sort of unfair discrimination. It has even been said that it is necessary to know the right people at the Air Ministry. I would like to take that criticism first. There is no use in mincing words. Charges amounting almost to corruption have been made. I have already said that those charges are without foundation. There has been no unfair discrimination. There are no sinister influences at work, nor indeed is there any scope for such influences. I do not propose, however, to restrict myself merely to this bare denial, and I do not think that the Committee would wish me to do so. The Committee is entitled to a full explanation of the precautions that are being taken by the Ministry and by the Government to ensure that; real occasion for such charges shall never arise.
There are those who appear to be opposed to the decision to continue to employ Imperial Airways as the chosen

1031
instrument for the development of Empire air routes, and for the North Atlantic. But that is not a departmental decision of the Air Ministry. It is the considered Government policy arrived at after the most exhaustive review by His Majesty's Government of all the conditions; and I have not the slightest hesitation in saying that Imperial Airway's record fully justifies that decision up to the hilt. I am reluctant to inflict upon the Committee figures which I have repeatedly quoted, but critics who persist in ignoring them give me no option. Therefore I repeat that in the latest year for which we have complete figures available, Imperial Airways carried a ton-mileage some 25 per cent. greater than their French, 150 per cent. greater than their Italian, and 50 per cent. greater than their Dutch competitors. I anticipate that the traffic figures for 1935 when available will make an even better comparative showing.
Now let us turn to subsidies. In 1935 Imperial Airway's subsidy was little more than one-third of that enjoyed by the French, about half that of the Germans, and about two-thirds that of the Italians. If I may put it in a different form, whereas the subsidy paid by the French per ton-mile carried, in the latest year for which we have figures, appears to have been about 9s., and the corresponding German and Italian figures about 4s. and lls. respectively, the subsidy paid to Imperial Airways is now a little under 2s. If the object of subsidies is to secure that commercial air transport shall carry the maximum volume of passengers, freight and mails at the minimum cost to the public purse, then I think Imperial Airways' record compares very favourably indeed with that of its Continental competitors. I repeat again that last year Imperial Airways carried across the Channel, in and out of Croydon, a greater number of passengers than all their Continental competitors, French, German, Belgian, Dutch and Swiss, combined.
In the teeth of these facts and figures it is ludicrous to suggest, as has been suggested on more than one occasion, that nobody travels by Imperial Airways except for patriotic motives. The real facts of the matter are that the company's record of safety and reliability is such that a marked preference is shown for
1032
them, even by foreign nationals. Travellers by Imperial Airways can insure against accidents, at the same rates as if they were proceeding by rail or steamship.
Before leaving the question of safety I would like to refer to a curious fact which experience has shown to be a fact, namely that both in service and civil flying, accidents tend to occur in patches. Therefore, to take an isolated period and to use it as material for attack on the safety record of an air transport company, is unfair and misleading. Contrasts have been drawn in this field between Imperial Airways and the Dutch. Let me remind hon. Members that the accident to the "City of Khartoum" was the first fatal accident to an Imperial Airways machine for over two years. On the other hand in the period December, 1934, to July, 1935, the Dutch—let me say that in my opinion Dutch air transport is exceedingly efficient—had a bad patch of accidents to Douglas and other aircraft, of which four were fatal. In fact so bad was this patch of accidents in that period that 33 persons lost their lives, some services had to be suspended altogether, others were considerably reduced or operated temporarily by foreign pilots, and one important service was made over to a German company. Again in 1935 Air France had three fatal accidents, and, I am sorry to say, has already had two this year. Pan-American Airways has had at least four serious accidents since last December, three of them involving fatalities.
It is with reluctance that I give these figures. They may give an entirely misleading impression of the dangers of air transport. That, of course, is the last thing I wish to do, and I hope that the figures will be viewed in their right perspective. I give them only as an answer to unfair and prejudiced criticism of Imperial Airways, which takes exception to the proposed subsidisation of that company under the powers that this Resolution will confer upon the Secretary of State. I sometimes wonder why it is that the company's critics find it necessary to wear spectacles which are so curiously focussed that they can see only failure in British air transport and success in foreign air transport. I wonder whether they realise how eagerly their very biased and prejudiced criticism is seized on abroad and used for purposes

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of anti-British propaganda. I am sure they do not intend in any way to play the game of our foreign competitors, yet that is exactly what they are doing beyond a shadow of doubt.
The record of Imperial Airways was not the only reason which influenced His Majesty's Government to come to the decision they have taken. All recent experience in the field of transport and communications has very forcibly driven home the lesson how necessary it is to avoid at all costs any wasteful duplication. I am glad that that is a lesson the value of which is well appreciated by not a few hon. Members opposite. If I may borrow the words used recently by an acknowledged authority in another field of transport, the fact is that "in our contact with the air we have already come to the point at which the operators on the sea have arrived only after much loss of money, time and temper."
The British Government are not alone in the view they take. There are in Europe to-day no fewer than 12 countries which practise the system of a single national air transport undertaking. The French have copied us the Germans and Italians have copied our methods, and the United States of America, in the comparable field of external operations, have adopted the same methods. To abandon our system, based as it is on the lessons of experience, and now that it has been very widely copied in the world, would be the height of unwisdom, and the Government are not prepared for a moment to contemplate such a course.
Let me say a few words to the Committee as to the general methods which govern the selection of companies for subsidy, for it is not only Imperial Airways which is to benefit by the subsidies which the Financial Resolution covers. The selection is not made by the Air Ministry acting independently and without advice. Decisions are come to in the light of the recommendations of an interdepartmental committee, under the chairmanship of Sir Warren Fisher. That committee is not a Treasury committee; it reports to my Noble Friend the Secretary of State. A word as to the constitution and nature of that committee. It is a standing committee which advises the Secretary of State on all matters concerning oversea air communications which affect more than one
1034
Department. One can say that that means virtually on all such questions. Sir Warren Fisher is an independent chairman, and the committee comprises representatives of the Treasury, the Air Ministry, the Foreign Office, the Dominions Office, the Colonial Office, the Board of Trade, the India Office, the Admiralty and the Post Office.
Therefore, for any one to suggest that a committee so composed could be subjected to undue pressure or influence, is manifestly absurd. Moreover, besides sending a representative to that committee, the Post Office as a Department is obviously closely and vitally affected in nearly all questions of air transport to-day. That Department, therefore, as well as the Air Ministry, requires to be fully satisfied that the operation of particular services is entrusted to the right hands. Then inside the Air Ministry there is the safeguard of independent financial and contractual control, upon which Members of this Committee have in the past laid considerable emphasis. The Director-General of Civil Aviation, of course, advises the Secretary of State on all technical matters connected with these contracts, but the actual negotiation of the contracts is the responsibility of the principal Financial Officer of the Air Ministry, the Permanent Secretary, and his staff. Therefore, both these officials have to be independently satisfied that the right choice has been made, and have then to satisfy Ministers. Here, then, we have every conceivable form of safeguard, of check and counter-check. Indeed, I do not know of any other sphere of Government business, in connection with the granting of subsidies or placing of contracts, which is subject to such close scrutiny by one independent authority after another. The Committee can therefore rest assured that the subsidies for which the Resolution provides will be administered with scrupulous fairness.
As an illustration of the way in which Sir Warren Fisher's Committee will normally proceed, when considering the inauguration of a new service, I may say that it has at present under review the possible operation of a service across the South Atlantic. Enquiries have indicated five different "interests" or undertakings who are interested in this service and who may like to be considered for it. All five have been asked to submit proposals. I take this opportunity of giving

1035
the very widest publicity to our intentions in this sphere. In order that in future there may be no conceivable grounds for grievance or misunderstanding, my Noble Friend proposes that, so soon as a decision has been reached in principle that a new service shall be inaugurated or a new route opened up in an area not covered by existing arrangements, publicity shall be given to that decision, whether by announcement in this House or through the medium of the Press, so that all who are, or may be, interested shall have an equal opportunity of submitting proposals.
It has been suggested that all future contracts shall be placed on a basis of competitive tendering. In the present state of air transport development, there are serious practical difficulties in the way of such tendering, and we do not consider that it would be in the best interests of the efficient development of air transport—though, of course, the proposals which will be put forward under the procedure I have outlined will naturally be on a competitive basis. I may add that our conclusion in this matter is reinforced by experience abroad, where the difficulties in the way of competitive bidding in connection with air services are well recognised.
I must come back to Imperial Airways to clear up another point on which there appears to be misapprehension. This Resolution and the Bill do not earmark any part of the £1,500,000 to this or any other company. The Bill merely authorises us to spend up to £1,500,000 on subsidies to Imperial Airways or any other undertaking that we may select. Of course, the Empire and projected North Atlantic routes will eventually absorb a substantial proportion of the £1,500,000 maximum specified. Actually the only major contract at present under detailed discussion with Imperial Airways is for the Empire routes, other than the North Atlantic. That contract is expected to absorb an estimated average figure of £600,000 over the fifteen-year period as a whole.
But before it passes this Resolution empowering the Secretary of State to subsidise air transport undertakings, the Committee may wish to be reminded of the three main features of the new Empire service. The scheme was designed to provide, firstly, a striking acceleration
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of schedules; secondly, a largely increased frequency of service; and, lastly, the carriage, in so far as concerns the United Kingdom, of all first-class mail matter within the Empire by air at the rate of 1½d. per half-ounce.
As regards the acceleration of schedules, we shall work by degrees to a 2½-day schedule to India and to East Africa, a 4½-day schedule to South Africa and to Singapore, and a six to seven-day schedule to Australia. As regards frequencies, we have already duplicated the services to South Africa and Singapore. If we are successful in our negotiations with Australia and the whole scheme can be brought into operation as originally planned, there will ultimately be nine services a week to Egypt, five to India, three to East Africa and Singapore, and two to Australia and South Africa, respectively. Negotiations for the extension of the Australian service to New Zealand are in progress. When all the services for which we are planning are brought to fruition, the United Kingdom will be operating a route-mileage of over 41,000 miles—that is to say, nearly twice the route-mileage which any other country save the United States is operating to-day, and, if you take the route-mileage of the Empire as a whole, it will then exceed even that of America.
All this we hope to get, as I have said, for an average subsidy of £600,000. When the outline proposals were drawn up, Imperial Airways were receiving a total subsidy of approximately £570,000. The new scheme represents no less than an eight-fold increase of ton-mileage capacity for an average subsidy only £30,000 above that figure. Postal rates are for my right hon. Friend the Postmaster-General, so under this head I will say no more than that the scheme will give us results without parallel in the world. The Committee can rest assured that if it passes this Resolution, and our plans in due course mature, this country will be getting good value for its money—record value, I may say.
Seeing that our programme in relation to the Empire routes is already so fully outlined, it may perhaps be asked why the draft agreement with Imperial Airways is not annexed to the Bill to which this Resolution relates. The answer is very simple. While the proposals are

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now formulated in their main outline, there are a certain number of subsidiary, but nevertheless important, points to be clarified. More important still, until our negotiations with Australia have been brought to a successful conclusion, the proposals must obviously be liable to alteration. My Noble Friend has, however, already undertaken to lay a White Paper giving a full account of its principal provisions before the agreement is signed. I would emphasise, however, that neither the Resolution nor the Clause in the Bill to which it relates and which gives power to make this and other agreements introduces any new principle. All that either does is to extend the period of time for which subsidies may be given and the maximum amount which they may cover by some 50 per cent. in each case. Moreover, whereas we have to-day, under the Act of 1930, what might perhaps be styled "blank cheque" powers, it is the intention in future that the cheques shall be filled in before they are signed, so that the House may see each cheque before it is signed.
Doubts have been expressed as to the necessity for a 15-years agreement. I should say first that this period was decided on after the most careful consideration of the point by His Majesty's Government. The scope of the new services is so vast, and represents such an expansion of Imperial Airways' present activities, that it is estimated it will need a capital of at least £2,000,000 to enable them to be successfully and efficiently organised. The present capitalisation of the company is approximately £650,000. It is clear that if these large sums are to be raised from the public, there must be some security of tenure, and 15 years was considered to be a minimum. I may add that one of Imperial Airways' principal foreign competitors has already been given a 15-years contract, and a lesser term, even if otherwise practicable, would inevitably handicap Imperial Airways in maintaining and consolidating the position of British air transport against foreign competition. It must not be overlooked that the company will have to sink large sums in ground organisation, just as in the past they have, at their own cost, provided 12 rest houses at different points along the existing Empire routes, substantial workshops, and all the other many items of ground
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equipment which are requisite to the operation of services on the scale proposed over and above those facilities which the Governments concerned will provide.
It may be asked whether the agreements contemplated under the powers which this Resolution will give us are open to the charge of "monopoly." Imperial Airways has to-day under existing agreements a formal monopoly of subsidy over certain routes. It has, of course, no monopoly of operation. In the new agreement, the Company will no longer have in law even the formal monopoly of subsidy. At the same time, while we have thought it best that the new agreements shall not even give the formal monopoly of subsidy which exists to-day, we have, of course, no intention of giving contracts over the same Empire routes to different competing concerns. That would lead to economic chaos. I know that there are certain Members who are very critical of subsidies in general. I can only say that if, in present circumstances, subsidies were to end to-morrow, our Empire services would terminate forthwith. To give a postal contract in place of subsidies would be no remedy, because for a contract of that kind to be operated successfully without a separate subsidy would involve the Post Office in immense losses such as have been incurred in the United States of America. The losses on a postal contract are, of course, concealed subsidies. Our own method, the adoption of which in America has been strongly urged by an important Government Commission, is, to our way of thinking, the best method because it enables Parliament, the taxpayer, and the general public to see much more clearly where they stand.
The new agreement will contain new safeguards against excessive profits. There is, for example, to be a triennial review of operating costs. If it is clear that costs have fallen or are falling, half the resultant savings will accrue to the State. Again, the Secretary of State, through his accredited officers, will have full access to Imperial Airways' books and accounts. The Government will continue to have two Directors on the Board of the Company, and, by virtue of its deferred shareholding, will take 50 per cent. of any profits in excess of the stipulated rate.
Mr. T. J0HNST0N: It is all very well to state that the State will get 50 per cent. of the profits over a stated figure, but it does not convey much if we do not know what the figure is.
Mr. GARRO JONES: Is it not a fact that the capital of the company is to be increased and therefore that the prior charge before the Government will participate in the profits will be increased?
Sir P. SASSOON: We must wait and see the price of any new issue. It is impossible to know until that comes out. Under the original 1923 Agreement it was only one-third of the excess profits. In this case we are to get at least one-half.
That brings me to another matter which has a close bearing on this point and which, I think, deserves mention in any explanation of the purpose of this Resolution. Of late, the value of Imperial Airways' shares has advanced substantially. There has, however, I am glad to think, been nothing in this country like the experience of the United States. The immense losses incurred by the American investing public in the field of air transport and aeronautical development show that speculation of this kind has nothing to do with our system of air transport organisation. We are determined to do everything in our power to prevent any possibility of the "financial ramps," as they have been described, which marred American aviation development. I may say that some of the worst of them were shown to be due to the association of air transport with aircraft manufacture.
Imperial Airways, on the other hand, unlike the American companies, have been from the first strictly debarred from interesting themselves in aircraft or engine manufacture, directly or indirectly, without the consent of the Secretary of State. That rules out one fruitful source of abuse. Fluctuations in Stock Exchange prices, however, neither His Majesty's Government nor the board of Imperial Airways can control. Everyone knows from experience that at times of great share activity, imagination is liable to outrun reasonable estimates of prospects, and any reasonable investor would be well advised to exercise a wise caution in attempting to forecast the future. I have already said that the new agreement will contain careful provisions to prevent excessive profits. If, none the less, profits
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rise above the stipulated figure, the Exchequer, by virtue of its deferred shareholding, will take half the balance. I have heard it suggested that the company's directors might increase their remuneration, in order to avoid the Exchequer getting a return on its deferred shares. That is really a most unfair reflection on the integrity of the board, which is above suspicion. When the company was in low water a few years ago, the directors voluntarily reduced their remuneration. That action on their part presents a true picture of the character of the board, but a surreptitious raising of fees is, in fact, impossible, since they are fixed by the company's articles of association. In short the board can of their own motion reduce their remuneration—and did so some time since; but they are not free to increase it. This can only be done in accordance with normal company practice, by the shareholders in general meeting.
I have, I fear, already spoken at great length; but, if the Committee will bear with me, I should like to cover as many as possible of the points with regard to which doubts or misgivings have from time to time arisen, in one quarter or another, and upon which, I think, the Committee will like to be assured before it approves this Resolution. I have already said that the authority which this Resolution gives will be exercised with scrupulous fairness. It has been suggested that the attitude of the Air Ministry towards a scheme promoted by a body styled the Irish Trans-Atlantic Corporation changed as soon as it became clear that Imperial Airways was interested in the northern route across the Atlantic. Again, I can give the Committee a positive reassurance. There is not a shred or scintilla of truth in that suggestion. Imperial Airways were interested in operating services across the Atlantic by all possible routes long before the corporation in question approached the Air Ministry. Further, the Air Ministry has at no time received any concrete proposals for the operation of air services from the Irish Trans-Atlantic Corporation. I may add that that undertaking does not, so far as know, possess a single aircraft—on the British Register at all events.
Concern of a like kind has been expressed regarding the reason why British Airways, rather than British Continental

1041
Airways, were selected to operate the Scandinavian services. The reason is simple enough. On the recommendation of the Fisher Committee, informal negotiations had been entered into with British Airways, in respect of the proposed Scandinavian service, months before British Continental Airways gave any indication to the Air Ministry of their wish to operate to Scandinavia. British Airways were selected after the fullest consideration, because they had far wider operating experience than any other concern save Imperial Airways. The company is the result of a merger of several undertakings with some years' experience of the operation of regular services, including Continental services. One of the merger companies—Hillmans Airways—had been operating since 1932. British Continental Airways, on the other hand, was formed only in April of last year, and they started operating a seasonal service to the Belgian coast only in July, 1935. Moreover, it was not until the middle of November that British Continental Airways applied to the Air Ministry to extend their Amsterdam service, which they had only started a month, to Sweden. At that date negotiations with British Airways were well under way, and the Fisher Committee, after careful review, adhered to their previous recommendation. They had advisedly selected a company with by far the widest operational experience available; the entry into the field of a new company, which had only been in existence a few months and whose operating experience was exceedingly short and limited in extent constituted no reason for a change in policy. As my Noble Friend has recently stated, we should be glad to see an amalgamation of these two companies to avoid unnecessary duplication of resources and effort. But that is a commercial matter, which is for the companies themselves to decide. I hope that I have made it clear that no injustice has been attempted or perpetrated as far as British Continental Airways is concerned. There are a number of smaller and more detailed points on which I propose to give the House information in order to relieve doubts and misapprehension which some hon. Members may still have.
Mr. MONTAGUE: Will the right hon. Gentleman make clear to the Committee what seems to be rather important,
1042
namely, the allegation that the trans-Atlantic company concerned have been misled into spending a great amount of money in preparatory experiments? Will the right hon. Gentleman make clear whether a definite decision has been arrived at as to the use of land either in Northern Ireland or in the Irish Free State for a jumping-off place?
Sir P. SASSOON: I do not know what money this company can have spent on any trial services, because, as I say, no concrete proposals were put to us, and they have no aircraft. The only proposal about which they ever approached us of which I have heard was in connection with the establishment of an air port in Ireland. They never at any time made any concrete proposals to us with regard to operating any service of any sort or kind.
Mr. MONTAGUE: Did they spend money on the air port?
Sir P. SASSOON: Not to my knowledge. I do not see what that has to do with it, because it was not due to our encouragement that they spent any money. With regard to the stopping place in Ireland, it has been decided for reasons of shortening the journey that we shall have a site on the most westerly part of Ireland, but it will only be a stopping place. The terminal base of the service will be in England.
Mr. SIMMONDS: My right hon. Friend stressed the point that he made a public announcement that he was considering the South Atlantic route. Did he make a public announcement before he considered the Swedish route?
Sir P. SASSOON: We did not make a public announcement in that way. We knew all the firms concerned. It must surely seem reasonable to hon. Members that this was a case where it was necessary to inaugurate a, first-class service which was to enter into an area where there was the most eager, subsidised foreign competition. Therefore, it was necessary that we should operate this service and select what we considered to be the most efficient and most experienced instrument for it. It seemed obvious to us that when you compare an amalgamation of companies which have had great operational experience, for two

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years at any rate, with another company which, however good it may be, had had only three months' seasonal experience,. the choice that the Fisher Committee made was the right one. In case there is any doubt still in the minds of hon. Members as to the Continental Airways Company being too late to be considered, I will say that they were considered fairly and impartially by the Fisher Committee when they made their application, and if their claims had qualified them for being selected, they would have been selected. There was no public announcement. That is a new method of policy which we are adopting to meet the general views that have been expressed on this question.
Mr. LEWIS: Is my right hon. Friend now stating that representative's of Continental Airways were heard by the Fisher Committee at some time?
Sir P. SASSOON: I did not say that. I said that their claims were considered by the Fisher Committee. We knew how many months they had operated and where they had operated, and we did not think that they were capable of entering into this field of competition.
Mr. MANDER: Is it not clear from what the right hon. Gentleman has said that under the old conditions British Continental Airways had not the same knowledge as British Airways that the Scandinavian route was under consideration; they came in at a later stage? But I understand that in future the conditions will be different, owing to the publicity which has been decided upon.
Mr. DENMAN: It is always understood that the Financial Resolution has as its object to enable the Committee upstairs to consider certain Clauses of the Bill, and it has frequently been ruled from the Chair that details of the Bill which are suitable to Committee are not appropriate subjects of discussion on the Financial Resolution. I should like to ask whether that is the rule or not?
The CHAIRMAN: Broadly speaking that is right, but I think all the matters which have been mentioned have a distinct and direct bearing upon the payments which this Resolution sanctions.
Mr. PERKINS: Is it not the case that when this matter was before the House a month ago the Prime Minister, in order to save an all-night sitting, promised that on this occasion we should have a discussion on the broadest possible lines?
The CHAIRMAN: We cannot go into any question of what the House did during a debate in the House. We are now in Committee.
Sir P. SASSOON: In answer to the hon. Member for East Wolverhampton (Mr. Mander), although the publicity was not as wide last year as it is to be in the future, British Continental Airways lost nothing by it. There are other points with which I should like to deal. There has been an impression current that the service from Singapore to Brisbane has been taken over by the Australian Government owing to dissatisfaction with Imperial Airways. As a matter of fact, this service has been subsidised by Australia and operated by an Australian company in partnership with Imperial Airways ever since its inception. As to the point that they have purchased Douglas machines to run that service, I can only say that I have heard nothing about it at all This company, which is closely associated with Imperial Airways, is under contract to operate the service until 1939. It has been suggested that owing to dissatisfaction with Imperial Airways South Africa has begun to purchase German aircraft. The Committee know that the Government of the Union of South Africa have had German aircraft for many years. I saw a report the other day that they were thinking of introducing British engines into those German aircraft, and, anyhow, I am happy to say that the Government of South Africa have ordered a fleet of seven civil aircraft of British design and construction.
To come now to that part of the Financial Resolution which relates to the Airworthiness Board. Questions have been asked as to the composition of the board. Of one thing the House may be assured. The persons appointed will be men who really know the essentials of the aircraft industry and air transport. Study of a list of leading personalities of the aircraft industry, from among whom the board will be in part selected, shows that there is hardly a body of manufacturers in the country with more practical

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working experience. Apart from this, the board is to have a staff of experts to assist it. The Committee may wish to have some idea of the amount of the Exchequer contribution to the board. It has not been completely settled but I think I can say that roughly it will be of the order of £12,000 per annum for the first five years.
The Committee will very properly be concerned to see that the provision for the establishment of the new board does not prejudice in any way the making of adequate provision for public safety. Some Members, indeed, may be inclined to think that devolution is carried too far. All I can say is that it does not go so far as either the Gorell Committee recommended or the interests themselves would wish. His Majesty's Government have felt it essential to retain some control over the airworthiness of the larger passenger-carrying aircraft. As for private aircraft, we have every reason to anticipate that the insurance companies, in their own interests, will provide a sufficient safeguard. I may add that there is nothing new in the principle of devolution. Ever since 1929, actual airworthiness work has increasingly devolved upon a body known as the Joint Aviation Advisory Committee representing Lloyds Register and the British Corporation Register. The new board will replace that body. It will not deal with the investigation of accidents. That will remain the concern of the Air Ministry's inspector and his staff.
Before closing this, I fear, discursive but, I hope, comprehensive statement, there is one major point of principle to which I feel I ought to refer briefly, and upon which I hope I shall not be going outside the scope of the Motion before the Committee in saying a few words. It has been suggested that Imperial Airways should be reconstituted on the lines of the British Broadcasting Corporation; in which case, of course, this Financial Resolution would be in very different form. I would not say dogmatically that such a proposal must be ruled out for all time. We are none the less convinced that, at the present stage of development, British air transport can best meet the very keen competition from abroad if it is handled by a commercial company in which the Government has a financial stake.
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Moreover, there is no complete analogy with such bodies as the British Broadcasting Corporation and the London Passenger Transport Board, whose sphere of action is primarily domestic. The vast bulk of the activities of Imperial Airways takes place oversea and through many different foreign countries. I think that a State-controlled organisation might very easily find itself severely handicapped in such a sphere of operations. There is the further danger that such a change might result in too cumbrous a unit of management, with a consequent rigidity which might well prove a handicap to efficiency and progress. For these reasons, and without prejudice to the ultimate future, His Majesty's Government are convinced that a change to-day, or for a considerable time to come, would be definitely disadvantageous. I should like, before I close, to make it clear that, outside the routes entrusted to Imperial Airways or which it is proposed to entrust to British Airways, other undertakings are entirely free to make proposals and all such proposals will receive full consideration. We must, of course, keep within the limits of our financial resources, but within those limits all proposals will receive full and impartial consideration from the Air Ministry and the Post Office, with the help and advice of the Fisher Committee.
In conclusion, I have only this to add. The adoption of this Financial Resolution is, of course, essential to Clauses 1 and 2 of the Bill. The Bill itself is intended to bring existing legislation up to date, and to open the way for the more rapid expansion of British air transport. It is a Bill which has been kept close to precedent, wherever precedent is available. Where new matter is introduced, that new matter is the result of close consultation with those who, by their knowledge and experience of air transport matters, are most fitted to give advice. I have no doubt that in this Debate hon. Members will bear in mind the nature and objects of the Bill to which this Resolution relates, and give to it the unbiased consideration which its importance merits. I have done my best to clear up some of the many points of misunderstanding and misgiving in the minds of hon. Members, and, of course, if any other points have even now been overlooked I shall do my best to deal with

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them on the Committee stage of the Bill itself.
4.57 p.m.
Mr. JOHNSTON: I am sure that many hon. Members, listening to the right hon. Gentleman, must have wondered why he did not make that speech on Second Reading. Had he done so it would undoubtedly have dispelled a great number of the objections and misgivings towards parts of the Bill which were sincerely and honestly held in many parts of the House. The Bill as it stands throws into very sharp relief the difference between the two main sections in this House on the questions of policy and principle involved. The right hon. Baronet and his friends are for continuing a policy of subsidising private corporations. I could not understand that sentence in his speech in which he said that as a result of this Measure the State had acquired a considerable stake in Imperial Airways. We can find no justification for that statement. He never explained how the British nation had acquired that stake. It is true that the nation holds£24,000 in shares, which were acquired as a result of giving up financial claims over the old company, but there is no new stake in Imperial Airways which the Treasury have acquired as a result of this Bill.
Under the old company arrangement, we had to give £1,000,000 per annum for 10 years. Under the right hon. Baronet's Bill we are to give £1,500,000 per annum, as a sheer subsidy, for 17 years from the present day. That is public money, handed out to a private corporation. I will say something later of the effects of that donation upon the fortunate shareholders. At the moment I will merely repeat that we are to give £1,500,000 by way of subsidy to certain so far undefined corporations, but with the knowledge that the bulk of the money is to go to a particular corporation, called Imperial Airways. As far back as Disraeli's time, the State had to face similar difficulties to those which the right hon. Gentleman is facing with his Bill. Disraeli had the Suez Canal problem to deal with, but he did not hand a subsidy to a corporation to engage in running the Suez Canal. Disraeli acquired over £4,000,000 worth of shares which have been a very fortunate investment for the British nation. That investment gave to the nation the
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right of control over the passage of the Suez Canal, exercised through our directors on the Canal Board.
In the days when it was seen that oil would be necessary as a means of transport to the British Navy, the right hon. Gentleman the Member for Epping (Mr. Churchill) found himself in a similar position to that of the right hon. Gentleman. He stepped forward on behalf of the then Government, and spent £7,500,000, not in subsidising the AngloPersian Oil Company, but in acquiring the preference stock, and so becoming a dominant force in the Anglo-Persian Oil Company. We appointed directors, with power of veto upon the policy of the Anglo-Persian Oil Company, and I believe that the only appeal against the decision of the Government directors is to His Majesty's Government themselves. The right hon. Gentleman the Member for Pollok (Sir J. Gilmour) was faced with another and similar position a few years ago, when the extraordinary situation arose that the steamship services, the sole means of transport between the mainland and the Western Isles of Scotland, had collapsed, or were on the point of collapsing. The right hon. Gentleman, after a Select Committee had inquired into the facts, got the then Government to agree that the subsidies given to the company should henceforth be on the basis of a public utility corporation. There was to be a limited dividend, and there were to be State directors and Government control over freights, fares and additional provision of new boats, and so on. There are three instances of where the principle has been applied that when State money is given for a public service of any kind, the State has to acquire ownership and control to the extent of that subsidy.
Most of us on these benches would accept that condition. It is a step, probably all the step we can get now, in the socialisation of property. It is a step in ownership and control. But we are not getting that in the Bill. We are getting nothing by way of ownership or control. There is a definite pledge from the State Treasury, for a period running for about 17 years from now, of a grant, donation, subsidy, present—call it what you will—of £1,500,000 of public money. The right hon. Gentleman, in an endeavour to placate us this afternoon, said that he was getting something. He said

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that there would be a fifty-fifty division of the spoil, after an agreed-upon level of profits. We asked him what was the agreed level of profits, but it is not yet fixed. It will not be more, said the right hon. Gentleman, than 10 per cent. That 10 per cent. is hopelessly illusory. No 10 per cent. can be earned unless there is a changed method in allocation of capital expenditure by the company. Here is a company which is developing a new service, and will have to spend lots of money in new ground arrangements. In 17 years it never will, on paper, earn 10 per cent., but it will, in fact, earn 10 per cent. It is earning 10 per cent. now, but on paper it earns 7 per cent. It is piling up new capital reserves and is acquiring property at the expense of the State subsidy.
The Government are making a habit of this kind of thing. It is no good saying that this is a particular service which we must subsidise. I think the words of the right hon. Gentleman were that if we had a corporation like the British Broadcasting Corporation, there would be a certain rigidity. If it were not for that rigidity, the right hon. Gentleman would, I gather, be happy to see a sort of British Broadcasting Corporation running this service. This Government continually uses the device of raiding the State Treasury for particular groups and getting nothing in return. In wheat deficiency payments, it gives £7,000,000, about £83 per grower; beet sugar, £50,000,000, and gets no stock or debenture for the State in return; meat subsidies, £3,000,000; milk, £1,250,000, and no return in stock to the State; shipbuilding, for the "Queen Mary," £1,500,000 for working capital, and up to £5,000,000 promised for a new sister ship, but no State ownership, no control, no acquisition of property by and on behalf of those giving the subsidy; tramp shipping, £2,000,000, and no shares for the State; hydrocarbon oils, £1,000,000, and no shares for the State. Now, with this civil aviation Bill, the right hon. Gentleman says that we cannot, if you please, run the service as a social service, as a nationalised concern, because of a certain rigidity which might be obvious in the structure.
It is difficult for us on this side of the Committee to see any dividing line between military aviation and civil aviation. Would the right hon. Gentleman
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and his friends offer to hand over military aviation to a private company? Never. That would not be tolerated for five minutes, even if they tried it. They would never dream of handing over the Navy, the Army or the Post Office, and they would never try to do it. Those are services vital to the nation. The contention on this side of the Committee is that civil aviation will become as vital to the life of the country, and a great deal more so, than military aviation; certainly as vital as the Post Office. It is, in our view, essential that civil aviation and air transport in the world in future should be owned and controlled by the nation as a whole, even as we control our Navy, our Army, or our roads. The other day I saw in the "Daily Telegraph," dated 6th August, 1868, a remarkable letter by John Ruskin, in which he said this:
"Neither the roads nor the railways of any nation should belong to any private persons. All means of public transit should be provided at public expense by public determination, where such means are needed, and the public should be its own shareholder. Neither road nor railroad nor canal should ever pay dividends to anyone."
That was written 68 years ago, but here are the right hon. Baronet and his friends, in the year 1936, asking us to hand over the future development of civil Aviation in this land, with public subsidies to the extent of £1,500,000, to a private corporation.
What has already happened here financially? It is all very well for the right hon. Baronet to say that Imperial Airways received £570,000 last year. I think that was the figure which the right hon. Gentleman gave, but I have not been able to trace it in the accounts, from which it appears to be only £548,000.
Sir P. SASSOON: I said that was what they were receiving when the proposals were outlined two years ago.
Mr. JOHNSTON: I beg the right hon. Baronet's pardon, but, at any rate, it is only a small difference. It is, then, £570,000 per annum, on a capital of £628,000, almost 100 per cent. of the capital of the company, handed away last year in subsidy, and they are to get more, and more, and more, in the years to come. It is not only the direct subsidy that matters, although that is quite enough, and is difficult enough to justify, but there is the indirect subsidy, over

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which the right hon. Baronet lightly skated. If the right hon. Baronet will look at the share value of Imperial Airways for 3rd September last year, he will find that the shares stood at 46s. Four days ago they stood at 55s. 3d. That is slightly less than the figure at which they stood at the time of the Second Reading Debate, but nevertheless there was an increase of 9s. 3d. per share, which on 624,000 shares represents a capital appreciation of £288,000—almost a third of a million pounds—which the fortunate possessors of those shares might unload on the market to-day as against the value of their shares last September. The right hon. Baronet says that there is to be a new issue, an issue of I think he said, £2,000,000, and he hinted rather broadly that investors had better be careful. That was a curious way of boosting a new issue, but I congratulate him on his frankness. That sentence of his will stand him in good stead later on. "You had better be careful," he says. "Do not expect that you are always going to get 7 per cent., or 10 per cent., or any fabulous sum." Nevertheless, there is to be a new issue of £2,000,000, and, if it is successful in the market, it is going to be the more difficult for this Government or any future Government to acquire the added values and the added properties from the monopolies that are now being created by the State, and to reach the position, at which the right hon. Baronet hinted, when even he, an anti-Socialist, would welcome a public utility corporation on the lines of the constitution of the British Broadcasting Corporation.
We do not want to make heavy weather for the right hon. Baronet on the details of this proposal. He spent a considerable portion of his time this afternoon in proving that it was better that Imperial Airways should very largely get a monopoly than that the subsidy should be spread over 20, 30 or 40 corporations. I agree with him. There is no justification for duplicating what went on in America. If hon. Members care to look at the files of the London "Times" for February, 1934, they will see a record of continuous collapse and of losses by investors of dozens, scores, hundreds of millions of dollars—the savings of countless poor folk swept away. We must take steps, and it will be the duty of the
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Opposition, if the Government will not do it, to see that steps are taken, to warn investors in this country against being exploited and plundered by mushroom corporations which we know, and the right hon. Baronet knows, are ready to spring to the front if there is the slightest chance of robbing and plundering the investors through this Measure.
He refuses our remedy of a State service; he refuses even a public utility corporation. He says that he is trying as far as he can to limit the subsidy to a particular firm. So far, so good; but the vital difference between us remains. Either he is building up a vast capitalist monopoly or he is tempting investors in this land to invest their savings in a company where they lose their money. There are only the two choices. We believe this to be a vital service, absolutely essential to the life of the nation. We think that it should be a State service, that we should own the capital, that we should control it as we control every other form of public service; and, because we hold that belief, and because we are so utterly at variance with the right hon. Baronet and his party on this matter, we shall divide the House. But we congratulate him on at any rate partially closing the door against such financial ramps as those which occurred in America, and which many of us were gravely afraid were going to begin here.
My last appeal to the right hon. Baronet on this matter is this: Can he not take steps, if be is going to have a £2,000,000 issue, to appeal to the Treasury to let us have a national investment board? Can we not get a beginning of control of finance in these matters? Must we for ever be at the mercy of the hawks and the vultures who, generation after generation, sweep away the savings and the thrift of our people? The right hon. Baronet stands at the parting of the ways. This is as big a service as steam-power was 100 years ago. This is the beginning of a new era. If the right hon. Baronet would take his courage in his hands and say that what is vital to the nation should be owned by the nation, he would not find any small, niggling opposition from this side of the House. Neither will he now. But we shall divide the House at. every possible stage in favour of a public service, in favour of Socialist ownership; and I hope it will not be long before the right hon.

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Gentleman's, hint of at any rate something on the lines of the British Broadcasting Corporation will be so far developed that he will be able to go to that sad taskmaster of every Government, the Treasury, and say, "I insist, in the interests of the nation, on this great civil aviation service being run as a public service in the interests of the nation, and not for the profit of a comparatively small number of shareholders."
5.24 p.m.
Mr. MANDER: The Under-Secretary, in his full and interesting speech, dealt with a number of points that were raised in the Second Reading Debate, and I think he has been able to reassure us at any rate on some of those points. We have before us to-day a Resolution for a very considerable sum of money in the way of a subsidy. None of us likes subsidies; one's first instinct is to oppose and resist them; but I think that, if ever there were a justifiable subsidy, it is in connection with the development of civil aviation. All other countries are doing it; they are spending very large sums upon it; and it is essential that we, for the purposes of national prestige if nothing else, should take every possible step to render ourselves supreme in air development, just as we have been all down the ages at sea. In passing I would say that it seems to me somewhat humiliating to think that day after day we read of the Zeppelin "Hindenburg" flying backwards and forwards across the Atlantic, at a time when we have no airship of any kind, and have completely given up the idea of airship construction. But we are dealing to-day with heavier-than-air machines.
Like the right hon. Gentleman the Member for West Stirling (Mr. Johnston), I contemplate, as the Under-Secretary did, that the time may arrive when civil aviation will be run by a public utility company of some kind, but I think that the present structure of Imperial Airways is probably the most effective way of dealing with the problem at the present moment. A private company, capable of taking more risks and showing more active enterprise than a Government Department could, is well fitted to be entrusted with this activity at the present time, coupled with a certain amount of Government control and Government representation; and,
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while we all feel, naturally, that a great deal can be said in criticism of the policy of Imperial Airways, as indeed it could be said of most things, I think it is only fair to say that Imperial Airways have built up an organisation of which this country has reason to be proud. Their flying is very safe, and attracts people for that reason; and, if they are behind other countries as regards the speed at which they fly, I hope that that will be overcome, and I believe it is being overcome by the machines that are now being built. But it cannot be doubted that among those interested in the development of flying services there is a great deal of dissatisfaction at the way in which the Air Ministry has dealt with various proposals that have been brought forward from time to time.
The subsidy paid to Imperial Airways is, of course, very much more than is actually disclosed by the figures given in the Resolution or in any agreement with them, because there are all sorts of unseen subsidies, such as the provision of aerodrome guards, the provision of aerodromes, wireless services, experimental services, and meteorological services, while experimental tests of aircraft are carried out by the Royal Aircraft Establishment, and also from time to time, I understand, the Royal Air Force is called upon, in connection with forced landings, to take out petrol and supplies and render help in that way It would be very interesting if the Solicitor-General were able, in his reply, to give some information, if it is available, as to the total amount represented by all these different headings in the way of subsidies which Imperial Airways are actually receiving.
I hear certain criticisms of the charges that are made by Imperial Airways, at various aerodromes under their control, to private owners flying round the world, that the charges are such—£5 or £2 10s. a day or night—as to discourage private flying. I should like to know whether there is anything in those criticisms. I believe it has been suggested that private owners are being discouraged from landing at Croydon, and are going rather to Gatwick, where the conditions are more favourable and where incidentally, there is, I think, likely to be less fog.

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There is undoubtedly very great dissatisfaction with the way in which the Air Ministry has been handling possible contracts, and the right hon. Baronet dealt with that matter to some extent in his speech this afternoon. I have put down an Amendment, which I understand will not actually be called, but which, if I might refer to it, is an attempt to meet the criticisms which have been made. It suggests that in future full publicity should be given to any proposed routes, and on this point the Under-Secretary has gone very far—indeed, I think he has gone the whole way—to meet the intention of the Amendment, because now everyone will know beforehand exactly what route is contemplated, and all will have an equal chance of corning in and putting forward their proposals. In addition, the idea is put forward that a particular contract, before it becomes binding with the force of law, should be brought before this House, so that Members may have every opportunity of discussing it and finding out, by questioning the Minister, that everybody has had fair play and an equal chance. After all, there are many precedents—the Import Duties Advisory Committee and many others—for bringing matters of this kind before the House. They could not take a great part of our proceedings and I hope, before a decision is taken, the right hon. Gentleman will give some consideration to the possibility of going still further than he has to-day in meeting the very real feelings of dissatisfaction which exist.
It is suggested in my Amendment on the Paper that tenders should be dealt with on a competitive basis. I quite agree, if it is assumed that "competitive" means the lowest tender, that is not the right test, but it is one of the elements that must be taken into consideration, and I never intended that it should be more than that. There are obviously other things, such as, who could supply the best and most reliable service, who has the best reputation for safety, who has the widest experience and what company is of the greatest financial soundness? All these, and probably other matters too, should be taken into consideration in granting a tender to any particular organisation. I am obliged to the right hon. Baronet for his information about the Fisher Committee and its
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composition, but in spite of the very full information that he gave us it is only right that I should say again that, whatever may be the case in the future—and I fully believe things will be very much better—as regards the past there is a feeling amongst those who have been to the Air Ministry and put forward their proposals that they have not had a square deal. That is quite a different thing from being unsuccessful. You may be unsuccessful and feel that, after all, you have had a fair chance, and you may be unsuccessful and feel that you have not had a fair chance.
I am not vouching for the details of particular cases but I have been in contact with a number of people who have given a great deal of time and thought to various proposals and have brought them before the Air Ministry, and undoubtedly, whatever the reason may be, they have gone away feeling that they have not been fairly treated, that they have not been dealt with on their merits and that others have been favoured.. That may be entirely wrong, but that is the impression left upon their minds, and. it is very much to be hoped that nothing of the kind will ever occur in the future. I fully believe it is the right hon. Baronet's intention to prevent any criticism of that kind arising in the future. He has dealt with the case of British Airways versus British Continental Airways, and it is clear that there was a certain grievance in the sense that the latter company only heard about it some time after the first company had been in negotiation with the Air Ministry. That is not likely to occur again. Then there is the case of the Irish Trans-Atlantic Corporation, Limited. I really cannot accept altogether what the right hon. Baronet said about that, because I believe that, whether that company had practical schemes or not, they certainly were encouraged to hope that they had a chance for a considerable period of time, and then suddenly, in October last, they were told that the whole matter had come to an end. The complaint that they have against the Air Ministry is that they ought to have been told at a very much earlier stage that it was no good going on, that they had not a chance and that the Air Ministry had other ideas, instead of their being allowed to hope when there really was no hope at all.

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The right hon. Baronet referred to the fact that he only knows of one case at present of a route being under active consideration, and that is South America. He says there are five companies bringing forward proposals. It is interesting to note that, at any rate, one of the companies—possibly more—is quite prepared to put forward a scheme without any subsidy at all, owing to the fact that oil fuel of a cheap grade is used; and it will be most interesting to see whether a proposition which would involve no cost upon the Exchequer is one which will come out of the investigation by the Fisher Committee. Then there is the Atlantic route. I should like to know whether there will be any possibility of other companies in addition to Imperial Airways, particularly if they do not want any subsidy, having a chance of competing for the Atlantic route, or whether it is definitely handed over to Imperial Airways regardless of any proposal, however advantageous, that may be brought forward.
Mrs. TATE: The hon. Member has referred to one company which is willing to do the South Atlantic route without a subsidy. It is only right to say that I am interested in one of the propositions that are before the Air Ministry, and it is quite untrue to say that any route could be covered entirely without a subsidy, because it would be necessary in any case to have a mail contract from the Government, which would in some way amount to a subsidy.
Mr. MANDER: I am not dealing with any particular company in which any Member of the House may be interested. I am dealing with propositions which have been brought forward in my knowledge. It may be that there is an element of that kind involved, but I agree that it is no good having a hidden subsidy in the form of a mail contract. Can any indication be given whether in the near future there is a possibility of a service down the West Coast of Africa? I do not know whether the Government feel that they are prohibited from dealing with that, owing to the fact that Imperial Airways are going to the East coast. I hope that is not the case, because there are others who are willing to put forward proposals to go down the West Coast of Africa, flying day and night, in two-and-a-half days instead of
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the four-and-a-half days that it takes to go down the East coast. I understand that there is a possibility that, if the British Government will not encourage any service to go down there, the German Government may very well do so. It is not necessary for me to point out the meaning of that, and to say how desirable it is that any service running down the West Coast of Africa should be British, and I hope consideration will be given to that.
There are certain other routes in the Mediterranean that ought to be developed at some time, and I hope the Solicitor-General will give a rather more extended list. Cannot he say what other routes are in contemplation in the next few months which will be open to general competition? I should like to thank the right hon. Baronet for the considerable advance that he has made in his speech to-day. He has certainly adopted one part of the Amendment that I have put down and I hope he will consider whether he cannot go still further and in that way give general satisfaction and complete agreement amongst all parties that they have had a fair opportunity. I hope that by passing this Resolution we shall be doing something which will put us absolutely in the first rank in the world as regards civil aviation.
5.40 p.m.
Captain F. E. GUEST: The Chair has been so good to me in previous Air Debates that I promise to take up very little time to-day, but there are naturally one or two observations that one is anxious to make. The first is that the amount of interest now taken in Air Debates is most encouraging to those who have, I might almost say, laboured with that subject for the last six or seven years. I am convinced that the country is appreciative of the interest that is being taken and is looking for guidance. That places upon the shoulders of the Ministry a very heavy responsibility because, rightly or wrongly, for one reason or another, perhaps particularly in a military sense, British aviation is not holding the position that many of us would like to see it hold in relation to the activity of other countries. If there is time to make up leeway, so much the better, but do not let the Government be complacent about it. A very short time ago large sums of money were voted

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for purposes of defence. To-day a very modest little sum is being voted to help, to stimulate and to encourage civil aviation. I have submitted time and time again, and at last I have got a few people who believe I am right in what I am saying, that civil aviation is the foundation of all military national air defence.
This Money Resolution is, of course, a step in the right direction, but a. very small one, and I do not see any reason why there should be a limitation attached to it. The Under-Secretary, in his most admirable and valuable contribution to the Debate, said that aviation was not static and that no one knew where it was going to lead you. No one knew how much it would develop, no one could say to what extent it would take the place and fill the part of other forms of transportation, and yet to-day we are going to put a limit upon it until a date something like 1953. I do not understand the mentality that could conceive a limitation of that nature. Whether it means that the Government next year may change the figure and increase it, or cut out the year 1953 altogether, I do not know. I should have thought, dealing with a brand new scientific development of this nature, it would have been far better to have asked the House for a sum of money for, we will say, the current year and next year, when the Estimates, come along; to ask for more, and they will always get it if they put their case.
I shall naturally vote for the Resolution, which is part and parcel of the Bill, but I disapprove of it on the ground that it is limited in point of time. Further opportunities will be granted to us on the Committee stage of the Bill, and I think it is wise on the Financial Resolution to stick to general principles and not go too much into detail. The fact that the Under-Secretary went very closely into detail should not necessarily be a guide to us to follow him. I am sorry that there is no reference to any assistance to private flying. I do not mean the plutocrat who buys a valuable machine and goes to Monte Carlo. I mean the light aero club where poor people can learn to fly at a cheap rate. This is all dealing with companies. I want to see a little more attention paid to the enterprise of the private person. But that may appear at a, later stage.
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Another reason why I am dissatisfied with the amount is that there seems to be a kind of ban upon, or disinclination to use, the word "airship." I started, a great many years ago, an anti-airship campaign, when, I believe, I was responsible for locking the doors of Cardington after the terrible disaster to "R' 36." But in spite of the accident which happened eight years later, there is no doubt that an example of what at airship can do has been presented to the world by the German performances both of the Graf Zeppelin and the Hindenburg. I thought that possibly I should be ruled out of order, but I think that the words which appear in paragraph (1):
"To authorise the Secretary of State to agree … to pay subsidies to any persons and to furnish facilities for their aircraft"
must cover the word "airship" Unless the Chairman feels inclined to ask me to desist, this is my opportunity to give to the Committee one or two impressions which were left upon my mind of the trip which I was able to make last week in the "Hindenburg." It required a good deal of courage to go on board, but I thought to myself that as the Graf Zeppelin had done 60 crossings, possibly the "Hindenburg" might be safe at least on its second crossing. Therefore, I got on board. The developments carried out during the last 14 or 15 years by the German scientists, and their courage and the money they have had to spend upon those developments, have produced something that we have never had much chance of dreaming about until. to-day. They have now, undoubtedly, an instrument of passage and transportation which personally I would rather get into than I would get into an aeroplane to travel the northern route to North America. The point is that Great Britain, who is rich, should not close her mind completely to the possible development of that form of air transport. A hundred persons were carried from New York to the west coast of Ireland in 36 hours, in the greatest possible comfort, without a movement of any sort or kind, and without even the sound of the engines, and that is something which is truly amazing. If we had been allowed to land at Croydon we would have had a 40-hour trip, but, unfortunately, the schedule was that we should be taken on to Frankfurt, and English passengers who had been on the

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airship had to fly back again, the loss of a day. But 62 hours against the wind, and 48 hours with the wind is a striking per- formance flying with 100 persons. I think that there is more in it now than meets the eye, and I should like to see the Ministry pay more attention to it, and when I say that, I mean it.
The Americans had two observers on board. We had a limited number of Press correspondents. The American naval section had two officers on board to make observations in the machine, in the control tower, and, if necessary, in the engine room, with a view to reporting to their Government what they thought of the possibility of re-introducing air- ship travel. We did not do this. I wonder whether the Under-Secretary of State will answer that point and give some reason why we ignored this amazing modern performance. It is the business of the private Member not to press too hard, especially if he is in support of the Bill as a whole, but to press and to stimulate if possible, increased activity and enterprise in the Government, and in the Department which controls the Air Service. It cannot be for want of money, and, therefore, there would be no harm in trying further experiments in this extraordinary means of air travel. It was said on the "Hindenburg" that, "we must not go too close to London," and, in fact, Dr. Eckener was asked to keep a little away from London. I am telling no secrets because it was known to every passenger on the ship. Only the week before I left these shores in the "Bremen," the German ship, sailing from Southampton, and I did not see any reason why the German airship should not be allowed to pass over Cardington on its way home.
Mr. PERKINS: Can my right hon. and gallant Friend tell the House who told Dr. Eckener that he was not allowed to come over London?
Captain GUEST: I must not tread upon the ground of difficult foreign or diplomatic negotiations, but it was public knowledge that we were not to pass over London. In spite of that fact we passed over New York and had a marvellous time. I want to-day, if possible, to convince the Minister on the desirability of taking up this dropped subject, as I am certain that there is more in it than we have appreciated up to now. That is all
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I have to say. There was a sentence used by the Under-Secretary which, I think, I shall take up on the Committee stage. It relates to the composition of the new board which is to control such matters as the certification of airworthiness and the carrying out of other responsibilities. But a curious incident occurred, which, I think, will strike a hopeful note in the minds of everyone. It related to the peaceful results and the friendliness between nations which may accrue from air travel. A prize was offered by a leading journal, consisting of a free trip to New York and back in the "Hindenburg," to anyone who could put into five words the greatest and most important significance of this great form of air travel. A young man, I think he was in his bathroom, told his wife to write on a piece of paper what he thought of it, and it was this:
"A giant shuttle on peace work."
He won the prize, and went over to America and back on the "Hindenburg."
5.53 p.m.
Lieut.-Colonel MOORE-BRABAZON: I did not know that my right hon. and gallant Friend the Member for the Drake Division of Plymouth (Captain Guest) was going to raise the question of airships. I and the Home Secretary were engaged on the investigation into the loss of the R.101, and although I went into that investigation a tremendous believer in the airship, a more studied consideration of that disaster left me very sceptical as to the future of the airship. But the consideration of the question of starting experiments again could not be wrapped up with the provisions of this Bill, but would have to be a question of policy by the Air Ministry at a later date, and financed according to the yearly expenditure on the subsidising of aviation generally. I do not think that one could really ask for the inclusion of words in a Bill of this sort to enable us to start building airships again.
I am very grateful to the right hon. Gentleman the Under-Secretary for the very lucid explanation which he gave to the Committee this afternoon. It might have saved a good deal of trouble if it had been given a little earlier. His explanations are always effective, but I thought that to-day the Patronage Secretary rather wanted us to have a sort of shorthand Debate, and that he wanted

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to close it at a very early hour. It was not an encouragement to many of us to speak for a short time. However, I hope to get through in the required time. I like the right hon. Gentleman imparting information but I do not like him in the role of a schoolmaster administering rebukes in rather a threatening way. I see no reason why anybody cannot criticise Imperial Airways without being told in a voice of great indignation that they are unpatriotic. Surely, we can criticise even more august bodies, and even the Government themselves, without being called unpatriotic. If that principle is to be laid down, are we to be called unpatriotic when in opposition we criticise a Labour Government? I think that there is danger along those lines.
We must remember that when we talk about Imperial Airways we are referring to a very strong organisation. First of all, there is the Secretary of State and his Under-Secretary, who go up and down the country with Sir Eric Geddes making speeches and saying how excellent each Department really is. That has a very big effect upon the country, and then we are deprived of one of the great organs of the State, the "Daily Mail," criticising aviation, at any rate, from the point of view of Imperial Airways, although that paper has contributed tremendously towards aviation. They even gave me £1,000 for flying one mile. That is a long time ago, and it was worth much more than £1,000, but it shows how interested they have always been in aviation. Now that great voice is muzzled because Mr. Esmond Harmsworth is a director of Imperial Airways, and again, a most extraordinary thing, although to-day we are discussing the future of a great public company the "Times" comes out with an article of two columns on the middle pages by the managing director of this private company. How very timely and how marvellous is the publicity behind it; and the climax of the whole business is the extraordinary fortuitous circumstance that the great lawyer who beat them in the one case when they were really in the Court is going to defend them tonight.
I put down an Amendment, which, apparently, is out of order—every Amendment you put down on a Financial Resolution is out of order—not because I asked the country to find more money,
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but apparently because I changed the direction in which that money should go. I should like the Solicitor-General to tell me, so that I do not have to press the point at a later stage, whether the provision of aerodromes really is included in the Bill, in addition to the providing of money for companies to run aeroplanes. There are many of us who think that you cannot subsidise aviation in any better way than providing really first-class ground organisation, which is a very expensive matter. You have to clear great tracks of land, and it is very difficult in some parts of the world. You have to provide radio, accommodation and services for fuelling and all that sort of thing. One of the dangers about a scheme such as that which we have before us to-day is that that type of provision made in any part of the Empire, if it is made by a private company, belongs to that company, and consequently it would be impossible for any other concern at a later date, without paying compensation, to run from that particular place. If the Government are to subsidise aerodromes up and down the Empire, they should be Government aerodromes and not owned by a private company.
The hon. Member for East Wolverhampton (Mr. Mander) seemed to think that by the publication of a White Paper the House would be satisfied with the explanation as to what the contracts were to be. I am not satisfied with that. A White Paper is not a thing you debate or vote upon. All that you can do is to read it. I hope that the Solicitor-General will be able to say that we shall be able to confirm the decisions which the Air Ministry comes to with regard to contracts. I am not particularly pleased with the fact that the Air Ministry feeling apparently so s1-aky on what they should or should not do, have placed the whole decision on these matters on the Fisher Committee. The Fisher Committee is a committee of civil servants. On that committee there are civil servants from every Department. Why should they have all the brains that are denied, apparently, to the Air Ministry to decide who are to run separate air services up and down the world? It seems to me that it is the Air Ministry that should deal with that matter and not a committee of civil servants, and I am sorry that they should feel that

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they have any lack of competence to deal with it.
I should like to learn from the Solicitor-General why there should be a pledge by Parliament as to this subsidy for so many years. Does it mean that every successive Administration is to be pledged to the payment of this money? What is the objection to having a Vote every year put into the ordinary Budget? Surely, this Bill would never override the Budget. I am persuaded that if the Chancellor of the Exchequer said: "I am afraid that this year we cannot afford this money," that a Resolution of the House would overrule any Bill of this sort. I am not interested whether it goes on for 10 or 30 years, because I feel that it is going to be a matter of immediate concern to us year by year, and therefore if the occasion arose I do not think that any Government, whether it be a National Government or any other Government, would take any notice of this Bill.
I welcome my right hon. Friend's statement that he is not proposing to run lines in competition on the same routes. I have always tried to plead that Imperial Airways should not, ipso facto, he a bar to the starting of new lines. The right hon. Gentleman told us that there was to be free competition for new firms to try and start new lines. I agree with him that once you have started a new line you should not allow parallel competition, but I welcome the announcement that on new lines the field is open to competition by tender. With regard to the second part of the Resolution, the setting up of an authority for the granting of certificates of airworthiness, etc., to private machines, that seems to me highly desirable and very wise. It was a recommendation of the Gorell Committee, on which I served.
6.4 p.m.
Sir SAMUEL HOARE: A fit of nostalgia makes me return for a few minutes to the field of aviation to make some observations upon a subject which once occupied very much of my time. I must confess that I am the father of the Imperial Airways Company, and as I listened to my hon. and gallant Friend the Member for Wallasey (Lieut.-Colonel Moore-Brabazon) I felt very proud that my child should apparently
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have become so influential that not only in this House, but in the world at large and even in the Press it is not criticised. I know how tiresome it is for an Air Minister or any other Minister to become reminiscent and tell the House what happened at some remote period in the past, but I will be very careful to avoid boring the House with memories of that kind.
The problem that confronted me when I was dealing with questions at the Air Ministry is the same problem that is confronting the Committee this afternoon, and it can be summarised in a single sentence—how can we free civil aviation from subsidies altogether? Subsidies are an unmitigated nuisance. They impede the free workings of the company, they are an embarrassment to this House, and they give rise to complex controversies such as we have listened to in these Debates. If once we could get rid of subsidies, immediately the House would be freed from many of the embarrassments that have weighed upon us in recent years, and immediately the aircraft industry would have at its disposal what it has always needed and what it has always lacked, and that is a large demand for civil machines. This was the problem which faced me 13 years ago, and it is the problem that we are discussing this afternoon.
What is the best plan of freeing civil aviation at the earliest possible date from the necessity of receiving subsidies from the public funds? There are four ways in which we can approach the problem. One of them was suggested by my hon. and gallant Friend the Member for Wallasey. He emphasised the need for giving extensive ground facilities for any air line that was able to operate. I agree with him that more should be done in that direction than has hitherto been done, but none the less I believe that indirect assistance of that kind in the present state of civil aviation is insufficient, and I regret to say that for some years to come more direct assistance will still be needed.
The right hon. Member for West Stirling (Mr. T. Johnston), who made a very interesting and on the whole a helpful speech, not unnaturally took the line that services of this kind should be a Government monopoly. It is inevitable that, speaking from those benches, he should

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take that line. Let me, however, suggest to him that, whatever may be the rights or wrongs of private enterprise and State management in other walks of life, there is a great difficulty in a Government monopoly of an Imperial air service of this kind. The lines pass over many countries, and it seems to me that it would be nothing but an embarrassment and a danger if all the questions that constantly arise in the operation of these services between the companies in this country and the companies abroad immediately became controversies between the Government here and the governments of other countries. On that account, if for no other, I think that the conception of a Government monopoly of a service of this kind which extends over many different countries is objectionable.
That being so, there are two other alternatives. There is the alternative of free competition and subsidies to a number of different companies, and there is the alternative that is the basis of the Government's proposals to-day, namely, subsidies given to a large and well-established organisation. I well remember appointing the Hambling Committee, and it is well worth the while of hon. Members to look at the report of that committee, where they will see set out the great disadvantages of excessive duplication of competition which is not really competition, but competition that is only between one Government-subsidised company and another. The Hambling Committee came to the view that the right course was to concentrate subsidies for the most part on one well-established organisation. That was the history of the origin of the Imperial Airways Company, and I think most hon. Members will admit that the statistics which the Under-Secretary of State for Air gave to-day amply justified the recommendations that were made by the committee.
He showed that the company are working their services more economically than any other comparable company in the world, that they have advanced further along the path of economic self-dependence than any other comparable company, and that so far as safety was concerned the insurance rates were no higher on their machines than the rates on railways or ships. In fact, the record that
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he gave showed that the experiment of concentrating our subsidies upon one well-established organisation has put our services into the first rank of civil air lines in any part of the world. I admit that these facts do not dispose of the question that we are discussing this afternoon. They show that so far as the past is concerned the experiment has been very successful. How far, however, do new conditions modify the policy that was then adopted'? I am inclined to think that they modify it in two directions. They seem to me to show that it is now possible to launch out upon more ambitious programmes than we contemplated when the Imperial Airways service was started, and I am glad to think that in the present proposals there is to be a really spectacular advance in the shape of extending the frequency of services to every part of the Empire, and generally speeding them up.
I think also—and here I find myself to a certain extent in agreement with my hon. and gallant Friend the Member for Wallasey—that the experience of the last 12 or 13 years shows that it is now possible to encourage other companies besides the Imperial Airways Company. I am glad to think that in these proposals it is contemplated that other companies are in future to have their share of the subsidies that we are approving this afternoon. With these two modifications a policy which has proved so successful during the past 12 or 13 years should be maintained, and it would be a great mistake to alter the basic principle—namely, that we do not unduly dissipate our financial help but concentrate it on well-organised companies that are not only likely to run their services safely and comfortably but are likely to help the problem, that in course of time civil aviation may be able to do without a subsidy altogether.
My last word is 1 o say to the Committee—persist in this policy. The danger of experiments of this kind—and after all in the field of civil aviation these services are still something in the nature of experimental service—is that the House of Commons and the Government are tempted not to persist, but to adopt new policies to suit the whims of a particular moment. I listened with great interest in that connection to what the hon. and gallant Member said about the airship

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experiment. Let that be a lesson. Looking back at the airship experiment—I was in daily contact with it for five or six years—I believe that if we had persisted in the policy of airship development, if there had not been quite so much criticism in the House nor quite so many demands for a reversal of the programme which was started, we should have made a success of that experiment. With that lesson in mind I say, do not let us make a similar mistake in dealing with these Empire air routes. We have, I believe, a sound policy. Let us by all means adapt it to modern conditions and persist in it, and not be drawn aside by changes which would inevitably undo the good work which has been done in the last 13 years.
6.19 p.m.
Mr. GARRO JONES: The right hon. Member for Chelsea (Sir S. Hoare) began his speech by claiming with some pride that he was the father of the company whose operations are engaging our attention this afternoon. Therefore, he appears in the Debate in the somewhat novel role of the prodigal father. Since the days when he occupied his position at the Air Ministry he has wandered into a far country with disastrous results, and it now only remains to be seen when the fatted calf will be slain for his return. If and when that happens we on this side of the House shall watch the festivities with some interest, but we shall not be able to participate in them, and nothing that the right hon. Gentleman has said on the subject of civil aviation this afternoon will encourage us to do so. Our main objection to this Financial Resolution is that it refuses to accept the principle of State control for an industry which, above all others, is particularly fitted for that form of control. The sole reason given by the right hon. Member for Chelsea against the adoption of State control was that if there were State control of Imperial Airways we should find that the diplomatic operations of the company in order to secure rights of way and other privileges in foreign countries, would be a constant source of difficulty and embarrassment to the Government.
Many fallacies fall upon your ear, Mr. Deputy-Chairman, when you have to listen to these debates, but I say that this is the grossest fallacy to which you have had to listen for some time. The
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Government have, in fact, to encounter these difficulties at the present time. The first thing Imperial Airways does if it encounters opposition in any foreign country is to come to His Majesty's Goveronment, and all the diplomatic resources of the Government are employed in order to secure for Imperial Airways the privileges it desires to enjoy in foreign countries. If no better reason than this can be found for declining to inaugurate a system of State control, it will not be long before we shall establish this principle for this company, and for others like it. We are in the strange position this evening—indeed it is no longer a strange position, because it is becoming the normal—that there are more supporters of the Government anxious to criticise these proposals than there are hon. Members on this side of the Committee, and, therefore, I do not propose to detain the Committee very long because I am anxious to hear what supporters of the Government have to say against these proposals.
I want to make clear our two main reasons for objecting to this proposal. The first is the financial reason. We do not believe that a sound financial case can be made out for the payment of this subsidy, and nothing that the Under-Secretary has said has justified it from the purely financial point of view. Indeed, the Under-Secretary did not attempt to justify it from the financial point of view. But a sum of approximately £25,000,000 is being guaranteed in the payment of subsidies to private enterprise by the passing of this Financial Resolution. Not only that, but in one year we are paying to this company an amount equal to about 75 per cent. of its paid-up capital. During the past few years the shares of this company have appreciated from 1s. to 50s. entirely owing to the subsidy paid by the Government, and now we have coming into view a further source of substantial capital appreciation which the company is going to enjoy on the guarantee of the Government paying its losses and also paying its profits. That is an aspect of the matter which the Under-Secretary let out during the course of his speech in which he told us that they were going to raise more capital—£2,000,000 I think—and that that sum was to be raised at a premium. There is no doubt about

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that. The shares are standing at 50s. in the market to-day, and they will probably be able to raise the £2,000,000—I am not an expert financier—they will probably be able to get almost anything they want. These shares, no doubt, can be raised at a premium of 100 per cent., no doubt they will be underwritten and fully subscribed on that basis. Therefore, we have the position that on the top of this £25,000,000, which is being guaranteed to private enterprise under these proposals, with no effective participation in profits, this company is going to raise at a premium a new capital issue of more than the present amount of its capital.
Is there anybody in the Committee who can honestly say that from a purely financial point of view these proposals are justified? The question answers itself. If they cannot be justified from the financial point of view, on what ground can they be justified? This company, so far as its position as an example of private enterprise is concerned, is a sham and a, pretence. That is no exaggeration. There is not a vestige of private enterprise, in the true sense of the word. left in the administration and control of this company. The Fisher Committee which supervises the policy of the Government in this regard shows that nearly every Department of the State has to make its contribution towards the government and management of this company. It gets financial State aid, and diplomatic State aid; meteorological State aid and technical State aid. There are two Government directors on the board, and in various other ways the State gives this company assistance and has some control. In no single respect, if the matter is regarded in the light of pure reason, could the Committee vote in favour of this Financial Resolution to-night. However, we cannot hope that the Committee will take that view, but I hope, nevertheless, that hon. Members opposite will be perfectly frank on their speeches on this proposal.
There is one further point to which I desire to draw the attention of the Committee, and that is in regard to the complaint made by the Under-Secretary of State of the criticisms from this side
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of the House in regard to the operations of Imperial Airways. It will be a strange thing if Imperial Airways are to be allowed to make the most skilful and exhaustive propaganda in favour of their right to a subsidy and that Members of Parliament, whose duty to their constituents and to the country pledges them to criticise these proposals, are to be charged with a lack of patriotism or unfairness towards the company if they reply. I have here a very attractive looking leaflet which is entitled "The other side of subsidies," and is a reprint of an article published in the "Aeroplane" on 11th March, 1936. I do not intend to read it because I am certain that it can be obtained in thousands from the offices of Imperial Airways. It lends some force to the remarks of the hon. and gallant Member for Wallasey (Lieut.-Colonel MooreBrabazon) in which he commented on the timely nature of the articles in the "Times" of yesterday and to-day, in the most prominent position in that influential journal, written by the managing director of Imperial Airways. Some two or three months ago, in what is perhaps the most influential trade paper dealing with these matters, an article was published, with no indication that it was other than an editorial article, in which occurred the following sentences:
"That Imperial Airways is the Government's chosen instrument to receive a subsidy and technical help is reasonable enough; that the subsidy should be the means of paying increasing dividends to shareholders is another matter. Why should the subsidy which comes out of the pockets of the taxpayers as a whole be used to pay higher and higher dividends to a body of shareholders? The maximum rate of dividend payable should be fixed at 3 per cent., which is better than the rate at which the Government can borrow unlimited millions any day of tile week, and any profits remaining after this rate is paid should be handed back to the Exchequer against the subsidy payment, or should be spent on improving flying stock or a higher pay for the ground staff."
Lieut.-Colonel MOORE-BRABAZON: In what paper is that?
Mr. GARRO JONES: It was the "Aeroplane" of 26th February. We can well imagine what a flutter that caused in the board-room of Imperial Airways, and it may be in. the rooms of the Air Ministry as well, where, I believe, 19

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copies of this journal are distributed. However, the directors got busy, and a week or two later there appeared another statement in the "Aeroplane" which had as its object the complete reversal of any suggestions previously made. I have that statement in my hand. But instead of printing the original and, as I submit, the spontaneous and true view of that journal, Imperial Airways had the reply printed—and circulated thousands of copies—as an answer to the previous complaint without quoting that complaint at all. But I am not at all sure that after making their answer their last state will not be worse than the first, because their main answer to the complaint about subsidies is this:
"If the Government took on the development of air mail services themselves, probably the way they would go about it would be to borrow the money from the public through Treasury bonds or some other kind of interest-bearing fund. On that money they would pay a guaranteed interest, or, in other words, a guaranteed dividend, and the whole of the trading risk would fall upon the Government."
I thought the whole object of our proceedings to-day was eagerly to accept the whole trading risk of this corporation. The risk already falls upon the Government; the risk of loss falls upon them, but the prospect of profit is not shared by them at all. Then, by way of a little reciprocal compliment, Imperial Airways include in this statement a little compliment to the Government. The leaflet reads:
"Instead of that, the Government is much cleverer. It gets the public to lend the whole of the money to develop the Empire air mail services with no guarantee of interest or dividends, and the public takes all the risk."
What, then, is this subsidy which we are voting in such an enormous amount this evening? The public is going to subscribe a, further £2,000,000 to this company—we have not had full details, and I am speaking merely on the basis of the information which was given by the right hon. Gentleman—and the company, presumably, will pocket, in addition to the vast annual subsidy, the whole of the premium on the shares which it is shortly to issue. On financial grounds and on managerial grounds, I believe that this proposition is unsound. I believe it would be far better to scale up the whole of the operations of Imperial Airways into a State organisation, which it is, in effect, already. I believe that would be far
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better for the development of Imperial aviation. It is the only method which in logic we can adopt, and I venture to predict that before many- years have passed that will be the system on which our air services will -be run.
6.35 p.m.
Mr. LEWIS: Before venturing to offer one or two criticisms of the Financial Resolution, I would like to express a word of sympathy to the Under-Secretary of State for Air. It is never an easy matter for a man to carry out the duties of Under-Secretary of State in this House if his chief Secretary of State is in another place. It is doubly difficult to do so when, on critical occasions in this House, he is liable to be deserted by all his colleagues. On the back of this Bill, in addition to the name of the Under-Secretary of State, there appear the names of the Financial Secretary to the Treasury and the Solicitor-General. Why were those two hon. Members not in their place on Second Reading? I do not know what was the reason. I am not sure that perhaps in the case of the Solicitor-General it may have been impossible—
The DEPUTY-CHAIRMAN (Captain Bourne): We are now discussing the Bill, and we had better leave the Second Reading Debate alone.
Mr. LEWIS: I wanted only to point out that many hon. Members feel that they did not have all the information given to them on Second Reading that they might have had. I wanted to exonerate the Under-Secretary of State from any blame for that owing to the fact that he was left alone to carry the whole burden. As you say it is not fitting to discuss the matter now, I will not pursue it, but will come to the terms of the Resolution before the Committee. Briefly, it might be described as a proposal to continue for a further term a system of subsidies similar to that at present in operation under the 1930 Act, the principal difference being that the total limit of possible subsidies is to be increased and the total period for which the subsidies may be granted is to be prolonged.
I do not wish to detain the Committee now by arguing the case for subsidies to civil aviation, and I think other hon. Members have done that adequately. There seems to be in the Committee a

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general appreciation of the importance of civil aviation and of the impracticability of carrying it on at the present time on any large scale without some Government assistance. If that be granted, so far as I can see the assistance can only take one of two forms, either that of an open subsidy, as proposed under this Resolution, or that of a concealed subsidy by way of airmail contracts. Personally, I much prefer the open subsidy. At this stage I do not wish to object either to the suggestion that a subsidy to civil aviation should be continued for a further period or to the amount suggested in the Financial Resolution, but I do object to the time suggested, because I think the period is too long.
The Under-Secretary of State laid stress on the scope of the scheme which is now before the Air Ministry. I do not consider that has anything to do with the matter. The scope of the scheme, although clearly it should affect the amount of the subsidy, does not seem to me to affect the period, which surely depends upon the nature of the expenditure. It depends upon whether the expenditure is such that it can be recouped only after a long period of time—expenditure for which many years of amortisation have to be provided—or whether it is expenditure of a character which in the ordinary course of events would be provided for over a short period of years. For example, if we were asked to consider a concession for a railway, I can well imagine that if the expenditure was to be devoted to laying down a permanent way, it would be necessary that any subsidy should run over a long period of years. I submit, however, that in the case before us the facts are entirely different. No doubt there are certain charges of a more or less permanent character for ground expenses, but I have yet to learn that they form a relatively large part of the total expenses of one of these civil aviation companies. I thought that the bulk of the cost went either in wages or in the provision of the machines themselves. The machines clearly are short-lived and the depreciation that has to be provided for them would in the normal course be provided over a short period of years. I cannot see that there is any real argument why the period suggested in the Financial Resolution
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for the subsidy should be 15 years instead of, say, 10 years.
Looking at the matter from the other point of view, it seems to me to be most desirable that the period should be as short as possible for two reasons, first, on the general grounds that this House likes to keep control in such matters of subsidies and does not wish to part with that control for a longer peiod than can be shown to be reasonably necessary, and, secondly—I am sorry to have to say this—on account of the unsatisfactory record of the Air Ministry in the matter of the administration of these subsidies. Much has been heard in the discussion on this Resolution of the case of the Scandinavian air route. Hon. Members will recollect that there are two private companies having somewhat similar names—British Airways and British Continental Airways—both of which are anxious to establish a service to Scandinavia and to get whatever Government assistance may be going in the establishment of that service.
The Air Ministry proceeded to open secret negotiations with one of those companies. I know that this afternoon the Under-Secretary of State pushed the responsibility on to some anonymous committee, a committee the members of which we have been told only this afternoon it is not suitable should be named in this House. I do not think the Air Ministry strengthened their case by trying to take refuge of that sort; they had better come boldly forward and take the responsibility that is theirs. They carried on the negotiations with this company so secretly that its rival, which was naturally closely interested in what was going forward, was entirely unaware of what was taking place until a point had been reached at which the negotiations had gone so far that the Air Ministry did not see fit to break them off or to modify them. No invitation had been issued to the other company—British Continental Airways—to say what they mile prepared to do or what were their plans. We are told vaguely that this committee of anonymous persons had before it the facts about this company. I asked the right hon. Gentleman to-day, when he was speaking, whether any representatives of the company had ever been heard by the committee, and he said, "Oh no, the committee has the facts before it; it did not hear any representative of the company."

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I suppose the facts were put before the committee by the representatives of the other company.
What was the result of all this secretive business? An agreement, which was not, I understand, signed, was negotiated for the payment of a subsidy to British Airways. At the same time an agreement was negotiated by the Postmaster-General for the carriage of mails by this same company, and as was pointed out to us this afternoon, a contract for the carriage of mails can very easily be a disguised form of subsidy. It is interesting to note in this connection that the Assistant Postmaster-General has coolly announced in the House that he is not prepared to give to the House the terms of that contract for the carriage of mails on the ground that it would be contrary to public policy, and he said that in spite of the fact that every hon. Member knows that the terms of every contract for the carriage of mails by sea are always published. I should like to know what are the considerations of public policy which make the Postmaster-General so anxious to keep quiet this bargain with British Airways. We are not allowed to see the details of the contract for the subsidy.
The DEPUTY-CHAIRMAN: The hon. Gentleman must pursue this on the Post Office Vote.
Mr. LEWIS: If I may not pursue the subject of the contract for mails, although it has been declared by the responsible Minister to be interwoven with the contract for the subsidy, I will say a little more on the question of the subsidy. These two contracts were entered into, and, as I have explained, the other company was not consulted, was not allowed to explain what it could do, and was left out in the cold. I hold no brief for either company, but in a case like that it is desirable, in the public interest, that the Ministry should hold the scales evenly between different sections of private enterprise. It is in their own interests to get the best bargain they can and to consider all possible alternatives.
Not merely have they ignored the second company in this case, but they have actively discouraged that company from opening an air route to Scandinavia. I understand that when the
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company wished to get the necessary permits a good deal of discouragement was put in its way. When the Air Ministry, in the ordinary course, forwarded the company's application to the Swedish authorities for permits to open the air route, the Ministry mentioned that, in no circumstances, would the company be considered for the carriage of His Majesty's mails. That is as if I were asked to give an introduction to somebody who wanted a favour and sent a message like this: "This is to introduce Mr. So-and-so who, I understand, wants something from you and I ought to mention that he is not a person whom I would, in any circumstances, employ" That was the kind of recommendation sent by our Air Ministry in respect of this company. I think it shows a bias which is most unfortunate.
Having regard to the way in which these negotiations have been conducted, I think it is not desirable to extend the period for which subsidies may be granted under this Measure. It may be that it is not too late to remedy the harm that has been done. We must all recognise from the speech which we heard this afternoon that the Air Ministry appreciate the undesirability of any repetition of such a case. We are told that in the case of the South American route all the interested companies, some five in number, are to be invited to say what they can do.
Captain GUNSTON: A great deal has been said about this company. Is it not a fact that the company in question had only one large machine and four small machines?
Mr. LEWIS: The facts, as far as this company is concerned, are that it was actually running a service to Amsterdam before the other companies started, and had made a survey with its own machines to Scandinavia before the other company. Of course, when they were informed that the other company was to have all the Government assistance, it was hardly to he expected that they would maintain five big machines.
I was saying, when interrupted, that it was not too late to put the matter right. The Under-Secretary has quoted his Noble Friend as being in favour of the idea that these two companies should amalgamate though, as he said, he himself could not suggest it to them. When

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two enterprising young British companies are endeavouring to establish a service on this route and neither of them is strong enough to do it without Government assistance, it seems common sense that they should pool their resources. It has to be remembered that at the moment it is the Air Ministry which is preventing anything of the kind. While they say "We will give our support to one company only" and refuse to look at the other they destroy any possible basis of amalgamation. I understand from the Under-Secretary that the agreement is not yet signed. This is a matter which really affects the reputation of the Air Ministry and the Government and I would appeal to the Government to look into it and see whether the difficulties cannot be smoothed out by doing what was done in the case of Imperial Airways—getting the conflicting interests to join together to form a stronger unit and then giving to that unit the assistance which it was intended, originally, to give to only a. part of it.
6.51 p.m.
Sir RONALD ROSS: The right hon. Baronet the Under-Secretary of State has been fortunate to-day in that he has had the weighty support of the right hon. Gentleman the Member for Chelsea (Sir S. Hoare) and even the opposition from the right hon. Gentleman the Member for Stirling and Clackmannan (Mr. Johnston) has been of a qualified nature. The right hon. Gentleman opposite is a good Socialist and while he sees that he cannot hope to convert to Socialism the right hon. Baronet—who appears to offer a poor field for such missionary enterprise—he does not quarrel very seriously with the Bill. Of course the idea of people getting any return for their money is abhorrent to the right hon. Gentleman and causes him pain, and I can appreciate that feeling in anyone holding the opinions which the right hon. Gentleman holds with such obvious sincerity. The farming out of civil aviation to a private company may well be the most appropriate way of dealing with a very difficult problem which is causing growing concern especially in regard to the starting of new enterprises.
The right hon. Gentleman opposite, in his very interesting speech, asked why not use private companies for warfare as
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well as for other things? We look at the matter from the practical point of view and take what we think is the best working principle. Private companies were tried for war in Italy in the Middle Ages and were found to have grave disadvantages. So we do not think that private companies are good for war. State ownership has been used for transport, notably in the case of railways and shipping and State ownership has been found to be a singularly unfortunate way of running transport. For those reasons we try to use the system which will work best in each case arid on this side of the House we believe in State ownership for warfare and private enterprise for commerce. As regards this particular company I have no great objection to it, not even to the shareholders making a small profit, so long as it is not too much, if their company is efficient. Perhaps I ought not to say "profits" because it is not the fashionable term now in use. The more progressive section of the House never allude to giving anybody any money but merely to giving them more purchasing power. I would not object to the shareholders of Imperial Airways having a little purchasing power as long as it was not too much.
I would, however, make two provisos. One is that reasonable competition on routes which are not covered or not adequately covered should not be stifled. I think Clause 5 of the Bill shows, as the right hon. Baronet said, that competition would not be stifled. The second point is that while we are subsidising a company to carry out the public work of aviation that company should make no secret political agreements—that is, it should make no agreements with other countries or communities of which this House is unaware. What check have we in that respect? Surely the only check the House has upon the activities of a company to which civil aviation is being entrusted in such a large degree, is in the voting of money. Here to-day, apparently, we are paving our last opportunity in that respect until 1953. The right hon. and gallant Member for the Drake Division of Plymouth (Captain Guest) rather alarmed me by asking for indefinite sums of money without any check. I do not think this Committee would be fulfilling its duty in allowing indefinite sums to be voted and I think there is something in the idea of giving

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the House an opportunity for review at a rather earlier period than 1953. From now until that year is a very long run. I think, however, that there should be reasonable confidence in continuity, in so far as continuity can ever be possible in a world which has many misfortunes, one of the greatest being the existence of people who believe in nationalisation. It is very hard to see how one could guarantee absolute continuity, having regard to that fact, although, possibly, I overestimate the importance of that influence.
I wish to ask my right hon. Friend the Under-Secretary, as I have asked him before, certain questions on how this money is to be spent. Although to-day he gave us a speech of great lucidity and of much assistance to us all, he has, like all other distinguished occupants of the Front Bench, a notable capacity for reticence when dealing with questions. I wish to ask him now what is the situation with regard to the North Atlantic air routes? Is there an agreement with the Irish Free State or is there not?
Mr. MacLAREN: Now we are getting at it.
Sir R. ROSS: Yes, now you are getting at it.
Mr. MacLAREN: Continuity.
Sir R. ROSS: If any of this money which we are voting is to be spent in the Irish Free State, I think we ought to be told how much is to be spent in that way. I am informed that the base of this service is to be in England, but the last point of land before setting out on the long journey across the water will be in some part of Ireland, and apparently it is now suggested that it is to be in the Irish Free State.
Mr. MacLAREN: Not Belfast?
Sir R. ROSS: I am glad to hear that no contract of a large nature is contemplated at present, but the right hon. Baronet alluded to the company having to sink large sums in ground organisation and obviously at such an important point as the last stage before the machines set out on their long trans-Atlantic journey, many important establishments will have to be erected. Are we going to pay this money to the Irish Free State
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Government? If so, is there any agreement? Who is to have control over any establishments which are put up there? It is a matter of great importance bearing in mind that this would be a British service of an almost national character, in a Dominion where it is, I think, impossible to fly the Union Jack and where it is certainly impossible for British officers in uniform to go about freely. It seems to me that if this plan is carried out, it is giving another hostage to a community with whom we have had out differences and are having differences at present who are not paying us the money—
Mr. MacLAREN: Do you?
Sir R. ROSS: I do not know what these interruptions are about, but they seem to be singularly inconclusive. If they were a little louder I might know what they were and be able to answer them. What this Committee ought to bear in mind is the possibility of more money being poured into that country with no control whatever over it. The one argument which is always of great weight, and which cannot be brushed aside, is that a serious additional element of risk would be added to the flight by going anywhere else than the Irish Free State. If that is established, one cannot ask men to add an appreciable degree of risk to a terribly perilous undertaking. But the more I consider this question the more it seems to me that the technical aspect, of the margin of risk is not the deciding factor in this decision. If the margin of safety is to be seriously affected by the 70 miles longer journey from the Free State into the United Kingdom, and is not provided for in a service of more than 2,000 miles, the service should not be undertaken. As I understand it, there is a considerable margin of safety, allowing for doing the passage with a 50 or 60 mile-an-hour gale blowing in either direction, which hardly ever occurs. Before this Resolution is passed, we should be told frankly what the position is regarding the North Atlantic service, what engagements, if any, have been entered into with the Free State, and to whom and of what amount will payments be made for building bases for the service. This is going to be a big service, and perhaps in future one of the most important in our national life.
7.3 p.m.
Mr. HOLDSWORTH: As one who was very dissatisfied with the scanty replies given in the Second Reading Debate, I want to be generous enough to thank the Under-Secretary for his full statement this afternoon. I also want to thank him for telling us that there is to be some sort of competition when these subsidies are given, some sort of public advertisement which will give everybody an opportunity of receiving some benefits. I am opposed to subsidies of any and every kind to private enterprise, but at least, if there is to be a subsidy, let there be fair and equitable opportunity for different companies to compete for it. It is a great pity that what is now to take place has not been the principle from the beginning. It is a striking thing that, after all the criticisms of the way in which these subsidies have been given, and the doubts expressed by several hon. Members, there has not been some grasp on the part of those responsible for giving subsidies that the idea that there was something hidden about it could have been avoided if the policy which the right hon. Gentleman has enunciated this afternoon had been followed from the beginning.
I have no interest, financial or otherwise, in any operating company or in any company that has anything to do with air navigation. I am only concerned that there should be fair play. I understand from the speech of the hon. Member for Colchester (Mr. 0. Lewis) that the contract for Scandinavia has not yet been signed. I do not like using the names of companies, but two names have been given—British Airways, Limited and British Continental Airways. The right hon. Gentleman suggested that these two companies should come to some commercial agreement. [HON. MEMBERS: "No!"] I understood he suggested that they should amalgamate. That is an agreement. You cannot amalgamate if you do not agree. One company at the moment stands in a tremendously privileged position. It is aware of the fact that it is to receive the subsidy. The other is in the unfortunate position of knowing that it is not to receive it. If they are to discuss amalgamation, they cannot meet one another on equal terms. While I acknowledge that it is no business of the right hon. Gentleman to enter into these discussions, I suggest to him that he should
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keep open that contract until there is some opportunity of the two companies meeting. That would meet the objection of those hon. Members who feel that one company has not been treated fairly. I wish that we could have a White Paper giving the basis on which in future these contracts and subsidies will be given. The electorate of this country is looking keenly on all these subsidies, and they want to know on what principles they are granted. Let us know that when subsidies are given there is fair play between one company and another.
7.8 p.m.
Mrs. TATE: I would like to join with other hon. Members in thanking the Minister for the full statement he made to-day, but I think that the Committee is put into some difficulty when we have a reply which we had a right to expect at the end of the Second Reading Debate given to us on the Financial Resolution. It leaves hon. Members in some difficulty in studying the Minister's reply. The Minister not only resented any criticism of Imperial Airways, but said that those of us who have criticised Imperial Airways were lacking in patriotism. I do not think we are lacking in patriotism or faith in aviation. It seems strange, if one has love for and faith in aviation, that one particular company should always be debarred from criticism, especially when it has forcible backing from the Government. The Under-Secretary to-day made no reassuring statement regarding the speeding up of Imperial Airway services as compared with other countries. He told us that the proposed service to Singapore was to take six or seven days.
Sir P. SASSOON: Four and a-half.
Mrs. TATE: I think I am right in saying that the proposed service of the Dutch K.L.M. will take two and a-half days. When we consider the granting of these privileges for another 15 years, many of us feel that it is not right to grant a subsidy for that period when we are behind in time compared with many other services in the world, and also when some of our machines are not as advanced as the machines being built by other countries. There is a description in the "Sunday Times" of a new seaplane called Do 20 under construction at the Dornier works at Friedrichshafen,

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which will have eight Diesel engines totalling 6,400 h.p. and will be the largest and fastest in existence. Have we any comparable seaplane under construction in this country? Have we reached any definite stage in our agreements with Pan-American Airways for the North Atlantic routes, and how does our agreement with Pan-American compare in advancement with the agreements of Germany, Holland and France? The point made by the hon. Member for East Wolverhampton (Mr. Mander) with regard to the charges made by Imperial Airways to private flyers using their grounds is worthy of note. Under the 1926 Agreement for the Egypt-India service, guards to aeroplanes are paid for by the Government, but a charge is made to the private flyer by Imperial Airways for the guard. I have a large number of bills of a private flyer using his own machine from here to India.
The DEPUTY-CHAIRMAN: That cannot possibly affect the subsidy, and therefore does not arise on this occasion.
Mrs. TATE: I am less fortunate than some of my predecessors who mentioned this matter when you were not in the Chair, Captain Bourne. I only wanted to say that it seems strange to pay one guinea for the guard at an aerodrome when the guard is already supplied under the subsidy arrangement to Imperial Airways. With regard to the South Atlantic route and other routes not already granted to Imperial Airways, the Minister has much reassured the Committee that these routes will have fair consideration, but I deplore the suggestion made by the hon. Member for East Wolverhampton that discussion of the grant to whichever company is given the service should come before the House. I cannot imagine anything more unfortunate than the House discussing the details of various technical schemes already exhaustively considered by the Fisher Committee. I have told the Committee that I have an interest in this matter, as a scheme in which I am interested is one of the five concerned. In regard to what the hon. Member for Colchester (Mr. Lewis) said about direct and indirect subsidies, I would like to point out that the Post Office mail contract is not an indirect subsidy but is a payment for services rendered. Every
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company, whether it is getting a Government subsidy or not, if it is the chosen instrument of the Government will get the mail contracts. The hon. Member's remarks were not quite accurate.
Mr. LEWIS: Does the hon. Lady suggest that the contracts for the carriage of air mails in America, which involved the American Post Office in immense losses, are not indirect subsidies?
The DEPUTY-CHAIRMAN: We cannot discuss what happens in America.
Mrs. TATE: That is indeed as well, because the subsidies for Post Office contracts in America rest on an entirely different basis from those in this country, and therefore the question cannot arise. I join with other hon. Members in deploring that the Government subsidy to Imperial Airways has done so much to raise the value of the shares in that concern. On the 23rd January, 1936, before the announcement of the increased subsidy, Imperial Airways shares stood at 53, but a fortnight later, after the disclosure of the increased subsidy, they stood at 67, and I certainly think that unless we are assured that all routes upon which Imperial Airways have a monopoly will run an air service with really modern, up-to-date machines, that all of their routes and aerodromes will have modern ground organisation, and that we shall have a speedier service, they have no right to be paid any dividends whatever.
7.16 p.m.
Mr. MONTAGUE: I would like to add my congratulations to the right hon. Baronet the Under-Secretary of State for Air upon the very clear and extensive way in which he presented his case this evening and answered the questions the lack of an answer to which caused so much concern on the day when the Second Reading of the Bill was taken. I am sure the Committee feel very satisfied at the way in which the matter has been handled this evening and that we are in possession of much fuller and more valuable information on the position of civil aviation in this country than we were at the end of the last Debate. I would like to make it perfectly clear that the attitude of the Labour party to the Amendments which are on the Paper, one of which is in the name of the hon. Member for

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Frome (Mrs. Tate), will be one of support, but that it has nothing to do with the point of view which the hon. Lady and her friends have put before this House from time to time. We are not in the slightest degree concerned about the quarrels between the various companies that desire to get a share of subsidy in preference to Imperial Airways.
I would like to point out—and hon. Members, of course, will know the fact upon reflection—that after all Imperial Airways was sponsored by the British Government. It is not altogether a private company; it is a company which was created by this House of Commons. Our criticism about subsidies and about the relations between the Government and Imperial Airways is one that, as one speaker has said, comes quite naturally from this side of the House, but at the same time Imperial Airways is a Government-instituted concern and does, at least to that extent, represent the principle that in the matter of civil aviation the Government have some sense of responsibility for its progress. For that reason, at any rate, I desire to make it clear that in supporting both of the Amendments which are on the Paper we have our own point of view and do not follow the line of argument that is favoured by those who are responsible for the Amendments.
I think it is very useful, in discussing subsidies, to consider what has been done in relation to civil aviation since the War, since the report of the Hambling Committee and the agreement for the creation of Imperial Airways out of two or three companies. There have been subsidies for many years, but on the 9th March, 1929, on the 22nd October, 1930, and on the 16th February, 1935, three successive agreements were signed between the President of the Air Council and Imperial Airways, Limited. Those were agreements in respect to subsidies and the management of the company and its ventures in connection with the various developments of Imperial aviation.
The first agreement was threefold. It included subsidies in respect to European routes, to the routes to Egypt, and to the ruotes to Karachi. The total amount that was sanctioned in the agreement of the 9th March, 1929, was £905,000, that is, in
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respect of the European routes. The amount for the Egyptian route was £715,000 over a period of 10 years, and for the Karachi route it was £860,000. Then came the larger development to Cape Town. There was a preliminary agreement for a subsidy, for an amount of money supplied by the Government, of £80,000 in reference to the Cairo-Mwanza route, part of the way to Cape Town, and the total subsidy for five years for the Cape Town route was £900,000. Then the last, as recently as 1925, from Karachi to Australia arid Singapore, with the arrangement, as we know between Singapore and Brisbane with the Australian company, was for £100,000 over a period of three years.
The total amount of money sanctioned under those three agreements, which does not take into account the subsidies that preceded them, the amounts which have been paid by the Treasury to Imperial Airways and others for development purposes, amounts to the quite colossal total, relatively speaking at any rate, of £3,480,000. Parliament has sanctioned for varying periods—10 years, five years, and three years—subsidies to the extent of £3,480,000. The total original capital of Imperial Airways, Limited, is in the neighbourhood of 2624,000, of which the odd amount, £24,000, is held by the Government, a very small holding considering the amount of money that has been sanctioned by this House. That means that the total subsidies so far sanctioned, quite apart from those which are considered in this Bill and quite apart from the proposal to increase the maximum from £1,000,000 to £1,500,000, could have bought Imperial Airways, lock, stock, and barrel five and a-half times over.
I am not for a moment criticising Imperial Airways. I am not even criticising the policy, so far as it goes, because, after all, the Labour Government were responsible for a continuity of that policy. We did not expect to be able to get our own particular ideas carried into effect. It was quite impossible that we should have been able to nationalise the air services of this country, and I am prepared to admit, if you are going to develop civil aviation in this country and the British Empire, that there is a case for Government support, but we do think that, in view of the proposals in this Measure, the time has come when the whole policy should be reconsidered.

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Some criticism has been put forward, notably by the right hon. Baronet the Member for Chelsea (Sir S. Hoare), of the policy for which our party stands, that is to say, the policy of a State air service. He said that he and his friends were opposed to a State air service, whatever might be said for the principle in other regions of commerce and of trade. His objection in the case of an air service was that there were a number of difficult diplomatic negotiations taking place between this country and other countries in regard to air arrangements, and if the organisation of Imperial airways was run by the Government in some such form as we have suggested from this side, with the idea of the British Broadcasting Corporation as a model, there would be very delicate considerations to face, and it would be exceedingly awkward if the matters under negotiation were made political questions between the various countries.
One would imagine that the right hon. Baronet the Member for Chelsea, who was for so long Secretary of State for Air, had had no experience of delicate negotiations with foreign countries under present conditions, but it has always happened. Continually we have had difficulties and troubles and negotiations with this country and with that in reference to our own Imperial routes. I remember the long, anxious hours during which we discussed with foreign representatives the subject, for instance, of the routes to Karachi, with reference to Persia. We are travelling to-day upon the Arabian side of the Persian Gulf because of those very difficulties that we had with the Persian Government. Those discussions were undertaken by the Air Ministry, and I fail to see how the right hon. Baronet can for a moment talk in that way about politics being brought into the question if we were to nationalise civil aviation in general. Politics are brought into the question to-day.
Another matter that the right hon. Gentleman the Under-Secretary of State will remember very clearly was the long, difficult, and involved negotiations which we had with Italy with regard to the route from Basle down through Italy in contradistinction to the Marseilles-Genoa route. All these things are constantly going on. They were at the time when I was at the Air Ministry, and the negotiations were conducted by the Government,
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by the Air Ministry. Yet the right hon. Baronet the Member for Chelsea thinks it is sufficient for him to Say that the real objection to making a national public service of Imperial airways—I do not mean the company, but Imperial airways in the general sense of the term—is that we should bring politics into the question of our Imperial air routes.
Another point of considerable importance is the composition of the board which will have so much control over aircraft and its operation. The Under-Secretary said that every interest would be fully and properly represented upon the board. The recommendation of the Gorell Committee was that manufacturing and insurance interests should be represented. I understand that recommendation is to be enlarged and that more manufacturing, insurance, and operators' interests are to be brought in and that one-quarter of the representatives will be of other interests. The Committee ought to be told who the other interests are to be. No one disputes that the people who are in charge of aeroplane manufacture should be responsible and valuable constituents on a board of this character, but surely the interests of the public should be represented. What about the interests of the private owners and of the pilots also? I remember attending the first meeting of the Guild of Air Pilots, which was sponsored, I believe, by the late Sir Sefton Brancker. That Guild is an important organisation representing the interests of the pilots, and I would like to know whether they are to be included. What about the technical side and the people who have technical experience?
The DEPUTY-CHAIRMAN: I am rather loath to interrupt the hon. Gentleman, but I cannot see how this question is connected with the Resolution.
Mr. MONTAGUE: It is connected because in the financial provisions of the Bill is the proposal to finance the board. A certain amount of money is to be granted. It is uncertain how much is required, but there is a provision in the Bill that the money shall be supplied until it is possible for the board to carry out its own financial responsibility. I submit that that justifies my reference to the board. The Under-Secretary

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also referred to the composition of the board. I am asking whether it is not possible to include on the board, which will have so many important responsibilities and be of such great importance in connection with the future of aircraft and its development, people who will represent the public, the air pilots and the practical and technical side of the industry.
I would like, in conclusion, to say that we on this side stand for the nationalisation of the air service. By nationalisation we do not mean some kind of rigid organisation of air affairs under the State in a departmental sense. We are prepared to recognise the fact and to admit that various types of industrial and commercial concerns can be dealt with, and should be dealt with, in various ways. We have, for instance, the example of the Post Office. In that case we have an essential national service that requires rather rigid national organisation. We do not want that. We want some kind of flexible organisation which will do away entirely with the motive of private enterprise and profit, and at the same time will be so organised as to provide for great elasticity and as much efficiency as the interests and the future of aircraft demand.
7.36 p.m.
Mr. PERKINS: The last time these matters were discussed in the House an unfortunate impression was left on the minds of many hon. Members, including myself, in regard to the granting of subsidies to British Airways and British Continental Airways. Owing to the fact that under Parliamentary procedure the Under-Secretary was not able to reply, we came away with a false impression that the subsidy had been given to British Airways because of some kind of hole-and-corner business, that it had been fixed up by people who knew the right people in the Air Ministry, and that the rival firm had not bad a square deal. The Under-Secretary has to-day made a full and frank statement, and we now understand the reasons that actuated the Air Ministry. I am satisfied with everything my right hon. Friend said, and I am convinced that British Continental Airways have no grounds whatever for complaint. We have had my right hon. Friend's word that this firm
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will be allowed to compete for any other services that come along, and I suggest that, in view of the fact that they showed such initiative in starting the line to Stockholm this year, they ought to be given a tiny preference over other air lines. I want to suggest to the Under-Secretary that he is making a big mistake if the principal qualification for receiving subsidies is the fact that a company must have a great deal of experience and that the most experienced air line will get the subsidy. The effect of that will be that on every occasion when Imperial Airways quotes for an air line, they will always get the subsidy and no other air line will ever be able to stand in opposition to it. That is rather a dangerous precedent, and I hope that when the Solicitor-General replies he will say that that is not the only qualification that will be necessary in future.
I want to say a word about the granting of the subsidy for 15 years to Imperial Airways. The suggestion has been thrown out that we should not criticise Imperial Airways. I do not mind how unpopular I am, but I am going to criticise them. I do not believe that we are doing the right thing to sell our birthright for the next 15 years. It is too long a period. We have often been told that Imperial Airways carry more passengers across the Channel than all the other air lines put together. That is true. We have been told that Imperial Airways are probably the safest air line in the world. I agree with that. The Under-Secretary, however, has not told the Committee that Imperial Airways at this moment are probably the slowest air line in the world, and that the vast Imperial Airways fleet are all practically obsolete. He has not told the Committee that Imperial Airways are the third to consider crossing the Atlantic. The Germans and the French are going across, and now we are just beginning to think of it. He has not told the Committee that it was the flying Dutchman who blazed the trail 1 o India and on to Singapore, and that we followed second. He has not told us that Imperial Airways during the last 10 years were one of the last firms to introduce night flying. He did not tell us that the Board of Imperial Airways are more interested in profits than service to the community.

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He did not tell us that over one-quarter, nearly one-half, of the subsidies which have been paid to Imperial Airways have been passed on to their shareholders as dividends.
The Under-Secretary did not tell us any of these things. Although I think that we ought to continue the subsidy to Imperial Airways, we are unwise to hand it to them for the next 15 years. Suppose in five years Imperial Airways go to sleep and they go back and do not continue in their present progressive mood. Those of us who have been to Short's and seen the new flying boats know that they are trying to turn over a new leaf, so that we may lead the world in civil aviation in the next four or five years; but there is a danger that they might slip back. This House will then be powerless, for under an agreement for 15 years we would be able to do nothing. Ten years would be long enough, and in the Committee stage I shall do my little bit by moving an Amendment to limit the subsidies to any one firm to 10 years, so that this House will have the opportunity of spurring companies on to greater efforts, and, if it is not satisfied, have the opportunity of giving the subsidy elsewhere.
7.42 p.m.
Mr. SIMMONDS: I rise in order to follow up the point of my hon. Friend who has just spoken. We are approving the grant of these vast sums of money to Imperial Airways and I would like to know whether it carries with it any inferential or actual obligation as between Imperial Airways and other civil aircraft operators in this country and the Empire. That is an important matter, as recent events have shown. Imperial Airways have the power to assist British civil aviation in this country and the Empire, or they have the power to frustrate every other effort which is made by a private subsidised or unsubsidised company. Do the Committee think that in granting this money we grant it on condition that Imperial Airways assist the development of British civil air transport, or do we approve it in the full knowledge that a hard competitive policy will be adopted by Imperial Airways to all other civil air transport operators? I can throw some light on this matter by quoting from art instruction from Imperial Airways to
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their staff as to how they should treat all other civil aircraft operators. It is this:
"If they"—
that is other civil aircraft operators—
"ask us to carry loads and freight, which for some reason or another they are unable to accommodate, we politely regret that owing to lack of space we are unable to assist them. With regard to any passengers they might not be able to carry on their services through cancelled services, we are not prepared to accept them straight from the companies concerned with a view to carrying them on behalf of those companies."
Therefore, it is obvious that the view that Imperial Airways take of their responsibilities to the Government and to the country is such that they feel entitled to adopt a hard competitive policy towards all other British civil air transport companies, all except one operating without subsidy. My right hon. Friend the Under-Secretary of State stressed the fact that the money which we are invited to approve was to be given in order that air transport shall get on to its feet and be able to run without a subsidy, but the companies to which this memorandum refers are to-day flying without a subsidy, and I know that two of them, at any rate, who are flying from this country overseas are flying at a profit. It would seem, therefore, that we are scarcely going the right way to encourage civil aviation to fly without a subsidy, if we do not make it perfectly clear to the directors of Imperial Airways that we expect them to adopt a liberal attitude towards all other operators of civil aircraft from or within the Empire.
Not only is Imperial Airways hostile to other British civil aircraft operators, but it is bound tightly together with foreign aircraft operators who are in receipt of subsidies in their various countries. It happens that France has just recently been attempting to quell three British unsubsidised aircraft companies operating from London to Paris. I raised this matter a few months ago with my right hon. Friend, and I believe that I then had the unanimous approval of the House for the contention that the policy of the French Government towards these unsubsidised British companies was intolerable. What has happened since? One of these companies, which had been flying for a considerable time, was told on a Tuesday by the British Air Ministry

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that its permit to fly to France would he withdrawn by the French Air Ministry on the following Friday, three days later. The company protested vigorously and a director of that company, with a member of the staff of the Directorate of Civil Aviation at the Air Ministry, went to France and patched up some agreement. But the agreement was on these lines, that in future this company must fly at the same rates for passengers and freight as Air France and Imperial Airways.
The DEPUTY-CHAIRMAN: I cannot see what connection the hon. Member's argument has with this Resolution.
Mr. SIMMONDS: I think I can explain that quite clearly. We are asked to approve this money going to Imperial Airways, and surely we should define the obligations which we consider attached to the acceptance of these sums, and I was pointing out here what are the present impressions, judging by their actions, of Imperial Airways as to the manner in which they can act. I trust, therefore, that in making this brief reference I am entirely in order.
The DEPUTY-CHAIRMAN: I think not. What was done by the French Government is a question which could not possibly arise.
Mr. SIMMONDS: It is true that I did mention the French Government, but that was merely to show the attitude of Imperial Airways and its associated company Air France. But I will leave the French Government to take care of itself. Since the agreement was made whereby this British unsubsidised company was allowed to continue to fly from London to Paris the company have written to the Air Ministry on this very point of the relative position of a subsidised and an unsubsidised company. They wrote on 8th April:
"Since the above negotiations took place it has come to our knowledge that both Air France and Imperial Airwayss, after succeeding in forcing us to bring our rates into line with their published rates, have now approached one of our customers and deliberately offered to cut the rates they forced us to establish to the original figure at which we were enjoying the business. A member of Imperial Airways staff actually requested our customer to maintain secrecy as regards their offer. Our customer promptly got in touch with us and has undertaken to support these statements of ours should the need arise."
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That is a very serious situation, that we should subsidise a great company, with a national and Imperial mission, and that it should appear to be playing so dubious a hand, forcing small operators out of the air. Therefore, I wish to close by asking my hon. and learned Friend the Solicitor-General this question, and if he cannot answer it to-day, perhaps the Under-Secretary of State will be able to answer it when we revert to this matter: Are the Government willing to insert in their agreement with Imperial Airways a Clause placing on that company an obligation to co-operate reasonably with other British civil air transport companies?
7.52 p.m.
Mr. LYONS: I wish to offer one or two observations in support of the proposals which the Government have made for this subsidy over so long a period. It seems to me that any such subsidy, if it is to be effective, must be for a long term. There is no doubt that Imperial Airways was chosen as the instrument for providing a national airways service some years ago on account of the inefficiency and wastefulness of giving small sums to a lot of small concerns which showed no national efficiency in the air services they were running. The hon. Member for Stroud (Mr. Perkins) made some criticisms of Imperial Airways and said theirs were the slowest services even if they were the safest. We ought to remember that with a far less subsidy than any foreign air service they have in a short time knit the Empire together in a manner which would once have been regarded as almost inconceivable. Some little time ago I had the privilege of going by air to one of the farthest African outposts, and by that trip I realised more than by anything else what great work Imperial Airways have done in knitting together the Empire with the quickest and one of the safest means of transport that the Empire has ever known. I believe those services can do more than anything else to knit together the Empire.
I said just now that this subsidy to be effective must be on a long-term basis. It is almost impossible to think that civil aviation in this country can be left to fend for itself. We now have an undertaking which has long wince passed beyond the experimental stage and has, with very little State help, given the Empire safe, speedy and regular services. One has only

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to look at the utility of these services in providing transport to the Continent and contrast the difference with the competing foreign services, to realise how successful its work has been. I would like to make this suggestion. A time-table has been established and I hope that we shall not go back upon it. I should like to think that a condition is to be attached to the subsidy whereby the Government, who are represented upon the board of Imperial Airways, can assure the country that the Empire services will at least be maintained on the schedule which is now projected, and even that the schedule will be extended. It was manifest a little time ago that a weekly service to Africa was insufficient, and that service was duplicated. It may very well be, when the new service comes into operation, with flying boats going along the coast, that the bi-weekly service will be insufficient.
I think the amount of the subsidy cannot be criticised as being too high. It has to be on a very large scale. If ever a subsidy could be justified it would be a subsidy for an Empire flying service such as this, but we ought to be assured that the Empire will get the benefit of a regular and extending schedule of services and that there will be no question of the services being decreased, no possibility that any regular route may be operated only spasmodically. It is a notorious fact that 12 or 18 months ago the service in operation between Croydon and South Africa was wholly insufficient for the demands made upon it, though, as I said, that state of affairs has now been altered by the provision of a bi-weekly service. I hope that no question of services proving insufficient for the needs of the travelling public will arise in the future. I trust that Imperial Airways will at all times have the responsibility of maintaining services which the Government think are adequate for the traffic on the various routes.
It is very easy to criticise and to lose sense of perspective. These regular air services throughout the Empire cannot be looked upon only from the point of view of speed. Speed is very expensive, and not one of the recent attainments in speed ought to be taken as a criterion by which to judge Imperial Airways services. They furnish regular services, knitting together foreign countries with all their differences in customs and with
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all their differences in climate. Imperial Airways have performed a great national service in bringing the air services in the Empire to their present pitch of regularity. I hope the Committee will support the Government in this scheme and support the subsidy which is so necessary for a service which cannot be left to operate by itself, because if the subsidy were taken off there would at once be a falling away in the service, and we should relapse into the chaos which existed some years ago, before this chosen instrument came into existence. In giving this subsidy for this long period we are assuring the Empire that the service will be maintained in such a manner that Empire traffic will be adequately provided for.
7.58 p.m.
The SOLICITOR-GENERAL (Sir Terence O'Connor): I should like to ask the indulgence of the House on this the first occasion on which I have to address it from the spot which is hallowed by so many memories and which is so closely intertwined with our history. I deserve that indulgence, or I can demand it, the more on account of the inevitable hiatus in my appearance in the House, the first in 12 years of service, which has prevented me, perhaps, from appreciating the very subtle variations of light and shade which are the very life of Parliament. If that absence results in any errors in the case I am about to conclude on behalf of the Government I hope that hon. Members in all parts of the Committee will forgive me. I can best discharge my task, I think, in winding up what has been a very friendly Debate, a Debate in which the value of my right hon. Friend's exposition of his case has been recognised from all sides, in which misapprehensions have been cleared up on all hands—misapprehensions that, I feel, must have been the misapprehensions of a moment only during the Second Reading Debate—if, first of all, I attempt to answer the various points which have been made in the course of the discussion.
The right hon. Gentleman opposite who opened the discussion pointed out the vital difference that was emphasised in the Resolution. and that effects the cleavage between the two great bodies of political opinion in this country. I am afraid that nothing that I can say this afternoon will narrow or bridge that gap. There is an enormous difference of point of view

1099
between us. He spent the whole of his speech in trying to show that we should utilise the subsidy in order to bring the air services of the country within State control, while the whole object and policy of those who sit on this side of the Committee is to be rid of subsidies, and to release this vital service for private enterprise, freed of subsidy. That is a fundamental difference of point of view which nothing that he or I could say would bridge. I would re-echo what was said by my right hon. Friend the Member for Chelsea (Sir S. Hoare), that subsidies are a perfect nuisance from every point of view, and the sooner we get rid of them the better.
Mr. JOHNSTON: I do not wish to interrupt the hon. and learned Gentleman during his maiden speech at that Box, but will he not pay some attention to the hint thrown out by the right hon. Baronet, that he would welcome the day when a British Broadcasting Corporation type of management could run civil aviation?
The SOLICITOR-GENERAL: I am much obliged to the right hon. Gentleman, but I think that when he reads the observations of my right hon. Friend in the OFFICIAL REPORT to-morrow, he may conclude that he was putting a slightly optimistic gloss upon them. What my right hon. Friend said was that the possibility of some kind of structure in the future was not to be ruled out. That was not committing himself, or cornnitting His Majesty's Government, in one way or the other. Of course it is not to be ruled out. That is the difference between hon. Gentlemen opposite and hon. Gentlemen on this side of the Committee. We are empiricists. We can conceive of anything as being possible; we are not hidebound to any particular scheme. I venture to think that that is a more beneficent and generous outlook than that of hon. Gentlemen opposite. All that we desire to see is something that will work effectively; whether it be by private enterprise, State control, or an amalgam of the two, is immaterial to us. We are, as I say, empiricists, and we hope that the result of the subsidy will be to accelerate the moment when this vital service shall become self-supporting. We look upon the subsidy, as he does not, as an effective
1100
means of evoking from private enterprise in this country a still further response. We hope, for instance, that the sum of money, which my right hon. Friend put in the order of £2,000,000, will be evoked from private pockets in this country in a way in which it could not be evoked if there were no subsidy to be considered.
With many of the remarks of the right hon. Gentleman I found myself in entire agreement. He gave us a very impressive warning, of which I am sure hon. Gentlemen sitting below the Gangway took account, against the possibility of our permitting the growth of mushroom corporations, such as grew up in the United States of America. It is very largely because the Government are impressed with the experience of America, and are determined that it shall not be repeated here, that we are not prepared to permit competitive tenders of the general kind suggested in the Amendment, which, I understand, is not in order. I shall refer to it to the extent to which the hon. Member for East Wolverhampton (Mr. Mander) was allowed to deal with it, and to no greater extent.
The hon. Gentleman agreed with the Government that if ever there was a case for a subsidy, here it is. I in turn, on behalf of the Government, agreed with him, which shows the concordat which is between us and which has been manifested during the discussion. The hon. Gentleman wanted to know the total amount which Imperial Airways would receive from all sources, in direct and indirect subsidies. I am afraid it is impossible to give him that figure. It is not merely that there is not time to compute, it, but that the computation would be impossible, for this kind of reason: Imperial Airways have the use of certain services in common with foreign and other undertakings, including the meteorological service and certain ground plant. It would not be possible to ascertain exactly how much of the cost of those services was attributable to user by Imperial Airways and how much to user by other undertakings. No such sum as would be worth anything could be calculated.
The hon. Gentleman asked me whether there had been complaints of high

1101
charges which were a discouragement to private owners in regard to the use of aerodromes. The answer is that there have been complaints, and that those charges are fixed by the Ministry together with other Departments. In respect of the services, taking them as a whole, the Ministry makes no profit, but, in fact, is out of pocket on the whole transaction. The hon. Gentleman asked me whether any routes beside the South American route were in contemplation for opening up. There are no other routes which can definitely be said to be in contemplation, but the South Atlantic route—the South American route—is very large, and is capable of a good many sub-divisions. It would include, for instance, the route down the West Coast of Africa as far as Bathurst. The omnibus phrase covers a possibility of more than one undertaking, and might represent several undertakings in different parts of the South Atlantic. However, that remains to be seen.
In addition to those points, it is perhaps as well that I should emphasise that the Financial Resolution which the Government as asking the Committee to agree to this afternoon merely authorises the payment of subsidies. It is not restricted, as some hon. Gentlemen seem to have assumed, to any one company. Imperial, Airways are not mentioned. All that we know at present, from the general observations made by my right hon. Friend, is that it is contemplated that, of this sum of £1,500,000, an average of about £600,000 will go to Imperial Airways over a period of 15 years, for the development of Imperial routes, but not including the North Atlantic. There will be left an aggregate balance of about X900,000, which will be available for Imperial Airways on the North Atlantic routes, and for any other applicants who come along with well-considered schemes and proposals that will stand the test of the careful examination which such proposals will receive. If my arithmetic serves me aright, £900,000 is the difference between the £600,000, which, on the average, will go to Imperial Airways, and the £1,500,000 for which authority is taken in the Resolution.
My right hon. and gallant Friend the Member for Drake (Captain Guest) was
1102
of opinion that this is a modest sum, and I agree with him. He wanted to know why the period of time was limited to 13 years, until 1953. The exact opposite point of view was taken by my hon. Friend the Member for Colchester (Mr. Lewis) who thought that the time was too long.
Captain GUEST: Perhaps my hon. and learned Friend will not mind my explaining that what I was complaining about was that there should be a limit of any sort or kind. It should either be for one year, or indefinitely.
The SOLICITOR-GENERAL: I fully appreciated that the objection of my right hon. and gallant Friend was to the limitation. The objection of my hon. Friend the Member for Colchester and others was, roughly and in plain terms, that 15 years is too long. They asked why we should enter into an undertaking for 15 years. My right hon. Friend the Under-Secretary of State has dealt with that point to a very large extent, but perhaps I can amplify one or two other considerations. This is what is about to be set in hand: Imperial Airways shall undertake this vast expansion, which will increase their mileage to this enormous extent. They are to undertake the preparation of the ground organisation for that expansion in the development of all these routes, and are to raise capital for the purpose. Can it be suggested that 15 years is too great a security of tenure for arrangements of that kind?
Let us put it the other way. It is possible that all that work may be scrapped at the termination of the 15 years under the proposals in the Resolution. I submit that a period of 15 years is on the narrow side rather than on the generous side. If we take an analogy which is comparable, in some respects, from electricity and gas undertakings, we see that they get a tenure of 40 years in many of the Acts, in order to give them some security for undertaking the vast capital expenditure which is necessary to enable them to give all the services that they have to give.
Mr. JOHNSTON: But they do not get £1,500,000.
The SOLICITOR-GENERAL: I agree; nor do Imperial Airways get £1,500,000. They are to have a share of the subsidy,

1103
and all that we know at the moment is that a figure of £600,000 has been given to the Committee by my right hon. Friend. [An HON. MEMBER: "A minimum."] A minimum sum. For that they have to raise capital, they have to organise the route, they have to organise the ground staff beyond what they already have, and they have to multiply to an enormous extent their mileage. The period was the subject of very careful consideration by the Government, and the Government, taking all these matters into account, availing themselves of the best advice that they were able to obtain, and setting aside the views on the one hand of those who, like my right hon. Friend, would wish to see a longer tenure, and those who, like my hon. Friend, would like to see it made shorter, have come to the conclusion that 15 years is a reasonable period; and I venture to ask the Committee to agree with them in that conclusion. MY hon. and gallant Friend the Member for Wallasey (Lieut.-Colonel Moore-Brabazon) asked whether aerodromes were included in the Resolution, and he has an Amendment on the Paper which raises this point.
Lieut.-Colonel MOOREBRABAZON: It is out of order, I understand.
The SOLICITOR-GENERAL: I hope, nevertheless, that I may be permitted to say what the answer is. I think that in terms it is intended that aerodromes should be included; the terms of the Resolution, as I read it, are capable of bearing the meaning that aerodromes should be included. I think that the words,
"to authorise the Secretary of State to agree … to pay subsidies to any persons and to furnish facilities for their aircraft,"
might be so read. But the view which is taken is that it is in fact unnecessary to ask for powers by way of subsidy to do this, and that the preferable course is that which is now being adopted, of entering into contracts with the owners of aerodromes whereby the services of the aerodrome are obtained for the Government or the Air Ministry. There is a reciprocal agreement whereby certain services are provided to the owners of aerodromes for the use that they grant. There are such arrangements in force at the present time, without the necessity for any Financial Resolution or any new legislative powers. For example, Messrs.
1104
Airports, Limited, are the owners of the Gatwick Aerodrome, and, in accordance with an agreement that has been made, they provide facilities for the use of their aerodrome as an alternative to Croydon in certain states of visibility; and it is an interesting fact that this agreement is for 15 years. In return, they receive certain payments, and, although in a sense these payments could be regarded as subsidies, they are, with the approval of the Treasury, charged under the rents sub-head of the Civil Aviation Vote, and not as a subsidy. That is only one instance—I could give others—showing the procedure that is adopted at the present time, and it is not the view of the Government that it is necessary to take any further powers.
I think I have dealt with my hon. and gallant Friend's question as to the number of years, but he made one point with which perhaps I ought to deal. Future governments, Le said, will not be bound by this Resolution. Of course they will not, but there will be a contract, and, if continuity of government means anything in this country, such contracts will be respected whatever government is in office. In the last resort, of course, Parliament is supreme. Parliament can decide that a contract shall be set aside, but, short of some decision of that kind of a far-reaching character, I think the answer is that, although the Resolution dies with the Government, contracts entered into as a result of the Resolution would continue with full force and effect.
The hon. Member for North Aberdeen (Mr. Garro Jones) made a similar plea for State control to that which was made by the right hon. Gentleman the Member for West Stirling (M r. Johnston), and I must oppose an equally emphatic negative to it. He suggested that the maximum return on the capital to be raised should be reduced to 3 per cent. I would like to see him go to the market and try to raise £2,000,000 for the development of air routes all over the world, including the North Atlantic route, and tell potential investors that 3 per cent. was the return he was offering them for their money.
Mr. GARRO JONES: I. too, must apologise for interrupting,. but, if the Solicitor-General will do what he

1105
suggested we should do, that is to say, if he will read my speech in the cold type of the OFFICIAL REPORT, he will find that I never suggested anything of the kind. I was reading a quotation from a trade paper, the "Aeroplane," which had been put into the hands of Members of the House as propaganda in favour of this proposal. If the money were to be raised at 3 per cent., it could only be done, as we very well know, by a Government guarantee, which would be less expensive than a subsidy.
The SOLICITOR - GENERAL: I apologise at once if I misunderstood the hon. Gentleman. One of the disadvantages of replying from this Box is that one cannot consult the OFFICIAL REPORT beforehand in respect of what has been said the same day. If the hon. Member was only quoting a point made by Imperial Airways in a pamphlet, I can only say that I am not responsible, and the Government are not responsible, for what was circulated in that pamphlet, but I would add this: The hon. Member seemed to take some objection because Imperial Airways had circulated in the form of a pamphlet something that was favourable to them, and had not circulated something that was unfavourable. Possibly that may be the difference between private enterprise and the Socialist State, but, if anyone is going to pay for the circulation of anything that matters, one would imagine prima facie that he would consider it preferable to circulate something nice about himself rather than something which criticised him.
My hon. Friend the Member for Londonderry (Sir R. Ross) wanted an assurance that reasonable competition would not be stifled. I gladly give that assurance. All the routes will be open; applications will be given thorough examination; and, although it would not be right to go as far as one hon. Member, who suggested that no advantage should be given to operators of experience—experience, of course, must count—every relevant consideration will, I am sure, be borne in mind. My hon. Friend also wanted an answer as to whether there was an agreement with the Irish Free State Government with respect to a taking-off and landing ground as a terminus for the Transatlantic service. The answer is that inter-governmental
1106
discussions have taken place between the British Government, the Government of the Irish Free State, and the Government of Canada, but nothing with reference to those discussions is involved in this Measure. That is to say, no part of the subsidy that the Committee is being asked to authorise has any relation to any expenditure in connection with a terminus in the Irish Free State but, as my hon. Friend has raised the matter, it is right also to say that all the experts, both of the Air Ministry and of Imperial Airways, and all the different parts of the Empire, are apparently in agreement that a site in the Irish Free State is the only practical site as a landfall for the projected route to-day.
The hon. Member for South Bradford (Mr. Holdsworth) in regard to these two companies around which so much discussion has turned, British Airways and British Continental Airways, who are apparently in competition in reference to the proposed Scandinavian route, wanted an assurance that the terms of the contract would remain open in order that both companies might be on equal terms in their mutual discussions as to amalgamation. I do not think I could promise that. The company that was chosen for this was chosen, as my right hon. Friend has proved, upon its merits. It had advantages both of experience and of organisation which the other company could not claim at all, and in those circumstances to lay it down that this contract was not to be ratified until these companies had discussed amalgamation among themselves would really involve the Government in trying to impose compulsory amalgamation upon the successful company at its own expense. I am sure my hon. Friend will recognise that this is a matter between these two companies. All that my right hon. Friend has done is to express a pious hope that they might resolve their difficulties by means of amalgamation.
The hon. Member for Frome (Mrs. Tate) wanted to have a reassurance as to the speeding up of Empire services. It is precisely with the object, among others, of enabling Imperial Airways to equip themselves with modern machines with which they can effect a speeding up that the subsidy agreement is in contemplation. Of course, it is necessary to make some kind of compromise between speed and cost. The greater the speed the

1107
greater the cost. Some compromise always has to be arrived at, and the policy of Imperial Airways, which has been encouraged by the Ministry, is that there should be a fair balance between speed and cost, so that you may not have a service which is unduly expensive, like so many American services, at a quite disproportionate cost.
Finally, the hon. Member for West Islington (Mr. Montague) wished to know whether we could state the composition of the board that is to be set up under Clause 2. As he knows, there are three groups of representatives decided on already—insurers, manufacturers, and operators. It is my right hon. Friend's intention that a fourth group should be left open to represent as fairly as possible all other interests which have a title to representation on the board. That, of course, could include representatives of the public and any other interests which could be fittingly represented. There is, therefore, a fourth compartment, the composition of which has not yet been decided upon, which has been left open for the representation of other interests.
Mr. MONTAGU E: May I take that as a promise that representatives of pilots will be included?
The SOLICITOR-GENERAL: I am afraid I could not answer that question
in the affirmative. Nothing has been decided yet as to the composition of this fourth group, but the intention is that it shall be representative of all other interests which do net come under the three sub-heads that I have mentioned. There has been no serious challenge to the main principles upon which this Resolution is based. There has been no serious challenge to the principle of subsidies. There has been no serious challenge to the question of amount, £1,500,000, involving, in the case of Imperial Airways, as my right hon. Friend put it, an additional £30,000 a year for services which are eight times as great in extent. There has been no serious challenge to our proposal to do as my right hon. Friend the Member for Chelsea said—concentrate our subsidies on one well-established organisation. Lastly, I think upon a true analysis the period that has been adopted, compromise though it be, is the fairest period and one which in all the circumstances ought to commend itself to the Committee. For these reasons I submit the Resolution with confidence, and I hope, as the discussion has been full and complete, it may be possible for the Committee to come to a decision.
Question put,
The Committee divided: Ayes, 259; Noes, 122.

Division No. 190.]

AYES.

[8.35p.m.

Acland-Troyte, Lt. Col. G. J.

Campbell, Sir E. T.

Dower, Capt. A. V. G.

Adams, S. V. T. (Leeds, W.)

Cartland, J. R. H.

Drewe, C.

Agnew, Lieut. Comdr. P. G.

Cayzer, Sir H. R. (Portsmouth, S.)

Dugdale, Major T. L.

Albery, I. J.

Cazalet, Thelma (Islington, E.)

Duggan, H. J,

Allen, Lt.-Col. J. Sandeman (B'kn'hd)

Channon, H.

Duncan, J. A. L.

Allen, Lt.-Col. Sir W. J. (Armagh)

Chapman, A. (Rutherglen)

Dunglass, Lord

Aske, Sir. R. W.

Christie, J. A.

Dunne, P. R. R.

Assheton, R.

Clarry, Sir Reginald

Eastwood. J. F

Astor, Hon. W. W. (Fulham, E.)

Cobb, Sir C. S.

Eckersley, p. T.

Baldwin, Rt. Hon. Stanley

Colfox, Major W. P.

Eden, Rt. Hon. A.

Balfour, G. (Hampstead)

Colman, N. C. D.

Elliot, Rt. Hon. W. E.

Balniel, Lord

Cook, T. R. A. M. (Norfolk, N.)

Ellis, Sir G.

Barclay- Harvey, C. M.

Cooke, J. D. (Hammersmith, S.)

Emery, J. F.

Beaumont, M. W. (Aylesbury)

Cooper, Rt. Hn. T. M. (E'nburgh.W.)

Emrys-Evans, P. V.

Beaumont. Hon. Ft. E. B. (Portsm'h)

Courtauld, Major J. S.

Entwistle, C. F.

Belt, Sir A. L.

Craddock, Sir R. H.

Errington, E.

Bennett, Capt. Sir E. N.

Craven-Ellis, W.

Evans, Capt. A. (Cardiff, S.)

Bernays, R. H.

Crooke, J. S.

Everard, W. L

Birchall, Sir J. D.

Crookshank, Capt. H. F. C.

Fleming, E. L.

Blaker, Sir R.

Groom-Johnson, R. P.

Fremantle, Sir F. E.

Blindell. Sir J.

Cross, R. H.

Furness, S. N.

Bower, Comdr. R. T.

Crossley, A. C.

Fyfe, D. P. M.

Bowyer, Capt. Sir G. E. W.

Crowder, J. F. E.

Ganzonl, Sir J,

Brass, Sir W.

Culverwell, C. T.

Gluckstein, L. H.

Briscoe, Capt. R. G.

Davidson, Rt. Hon. Sir J. C. C.

Goodman, Col. A. W.

Brocklebank, C. E. R.

Davies, Major G. F. (Yeovil)

Gower, Sir R. V.

Brown, Rt. Hon. E. (Leith)

De Chair, S. S.

Graham, Captain A. C. (Wirral)

Brown, Brig. -Gen. H. C. (Newbury)

Denman, Hon. R. D.

Greene, W. p. C. (Worcester)

Browne, A. C. (Belfast, W.)

Denville, Alfred

Gridley, Sir A. B.

Bull, B. B.

Despencer- Robertson, Major J. A. F.

Grimston. R. V.

Burgln, Dr. E. L.

Dodd, J. S.

Guest, Capt. Rt. Hon. F. E. (Drake)

Burton, Col. H. W.

Dorman-Smith, Major R. H.

Guest, Mai. Hon. O (C'mb'rw'll. N. W.)

Guinness, T. L. E. B.

Meclay, Hon. J. P.

Savery, Servington

Gunston, Capt. D. W.

Maltland, A.

Scott, Lord William

Hannah, I. C.

Makins, Brig. -Gen. E.

Selley, H. R.

Hannon, Sir P. J. H.

Mander, G. le M.

Shakespeare, G. H.

Harbord, A.

Manningham-Buller, Sir M.

Shaw, major p. S. (Wavertree)

Hartington, Marquess of

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

Shaw, Captain W. T. (Forfar)

Harvey, G.

Markham, S. F.

Shepperson, Sir E. W.

Haslam, Sir J. (Bolton)

Maxwell, S. A.

Simmonds, O. E.

Hellgers, captain F. F. A.

May hew, Lt.-Col. J.

Simon, Rt. Hon. Sir J. A.

Heneage, Lieut.-Colonel A. P.

Meller, Sir R. J. (Mitcham)

Smiles, Lieut.-Colonel Sir W. D.

Hepburn, P. G. T. Buchan

Mellor, Sir J. S. P. (Tamworth)

Smith, L. W. (Hallam)

Hepworth, J.

Mills, Sir F. (Leyton, E.)

Smithers, Sir W.

Herbert, Major J. A. (Manmouth)

Mills, Major J. D. (New Forest)

Somervell, Sir D. B. (Crewe)

Herbert, Captain S. (Abbey)

Mitchell, H. (Brentford and Chiswick)

Somerville, A. A. (Windsor)

Hills, Major Rt. Hon. J. W. (Ripon)

Mitcheson, Sir G. G,

Somerville, D. G. (Willesden, E.)

Holmes, J. S.

Moore-Brabazon, Lt.-Col. J. T. C.

Southby, Comdr. A. R. J.

Hope, Captain Hon. A. O. J.

Morgan, R. H.

Spears, Brig. -Gen. E. L.

Hore-Bellsha, Rt. Hon. L.

Morris-Jones, Dr. J. H.

Spens, W. P.

Horsbrugh, Florence

Morrison, G. A. (Scottish Univ's.)

Stanley, Rt. Hon. Lord (Fylde)

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

Morrison, W. S. (Cirencester)

Stanley, Rt. Hon. Oliver (W'm'l'd)

Hudson, R. S. (Southport)

Munro, P.

Stewart, J. Henderson (Fife, E.)

Hulbert, N. J.

Nicolson, Hon. H. G.

Stourton, Hon. J. J.

Hume, Sir G. H.

O'Connor, Sir Terence J.

Strauss, E. A. (Southwark, N.)

Hunter, T.

Orr-Ewing, 1. L.

Strauss. H. G. (Norwich)

Jackson, Sir H.

Peake, O.

Strickland, Captain W. F.

James, Wing-Commander A. W.

Peat, C. U.

Stuart, Hon. J. (Moray and Nairn)

Jarvis, Sir J. J.

Penny, Sir G.

Sueter, Rear-Admiral Sir M. F.

Joel, D. J. B.

Perkins, W. R, D.

Sutcliffe, H.

Jones, Sir G. W. H. (S'k N'w'gfn)

Peters, Dr. S. J.

Tasker, Sir R. I.

Jones, H. Haydn (Merloneth)

Petherick, M.

Tate, Mavis C.

Jones, L. (Swansea, W.)

Pickthorn, K. W. M.

Taylor, vice-Adm. E. A. (Padd., S.)

Kerr, J. Graham (Scottish Univs.)

Pilkington, R.

Thomas, J. P. L. (Hereford)

Kimball, L.

Ponsonby, Col. C. E.

Tree, A. R. L. F.

Knox, Major-General Sir A. W. F.

Porritt, R. W.

Tryon, Major Rt. Hon. G. C.

Lamb, Sir J. Q.

Procter, Major H. A.

Tufnell, Lieut.-Com. R. L.

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

Radford, E. A.

Turton, R. H.

Leckie, J. A.

Raikes, H. V. A. M.

Wakefield, W. W.

Leech, Dr. J. W.

Ramsay, Captain A. H. M.

Walker-Smith, Sir J.

Lees-Jones, J.

Ramsbotham, H.

Ward, Lieut.-col. Sir A. L. (Hull)

Leighton. Major B. E. P.

Ramsden, Sir E.

Ward, Irene (Wallsend)

Lennox-Boyd, A. T. L.

Rankin, R.

Wardlaw- Milne, Sir J. S.

Levy, T.

Rathbone, J. R. (Bodmin)

Wells, S. R.

Lewis, O.

Reid, W. Allen (Derby)

Wickham, Lt.-Col. E. T. fl.

Liddall, W. S.

Remer, J. R.

Williams, H. G. (Croydon, S.)

Lindsay, K. M.

Rickards, G. W. (Skipton)

Wilson, Lt.-Col. Sir A. T. (Hitchin)

Little, Sir E. Graham-

Ropner, Colonel L.

Windsor-Clive, Lieut.-Colonel G.

Lloyd, G. W.

Ross, Major Sir R. D. (L'derry)

Withers, Sir J. J.

Loftus, P. C.

Ross Taylor, W. (Woodbridge)

Womersley, Sir W. J.

Lovat-Fraser, J. A.

Rowlands, G.

Wood, Bit. Hon. Sir Kingsley

Lumley, Capt. L. R.

Ruggles-Brlse, Colonel Sir E. A.

Wragg, H.

Lyons, A. M.

Russell, A. West (Tynemouth)

Young, A. S. L. (Partick)

MacAndrew, Colonel Sir C. G.

Salt, E. W.

McCorquodale, M. S.

Samuel, M. R. A. (Putney)

TELLERS FOR THE AYES.—

MacDonald, Rt. Hn. J. R. (Scot. U.)

Sanderson, Sir F. B.

Lieut. Coclonel Llewellin and Captain

MacDonald, Rt. Hon. M. (Ross)

Sandys, E. D.

Waterhouse.

McKie, J. H.

Sassoon, Rt. Hon. Sir P.

NOES.

Acland, Rt. Hon. Sir F. Dyke

Ede, J. C.

Hollins, A.

Adams, D. (Consett)

Edwards, A. (Middlesbrough E.)

Hopkin, D.

Adams, D. M. (Poplar, S.)

Edwards, Sir C. (Bedwellty)

Jagger, J.

Adamson, W. M.

Evans, D. O. (Cardigan)

Jenkins, A. (Pontypool)

Alexander, Rt. Hon. A. V. (H'lsbr.)

Frankel, D.

Jenkins, Sir W. (Neath)

Ammon, C. G.

Gallacher, W.

John, W.

Anderson, F. (Whitehaven)

Gardner, B. W.

Johnston, Ht. Hon. T.

Banfield, J. W.

Garro- Jones, G. M.

Jones, A. C. (Shipley)

Barnes, A. J.

Gibbins, J.

Kelly, W. T.

Burr, J.

Graham, D. M. (Hamilton)

Kennedy, Rt. Hon. T.

Batey, J.

Greenwood, Rt. Hon. A.

Kirby, B. V.

Benson, G.

Grenfell, D. R.

Kirkwood, D.

Sevan, A.

Griffith, F. Kingsley (M'ddl'sbro, W.)

Lathan, G.

Bromfield, W.

Griffiths, G. A. (Hemsworth)

Lawson, J. J.

Burke, W. A.

Griffiths, J. (Llanelly)

Leach, W.

Cassells, T.

Groves, T. E.

Lee, F.

Chater, D.

Hall, G. H. (Aberdare)

Leslie, J. R.

Cluse, W. S.

Hall, J. H. (Whiteehapel)

Logan, D. G.

Cocks, F. S.

Hardle, G. D.

Lunn, W.

Compton, J.

Harris, Sir P. A.

McGhee, H, G.

Cripps, Hon. Sir Stafford

Henderson, A, (Kingswinford)

MacLaren, A.

Daggar, G.

Henderson, J. (Ardwick)

Maclean, N.

Dalton, H.

Henderson, T. (Tradeston)

Marklew, E.

Davies, D. L. (Pontypridd)

Hills, A. (Pontefract)

Marshall, F.

Day, H.

Holds worth, H.

Maxton, J.

Dunn. E. (Bother Valley)

Holland, A.

Milner, Major J.

1110

1111

Montague, F.

Ritson, J.

Viant, S. p.

Moreing, A. C.

Robinson, W. A. (St. Helens)

Walker, J.

Morrison, Rt. Hon. H. (Ha'kn'y, S.)

Rowson, G.

Watkins, F. C.

Morrison, R. C. (Tottenham, N.)

Seely, Sir H. M.

Watson, W. McL.

Muff. G.

Sexton, T. M.

Welsh, J. C.

Oliver, G. H.

Shinwell, E.

Westwood, J.

Owen, Major G.

Silkin, L.

White, H. Graham

Paling, W.

Sinclair, Rt. Hon. Sir A. (C'thn's)

Whiteley, W.

Parker, H. J. H.

Smith, Ben (Rotherhithe)

Wilson, C. H. (Attercliffe)

Parkinson, J. A.

Smith, E. (Stoke)

Windsor, W. (Hull, C.)

Pethick-Lawrence, F. W,

Smith, Rt. Hon. H. B. Lees-(K'ly)

Woods, G. S. (Finsbury)

Potts, J.

Stewart, W. J. (H'ght-le-Sp'ng)

Young, Sir R. (Newton)

Price, M. P.

Taylor, R. J. (Morpeth)

pritt, D. N.

Thorne, W.

TELLERS FOR THE NOES.—

Quibell, D. J. K.

Thurtie, E.

Mr. Charleton and Mr. Mathers.

Richards, R. (Wrexham)

Tinker, J. J.

Resolution to be reported To-morrow.

TITHE [MONEY].
Considered in Committee under Standing Order No. 69.
[Sir DENNIS HERBERT in the Chair.]
Motion made, and Question proposed,
"That for the purposes of any Act of the present Session to extinguish tithe renteharge and extraordinary tithe rent-charge, and for other purposes (hereinafter referred to as 'the said Act') it is expedient to provide—

I. For the payment out of the Consolidated Fund—

(a)of such amounts as may be required for defraying, in so far as they are not otherwise provided for, any sums required for the payment of interest on, or for the redemption of, redemption stock and, any sums required to be set aside for the purposes of a sinking fund sufficient to provide for the redemption of such stock on or before the first day of October, nineteen hundred and ninety-six;

(b) of such sums by way of advances to the Redemption Annuities Account as may be necessary to render that Account sufficient to defray any of the sums mentioned in the last foregoing sub-paragraph and any of the sums following (that is to say):—

(i) sums by way of contribution towards losses of rating authorities by reason of the passing of the said Act, being contributions of which the present value when issued, together with the present value of any such contributions previously issued, does not exceed the present value of a series of annual payments of six hundred thousand pounds each made on the first day of April in the year nineteen hundred and thirty-seven and in each of the fifty-nine subsequent years;

(ii) a sum of two million pounds to Queen Anne's Bounty;

(iii) sums to Queen Anne's Bounty estimated by the Treasury to be the equivalent of the amount by which the aggregate of the payments in respect of redemption annuities charged in
1112
respect of land out of which ecclesiastical tithe renteharge issued calculated on the basis of the urban proportion exceeds such aggregate calculated on the basis of the agricultural proportion;

(iv) sums in respect of tithe rent-charge due before the second day of October, nineteen hundred and thirty-six;

(v) sums to the Exchequer and to the Bank of England in respect of expenses incurred in connection with the execution of the said Act;

(c) to the Redemption Annuities Account of sixty annual payments of six hundred and eighty-five thousand pounds each.

II For authorising the Treasury, for the purpose of providing for any advances to the Redemption Annuities Account out of the Consolidated Fund, to borrow money in any manner in which they are authorised to raise money under and for the purposes of sub-section (1) of section one of the War Loan Act, 1919.

III For the payment out of moneys provided by Parliament of any expenses incurred by any Tithe Redemption Commission or by any Arrears Investigation Committee established by the said Act.

IV. For the payment to the Consolidated Fund of any advances made out of that Fund to the Redemption Annuities Account, together with interest thereon.

V. For the payment into the Exchequer of any sums, in respect of expenses incurred in connection with the execution of the said Act, which are thereby directed to be paid into the Exchequer out of the Redemption Annuities Account;

For the purposes of this Resolution the following expressions have the meanings hereby assigned to them, that is to say:
'Agricultural proportion' means, in relation to the amount of a rentcharge, the proportion which ninety-one pounds eleven shillings and twopence bears to one hundred pounds;
'Present value' means, in relation to any contribution towards losses of rating authorities issued out of the Redemption Annuities Account on any date, the value of that contribution at the first day of October, nineteen hundred and thirty-six, determined on the basis of interest at three per cent. per annum;

1113
'Redemption annuities' means annuities in respect of all land out of which rentcharge issued before being extinguished by the said Act, such annuities being charged for a period of sixty years, at an amount—

(a) as respects extraordinary tithe rentcharge equal to four per cent. of the capital value thereof; and

(b)as respects tithe rentcharge, in the case of land comprising agricultural land equal to the agricultural proportion of the amount of the tithe rentcharge, and in the case of other land equal to the urban proportion of the amount thereof, except in so far as any such annuity may be reduced having regard to special incidents attaching to the rentcharge or may be apportioned or may be wholly or partly extinguished in consideration of payments determined by the Treasury, or without such consideration where the cost of continuing the charge would be excessive or in cases of coast erosion, and except in so far as the amount of any such annuities may, where the amount thereof exceeds one-third of the annual value (ascertained in like manner as for the purposes of assessment to income tax under Schedule B) of an agricultural holding in which the land is comprised (exclusive of any part thereof in respect of which no annuity is charged) be, in any year, remitted to the extent of the excess;

'Redemption Annuities Account' means an account to be established under the said Act into which are payable all sums received on behalf of the Crown in respect of redemption annuities;
'Redemption stock' means stock to be issued for compensation in respect of rent-charges extinguished by the said Act up to an amount in the case of extraordinary tithe rentcharge, equal to the capital value thereof, and in the case of tithe rent-charge such an amount as will yield interest equal in amount to the aggregate of the gross annual value of all such rent-charges, less deductions in respect of cost of collection and management, land tax, rates and uncertainty of collection, and any additional stock to be issued for compensation in respect of rentcharges which were free from Income Tax;
'Rentcharge' means tithe rentcharge and extraordinary tithe rentcharge, but excluding any tithe rentcharge or extraordinary tithe rentcharge where, immediately before the second day of October, nineteen hundred and thirty-six, it and the land out of which it issued are vested in the same person, having been so vested on the twenty-sixth day of February, nineteen hundred and thirty-six, and continuously thereafter;
'Urban proportion' means, in relation to the amount of a rentcharge, the proportion which one hundred and five pounds bears to one hundred pounds;
'Capital value' means, in relation to extraordinary tithe rentcharge, the capital
1114
value thereof as ascertained under the Extraordinary Tithe Acts, 1886 and 1897;
'Gross annual value' means, in relation to a rentcharge which issued out of land which comprised agricultural land. the agricultural proportion of the amount thereof, and in relation to a rentcharge which issued out of any other land—

(a) in the case of a lay rentcharge, the urban proportion; and

(b) in the case of an ecclesiastical

rentcharge, the agricultural proportion; of the amount thereof"—(King's Recommendation signified.)—[Mr. Elliot]
8.44 p.m.
Mr. MICHAEL BEAUMONT: On a point of Order. Before we discuss this Resolution, I should like to ask for your guidance, Sir Dennis, and to suggest that it might facilitate discussion if you could inform us which Amendments are in order and which you propose to call, and, in particular, whether the Amendment in the name of the hon. Gentleman the Member for Central Leeds (Mr. Denman), to leave out lines 48 to 109, is in order or not, and if not will you give some reason?
The CHAIRMAN: I think that perhaps it may be for the convenience of the Committee if I indicate, as far as I can at. this stage what Amendments I propose to call. I am afraid that at present some of them are a little difficult to understand, and I contemplate the possibility that I may call an Amendment, and that, when hon. Members have proceeded with it some way, I may discover that it is out of order. At the moment, the first Amendment that I propose to call is the second one on the Order Paper, in the name of the hon. Member for Central Leeds (Mr. Denman)—in line 9, leave out from "stock," to the end of line 10. The next two Amendments—in line 10, leave out "October, nineteen hundred and ninety-six," and insert "April, two thousand and five," which stands in the name of the hon. Member for Central Leeds; and in line 10, leave out "ninety-six" and insert "seventy-six," which stands in the name of the hon. and learned Member for North Hammersmith (Mr. Pritt)—if necessary, can be discussed on the first Amendment of the hon. Member for Central Leeds, and one of these two might be divided upon. The Amendment at the top of page 1954, in the name of the hon. and learned Member for Ashford (Mr. Spens)—leave out lines 15 to

1115
21—is, I think, in order. The next Amendment, in the name of the hon. Member for Thirsk and Malton (Mr. Turton)—in line 18, leave out from "present," to end of line 21, and insert "contributions to the rating authorities in respect of tithe."—is not in order.
The next Amendment, in the name of the hon. and learned Member for Ashford, to leave out line 22, will be called. The further Amendment in the name of the hon. Member for Thirsk and Malton—in line 22, after "pounds," insert:
"to those who have since nineteen hundred and twenty-six made sinking fund payments in respect of their tithe rent-charge under the Tithe Act, 1925 and "
is out of Order. The Amendment in the name of the right hon. Member for North Cornwall (Sir F. Acland), to leave out lines 23 to 28, is in Order. There are no other Amendments in Order, or at least there are no other Amendments which I propose to call, until we come to the Amendment in line 60, to leave out "of," and insert "exceeding," which stands in the name of the hon. Member for Central Leeds. The further Amendment to line 60, which also stands in the name of the hon. Member for Central Leeds—after "sixty," insert "and not exceeding sixty-eight and a-half," is consequential, and we can take these two Amendments together. The hon. Member for Aylesbury (Mr. M. Beaumont) asked me whether, if I proposed to rule out of order the Amendment of the hon. Member for Central Leeds to leave out lines 48 to 109, I would tell him the reason for so doing. I am not sure about ruling that Amendment out of order at the moment, but I do not propose to call it unless the hon. Member presses me to do so and so explains it as to persuade me it is in order, because for the time being I do not see how the Amendment will make sense. If I am correct in what I think is in the hon. Member's mind, I fancy that I shall rule the Amendment out of order, as increasing the charge, but we will deal with that matter when we come to it.
Mr. M. BEAUMONT:I am only putting these points now in order to endeavour to facilitate discussion. It may be necessary in regard to the last Amendment to which you have referred to go into the whole question of the procedure on this
1116
Financial Resolution. To do that I understand that it will be necessary to move "That the Chairman do report Progress, and ask leave to sit again," and I should desire to take that course either now or at such time as you may think desirable for the convenience of the Committee.
The CHAIRMAN: That is a matter for the hon. Member. If he desires to move to report Progress and he satisfies me that it is a proper Motion for me to accept, of course, I shall do so, but the way that he put the question to me was rather asking for guidance. I might therefore perhaps suggest to him that it would be well if the Minister made his opening speech in introducing the Resolution. Then the hon. Member and all of us might have a clearer understanding than we have at the present time of the meaning of the Resolution.
Lieut. - Colonel ACLAND-TROYTE: With regard to the third Amendment on page 1,955, which stands in my name and in the names of two of my hon. and gallant Friends—in line 73, leave out "one-third," and insert "one-fifth." I understand that that is likely to be ruled out of Order because it may impose a charge upon the public. Suppose the Amendment of the hon. Member for Central Leeds (Mr. Denman) at the bottom of page 1,954—in line 60, after "sixty," insert "and not exceeding sixty-eight and a-half" is carried and the money required is increase, would that not make my Amendment in order?
The CHAIRMAN: I am prepared to consider that point when we come to it, but the hon. and gallant Member's argument is dependent upon whether or not a previous Amendment is carried.
8.51 p.m.
The MINISTER of AGRICULTURE (Mr. Elliot): It is dear that it will be possible, even on the Amendments which you have indicated that you intend to call, to raise all points of principle, and I am in hopes that I shall satisfy the Committee that on several points it will not be necessary to move those Amendments or, at any rate, to carry them to a Division. I hope to be able to satisfy the Committee fully as to the extent to which their rights am safeguarded in the Financial Resolution which we have put down and the Amendments which will be possible in Committee, if the Resolution

1117
is carried substantially in its present form. It will be remembered that only last week the House gave a Second Reading to the Tithe Bill, which enshrines several important principles. The main principle which the Bill enshrines is that it was the opinion of the House that tithe as at present understood should finally determine and come to an end. That was unanimously agreed in all parts of the House, and the only matters for discussion during the Debate were the conditions under which that should come a bout.
The essential conditions are financial. The Financial Resolution which I now have the honour of moving is the Resolution which is necessary to carry out the will of the House as expressed on division on the Second Reading, and does not, I submit, go in any way beyond that, or tie the hands of the Committee subsequently in any respect in which the hands of the Committee ought not to be tied. That may seem a somewhat strong statement in view of the admittedly long and intricate nature of the Financial Resolution which we have before us, but the long and intricate nature of the Financial Resolution is fundamentally clue to the intricate nature of the subject which we ask the House to consider. I say further that it is a striking example of the merits of the financial procedure of the House of Commons that only in this way and under this procedure could that finance properly be considered.
Each of the points which are set down in the Financial Resolution as subsequently not to be overturned by a decision in Committee of this House are points which hang together closely with other points and can only be considered as a whole. It would not be possible to consider these points piecemeal, and for that very purpose I was more than astonished in going over the Financial Resolution with a view to loosening it as far as it could be loosened. It was only then that I began to appreciate the full merits of the procedure of this House of Commons, worked out as it has been for so many years and with such close attention to the rights of the whole House over finance, and the reluctance of the House to part with any of its rights to any of its Committees, however important those Committees might be.
1118
It is very desirable that I should indicate what the Resolution does not do. The Resolution is a stage in a remit of this Bill to a Committee upstairs, and it is vital for the purpose of my argument and for the purpose of convincing the hon. Member for Aylesbury (Mr. M. Beaumont) that it is not necessary for him to move his Resolution. to report Progress, to show that important Amendments such as those which the House desires to discuss by a Committee upstairs can be fully discussed under the procedure which is here being adopted. I hope to be able to give examples forthwith to the Committee of points on which the Committee upstairs will be completely free to discuss, assuming that the Financial Resolution is passed in its present form, and then I will come to the other points upon which the House will bind, and I submit rightly, the Committee upstairs.
Out of all the points under discussion on the Second Reading two stood out. First, the desire, more particularly of the, tithepayer, that the Treasury should not, make any profit out of the scheme; that the whole of the proceeds should be set to the advantage of the tithepayer in order that the grievous burdens upon him might be reduced as far as possible and removed altogether as soon as might be. I have been pressed more particularly on the point raised in Clause 13, Subsection (6) of the Bill, as to whether the two-thirds allowed for deduction of Income Tax is or is or is not a fair sum. A discussion on that will in no way be prejudiced by the passing of the Resolution. It will be open to hon. Members to move a modification of that sum. I have given the closest attention to this point in connection with the Treasury, who have been most helpful in the matter, in pursuance of a pledge I gave the hon. and gallant Member for Maldon (Sir E. RugglesBrise) that, no profit should be made by the Treasury; and we shall sympathetically consider Amendments which may be moved to the advantage of the tithepayer. I am giving this as an example of the way in which the Committee will be free to consider these important questions.
Take another point, the protection of life interests. Many hon. Members have stressed the importance of the protection of life interests and have begged me to, do something in regard to it, or. at any

1119
rate, to ensure that the hands of the Committee are not tied by the terms of the Financial Resolution. I am in the position to say that we can meet the House fully on that point, and that an Amendment can be submitted in Committee. If the Financial Resolution is passed such an Amendment will be submitted on behalf of the Government, which will fully protect all existing life interests of incumbents. It is clear that the hands of the Committee are not being tied in these enormous and important considerations. Certain Amendments have been put down to the Financial Resolution to prolong the period of payment of the annuities and compensate these incumbents' interests by increasing the amount to be paid by the tithepayer. I shall have to resist such Amendments strongly; and I must say at once that the Government find this solution impossible to accept. Similarly we find it equally impossible to contemplate introducing a charge on the general taxpayer for this purpose. We have, however, found it possible to meet fully the life interests of existing incumbents in another way.
It is proposed that the Church authorities should be enabled to devote part of the stock which is to be issued to Queen Anne's Bounty, in compensation for the extinguishment of tithe, to the preservation of the life interests of all existing incumbents. The diminution of the reversionary interests involved is not substantial, and the life interests of individuals who derive their income from tithe rentcharge owned by ecclesiastical corporations will he protected in a similar manner. Further, I may say that these proposals meet with the full approval of the ecclesiastical authorities with whom I have conducted the negotiations. But the hands of the Committee upstairs arc not in any way bound, if Amendments are so moved, to alter these arrangements, increasing or diminishing the arrangements, and consequently I beg the House to realise that in passing the Resolution they are not fettering the hands of their Committee in this most important matter.
A further point raised was whether deductions were possible for collection. This too can be reviewed by the Committee upstairs, if it so desires. They can be diminished or altered in any way, but I must warn the House that I shall resist attempts to do so. The finance
1120
of the Bill has been so closely calculated that as at present advised I cannot see any way in which these results could be altered without wrecking the Bill. But it is the privilege of hon. Members to press Amendments even if they think they will do injury to the Bill or damage the Bill in any way. I am not attempting to resist that procedure, but I am concerned to show that the legitimate rights of hon. Members to miter and amend the scheme laid down in the Bill will be as fully safeguarded after the Financial Resolution is passed a, s they were before. Therefore, I hope it will not be necessary for the hon. Member for Aylesbury and his friends, who are rightly jealous of the rights of the House and its Committee, to press a Motion to report Progress, which he has suggested.
Mr. A. V. ALEXANDER: We are much obliged to the right lion. Gentleman for the way in which he is dealing with the Resolution. He is anxious to meet the Committee's point of view, but I would ask him to consider this point before he leaves the general position; that many Amendments to the Resolution are being ruled out of order on the ground that in one form or another they would increase the charge on the subject. We are really concerned with the manner in which the Resolution is drawn, and I hope he will address his mind to that problem.
Mr. TURTON: I have an Amendment on the Order Paper to alter the deductions. It has been moved out of order on the Financial Resolution, and I should have thought that if it was out of order on the Financial Resolution it must also be out of order to move it in Committee.
Mr. LOFTUS: May I ask whether the Committee upstairs will have power to deal with possible reductions to Schedule B to a lower scale because that is the key of the whole Bill?
Mr. ELLIOT: No, Sir, and that question shows how necessary it is that these matters should be discussed and decided by the whole House. Clearly the purpose of the action of the House of Commons is to maintain the control of finance on the Floor of the House, and older Members will agree that control of finance properly rests with the Committee of the Whole House.
Earl WINTERTON: The right hon. Gentleman has appealed to older Members of the House. The gravamen of the charge is that the way in which Financial Resolutions are now framed makes it impossible for the House to exercise its authority. More and more the draftsman is framing the Financial Resolution in such a way as to give the Chair no option but to rule Amendments out of order.
Mr. ELLIOT: I think the Noble Lord is perfectly entitled to make a general observation such as that, but, I think he must await the detailed exposition of the Financial Resolution which I am about to give before he can conclude that the discretion of the draftsmen has been improperly exercised on this occasion. The hon. Gentleman the Member for Lowestoft (Mr. Loftus) and the hon. Member for Thirsk and Walton (Mr. Turton) raised certain points. I have given the Committee my assurance that the amounts properly chargeable for deduction could be altered in Committee upstairs, although I have indicated that, as I am at present advised, to do so would be to insure the Bill. That, however, is a diversion from the main question, which is whether the discretion which the Government must necessarily exercise on a Financial Resolution has been improperly exercised on this occasion. I trust to be able to show the Committee that it has not been.
I will turn to the point raised by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander), who asked whether the Amendments which had been ruled out of order did not indicate that the Resolution has been so drawn as to limit the discretion of the House. My reply is "No," because the scheme in essence is one of redemption and extinguishment in which the ultimate liability is borne by the general taxpayer, and therefore it is the duty of the Government, in drawing the Resolution, to make sure that the charge upon the general taxpayer is not increased. It is not a question of the burden being added to on one side or on the other, but a question as to whether the burden laid upon the general taxpayer will be increased. The first to resent an increase in the burden on the general taxpayer for the purpose of relief of particular agricultural interests would be hon. and right hon. Gentlemen opposite. Therefore,
1122
I say that in drawing the Resolution as it has been, I have drawn it with a strict and meticulous observance of the rights of the House as a whole and the rights of the taxpayer as a whole, all the more so because I represent a constituency in the Kingdom of Scotland, which will derive no benefit from any of the provisions of this Bill, but which might easily suffer injury therefrom. Consequently, it is very necessary, in the interests of my own constituency, apart from any other reason, that I should carefully see that no prejudice should be caused by this Bill to the interests of the general taxpayer.
Mr. ALEXANDER: As I have understood the selection of the Chair, Amendments which have nothing to do with the general taxpayer as such, but which, from our point of view, give less to the Church and more to the tithe-payer, have been ruled out of order because, I take it. such Amendments would mean an increased burden being placed upon those who are incumbents of the Church of England. I would like to be clear on this point, because some of the Amendments which have not been called would 'have enabled us to meet certain claims of the tithe-payers.
Mr. ELLIOT: We shall be able to discuss those points when the discussion on the Amendments takes place. The Amendments in the earlier stages certainly dealt with the terms of issue of the stock which would, of course, have nothing whatever to do with increasing or decreasing the burden on the taxpayers. So far as I understand, they have not been ruled out of order for that reason. However, it is not for me to give the reasons for which the Chair may or may not call Amendments. I repeat that the scheme of finance of this Bill is the result of very long and patient work and is interlocked so closely that it is impossible, in my contention, to say that in pulling one stick from the heap one would not upset the balance of the whole heap and frustrate the intention of the House on Second Reading, which was that the scheme of extinguishment should be framed and carried out without any burden being placed on the general taxpayer.
Let me now explain as briefly as I can the Financial Resolution. It is worth attention. After all it covers some

1123
£70,000,000 of public money and it covers, let us hope, the solution of a problem which for centuries has vexed the life both of the national Church and of our countryside. It follows the report of a most authoritative Commission which was able to give time and thought to the problem in circumstances which may not recur again for many years, and to bring forward a scheme for a solution at a time when, because of the cheapness of money, we are able to attack the problem with some chance of success, a chance which may not always be present.
When we issued the White Paper in February, we described the scheme, which I shall not go over again, because time is short; but I would draw the attention of the Committee to the fact that since that time we have made certain modifications. We have followed the desire of the Royal Commission by including within the scheme the extraordinary tithe rent-charge, and that increases both the amount of the redemption annuities to be received and the stock to be issued. These items on each side of the ledger will balance, and no charge will be laid here upon the scheme or upon the general taxpayer. We also decided to fix the redemption annuities in the case of land liable to tithe rentcharge at the rate of £105 per cent. for non-agricultural land and £91 lls. 2d. per cent. for agricultural land. I discussed that on Second Reading. I think it commended itself to the sense of justice of the House then, and I think it will commend itself to the sense of justice of the Committee now, because no Amendment has been put down to destroy that differentiation, nor was it the subject of any adverse criticism on the Second Reading of the Bill.
It is suggested, however, that in some way or other the Exchequer might make a profit out of this. I say again with the utmost emphasis that I can command that the Exchequer will make no profit out of it, and there are no hidden reserves in the scheme which will enable it to be varied for the purpose of providing, on the one hand, more compensation for the tithe-owner or, on the other hand, more relief to the tithe-payer, either by reducing the amount of the redemption annuities or by shortening the period during which such redemption annuities will be payable. In fact, the
1124
scheme must be regarded as a whole, and as the Government cannot contemplate that any additional charge should fall on the Exchequer, it was necessary to draw the Financial Resolution in the terms in which it is drawn.
To deal now with the various items of the Resolution, paragraph I (a) covers the payments out of the Consolidated Fund. I want to make it quite clear that it is anticipated that the receipts from the redemption annuities, added to the Exchequer contribution of £685,000 referred to in paragraph I (c), will be sufficient to meet the outgoings on the scheme. This £685,000 is the existing Treasury contribution to rates on tithe rentcharge of £550,000 per annum and an added sum of £135,000 per annum, the anticipated saving on the administration of the existing Tithe Acts and increased receipts from Income Tax as a result of the change of system. It is almost unprecedented that the Treasury should agree to bring into the ambit of a scheme, hypothetical gains such as these. These are estimates and it will not be possible, as I think will be agreed, for a final balance to be struck for some years. We worked out these estimates very carefully because it is impossible to forecast accurately how they will work out finally. I can only say that by including these and by the fact., as I say, that under Clause 13, Sub-section (6), I hope to be able to modify the scheme to the benefit of the tithe-payer, the Treasury has implemented the declaration made by the Government that it did not desire to draw any profit out of the scheme which is now before us.
Furthermore, there is a further Treasury guarantee. Although we anticipate that these sums will be sufficient to meet the outgoings of the scheme, including interest and sinking fund on the redemption of stock, in order to make it clear beyond doubt that the Government are implementing their undertaking to guarantee the interest on and the redemption of the stock it is necessary to make this provision for payment out of the Consolidated Fund, and although it is anticipated that no ultimate call will be made on the Consolidated Fund the guarantee is here. Sums will be required for the payment of interest on stock and to be set aside for the purpose of the sinking

1125
fund in advance of receipts from redemption annuities. The interest on the stock will fall due on the same day as the annuities will fall to be collected, and of course it is not to be expected that payment of annuities in full will be made on that date. As to the payment towards making good the losses to rating authorities that is to he found in paragraph 1, sub-paragraph (b) (i). There the scheme is charged with an annual payment of £600,000 per annum for 60 years, and there is also the sum of £131,000 expenses. These are not flat rate sums running right through the whole period of the annuity. They will clearly be very much larger in the early stages tapering off as the scheme proceeds. The expenses will, of course, taper off to a very much smaller sum and the expenses of the local authorities will start, not at the sum of £600,000 given here, but at a sum in the neighbourhood of £1,000,000. Therefore, in its earlier stages the scheme will undoubtedly be heavily in deficit. It is in the later years that the receipts from the annuities will begin to redeem the outstanding deficiencies and finally balance the scheme at the end of the period.
Then there is the sum of £2,000,000 to be paid to Queen Anne's Bounty, the reason for which is explained in the White Paper. It does not correspond to any particular receipts, but is provided out of the general finance of the scheme. This is a capital payment, although shown in the White Paper statement of estimated income and expenditure in terms of a 60 years annuity. Therefore, it will be necessary to borrow from the Consolidated Fund in order to enable payment to be made in advance of the credits to the scheme out of which, as I have explained, it will finally be met. This is another item in regard to which, by placing the credit of the community at the back of the scheme, we may advance towards and perhaps finally achieve a solution of the problem. But it is a reason why this Resolution is so long and intricate. It concerns vast sums and sums which are devoted to the solution of a problem affecting one set of taxpayers only, so that for the protection of the rest of the community it is vitally necessary that this Resolution should be drawn in close and careful terms.
1126
Sub-paragraph (b) (iii) indicates the sums that will be paid to Queen Anne's Bounty in respect of additional receipts from non-agricultural land. These also will be issued in the form of a lump sum and that again involves making payment in advance of the receipts from the corresponding annuities. Sub-paragraph (b) (iv) relates to payment to the tithe-owners in respect of taking over by the State of their rights to collect arrears of tithe rentcharge outstanding on 1st April, 1937. As the Committee knows the intention is that the arrears then outstanding shall be subject, if the tithe-payer desires, to review on the ground of hardship by a committee established for the purpose and that these arrears may be reduced, paid by instalments, or remitted if the Arrears Investigation Committee so decide. The expenses of the Exchequer and the Bank of England will commence to operate as from the inception of the scheme and in sub-paragraph (b) (v) there are provisions which indicate that the expenses there will need to be met by borrowing because there will be no surpluses at that stage in the Tithe Redemption Account. Sub-paragraph (c) refers to the Exchequer contribution to the finances of the scheme which does not involve a net additional charge upon the Exchequer.
Paragraph II gives power to borrow in order to make advances out of the Consolidated Fund to the Redemption Annuities Account and is required consequent upon the features already mentioned in paragraph I, subject of course to the repayment into the Consolidated Fund of such advances at a later date. Paragraph III indicates the provision for the payment of the expenses of the Tithe Redemption Commission and the Arrears Investigation Committee out of moneys provided by Parliament. That is in order to ensure Parliamentary control over the operation of the expenses of those bodies and that Parliamentary control is fully maintained. Yet these sums will not become a charge upon the Exchequer because the Parliamentary Vote which bears these expenses will be reimbursed from the Tithe Redemption Account upon which the expenses will ultimately fall. The bearing of the expenses upon a Parliamentary Vote is only for the purpose of enabling the expenses to be reviewed and criticised by the House of Commons.

1127
Paragraph IV relates to the payment into the Consolidated Fund from the Redemption Annuities Account as explained previously. This payment will be made in the later periods of the annuities payment as I have just stated when the Redemption Annuities Account will have the available credits. Paragraph V relates to the refund to the Exchequer of sums which are first paid out of the moneys provided by Parliament. The remainder of the Resolution deals with the definition of the terms used in the foregoing paragraphs and I can best explain these all together. The tithe-payer will be required to pay, in respect of agricultural land, £91 lls. 2d. per £100 of tithe rentcharge—par value—for 60 years subject to the remission of so much of the redemption annuity as exceeds one-third of the Schedule B value of agricultural land. It will be seen that finance is not merely the essence of these provisions, it is the whole of these provisions and therefore it would be impossible that any Committee upstairs should have the power of altering these provisions. The tithe-payer will be required, in respect of urban land, to pay £105 per £100 of tithe rentcharge for the same period. The Ecclesiastical tithe-owner is compensatd for the extinguishment of his tithe rent-charge by the issue of 3 per cent. stock sufficient to produce an income representing the gross annual value of the tithe rentcharge calculated at the reduced rate, less the deductions I have mentioned. In addition paragraph (2) provides for the payment of a lump sum representing the difference in the receipts from redemption annuities in respect of non-agricultural land at the rate of £105 instead of £91 lls. 2d.
Mr. ALEXANDER: I hope that the Minister will see quite clearly that under this last paragraph there is no real possibility of our side improving the position of the tithe-payers except by rejecting the Bill on Third Reading. On this our hands are completely tied. I hope that the Minister will face up to that.
Mr. ELLIOT: I think that we faced up to that both on the Second Reading and now on the Financial Resolution. If the Exchequer is to find £70,000,000 the taxpayer must know what, sums are being paid into this account to balance these enormous outgoings which will begin
1128
from the date of the passage of this Bill. It is out of the question that the taxpayer should not be fully safeguarded, and these sums are necessary to balance the great expenditure which the State in the initial stages will be called on to undergo. Both for Ecclesiastical and lay tithe rentcharge it is of the essence of the scheme—to the main principles of which the House has already given its consent—that there should be annuities paid into the fund sufficient to balance the payments out and to give fair and reasonable compensation to the tithe-owner.
Mr. ALEXANDER: I am still very unhappy about this and I do not want any misunderstanding later. All we are asking for is that there should be lesser sums paid out, and the whole point that arises is whether by any process we may take, because it would lessen over all certain income of the Church of England, it could be regarded as increasing the charge on the rest of the community. Is that the reason why we cannot move an Amendment to safeguard the tithe-payer? If you cannot do that you may as well save time, as far as the tithe-payer is concerned, in Committee upstairs, and all that you can do is to vote against the Third Reading.
Mr. ELLIOT: There are provisions where it will be competent to vote against sums to the Church. I hope that the Committee will not refuse these sums, but it is not beyond the power of the House to divide on certain of these sums. I do not wish to go into the matter because there are Amendments, I understand, which the Chair is allowing to be called. The interlocking of the scheme of finance is such that if the Treasury is to make these great payments it must make them under a scheme with some prospects of finality, some prospect of redemption. It is not enough to pick and choose and to say that we will have all the benefit and not the liability.
Mr. PRICE: Is it not possible for us to move an Amendment in such a way that there will be no increased charge on the taxpayer, but such reorganisation of the finances of the Church as would provide the necessary relief to the tithe-payers?
Mr. ELLIOT: Certainly it is possible. There are lump sums there which could be omitted. The hon. Gentleman could

1129
move an Amendment to that effect, and it would be quite in order for him to argue that he was not really injuring the Church, since it would be possible for them to reorganise their finances. I am sure that that would be in order, but it is not for me to usurp the functions of the Chair.
I have done my best to explain not merely the Financial Resolution, but to go a little wider—I hope with the agreement of the House—into the difficult questions of order which, I agree, are raised by such a long and intricate Resolution as this. The House is rightly jealous of the intricacies of finance and the procedure rightly lays down that after these intricacies have been considered on a Financial Resolution they should be laid before a Committee of the Whole House to be considered or rejected as a considered scheme, and as a considered scheme which has been long worked out, which is adequate to fulfil the purposes which the House laid down on the Second Reading of the Bill, a scheme which is capable of amendment and improvement, but which forms the basis of a settlement of this long and vexed question, I commend this Financial Resolution to the Committee.
9.33 p.m.
Mr. M. BEAUMONT: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
Having now heard the Minister's explanation I desire to put to the Committee that this Resolution does, in fact, limit the opportunities of discussion on Debate, and that the object of the Government could have been achieved with full powers of discussion by another procedure. I have no objection to the actual provisions of the Bill. Points which excite some hon. Members do not excite me. I support the Bill. I am only making this Motion and putting this before the Committee in order to safeguard what all Members in all parts of the House value—proper discussion on all matters of finance. The right hon. Gentleman, whom I desire to thank most heartily for the manner in which he endeavoured to meet our fears and objections, though I am bound to say that in my case he has not done so, indicated matters which could be discussed in Committee if the Financial Resolution
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were passed. But he was not able to indicate the various important matters which could not be discussed in detail.
I wish to touch on three points only. First of all, there is the question of the one-third contribution referred to by my hon. Friend the Member for Lowestoft (Mr. Loftus); then there is the point made by the right hon. Member for Hillsborough (Mr. Alexander), that there were various Amendments which would have the effect of reducing the main charge as a whole, yet which could not be moved because they imposed an indirect charge; and then there is the point raised by my hon. Friend the Member for Thirsk and Malton (Mr. Turton). These things cannot be discussed in detail. It is my contention that had this Resolution been founded on Standing Order No. 68, instead of on Standing Order No. 69, all these questions could have been raised in detail upon Amendments, most of which could, if necessary, have been divided upon. They could have been settled by the House, and yet the Minister could have produced a Financial Resolution which would have safeguarded the public expenditure and limited the amount of charge to be placed on public funds.
The matter is one of some substance, and the whole thin, is best put forward in a letter which appeared in the "Times" of Monday last from Sir Bryan Fell, a long-time servant of this House, who describes therein the procedure under Standing Order No. 68. He refers to the question asked of the Prime Minister by my hon. Friend the Member for Central Leeds (Mr. Denman) last Wednesday and the reply given by the Prime Minister, and he describes how in the old days Bills in every way as complicated as this Measure were nevertheless discussed fully under the older procedure. He says:
"Before 1922 Standing Order No. 68 governed the procedure, and under this the House, as a preliminary step, used to resolve that on a future day it would resolve itself into a committee to consider a motion for a charge on the people. This resolution, which was drawn up by the clerks in the Public Bill Office and not by the Treasury, was couched in quite general terms, and it was to this that the King's recommendation was signified. On a future day a motion was then made in Committee covering the italicised parts of the Bill and to this Motion any amendment might be moved, even though it increased the

1131
charge, provided that it was within the general terms to which the King's recommendation had been given. Once the financial resolution had been passed—"
This is where the Minister would be safe-guarded—
"—of course, no amendment increasing the charge could be moved to the Bill. In other words, broadly speaking, the Crown recommended that a charge should be incurred for some purpose and left the House to decide the amount of that charge and the precise objects on which the money should be spent."
I might amplify that by saying that it was the custom in days gone by to have a very broad Financial Resolution of this nature, and on its Report stage to insert a maximum sum, which then governed all the subsequent proceedings. So far as I know, no objection was made to that procedure on any of the grounds put forward in justification of this Financial Resolution by the Minister to-night. Standing Order No. 69, under which this Resolution is drawn, was moved for quite different reasons. It was originally moved in a time of emergency, and in a different form, in order to enable the Report and Committee stages of a Financial Resolution to be taken on the same day. When it was moved, the only person who objected to it was Lord Banbury, then Sir Frederick Banbury. What he must be thinking of this present Resolution I cannot imagine, but he objected to the new Standing Order on the ground that the procedure of having the Committee and Report stages on the same day would make the Resolution unduly wide and prevent the putting in of the limiting time. It was never contemplated that this new procedure would be used to tighten up Financial Resolutions or to bring into them matters like these enormous definitions which are essentially matters for the Bill and which, I understand, we are to be precluded by the Rules of order from amending.
This procedure was not used, as a matter of fact, until 1922, and when it was first adopted there was no objection of the sort which I am voicing to-night. The Financial Resolutions to which the King's recommendations were attached were drawn up by the Treasury and were drawn as broadly as under the old Standing Order, and the only difference was that in those days there was not the procedure of the two discussions. There was
1132
the opportunity for two discussions, one on the Motion to set up the Committee and one on the Resolution itself, and it was on the former that full freedom of debate was given to the House. Gradually, over a period of years—and I have seen it during the short time I have been in the House—these Financial Resolutions have been used to bring in more and more matters which are properly, as we say, within the scope of the Bill and which in any case should be the objects of detailed Amendments and discussion. It is no use saying that you can discuss all these points on the Committee stage of the Financial Resolution. You can discuss them on the Second Reading if it comes to that. The object of the Committee stage, whether of a Financial Resolution or of a Bill, is to get detailed discussion of individual points and replies from the Minister.
This is a growing evil, of which this Financial Resolution is a particularly glaring example, and I would remind the Committee that it has not escaped the notice of the Chair. On the 4th December, 1934, in reply to my hon. Friend the Member for Gravesend (Mr. Albery), Mr. Speaker himself said that in his view the limit had been reached, and he was not prepared to say that it had not been overstepped in this matter. I do not think anyone who has seen this Financial Resolution and several others which have been on the paper recently would say that any notice whatever has been taken of that comment by Mr. Speaker. I am willing to believe that Ministers do not want to fetter discussion in this House. I know how fatally easy it is to have it suggested to them that this is a better and simpler way to get things through and to have clearer definitions. It is not a question of this Government alone, because there were Financial Resolutions when the party opposite were in power which were just as had. It is a general governmental procedure. I do not believe that it is deliberate, but I do believe that it is dangerous.
Luckily, however, the House has the remedy in its own hands. It is urged in the letter from Sir Bryan Fell that the correct procedure would be to repeal Standing Order No. 69 and go back to the old procedure under Standing Order No. 68. That would be too drastic. Under Standing Order No. 68 you did waste a day, and there was no objection

1133
to Standing Order No. 69 when it was kept within reasonable bounds.
All I ask the hon. Members on all sides to do is to make it clear to whatever Government is in power, they intend to safeguard their rights of Debate on every important point of detail. It may be that the Minister will say, "I cannot accept this; if you move it you wreck the Bill, and the Committee will have to decide on that point." No one could blame the Minister for taking up that attitude, but at least we would have an opportunity to move amendments and to get proper reasoned replies to them. I ask the Committee to say that to any Government and, failing compliance, to oppose any Financial Resolution which did not allow reasonable freedom of debate. I am in favour of this Bill and of the principles of this Resolution. I shall certainly in any Division there is to-night vote with the Government, but I have made my protest and I shall in future oppose any Resolution which I thing limits the freedom of debate, and I hope that I shall get a large amount of support from hon. Members in that action.
9.47 p.m.
Sir FRANCIS ACLAND: The hon. Member for Aylesbury (Mr. M. Beaumont), has raised so big a point that it is difficult to discuss it properly at this time of night. I think that the attitude he has taken, although some of my friends rather jeered when he said he would support the Resolution to-night but not further Financial Resolutions drawn in this way, is a logical attitude to take. I would like to bring one matter even more clearly than he did to the notice of the Committee as to the way in which we are limited. 'We all recognise how carefully the Minister has considered the Resolution in view of the criticisms so often made that these Resolutions are unduly limiting; how anxious he was that as many things should be left open for discussion upstairs as possible; and how he had tried confidently, in framing the resolution, to leave things open for a subsequent detailed Debate. In spite of all that, however, we find that the important matter of the remission to be given where the amount of tithe exceeds some proportion of the annual value of the land has to be dealt with in this Resolution. The Chair has indicated that
1134
it cannot call any Amendment dealing with that. We find that it cannot be dealt with, as the Minister said, upstairs and we find, therefore, that that matter, on which the actual payers of tithe are very much interested, namely, the amount of the tithe compared with the annual value of the land and whether they would be entitled to remission, can only be dealt with either by voting against the Second Reading of the Bill or by voting against the Third Reading of the Bill. The Chair has made it clear that no Amendment on that matter can be called. The Minister has made it clear that no Amendment will be in order upstairs, yet here is a matter which is extremely vital to all tithe-payers where we simply have to accept what is put in the Bill or vote against it, and where no real discussion of it is possible. Under the old procedure, which was looser, that matter would have, been open for the discussion of the House. Therefore it is legitimate for the hon. Member for Aylesbury to raise it to-night.
9.50 p.m.
Mr. TURTON: I support the Motion of my hon. Friend the Member for Aylesbury (Mr. M. Beaumont) for this reason. The Committee will have sympathy with me in the fact that I have nine Amendments on the Paper, every one of which is out of order. As it was not my intention to add a charge on either the Exchequer or the ratepayers, all the Amendments are out of order for the reason that I was attempting to alter the financial chain round this very difficunlt and contentious subject. The Minister who gave us a very careful and helpful exposition of the Financial Resolution told us some things that he said could be moved in Committee. I was the more surprised when I found that three of the things he said that we could move in Committee were the very subjects that I had tried to amend in the Financial Resolution, but with respect to which I had been met with the objection that they were out of order. The first one is concerned with the question of uncertainty of collection. The Minister said that all the deductions should properly be made from the redemption stock and they could be moved in Committee. Some of us think that in this Bill the tithe-owners, both Church and laity, are being rather injuriously affected by the reduction of 5 per cent. and 10 per cent. respectively in the uncertainty

1135
of collection. The Minister said that that could be argued upstairs. As my Amendment to the Financial Resolution has been ruled out of order, it will not be in order for me to move it on the Committee stage of the Bill.
Th. second question which the Minister said we could amend related to the gift of £2,000,000 to Queen Anne's Bounty. The Minister said that upstairs in Committee we could say that that sum should not be given to Queen Anne's Bounty, but should be given to the tithe-payers or some such other body. I have not tried to go as far as that, but I did want to try to give that £2,000,000 partly to Queen Anne's Bounty and partly in recompense of the £1,300,000 that, under the provisions of this Bill, is being stolen from the ecclesiastical tithe-payers. It is in respect of a sum they paid for sinking fund, and I ask at least that they might be given back their own money. I find, however, that a Member is not allowed, within the Rules of this House, to move that money which belongs to the King's subjects at the moment should be kept by them. That Amendment is ruled out of order, I have learned, because it would require the King's Recommendation for the money that belongs to the ecclesiastical tithe-payers to be retained by them. It appears that we cannot upstairs move that that £2,000,000 should be given to any other body than Queen Anne's Bounty.
The last point on which we are muzzled is in respect of the Minister's valuable promise on Second Reading, in answer to my hon. and gallant Friend the Member for Maldon (Sir E. Ruggles-Brise), that if my hon. and gallant Friend can show that the Treasury has made any money out of this scheme the Government will do their utmost to return it to the scheme. It was our intention to-night to show the Committee where the Treasury were making money out of the scheme, and propose how it should be returned both to the tithe-payer and the tithe-owner, but that has been ruled out of order because it would be altering the chain of financial circumstances to which this Financial Resolution applies. For those reasons I think that we who are interested in this question are not receiving full justice by the rules of Order. We are muzzled and gagged. We are not trying to add to the charges on
1136
the Exchequer but trying to adjust the burden between the three parties to the dispute, the tithe-payer, the tithe-owner and the Exchequer, because we feel that the Exchequer is getting too much out of it.
9.56 p.m.
Mr. ALEXANDER: The first point I want to make is that it is very advisable when one is considering such intricate and detailed points of financial procedure to have present a representative of the Treasury. We have neither the Chancellor of the Exchequer nor the Financial Secretary to the Treasury with us. [interruption.] think that interruption is quite irrelevant. One cannot expect the Patronage Secretary, with all his other exacting duties, especially dealing with an obstreperous lot of back benchers, to give us financial advice on this question; but we ought to have either the Chancellor of the Exchequer or the Financial Secretary present, and I am sure that if the Prime Minister were standing where I am he would be saying the very same thing. The second point is that we have got into another difficult situation in regard to procedure, and I beg the Government to remember that this has not occurred without long warning. From the moment when this Bill was introduced and when this Resolution was put on the Paper the Government have been pressed from all sides of the House to reconsider the position because Members have said that they were not able, either on the Floor of the House or in Committee, to make an examination of grievances in a manner that would allow them to be amended if thought fit. Now we have arrived at this pass to-night.
All the way through I have tried not to waste time but to get the Minister to face up to the position. We want the Government to remember that the House of Commons has rights, especially when it is dealing with financial questions. I think it is only right to say that the Minister, on behalf of the Government, has been endeavouring to get a national settlement of a long and irritating grievance but it will not do any good if the settlement sets up another set of grievances. Probably I am approaching this matter from quite the opposite point of view, in regard to the rights of critics, from that of the hon. Member who moved to report Progress. I am certain

1137
that none of my hon. Friends on this side of the Committee want to do anything which would increase the charge upon the general taxpayer in order to enlarge the income of one section of one of the religious bodies in this country. On the other hand, we must give consideration to the large number of agriculturists and their dependants who are pressing for immediate and for greater relief than if afforded under the scheme; yet because of the way in which the Financial Resolution is drawn—and again, Sir Dennis, I am subject to your correction—we cannot move the reduction of the par value for the redemption stock to be issued in exchange for the existing tithe rentcharge and the annual charge to be met by the tithe-payer.
It is difficult to say too much on this point without going into the merits of the scheme, but we on this side of the Committee have said all the way through that we want to give better and more immediate relief to the tithe-payers, and we do not argue that it is necessary thereby to increase the charge upon the Exchequer, because with the present funds of the Church of England, and certainly out of the potential growing income and other sources of revenue of the Church of England, there is ample to provide what is required both for the special provision for the poorer clergy and for the general maintenance of life interests and, even, in some degree for pensions—if the Church will only put its house in order and rearrange its income. Therefore, we ought to have an opportunity to move, and if thought fit, to carry, Amendments to this effect either in Committee on the Bill or on consideration of the Financial Resolution; but in the form in which that Resolution is drawn at present we are told, or at least we assume from the Ruling of the Chair—and I am not challenging the Ruling—that we cannot move any such Amendment because it would mean a charge upon that section of the citizens whom we call incumbents of the Church of England.
Such a position is quite impossible, and I beg the Minister to advise the Government to postpone the question for a day. We do not want to get into the same "jam" as we were in last night. We did not want it last night. We want to get a sane basis for the discussion of the
1138
rights of the citizen in this democratic House of Commons. We are not permitted to do it under this Resolution and, therefore, although we approach the matter from the aspect of another class of citizens than those for whom the hon. Member spoke when he moved to Report Progress, we shall support him in that Motion when it is put from the Chair.
The CHAIRMAN: The right hon. Member for Hillsborough (Mr. Alexander) has, quite unintentionally, of course, put into my mouth a ruling which I was not conscious of having given. He raised the question of whether it was competent for the Committee upstairs on the Bill or possibly for this Committee here, to reduce the charge which is being made on the tithe-payers and, correspondingly, to reduce the payments which are to be made to the tithe-owners. I am not aware that I ruled out of order any Amendment to that effect. Perhaps the right hon. Gentleman will point out the Amendment to me. I am inclined to think at the moment that any Amendment of that kind would be in order here. What will happen in the Committee upstairs is not a matter for me to decide. I am not likely to be in the Chair there, but if I were I should have to wait until I came to be in the Chair in that Committee to say what I should do. I can only say what I regard as being in or out of order on this Financial Resolution. As other suggestions have been made in the course of this Debate as to what I have ruled I should like to make the position clear in two sentences. The only grounds on which I have ruled Amendments out of order are these: one, that they increased the charge; the other ground is not, as the right hon. Gentleman put it, because the Amendment creates a charge upon a particular class of taxpayers, but because it is contrary to the King's Recommendation. If the Financial Resolution provides that the money is to be used for the benefit of certain recipients an Amendment is out of order which would alter the recipients of the money so as to give it to recipients other than those named under the King's Recommendation. Those are the only rulings which I have given in regard to this particular Resolution.
Mr. LOFTUS: On a point of Order. Would it be in order to move, say, a reduction on Schedule B, to provide—
The CHAIRMAN: That is not a point which can be raised at the present moment, when we are on the question that I do report Progress and ask leave to sit again, moved for the purpose of considering a particular matter which has been raised in discussion.
Mr. ALEXANDER: We are obliged to you for the explanation which you have given, but may I put the point that the Motion in the name of the hon. and learned Member for North Hammersmith (Mr. Pritt), to leave out "ninety-one pounds eleven shillings and twopence," and to insert, "eighty pounds sixteen shillings and eleven pence," is one which we have particularly in mind. May I take it from your explanation that you did not call that Amendment because, in your view, it infringes the King's Recommendation?
The CHAIRMAN: The reason why I ruled that out of order was that I regarded it as creating a charge. It increases the proportion between the two funds, and therefore increases the amount which has to be paid out of the Consolidated Fund.
Mr. ALEXANDER: As I understand it, the charge on the Consolidated Fund is to be a self-balancing one, and if less is paid to the Church there is no reason why there should be an extra charge upon the Consolidated Fund. That is the whole point. I do not want to upset the Chair in any way, but it would ease the situation in the Committee if we were able to debate that point. My own view, which may be wrong, after the Minister's explanation that this is a self-balancing fund, is that when we are moving for a lower capital figure, under which less will be paid to the Church in the ultimate redemption, it will still be self-balanced, and will not constitute an extra charge. If the Chair would accept that point of view, the result would be to ease the points of difficulty that we are putting to the Government.
The CHAIRMAN: That point was in my mind when I was considering the Amendment before the House met and I looked to see whether I could find another compensating Amendment which would have the effect to which the right hon. Gentleman has been referring, but I could not find it. This Amendment, standing by itself, undoubtedly creates a charge.
10.8 p.m.
The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon): Perhaps I may be permitted to say a word on the Motion moved by my hon. Friend. I recognise that it was proposed with the object of raising a point of practice which is of great importance, and which was recently the subject of a very interesting letter in the "Times." My hon. Friend was perfectly entitled to raise the point, which he did not do in any party sense or because he took any view, favourable or otherwise, of any particular part of the Bill or to the general scheme of the Bill. He was raising a question which any Member of the House of Commons, and certainly any old Member like myself, is very willing to hear discussed in that atmosphere. The right hon. Gentleman the Member for North Cornwall (Sir F. A eland) dealt with it in the same way. When the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) joined in the discussion, a quite different motive appeared in almost every sentence he uttered. [HoN. MEMBERS: "Oh!"] He was good enough to say that if there were a Division he would support my hon. Friend, but he was not raising, as it were in vacuo, an interesting question of Parliamentary procedure. He indicated quite plainly that he had several objections to the Bill, which he was afraid, in present circumstances, he would not be able effectively to raise from his point of view.
Mr. ALEXANDER: Is not that the whole point of our procedure? This is a Money Resolution, and we adhere to the old principle that we will not grant supply without the discussion of grievances.
Sir J. SIMON: The right hon. Gentleman had no occasion to interrupt. I was pointing out that the reason why he was supporting the Motion was that which he gave, and which he has just repeated. He considers that he has substantial objections. My hon. Friend is not saying that, but is raising a question of procedure. I want to deal with that question of procedure. I have no doubt that he was quite accurate in telling the House what the old practice used to be. Many of us read it in Sir Bryan's letter in the "Times" and found it a most interesting letter to study. All those hon. Members who remember him will remember that he

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most carefully studied all these rather technical but not at all uninteresting matters, and will have read the letter with great respect. Whatever the old practice used to be about acting under Standing Order No. 68 and not going straight on to Standing Order No. 69, it is not the practice now. There is no doubt that present-day practice, under all Governments, is to proceed direct under Standing Order No. 69.
Without being in any way controversial, I would observe that the only question is, whether, having regard to the subject-matter of the Bill, the Resolution which is on the Paper is what is called unduly strict. I should be the first to admit, if we were to take the ordinary case which from time to time arises, that so elaborate and detailed and so closely-fitted-together a jigsaw puzzle as this might fairly be regarded, I am quite willing to agree, as too strict; but you cannot deal with these things in the abstract, or wy a foot rule. You cannot say that because this Resolution covers a page and a-half of print it is therefore too minute; you have to consider what is the subject-matter, and what is the nature of the Bill to which it is attached as the Financial Resolution.
I happen, for my sins, to have been taking some part behind the scenes in studying the detail of this Bill, and I am only too ready to admit, although I have had a fairly long experience in examining detailed things, that I have rarely come across a more elaborate fitting together and interlocking-clause arrangement than this Tithe Bill. That may be a reason to some hon. Members for ruling it out altogether, but once you have a Bill constructed on that principle and interlocking in that way, it is inevitable that the co-relative Money Resolution follows a much more elaborate pattern than it would in the ordinary course. One can conceive of cases in which it would be possible to put the financial accompaniment into two or three words, but when one is dealing with this Bill, with its interlocking arrangements, for my part I do not quite see how it would be possible to avoid having a Resolution in this detailed form. Let me take the example referred to by the right hon. Member below the Gangway, of the definition of redemption annuities, which contains these words:
1142
"where the amount thereof exceeds one-third of the annual value (ascertained in like manner as for the purposes of assessment to Income Tax under Schedule B) of an agricultural holding in which the land is comprised (exclusive of any part thereof in respect of which no annuity is charged) be, in any year, remitted to the extent of the excess."
I can quite understand any hon. Member, especially looking at the Resolution without having had to go through all the details of the Bill, thinking that that is really tying the Committee, in the Financial Resolution, very tightly, but may I suggest the answer l So far as the Clause in the Bill provides that, for the future, no person who pays tithe rent charge shall have to pay more to the person entitled to receive it than one-third of the annual value, no Financial Resolution is necessary at all. It is simply as though you were to enact that certain debtors, who owe a particular sum of money, shall, if it exceeds a certain proportion of their rent, henceforward pay a smaller sum. No Financial Resolution would be necessary for that; it would simply provide that something which at this moment is a legal debt shall in future not be a legal debt, but shall be discharged by paying only a portion of it.
It is not for that purpose that these words are put into the Resolution. But the scheme of the Bill is that there shall be created redemption annuities, which shall be sufficient to take the place of, and be the equivalent of, the future rights of those who are now the tithe-owners, and therefore, when the new Act of Parliament reduces the rights of tithe-owners by saying that no one shall be charged more than one-third of the annual value, that, of course, necessarily affects the measure of the redemption annuities which are to be created, and the only reason why the annuities are defined here in this way, and why there is the reference to the one-third, is because otherwise you would completely destroy what is admittedly the principle of the Bill, be it right or wrong, namely, that you should not provide, under the guarantee of the Treasury, redemption annuities for a larger amount than the amount will actually be. I think my right hon. Friend will see that, although it looks very elaborate, and is indeed very elaborate—I should be glad to see it stated more simply—it is not the case that the Resolution ties anyone down too tightly.

1143
This is only put in as a necessary definition for the purpose of defining what are the redemption annuities which the House will ultimately, if it authorises the Resolution, make a charge upon the public funds. I believe that all the other cases could be dealt with in a similar way.
The broad point, without discussing, all the details is this: I agree with my hon. Friend that this is a most elaborate document, and one which is extremely difficult to construe, but that is because it is part and parcel of an extremely elaborate interlocking scheme, in which, for example, you are not to put upon the Treasury—that is to say, the general taxpayer—a permanent, new burden; a scheme in which you are to see to it that the rating authorities are not to lose a source of income which they now have; a scheme under which there is going to be a particular contribution of £2,000,000 to Queen Anne's Bounty, and so forth. Each one of these things must necessarily appear in this Resolution, and, so far as I can see, they do not appear in the Resolution in any more detail than is necessary if it is to correspond with the scheme of the proposed Act of Parliament. Of course, hon. Members will appreciate that at each point they can challenge any important provision.
Let me take, for example, the paragraph which begins at line 15. If there was anyone who thought there should not be provided that which would compensate the rating authorities for the loss in rates which they certainly will incur if the Bill passes, it would be in order to propose to omit, or water down, or modify the paragraph beginning in line 15. In the same way it would be in order to move to omit paragraph (ii), and if anyone wished to challenge paragraph (iii), which is really in the nature of a vulgar fraction and cannot be altered without increasing the charge, of course he is at liberty to propose to omit it; and the same with any other item that comes into the scheme. It is not unreasonable to appreciate that if you have an elaborate scheme like this Tithe Bill, it is impossible that the financial scheme also should not be an interlocking and elaborate scheme. If you do not do that, you are striking at the very root of the Bill. I hope my hon. Friend, who has raised a most useful and interesting
1144
point, may be disposed to withdraw the Motion.
10.22 p.m.
Earl WINTERTON: I am not quite sure that the right hon. Gentleman quite appreciates the full force of the contention in the letter written by a distinguished former official of the House to which reference has been made. He says the practice under which we are operating to-night is now the common practice of the House. But there is no reason why it should be the common practice of the House. That is the point. It is equally open to this or any other Government to adopt the other practice. I certainly wish to make no party profit out of this. There is no party profit to be made, because all Governments of recent years have been equally to blame. If there is any matter where those who, to use a generic term, are on the Right in politics ought to be very careful in these matters, it is in the case of a Financial Resolution, because by the growing practice of successive Governments it would be possible for some subsequent Government to effect enormous changes through a Financial Resolution and make it almost impossible for the Chair to permit Amendments to it. That is really the gravamen of the charge that we bring.
I am glad my hon. Friend has raised the matter. It goes far beyond the importance of the questions affected by this Bill. I am largely in favour of the financial provisions, but it is a matter that requires careful attention. Let the Committee be frank with itself. Why has this practice been adopted? Because, with the huge sums of public money that we are now asked to vote, it would be extremely difficult for any Government to get their financial business through if they adopted the old practice. But is that a reason for going against the old practice? On the contrary, the old practice safeguards the interest of the taxpayer to a far greater degree than it is safeguarded to-day. I am not prepared to say that. I will vote with my hon. Friend but I associate myself with everything he has said. This is a matter which requires the most careful attention of the Leader of the House. There has been a suggestion in some quarters that it is the object of every Government to instruct the draftsmen so to draft Financial Resolutions as to make it

1145
almost impossible to amend them, and the cheers that greet my remark show that that view is generally held in all quarters of the House.
10.25 p.m.
Mr. ATTLEE: I should like to support what the Noble Lord has said, and to add one point to it. He said that the draftsmen are instructed to draw the Resolutions very closely, and the effect is that the House gets no real chance of amending these Bills. It is not so much a matter of the enormous sums; the serious matter is that we are always having propositions brought before us, the result of outside bargaining and arrangements made in various financial interests of one kind or another, or of what the Home Secretary calls interlocking arrangements. What happens is that you have a large number of items in a bargain, and the thing is so drawn that this House is precluded from expressing an opinion, or of altering in any way this bargaining, although it may think that some particular item is wrong. We are then told, "You cannot do this; it has all been carefully locked together." The result is, what I said yesterday, that this House is being made merely a kind of rubber stamp to approve of arrangements which have been come to outside.
This is a serious matter for this House. We all know the obligations of legislation, but it is 'a serious thing if real arrangements are to be made outside, and the Executive is to come down, and, by tying down the House very narrowly, says, in effect, "We have discussed all these details, we have made all these arrangements and you are only asked to say 'Aye' or 'No'." The result is that the Whips are put on and the Government Members naturally say "Aye," and the Opposition and some dissentients say "No," but the whole thing is taken out of the hands of this House as a deliberative Assembly.
Mr. M. BEAUMONT: I think that the purpose of my Motion has been served, and I therefore beg to ask leave to withdraw it.
HON. MEMBERS: "No!"
10.28 p.m.
Mr. A. BEVAN: The right hon. Gentleman the Home Secretary dealt with the complaint which has been made in
1146
very great detail, and I am sure that the whole House is obliged to him for the able way in which he dealt with the matter. But he did not bring out the point of the complaint made by the hon. and gallant Gentleman in the relief that I expected. I begin to realise that he did not raise the matter in order to obstruct the force of the Financial Resolution. At the beginning I treated the protest of the hon. and gallant Member with a great deal of suspicion. It seemed to me that what was desired was to have a Financial Resolution so loosely framed that it would be open to hon. Members to increase the charge upon the Treasury, and I should be against that. The Financial Resolution is in pursuance of the Bill itself, and, as the Minister of Agriculture pointed out, the purpose of the Resolution being to give effect to the Bill, it could not impose a charge upon the taxpayer because the Bill itself did not propose to impose such a charge. Therefore I was suspicious that the hon. and gallant Gentleman was trying to persuade the Committee to secure the withdrawal of the Financial Resolution, which would then have been reintroduced in a, form in which the taxpayer would have been called upon to subsidise either the tithe-payer or the Church, and I was against that sort of thing.
The point made from this side of the Committee, and indeed by hon. Members in all parts of the Committee—it is true that most Governments have been guilty of it, and that the Labour Government in 1929–31 were quite as guilty as other Governments—was that Financial Resolutions are brought in very widely drawn. Our contention is that in respect of this particular Resolution it is not necessary for the protection of the taxpayer for the Resolution to be drawn in this way. It is not the hon. Member's contention that the Financial Resolution should be so drawn that Amendments can be moved making a charge on the taxpayers. Our contention is that the Financial Resolution is so drawn that we cannot move Amendments in Committee altering the relations between the tithe-payer and the Church. we maintain that there is no organic financial relationship between what the tithe-payer pays and what the Church receives, and the ultimate amount of stock to be issued by the redemption fund. There is

1147
no reason why we cannot reduce the payment of the tithe-payer and reduce the income of the Church, or increase the payments of the tithe-payer and the income of the Church. There is no reason why the Financial Resolution cannot be drawn in those terms, and leave the financial obligation of the Treasury exactly where it is.
What the right hon. Gentleman has done is to make the financial relationship between the Treasury, the Church and the tithe-payer an organic part of the Bill, so that we cannot alter the payment of the tithe-payer without altering the Treasury's relationship. That is what the Chairman meant when he said that he could not accept the Amendment of the hon. and learned Member for North Hammersmith (Mr. Pritt), because it conflicted with the King's recommendation, but we say that the King's recommendation ought not to have been drawn in those terms. I should like the Home Secretary to deal with that point. If the fund which is to be assembled under the Bill is a self-balancing fund so that the payment to the Church at no time exceeds the receipts from the tithe-payer, how could an alteration in one or other of those payments affect the Treasury in any way? Perhaps the Home Secretary will answer. It is a simple and specific point.
Sir J. SIMON: I have stated my view as clearly as I can, and I have listened with the greatest attention to the hon. Member, but I do not think that he has raised a new point.
Mr. BEVAN: Under the Financial Resolution as it will leave the Committee it will be impossible to move a reduction in the burden of the tithe-payer and it will be impossible to move any increase or decrease in the revenues of the Church. What we want to know is, why is it part of the general scheme of the
Bill that the relationship between the Treasury and those two parties should be in any way affected by the Financial Resolution? The right hon. Gentleman has not answered that question. Will it be possible in the Committee to reduce the charge to the tithe-payer, provided that there is an equal reduction in the income of the Church?
Mr. ELLIOT: The Chairman has said that it will be perfectly in order to have those Amendments moved on the Floor of the House.
Mr. BEVAN: The Home Secretary made exactly an opposite statement. He spoke about interlocking between the Treasury, the Church, who are receiving money, and the tithe payer. The Chair has already ruled out of order an Amendment because it changes the recipients of the money. That is the position. The Financial Resolution has been so drawn as to prevent the Committee making any alteration whatever in the burden on the tithe-payer and it is against that that we are protesting.
Mr. THURTLE: Every speaker so far has emphasised the importance of this matter. The Minister of Agriculture admitted that the bon. Member for Aylesbury (Mr. M. Beaumont) had raised a very important issue. It has been discussed at length, and we have had the benefit of the guidance of the Home Secretary, to whom we are grateful. But I think it would be a, help to the Committee on such an important constitutional point if we could have the benefit of the guidance o. the Prime Minister himself, and I suggest that before we go to a Division the right hon. Gentleman might be good enough to give us his views.
Question put, "That the Chairman do report Progress, and ask leave to sit again."
The Committee divided: Ayes, 124; Noes, 262.

Division No. 191.]

AYES.

[10.38 p.m.

Acland, Rt. Hon. Sir F. Dyke

Benson, G.

Dunn, E. (Rother Valley)

Adams, D. (Consett)

Bevan, A.

Ede, J. C.

Adams, D. M. (Poplar, S.)

Bromfield, W.

Edwards, A. (Middlesbrough E.)

Adamson, W. M.

Burke, W. A.

Edwarcs, sir C. (Bedwellty)

Alexander, Rt. Hon. A. V. (H'isbr.)

Cape, T.

Evans, D. O. (Cardigan)

Ammon, C. G.

Cassells, T.

Foot, D. M.

Anderson, F. (Whitehaven)

Cluee, w. S.

Gallacher, W.

Attlee, Rt. Hon. C. R.

Cocks, F. S.

Gardner, B. W.

Banfield, J. W.

Cripps, Hon. Sir Stafford

Garro Jones, G. M.

Barnes, A. J.

Daggar, G.

George, Major G. Lloyd (Pembroke)

Barr, J.

Dalton, H.

George. Megan Lloyd (Anglesey)

Batey, J.

Davies, D. L. (Pontyprldd)

Gibbins, J.

Graham, D. M. (Hamilton)

Lee, F.

Rothschild, J. A. de

Green, W. H. (Deptford)

Leslie, J. R.

Rowson, G.

Greenwood, Rt. Hon. A.

Logan, D. G.

Seely, Sir H. M.

Grenfell, D. R.

Lunn, W.

Sexton, T. M.

Griffith, F. Kingsley (M'ddl'sbro, W.)

McGhee, H. G.

Shinwell, E.

Griffiths, G. A. (Hemsworth)

Me Govern, J.

Silkin, L.

Griffiths, J. (Llanelly)

MacLaren, A.

Sinclair, Rt. Hon. Sir A. (C'thn's)

Hall, G. H. (Aberdare)

Maclean, N.

Smith, E. (Stoke)

Hall, J. H. (Whitechapel)

Marklew, E.

Sorensen, R. W.

Hardie, G. D.

Marshall, F.

Stephen, C.

Harris, Sir p. A.

Maxton, J.

Stewart, W. J. (H'ghtn le Sp'g)

Henderson, A. (Kingswinford)

Milner, Major J.

Strauss, G. R. (Lambeth, N.)

Henderson, T. (Tradeston)

Montague, F.

Taylor, R. J. (Morpeth)

Hills, A. (Pontefract)

Morrison, Rt. Hon. H. (Ha'kn'y, S.)

Thurtle, E.

Holdswnrth, H.

Morrison, R. C. (Tottenham, N.)

Tinker, J. J.

Holland, A.

Muff, G.

Viant, S. P.

Hollins, A.

Naylor, T. E.

Walker, J.

Hopkin, D.

Oliver, G. H.

Walking F. C.

Jagger. J.

Owen, Major G.

Watson. W. McL.

Jenkins, A. (Pontypool)

Paling, W.

Welsh, J. C.

Jenkins, Sir W. (Neath)

Parker, H. J. H.

Westwood, J.

John, W.

Parkinson, J. A.

White, H. Graham

Johnston, Rt. Hon. T.

Pethick Lawrence, F. W.

Whiteley, W.

Jones, A. C. (Shipley)

Potts, J.

Williams, E. J. (Ogmore)

Jones, H. Haydn (Merioneth)

Price, M. P.

Wilson, C. H. (Attercliffe)

Kelly, W. T.

Pritt, D. N.

Windsor, W. (Hull, C.)

Kennedy, Rt. Hon. T.

Quibell, D. J. K.

Woods, G. S. (Finsbury)

Lathan, G.

Richards, R. (Wrexham)

Young, Sir R. (Newton)

Lawson, J. J.

Ritson, J.

Leach, W.

Robinson, W. A. (St. Helens)

TELLERS FOR THE AYES.—

Mr. Charleton and Mr. Mathers.

NOES.

Acland Troyte, Lt. Col. G. J.

Cooke, J. D. (Hammersmith, S.)

Guinness, T. L. E. B.

Adams, S. V. T. (Leeds, W.)

Cooper, Rt. Hon. T. M. (E'nbitrgh.W.)

Gunston, Capt. D. W.

Agnew, Lieut. Comdr. P. G.

Courtauid, Major J. S.

Hamilton, Sir G. C.

Albery, l. J.

Craddock, Sir R. H.

Hannah, I. C.

Allen, Lt. Col. J. Sandeman (B'kn'hd)

Cranborne, Viscount

Hannon, Sir P. J. H.

Allen, Lt. Col. Sir W. J. (Armagh)

Craven-Ellis, W.

Harbord, A.

Anstruther Gray, W. J.

Crooke, J. S.

Harvey, G.

Aske, Sir R. W.

Crookshank, Capt. H. F. C

Haslam, Sir J. (Bolton)

Assheton, R,

Groom Johnson, R. P.

Heilgers, Captain F. F. A.

Astor, Major Hon. J. J. (Dover)

Crowder, J. F. E.

Heneage, Lieut. Colonel A. P.

Astor, Hen. W. W. (Fulham, E.)

Davidson, Rt. Hon. Sir J. C. C.

Hepburn, P. G. T. Buchan

Baldwin, Rt. Hon. Stanley

Davies, C. (Montgomery)

Hepworth, J.

Baldwin-Webb, Col. J.

Davies, Major G. F. (Yeovil)

Herbert, A. P. (Oxford U.)

Balfour, G. (Hampstead)

De Chair, S. S.

Herbert, Major J. A. (Monmouth)

Balfour, Capt. H. H. (Isle of Thanet)

Denman, Hon. R. D.

Herbert, Captain S. (Abbey)

Balniel, Lord

Denville, Alfred

Hills, Major Rt. Hon. J. W. (Ripon)

Barclay Harvey, C. M,

Donner, P, W.

Holmes, J. S.

Beaumont, M. W. (Aylesbury)

Dorman-Smith, Major R. H.

Hope, Captain Hon. A. O. J.

Beaumont, Hon. R. E. B. (Portsm'h)

Dower, Capt. A. V. G.

Horsbrugh, Florence

Belt, Sir A. L.

Drewe, C.

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

Bennett, Capt. Sir E. N.

Duckworth, G. A. V. (Salop)

Hudson, R. S. (Southport)

Bernays, R. H.

Dugdale, Major T. L,

Hulbert, N. J.

Birchall, Sir J. D.

Duggan, H. J.

Hume, Sir G. H.

Bird, Sir R. B.

Duncan, J. A. L

Hunter, T.

Blindell. Sir J.

Dunglass, Lord

Jackson, Sir H.

Bower, Comdr. R. T.

Dunne, P. R, R.

James, Wing-commander A. W.

Bowyer, Capt. Sir G. E. W.

Eckersley, P. T.

Joel, D. J. B.

Boyce, H. Leslie

Edmondson, Major Sir J.

Jones, Sir G. W. H. (S'k N'w'gt'n)

Brass, Sir W.

Elliot, Rt. Hon. W. E.

Jones, L. (Swansea, W.)

Briscoe, Capt. R. G.

Ellis, Sir G.

Keling E. H.

Brocklebank, C. E. R.

Emery, J. F.

Kerr, J. G. (Scottish Universities)

Brown, At. Hon. E. (Leith)

Emrys-Evans, P. V.

Kimball, L.

Brown, Brig.-Gen. H. c. (Newbury)

Entwlstle, C. F.

Lamb, Sir J. Q.

Browne, A. C. (Belfast, W.)

Errington, E.

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

Bull, B. B.

Evans, Capt. A. (Cardiff, S.)

Leckie, J. A.

Bullock, Capt. M.

Everard, W. L.

Leech, Dr. J. W.

Burton, Col. H. W.

Fleming, E. L.

Lees Jones, J,

Butler, R. A.

Fremantle, Sir F, E.

Leighton, Major B. E. P.

Campbell, Sir E. T.

Furness, S. N.

Lennox Boyd, A. T. L.

Cartland, J. R. H.

Fyfe, D. P. M.

Levy, T.

Castlereagh, Viscount

Ganzoni, Sir J.

Lewis, O.

Cayzer, Sir H. R. (Portsmouth, S.)

Gluckstein, L, H.

Llddall, W. S.

Cazalet, Thelma (Islington, E.)

Goldie, N, B.

Little, Sir E. Graham-

Channon, H.

Goodman, Col. A. W.

Llewellin, Licut.-Col. J. J.

Chapman, A. (Rutherglen)

Gower, Sir R. V.

Lloyd, G. W.

Christie, J. A.

Graham, Captain A. C. (Wirral)

Lumley, Capt. L. R.

Clarry. Sir Reginald

Granville, E, L.

Lyons, A. M.

Cobb, Sir C. S.

Greene, W. P. C. (Worcester)

MacAndrew, Colonel Sir C. G.

Colfox, Major W, P.

Gridley, Sir A. B.

McCorquodale, M. S.

Colman, N. C. D.

Grimston, R. V.

MacDonald, Rt. Hn. J. R. (Scot. U.)

Colville, Lt. Col. D. J.

Guest, Hon. I. (Brecon and Radnor)

McKie, J. H.

Cook, T. R. A. M. (Norfolk, N.)

Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)

Maclay, Hon. J. P.

1150

1151

Macmillan, H. (Stockton-on-Tees)

Raikes, H. V. A. M

Spears, Brig.-Gen. E. L.

Magnay, T.

Ramsay, Captain A. H. M.

Spens, W. P.

Maitland, A.

Ramsbotham, H.

Stanley, Rt. Hon. Lord (Fylde)

Makins, Brig.-Gen. E.

Ramsden, Sir E.

Stanley, Rt. Hon. Oliver (W'm'I'd)

Manningham-Buller, Sir M.

Rankin, R.

Stewart, J. Henderson (Fife, E.)

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

Rathbone, J. R. (Bodmin)

Stourton, Hon. J. J.

Markham, S. F.

Rayner, Major R. H.

Strauss, H. G. (Norwich)

Mason, Lt.-Col. Hon. G. K. M.

Reid, W. Allen (Derby)

Strickland. Captain W. F.

Maxwell, S. A.

Rickards, G. W. (Skipton)

Stuart, Hon. J. (Moray and Nairn)

Mayhew, Lt.-Col. J.

Ropner, Colonel L.

Sutclifle, H.

Meller, Sir R. J. (Mitcham)

Ross, Major Sir R. D. (L'nderry)

Taeker, Sir R. l.

Mellor, Sir J. S. P. (Tamworth)

Ross Taylor, W. (Woodbridge)

Thomas, J. P. L. (Hereford)

Mills. Sir F. (Leyton, E.)

Rowlands, G.

Tree, A. R. L. F.

Mills, Major J. D. (New Forest)

Ruggles-Brise, Colonel Sir E. A.

Tryon. Major Rt. Hon. G. C.

Mitchell, H. (Brentford and Chiswick)

Russell, A. West (Tynemouth)

Tufnell, Lieut. Com. R. L.

Mitcheson, Sir G. G.

Russell, S. H. M. (Darwen)

Turton, R. H.

Moreing, A. C.

Salmon, sir l.

Wakefield, W. W.

Morgan, R. H.

Salt, E. w.

Walker-Smith. Sir J.

Morris, J. P. (Salford, N.)

Samuel, M. R. A. (Putney)

Wallace, Captain Euan

Morrison, G. A. (Scottish Univ's.)

Sanderson, Sir F. B,

Ward, Irene (Wallsend)

Munro, P.

Sandys, E. D.

Waterhouse. Captain C.

Nlcolson, Hon. H. G.

Sassoon, Rt. Hon. Sir P.

Wedderburn, H. J. S.

O'Connor, Sir Terence J.

Scott, Lord William

Wells, S. R.

Ormsby-Gore, Rt. Hon. W. G.

Selley, H. R.

Wickham, Lt. Col. E. T. R.

Orr-Ewing, I. L.

Shakespeare, G. H.

Williams. H. G. (Croydon, S.)

Patrick, C. M.

Shaw, Major P. S. (Wavertree)

Wilson, Lt. Col, Sir A. T. (Hitchin)

Peake, O.

Shaw, Captain W. T. (Forfar)

Windsor Clive, Lieut. Colonel G.

Peat, C. U.

Shepperson, Sir E. W,

Winterton, Rt. Hon. Earl

Penny, Sir G.

Simmonds, O. E.

Wise, A. R.

Perkins, W. R. D.

Simon, Rt. Hon. Sir J. A.

Womersley, Sir W. J.

Petherick, M.

Smiles, Lieut.-Colonel Sir W. D.

Wragg, H.

Pickthorn, K. W. M.

Smith, L. W. (Hallam)

Young, A. S. L. (Partick)

Pilklngton, R.

Smith, Sir R. W. (Aberdeen)

Ponsonby, Col. C. E.

Smithers. Sir W.

TELLERS FOR THE NOES.—

Porritt, R. W.

Somervell, Sir D. B. (Crewe)

Lieut. Colonel Sir A. Lambert

Procter, Major H. A.

Somerville, D. G. (Willesden, E.)

Ward and Dr. Morris Jones.

Radford, E. A.

Southby, Comdr. A. R. J.

Question put, and agreed to.

Original Question again proposed.
10.48 p.m.
Mr. DENMAN: I am sure my hon. Friend the Member for Aylesbury (Mr. Beaumont), who moved to report Progress, will feel that his protest was justified and that it has borne useful fruit, but it has had one unfortunate result in that it has interrupted the even flow of what was beginning to be a very interesting Debate. The Minister started in a tone which was, I am sure, in conformity with the spirit of the whole Committee. We all desire to end this system of tithes. We all desire to ease, as far as may be, the burden on the hard-pressed tithe-payer and the only question between us is as to the conditions on which it is to be done. The Minister made one important pronouncement. He asserted that the life interests of incumbents were to be preserved. Those of the Committee who were present on the Second Reading will remember that that was a point made in various quarters of the House and a point which I myself made.
Sir PATRICK HANNON: We cannot hear a word.
Mr. EDE: You are lucky.
Mr. DENMAN: One recognises the interest of South Shields in tithe, and
1152
the hon. Member will no doubt give us an example of his intimate knowledge of the subject. Meanwhile, if he does not wish to listen to the facts of the subject he is at perfect liberty to go to the smoking-room.
Mr. EDE: As a matter of fact my interruption showed that I was listening ails' giving the hon. Member's remarks their true valuation.
Mr. DENMAN: I was observing that the Minister had made an announcement of great importance, namely, that the life interests of incumbents would be preserved. That announcement will bring satisfaction into thousands of families, to persons not earning large incomes, of very slender means. It is an announcement I welcome personally. because it will free me from the obligation of moving Amendments to this Resolution. It is true that the method which the Minister adopts is not the method which I asked him to adopt. I asked him to provide the sum by the method of lengthening the lifetime of annuities. It. was quite obvious to anybody who had taken the trouble to read the Financial Resolution that that was the one method by which the tithe-payers and owners could gain substantial benefit, and I was willing and glad that the tithe-payers should have the advantage of a lengthening of the period as well

1153
as tithe-owners. But I recognise from the feeling among farmers as well as from the views expressed by the Minister that the possibility of lengthening the period is ruled out and I accept that decision with this one proviso: That if in future years more money is needed and the lifetime of these annuities is extended, then the tithe-owners, both ecclesiastical and lay, will have a reasonable right of reviving their claim to a share of what is provided by means of lengthening the life of the annuities.
For the purposes of this Bill I regard that particular controversy as at an end and I accept the 60 years period. I am not entitled to speak for the Church, and the question will naturally arise: Ought the Church to accept that '? Though I am not entitled to speak for the Church I may, I think, properly express the hope that Church people throughout the country will accept that solution, but no one is entitled to give that advice unless he realises the extent of the sacrifice which is involved. The preservation of these life interests means that a sum of £3,000,000 will have to be taken from the fund handed to the Church and applied to the purpose of these life interests. It means that whereas at present the par value of the tithe to the ecclesiastical owner is 94, that whereas under the Bill it will be reduced to 76, it will under this new scheme be down to 72. That is a very substantial sacrifice, and though existing life interests are preserved, it means that in the case of new incumbents they will take on their duty at the figure of 72 by comparison with the figure of 94 which their predecessors enjoyed. I mentioned on the Second Reading that the capital cost to the Church was in the region of £10,000,000. In fact it is £10,750,000. That again is a real sacrifice.
I want to say further that no one in this House advising the Church as a mere matter of business whether to go on under the present system or to accept this Bill could possibly hesitate to advise them to go on with things as they are. Members are apt to forget that because there are real grievances among tithe-payers, which we all want to remedy, over the country as a whole tithe is paid easily and well. Up to the time of the present depression Queen Anne's Bounty habitually obtained over 99 per cent. of
1154
the annual value of the tithe, and even in these years of difficulty up to the last half-year in which one can say that tithe has been completely collected—because there are always considerable arrears—the figure has not fallen below 95 per cent.; and let me add that the very last figure that we have, at the end of February, shows that in the course of the year ending February, 1936, Queen Anne's Bounty received more than the complete annual figure, because it was these arrears that brought the figure in excess of the complete annual figure.
Purely from the business aspect, no one could advise the Church to drop that and deliberately to suffer a loss that exceeds 20 per cent. on the capital sum, but, of course, we all know that it is not really a business problem at all, and if any friend of the Church chose to argue it purely on a business basis, I think he would be making a profound mistake. The Church has recognised that the continuance of tithe does mean a real barrier to its work. In many districts in this country it is a cause of dispute, ill-feeling, and bad blood in the countryside which prevents the Church fulfilling her function, and in those circumstances he would be a very bad adviser who would ask the Church to look upon this as purely a business matter. You cannot weigh in the balance questions of spiritual influence and questions of business advantage. No one can say how much sacrifice it is worth the while of the Church to make to end this controversy.
You cannot in one scale put so many units of spiritual horse-power and in the other scale put so much gold per unit. Human nature is not made that way, and I therefore say that I hope the Church, though it is suffering real financial hardship, will accept this solution with wholehearted satisfaction. I do not want it accepted grudgingly, because no solution will really be satisfactory if it leaves behind it the bad blood that we have seen flowing in recent years. I want the Church at the end of this to be able to go on with her work, to be able to march on with the sense that a weight is lifted from her shoulders, and to go on with lighter feet and gayer heart. That is why I support the Financial Resolution, and I shall support the Minister in all stages of the Bill. I thank him for the concessions he has made.
The DEPUTY-CHAIRMAN: I understood the hon. Member to say that he did not propose to move an Amendment. Am I right in thinking that he does not propose to move any of the Amendments that he has on the Paper?
Mr. D ENMAN: That is so.
11.1 p.m.
Major COLFOX: Those people who look upon this Bill and the plan on which it is founded as a complete, final and lasting solution of the tithe problem are under a delusion, because I do not think that there is the least likelihood of this plan enduring very much longer than the last final and complete solution of 10 years ago. This plan is founded upon the same principle as that plan, namely, the ability of the tithe-payer to pay the sum required of him. In 1925 the ability of the tithe-payer was assessed at a certain sum and it was estimated then that he would be able to pay that sum over a. course of years running, I think, to 80. The present Bill is based on another estimate of the ability to pay, and again it is an estimate which it is proposed to enact for a considerable number of years.
I believe that this scheme is bad for two reasons—first, that it does not relate the payments required by the tithe-payers to the value of the produce of their land; and, second, that it is deemed to be a final and lasting solution. These two faults are really one fault, because they could be so easily cured if the Minister would agree to limiting the duration of the Bill to a definite short number of years, and then, in the light of experience at that time, to re-assess the amount which the tithe-payer should pay.
I believe that the only satisfactory solution is to make it clear to the recipients of tithe that the amount which they receive shall be related to the value of the produce of the land as, indeed, it was in former years, and as, indirectly, it was under the 1925 Act, and somewhat more indirectly, under the present Bill. If the amount that the tithe-payer could pay were to be assessed—and I should not like to suggest any assessment, because it would be quite beyond my capacity to arrive at a suitable figure—I think that from that amount ought to be deducted a fixed sum for the redemption of the capital value of the tithe over
1156
a given number of years, another sum for the administration expenses, another for the payment of rates, another for the payment of the poor clergy, and then the balance left should be handed over to the tithe-owner. Then the same process should be gone through at the end of a limited number of years-, say five, and the only amount which should necessarily remain the same should be the amount set aside for the redemption of the capital of the tithe over the fixed period of years. This Bill is good up to a point. It does make a slight reduction in the amount which the tithe-payer has to pay, and it does make provision for the final extinction or tithe.
The DEPUTY-CHAIRMAN: The hon. Member must realise that we are not now discussing the Bill, but the Financial Resolution.
Major COLFOX: Another objection I have to this Bil is definitely a financial objection, namely, that of the amount which the tithe-payer is called upon to pay only a comparatively small proportion is to reach the tithe-owner. I have never yet been able to discover what proportion of the £91 odd is to be set aside for the sinking fund for redemption. There was on the Order Paper to-day a question asking for information on that point, but as it was a question put down for a written answer I do not know what the answer is. Perhaps the Minister will tell us what proportion of that £91 is set aside for redemption. I am inclined to believe that it is a biggish proportion, a sum, probably, considerably in excess of any sum which would be considered sufficient to redeem a like capital sum if it were a question of a loan repayable by instalments. [HON. MEMBERS: "Divide") The Opposition are very restless this evening and very vociferous. I shall not detain the Committee much longer, but I should be grateful if the Minister would give me that information, and also say what will be his attitude to an Amendment, if moved in Committee, which would have the effect of limiting the duration to, say five or even 10 years, at the end of which time a re-assessment would be made on a re-estimate of the capacity of the tithe-payer to pay.
11.10 p.m.
Mr. SPENS: I rise to refer to two Amendments which are on the Paper in

1157
my name, and which appear to be in order. They are, to leave out lines 15 to 21 and to leave out line 22. They were put down because it appeared to me necessary that if you are attempting to decrease any burden on the tithe-payer by this arrangement, you must move to decrease what has to be paid out from the Sinking Fund, so as to get any compensating reduction between what goes out and the reduction which is attempted to be made in what is going in. The second reason was that, during the Second Reading, certain Members pressed very strongly, on behalf of the ecclesiastical tithe-owners at least, that the period during which the redemption annuities were to run should be increased. That meant that any additional advantages accruing to the ecclesiastical tithe-owners were to come indirectly out of the pockets of the tithe-payer. Accordingly, it was as a kind of protest against that attitude that I put down these two Amendments to reduce the amount to be paid out of the redemption annuity fund for the benefit of the rates and the Queen Anne's Bounty.
The hon. Member for Central Leeds (Mr. Denman) says he has no right to speak for the Church, and that he did not propose to press any of his Amendments. It is clear that persons who are interested in the Church and who realise the situation in this country, are likely, I put it no stronger, to be dissatisfied with the very useful suggestion made by the Minister of Agriculture that he is able to provide a life interest by authorising Queen Anne's Bounty to offer part of the fund which they are receiving for the redemption of the life annuity.
That provides for a life annuity without increasing by one halfpenny the burden on the tithe-payer, and is a solution which should go a long way to satisfy the Church. So far as my counter-effect was intended, I do not propose to go on, but I want to repeat to some small extent what I said on Second Reading. When hon. Members are referring to tithe income, they say that the churches, under this arrangement, are suffering financial loss, and that without any change in the law it would have been possible, for a number of years, for a large proportion of the tithe in this country to have been collected. They argued as though the tithe income was a gilt-edged investment of the Church. I
1158
am certain that those hon. Members are wrong in their point of view.
No one wants to damage the Church in any way, but church people must realise that during the last few years tithe income has been very uncertain and that under these arrangements, dealing with a most precarious type of income, they are getting a very satisfactory result. Those persons, who look at the problem in that way, and not as the hon. Member for North Leeds looks at it, are going to assist in the facing of this problem. It is not put forward as a final settlement, but as one step on the road to dealing with a very difficult subject. As such, I believe it is going to be effective. It is true that one would like to see further concessions made if possible on both sides, but if the basis is that we have to-day a balanced account, with so much in the annuity fund from the tithe-payers, and certain payments out for the benefit of tithe-owners, rates, and so forth, so far as I am concerned I do not believe that the scheme embodied in the Financial Resolution can be improved very much further than in the points in which the right hon. Gentleman has already promised to improve it as the Bill goes through Committee, and accordingly I propose, on these grounds, to support the Resolution.
11.16 p.m.
Sir STAFFORD CRIPPS: I agree with the last two speakers that this Financial Resolution and the Bill based upon it cannot conceivably alter the tithe problem. There is something much more in the tithe problem than merely the question of arriving at a compromise between the tithe-payer and the tithe-owner. Tithes represent a completely out-of-date payment, a payment which should long ago have ceased—
The DEPUTY-CHAIRMAN: We cannot, on the Financial Resolution, go into a general discussion of the merits or demerits of tithe.
Sir S. CRIPPS: I was not going into the general question, but was merely commenting on the remark of the two previous speakers that this could not solve the problem. I naturally do not propose, in view of your Ruling, to attempt to deal with the question generally, but I desire to deal with one remark of the hon. Member for Central

1159
Leeds (Mr. Denman) with regard to the removal of the incubus upon the Church. Quite clearly, this Financial Resolution is going to remove some of the tithes that are at present payable to Queen Anne's Bounty, and I was very delighted to hear the hon. Member for Central Leeds refer to this as an incubus upon the Church. I should have liked to see the whole incubus removed; I should have liked to see the complete removal from the Church of all tithe receipts; and this Financial Resolution would have been far more satisfactory in my view from the spiritual aspect of the Church if it had entirely divorced the Church from any such receipts as are here contemplated from Queen Anne's Bounty; for, just as the hon. Gentleman has suggested that the removal of a portion of them will very much improve the position of the Church spiritually in the country, the removal of the whole of them would improve it to an even greater extent. The hon. Gentleman smiles, but it is the fact to-day that—
Mr DENMAN: My real point was that what would benefit the Church was the abolition of tithe.
Sir S. CRIPPS: I entirely agree; I am only regretting that, under this Financial Resolution, they are still to receive what is the equivalent of tithe, for I am sure the hon. Gentleman is not going to raise so specious an argument as to say that this indirect method of payment is going to be considered as a giving up by the Church of tithe rentcharge. Everyone who pays these charges will of course know that they are going to the Church very largely in the future, just as they did in the past; this camouflage of changing the term "tithe rentcharge" to "tithe annuity," or "annuity," is not going to deceive a single payer of tithe in Great Britain. They are going to realise that the position is unaltered, except that the amount is slightly smaller. I should have liked to see, for the very reasons that the hon. Gentleman put forward, the complete abolition of that payment, in order to give that extra spiritual horsepower, as he phrased it—I am not quite certain what it means, but it sounds all right—to the Church.
Lieut.-Commander AGNEW: Without compensation?
Sir S. CRIPPS: Certainly, as the hon. Member wants. He is delighted at the sacrifice becauses it shows the spiritual basis of the Church and not the financial basis. When the Church is able to divorce itself from the State financial basis and depends upon the free voluntary gifts of those who are keen enough to support it, it will start reviving its spiritual power.
The second point I wanted to deal with was one made by the hon. and gallant Gentleman the Member for Dorset, West (Major Colfox). He said that one of the drawbacks of this Resolution was that it did not relate tithe payments to the value of the land. I agree that that has been one of the great criticisms of tithe rentcharge for many years. He suggested that in the old days when tithe was related to the produce of the land it was more satisfactory. If he will look back into the history of the discussions as regards tithe he will find that it was less satisfactory. Every means was adopted to get out of the extremely inconvenient system by which the parson had every tenth crop of hay, or however the produce was arranged. That has always been a great incubus upon agriculture and the failure in this Resolution to relate the payment to the value of the land or the value of the produce is also a very serious drawback and one which makes it quite certain that no solution can ever be found along these lines. Indeed there is only one way by which you can so relate the payment to the value of the land arid that is by making one single payment by the tithe-payer which is related to the value of the land and to get both into the same ownership.
Major COLFOX: The hon. and learned Gentleman cannot expect me to agree with him. I thought I made it quite clear in what way I suggested that the amount of payment should be related to the produce of the land, namely, the method that was adopted in the 1925 Bill and is readopted in this Bill, hut I wish it to be only for a limited number of years when it shall be re-assessed for another short period, and so on.
Sir S. CRIPPS: I am sure the hon. and gallant Gentleman will appreciate that you cannot relate the tithe to the value of the land through corn prices alone.
Major COLFOX: I never said so.
Sir S. CRIPPS: The hon. and gallant Gentleman suggested that it should be on the same basis. The old basis was corn prices alone.
Major COLFOX: The old basis which has been used on this occasion and in 1925, as the hon. and learned Gentleman knows, was not the value of corn alone, although I admit that the value of corn alone was the basis of value of tithe before 1925.
Sir S. CRIPPS: The 1925 Act was to take a hypothetical contemplated value for corn alone. That is the basis on which it was fixed. It came out wrong, because the forecasts of those who devised the 1925 scheme were wholly wrong. The basis on which it was fixed was the anticipated price of corn for the ensuing years. On that basis it is obviously impossible to deal with the true value of the land for its productive purpose to the farmer, especially where you have mixed farms, dairy farms arid other types of farms all together. The only satisfactory method from the point, of view of the farmer is a single payment which represents the true value of the land to him which he is entitled to use for that payment. In order to bring about that merger, you cannot do it by the methods of this Financial Resolution. You are forced to do it by getting the ownership of tithe into the same hands as the ownership of the land. That can only be done in one way, and that is, by putting tithe in the ownership of the State. The only ultimate solution possible for this problem is not an attempt to build up a fund, as this Financial Resolution attempts to build up a fund, which balances payments between one particular set of people, the tithe-payer, and another particular set of people, very largely the Church in this case, but to take the whole matter out of the exceptional method of dealing with it, compensate—if you believe in compensation—the tithe-owner, and then, the State having come into the position of the right to receive tithe, also put the State into the position of the right to receive rent, and then fix the fair payment to the farmer for the use of his land. That is the only possible solution which can ever be brought about for the tithe problem to-day.
11.27 p.m.
Colonel Sir EDWARD RUGGLESBRISE: I desire to refer to one or two
1162
statements which my right hon. Friend the Minister made in his opening remarks on the discussion of the Financial Resolution. He told the Committee that his hands would not be tied in the later stages by anything in the Financial Resolution, and he went on to say that that was a strong statement. I am bound to say that my spirits rose when he made that statement, as did the spirits of a great many of my hon. Friends who are taking a deep interest in the Bill. We feel that the Amendments we desire to move, both on the Financial Resolution and in Committee upstairs later on, will not be out of order. My right hon. Friend went so far as to give an indication of some of the points which would be open to free and future discussion. He stated that the point with regard to the Income Tax deduction in Clause 13 would be open to discussion in Committee upstairs, and also indicated that the question of preserving the life interest of the tithe-owner could be so discussed. That has given great satisfaction to the hon. Member for Central Leeds (Mr. Denman) and to many other hon. Members all over the House. My right hon. Friend mentioned the cost of collection. I was not clear whether he intended to intimate that it would be possible in the Committee further to consider the question of the position of collectors of tithe, but I hope that he did, in view of the fact that he told us that the statement with which he opened the discussion was a strong statement.
After he had given two or three instances in which it would be possible for the Committee to discuss the Bill unhampered at the later stages, I was not able to follow him when he went on to say, that the whole essence of the Bill is connected and tied up with the burden of the taxpayer. In view of the fact that the share borne by the taxpayer is extremely small in comparison with that borne by the tithe-payer and the amount received by the tithe-owner, the taxpayer's position is almost negligible. The Minister made a point about the liability of the taxpayer and said that in the scheme of the Bill there were no savings or payments in reserve. That statement is very satisfactory in so far as it goes, but I should be obliged if he would give an explanation on the question of savings. On the Second Reading of the Bill I gave some figures which

1163
indicated that the savings to the Exchequer in regard to rates would be very considerable, amounting to £96,000 a year over the whole period. I am prepared to accept the general statement of my right hon. Friend that the Exchequer is not making any saving, but an explanation of the figures in regard to rates would be desirable and would go some way towards clearing up an obscure point. If my right hon. Friend had given us a few instances in which it would be possible for us to discuss matters and move Amendments freely it would have been more satisfactory. I was disappointed to find that when we come to the question of the remission of a fraction under Schedule B, in Clause 14, which it one of the most important points in the Bill, he said, or I understood him to say, that it would not be possible to discuss the fraction in Committee. I may have misunderstood him. It is difficult lo see, if the question of Income Tax under Clause 13 can be discussed, and Amendments can be moved to that Clause, why under Clause 14 it would be out of order to discuss the fraction of the remission in relation to Schedule B. Perhaps my right hon. Friend will give us a clear exposition on that point.
There is one further point which was not cleared up in the discussion on the Motion to report Progress. When your predecessor was in the Chair, Captain Bourne, he said that it was not within his province to say what Amendment will or will not be ruled out of order when the Bill goes upstairs. The difficulty under which I and other hon. Members labour is in deciding this question—does the fact that you in the Chair here have ruled out an Amendment to the Financial Resolution necesarily tie the hands of the Chairman in Committee upstairs? We hope that, although some Amendments are out of order on the Financial Resolution, they may be in order when we get into Committee upstairs. Can you give us a Ruling on that point, whether an Amendment which has been ruled out of order on the Floor of the House on the Financial Resolution must necessarily be ruled out of order by the Chairman in Committee upstairs?
The DEPUTY-CHAIRMAN: It is no part of my duty to indicate what view the Chairman of the Committee upstairs may hold, but it is the common rule and
1164
practice of the House that when a Resolution has been passed in Committee of the Whole House, and subsequently has agreed to the House on Report, the Committee on the Bill is strictly bound by the terms of that. Resolution. Any Amendment which, in the opinion of the Chairman of the Committee, is not within the terms of such Financial Resolution is automatically out of order.
Sir E. RUGGLES-BRISE: Would you go so far as to rule that any Amendment appearing on the Order Paper today in connection with this Financial Resolution must ipso facto be out of order if it reappears on the Order Paper of the Committee upstairs?
The DEPUTY-CHAIRMAN: If the Amendment on the Order Paper would impose a. charge and has been ruled out of order on that account, then for that reason it, obviously, would impose a charge in Committee, which has not been authorised by the House.
11.37 p.m.
Sir ERNEST SHEPPERSON: I should like to express my appreciation that we shall be able to move Amendments in Committee which we thought we should not be able to move. Those who represent agricultural constituencies are in this difficulty, that on this Bill whatever we do we shall be wrong. We have had letters from our constituents, local clergymen, pointing out the sacrifices which the Bill will mean to them. From the opposite point of view we have had letters from tithe-payers pointing out the injustice that they will suffer. We do not know what to do. In most legislation which comes before this House we know that if we support one side we shall get blamed by one side and earn the gratitude of the other, but, on this matter, we have the certain knowledge that whatever we do we shall get no gratitude from either side, but a great deal of blame. What shall we do about it? If I studied merely the question of expediency I should have a bad attack of arthritis from which I suffer, and remain out of the House for the next two or three weeks. That would be the act of a coward, and I do not intend to take that course.
I have always taken one attitude on the tithe question. In 1924 I moved an Amendment in Committee to reduce the

1165
figure from £105,000,000 to £100,000,000, because I thought we were stabilising tithe at a figure with no certain knowledge that agricultural commodity prices would remain at a figure which would justify such an amount. I lost the Amendment. It is always unpopular to say the simple words, "I told you so," but I am going to risk that unpopularity to-day and suggest that what I said in 1924 with regard to commodity prices was true. It is this fall in prices which has caused the Act of 1924 to be unjust to the tithe-payer. I have met tithe-payers many times in my constituency and I have always taken this attitude, that they have no justification in asking for the total remission of tithe—
The DEPUTY-CHAIRMAN: The hon. Member's speech has no connection whatever with the Resolution.
Sir E. SHEPPERSON: I bow to your Ruling, Captain Bourne, but the point I was endeavouring to make was that the amount of £91 lls. 2d. to be paid by the tithe-payer under this Bill is a great improvement on the figure of 1924, which was £109 4s. I would like now to put this query to the Committee: Is the figure of £91 lls. 2d. one that we can justifiably accept? From 1836 the tithe-payer has had to pay tithe based on a seven-years' average of corn prices. The point I wish to put is whether this figure of £91 lls. 2d. which he is now asked to pay is one that would be met by the seven-years' average of corn prices to-day? According to the Royal Commission's Report, the figure for 1935, if based on the then corn prices, would have been £80. This amount of £91 lls. 2d. includes a certain sum for redemption, and I would like to ask the Minister what part of the sum goes towards redemption. I would also like to ask him what would be the figure that would have to be paid annually on this annuity if tithe-payers preferred not to have the redemption period of 40, 60 or 80 years, but an even longer period or even a period without redemption. I have been led to understand that if there were no redemption the amount would be something in the nature of £75 a year. I can assure the Minister that if we could go to the country now and make an offer to the tithe-payer that he should pay anything between £75 and £80 a year without redemption, the country would
1166
accept this Tithe Bill with all Possible gratitude.
Motion made, and Question, "That the Chairman do report Progress; and ask leave to sit again," put, and agreed to.—[Captain Margesson]
Committee report Progress; to sit again To-morrow.

ORDERS OF THE DAY.

  LAND REGISTRATION [MONEY].
  Resolution reported,
  "That for the purposes of any Act of the present Session to amend the law with respect to Land Registration and the Insurance Fund established under the Land Transfer Act, 1897, it is expedient to authorise the payment out of the Consolidated Fund—

  (a)of such sums as may become payable therefrom by reason of the repeal of the proviso to section seventy-five of the Land Registration Act, 1925;

  (b)of such sums as may become necessary to enable the said Insurance Fund to pay indemnity for any loss chargeable thereon or to bring the value of the assets thereof up to a standard value;

  and to authorise the payment out of the said Insurance Fund into the Exchequer of the amount by which the value of the assets of that fund at the end of any financial year exceeds that standard value."

CHURCH OF ENGLAND ASSEMBLY (POWERS) ACT, 1919.
11.47 p.m.
Sir FRANCIS FREMANTLE: I beg to move:
"That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Cathedrals (Houses of Residence) Measure, 1936, be presented to His Majesty for Royal Assent."
This Measure has passed the Church Assembly and now comes up for final approval. It has been submitted to the Ecclesiastical Committee which reports that proper protection for the rights of His Majesty's subjects appears to be provided and that it is expedient that it. should proceed. I hope it will be passed straightaway by the House.
Mr. DENMAN: I beg to second the Motion.
Sir F. FREMANTLE: I beg to move,
"That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Union of Benefices (Amendment) Measure, 1936, be presented to His Majesty for Royal Assent."
This Measure also has passed the final approval of the Church Assembly, and the Ecclesiastical Committee have reported that it, does not affect prejudicially the rights of His Majesty's subjects, and that it is expedient that it should be allowed to proceed. It is a Measure to amend the existing Measure for the union of benefices.
Mr. DENMAN: I beg to second the Motion.
The remaining Orders were read, and postponed.
It being after Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Ten Minutes before Twelve o'Clock.

  GERMANY AND AUSTRIA (ARMIES).
  GERMANY AND AUSTRIA (ARMIES).
  MEASLES (INOCULATION).
  MEASLES (INOCULATION).
  SLAUGHTER OF ANIMALS.
  SLAUGHTER OF ANIMALS.
  CANADIAN NATIONAL EXHIBITION.
  CANADIAN NATIONAL EXHIBITION.
  PUBLIC ASSISTANCE STATISTICS.
  PUBLIC ASSISTANCE STATISTICS.
  STIRLING TOWN COUNCIL (BY-LAWS).
  STIRLING TOWN COUNCIL (BY-LAWS).
  MILK PRODUCTS (IMPORTS).
  MILK PRODUCTS (IMPORTS).
  PERFORMING DOGS.
  PERFORMING DOGS.
  NURSERY SCHOOLS.
  NURSERY SCHOOLS.
  JIBUTI-ADDIS ABABA RAILWAY.
  JIBUTI-ADDIS ABABA RAILWAY.
  PROTECTORATES AND MANDATED TERRITORIES.
  PROTECTORATES AND MANDATED TERRITORIES.
  INTERNATIONAL RED CROSS.
  INTERNATIONAL RED CROSS.
INDIA.
  COURT-MARTIAL (LIEUT.-COLONEL SANDFORD).
  COURT-MARTIAL (LIEUT.-COLONEL SANDFORD).
  GOLD COAST (ABORIGINES PROTECTION).
  GOLD COAST (ABORIGINES PROTECTION).
  INTERNATIONAL LABOUR CONVENTIONS.
  INTERNATIONAL LABOUR CONVENTIONS.
  SHARE TRANSACTIONS (STAMP DUTY).
  SHARE TRANSACTIONS (STAMP DUTY).
ROYAL NAVY.
  CLYDE, TYNE AND BARROW (SHIPBUILDING CONTRACTS).
  CLYDE, TYNE AND BARROW (SHIPBUILDING CONTRACTS).
  BATTLESHIP CONSTRUCTION.
  BATTLESHIP CONSTRUCTION.
  AMERICAN STATES (MIGRATION).
  AMERICAN STATES (MIGRATION).
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
LEE CONSERVANCY CATCHMENT BOARD BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

PUBLIC HEALTH (DRAINAGE OF TRADE PREMISES) BILL. [H.L.]
LORD GAINFORD: My Lords, I beg leave to introduce a Bill to amend the law with respect to the discharge of trade effluents into the sewers of local authorities, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Gainford.)
On Question, Bill read 1a, and to be printed.

MEASUREMENT OF GAS.
Message from the Commons to acquaint the House that they concur with their Lordships in the Resolution of May 12, That it is desirable that a joint Committee of both Houses of Parliament be appointed to consider whether it is expedient, and if so in what circumstances and subject to what conditions, to authorise the measurement of gas supplied by gas undertakers to consumers by means of meters so designed as to register in therms instead of cubic feet.
PILOTAGE AUTHORITIES (LIMITATION OF LIABILITY) BILL.
Brought from the Commons; read 1a; and to be printed.
GRAMPIAN ELECTRICITY SUPPLY ORDER CONFIRMATION BILL.
Brought from the Commons; read 1a; to be printed, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899) deemed to have been read 2a and reported from the Committee.
GLASGOW CORPORATION ORDER CONFIRMATION BILL. [H.L.]
Returned from the Commons, agreed to.
GREAT WESTERN RAILWAY (ADDITIONAL POWERS) BILL.
Brought from the Commons; read 1a; and referred to the Examiners.
NOTTINGHAMSHIRE AND DERBYSHIRE TRACTION BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered and agreed to.
RHYMNEY VALLEY SEWERAGE BOARD BILL. [H.L.]
Returned from the Commons, agreed to.
YORKSHIRE ELECTRIC POWER BILL. [H.L.]
Returned from the Commons, agreed to.
MERSEY DOCKS AND HARBOUR BOARD BILL.
Returned from the Commons, with the Amendments agreed to.
SOUTH EAST CORNWALL WATER BOARD BILL.
Returned from the Commons, with the Amendments agreed to.
BRENTFORD AND CHISWICK CORPORATION BILL.
Brought from the Commons; read 1a, and referred to the Examiners.
COLNE VALLEY AND NORTHWOOD ELECTRICITY BILL.
Brought from the Commons; read 1a, and referred to the Examiners.
POST OFFICE (SITES) BILL. [H.L.]
Read 3a (according to Order): Amendments (Privilege) made: Bill passed, and sent to the Commons.

COTTON SPINNING INDUSTRY BILL.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Templemore.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF ONSLOW in the Chair.]
Clause 1:
The Spindles Board.
1.—(1) With a view to the elimination of redundant spinning machinery in cotton mills in Great Britain, there shall be established a board (which shall be called, and is hereafter in this Act referred to as, "the Spindles Board ") having such powers as are conferred on them by the following provisions of this Act.
EARL PEEL EARL PEEL moved, in subsection (1), after "Great Britain," to insert:
" a poll of the owners of cotton mills in Great Britain shall be taken forthwith and, if the owners of not less than three-quarters of the spindle capacity of all the spinning machinery in cotton mills in Great Britain, voting in such manner and form and within such period, as is prescribed by the Board of Trade, are certified by the Board of Trade to have voted in favour of the establishment of a board having the powers specified in this Act, then"
The noble Earl said: This Amendment, which stands in the names of four of my noble friends as well as my own, must be read with the further Amendment at the top of page 2 of the Marshalled List, to insert a new subsection. The intention of this Amendment is that before the measure comes into force a poll shall be taken of the owners of spindle capacity, as it is called, in such a manner as the Board of Trade may prescribe. A report is to be made by the Department as to the result of that poll, and if it is found that three-quarters of those owning the spindle capacity have not voted for the establishment of the Spindles Board "this Act shall cease to have effect," as provided in the proposed new subsections.
I do not think that, on the point of principle, there ought to be any great objection on the part of the Government. The President of the Board of Trade lent rather a sympathetic ear to this proposal.

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May I quote what he said in Standing Committee in another place on February 13? He said:
"I should hold a different view about this Amendment if I could get an assurance from the honourable member for Mansfield (Mr. Charles Brown) that if a new ballot were promoted and there were a 75 per cent. majority in favour he would withdraw his opposition to the Bill. If the honourable member would do that, it might modify my view."
It is quite clear, therefore, interpreting this Parliamentary language of the President of the Board of Trade, that if the honourable member concerned withdrew opposition to the Bill the President would look with a favourable eye—I think I may say—upon such an Amendment. The honourable member concerned was perhaps not quick enough to take up the challenge and no doubt the matter then passed off.
The opinion of the trade in a question of this kind is obviously of the greatest possible importance, because admittedly the Government took this measure up, as it were, and introduced it in another place largely influenced by what they held to be the opinion of the trade on that subject. I do not think that my noble friend would deny that. Let me say one word only about the 75 per cent. Other noble Lords may have views upon the precise majority required, but I think everybody would agree that when in a trade you establish a taxing authority, as you are proposing to do here, and when compulsory levies are to be made from the whole of the trade, in such a case, anyhow, a bare majority should not be sufficient to establish that right. Moreover, I should like to quote the authority of a very important committee of the Federation of British Industries, of which Sir James Lithgow was the chairman, which said that in schemes of this class certainly not less than 75 per cent. should vote for the scheme. There is therefore high authority, not only from the Federation of British Industries but also from the President of the Board of Trade himself, as to the necessity in cases of this kind of establishing a substantial majority in the trade in order to secure that the rest of the trade should be compulsorily bound.
Some of your Lordships may say: "Yes, but you have already had a ballot in the trade." There was no doubt
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such a ballot conducted some time ago, at the end of the year 1934, a year and three-quarters ago. I would submit, first, that there has been a great deal of change of opinion since then and the details of the measure are now far better known than they could possibly have been known at that time. I should like also to suggest that if you have a ballot of that kind it should certainly fulfil three qualifications: first, it should be impartially conducted; secondly, it should not be managed by interested parties: and thirdly, when a final day is settled for the conclusion of the ballot, the voting should not be re-opened. If you examine the history of the way in which this ballot was taken you will find that not one single one of these rules was observed; every one of them was broken. I am going to submit that, whatever might have been the result of this ballot, it was not conducted in a way which would have secured a fair decision as to the view of the trade.
I do not quite know why, but two sets of ballot papers were issued, with one of which I am dealing to-night. I think, incidentally, that having two sets of ballot papers about two different things is rather confusing. As regards this matter with which we are now dealing, the reply was printed: "I am in favour of the proposals put forward by the Drafting Committee and the Resolution relating thereto passed at the meeting of the General Committee of the Federation on 9th October, 1934." The papers had to be returned—both the one in which I am interested and the other about a cotton spinners' association—not later than November 10. But the ballot paper was issued in rather a remarkable form. It was not clear what you should do if you opposed the scheme, although it was clear what you should do if you favoured the scheme. It appeared to be the inference that if you were against the scheme you did not vote at all, and it was on this interpretation that no doubt a very large number of the owners of the millions of spindles who were supposed to be included in the ballot did not vote. I think that part of the idea was this: many of them thought that it would be ineffective altogether, because the idea had prevailed that unless 80 per cent. of the owners of spindles supported the scheme it would not come into action. That is the first point I make about the

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starting of the ballot. I submit that if you have a ballot you ought to state quite clearly on the ballot paper how you vote, "Aye" or "No "; "Aye" for the scheme and "No" against it.
Moreover, I have to state that those who were conducting the ballot were not impartial people but were the people who were themselves promoting the scheme, a very remarkable way of conducting an impartial ballot. The ballot was not going too well, and on November 3, 1934, the secretary of the Federation addressed rather a remarkable appeal to the voters. May I read his words? He said:
" I need hardly remind you that it is only when the final form of the rules of the Cotton Spinners' Association and the scheme for dealing with surplus capacity are submitted and approved that any firm will be definitely committed to them."
They wore told, therefore, in authoritative language by those who were conducting the ballot and by those who were responsible for the scheme, that at that stage they were not bound at all. Is that a fair way of conducting a ballot: to tell voters that they will not be bound by the scheme, but afterwards, when the poll is declared, to tell them that they were bound by the scheme? I cannot think that anybody could support a method of that kind.
Not only that, but November 10 was fixed as the date of the closing of the ballot. Was the ballot closed then? No! I understand that the supporters of it did not think that a sufficient number of people had voted, or were not voting the right way, and actually the ballot was not closed until December 18, a month after the date fixed. I am not quite sure whether I know on what authority that ballot was extended. Very odd methods were used in order to discover who voted for and who voted against the scheme. May I quote from a letter written by a gentleman called the liaison officer, who, I understand, acted for the Federation. He says, referring to an answer:
"…you have marked it as ' No.'…I enclose a new form "—
they are most indefatigable people; if you vote against they will not accept it, and send a new form—
" and shall be greatly obliged if you can see your way to answer in the affirmative, but with a proviso that the capital required for the scheme should he provided
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by the Government. This will at least have the effect of showing that you are in favour of the scheme but that you, like certain others, consider that the Government should come to the assistance of the industry."
The answer to that letter was as follows:
" Yes, provided that all the capital required to purchase the surplus spindleage is supplied by the Government…"
I do not call that a very enthusiastic acceptance, or a very definite acceptance, of this scheme. The answer goes on:
"…if we have to contribute financially to any scheme for this purpose, our answer is definitely ' No '."
I may assume, I think, now that they have to contribute to this scheme, that their answer would be definitely "No." It would be very interesting to know whether these gentlemen are put down as answering for or against. I only put this correspondence forward in order to ask whether any one of your Lordships can say that that is a fair way in which to conduct a ballot. I submit that it was not, and although much of its management might have been clever on the part of the supporters, it cannot be considered as an impartial ballot, to obtain the impartial views of the trade.
I have here a report in The Times of June 25, 1935, of a speech by the Prime Minister, which was made some seven or eight months after this so-called ballot was taken. What are the words he uses? He says:
" In the same way we have promised to introduce a Bill, and a Bill is now in draft, to deal with the surplus spindles in the spinning department."
Then there are the important words:
" That will be submitted to the industry, and, if thought desirable, will be passed into law."
It is quite clear why those words were spoken by the
Prime Minister. They were spoken after this ballot had been taken. If the Government were satisfied with the ballot I do not know why they should have wanted to have another one; but it is clear that they were conscious at that time that there was much dissatisfaction in the trade at the way in which the ballot had been taken, and that the Prime Minister considered that the matter should be again submitted to the industry. Of course the words "submitted to the industry" could only mean, and were understood by those who had

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taken part in the ballot to mean, that at the proper time a ballot would be taken. I submit that your Lordships should give effect to that undertaking of the Prime Minister and accept this Amendment, which would carry out that pledge.
I have only two further observations to make. Objections have been raised, I think, in another place, that the taking of this ballot would delay the operation of the measure. It would delay it, but I think I may say that the ballot could easily be carried out in a month, and as the levy is going to last for fifteen years, it may well be fair to sacrifice a month in order to ascertain the opinion of the trade now that all the facts are before them, all the details of the Bill are prepared, and they know-exactly what they are voting about. I think, if I may make this appeal to the Government, that it would be a very great advantage to the trade itself, and to the future satisfactory working of the trade, if any sense of bitterness were removed as to the way in which that ballot was taken, and if any indecision as to the feeling of the trade were removed by a ballot such as I propose, conducted not by one of the two parties to the ballot, whether for or against the scheme, but impartially, under the auspices of the Board of Trade.
May I put this last point? It is clear that we may have other schemes of this kind. If we are to have them it is well to set fairly any precedent, and to show that in this case there is no doubt about the matter, and that the opinion of the trade has, as far as it is possible to do so, been obtained in an impartial manner. I therefore strongly urge upon the Government that they should follow the opinion, or the conditioned opinion if you like, of the President of the Board of Trade, and that they should get rid of all this discussion and division of opinion, and soreness and bitterness, by accepting my Amendment and holding a fair and impartial ballot, in order to decide what really is the opinion of the trade. I beg to move.
Amendment moved—
Page 1, line 9, after (" Great Britain ") insert:
(" a poll of the owners of cotton mills in Great Britain shall be taken forthwith and, if the owners of not less than three-quarters of the spindle capacity of all the spinning machinery in cotton mills in Great Britain,
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voting in such manner and form and within such period, as is prescribed by the Board of Trade, are certified by the Board of Trade to have voted in favour of the establishment of a board having the powers specified in this Act, then ").—(Earl Peel.)
LORD SANDERSON: We on these Benches think this Amendment is a very reasonable Amendment, and if I may say so I think the noble Earl has put a very strong case for it. There seems to be little doubt that the ballot was conducted in an unsatisfactory way, and after all the majority obtained was not very large. I also gather that a good part of the majority consisted of people who voted with qualifications at first, and afterwards came in. That was rather unsatisfactory, and it is surely a mistake to force a law on people who think they are being treated unfairly, whether rightly or wrongly, and afterwards have a grievance. It would surely be better in the circumstances if another ballot were taken. It would not cost very much and, as the noble Earl has said, it would not take more than a month. I think that the Bill, if it were passed, would then start under much more favourable auspices than it will if it is forced through in face of a great deal of feeling in the cotton trade. We on these Benches therefore support the Amendment.
VISCOUNT BERTIE OF THAME: The circular letter written by the Federation of Manchester Cotton Spinners, referred to by my noble friend Lord Peel, was probably written under a misapprehension, but it was none the less misleading as events turned out, and therefore the only fair thing to do is to have a fresh ballot. There is one question which I wish to ask Lord Templemore, of which I have given him private notice, and that is, if he will tell the Committee what the state of the poll was at the time when it was extended in the extraordinary way that it was extended.
LORD PHILLIMORE: I think there is very little in reality that parts the Government from us, and my desire is only to see implemented the principle which the Government themselves laid down when they introduced this Bill. The noble Lord who is in charge of the Bill was the first to say that this was a Bill which has a decisive majority of Lancashire opinion behind it. He said he could assure your Lordships that without that opinion it would certainly not have been

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worth while for the Government to introduce it. The noble Earl, Lord Derby, whose speech necessarily had so profound an influence on your Lordships, was careful to say:
" This is not a case of the Government imposing it on the industry; the industry is demanding it from the Government. I hope your Lordships when you are making your decision will remember that this is the demand of the industry itself."
And the Secretary of State for Air used words very much to the same effect. Now quite simply we are asking that this principle, which the Government accept and indeed lay stress on, should be made sure.
I do not suppose the Government themselves would ever use this particular precedent again, nor this particular method by which the verdict of the Lancashire cotton industry was attempted to be obtained. We are promised that this Bill is the forerunner of other Bills dealing with the cotton trade. Is it to be believed that in each section of that industry so unsatisfactory a method of obtaining the opinion of the trade will again obtain? I cannot believe it. Only last night in another place the Government announced their preference for voluntary action on the part of the industry under discussion, and with that object I understand they are introducing clauses to postpone the effective working of that Bill in the hope that voluntary action will take them further. Even supposing we are wrong in thinking that a two-thirds majority is not available for the present measure, we are asking, as the noble Earl, Lord Peel, pointed out, for nothing more than a short postponement of the action of this Bill, a far shorter one than is contemplated in the case of the Coal Mines Bill.
There is another set of reasons which I think was perhaps not fully brought out on Second Beading. During the boom years of the Lancashire cotton trade—comparatively boom years at any rate—from 1926 to 1930, the proportion of active spindles to the whole number averaged only 84 per cent. At the present time, we are told, only 37,000,000 spindles are required for the production of the yarn that can be sold and there exist 48,000,000, 3000,000 of which are permanently stopped and 4,000,000 of which are necessary for spare parts for the running of the industry. In other words, out of the 45,000,000 spindles available no less than 82 per cent. are already
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in active use, as against 84 per cent. in the boom years, quite apart from those required for spare parts. Now what does this show? It shows that this redundancy, which it is the object of this Bill to remove, has been eliminating itself, possibly by drastic and sad steps but it has been eliminating itself so effectively that at the present time at least 82 per cent. of the possible spindles are in active operation. For the sake of eliminating another 4,000,000 or 5,000,000, possibly 10,000,000 spindles, is it wise not to take the true opinion of Lancashire industry, revised up to date in the light of the better trade that is now available, and therefore to accept the proposal of the noble Earl for a further ballot?
LORD FAIRFAX OF CAMERON: I rise to support the Amendment which has been so ably moved by my noble friend Lord Peel. The original Committee which was appointed to prepare a scheme to be submitted to the Colwyn Committee was in considerable disagreement. At one of its meetings it was moved and seconded that the redundancy proposals should be eliminated from the cotton control scheme. The Chairman of the Committee, realising that if this proposal were carried it would wreck the scheme, declined to put it to the meeting and immediately adjourned. He thereupon got in touch with the Bankers' Industrial Development in London, and as a result two of the members of that Committee went to Manchester and persuaded the mover and seconder to withdraw their motion temporarily. If these measures had not been resorted to, I am of opinion that the scheme would never have reached Lord Colwyn's Committee.
The Federation of Master Cotton Spinners, when pressing firms to vote, made the following statement in their letter of November 3, 1934—Lord Peel has already road it, but it is so important that I venture to read it again:
" I need hardly remind you that it is only when the final form of the rules of the Cotton Spinners' Association and the scheme for dealing with surplus capacity are submitted and approved that any firms will be committed to them."
I, unfortunately, have been associated with the cotton industry for about eighteen years, and our position is that

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we did not return the forms which were sent to us for the purpose of voting because we considered the whole system was in a preliminary or nebulous stage and would have to be reconsidered. As a matter of fact, the accountant of the Federation of Master Cotton Spinners, who was receiving the ballots, telephoned pressing us to send in our reply. We asked him which he would rather have—our reply against the scheme or no reply at all. He said: "Certainly, if you are voting against the scheme then I would rather have no reply." It is generally supposed that those who are conducting a ballot should be unbiased, and it would therefore appear very curious that those in charge of this ballot should have been so prejudiced in favour of a scheme.
In view of the statement of the Federation of Master Cotton Spinners which has been referred to, we who oppose the Bill feel we have not received proper treatment. I am certain that there are many other firms that took the same view of the matter as we do, and who should be given an opportunity of registering their votes in a proper constitutional manner. We are not asking much, as this vote need not take more than a couple of weeks. It would only take three or four days to send out the forms, and they could be returned within ten or fourteen days. If they gave those in favour of the Bill their 75 per cent. of the total votes cast, we would be quite willing to withdraw our opposition, although we entirely disagree that the Bill is a panacea for the troubles of the cotton trade. It is only fair to your Lordships' House that you should be satisfied before passing this Bill, which we are advised is a Spinners' Bill, that there is evidence that 75 per cent. of the trade is in favour of it. I am of the opinion that this is most important, as the present Bill differs so radically from the scheme on which the trade originally voted eighteen months ago. In support of my contention, and in spite of the fact that it was considered a formal ballot, the accountant to the Federation, after the expiration of the period for voting, continued to solicit replies in favour of the scheme from both sides, and I expect many firms changed their minds thinking they would be given another opportunity of registering their votes in view of the Federation's letter of November 3, 1934.
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It is generally admitted that the total number of spindles in Lancashire to-day is about 42,307,000, which, if converted into mule equivalents, is approximately 47,829,000, of which 3,180,000 are in mills that have been closed down and 4,000,000 are estimated to be permanently out of employment, as the noble Lord, Lord Phillimore, has already told your Lordships. It really appears, therefore, that there are only about 36,000,000 to 37,000,000 spindles necessary, if running full time, to produce 1,140,000 lbs. of yarn, which is the total estimated requirements of yarn for all purposes. If these figures are correct—and I have every reason to believe they are—there is only a redundancy of 7,000,000 spindles, and if the trade improves as it is doing at present these may easily be required. If you take the Joint Committee's figures up to date, you see that they report that during February and March, 1936, running mills ran 87 per cent. of their spindles as compared with only 73 per cent. when the scheme was mooted in 1934; so that basing on 87 per cent. of running, there would be little or no saving for a firm to run 100 per cent. if they had to pay a levy for doing so. In other words, the levy would rob the firm of practically all the advantages of concentrating on 100 per cent. production.
The prices of raw materials throughout the world are gradually improving, with the result that many countries which produce raw materials are enabled to purchase more cotton goods, their power of purchasing being largely governed by the prices at which they can sell their raw materials. Personally, I am of the opinion that if there has to be a levy, it would be far more constructive to use it for assisting the export trade rather than for breaking up spindles. I submit that there is no pressing need for this Bill, and certainly not so pressing a need as not to be able to give the firms in the cotton trade the opportunity of having a formal ballot. I hope that, in view of the various arguments which I have advanced, His Majesty's Government will be able to see their way to accept the Amendment.
THE SECRETARY OF STATE FOR AIR (VISCOUNT SWINTON): This Amendment quite plainly asks your Lordships to reverse the decision which you gave by a very large majority on the

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Second Reading a week or two ago. The decision which your Lordships then took to give a Second Reading to
this Bill clearly implied three things. In the first place, it implied that the House was satisfied that there was a sufficient weight of opinion in the cotton trade behind the Bill to justify your Lordships in that vote. Your Lordships obviously were equally satisfied that the Bill was right in principle. I am not going to follow the last noble Lord in his speech which, if I may say so, would have been more appropriate to the Second Reading. Another thing—I am sure I speak in the recollection of the Committee—that was very much in your Lordships' minds was that there had been quite enough delay in this matter, and that if this Bill were to be passed the sooner it was passed the better. Neither the Government nor this House would have been justified in giving a Second Reading to the Bill by a large majority unless they had been completely satisfied, as indeed the majority of your Lordships were satisfied, on these points. Therefore, this is largely an attempt to reverse that decision.
It is suggested that the ballot was not reasonably conducted. This was not a ballot under the Ballot Act in an election. Lancashire has been in the habit of taking ballots almost ever since there has been a cotton trade. I have no doubt at all it was taken in the manner to which Lancashire was accustomed. I have no doubt, equally, that the very shrewd men in the cotton trade knew exactly what they were voting upon. Indeed, I was not greatly impressed, and I doubt whether your Lordships were, with the argument advanced by the noble Lord, Lord Fairfax, who took so little interest in whether he cast his vote for or against that he said: "Well, which would you like ma to do, to give no vote or to vote against? "If that was all the interest which the noble Lord took in a ballot which was greatly exercising the people of Lancashire, I do not think he really is entitled to come here and ask that a further ballot should be taken in the trade.
My noble friend Lord Bertie asked what was the effect of keeping the ballot open and my noble friend Lord Peel asked why it was done. It was kept open for a longer time in order to meet the very point which the noble Earl, Lord Peel,
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himself made, that it was desirable that as many people as possible should have the full opportunity of voting, and to reduce the number of those people who, if they desired to vote, had not cast a vote at all. It made no difference to the general proportion of people who were for or against the scheme. What it did do was to reduce the proportion of non-voters in November, I think it was, when the ballot would ordinarily have closed. A good deal has been said about whether votes were really given for or against the proposals. That question having been raised, the Board of Trade themselves made a full scrutiny of every paper which was filled up, and the President of the Board of Trade authorises me to state that the Board of Trade take full responsibility for the figures that 27,750,000 spindles voted unconditionally in favour of the proposals and 8,750,000 spindles voted against. There were a certain number of people who did not take the trouble to vote at all, but there is no foundation, I am assured, for the suggestion that people ever thought there was going to be a second ballot. Any documents which may have accompanied the ballot paper made it clear that if the Colwyn Committee was satisfied—and the noble Lord, Lord Colwyn, is here in his place—there was enough opinion to justify the trade in going forward to ask the President of the Board of Trade to implement his undertaking, then upon that voting the Committee would go to the President and would ask him to introduce the legislation.
Let me add this. I did reply to my noble friend last time that any changes which were made in the Bill, as distinct from the proposals put forward, were changes—and I defy anybody to contest this—which were in favour of and not against the objectors to the Bill. For instance, the levy was at a lower rate than anybody expected at the outset. There were also one or two other points which I need not go into now. There is no doubt the voters in Lancashire understood quite well what they were doing. Many of your Lordships have fought contested elections earlier in your lives. We have all of us at every election had a number of very good reasons why we lost the election. The electors, we would say, had not really understood the issues, and things of that kind. Few of us were inclined to accept what is generally the

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real reason—namely, that the voters wanted to vote for the other fellow and not for us. I venture to submit that a large number of the trade quite understood what they were voting about, and that they voted in favour of this proposal. I invite your Lordships to reject this Amendment and to adhere to the decision which you came to upon the Second Reading.
VISCOUNT BERTIE OF THAME: I asked the noble Viscount to give to me the state of the poll. He has not given me the state of the poll. When I asked for the state of the poll I meant the figures, which have not been given. The noble Viscount also suggested in his speech that former ballots have been taken in Lancashire, and that the issues have been well understood, but were those former ballots extended in the way that this was?
VISCOUNT SWINTON: I am sorry I did not give the figures but they were given on the Second Reading. On the 10th of November, the figures were: in favour 21,384,682; against 7,138,280; total of votes, 28,522,962. Then, as I said, the fact of carrying the ballot on did not materially alter the proportion of the vote. What it did do was to give people a further opportunity to record their votes, and the totals then rose to the following: 27,750,000 in favour, 8,750,000 against.
VISCOUNT BERTIE OF THAME: There is one other question. A moment ago I asked the noble Viscount if former ballots in Lancashire had been extended in the way this one was.
VISCOUNT SWINTON: I do not know, but I say at once that if there is any question whether people have had plenty of opportunity to vote it seems to me quite a reasonable thing to extend the time and let people cast their votes.
VISCOUNT BERTIE OF THAME: Even at Parliamentary elections?
EARL PEEL: Will your Lordships allow me to say one word in reply to my noble friend who has defended the Government? I do not think he was very enthusiastic about the way in which some of this ballot was taken. He rather brushed the thing aside generally, and said in effect that whatever the method of the ballot may be we pretty well know what the
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opinion of Lancashire is. I wonder if we do. That is exactly what we want to know. The reason I have brought this Amendment forward, and I hope your Lordships will support it, is that, when these things are done, they should be done properly, correctly and in order. The noble Viscount says that a great many of us have stood for contested elections. So we have. Can any noble Lord say he stood for any contested election in which a ballot was taken in this manner? If a ballot was taken in this manner I can imagine the indignation that there would be on both sides if we were able to bring forward such evidence as we have put forward in this case. I deeply regret that the Government have not thought fit to put an end to all this difficulty and bitterness by accepting this ballot, which would only take, as I said, three or four weeks.
There is one very significant silence on the part of the noble Viscount. I gave a quotation from the speech of the Prime Minister in June, 1935, in which he said that these proposals were to be submitted to the trade. That was the pledge definitely given and, I am sure, given because there was a good deal of dissatisfaction at that time with the ballot that had taken place a year before. On that the noble Viscount has nothing to say.
VISCOUNT SWINTON: I beg pardon. I am very sorry I did miss that point. It is perfectly clear what the Prime Minister meant. The Prime Minister meant that if the Lancashire trade came forward and asked for this Bill, a Bill would be drafted, and that the Bill would be shown to these people who had been responsible for coming forward. That is the simple meaning of what the Prime Minister said. There is no ground for any suggestion that any pledge was broken by the Prime Minister. The Prime Minister is just as much opposed to having any second ballot as any member of the Government. I speak for the Government as a whole.
EARL PEEL: I am very glad that the noble Viscount has referred to this matter. I was afraid he was leaving out the answer altogether. All I can say is that that is the way in which the promise was taken. No one would have been satisfied if the Bill had been merely presented to those persons who were promoting the Bill. It ought to have been presented to

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the whole mass of the voters who, surely should have had the opportunity of pronouncing upon it. I do not wish to keep your Lordships longer but I think I really must trouble you to go to a Division in order at least to set, if we can, a second precedent, and in order that your Lordships may assure yourselves that these
LORD TEMPLEMORE: There is a drafting Amendment to this clause. I beg to move.
Amendment moved—
Page 1, line 10, leave out (" which shall be called and is ")—(Lord Templemore.)
Clause 1, as amended, agreed to.
Clause 2:
Power of Spindles Board to acquire and dispose of spinning plant, etc.
2.—(1) Subject to the provisions of this section, the Spindles Board may, during the period of two shears beginning on the appointed day, acquire by agreement—

(a) such premises and land used, or appropriated for use, for the purpose of the business of a cotton mill, and such machinery and other things whatsoever in or on premises or land used, or appropriated for use, for that purpose, as the Board consider it expedient to acquire with a view to the elimination of redundant spinning machinery in cotton mills in Great Britain, and

(b) such easements or rights in respect of land or water as appertain to, or are

methods are not to be adopted in the future for founding Bills or ascertaining the feeling of the trade.
On Question, Whether the proposed words shall be there inserted?
Their Lordships divided:—Contents, 12; Not-Contents, 52.

CONTENTS

Peel, E.

Askwith, L.

Illingworth, L.

Fairfax of Cameron, L. [Teller.]

Lawrence, L.

Bertie of Thame, V. [Teller.]

Phillimore, L.

Hampton, L.

Sanderson, L.

Ashton of Hyde, L.

Hare, L. (E. Listowel.)

Strabolgi, L.

NOT-CONTENTS

Hailsham, V. (L. Chancellor.)

Onslow, E.

Colwyn, L.

Plymouth, E.

Conway of Allington, L.

Halifax, V. (L. Privy Seal.)

Rothes, E.

Denman, L.

Doverdale, L.

Northumberland, D.

FitzAlan of Derwent, V.

Elgin, L. (E. Elgin and Kincardine.)

Somerset, D.

Leverhulme, V.

Monsell, V.

Gage, L. (V. Gage.) [Teller.]

Aberdeen and Temair, M.

Swinton, V.

Gainford, L.

Zetland, M.

Greenwood, L.

Amulree, L.

Hutchison of Montrose, L.

Abingdon, E.

Annaly, L.

Mottistone, L.

Cavan, E.

Bayford, L.

O'Hagan, L.

De La Warr, E.

Bingley, L.

Rayleigh, L.

Derby, E.

Boyle, L. (E. Cork and Orrery.)

Remnant, L.

Hardwicke, E.

Rennell, L.

Iddesleigh, E.

Carew, L.

Rochester, L.

Lucan, E. [Teller.]

Carnock, L.

Shute, L. (V. Barrington.)

Macclesfield, E.

Clanwilliam, L. (E. Clanwilliam.)

Sinclair, L.

Midleton, E.

Stanmore, L.

Munster, E.

Clinton, L.

Templemore, L.

Wolverton, L.

On Question, Amendment agreed to.

enjoyed with, land which the Board propose to acquire under paragraph (a) of this subsection;
and the powers conferred by this subsection are hereafter in this Act referred to as "purchasing powers."
(2) At any time before the end of the period mentioned in the preceding subsection, the Board of Trade may, on the application of the Spindles Board and with the consent of the Treasury, make an order extending by one year the period during which the purchasing powers of the Spindles Board are exercisable.
(4) The Spindles Board may dismantle, break up, sell or otherwise dispose of any property, rights or interests acquired by them under this section, and may maintain and repair any such property if and in so far as it appears to them to be necessary so to do for the purpose of disposing of it:
Provided that the Board shall not cause any machinery or parts of machinery acquired by them under this section to be removed from Great Britain, and shall not dispose of any such machinery or parts of machinery unless they have satisfied themselves, so far as they reasonably can, that the machinery or parts will not be removed from Great Britain.
LORD STRABOLGI LORD STRABOLGI moved, at the end of subsection (1), to insert:
" Provided that such powers shall not be exercised unless the Board of Trade are satisfied that the property to be purchased is that of an undertaking which is financially solvent."
The noble Lord said: The Amendment that stands in my name, which I put down in consultation with my noble friends, is self-explanatory. It is very similar in effect to the Amendment standing in the names of two noble Lords opposite, Lord Phillimore and Lord Fairfax. I hope that the Government reply will be different from the one given on the last Amendment when the noble Viscount the Secretary of State for Air said that, your Lordships' House having given a majority for a Second Reading, that meant in effect that the Bill must not be amended or improved. I submit that that is a novel Parliamentary doctrine. It is one that I have not previously met with in the course of my Parliamentary career.
My Amendment, I should have thought, would have appealed to those who support the principle of the Bill. It does not in any way affect the principle of the Bill, and is, I believe, an improvement. The object is to prevent the money of the more efficient, more prosperous and solvent section of the industry being used to buy up or bolster up the credit of bankrupt concerns. I am informed on very good evidence indeed that since this Bill was published sharp gentlemen in Lancashire have been buying up bankrupt concerns with a view to recouping themselves with a handsome profit out of the levy and compensation. I am informed that the sharp gentry stand to make a good deal of money; I am told that they are going to do very well out of it. It would be bad enough if this were Government money that was being distributed in this way to these sharp gentry, but this is the money of the more prosperous and efficient sections of the industry. Surely your Lordships would wish to prevent that sort of sharp practice succeeding? Furthermore, the money that is paid in compensation for undertakings that are insolvent will obviously go to the creditors and will not find its way back into the industry for modernisation and improvements. It would be lost to the industry for ever.
It is notorious and, indeed, has been admitted by the President of the Board of Trade in the most public manner, that a great deal of speculation took place in the cotton industry in the so-called boom years. It has been referred to by the noble Earl, Lord Derby, the noble Earl, Lord Peel, and others with a very intimate knowledge of the cotton industry. There was a great deal of speculation; the capital was watered; concerns were handed over to people who did not understand the management of them and who quite deservedly went bankrupt. Since the proposal of this Colwyn Committee's scheme, many of the concerns that would have been scrapped altogether have been kept alive in the hope of getting compensation. I submit to your Lordships that this is on a wrong principle. When this matter was in Committee in another place a similar Amendment was discussed, and Mr. Dodd declared in resisting the Amendment—he was supporting the Government, and apparently has a professional connection with the trade and a great deal of knowledge—that of 389 mills of which he had made a survey, 118 had credit balances and 271 had debit balances. That, however, I submit, is not the same thing as being insolvent. I want to protect the prospering, continuing section of the industry from having to pay for definitely insolvent bankrupt concerns, and I submit that my Amendment would be an improvement to the Bill without striking in any way at its principle. I hope, therefore, that your Lordships will support the Amendment.
In the pamphlet that was issued on July 17 of last year by the drafting committee it was openly admitted that the creditors would share in the benefit of the scheme and that in many cases the creditors were the banks. I am not here to make any sort of attack on the banks, but I think that the banks were parties to the financial speculation of which I have spoken and which has been described and condemned by the President of the Board of Trade and others. I believe it is a fact that the banks were parties to this descent upon Lancashire by certain company promoters and people of that sort from the City of London, who were very largely to blame for its subsesequent plight and difficulties. Surely, in

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a Bill that is designed to reduce redundancy, to reduce the industry to manageable proportions, it is not right that these outside financiers—speculators in some cases—should stand to gain, and still less these gentry who have deliberately bought up bankrupt firms in the hope of getting something out of the levy and making what they call, I believe, a "killing," which will be a burden on the efficient section of the industry. I beg to move.
Amendment moved—
Page 2, line 25, at end insert the said proviso.—(Lord Strabolgi.)
LORD TEMPLEMORE: As the noble Lord opposite has said, this Amendment and the Amendment standing in the name of two noble friends of mine can really be taken together, and if it is convenient to the Committee I will speak now. Of course they, if they desire, can speak again and ask mo questions when I have sat down. The noble Lord opposite found fault, apparently, with the answer given by my noble friend the Secretary of State to the Amendment of the noble Earl behind me, because he said that, your Lordships having taken a certain line and given a certain decision on the Second Reading, therefore we are bound to vote against the Amendment of the noble Earl. Without saying that this Bill ought not to be amended at all—of course I do not think that—nevertheless, in the circumstances I think that the reply of my noble friend was perfectly right in that case.
To return to the Amendment of the noble Lord. I thought—and after hearing the noble Lord speak I am sure—that the idea behind this Amendment is to prevent the operations of the Spindles Board from affording compensation for the loss of capital arising out of the speculation which took place in the cot ton industry in 1020. It is common knowledge that in 1920 financial speculation was rife in the cotton spinning industry, and that mills were bought and sold at prices considerably in excess of their proper values. As a result mills were left carrying capital far greater than the cost of their replacement value, capital which had no relation at all to their earning power: a figure of from £4 to £6 per spindle was by no means uncommon. But all this belongs to the distant past and has little or no bearing on what is happening in
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Lancashire and the difficulties now. I venture to say that the Spindles Board will be paying on an average for the spindles they acquire, not £4 or £6, but 5s. per spindle—less than one-eighth of the present-day cost of replacement. The Board will acquire a great deal of plant from derelict concerns at considerably less than this figure of 5s. Mill-owners can always, of course, obtain the scrap value of their mills—1s. or 2s. per spindle, or whatever it may be, according to the state of the scrap metal market—and it will be for the Spindles Board to decide, in the case of each mill offered to them, whether or not the interests of the industry will be served by making some small additional payment over and above the bare scrap value in order to get rid of the uneconomic competition of the mill.
With regard to the noble Lord's Amendment, I would venture to say that it would entirely defeat the object of the Bill. As far as I can see, if the Amendment means anything, it means that the Board should purchase and scrap the efficient concerns that are doing profitable business and providing steady employment for their operatives. I cannot think that the noble Lord prefers that these firms should be put out of business and leave the field to less efficient firms.
EARL PEEL: I could not catch what the noble Lord said. Would he mind repeating his last sentence?
LORD TEMPLEMORE: I cannot believe that the noble Lord would prefer that firms doing profitable business should be put out of business, as they would be if the Amendment were carried, and leave the field to less efficient firms. The object of the Bill is to cut out the dead wood in the industry; the Amendment, on the other hand, would preserve it at the expense of the sound timber. The spindles of the financially derelict mills constitute the main obstacle to reorganisation and re-equipment of the cotton spinning industry. Whether they are running spasmodically or whether they are stopped, they are in a position to enter the market whenever there is an improvement in the demand for cotton yarn. Financially desperate, they may accept orders at hopelessly uneconomic prices, and so, spreading the production of yarn over a still greater number of units, destroy the possibility of steadier

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employment and more economic utilisation of machinery for the industry as a whole. While these mills remain to constitute a threat to the rest of the industry, the industry will always fail to attract the new capital which it must have if it is to reorganise and re-equip. For these reasons, my Lords, I cannot accept the two Amendments in question.
LORD PHILLIMORE: This question was discussed at some length in another place, and Amendments were brought forward in rather a different form, if I have read the proceedings aright. It was suggested that the Spindles Board should not be allowed to pay more than a certain amount for spindles belonging to insolvent firms. I gather from what has been said that it will not be the intention, and we hope it will not be the practice, to pay more than a certain amount over scrap value. In other words, the Government might have accepted the Amendment put forward in another place, which does place a limit upon what may be expended for what I may call bankrupt spindles. The Government, no doubt moved by a sense of its great majority and autocratic powers, refused to consider such an Amendment as that. Therefore it seemed good to certain of us to move the Amendment again in a simpler and more convenient form, by which the levy which is going to be made on firms, which are after all active firms, should not be used to buy up not only dead wood but rotten wood, so rotten that it cannot be used again. I think it is not in dispute that there are in the trade already in Lancashire three to four million spindles belonging to bankrupt firms, which—I will not say cannot, but are wholly unlikely ever to come into operation again.
What are the Government proposing to do? They retain power to buy these spindles, in order to pay bankrupt firms rather more than they would have been paid in the open scrap market. They are not going to do it with Government money, and, of course, not with the bankrupts' money, but at the expense of the rest of the trade. It seems to me a most remarkable procedure, and more discouraging to the proper conduct of business than anything one can imagine. I do not know whether noble Lords appreciate that it will not only be spindles but land and buildings. Some of the buildings will be out of date,
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heavily mortgaged, and quite useless for modern cotton production. The truth is that machinery for scrap is worth about 2s. per spindle, and anything over that is making a present to the bankrupt concerns at the expense of active members of the trade. I hope that the noble Lord who moved the Amendment will obtain better success than we did, and I shall support him in the Lobby if he desires to take a Division.
LORD STRABOLGI: I should like to exercise my right to point out that the noble Lord who spoke for the Government did not deal with the main argument that I ventured to present. He spoke of the days of 1920, and said that that was an old story, and that the rampaging and speculation of those days can be forgotten. I am talking about what has been happening in the last few months. In the last few months these gentlemen have been running round buying up derelict concerns, with the intention of doing well out of them now that this Bill has been presented. I received that information as recently as yesterday morning from a gentleman who is in favour of this Bill, and I want to prevent these speculators from making money in 1936, not in 1920. There is just one other comment. I may be wrong, but I have always understood ever since this Bill was born that its object was to reduce redundancy. I submit that you do not reduce redundancy by buying up and compensating derelict, closed-down mills which it is most improbable can ever come into production again. If the Bill is intended to reduce redundancy, you need every penny raised by the levy. I see that in the estimates of the Committee itself it is stated that there are 7,250,000 spindles in the closed mills. If you do not support this Amendment a great deal of the levy will be misused, and will not go to the reduction of redundancy. Therefore I hope your Lordships will support the Amendment.
On Question, Amendment negatived.
LORD STRABOLGI LORD STRABOLGI moved, at the end of subsection (1), to insert:
" Provided that in exercising such purchasing powers the Board shall not without the consent of the Board of Trade acquire more than fifty per cent. of spindles, whether working short time or not in any area to be defined by the Board of Trade."
The noble Lord said: This Amendment breaks entirely new ground, which was

1093
not, as far as I am aware, discussed at all in another place. It is put down at the request and with the support of my noble friends in this House, and of my Party in another place. The object is to give a discretion to the Board of Trade—it is not mandatory but it is discretionary—to prevent the formation of new distressed Special Areas. Where you have a district the greater part of the employment of which depends upon one or two big mills, if you close down the whole of those mills you do much more than throw the operatives in those mills out of work. You ruin the shop-keepers, you cause great distress to all the ancillary trades and all sorts of people who are directly or indirectly de-pendent on the custom of those operatives. The First Lord of the Admiralty will remember the great arguments we used to have about the redundancy of Chatham as a naval dockyard. It was not only the dockyard but the hospital—
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT MONSELL): Sheerness.
LORD STRABOLGI: And Chatham too. But, apart from strategical and economic reasons, there were all sorts of social reasons against closing down the industry of a particular district. I want to give a discretionary power to the Board to say: "In this case you will create too much distress in this particular area, and you had better look elsewhere and find your redundancy in another district." There is another consideration. In parts of Lancashire, I am informed, the coal mines have been doing very badly as well. They are in the same areas as the cotton mills that are also doing badly, and if you add to a distressed industry of coal mining a distressed industry of cotton you will create very widespread distress. For these reasons I hope that this very reasonable Amendment will be accepted.
Amendment moved—
Page 2, line 25, at end insert the said proviso.—(Lord Strabolgi.)
LORD TEMPLEMORE: After I had replied to the last Amendment of the noble Lord opposite, I think he thought I had rather skated over his points and had not given him a proper reply. I assure the noble Lord it is the last thing I wish to do, either then or ever, and I have got a very full reply to this Amend
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ment, which I regret very much that His Majesty's Government cannot accept. The Amendment as it stands would do just what we do not want to do: it would prevent the Spindles Board from acting at its own discretion. It would prevent the Spindles Board from acquiring more than one-half of the spindles in any particular area, it being left to the Board of Trade to decide what the areas should be. I think the noble Lord said that, if the Amendment were carried it would prevent serious unemployment in isolated villages which are solely dependent on a few cotton mills or on a single mill. But very few cases of this kind could, I think, possibly arise. Over 90 per cent. of the cotton spinning industry is grouped within a few miles of Oldham and Bolton. The vast majority of the operations of the Spindles Board will be concerned with these two areas, and taking each of the areas as a whole there is no possibility that the purchases of the Spindles Board will amount to anything like 50 per cent. of the spindles in the areas. Over the industry as a whole the purchases will probably not exceed more than from one-sixth to one-quarter of the total.
The large majority of the mills with which the Spindles Board will be concerned will be in districts containing scores, if not hundreds, of mills, but it would be highly undesirable to prevent the Board from accepting offers of sale from mills outside these districts. The uneconomic competition of the mill is not in any way lessened by the fact that it may be remote from the ordinary centres of the industry. The Amendment is an attempt to graft on to the Bill an entirely new principle and to hamper the Spindles Board with conditions that have no bearing on their primary function. That function is not to reorganise or plan the distribution of the industry but to put an end to the war of attrition that is sapping the vitality of the industry. The casualties of this war in mills and in operatives have not been confined to any particular area or to any particular percentage in those areas. One has only to think of the town of Mossley, which was mentioned by the noble Earl, Lord Derby, during the Second Reading, where all the cotton mills have been closed down by internal competition in the industry. The object of this Bill is to put an end to a process which can only result

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in town after town and village after village going the way of Mossley. In the particular instance of Mossley, however, there have been attempts to attract new industries of the kind to which Lord Derby referred on the Second Reading of the Bill, and these are fortunately bearing fruit. Where this cannot be done the matter can best be dealt with by means of the Ministry of Labour training and transference schemes. It is in these directions rather than by fettering the powers of the Spindles Board that the true solution of the problem raised by the Amendment will lie. I regret that the Government cannot accept the Amendment, which hampers the Spindles Board which we are setting up and goes quite contrary to the spirit of the Bill.
LORD STHABOLGI: I am much obliged to the noble Lord for the very full reply he has given, and I want to take the opportunity of saying that I really was not complaining; I was trying to help him on the last Amendment. I pointed out that he had omitted what I thought was an answer to a very important argument. I do not propose to put your Lordships to the trouble of a Division.
On Question, Amendment negatived.
LORD SANDERSON LORD SANDERSON moved, after sub-section (2), to insert the following new subsection:
" ( ) The Spindles Board shall make provision for the payment of compensation to cotton operatives who in consequence of the exercise by the Board of their purchasing powers, lose their employment or are deprived of an opportunity of obtaining employment."
The noble Lord said: When I spoke on the Second Beading of this Bill I devoted a good deal of my speech to the question of compensating the working people of Lancashire who might suffer from the results of this Bill when it became an Act, and I expressed the hope, I think courteously, that the Government would consider an Amendment of the kind that we have before us now, if I put it down, and that they would be able to accept it. No answer was given to that question in the reply of the noble Viscount, Lord Swinton. In fact, the whole question, which to us is a very important one—the question of compensating workers—was never mentioned
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at all by the noble Viscount in his reply. I hope that may have been due to the fact that the Government wanted time perhaps to discuss this question a little more, and if that is so I hope that they have made up their minds to accept this Amendment to-day.
We ought to remember that there are human beings concerned in this industry besides machines, and throughout the Bill, as far as I can remember, there is not a single mention of the men and women who are working in the industry—people who are bound to suffer by the loss of their livelihood if this Bill passes in the form in which it stands. Of course I may be told that there will be no unemployment as a result of the Bill. Well, it is said that there are 10,000,000 redundant spindles, and those have to be got rid of. It may be said that perhaps 5,000,000 of them are not working now. That may be so, and perhaps another quarter of the 10,000,000 may be working part time. That also may be so, but even then there will be a quarter of the 10,000,000 spindles working, and people who are working those spindles now will be thrown out of work when they are bought up by the Spindles Board. It may be said: "Oh, no, the industry will be so prosperous after this process of buying up the spindles has gone on that the unemployed workers will be absorbed by the mills which are left working in the industry." Well, I do not believe that myself, and at any rate, if it is the case, it will take time before this prosperous period appears. Why not compensate these workers, at any rate during the transitional period at the very least?
Then I may be told that there is no precedent for compensating displaced working people in the case of a change like the one that is contemplated. That may be true, but there are plenty of precedents for compensating people who are earning salaries. We have the Local Government Act, 1929, for instance, where that was done, and it is a common practice in commercial and industrial undertakings to compensate salaried officials such as bank clerks and the like who are often given bonuses and pensions. Many of these Lancashire people who will be displaced will be the technicians of the industry, highly skilled men who have spent years of their lives

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in attaining to the posts they now hold as minders, overlookers and so on. They very much correspond to some of the officials in other industries. They are quite as skilled in their particular line as bank clerks and local government officials, and there seems to be no reason why they should not be compensated. I should go further and say that all the workers who will be displaced should be compensated.
I know I shall be told that the Labour Party when in office in 1930 did not offer compensation in the case of the Coal Mines Act of that year. That is true, but they ought to have done so. I give the Government that point, but because the Labour Party failed to do what is right in that ease is surely no reason why the present Government should do wrong in the present case. I do not mind much about creating precedents. After all, precedents have to be made some time, and why not make one now? I shall be told that many of the workers have already been displaced in this industry by ordinary economic forces, and have received nothing but their insurance benefits. Why, therefore, should the workers who may be displaced under this Bill be treated in a better way than the workers who have been displaced by ordinary economic forces? My answer is that these present workers are going to be displaced by Act of Parliament. That is quite a different thing to displacing people by ordinary economic forces. Lots of mill-owners who, if left alone, would be displaced by economic forces—they certainly would go bankrupt, many of them—are going to be paid for their spindles. Working people who are going to be driven out of the industry are not going to be paid anything for the loss of their means of livelihood. I say that is unjust. I hope very much that the noble Viscount will tell me he can accept the Amendment and I hope your Lord-ships will support it. I beg to move.
Amendment moved—
Page 2, line 31, at end insert the said subsection.—(Lord Sanderson.)
VISCOUNT SWINTON: I did not deal with this point on the Second Reading because the noble Lord had made it plain that he proposed to raise it in the appropriate way by an Amendment on the Committee stage. In passing, let me say that a proposal to compensate somebody
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who was deprived of the opportunity of obtaining employment would obviously be a hopelessly unworkable thing. No one could conceivably arbitrate or assess a matter of that kind. I shall deal with it rather on the broad merits of the case of somebody of whom it could be said—and there certainly would be very few cases—that he is unemployed by reason of the fact that a particular mill has been shut down. What are the merits of this case? The whole justification of the Bill is that it will create conditions in this industry which will make for better trade and better employment. It certainly will not, even in the first moments, diminish employment in the aggregate, and if the scheme works even half as well as those who have fathered it hope, it certainly will increase employment in this industry. Observe, my Lords, that when you take this industry, it is not like the coal mining industry, which is spread over the whole of the land, and in which concentration, say in the Midlands, may hit pits in South Wales. If ever you had an industry that is largely localised, it is this spinning industry in the Bolton and Oldham areas. Therefore, if men are thrown out of work in one mill and employment is improved in another, it is going to happen in a district where it is extraordinarily easy for men to get by train, from one place to another. It is an industry where transfer is incomparably easier than in any of the other industries where rationalisation has been proposed.
Compensation in the way the noble Lord has spoken of it is really an erroneous expression. It is not that you are buying up businesses here and amalgamating them. All that you are going to do is to buy, and buy as cheaply as you can, the redundant spindles, to stop these spindles from working. Many of these spindles, as has been obvious from the debate, are spindles which are not in work at the present time. You have got to get rid of them in order to prevent them from coming in intermittently and weakening the market in the hopeless way they do. In a case like that what ought to be the State's policy? Surely it ought to be the line of policy which we are carrying out—the two-fold policy of a great, wide and, I think, not ungenerous measure of unemployment insurance for people who are thrown out of work, coupled on the positive side with schemes for creating

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conditions in which the trade may become more prosperous. Indeed, the whole justification of this Bill is that you are going to create conditions of that kind. That being the broad policy which every Government has followed, with greater or less success, surely it would be very unreasonable to put by Statute a particular obligation upon an industry which is trying to set its house in order and leave entirely free all those industries which are not making any effort to rationalise or improve their position by collective action?
The noble Lord said—and it was very relevant—that when the Labour Party were responsible for bringing in a Coal Mines Bill they included no provision of this kind. He said they were wrong; at the time he said they were right; but when you cease to have responsibility you become, perhaps, more liberal in your outlook! If ever there was a case where such a proposal would have been reasonable it was that case. There you were, in fact, proposing to amalgamate undertakings. You were giving a full price to the undertakings which you took over. You were displacing men in one pit or one district who might very likely be unable to obtain employment for some time. The noble Lord's Party and his Government deliberately thought in that case that it was not right to introduce an obligation of that kind. Just the same specious case could have been made for it which has been made by the noble Lord here. I venture to say to him, with all respect, that if, where the case was much stronger, where there was a great deal more money involved, his own Government deliberately decided that it would not be right to put such an obligation on an industry, it is not reasonable for him now to come and ask for it in this case, where there is a very limited amount of money, where there is no amalgamation, where compensation is on a very limited scale and for a very limited purpose. In such circumstances I suggest that it is not reasonable to press this particular Amendment at this time.
LORD STRABOLGI: I think just a few words are called for in reply to the very adroit speech which the Minister has made. It is true that the Labour Party did not provide compensation in the Bill which has been mentioned, but I think the noble Lord is not unaware
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of the circumstances of the Labour Party at that time. The Labour Government was in a hopeless minority in the House of Commons. I think the real masters were the Party of the noble Lord now on the Liberal Benches, Lord Rhayader. We could not move in that matter with out the consent either of the Conservatives or the Liberals. When they combined against us the situation was in tolerable.
VISCOUNT SWINTON: You did not try it.
LORD STRABOLGI: I want to remind the noble Viscount of his own better record in a much earlier Bill, the Railway Bill. He was not then adorning the Government Bench, but he was supporting the Coalition Government which brought in a Railway Bill in which compensation was provided for when so-called redundant lines were closed down. The railwaymen were duly compensated then. For that reason we think there is a very good case here. This is very important. We are told that you intend to scrap under this Bill, I think it is 10,000,000 spindles, and the calculation is that that affects 30,000 operatives. That is very serious indeed. I confess that I cannot really make out what the Government's policy in this matter is. At one moment they tell us that this Bill is to reduce redundancy—in that case you are bound to increase unemployment—at the next moment they say: "Oh, no; you are only going to scrap spindles that will never turn again, and that will not affect employment." They cannot have it both ways.
I am afraid we shall have to trouble your Lordships to divide on this question, because it really is a matter of principle. I am going to quote to your Lordships what is going to be said if you refuse this request. I have here a document prepared by the Committee that is opposing the Bill on behalf of, I think, 16,000,000 spindles headed by Sir James Lithgow and the noble Lord, Lord Melchett, and a number of other prominent industrialists. This is what they say on this point:
" The Bill enables the Socialists—
that is, ourselves—
" to argue that whereas they would only interfere in the interests of the masses, the present Bill interferes in the interests of the few "—

1101
that is, the bankers and the shareholders. This is the opinion of the noble Lord, Lord Melchett, and Sir James Lithgow, and we are certainly going to say this—can you blame us? "There is great compensation for the speculators who have bought up idle mills that will never work again; the shareholders are paid; the bankers are paid; but the poor operatives, in the words of the Air Minister, have the unemployment insurance to fall back on for a certain time. They can take tramcars and go and find jobs in the next town." Thank you for that argument; we shall use it.
VISCOUNT BERTIE OF THAME: I do not wish to say anything offensive to the noble Lord opposite, but surely it is a
On Question, That Clause 2 be agreed to?
EARL PEEL: On Clause 2 I should like to ask a question which I should have asked on the Amendment of my noble friend Lord Fairfax if he had moved it. I gave notice of this question to the noble Viscount. It is as follows: Sub-section (4) of Clause 2 says:
" The Spindles Board may dismantle, break up sell or otherwise dispose of any property."
So that the Spindles Board are quite free, as I understand it, to sell machinery,
waste of time to go to a Division on this when noble Lords know they will be defeated here, and that, even if they won here, the question of Privilege would be raised in the other place.
LORD STRABOLGI: No.
VISCOUNT BERTIE OF THAME: Certainly; it is a money provision.
LORD STRABOLGI: No.
VISCOUNT BERTIE OF THAME: I apologise. I am wrong.
On Question, Whether the proposed new subsection shall be there inserted?
Their Lordships divided:—Contents, 7; Not-Contents, 54.

CONTENTS

Amulree, L.

Hare, L. [E. Listowel.) [Teller.]

Sanderson, L.

Arnold, L.

Strabolgi, L. [Teller.]

Faringdon, L.

Rochester, L.

NOT-CONTENTS

Hailsham, V. (L. Chancellor.)

Bertie of Thame, V.

Dunmore, L. (E. Dunmore.)

Halifax, V. (L. Privy Seal.)

FitzAlan of Derwent, V.

Elgin, L. (E. Elgin and Kincardine.)

Goschen, V.

Northumberland, D.

Leverhulme, V.

Fairfax of Cameron, L.

Somerset, D.

Monsell, V.

Gage, L. (V. Gage.) [Teller.]

Wellington, D.

Swinton, V.

Hampton, L.

Trenchard, V.

Hastings, L.

Zetland, M.

Illingworth, L.

Annaly, L.

Jessel, L.

Cavan, E.

Ashton of Hyde, L.

Phillimore, L.

De La Warr, E.

Barnby, L.

Rankeillour, L.

Derby, E.

Bayford, L.

Remnant, L.

Lucan, E. [Teller.]

Bingley, L.

Rennell, L.

Macclesfield, E.

Carew, L.

Ritchie of Dundee, L.

Munster, E.

Carnock, L.

Rockley, L.

Onslow, E.

Clanwilliam, L. (E. Clanwilliam.)

Sinclair, L.

Plymouth, E.

Stratheona and Mount Royal, L.

Radnor, E.

Colwyn, L.

Rothes, E.

Conway of Allington, L.

Templemore, L.

Scarbrough, E.

Doverdale, L.

Wolverton, L.

Stanhope, E.

Resolved in the negative, and Amendment disagreed to accordingly.

because I presume machinery is included in property. The only limitation on the Board is that they may not sell any of the machinery so acquired, whether spindles or ancillary machinery, outside the United Kingdom. Apparently they can sell inside the United Kingdom. The question I want to put to the noble Viscount the Secretary of State for Air is whether it is not rather inconsistent with the general object of the Bill. As he said, the object of the Bill is the buying of spindles to prevent them working, but under this clause the Board can buy them and sell them. They may buy spindles at 5s. each and sell them, say, at 3s. each. They would be bought by some spinner

1103
who, having acquired them at that cheap price, would presumably add them to his own machinery and be able to compete successfully with—undercut if you like—other spinners not so fortunate in getting machinery so cheaply. Is that really intended? It docs seem rather inconsistent with the general idea of the Bill. I can understand that they should dismantle and scrap and break up spindles, but I do not understand why they should sell them subject only to the limitation that they should not sell outside the country.
VISCOUNT SWINTON: I am very glad to answer my noble friend's question. It would appear, put in the way my noble friend put it, that there is some inconsistency here. The object of the Bill is to get rid of whatever is the proper number of spindles—10,000,000, 12,000,000, or whatever it may be—and there is quite wisely a clear direction that the greatest care must be taken that they are not sold outside the country so as to stimulate foreign competition. What will happen in the ordinary course is that spindles will be scrapped, but there is a possibility that the Board may be offered spindles which are in fairly decent condition. They might then find that there was some firm which wished to give up spindles which were in bad condition and should obviously be scrapped, and it is not unreasonable that in such a case the Board—which, after all, will be managed by the trade itself which will know best how to run its own business—should not be precluded from selling these rather good spindles as a sort of part exchange for worse spindles which they would scrap. It is in order not to deprive them of that power, which might be convenient for the trade, that the clause has been drafted as it appears in the Bill.
EARL PEEL: I am much obliged to my noble friend for the answer he has given, but nevertheless it does seem to me inconsistent with the idea of the Bill that people should be able to buy these spindles cheap and compete with others.
Clause 2 agreed to.
Clause 3 [The Advisory Committee]:
LORD TEMPLEMORE: There is a drafting Amendment to this clause. I beg to move.
Amendment moved—
Page 4, line 26, leave out (" thereof ") and insert (" of the Committee ").—(Lord Templemore.)
On Question Amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5:
The spindles levy.
(3) If, at the beginning of the second or any subsequent levy year, the total spindle capacity of the spinning machinery in all cotton mills in Great Britain of which any particular person is the owner exceeds the spindle capacity, as at the beginning of the appointed day, of the spinning machinery in all cotton mills in Great Britain of which that person then was, or has, at any time since, been, the owner, except—

(a) any cotton mill of which he is not the owner at the beginning of the said year, and in which, at the time when he ceased to be the owner thereof, there was any spinning machinery, and

(b) any cotton mill of which he has become the owner after the beginning of the appointed day, and in which, at the time when he became the owner thereof or when any other person previously became the owner thereof after the beginning of that day, there was no spinning machinery,

the amount of spindles levy which, in the case of the first-mentioned cotton mills, is payable for the said year in respect of the said excess shall, in lieu of the sum which would, apart from this subsection, be so payable (hereinafter referred to as "the ordinary levy "), be the sum produced by multiplying the ordinary levy by the number of levy years which will have elapsed at the end of the said year, less the total sum (if any) already paid by virtue of this subsection in the case of those cotton mills.
(4) If, as respects the cotton mills of which any particular person is the owner at the beginning of the second or any subsequent levy year, there is no spindle capacity, as at the beginning of the appointed day, which can, in relation to that person, be taken into account for the purpose of the last preceding subsection, the amount of spindles levy which, by virtue of subsection (2) of this section, is payable for the said year in the case of those cotton mills shall be increased by the total sum which would, by virtue of that subsection, have previously become payable by way of spindles levy in the case of the cotton mills if the spinning machinery therein at the beginning of the said year had been therein at, and at all times since, the beginning of the appointed day, less the total sum (if any) which has already been paid by way of spindles levy in the case of those cotton mills:
Provided that if any of the said cotton mills was a cotton mill at the beginning of the appointed day, then for the purpose of ascertaining whether any, and, if so, what,

1105
deduction is to be made under the preceding provisions of this subsection in respect of sums already paid by way of spindles levy, no account shall be taken of any sum which has accrued due by way of spindles levy in the case of that cotton mill before the first occasion after the beginning of the appointed day on which any particular person became the owner of the cotton mill at a time when there was no spinning machinery therein.
LORD PHILLIMORE LORD PHILLIMORE moved to leave out subsections (3) and (4). The noble Lord said: The more I look at this Bill the less surprised I feel that the noble Viscount the Secretary of State for Air was so anxious to stifle the free discussion and examination by your Lordships of its particulars. He said to your Lord-ships: "You have swallowed the whole nasty dose at one draught on Second Reading. Why are you troubling now to look at the even more unpleasant ingredients?" I quite agree with him. The more I look at this Bill the more ingredients I find which are opposed to all sound principles both of business and everything else. At any rate your Lord-ships will not fail to find that this particular Clause 5 does, in the words of the Parliamentary Secretary of the Board of Trade in another place, constitute—I think this was his phrase—a new introduction into English industrial practice. In other words, nothing so egregious has ever been done before. The object of my Amendment is to strike this new and very unfortunate introduction out of the Bill. I want to get rid of the back levy which the Bill imposes upon new entrants into the cotton industry. Under the Bill if I or some more intelligent person invents a wholly new machine which would revolutionise the cotton industry and I introduce it into a mill ten years hence, I shall have to pay back levy for the whole of that ten years. I should be severely fined for the want of success of my predecessors in the trade. If, to come a little nearer to probabilities, I introduce ring spindles instead of mule spindles, I should equally be fined for doing so. What an encouragement to new activities, new brains and the resuscitation of the Lancashire cotton trade! This principle, I submit, will end in killing English trade and English inventiveness, English energy and English enterprise. I hope I have put the matter clearly before your Lordships, and I hope you will not agree that this principle shall be introduced into our life.
Amendment moved—
Page 6, line 1, leave out subsections (3) and (4).—(Lord Phillimore.)
VISCOUNT BERTIE OF THAME: No doubt the noble Viscount will make out that this levy is very puny, but I think that a gentleman who wrote in the Economist hit the nail on the head when he said this:
" Many a formidable problem can be made to appear puny if it is shifted to a new and enlarged setting or focussed from a different angle. One of the chief tasks of statesmanship to-day is to make a fifty per cent. outrage on liberty look like a one per cent. voluntary offering on the part of the victims."
If he says that, I think the answer is contained in the passage which I have read.
VISCOUNT SWINTON: I was really going to deal with the whole thing on its merits. I am the last person to stifle discussion, and I always love the noble Lord's interventions, because they enable us better to appreciate the real merits of the Bill. What the noble Lord said is, really, that this is a very wicked clause, because, if a man comes in later on during the fifteen-year period, he has to pay a levy. There is one argument in favour of the noble Lord's proposal, and that is a parable in the Scriptures; but what he is asking up to do is to give the man who comes at the eleventh hour into the vineyard a preference over all those who have borne the burden and heat of the day. I do not think that is at all a reasonable proposition. If this scheme succeeds, if it succeeds in getting a balanced production and stable conditions in the industry, it will be the very success of this scheme, by those stable conditions and balanced production, that will bring in new capital. Why should the man who reaps that advantage and comes in late have a preference over all the established firms who have been paying this levy in the past? Surely the only fair thing to do is to put the new entrant, who decides to come in when the scheme has proved itself, established itself and brought success, and the old-established firms in the cotton industry who have been paying a levy all these years, on an equality. That is all the Bill does, and I hope that your Lordships will not assent to undue preference.
VISCOUNT BERTIE OF THAME: The noble Viscount drew a false simile from

1107
the Bible, because the eleventh-hour man got the same reward as those who had worked all day.
LORD BARNBY: May I ask the noble Viscount what the levy would amount to? Is it not possible that those in charge of the Board would be able to insist that the buyers of spindles that revert into use after being bought by the Board shall only be allowed to have them on condition that they break up an equivalent number of spindles to that which they buy from the Board?
VISCOUNT SWINTON: That is a Committee point, I think, on an earlier clause. I am not quite sure whether it would be—though I think it would be—in the power of the Board to impose any conditions they like in an indirect way. They are not obliged to buy anybody's spindles unless they decide that it is good business to do so, and therefore indirectly, no doubt, they could achieve whatever conditions they thought fair.
LORD BARNBY: That is to say, if a machine passes through the Board's hands, they shall be able to insist that the purchasers of the machine shall break up an amount of spindles equivalent to that which they buy.
VISCOUNT SWINTON: Certainly.
EARL PEEL: I am not quite sure that my noble friend has given a perfectly fair account of this system of entrance and preference. He asks, why should these firms have a preference if they enter into business nine or ten years hence? I was going to put it the other way: why should they have this heavy penalty? Why should they be fined, as it were, ten times the amount of the payment made by the other firms? These firms are not waiting about for three, four, five, or six years in order to enter the business at a favourable opportunity. They have, perhaps, been responsible for some new invention, some new way of spinning cotton, and so on, which will be of great value. I want to give an actual case that has come to my notice. There are a good many yarns now being experimented and worked which are not merely cotton but are a combination of cotton, jute and other fibres. I have in my hands here a letter from a firm who are spinning a new yarn which is about 80 per cent. jute and 20 per cent. cotton.
1108
If an arrangement of that kind is made five or six years hence, to manufacture a new invention which may be of very great value and has a composition which is 20 per cent. cotton—I believe that, according to the definition clause, 1 or 2 per cent. would make it cotton and therefore subject to the levy—surely it would be very hard, and not at all conducive to activity in invention, that you should penalise those people by the number of years that have elapsed since this particular levy was started. That is a complete accident. Why should they be penalised to this extent? I am not asking for a preference for them, but I say that, because a firm starts ten years hence, it is going to pay ten times the amount of the levy that it would pay if it started now. I cannot see the fairness of this provision at all. I also agree with my noble friend that these Biblical references of the noble Viscount's are rather confusing, because, as everybody knows, you can preach all sorts of sermons on the same text.
LORD STRABOLGI: May I ask for guidance on this matter? Is it not the intention of the Government in the future to make the cotton industry a closed corporation?
VISCOUNT SWINTON: No.
LORD STRABOLGI: And that anyone who comes into it will have to pay this fine? That is how I read the Bill. It is very complicated, but I rather gathered that that was the noble Lord's intention.
VISCOUNT SWINTON: It is not a case of paying a fine. The Bill establishes a levy on the cotton industry. What it is proposed to do is to make this absolutely equal on every person.
LORD STRABOLGI: If in fourteen years' time the noble Lord and I invent a wonderful new method of Spinning cotton and want to exploit it for the good of the country, have we to pay fourteen years' back levy?
VISCOUNT SWINTON: Yes, just as, if I am in the trade and having been paying fourteen years' back levy, I am probably more likely to make an invention. It is more likely that the people who have fourteen years' experience will make these progressive discoveries if they are in the trade than that the noble Lord will who is not. It is a bit unfair, if I am in the

1109
cotton trade all my life and am bound to pay a levy for fourteen years, that I should be at a discount compared with the noble Lord, who has the luck to hit on an invention and comes into the trade for the first time.
TEE EARL OF RADNOR: At the same time, I cannot help feeling that the argument is very poor. I do not understand the cotton trade, but it appears to me that the man who has been in the cotton trade for fourteen years has been earning
Resolved in the affirmative, and Amendment disagreed to accordingly.
Clause 5 agreed to.
EARL PEEL EARL PEEL moved, after Clause 5, to insert the following new clause:
Saving for manufactories not in competition with the cotton trade.
"6. Nothing in this Act shall apply to a mill which is by this Act declared to be a cotton mill but which is shown to the satisfaction of the Spindles Board to be carried on as ancillary to a business manufacturing goods other than cotton goods and the products of which are used exclusively in that business and are not sold in competition with the trade in cotton yarn or cloth."
The noble Earl said: The effect of this new clause is that certain industries which may make, use of spindles would be exempted from the operation of the Bill, because they in no way compete in the cotton industry. The general principle of the Amendment is this. This scheme, according to its supporters,
some money to pay his levy, whereas the man who starts with the new invention has to pay fourteen years' back levy but has not had the opportunity to earn the levy. It is nothing more or less than a fine, and to my mind, knowing nothing of the cotton industry, it appears to be simply a check on all progress.
On Question, Whether subsections (3) and (4) shall stand part of the clause?
Their Lordships divided:—Contents, 38; Not-Contents, 15.

CONTENTS

Hailsham, V. (L. Chancellor.)

Onslow, E.

Doverdale, L.

Plymouth, E.

Elgin, L. (E. Elgin and Kincardine.)

Halifax, V. (L. Privy Seal.)

Scarbrough, E.

Stanhope, E.

Gage, L. (V. Gage.) [Teller.]

Northumberland, D.

Hutchison of Montrose, L.

Somerset, D.

FitzAlan of Derwent, V.

Jessel, L.

Wellington, D.

Goschen, V.

Luke, L.

Swinton, V.

Middleton, L.

Zetland, M.

Remnant, L.

Barnby, L.

Ritchie of Dundee, L.

De La Warr, E.

Bingley, L.

Rochester, L.

Derby, E.

Carew, L.

Strathcona and Mount Royal, L.

Lucan, E. [Teller.]

Carnock, L.

Macclesfield, E.

Clanwilliam, L. (E. Clanwilliam.)

Templemore, L.

Midleton, E.

Wolverton, L.

Minister, E.

Colwyn, L.

NOT-CONTENTS

Peel, E.

Ashton of Hyde, L.

Hastings, L.

Radnor, E.

Conway of Allington, L.

Phillimore, L. [Teller.]

Fairfax of Cameron, L.

Rhayader, L.

Bertie of Thame, V. [Teller.]

Faringdon, L.

Sanderson, L.

Hampton, L.

Strabolgi, L.

Arnold, L.

Hare, L. (E. Listowel.)

is to the advantage of the trade, and presumably of those who contribute to this fund which is levied for the benefit of the trade. The objects claimed for the Bill are that it will reduce undercutting, perhaps may raise prices and get more money for the products of the industry, or again, it may lead to better manufacturing by the lowering of overhead charges. I would submit that those who, even though they may use spindles, can get no advantage, but can only reap disadvantage, from this Bill, should be exempted; in other words, that those who do not sell in the cotton market, but in other markets unrelated to the cotton market, should be exempted.
Perhaps I may give one or two examples of this—corset cloths, horticultural shadings, imitation furs, lamp and candle wicks, and other matters of that kind. I should add that my Amendment places a very sharply defined limit on the exemptions. Your Lordships will see that three barriers must be surmounted

1111
before exemption can be accorded to a particular industry. It must be a cotton mill which is shown to the satisfaction of the Spindles Board to be ancillary to a business manufacturing goods other than cotton goods, the product of which must be used exclusively in that industry, and must not be sold, and is not sold, in competition with the trade in cotton yarn or cloth. One criticism has been made on this Amendment by the Board of Trade in another place. They say that this Bill ought to apply to all the trade, and therefore must include specialties. Now I do not want to exclude specialties, but to exclude anything that can be called a specialty which is not in the trade at all. If it is in the trade at all it should contribute under the terms of this Bill. Again, if any of these conditions are broken that business would have to contribute at once. For instance, if a business, instead of spinning solely for its own use, should go and sell yarn in the market, at once the condition would be broken and it would become subject to the levy.
There are two objections that have been stated to this. One is that if you make some exemptions the remaining firms will have to pay more, and I agree that that is so; but I do not think these firms which are going to get an advantage (so they say) from this levy ought to diminish their own burden by dragging in levies from firms and businesses which ought to be exempted and can get no advantage out of it. Another difficulty that was raised was this: "Oh, but how are you going to define these particular businesses?" I agree it might be difficult to define them in an Act of Parliament, but I have set up in my Amendment those three barriers or hedges which they will have to jump before they get exempted. They will come before the Spindles Board, that Board will decide whether or not they should be exempted, and the decision of that Board, I suggest, should be final. I certainly do not want this question to go to the Courts, and therefore I suggest that the decision should be final. It has been said, again, that they ought to pay their contribution because if they did not spin this cotton themselves some other firm would spin it and would have to pay some levy on its spindles. I do not know what might happen if some-
1112
thing is quite different from what it is at present, but I am basing my case on the present condition of the trade, and I have said that if anybody goes into the market and sells he loses his exemption.
Why is it that these firms spin their own yarn? It is very largely because these are not the class of yarns that are mostly made in the market, and because they must be assured themselves of getting the particular yarn which they want for their own business, and of which they really are the judges. They do not compete with, or under-cut, the great cotton market in any way. If they go into that market at all it is as buyers, and not in any way as sellers; and clearly, if they do not sell in the market, they can get no advantage and they do not undercut. If they go into the market as buyers, they may suffer because the price may be raised by the fruitful and useful operations of this Bill. I submit therefore that firms which can comply with these conditions, difficult conditions I agree, should be exempted if they can establish them before the Spindles Board. The general principle—and I think it is a fair principle I lay down—is that only those should pay into the pool who have some chance of taking something out of the pool. If they have no chance, as these firms have not, I submit that they ought to go free. I hope therefore that the Government will grant this exemption which does not go in any sense to the root of the Bill. As my noble friend, I think, said on the Second Reading, it is a Committee point, but it is an important Committee point.
Amendment moved—
After Clause 5, insert the said new clause.—(Earl Peel.)
LORD STRABOLGI: I think this is a very reasonable Amendment and has been very reasonably argued. May I quote another case with which I am familiar—the cards for carding cotton? The card makers make their own cotton backing, and if you put up the price of cards by charging a levy on them, you indirectly hit the very people you want to benefit. Further, if you really want to spread the levy why have not the Government put a levy on the flourishing artificial silk industry that does compete with cotton? I do not understand why you should levy on the card makers and linoleum makers.
EARL PEEL: Linoleum makers do not use cotton.
LORD STRABOLGI: What is it, jute?
EARL PEEL: Jute.
LORD STRABOLGI: I apologise. I quoted the only case I knew intimately—card making. There they do use cotton, and I think it is unfair to levy upon them.
EARL PEEL: I do not want to disturb one of my supporters.
VISCOUNT SWINTON: This Amendment, which is quite a reasonable one, I agree, to raise on the Committee stage, poses an interesting conundrum: When is a cotton spinner not a cotton spinner? The noble Earl, Lord Peel, would like us to say he is not a cotton spinner when another industry in which he is interested consumes the cotton which he spins. I really do not think that that is a very reasonable conclusion at which to arrive. The principle is quite a fair one to quote. It is this. A man spins cotton, but he says: "I find it convenient in another manufacturing business to use all the cotton which I spin. Provided I use the result of my spinning in another business I ought to be exempt from the levy." Let me make it quite plain to your Lordships that we must try this as a principle. I believe it will be quite impossible in equity or in practice to set up these hedges about which my noble friend has talked. Either we are going to exempt cotton yarn which is used in a man's own manufacturing business or we are going to put a levy on all cotton that is spun. If you treat it in that way as a principle—and it is the only way in which in practice you would find you could treat it—you are going to cover an enormous field.
I am informed that there are at least 150 firms, manufacturing one commodity or another, who use yarn spun in mills which they own. The result is that even to-day you would have to exempt from the levy something like a quarter of the total spindleage which there is, and nobody knows how much this may develop in future. With new developments it may become more and more to the interest of firms to acquire their own spinning mills. I am perfectly certain that if this Amendment were carried it
1114
would become enormously to the interest of manufacturing firms to acquire their own spinning mills and thus get out of the levy. Therefore if we did that we should simply be driving a coach and four through the whole structure of this Bill. Is it reasonable to break down the structure of the Bill in this way? I submit that it is not. There is no doubt that these spindles, whether they are owned by an independent firm merely engaged in the operation of spinning or whether they are owned by some large or small manufacturing concern to which spinning is subsidiary or ancillary, form part of the aggregate total of spindles in the whole of the spinning industry, and they contribute towards the redundancy which it is the object of this Bill to abolish. Of that there can be no question.
EARL PEEL: Yes.
VISCOUNT SWINTON: Then I will tell the noble Earl why. He manufactures yarn for his own firm. If he is not a manufacturer of yarn, if he does not own his own spinning mill he will go out into the market and buy that cotton yarn from one of the other mills in the trade, and his spindleage therefore has a direct effect on the general fortunes of the trade. I say more than that, and I think anybody with general business experience would bear this out: Even where you manufacture your own semi-manufactured material like yam you have an interest in there being a steady and firm market. Your competitiors buy in the open market. You want to be able to buy your semi-manufactured material at the same price as they do. You want therefore a firm basis and a steady market, and it is directly to your interest, if you are yourself an owner of spindles, to see that the market in cotton yarn is steady and firm. I therefore repudiate the suggestion that there is no interest to the owner of an ancillary business in seeing this scheme through.
I do not rest that on just my own judgment, though I think any impartial man—and I am looking at this quite impartially—would come to that conclusion. I think it fair to say to your Lordships that there are tremendous concerns in the same position—great firms like Coats, which was mentioned in the debate on the Second Reading, and Tootal, Broadhurst and Co., and Dunlops, who are enormous users of cotton yarn.

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I understand that all these three firms and many others—although if Lord Peel's argument is right they have no interest in this matter at all—consider this is a sound proposition for the trade as a whole, and I am instructed by the Board of Trade to say that they have expressed their active support of this principle, and would be very sorry to see this Amendment carried. I hope, therefore, the Committee will reject it.
EARL PEEL: I was very much interested in the skill with which the Government used one argument one moment and another argument another moment, although they were contradictory. The whole of the argument on which the Second Reading of this Bill was based was to the effect that this levy was only a very small percentage on each pound of cotton, and it really can make no difference. Now, when the Government are arguing the other way, the noble Viscount tells us that it would be clearly to the interest of other businesses to build up their own cotton business. They cannot be right in both these respects. There is this one question at issue, and that is this contribution to redundancy. The noble Viscount says: "Oh, these firms, if they did not make it themselves, would go out into the market and buy it." But the very reason that they make it themselves is that it is very difficult for them to go out into the market, because these are special grades which are not very much made and which it might be difficult for them to get.
The suggestion that an ancillary business should be exempted if it contributes
only to the main business is, after all, an old principle. For instance, in the case of the Coal Mines Bill, an Amendment was moved that those coal mines which were owned or controlled by steel businesses and so on should be exempted from the quota and the provisions of the Bill. I agree with that and, curiously enough, the most vigorous support of that principle was given by the noble Viscount himself in the House of Commons only five years ago. Even now in the Coal Mines Bill that has been introduced in another place, and which has given rise to certain criticisms, the same principle has been followed, and the reorganisation, I understand, is not to apply to those coal mines which are controlled or owned by steel or other businesses. Therefore I would suggest to the Government that the principle is not at all so clear as the noble Viscount suggests, and that the mere fact that there are a number of other firms or industries which might manufacture for themselves, or which now do manufacture for themselves, is really no reason for making them contribute towards a business with which they do not compete and to make a contribution of which they can reap no advantage to themselves. That is the whole case I put forward for exemption, that those who pay shall gain something and those who can gain nothing shall not pay.
On Question, Whether the new clause shall lie there inserted?
Their Lordships divided:—Contents, 10; Not-Contents, 41.

CONTENTS.

Peel, E.

Arnold, L.

Hare, L. (E. Listowel.)

Radnor, E.

Fairfax of Cameron, L. [Teller.]

Phillimore, L.

Rhayader, L.

Bertie of Thame, V. [Teller.]

Glenravel, L.

Strabolgi, L.

NOT-CONTENTS.

Hailsham, V. (L. Chancellor.)

Plymouth, E.

Doverdale, L.

Scarbrough, E.

Elgin. L. (E. Elgin and Kincardine.)

Halifax, V. (L. Privy Seal.)

Stanhope, E.

Gage, L. (V. Gage.) [Teller.]

Northumberland, D.

Gosrhen, V.

Somerset, D.

Monsell, V.

Hampton, L.

Wellington, D.

Swinton, V.

Hutchison of Montrose, L.

Jessel, L.

Zetland, M.

Ashton of Hyde, L.

Rankeillour, L.

Bayford, L.

Remnant, L.

De La Warr, E.

Bingley, L.

Rennell, L.

Derby, E.

Carew, L.

Ritchie of Dundee, L.

Lucan, E. [Teller.]

Carnock, L.

Rochester, L.

Macclesfield, E.

Clanwilliam, L. (E. Clanwilliam.)

Strathcona and Mount Royal, L.

Midleton, E.

Munster, E.

Colwyn, L.

Templemore, L.

Onslow, E.

Conway of Allington, L.

Wolverton, L.

Resolved in the negative, and Amendment disagreed to accordingly.
Clause 6 agreed to.
Clause 7 [Funds of Spindles Board]:
LORD TEMPLEMORE: The Amendment in my name to this clause is a drafting Amendment.
Amendment moved—
Page 9, line 4, leave out (" for which they are available ") and insert (" of defraying spindles expenses ").—(Lord Templemore.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clauses 8 to 13 agreed to.
Clause 14:
Returns and statistics in respect of cotton mills.
14.—(1) Subject to the provisions of this section, the owner of every cotton mill in Great Britain shall, within one week after the beginning of each levy year, send to the Spindles Board, in such form as the Board may prescribe, a return showing the spindle capacity, as at the beginning of that year, of all the spinning machinery (if any) then in the cotton mill.
If any person fails to send to the Spindles Board in accordance with this subsection a return which he is thereby required to send, he shall be liable on summary conviction to a fine not exceeding one hundred pounds, and to a further fine not exceeding fifty pounds for every day on which the failure continues after a written demand for the return has been served on him by the Board: and if any person being, or acting on behalf of the person required by this subsection to send a return to the Board, sends, or causes or permits to be sent, to the Board for the purposes of this subsection a return which he knows, or could reasonably he expected to know, to be incorrect in any material particular, he shall be liable, on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding one hundred pounds or to both such imprisonment and such fine.
(3) Within one week after the beginning of each of the consecutive periods of six months during which the purchasing powers of the Spindles Board are exercisable, the owner of every cotton mill in Great Britain shall, subject to the following provisions of this section, send to the Board, in such form as they may, with the approval of the Board of Trade, prescribe, a return showing the extent (if any) to which spinning machinery has been operated in the cotton mill during the six months immediately preceding that period, and, if any spinning machinery was operated in the cotton mill at any time during those six months, the quantity of the yarn which was, during those six months, produced in
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the cotton mill hy means of that spinning machinery.
If any person—

(a) fails to send to the Spindles Board in accordance with this subsection a return which he is thereby required to send, or

(b) being, or acting on behalf of, the person required by this subsection to send a return to the Board, sends, or causes or permits to be sent, to the Board for the purposes of this subsection a return which he knows, or could reasonably be expected to know, to be false in a material particular,

he shall be liable on summary conviction to a fine not exceeding fifty pounds, and (in the case of a failure to send a return) to a further fine not exceeding ten pounds for every day on which the failure continues after a written demand for the return has been served on him by the Board.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (1), to substitute "fifty pounds" for "one hundred pounds" The noble Viscount said: This clause constitutes a new offence. Whenever I have moved Amendments to other Bills to in-crease penalties I have always been told that they are vindictive. I do not want to use quite that term in reference to this clause, but it really does seem to me rather preposterous that such very heavy fines should be inflicted. Under this subsection penalties of one hundred pounds and fifty pounds per diem are put in for failing to send a return to the Spindles Board showing the spindle capacity in a cotton mill. Under sub-section (3) a return showing the extent to which the spinning machinery has been operated during the previous six months is required to be made, and in that case, for failure to send a return or for sending a false return, the offender is liable to a fine not exceeding fifty pounds and five pounds for every day on which the failure continues after a written demand for a return has been served on him. It is difficult to see why the penalty should be heavier in one case than in the other. I admit that under subsection (1) a person can also be imprisoned. It is a serious offence to send in a false return, but while I am on this subject I should like to have my noble friend's attention to a suggestion I have to make. It is that he should move on Report an Amendment to leave out the penalty of imprisonment for failing to send a return, because I think imprisonment is rather a stiff order for such a failure.
Amendment moved—
Page 14, line 29, leave out (" one hundred ") and insert (" fifty ").—(Viscount Bertie of Thame.)
LORD TEMPLEMORE: My noble friend did me a great injustice in suggesting that I was not attending to him. I was paying the greatest attention, as I always do, to his observations and to those of all your Lordships. I regret I cannot accept this and the following Amendment in my noble friend's name. He will understand that these penalties are maximum penalties, and it will be for the appropriate Court—after all the Spindles Board is not the Court—to decide, within these upper limits, on a suitable penalty for a particular case. His Majesty's Government consider that it is really necessary to have severe penalties for deliberate gross default in a matter so vital to the scheme as the return of spindle capacity of the machinery. It is on this return that the whole system of the levy will rest, and unless prompt and accurate returns are obtained the scheme cannot possibly function. There will be no difficulty whatever in rendering the return. It will not be a complicated document, and the information it seeks can be supplied in a few minutes. As regards the request that the noble Viscount made that I should consider the omission of certain words on Report, I will certainly consider the suggestion, and if I am advised that it is possible, I will do so. I cannot accept this Amendment.
VISCOUNT BERTIE OF THAME: I certainly shall not trouble the House to divide on this. I think on the whole I shall withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME had on the Paper an Amendment in subsection (1), to leave out "continues" and insert "is found by the Court to have continued." The noble Viscount said: I am not going to move this Amendment. I had the privilege of seeing the noble Lord's advisers this morning. They pointed out to me that the offender must go before the Court, and that the Spindles Board have not the power to impose a fine. Therefore I do not move the Amendment.
THE LORD CHAIRMAN: I have a manuscript Amendment from the noble Lord, Lord Templemore, to move on
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Clause 14, page 14, line 33, to leave out from the first "person" to "in" in line 38, and insert "knowingly or recklessly makes in any return required by this subsection to be sent to the Board a statement false." In order to save the Amendment of the noble Viscount, Lord Bertie, which comes next, I will put it in the form that the words—
VISCOUNT BERTIE OF THAME: It will not be necessary to save my Amendment because I accept the one which has just been referred to.
THE LORD CHANCELLOR (VISCOUNT HAILSHAM): By permission of the Committee I will move the Amendment that has just been referred to. It is to meet the point that my noble friend Lord Bertie desired to cover by his Amendment on the Paper. In the Bill as drafted the penalty was incurred if any person made a return which he knew, or could reasonably be expected to know, to be incorrect. My noble friend Lord Bertie thought that that was imposing too heavy an obligation, and he desired to leave that out, and to put in instead "if any person knowingly or recklessly" made such a return. We thought that the wording of the noble Viscount's Amendment was not quite satisfactory. We propose to accept the principle of what my noble friend desires, and if your Lordships accept the Amendment which I am about to move, the clause will read:
"…if any person knowingly or recklessly makes in any return required by this subsection to be sent to the Board a statement false in any material particular, he shall be liable, on summary conviction "—
and so on. I think that is an improvement. It certainly is a mitigation of the penalty, because now the offence has to be wilful or reckless, whereas, as the Bill was drafted, it had to be wilful or negligent.
Amendment moved—
Page 14, line 33, leave out from the first (" person ") to (" in ") in line 38 and insert (" knowingly or recklessly makes in any return required by this subsection to be sent to the Board a statement false ").—(The Lord Chancellor.)
VISCOUNT BERTIE OF THAME: I should like to thank my noble and learned friend the Lord Chancellor for the very fair way he has met the point with which I wished to deal.
On Question, Amendment agreed to.
THE LORD CHAIRMAN: There is another manuscript Amendment which has been handed in: Page 15, line 32, leave out from the beginning of the line to "false" in line 37 and insert "knowingly or recklessly makes in any return required by this subsection to be sent to the Board a statement."
THE LORD CHANCELLOR: This is a consequential Amendment in paragraph (b), in subsection (3). I beg to move.
Amendment moved—
Page 15, line 32, leave out from the beginning of the line to (" false ") in line 37 and insert (" knowingly or recklessly makes in any return required by this subsection to be sent to the Board a statement ").—(The Lord Chancellor.)
On Question, Amendment agreed to.
VISCOUNT BERTIE OF THAME: I am instructed by the noble Lord's advisers that I should move the next Amendment.
Amendment moved—
Page 15, line 38, leave out (" a ") and insert (" any ").—(Viscount Bertie of Thame.)
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clauses 15 to 17 agreed to.
Clause 18 [Offences committed by corporations]:
VISCOUNT BERTIE OF THAME: This is a drafting Amendment to this clause which I understand is accepted by the Government. I beg to move.
Amendment moved—
Page 17, line 13, after the second (" be ") insert (" proceeded against and ").—(Viscount Bertie of Thame.)
On Question, Amendment agreed to.
Clause 18, as amended, agreed to.
Remaining clauses agreed to.
Schedule:
LORD TEMPLE-MORE: There is a drafting Amendment in the Schedule. I beg to move.
Amendment moved—
Pago 20, line 30, leave out (" thereof ") and insert (" of the Board ").—(Lord Templemore.)
On Question, Amendment agreed to.
Schedule, as amended, agreed to.

CIVIL LIST BILL.
Order of the Day for the Second Reading read.
LORD TEMPLE MORE: My Lords, in moving the Second Reading of this Bill I wish to inform your Lordships that acting on the precedent set by the late noble Marquess, Lord Salisbury, father of my noble friend, in 1901, and by my noble friend Lord Denman in 1910, I do not propose to make a speech. I am, however, perfectly ready of course to answer any question on the Bill should any noble Lord desire information. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Templemore.)
On Question, Bill read 2a: Committee negatived.

SUGAR INDUSTRY (REORGANISATION) BILL.
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.
House adjourned at a quarter past seven o'clock.

Preamble
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the further Standing Orders applicable to the following Rills have been complied with:

Great Western Railway (Ealing and Shepherd's Bush Railway Extension),

London and North Eastern Railway (London Transport).

Also the Certificate that no Standing Orders are applicable to the following Bills:

Ministry of Health Provisional Order (Bristol),

Ministry of Health Provisional Order (Falmouth),

Ministry of Health Provisional Order (Stockton-on-Tees).

And also the Certificate that the further Standing Orders applicable to the following Bill have not been complied with:
Southern Railway.
The same were ordered to lie on the Table.

LIVERPOOL CORPORATION BILL. [H.L.]
Reported from the Select Committee, with Amendments.

LEICESTER GAS ORDER, 1936.
Special Order proposed to be made on the application of the Lord Mayor, aldermen and citizens of the City of Leicester:
Laid before the House (pursuant to Act) for affirmative Resolution, and referred to the Special Orders Committee.

LAND REGISTRATION ACT, 1935 (MIDDLESEX ORDER IN COUNCIL).
Draft of an Order in Council declaring that registration of title to land is to be compulsory on sale in the Administrative County of Middlesex on and after the 1st January, 1937:
Laid before the House (pursuant to Act) on the 23rd January last, and referred to the Special Orders Committee.

SUNDAY ENTERTAINMENTS ACT, 1932 (RURAL DISTRICT OF EASTRY ORDER).
Order made by the Secretary of State for the Home Department extending Section 1 of the Act to the rural district of Eastry:
Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.