Sitting of 22 June 1938

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

PRIVATE BUSINESS.
Sheffield Gas Bill [Lords].
As amended, considered; to be read the Third time.
Middlesex County Council (General Powers) Bill [Lords] (by Order).
Second Reading deferred till Monday next.
Land Drainage Provisional Order (Louth Drainage District) Bill,
Second Reading deferred till Tomorrow.
Ministry of Health Provisional Order (Bucks Water Board) Bill,
Ministry of Health Provisional Order (Church Stretton) Bill,
Ministry of Health Provisional Order (Cirencester) Bill,
Ministry of Health Provisional Order (Horsforth) Bill,
Ministry of Health Provisional Order (Llandrindod Wells) Bill,
Ministry of Health Provisional Order (Mid-Staffordshire Joint Hospital District) Bill,
Ministry of Health Provisional Order (Rawmarsh) Bill,
Ministry of Health Provisional Order (Wath upon Dearne) Bill,
West Hartlepool Corporation (Trolley Vehicles) Provisional Order Bill,
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.

  CHINA AND JAPAN.
  Mr. Manderasked the Prime Minister to what extent requests made by China at the League of Nations Council
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  meeting in May last for an extension of the League Health Services in China to prevent epidemics, for loans and for action to assist China under Articles 11 and 17 of the Covenant, are being carried out?
  The Under-Secretary of State for Foreign Affairs (Mr. Butler): The general position as regards assistance to China is as stated in the reply given to my hon. and gallant Friend the Member for the Isle of Wight (Captain P. Macdonald) on 14th June. As regards the last part of the question, the Chinese representative at the League of Nations Council meeting in May last made no demand for action by the League under Articles II and 17 of the Covenant. The Council, however, remains seized of the original appeal of the Chinese Government under Articles 11 and 17 of the Covenant.
  Mr. Mander: Is there any question of making arrangements with. China for the consideration of these matters?
  Mr. Butler: I am not in a position to make any detailed statement on this subject at present.
  Mr. Hannahasked the Prime Minister whether he is now satisfied that the Japanese assurance that normal conditions would be restored in the collection of Chinese Customs at Shanghai, involving the payment of duty by Japanese importers, at the earliest possible date has been fulfilled?
  Mr. Butler: My information is that Customs examiners are now being permitted to function on Japanese controlled wharves as well as other wharves, and that Japanese as well as other nationals are required to pay the Customs duties according to the amended tariff in force at ports under Japanese military occupation.

  CZECHOSLOVAKIA.
  Mr. Manderasked the Prime Minister whether he will consider the advisability of putting forward proposals to the German and Czechoslovakian Governments which would enable citizens who desire to emigrate to Germany to do so on appropriate terms?
  Mr. Butler: No, Sir. I do not consider that such a proposal would serve any useful purpose.
  Mr. Mander: If the Sudeten Deutsch think that they would have a much better time in Germany, had they not better go there?
  Mr. Butler: I think they had better be asked by the hon. Member himself.
  Mr. Mander: I am afraid that that would be mischievous.

  CALIPHATE.
  Mr. Hannahasked the Prime Minister whether, in view of our ancient friendship with Islam, the Government will help to settle the question of the succession to the Caliphate?
  Mr. Butler: The Caliphate is a matter which concerns Moslems, and is one in which His Majesty's Government would not be prepared to intervene.
  Mr. Hannah: Would not something of this kind he the best possible answer to Mussolini's "sword of Islam"?

  GREAT BRITAIN AND MEXICO.
  Mr. Arthur Hendersonasked the Prime Minister whether the British representative in Mexico City has now reported to His Majesty's Government; and whether an attempt is to be made to settle the differences between His Majesty's Government and the Mexican Government?
  Mr. Butler: Yes, Sir. His Majesty's Government are most anxious to effect a fair and reasonable settlement of their differences with the Mexican Government resulting from the expropriation of the British-controlled oil properties. Unfortunately, however, the attitude of the Mexican Government, culminating in the suspension of diplomatic relations, has so far precluded such a settlement.
  Mr. Henderson: Do the Government intend to make contact with the Mexican Government, either directly or indirectly, with a view to securing a settlement?
  Mr. Butler: I think we must hope that the Mexican Government will modify their own attitude in the matter.

  ARMAMENTS LIMITATION.
  Mr. A. Hendersonasked the Prime Minister whether he is aware that the
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  United States Government have expressed their willingness to enter into discussions with a view to securing an effective limitation and reduction of armaments; and whether, for such a purpose, His Majesty's Government will enter into discussion with the United States Government in order that definite action may be taken?
  The Prime Minister (Mr. Chamberlain): I presume the hon. Member has in mind Mr. Cordell Hull's recent statement that the United States were prepared to join with other nations in moving resolutely towards bringing about an effective agreement on limitation and progressive reduction of armaments. As I have already said, His Majesty's Government are in full agreement with these sentiments, and they will neglect no suitable opportunity of co-operating with the United States and other Governments to attain these objects.
  Mr. Henderson: Is the right hon. Gentleman aware that on Thursday of last week a high official of the State Department at Washington stated that the United States Government was willing to enter into discussions with regard to the possibility of disarmament; and will not His Majesty's Government respond to that invitation?
  The Prime Minister: If any invitation is addressed to us by the United States Government, we shall certainly respond to it.
  Mr. Leach: Would the Prime Minister tell us what he would regard as a "suitable opportunity"?

  TURKEY (ARMAMENTS CREDIT).
  Mr. C. Wilsonasked the Prime Minister whether he is aware that in the Great War guns manufactured by a British firm and supplied to a foreign Power were used in destroying many British lives; and whether in the agreement regarding an armaments credit for Turkey any guarantee has been obtained which may be relied on to prevent such armaments being used against British subjects?
  The Prime Minister: Cases of the kind to which the hon. Member refers have doubtless occurred in the past. On this occasion His Majesty's Government have

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  not sought or received any formal guarantee, but they would not have undertaken to recommend these credits to Parliament unless they had full confidence in the friendly intentions of the Turkish Republic towards this country.

  CANTON AND ENDERBURY ISLANDS.
  Mr. Roland Robinsonasked the Prime Minister what progress has been made in the negotiations with the United States of America with regard to the islands of Canton and Enderbury in the Southern Pacific Ocean?
  Mr. Butler: I would refer my hon. Friend to the answer which I gave him on 26th April, and to which at the moment I have nothing to add.
  Mr. Robinson: How long have these negotiations been going on; and when does he expect a solution to be reached?
  Mr. Butler: The negotiations have been going on for a considerable time, and I hope an agreement will be reached soon.

  ANGLO-ITALIAN AGREEMENT.
  Mr. A. Hendersonasked the Prime Minister what representations have been received from the Italian Government that the date of the operation of the Anglo-Italian Agreement should be expedited?
  The Prime Minister: In the course of the exchange of views which has from time to time taken place between the two Governments, the Italian Government have made plain their desire, in which the British Government fully participate, that the Agreement should be brought into force at the earliest possible moment consistent with the fulfilment of the prerequisite conditions.
  Mr. Henderson: In view of the fact that the Italian Government have suspended the discussions they were having with the French Government, will the Prime Minister give an assurance to the House that the Italian Government will not be allowed to drive a wedge between the French and ourselves?
  The Prime Minister: I have no reason to suppose that the Italian Government wish to drive a wedge between the French and ourselves.
  Mr. Wedgwood Benn: Is it one of the prerequisite conditions that bombing of our ships by Italian aeroplanes shall, cease?
  The Prime Minister: The conditions have been made public.
  Mr. Benn: No, they have not.

  SPAIN.
  Mr. Dayasked the First Lord of the Admiralty whether any British merchant ships have been taken into port by the British naval authorities for examination under the Merchant Shipping (Carriage of Munitions to Spain) Act since 14th June?
  The Parliamentary Secretary to the Admiralty (Mr. Shakespeare): No, Sir.
  Mr. Day: Can the Minister give us any information as to how long ago these investigations took place?

  SIERRA LEONE (EDUCATION ORDINANCE).
  Mr. Ridleyasked the Secretary of State for the Colonies whether he will see that the board of education being set up under the recent education ordinance in Sierra Leone will include at least one African?
  The Secretary of State for the Colonies (Mr. Malcolm MacDonald): The Board of Education to be set up under the new Ordinance is to include one African ex officio member; four persons nominated by the proprietors of schools, who may be either African or European; one nominee of the Freetown City Council and one nominee of the rural areas, who are likely to be Africans; and also four Africans appointed by the Governor.

  PALESTINE.

    PARTITION.
    Mr. Manderasked the Secretary of State for the Colonies the present position with regard to partition in Palestine, in view of the evidence given by Sir John Shuckburgh, Permanent Under-Secretary for the Colonies, to the Mandates Corn-mission in Geneva, to the effect that the matter is contingent upon the findings of the Technical Commission?
    Mr. M. MacDonald: I would refer the hon. Member to the statement which I made on the subject in the course of the Debate on 14th June.
    Mr. Mander: Do I understand that it would not be true to say that the question of partition is in any way dependent on the findings of this Technical Commission?
    Mr. MacDonald: The commission are inquiring into the question of an equitable and practicable scheme, and, naturally, a certain amount must depend on the findings of the commission.
    Mr. Mander: Is it not the case that in principle partition is the definite policy of the Government now?
    Mr. MacDonald: Yes, Sir; I withdraw nothing of the statements on that point which have been made from time to time in this House and elsewhere.
    Captain Peter Macdonaldasked the Secretary of State for the Colonies when it is anticipated that the Palestine Partition Committee will be able to submit its report; and whether it will be possible to submit any final proposal for the settlement of the Palestine question to the Mandates Commission at Geneva during the current year?
    Mr. MacDonald: It is not yet possible to foresee when the Partition Commission will be able to submit their report, or when it will be possible for His Majesty's Government to reach a decision, but my hon. and gallant Friend may rest assured that there will be no avoidable delay.

    PATRIARCHATE.
    Mr. Hannahasked the Secretary of State for the Colonies whether he can now make any statement about the Orthodox Patriarchate of Jerusalem?
    Mr. M. MacDonald: It is hoped to publish next month the draft of an Ordinance to revise and amend the law relating to the organisation and administration of the Patriarchate.

  KENYA.

    ABYSSINIAN REFUGEES.
    Mr. Perkinsasked the Secretary of State for the Colonies whether he is aware that over 6,000 Abyssinians are
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    now living in Kenya; whether he will consider the possibility of transferring them to the hilly territory in Tanganyika, which is a similar climate to that of Abyssinia; and if he will approach the Emperor with a view to offering him the rule of this territory within the suzerainty of the Empire?
    Mr. M. MacDonald: The question whether it would be possible to settle the Abyssinian refugees in the Highlands of Tanganyika has been fully considered, but the conclusion reached was that it would not be practicable. The last part of the question, therefore, does not arise.
    Mr. Perkins: Why does my right hon. Friend consider it to be not practicable?
    Mr. MacDonald: There are a number of detailed difficulties. Perhaps I might let my hon. Friend have a communication on the matter.

    CHILD LABOUR.
    Mr. David Adamsasked the Secretary of State for the Colonies whether or not juveniles employed in Kenya come under the penal sanctions of the labour code?
    Mr. M. MacDonald: As the law stands at present, juveniles employed on contract in Kenya are subject to the penal sanctions prescribed by the Employment of Servants Ordinance. As I indicated in my reply to a question by the hon. Member for the English Universities (Mr. Harvey) on 20th June, the Governor is appointing a committee to review the question of child labour in Kenya, including the application of penal sanctions for the enforcement of contracts entered into by juveniles.
    Mr. Adams: When is the Minister likely to have the report on the subject?
    Mr. MacDonald: I think it will be some little time. I am not yet certain of the actual personnel of the committee of inquiry that has been appointed, but I can assure the hon. Member that the inquiry will be pursued as rapidly as possible.
    Mr. Adamsasked the Secretary of State for the Colonies what was the nature of the experience referred to amongst the objects and reasons for the Bill lowering the age of child labour in Kenya which convinced the Kenya Government that it

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    must regulate the employment of juveniles and lower the age to 10 years?
    Mr. MacDonald: It is not the case that the age limit at which children can be employed in Kenya has been lowered. The position is that, except for the minimum ages prescribed for certain forms of employment in the Employment of Women, Young Persons and Children Ordinance, 1933 there has not hitherto been any overriding minimum, which has now for the first time been prescribed in the Employment of Servants Ordinance. As regards the remainder of the question, I am informed by the Governor that the statement in the Objects and Reasons, that experience has shown the necessity for further provision to regulate the employment of juveniles, did not relate to any particular experience, but that this was a general statement implying that, in Kenya as elsewhere, control of the employment of juveniles had been found to be advisable.
    Lieut.-Colonel Sir William Allenasked the Secretary of State for the Colonies whether the conditions imposed by various ordinances on the recruitment of children of 10 years in Kenya permit of these children being removed from their parents and employed at a long distance from their homes?
    Mr. MacDonald: There is no specific restriction in the law on this point. But no juvenile may be recruited without the consent of his parent or guardian and the certificate of the district officer: and these restrictions are designed, among other things, to safeguard the interests of juveniles in the respect which my hon. and gallant Friend has in mind.
    Mr. Herbert Morrison: Does the right hon. Gentleman think it is right and reasonable that children of these tender years should be removed from their parents to go to work in distant parts?
    Mr. MacDonald: As I have said, the Governor is appointing a committee of inquiry to go into this very question. Pending the report of the committee, I could not add anything to answers I have given to previous questions.
    Mr. Rileyasked the Secretary of State for the Colonies whether he is now in possession of any reports to the inquiry which he was having made regarding the
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    conditions of employment of children from 10 years upwards in our African Colonies; and will be have copies or summaries of all such reports placed in the Library?
    Mr. MacDonald: It will, I expect, be some little time before I receive these reports, especially in the case of Kenya, where, as the hon. Member is aware, the Governor is appointing a committee to review this matter. As regards the last part of the qeustion, I will consider the hon. Member's suggestion when I have received the reports.
    Mr. Edmund Harvey: Will the report be laid before this House in any form, or issued as a White Paper?
    Mr. MacDonald: I cannot promise that, but I will give the matter consideration when I have received the report.
    Mr. Benn: Will the report include an account of the penal sanctions to which these children are subject?
    Mr. MacDonald: The committee is inquiring into the question of penal sanctions as well as the question of age limit.
    Mr. Benn: That was not quite what I asked. I asked if the report would include a record of the sanctions to which they are at present subject.
    Mr. MacDonald: I think that is implied in what I have said.
    Mr. Ridley: Could the right hon. Gentleman not express an opinion now, without waiting for the report of the inquiry?
    Mr. MacDonald: There would not be much purpose in an inquiry into the facts if I were to prejudice the whole inquiry by making a categorical statement now.
    Mr. Rileyasked the Secretary of State for the Colonies whether, where children of 10 years of age and upwards are employed under contract in Kenya, the district officer must in all cases certify such contracts; whether before such contracts are entered into the medical officer of the district must examine the child and certify its physical and mental fitness; and whether the employers of such children are under legal obligation to keep a register of such children where they are employed on the surface of mines or on plantations?
    Mr. MacDonald: The answer to the first part of the question is in the affirmative. As regards the second part of the question, it is prescribed that no person shall employ a juvenile in any class of labour for which, in the opinion of a Government medical officer, he is physically unsuitable. As regards the third part of the question, it is prescribed, in the Employment of Women, Young Persons and Children Ordinance, 1933, that the employer shall keep a register of all young persons employed in any industrial undertaking (which includes a mine) the minimum ages for which in Kenya vary from 12 to 16 years according to the nature of the employment. There is no corresponding provision in regard to the employment of children on plantations, except where the employment is of an industrial character.
    Mr. Riley: Are the children examined by medical officers of health, who certify their fitness, physical and mental, before they are allowed to be employed?
    Mr. MacDonald: The provision of the ordinance is as I have stated. Exactly how it is administered I cannot say; but I am at present in communication with the Governor, and will let the hon. Member have the information as soon as I can.
    Mr. Shinwell: Can the right hon. Gentleman justify the exploitation of children at this age?
    Mr. MacDonald: Hon. Members are very persistent in trying to get an answer out of me, but I have refused to prejudice the inquiry now being conducted, and I think that is a perfectly proper attitude to take up.
    Mr. Leach: Who appoints the medical officers who are quite willing to issue

    Total Casualties (Civilian and Police Forces) 1935–37.

    —

    1935.

    1936.

    1937

    Killed.

    Injured.

    Killed.

    Injured.

    Killed.

    Injured.

    Jamaica*

    …

    …

    …

    1

    14

    —

    —

    —

    7

    St. Vincent

    …

    …

    …

    6

    37

    —

    —

    —

    —

    St. Kitts

    …

    …

    …

    3

    9

    —

    —

    —

    —

    Trinidad

    …

    …

    …

    —

    —

    —

    —

    14

    59

    Barbados

    …

    …

    …

    —

    —

    —

    —

    14

    47

    Bahamas

    …

    …

    …

    —

    —

    —

    —

    1

    2

    * Casualties in the Jamaica disturbances of 1938 total 10 killed and 123 injured; of those injured about 64 were only slightly injured.

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    certificates for the employment of children at 10 years of age?
    Mr. MacDonald: They are appointed in the normal way for the appointment of medical officers in the Colonies. I should have to have notice of the question before giving an exact answer.
    Mr. Leach: Had you not better sack them all?
    Mr. David Adams: What is the nature of the employment for children at 10 years of age?
    Mr. MacDonald: It is really employment in the plantations. I understand that the principal kind of employment is picking foreign bodies off the tea trees. It is all employment of a light kind.
    Dr. Edith Summerskill: What is the maximum number of hours that children of 12 can spend underground in the mines?
    Mr. MacDonald: I think I am right in saying that the employment of children of 12 underground is entirely prohibited. But perhaps the hon. Member will put the question down.
    Mr. R. J. Taylor: What is the age on the surface?

    WEST INDIES (LABOUR DISPUTES).
    Mr. Ridleyasked the Secretary of State for the Colonies how many persons have been killed or wounded in each of the labour disputes in the West Indies in the last three years?
    Mr. M. MacDonald: As the reply is in tabular form, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:

    TROPICAL DISEASES.
    Mr. David Adamsasked the Secretary of State for the Colonies whether he is aware that in the southern United States full-time malaria units, consisting of a physician, an engineer, and an entomologist, are now being added to the staffs of state health departments; and whether parallel steps are being taken in British Colonies in the control of tropical diseases?
    Mr. M. MacDonald: Yes, Sir. Similar steps have for some years past been taken in most British Colonies. The need for co-ordinating medical, engineering and entomological advice is fully appreciated.

    EAST AFRICA (HIGHER COLLEGE).
    Mr. Barrasked the Secretary of State for the Colonies whether he can make any statement on the detailed proposals for the establishment of a higher college for East Africa; whether the inter-territorial conference called by the Governor of Uganda resulted in any constructive proposals; and whether the Government of Kenya proposes to show its sympathy with the proposed college by making a grant similar to the grants made by the Governments of Uganda and Tanganyika.
    Mr. M. MacDonald: I am glad to be able to state that the proposals for the establishment of the higher college have now reached an advanced stage, and the answer to the second part of the question is in the affirmative. I am sending the hon. Member a copy of the report of the Conference. A substantial proportion of the money for the endowment fund has already been promised, and plans for the new college buildings are at present being studied by experts in this country. With regard to the third part of the question, the matter will be considered by the Kenya Legislative Council at its meeting next month.

  CIVIL AVIATION.

    EXPERIMENTAL TRANSATLANTIC FLIGHTS.
    Captain P. MacDonaldasked the Secretary of State for Air whether he is now in a position to make any statement with regard to the programme of experimental Transatlantic flights which it is proposed to carry out during the present summer.
    The Under-Secretary of State for Air (Captain Harold Balfour): As I informed my hon. Friend the Member for Stour-bridge (Mr. Morgan) on 1st June, it is hoped to carry out experimental Transatlantic flights with the Mayo composite aircraft, with flying boats and with land-planes during the course of the year. The programme is under active consideration with Imperial Airways.

    EMPIRE ROUTE (HEAVY-OIL ENGINES).
    Mr. Chorltonasked the Secretary of State for Air what steps are being taken to fit the long-distance Empire machines with heavy-oil engines by reason of the economy in fuel and safety from fire.
    Captain Balfour: As my right hon. Friend informed my hon. Friend on 28th May, research is in train and encouraging progress is being made in the development of the heavy-oil compression ignition engine, but the results so far attained show a marked disparity in performance as compared with petrol engines. While there is at present no machine on the Empire route of sufficient range to show economy due to fuel when fitted with compression ignition engines the Air Ministry are exploring, with Imperial Airways, the feasibility of fitting engines of this type to one of their aircraft for experimental purposes.
    Mr. Chorlton: How many engines of this kind have the Germans in commercial service?
    Captain Balfour: I cannot say.
    Mr. Perkins: Will my hon. Friend inquire from the Germans what engines they use in their trans-Atlantic boats?
    Captain Balfour: If the hon. Member will put down a question on the subject, I will endeavour to obtain the information.

    EMPIRE FLYING-BOAT BASE.
    Rear-Admiral Sir Murray Sueterasked the Secretary of State for Air whether any decision has now been come to with regard to the Langstone Harbour scheme for Empire flying boats; and, if the town council of Portsmouth does not desire to develop an air harbour, will he consider developing with rapidity an alternative site on the South Coast, and so avoid the necessity of a flying boat

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    having to use a French port, as had to be done recently by a flying boat on her return from India?
    Captain Balfour: An examination of the various alternative sites for an Empire flying-boat base is proceeding as rapidly as possible with a view to securing the most adequate facilities to enable day and night regular arrivals and departures to be effected without interruption to air services or interference with shipping traffic.

    BRITISH AIRWAYS, LIMITED (LONDON-OSLO SERVICE).
    Mr. R. Robinsonasked the Secretary of State for Air whether his Department is negotiating with British Airways, Limited, with a view to their continuing the present London-Copenhagen-Stockholm service to Oslo?
    Captain Balfour: Preliminary consultations are proceeding with British Airways on the subject of European Air Services, one of which is a London-Oslo service.
    Mr. Robinson: As it is proposed to run a service to Oslo, will the Under-Secretary bear in mind that one is already provided by Allied Airways, and will he also bear in mind the recommendation of the Cadman Report that there shall be only one British service to each centre?
    Captain Balfour: Allied Airways run from Newcastle to Stavanger, and the advisability of allowing this service to rank for internal subsidy is at present under consideration with the Treasury.

    AIR-LINE BOOKINGS (RAILWAY COMPANIES' BAN).
    Mr. R. Robinsonasked the Secretary of State for Air whether the ban on air-line bookings has now been completely removed?
    Captain Balfour: As I have already informed the House, the railway companies have intimated their intention to remove the ban on air bookings. The ban has been removed in the case of all internal air lines except in respect of the three services of Channel Air Ferries, Limited, and negotiations are in active progress between the operating company and the railway companies. The ban also applies to the Dublin service of West Coast Air
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    Services Limited and that case is also under consideration.
    Mr. Robinson: Will the Under-Secretary look into the case of the air charter companies; and is he aware that the usual agencies while they book charters for Imperial Airways and its associated companies refuse to take such bookings for smaller companies like British American Air Services Limited?
    Captain Balfour: If such services are operated at separate fares so as to require a licence under the new licensing order, they will be in the same position as regards booking facilities as any other licensed service.
    Mr. Mander: Is the ban still in operation on bookings for the Irish Free State?
    Captain Balfour: For the moment, yes, but negotiations are being pursued actively with a view to its removal.

    WORKMEN'S COMPENSATION (ROYAL COMMISSION).
    Mr. Ellis Smithasked the Prime Minister whether he will set up a Royal Commission to investigate the Workmen's Compensation Acts and the effect of accidents and industrial diseases on the lives of the people?
    The Prime Minister: The Government have had under careful consideration the question of the action to be taken in regard to workmen's compensation. As the House will recollect, proposals for alterations in the present system—some of them of a far-reaching character—have been debated in this House on several occasions during the last few years, and while there has been great divergence of opinion on the merits of the particular proposals, it has been generally recognised that there is a strong case for review of various provisions of the existing Acts in the light of modern ideas and conditions. The Government have considered the feasibility of themselves formulating proposals on the basis of existing information but they have come to the conclusion, having regard to the magnitude and complexity of the questions at issue, that it would be impossible to frame any satisfactory legislation without an up-to-date inquiry of a formal and comprehensive character. Certain special problems of workmen's compensation have been, or are, the subject of investigation

    1065
    by Departmental Committees, but since the Holman Gregory Committee reported 18 years ago, there has been no general inquiry into the working of the Acts. The Government have accordingly decided to recommend the appointment of a Royal Commission with wide terms of reference which will enable it to inquire generally in to the working of the present system and give authoritative advice as to any changes which may be desirable. I may add that it is contemplated that the Commission should be empowered to consider, in relation to workmen's compensation, proposals such as have recently been brought forward in this House on several occasions, for modification of the position in regard to the employer's liability at common law.
    Mr. T. Smith: Will the Prime Minister see that when this Royal Commission is set up and starts its inquiries, it takes into account the workmen's compensation law in some of our Dominions, which is a long way ahead of anything that we have in this country?
    The Prime Minister: I have no doubt that the Royal Commission will have those provisions in front of them.
    Mr. Shinwell: As the Royal Commission may take a long time before it publishes a report on this matter, will the Prime Minister consider asking such Commission, when it is set up, to consider the publication of an interim report upon which legislation may be introduced?
    The Prime Minister: I will consider that, but I am not sure that the information in our possession would be such as to justify our asking the Commission to do that. I certainly will consider the matter.
    Mr. Shinwell: Will the Prime Minister consider asking such a Royal Commission to consider special aspects of the workmen's compensation law?
    The Prime Minister: I think it is obvious that, if we set up a Royal Commission, it would not be proper to introduce any legislation which affected the general system until we have had its report. I should not consider, on the other hand, that we should be debarred from introducing legislation dealing with particular aspects of the question in the meantime.
    Mr. Robert Gibson: When the Prime Minister says that the position of the employers' liability at common law will also be included in the consideration of the Commission, does he mean by that that the doctrine of common employment will be considered?
    The Prime Minister: Yes, Sir.
    Mr. E. Smith: When the Prime Minister is considering the personnel of the Royal Commission, will he hear in mind the need for people who have had years of workshop experience being represented on the Commission, and that it should not be outweighed with people of the legal profession?
    The Prime Minister: I hope that both employers and employed will be suitably represented on the Commission.

    TRADE AND COMMERCE (GOVERNMENT POLICY).
    Mr. R. Gibsonasked the Prime Minister whether, in view of the trade figures for the month of May, he will now state the Government's policy to meet the slump in trade?
    The Prime Minister: I would refer the hon. and learned Member to the reply which I gave to him on 23rd May last.
    Mr. Gibson: Can the right hon. Gentleman say what Departments have officials considering this matter, do those officials have joint meeting, and, if so, when did the last meeting take place on the subject?
    The Prime Minister: Certainly the Departments concerned do have representatives considering this matter. I cannot say without notice when the last meeting took place, but they are constantly having the matter under consideration.
    Mr. Dalton: Has not the slump become much more severe since the Prime Minister's last statement?
    The Prime Minister: I do not accept the suggestion of a slump.
    Mr. Mathers: Will the Prime Minister expedite the Government decision upon big projects, such as the Forth Road Bridge, which would have a very considerable effect in preventing a slump in Scotland?

  ROYAL AIR FORCE.

    VOLUNTEER RESERVE (PRINCE ALEXANDER OBOLENSKY).
    Mr. R. C. Morrisonasked the Secretary of State for Air whether the public announcement that Prince Alexander Obolensky has been granted a commission in the Royal Air Force Volunteer Reserve indicates that British-born subjects whose fathers are not British are no longer barred from entering the Royal Air Force as cadets?
    The Secretary of State for Air (Sir Kingsley Wood): There is no intention of modifying the present regulations under which the parents of candidates for commissions in the Royal Air Force, its reserves and auxiliaries must be British subjects. Under those regulations it is, however, open to the Secretary of State to authorise departure from this rule in suitable cases, and such authority was given in the case referred to.
    Lieut.-Colonel Sir A. Lambert Ward: Does not the fact that this gentleman has played rugby football for England indicate that he is tolerably well qualified to have a commission in the Royal Air Force?
    Mr. David Grenfell: Can the Minister say how many Russians it is proposed to enrol in the Air Force?
    Mr. R. C. Morrison: Will the right hon. Gentleman see that equal consideration is given to other applicants who may not bear distinguished titles?
    Sir K. Wood: I will give careful consideration to any case that comes before me, but I ought to say that, in this case, the individual referred to was already a member of an air squadron and his name was put forward by his commanding officer.

    MINCHINHAMPTON AERODROME (WORKERS' ACCOMMODATION).
    Mr. Perkinsasked the Secretary of State for Air what steps are being taken to provide housing accommodation for the additional workers likely to be employed permanently by the Air Ministry on Minchinhampton aerodrome?
    Sir K. Wood: Stroud Rural District Council have already agreed to provide a proportion of the houses required for the additional workers, and I am hopeful
    1068
    that the outcome of the negotiations at present in progress with the Stroud Urban District Council regarding the provision of the balance of the accommodation will be equally satisfactory.
    Mr. Perkins: Do I understand from the reply of my right hon. Friend that it is the intention of the Ministry, wherever possible, to employ its own people?
    Sir K. Wood: I shall be obliged to my hon. Friend if he will put the question upon the Paper, as that is a general matter of policy.

    SUPPLIES (WEST WALES).
    Mr. Hopkinasked the Secretary of State for Air whether any orders have been placed for shirts, socks, and flannel with firms in West Wales, and if he is satisfied that they are receiving a fair share of the orders for these goods now being placed?
    Sir K. Wood: Supplies are purchased on the basis of competitive tendering. There are two Welsh firms on the list for shirts and if the hon. Member will supply me with any names of suitable firms in West Wales I shall be glad to have them considered so far as future orders are concerned.

    SEA-BOMBING AREA, ORFORDNESS.
    Mr. Ross Taylorasked the Secretary of State for Air whether, following upon the representations made by the Suffolk and Essex Fishery Board regarding the proposed extension under draft bylaws, prepared by his Department, of the sea-bombing area off Orfordness which will so curtail the fishing grounds off Aldeburgh as to render them all but useless, thus gravely affecting the fishing and other interests of the town, he has made such modification of the draft by-laws as will prevent the interests referred to being entirely sacrificed to those of defence?
    Sir K. Wood: The representations referred to are being sympathetically considered in conjunction with the Ministry of Agriculture and Fisheries.

    AIRMEN'S CHILDREN (EDUCATION).
    Mr. Grant-Ferrisasked the Secretary of State for Air what arrangements are being made at new and isolated stations for the secondary education of airmen's children?
    Sir K. Wood: Consideration is now being given to this matter with a view to improving the facilities for school attendance in the circumstances referred to.
    Viscountess Astor: Will my right hon. Friend consider camp schools which might be built now, as there would be a great evacuation of children in the case of war, and in the meantime it would help them in regard to their health?

    AUXILIARY FORCE.
    Mr. Grant-Ferrisasked the Secretary of State for Air the date when the new regulations for the Auxiliary Air Force will come into force?
    Sir K. Wood: The new regulations for the Auxiliary Air Force will be brought into force as soon as the necessary administrative arrangements can be completed. It is anticipated that the new scheme of emoluments will in the main be introduced on 1st July next.
    Mr. Grant-Ferris: Is my right hon..Friend aware that the whole of the Auxiliary Air Force is extremely grateful to the Air Ministry and would like to place on record their thanks, and also to the late Under-Secretary of State for what he did in furtherance of this work?

    BALLOON BARRAGE.
    Mr. Daltonasked the Secretary of State for Air whether he has examined the possibility of placing a balloon barrage along the whole length of the East Coast of this country; and what would be the cost of such a means of defence?
    Sir K. Wood: The desirability of extending the balloon barrage is receiving close attention in connection with a general review of methods of defence against air attack. No estimate of the cost of placing a balloon barrage along the whole length of the East Coast of this country is available, and I should add that it is not considered that the siting of a barrage as suggested would be an effective or economical use of this particular method of defence.
    Mr. Dalton: Assuming that this method is regarded as effective, is it not essential that mass populations on Tyneside, Teesside and in the Midland towns should be afforded similar protection to that which is afforded to London?
    Sir K. Wood: I can well understand that, but I would draw the attention of the hon. Gentleman to the last part of my reply, and perhaps I might be able to indicate to him certain considerations which I have in mind in that connection.
    Mr. Dalton: Has not the right hon. Gentleman merely said that the placing of a balloon barrage along the East coast would not be economical, and will he not consider the placing of a barrage around some of these numerous industrial populations?
    Sir K. Wood: That is another matter. I am dealing with the suggestion on the Paper as far as the length of the East coast of the country is concerned.
    Mr. Simmonds: Is it not the fact that this barrage should be mobile?
    Mr. Daltonasked the Secretary of State for Air whether he has taken any steps to accelerate the completion of the balloon barrage for the defence of London?
    Sir K. Wood: All practicable steps are being taken to ensure the completion of the balloon barrage at the earliest possible date. Recruiting is in progress for all four centres to be located in the London sectors, and it is hoped that by September, eight of the 10 squadrons to be formed will be in training.
    Mr. Duncan: Can my right hon. Friend say whether there is now sufficient gas-making apparatus for the balloons?
    Sir K. Wood: Certain difficulties have arisen, but I am glad to say that they are now being overcome.
    Mr. J. J. Davidsonasked the Secretary of State for Air whether the balloon barrage system of defence is to be established in Scotland?
    Sir K. Wood: As I have already informed the House, I am giving the question of the extension of the balloon barrage my personal attention, but it is not possible to arrive at any decision until further experience has been gained in the development of a balloon barrage in the London area.
    Mr. Davidson: Can the right hon. Gentleman assure Scottish Members that the defence of Scotland in this respect will not depend upon the mobility of the

    1071
    London balloon barrage system, and can he say whether the Scottish local authorities are being consulted with regard to this form of defence in Scotland? Has the Scottish Office been consulted?
    Sir K. Wood: I think we must await further experience as far as barrage in the London area is concerned before we can decide the matter to which the hon. Member refers.
    Mr. Davidson: Have any steps been taken to obtain the opinion of the Scottish local authorities, apart from the London barrage?
    Sir K. Wood: I do not think so. It is a matter more for technical consideration.
    Mr. Duncan: Can the right hon. Gentleman say whether the experiments are proceeding satisfactorily?
    Mr. Montague: Has the Minister considered an alternative or additional proposal for a rocket-controlled barrage on the coast?
    Sir K. Wood: All these matters will, obviously, have to be considered in the light of what I have said.

    AIRCRAFTMAN'S DISMISSAL.
    Mr. Sorensenasked the Secretary of State for Air whether, in view of the recent dismissal of an aircraftman subsequent to his conviction for cruelty to a child, it is the practice always to insist on dismissal in cases of such proven cruelty; whether there are similar cases on record; whether opportunity of reenlistment is given after an appropriate period of expiation; and whether the regulations involving dismissal for proven cases of injurious treatment of children applies also in time of war?
    Sir K. Wood: There are no similar cases on record. Any such case, including the re-enlistment aspect if it arose, would be considered on its merits having regard to the best interests of the Royal Air Force and of the man himself. As regards the last part of the question no such regulation exists.
    Mr. Sorensen: Does the right hon. Gentleman not agree that while condemning without qualification cases of cruelty to children, it is socially unwise to punish the offender in the way that was done in this case?

    BRITISH AIR FORCES.
    Mr. Dayasked the Secretary of State for Air the present number of squadrons in the Metropolitan Air Force and those engaged in overseas service; the number of squadrons in the Fleet Air Arm; and whether the formation of the various aircraft is proceeding at a satisfactory rate?
    Sir K. Wood: The numbers asked for are as follow: Metropolitan Air Force, 123 squadrons (including one squadron temporarily overseas); overseas, 29 squadrons; Fleet Air Arm, the equivalent of 20 squadrons.
    Mr. Day: Are these squadrons operating as complete with pilots and machines?
    Sir K. Wood: I have answered the question on the Order Paper and I should require notice of any further point.

    METEOROLOGICAL OFFICE.
    Mr. Markhamasked the Secretary of State for Air how many meteorological stations in this country now take accurate observations of radiation and humidity; and whether it is proposed to add to them in the near future?
    Captain Balfour: As regards solar radiation, continuous records are maintained at Kew, South Kensington and Rothamsted and occasional records at Eskdalemuir. No increase is under consideration. Humidity observations are part of the ordinary routine at all meteorological office stations and it is not intended to increase the number of stations except as part of the expansion of the meteorological service to meet both Service and civil aviation requirements.
    Mr. Markham: Does not the Under-Secretary consider it necessary to increase the number of these stations? Is it not necessary that more adequate records should be taken of relative and absolute humidity for other purposes?
    Captain Balfour: I will bear in mind the point raised by the hon. Member in consultation with the experts of my Department.
    Mr. Markhamasked the Secretary of State for Air whether he is satisfied that the present staff of the Meteorological Office is adequate for its duties; and what

    1073
    numbers are at present engaged upon weather forecasting?
    Captain Balfour: As the result of the expansion of the Royal Air Force and of civil aviation a very large increase in the staff of the Meteorological Office has been called for, and is being met as rapidly as suitable personnel can be recruited and trained. There are at present 87 persons engaged on making day-to-day weather forecasts and 13 under training. These numbers will be increased during the next 12 months.
    Mr. Markham: Does the proposed expansion give sufficient time for the senior staff so that they can devote adequate time to their research duties?
    Captain Balfour: We recognise that these duties make a heavy strain on the senior members of the meteorological staff, but I am told that the matter can be dealt with adequately without further expansion.
    Mr. Markham: Is it not a fact that the senior staff have been for years swamped with routine work and that the present expansion does not give an adequate staff to deal with research problems?
    Captain Balfour: The present expansion aims at training other experts for the work in order to reduce the routine work that has to be done by the senior staff.
    Mr. Markhamasked the Secretary of State for Air whether he is aware that weather forecasts for a fortnight or longer are now being made both in this country and in Germany and have attained a high percentage of accuracy; and whether he will consider taking steps to ensure that the present forecasts from the Meteorological Office are supplemented by comparable long-distance forecasts?
    Captain Balfour: I am aware of the long-range weather forecasts being attempted by various methods in many different countries. These efforts are being carefully studied by the Meteorological Office, but so far none of the methods has attained the accuracy which would justify the issue of such forecasts in this country.
    Mr. Markham: Is it not a fact that there is 95 per cent. accuracy of forecast made in this country and published in one of our leading newspapers, and would
    1074
    it not be advisable that the Meteorological Office should consider alternative methods of its own?
    Captain Balfour: Long-range forecasts have been studied for many years in India and Germany where the work has been encouraging, but it is not convincing yet. Long-range forecasts in this country, with our changeable climate would be more difficult than in any other country, and it is best to await the result of investigations which we are now pursuing.

  TRANSPORT.

    RAILWAY SERVICE, EAST LANCASHIRE.
    Major Procterasked the Minister of Transport whether his attention has been drawn to the slow train service between Manchester, Accrington, and Colne; and whether he will consult with the railway company as to the possibility of electrifying this route?
    The Minister of Transport (Mr. Burgin): I am informed by the London Midland and Scottish Railway Company that they are introducing improved services on this line in July. The company say that they would not feel justified, in existing circumstances, in incurring the expenditure involved in electrifying this route. I may add that I understand that the whole problem of the transport services in this part of Lancashire is to be the subject of a conference next month between representatives of the local authorities, trading bodies and operators of various forms of internal transport.
    Major Procter: What does the right hon. Gentleman mean by "improved"? Does it mean that they can so accelerate this service that they can give a speed of more than 20 miles an hour for this route?
    Mr. Burgin: What I mean by improvement is, making it better than the position that exists. I should not like to deal with any particular mileage per hour, without notice. The London Midland and Scottish Railway have said that they propose to introduce an improved service on this section of the line in July next.

    BERNERA ISLAND, LEWIS (CAUSEWAY).
    Mr. Malcolm MacMillanasked the Minister of Transport whether he has now

    1075
    received the recommendations of the County Council of Ross and Cromarty regarding the proposed causeway at Bernera Island, Isle of Lewis; and when the work is likely to begin and the estimated cost?
    Mr. Burgin: The position is the same as when I replied to the hon. Member's question on 9th March last. No further application has been received from the county council since that date.
    Mr. MacMillan: In view of the inconvenience caused to a population of several hundred people, the inevitable cruelty to stock, the damage to commodities and the general lack of facilities, will the right hon. Gentleman take steps to provide the facilities necessary?
    Mr. Burgin: I have pointed out that it is a matter for the county council. I gave the hon. Member that reply when he raised the matter on 9th March. I have no communication from the county council since.
    Mr. MacMillan: In view of the failure of the county council to look after the interests of these people, will the right hon. Gentleman take up the matter and do something?

    STEAMER SERVICE, STORNOWAY.
    Mr. Malcolm MacMillanasked the Minister of Transport whether he has now considered the further representations made to him regarding the proposed improved and faster, or earlier, steamer service to Stornoway from the mainland; and whether he has any proposals for assisting the town council and others concerned in this direction?
    Mr. Burgin: I am in communication with the shipping and railway companies concerned and will inform the hon. Member of the result as soon as possible.

    ROAD WORKERS' WAGES.
    Mr. Malcolm MacMillanasked the Minister of Transport whether the fair wages clause operates on all road work financed under the five-year road plan of 100 per cent. grants from the Ministry of Transport to Highland authorities; and what wages are being paid on such works in the Isle of Lewis and on the mainland of the county of Ross and Cromarty, respectively, on these schemes?
    Mr. Burgin: Yes, Sir. The fair wages clause is operative. In answer to the second part of the question the minimum hourly rate is 11d. in both cases, but I understand that the majority of men employed on the works in the mainland are, in fact, receiving higher rates.
    Mr. MacMillan: Has the right hon. Gentleman received no complaints whatever about low wages being paid on these schemes?
    Mr. Burgin: I have no reason to think that the fair wages clause is not being operated.

    CHEYNE WALK, CHELSEA.
    Mr. Benjamin Smithasked the Minister of Transport whether, in view of the divergence of opinion concerning the usefulness of the barrier erected at the western end of Cheyne Walk, Chelsea, it is his intention that the various interests concerned should be given the opportunity of expressing their views at a public inquiry?
    Mr. Burgin: I have no jurisdiction which would warrant my holding an inquiry into this matter.
    Mr. Smith: Is not the right hon. Gentleman aware that this barrier extends for 5o per cent. of the road and surely he has some means of negotiating with the local authority on the matter?
    Mr. Burgin: "Local government" means that local authorities have powers in their own areas. This barrier has been erected by the Chelsea Borough Council, and I am afraid it is a matter for them.
    Mr. A. V. Alexander: Is it on a main arterial road?

    SIGNALLING ARRANGEMENTS, FELLING.
    Mr. Dobbieasked the Minister of Transport whether he is aware that, although there is no apparatus at Felling signal box, on the London and North Eastern Railway, to give the signalmen a visible reminder of the order in which trains are approaching, the train register and signal lads have been withdrawn; and whether, in the interests of safe working, he will press the company to reintroduce both the train register and signal lads in this case?
    Mr. Burgin: This matter had already been brought to my attention and the circumstances have been carefully considered. Having regard to the conditions which obtain at Felling in relation to those elsewhere, I do not feel that I should be justified in pressing the railway company to re-introduce the train register and restore the signal lads. The railway company are primarily responsible for safety in operation and for the adequacy of their staff. The company have now had over two years' experience of working at the Felling box without the train register book. No difficulty has been experienced during that period, and in the company's view this has confirmed the opinion that the present staffing arrangements are adequate.
    Mr. Dobbie: In view of the concentration of responsibilities forced on the signalman by the withdrawal of the signal lads, and the lack of safety arrangements to guarantee the maximum amount of safety to the general public, will the right hon. Gentleman look further into this matter?
    Mr. Burgin: I will certainly keep it closely under review. The question of safety is very prominent in my mind, and also in the minds of the railway management, and I think the attention drawn to this matter by the question should ensure that complete precautions will be taken at this signal box.

    TRUNK ROADS (LIGHTING).
    Mr. Dayasked the Minister of Transport particulars of the agreements which have been entered into between his Department and the local authorities for the purpose of illuminating main trunk routes and/or roads, as recommended by the departmental committee on street lighting under the provisions of the Trunk Roads Act, 1936?
    Mr. Burgin: No agreements have yet been completed but as indicated in the answer which I gave to my hon. and learned Friend the Member for East Leicester (Mr. Lyons) on 19th May, certain proposals are under the consideration of my Department or of the local authorities concerned.
    Mr. Day: Will the right hon. Gentleman consider utilising the powers given him by this Act?

    SIGN POSTS, SCOTTISH HIGHLANDS.
    Sir Malcolm Barclay-Harveyasked the Minister of Transport whether he will give instructions that on the roads in the Highlands of Scotland, to which he is giving a 100 per cent. grant, posts notifying crossing-places, etc., shall be of wood and not of metal?
    Mr. Burgin: I am 10th to specify any particular material without regard to individual circumstances, but if my hon. Friend has special reasons I will be glad to consider them.

    BRESSEY REPORT (LAND SPECULATION).
    Major Oscar Guestasked the Minister of Transport whether, in view of the publicity given to road development in the London area since the issue of the Bressey Report, the Government are taking any steps to safeguard against increase in the cost of acquiring land required for new roads?
    Mr. Burgin: The responsibility for safeguarding must rest on the highway authorities concerned. They alone have the necessary powers. Expenditure for these purposes, if approved, ranks for grants.
    An Hon. Member: Is the right hon. Gentleman aware that there has already been considerable speculation in the neighbourhood of proposed new arterial roads as a result of the publication of this report?
    Sir Percy Harris: As the Government have to pay a good percentage of the cost would it not be wise in their own interests to point out to local authorities that they should take into consideration the interests of their localities in view of the activities of these speculators?
    Mr. Burgin: Perhaps the question and answer will have a result in that direction. My answer is to point out that the responsibility for safeguarding is a highway authority responsibility.

    ROAD ACCIDENTS, NEWCASTLE AND GATESHEAD.
    Mr. Denvilleasked the Minister of Transport the total number of accidents, fatal and otherwise, within the boundaries of Newcastle-on-Tyne and Gateshead, and the number attributable to non-local vehicles?
    Mr. Burgin: The numbers of road accidents involving personal injury in Newcastle-on-Tyne and Gateshead during the year 1937 were:

    Fatal accidents

    Non-fatal accidents.

    Newcastle-on-Tyne

    32

    931

    Gateshead

    10

    415

    No information is available as to the places at which the vehicles involved are kept.
    Mr. Denville: Does not this show the desirability of a by-pass being built in this locality?
    Mr. Burgin: The question is a statistical one, not a question of policy.

    LAND ACQUISITION, CARMARTHEN (COMPENSATION).
    Mr. Hopkinasked the Minister of Transport whether he can now say how the £4,882 compensation for 1.3 acres of land near the Carmarthen Bridge is made up, and whether this sum includes a claim for loss of business as well as the acquisition of land and buildings; whether he is aware that the above sum has not been paid and that in at least six other cases the amounts of compensation save not been agreed; what has been the cause of the delay; and when the whole matter will be settled?
    Mr. Burgin: The total of £4,882 represents the compensation payable to seven persons who have or had interests in the land and property; it covers all items including loss of business, although no part is earmarked as being in respect of loss of business. Two of the seven have been paid and the remaining five will be paid as soon as the necessary legal formalities have been concluded. The delay in other cases is due to inability to reach agreement with the owners, and the cases will have to be referred to arbitration.

    HOUSE OF COMMONS TERRACE.
    Mr. Perkinsasked the First Commissioner of Works whether he will consider raising the level of the Terrace?
    The First Commissioner of Works (Sir Philip Sassoon): Yes, Sir; but in view of the heavy cost involved—some £7,000 or £8,000—I propose to defer the work until such time as major repair to the Terrace paving becomes necessary.
    Mr. Perkins: Can the First Commissioner tell us when it will be necessary for this work to be done?
    Sir P. Sassoon: When the pavement becomes bad enough.

    TOWER HILL IMPROVEMENT SCHEME.
    Major Carverasked the First Commissioner of Works whether he is aware that the activities of the Tower Hill improvement scheme have considerably added to the amenities for the general public in the neighbourhood of the Tower of London; and, in view of this, whether he will expedite the suggested alterations to the entrance to the Tower by removing certain old railings and the brick wall near Tower Dock, which block the river view?
    Sir P. Sassoon: I can assure the hon. and gallant Member that I fully appreciate the work which is being done in connection with the Tower Hill improvement scheme, and I am giving sympathetic consideration to the possibility of carrying out the alterations to which he refers.

    LAND REGISTRATION.
    Sir Joseph Leechasked the Attorney-General whether he is aware that the policy of extending compulsory registration on the sale of land under the Land Registration Act, 1925, is now so operated as to he neglectful of the public interest; and will he authorise and organise compulsory registration in an additional number of populous areas occupied by wage-earning residents outside the home counties without further delay?
    The Attorney-General (Sir Donald Somervell): I cannot accept the suggestion that there has been any neglect of the public interest in the proceedings taken under the Land Registration Act, 1925. It is not practicable to make orders in respect of areas which are not defined areas of local government. Generally speaking, the work of extending compulsory registration on sale to further areas is proceeding with all convenient speed.
    Sir P. Harris: As the experimental stage has long since passed, and it has been proved that it is of great advantage to the country and to owners of land to

    1081
    have this registration, why are the Government not utilising the powers to extend the area?
    The Attorney-General: The hon. Member knows that there have been extensions, first in the county of Middlesex and one recently in the Provinces. The fact that the experiments have succeeded does not alter the fact that the matter is one of great complexity and highly technical, and one in which it is extremely important that the extensions should not be made except where all the conditions are fulfilled which will enable decisions to be carried out without mistakes being made.
    Sir M. Sueterasked the Attorney-General whether he will arrange for the expansion of the technical staff of His Majesty's Land Registry so that compulsory orders for registration on sale can be extended to areas outside the north and north-east of Middlesex and thereby facilitate conveyancing of property in the expanding suburbs just beyond Middlesex; and what is the difficulty in organising a technical staff for this service to the public?
    The Attorney-General: As I have often pointed out in answer to questions in this House, the work of extending the compulsory areas under the Land Registration Act is proceeding with as much expedition as is consistent with proper administration. The areas in respect of which it is now proposed to make orders are in the first place the County Borough of Croydon in the county of Surrey. It is not proposed to make any such order for an area north or north-east of Middlesex until progress has been made in respect of these areas.

    SOLICITORS' ACCOUNTS.
    Sir M. Sueterasked the Attorney-General whether in view of the convictions since 1935 in the criminal courts of solicitors for fraudulent conversion of clients' money, he will take steps to require solicitors to deposit in local banks, in the joint names of themselves and of the Public. Trustee, such funds and securities as solicitors deal with for clients, so that valuable property cannot be converted without the cognizance of the Public Trustee?
    The Attorney-General: As I stated in reply to the hon. Member for Newcastle
    1082
    (Sir J. Leech) on 10th June, the question of the steps to be taken in these matters is under consideration by the Law Society, who hope shortly to formulate proposals. I do not think that the suggestion made by my hon. and gallant Friend would be practicable.
    Mr. Petherick: Will the Attorney-General encourage the Law Society to take steps at the earliest possible moment to prevent such cases of fraud as have appeared in the newspapers and which cast discredit on an honourable profession through the lapses of a few members?
    The Attorney-General: I have stated more than once that the Law Society, with whom I have been in touch have had this matter under active consideration for some months, and they hope to put forward proposals shortly which will commend themselves to the House.
    Mr. Alexander: Will these proposals include a guaranteed bond system?
    The Attorney-General: I cannot say yet what they will include.

    BRITISH BROADCASTING CORPORATION (DIRECTOR-GENERAL).
    Mr. Hulbertasked the Postmaster-General whether he can now announce the name of Sir John Reith's successor as Director-General of the British Broadcasting Corporation?
    The Assistant Postmaster-General (Sir Walter Womersley): I understand that the question of the appointment of a Director-General of the British Broadcasting Corporation is under consideration by the governors of the corporation, with whom the appointment rests under Clause 7 of the Royal Charter.
    Mr. Hulbert: Can the Assistant Postmaster-General give us any idea when the governors will come to a decision?
    Sir W. Womersley: I cannot give any idea.
    Captain Arthur Evans: Will the Assistant Postmaster-General ask the governors that in making this appointment they will bear in mind the interests of the Vale of Evesham in this matter?
    Mr. De la Bère: Will my hon. Friend impress upin the governors the importance of not appointing a succcessor who will provoke Members of Parliament?

    HOUSING (SHOREDITCH).
    Mr. Crowderasked the Minister of Health whether his attention has been called to the cost of erecting a five-storey block of dwellings in the Loanda Street area, Shoreditch, at a cost of £194 per room; what is the annual net deficiency; and what proportion of this will be borne by the State and the ratepayers, respectively?
    The Parliamentary Secretary to the Ministry of Health (Mr. Bernays): I am aware of this proposal. The annual deficiency is estimated at £1,303. I understand that the borough council have not yet decided how many of the flats should be used for the abatement of overcrowding, and how much of the deficiency will be borne by the Exchequer will depend on this decision.
    Mr. Thurtle: Does not the hon. Gentleman agree that the cost of land in Shore-ditch is very high, and that the Shore-ditch Borough Council is to be commended on the efforts it is making, under great difficulties, to provide housing for the people?
    Mr. Bernays: Yes, Sir. I have no reason to suppose that the Borough Council are not making every possible effort.
    Sir Joseph Nall: Can my hon. Friend say how much of this cost is due to the site and how much to the construction?
    Mr. Bernays: Not without notice.

    MILK INDUSTRY (GOVERNMENT PROPOSALS).
    Mr. Alexanderasked the Minister of Agriculture whether he is in a position to make a statement with regard to forthcoming milk legislation, having regard to the fact that the provisions of the existing temporary Measures expire on 30th September next?
    The Minister of Agriculture (Mr. W. S. Morrison): I regret that owing to the pressure on Parliamentary time it will not now be possible for legislation to give
    1084
    effect to the Government's proposals contained in the White Paper on Milk Policy issued in July, 1937, to be introduced and considered this Session. The Government hopes, however, to introduce such legislation early next Session and, as an interim Measure, proposes to ask Parliament to pass before the Summer Recess a Bill to extend the chief provisions of the Milk Acts, 1934 to 1937, for a further 12 months until 30th September, 1939, and, as proposed in paragraph 8 of the White Paper, to release the Milk Marketing Boards from liability accruing after 30th September last to repay to the Exchequer the advances made under the Milk Acts in respect of manufacturing milk. An extension of Section II of the 1934 Act will enable Exchequer contributions to be made towards the cost of the schemes referred to in paragraphs 20 and 21 of the White Paper, namely cheap milk for school children and for expectant and nursing mothers and children under school age, and in order to facilitate the development of those schemes the Government proposes to ask Parliament to provide an additional £750,000 instead of the £500,000 hitherto made available annually.
    Mr. T. Williams: In view of the great anxiety in the minds of liquid milk consumers owing to the recurring increases in price, cannot the Government expedite their Measure, seeing that there is no chance of any immediate reduction in the price of liquid milk while the distribution is not rationalised?
    Mr. Morrison: The Government are anxious to proceed with their main Bill, but the exigencies of Parliamentary time this Session have rendered it impossible to introduce it.
    Mr. Leach: Cannot the Government consider having another Session?
    Mr. Maxton: Did the Minister say that there is to be an additional £750,000 on top of the existing £500,000?
    Mr. Morrison: The figure of £750,000 is the total. There is to be an addition of £250,000 to the £500,000 hitherto made available.

    BOATING ACCIDENT, RIVER MERSEY.
    Mr. Kirbyasked the President of the Board of Trade whether his attention

    1085
    has been drawn to a boating accident in the River Mersey, near Widnes, on Sunday last when a man, four boys, and a girl lost their lives by drowning following the capsizing of a small passenger pleasure-boat; and what action is taken by way of inspections, annual or otherwise, to ensure that all passenger-boats used on such tidal rivers are in all respects seaworthy?
    The Parliamentary Secretary to the Board of Trade (Mr. Cross): My attention has already been drawn to this regrettable accident and I should like to take this opportunity of expressing my sympathy with the relatives of those who lost their lives. I am making certain inquiries, and I should prefer not to make any statement on the case at present. As regards the latter part of the question, every mechanically propelled passenger vessel plying or proceeding on an excursion and carrying more than 12 passengers is required by the Merchant Shipping Acts to be surveyed once at least in each year and to hold a passenger certificate issued by the Board of Trade. Under the Public Health Acts local authorities have power to license certain pleasure boats let for hire which do not hold a Board of Trade certificate.
    Mr. Kirby: Is the hon. Gentleman aware that at the inquest on these persons, which was held yesterday, the jury expressed the opinion that their deaths were very largely due to the absence of regulations in regard to the registration of such boats, and can I be told what steps the Government will take to ensure that these boats are registered?
    Mr. Cross: I am making inquiries. I have not yet got full information, and I really cannot make any statement on the point until the information has been obtained.
    Mr. Pilkington: Does my hon. Friend know whether this boat in particular was inspected recently, and further can he say when he hopes that these inquiries will be completed?
    Mr. Cross: I have no information to the effect that the boat was inspected in the way indicated in my answer. At the same time, it is doubtful whether it is
    1086
    a boat which should have undergone any inspection.
    Mr. Benjamin Smith: Is it not common knowledge to the Department that, in fact, the annual survey does not take place in many of these cases?
    Mr. Cross: I cannot say whether this is a boat that should be ranked as a pleasure boat or not.
    Mr. Pilkington: Will the results of the inquiry be published?
    Mr. Cross: No, I cannot give any undertaking.

  BILL PRESENTED.
    SALMON FISHERIES (SCOTLAND) BILL,
    "to regulate the law in regard to salmon fishing in Scotland and for purposes connected therewith," presented by Captain Ramsay; supported by Captain McEwen, Lord William Scott, Sir Edmund Findlay, Sir Archibald Sinclair, Mr. Johnston, and Mr. Neil Maclean; to be read a Second time upon Monday next, and to be printed. [Bill 189.]

BUSINESS OF THE HOUSE.
Attlee: Will the Prime Minister state what business it is proposed to take in the event of the Motion for the suspension of the Eleven o'Clock Rule being carried?
The Prime Minister: We propose to report Progress in Committee on the Finance Bill at about 10 o'clock in order to take the Committee stage of a new Ways and Means Resolution relating to duties on motor cars, etc. We also propose to take the Lords Amendments to the Housing (Rural Workers) Amendment Bill. The Motion for the suspension of the Eleven o'Clock Rule will cover the last two items.
Motion made and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting. from the provisions of the Standing Oraer (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 246; Noes, 134.

Division No. 242.]

AYES.

[3.47 p.m.

Allen, Col. J. Sandeman (B'knhead)

Errington, E.

O'Neill, Rt. Hon. Sir Hugh

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

Erskine-Hill, A. G.

Palmer, G. E. H.

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

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

Perkins, W. R. D.

Anderson, Rt. Hn. Sir J. (Sell Univ's)

Findlay, Sir E.

Peters, Dr. S. J.

Assheton, R.

Fleming, E. L.

Petherick, M.

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

Fox, Sir G. W. G.

Pickthorn, K. W. M.

Astor, Viscountess (Plymouth, Sutton)

Furness, S. N.

Pilkington, R.

Alholl, Duchess of

Fyfe, D. P. M.

Plugge, Capt. L. F.

Baillie, Sir A. W. M.

Gluckstein, L. H.

Ponsonby, Col. C. E.

Baldwin-Webb, Col. J.

Glyn, Major Sir R. G. C.

Porritt, R. W.

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

Goldie, N. B.

Pownall, Lt.-Col. Sir Assheton

Barclay-Harvey, Sir C. M.

Graham, Captain A. C. (Wirrat)

Procter, Major H. A.

Barrie, Sir C. C.

Grant-Ferris, R.

Radford, E. A.

Beamish, Rear-Admiral T. P. H.

Gretton, Col. Rt. Hon. J.

Raikes, H. V. A. M.

Beauchamp, Sir B. C.

Gridley, Sir A. B.

Ramsay, Captain A. H. M.

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

Grigg, Sir E. W. M.

Ramsden, Sir E.

Beit, Sir A. L.

Grimston, R. V.

Rankin, Sir R.

Bennett, Sir E. N.

Guest, Hon. I. (Brecon and Radnor)

Rathbone, J. R. (Bedmin)

Bernays, R. H.

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

Rawson, Sir Cooper

Birchall, Sir J. D.

Hannah, I. C.

Rayner, Major R. H.

Bird, Sir R. B.

Harbord, A.

Reed, A. C. (Exeter)

Blair, Sir R.

Harvey, T. E. (Eng. Univ's.)

Reed, Sir H. S. (Aylesbury)

Boulton, W. W.

Haslam, Henry (Horncastle)

Reid, Sir D. D. (Down)

Bower, Comdr. R. T.

Haslam, Sir J. (Bolton)

Reid, W. Allan (Derby)

Briscoe, Capt. R. G.

Heilgers, Captain F. F. A.

Rickards, G. W. (Skipton)

Brown, Col. D. C. (Hexham)

Hely-Hutchinson, M. R.

Robinson, J. R. (Blackpool)

Brown, Rt. Hon. E. (Leith)

Heneage, Lieut.-Colonel A. P.

Ross Taylor, W. (Woodbridge)

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

Hepburn, P. G. T. Buchan-

Rowlands, G.

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

Hepworth, J.

Royds, Admiral Sir P. M. R.

Bull, B. B.

Herbert, Major J A. (Monmouth)

Ruggles-Brise, Colonel Sir E. A.

Bullock, Capt. M.

Higgs, W. F.

Russell, Sir Alexander

Burgin, Rt. Hon. E. L.

Holdsworth, H.

Russell, R. J. (Eddisbury)

Butler, R. A.

Holmes, J. S.

Russell, S. H. M. (Darwen)

Campbell, Sir E. T.

Hope, Captain Hon. A. O. J.

Salmon, Sir I.

Carver, Major W. H.

Horsbrugh, Florence

Sanderson, Sir F. B.

Cayzer, Sir C. W. (City of Chester)

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

Sassoon, Rt. Hon. Sir P.

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

Hudson, Rt. Hon. R. S. (Southport)

Scott, Lord William

Cazalet, Thelma (Islington, E.)

Hulbert, N. J.

Selley, H. R.

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

Hunloke, H. P.

Shakespeare, G. H.

Channon, H.

Hunter, T.

Shepperson, Sir E. W.

Chapman, A. (Rutherglen)

James, Wing-Commander A. W. H.

Shute, Colonel Sir J. J

Chapman, Sir S. (Edinburgh, S.)

Jarvis, Sir J. J.

Simmonds, O. E.

Chorlton, A. E. L.

Joel, D. J. B.

Simon, Rt. Hon. Sir J. A.

Christie, J. A.

Jones, Sir H. Haydn (Merioneth)

Smiles, Lieut.-Colonel Sir W. D.

Churchill, Rt. Hon. Winston S.

Jones, L. (Swansea W.)

Smith, Bracewell (Dulwich)

Clarke, Colonel R. S. (E. Grinstead)

Keeling, E. H.

Smith, Sir R W. (Aberdeen)

Clarry, Sir Reginald

Kerr, Colonel C. I. (Montrose)

Smithers, Sir W.

Cobb, Captain E. C. (Preston)

Kerr, H. W. (Oldham)

Somervell, Rt. Hon. Sir Donald

Colville, Rt. Hon. John

Kerr, J. Graham (Scottish Univs.)

Southby, Commander Sir A. R. J.

Conant, Captain R, J. E.

Keyes, Admiral of the Fleet Sir R.

Stanley, Rt. Hon. Lord (Fylde)

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

Law, Sir A. J. (High Peak)

Stewart, J. Henderson (Fife, E.)

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

Leech, Sir J. W.

Stourton, Major Hon. J. J.

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

Lees-Jones, J.

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

Courthope, Col. Rt. Hon. Sir C. L.

Leighton, Major B. E. P.

Stuart, Hon. J. (Moray and Nairn)

Cox, H. B. evor

Lewis, O.

Sueter, Rear-Admiral Sir M. F.

Crookshank, Capt. H. F. C.

Lindsay, K. M.

Taylor, C. S. (Eastbourne)

Cross, R. H.

Lipson, D. L.

Thomson, Sir J. D. W.

Crossley, A. C.

Lloyd, G. W.

Titchfield, Marquess of

Crowder, J. F. E.

Locker-Lampson, Comdr. O. S.

Tree, A. R L. F.

Cruddas, Col. B.

MacAndrew, Colonel Sir C. G.

Tufnell, Lieut.-Commander R. L.

Culverwell, C. T.

M'Connell, Sir J.

Wakefield, W. W.

Davidson, Viscountess

MacDonald, Rt. Hon. M. (Ross)

Walker-Smith, Sir J.

Davies, Major Sir G. F. (Yeovil)

Macdonald, Capt. P. (Isle of Wight)

Wallace, Capt. Rt. Hon. Euan

Davison, Sir W. H

MeEwen, Capt. J. H. F.

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

Dawson. Sir P.

McKie, J. H.

Ward, Irene M. B. (Wallsend)

De la Bère, R.

Maclay, Hen. J. P.

Wardlaw-Milne, Sir J. S.

Denman, Hon. R. D.

Maitland, A.

Warrender, Sir V.

Denville, Alfred

Makins, Brigadier.General Sir Ernest

Waterhouse, Captain C.

Donner, P. W.

Manningham-Buller. Sir M.

Watt, Major G. S. Harvie

Dorman-Smith, Major Sir R. H.

Markesson, Caot. Rt. Hon. H. D. R.

Whiteley, Major J. P. (Buckingham)

Drewe, C.

Markham, S. F.

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

Duckworth, Arthur (Shrewsbury)

Marsden, Commander A.

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

Duncan, J. A. L.

Maxwell, Hon. S. A.

Willoughby de Eresby, Lord

Dunglass, Lord

Mayhew, Lt.-Col. J.

Windsor-Clive, Lieut.-Colonel G.

Eckersley, P. T.

Mills, Major J. D. (New Forest)

Winterton, Rt. Hon. Earl

Eden, Rt. Hon. A.

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

Womersley, Sir W. J.

Edmondson, Major Sir J.

Morris-Jones, Sir Henry

Wood, Hon. C. I. C.

Elliot, Rt. Hon. W. E.

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

Wood, Rt. Hon. Sir Kingsley

Ellis, Sir G.

Morrison, Rt. Hon. W. S. (Cirencester)

Wright, Wing-Commander J. A. C.

Elmley, Viscount

Muirhead, Lt.-Col. A. J.

Young, A. S. L. (Partick)

Emery, J. F.

Nall, Sir J.

Emrys-Evans, P. V.

Neven-Spence, Major B. H H.

TELLERS FOR THE AYES.—

Entwistle, Sir C. F.

Nienlson, Hon. H. G.

Captain Dugdale and Mr.Munro.

1088

1089

NOES

Adams, D. (Consett)

Hall, J. H. (Whitechapel)

Ridley, G.

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

Hardie, Agnes

Riley, B.

Adamson, W. M.

Harris, Sir P. A.

Rilson, J.

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

Heyday, A.

Roberts, W. (Cumberland, N.)

Ammon, C. G.

Henderson, A. (Kingswinford)

Robinson, W. A. (St. Helens)

Anderson, F. (Whitehaven)

Henderson, J. (Ardwick)

Rothschild, J. A. de

Attlee, Rt. Hon. C. R.

Henderson, T. (Tradeston)

Salter, Dr. A. (Bermondsey)

Banfield, J. W.

Hills, A. (Pontefract)

Seely, Sir H. M.

Barnes, A. J.

Hopkin, D.

Sexton, T. M.

Barr, J.

Jagger, J.

Shinwell, E.

Batey, J.

Jenkins, A. (Pontypool)

Short, A.

Benn, Rt. Hon. W. W.

Jenkins, Sir W. (Neath)

Silverman, S. S.

Benson, G.

John, W.

Simpson, F. B.

Broad, F. A.

Jones, Morgan (Caerphilly)

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

Bromfield, W.

Kelly, W. T.

Smith, Ben (Rotherhithe)

Brown, C. (Mansfield)

Kennedy, RI. Hon T.

Smith, E. (Stoke)

Buchanan, G.

Kirby, B. V.

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

Burke, W. A.

Lansbury, Rt. Hon. G.

Smith, T. (Normanton)

Cape, T.

Lathan, G.

Sorensen, R. W.

Cassells, T.

Lawson, J. J.

Stephen, C.

Chater, D.

Leach, W.

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

Cluse, W. S.

Lee, F.

Stokes, R. R.

Cocks, F. S.

Leonard, W.

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

Cove, W. G.

Leslie, J. R.

Summerskill, Dr. Edith

Crisps, Hon. Sir Stafford

Logan, D. G.

Taylor, R. J. (Morpeth)

Dagger, G

Lunn, W.

Thurtle, E.

Dalton, H.

Macdonald, C. (Ince)

Tinker, J. J.

Davidson, J. J. (Maryhill)

McEntee, V. La T.

Tomlinson, G.

Davies, S. O. (Merthyr)

McGhee, H. G.

Viant, S. P.

Day H.

McGovern, J.

Walkden, A. G.

Dobbie, W.

Maclean, N.

Walker, J.

Dunn, E. (Rother Valley)

MacMillan, M. (Western Isles)

Watkins, F. C.

Ede, J. C.

Mender, G. le M.

Watson, W. McL.

Edwards, A. (Middlesbrough E.)

Maxton, J.

Wedgwood, Rt. Hon. J. C.

Edwards, Sir C. (Bedwellty)

Milner, Major J.

Westwood, J.

Evans, D. O. (Cardigan)

Montague, F.

White, H. Graham

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

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

Wilkinson, Ellen

Frankel, D.

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

Williams, D. (Swansea, E.)

Gallacher, W.

Naylor, T. E.

Williams, E. J. (Ogmore)

Gardner, B. W.

Owen, Major G.

Williams, T. (Don Valley)

George, Major G. Lloyd (Pembroke)

Parkinson, J. A.

Wilson, C. H. (Attercliffe)

Gibson, R. (Greenock)

Pearson, A.

Woods, G. S. (Finsbury)

Green, W. H. (Deptford)

Pethick-Lawrence, Rt. Hon. F. W.

Greenwood, Rt. Hon. A.

Poole, C. C.

TELLERS FOR THE NOES.—

Grenfell, D. R.

Price, M. P.

Mr. Mothers and Mr. Groves.

Griffiths, J. (Llanelly)

Richards, R. (Wrexham)

ORDERS OF THE DAY.

  FINANCE BILL.
  Considered in Committee.
  [Captain BOURNE in the Chair.]

  FINANCE BILL.

    CLAUSE 1.—(Increase of Customs Duty on hydrocarbon oils.)
    4.20 p.m.
    Mr. David Adams: I beg to move, in page r, line 19, to leave out "increased," and to insert "reduced."
    Before moving this Amendment, may I ask, Captain Bourne, whether I may be allowed at the same time to deal with my subsequent Amendment, in line 20, to leave out "ninepence," and to insert "sevenpence"?
    The Deputy-Chairman: It is obvious that, if the hon. Member's first Amendment were rejected, the second Amendment would no longer be called, but I think it might be for the convenience of the Committee if we took a rather wide discussion on this Amendment, on the understanding that the arguments would not be repeated when I put the Question, "That the Clause stand part of the Bill." I think it would be a pity to narrow the discussion down to this actual Amendment itself.
    Mr. Adams: Thank you, Captain Bourne. My hon. Friends and I are taking a step directly in opposition to the views expressed by the Government in the Finance Bill. We challenge, on public grounds, the policy which the Government propose and suggest that, instead of an increase in the Petrol Duty, there should be a diminution of it. We say, not with any desire to obtain anything in the nature of a party advantage, if that were possible, but with a full and proper sense of public obligation in this matter, that we desire a reversal of the Government's policy with regard to taxation of this sort. The taxation upon petrol is higher than ever before. It certainly was in existence before the War, but the Excise Duty was removed in 1919 and the Customs Duty in 1921. There was, therefore, a period at all events, perhaps in better and wiser days, in our judgment, when there was no such taxation. It was revived by the right hon. Member for Epping (Mr. Churchill),
    1118
    when Chancellor of the Exchequer, as a duty on hydrocarbon oil, and as part of the financial arrangements associated with the derating proposals of the Government, and, as the Committee is probably aware, the duty was twice increased by Mr., later Lord, Snowden, in 1931.
    We observe that the policy that is now being pursued is contrary to the declared Government policy as expressed in the Finance Bill itself, because the Government are making an additional allowance, towards the wear and tear of machinery equal to a grant of £3,250,000, the purport of that being that industrial machinery throughout the country should not be weakened or impaired. We agree that that is a sound proposition, if the end sought can be achieved, but in the petrol tax we have a reversion of such an attitude, inasmuch as we declare that this is a serious tax upon industry, that it adds to the cost of motoring in all its aspects, and that so costly is it to-day, with the horse-power tax and other forms of taxation, and particularly petrol charges, that there are many persons who utilise their private motor cars only at week-ends. This is one of the main factors in making motoring a costly pastime, and as a result of that the Government are shutting out from the use of the private motor car a very large proportion of our population; they are virtually shutting out the working classes. I declare that this policy is undoubtedly closing a very vast and hitherto untapped market for British motor cars, and that if we could reach a stage, which we hope to do some day, in which the petrol tax was abolished and in which the horse-power tax went the same way, these two factors themselves would have a very large influence in making motoring available to the masses of the people.
    In the United States of America the conditions are deliberately made easy for the motorist by the Government, the maximum tax upon petrol being four cents, or twopence, at any time; and I have occasion personally to know that any suggestion that the tax should be increased or any attempt in the direction of increasing the cost of motoring in that country would be strongly resisted, not only by the Government, but by all responsible people in the United States. The result of that position is that motoring

    1119
    is looked upon as one of the normal enjoyments, functions, entertainments, and sources of pleasure in the United States. It is interesting to note that Herr Hitler, in a declaration some little time ago, said that the totalitarian State of which he was the head would, in the process of time, be able to bring motoring within the reach of all sections of the German people; and in Russia there is an effective movement taking place for the production of cheap cars, and the preservation of cheapness as affecting motoring will place the Russian people on the whole in a position to enjoy this pastime.
    I said that this tax was a contributory factor affecting the export sales of British motor cars. The petrol tax and the horsepower tax have forced upon this country the production of the small car, which is, in my judgment, not comparable in comfort and convenience with the larger models, but the British people are forced, by reason of this taxation, to content themselves with these lesser cars, which are unknown in the United States and unknown in most of our Dominions and Dependencies. I assert that the policy which the Government have pursued has caused a loss to this country, inasmuch as we do not export these small cars. They are quite useless abroad, and, as I say, they are almost unknown in our Dominions and Colonies. A friend of mine who has come from the Sudan tells me that in an outlying area chiefly under British control, where the population is only between 300 and 350, there were 30 motor cars, not one of which was of British origin. The fact that we in this country are largely producing small cars means considerable loss in material, in technical skill and labour as compared with the production of larger cars in the United States. Economists would say as to the incidence of the tax that it is steeply regressive and penalises the poorer motorist out of all proportion to the value of his car. That statement will probably not be controverted because in the "Economist" there was an estimate that for a car costing £200, the average cost of petrol, oil and maintenance would be about 31 per cent. That is a heavier percentage than on a large and more costly car.
    I would not be in order in arguing the question of the justice of the tax as between motorist and motorist, but it
    1120
    seems to me that some case might be presented for a properly graded tax, if the tax must be continued, upon horsepower or other means, so that there should not be this discriminatory tax between motorists which undoubtedly prevails. We have by our policy impaired our export trade, while as a nation we are utilising the small and relatively indifferent car so far as convenience and power are concerned owing to the penalties imposed upon motoring. The industry has been hampered because there is a vast market among the working classes which could have been catered for but for the heavy taxation. The difference in this respect between this country and the United States is not due to any disparity in wage standards, but is due to the fact that motoring in that country has been encouraged as an instrument for enjoyment and for the preservation of the public health. It is encouraged as a deliberate policy so that it shall be within reach of the masses of the people. I admit that in the United States there are greater facilities than we enjoy in accessibility to mountains, forests, lakes and rivers. Many thousands of square miles everywhere are free to the American common people. If we had cheaper motoring within reach of the masses of the people we would have that advantage, together with a larger and more profitable industry, and an industry which was capable of exporting its wares abroad because it would produce a larger type of car. It would also bring within reach of the people the great reservoir of health from which they are admittedly excluded to-day.
    4.36 p.m.
    Mr. H. G. Williams: Although I find myself in a considerable measure of sympathy with the hon. Member for Consett (Mr. David Adams), I do not propose to follow him into the Lobby if he divides. It is unfortunate that in this country we keep distinct the questions of expenditure and taxation. If we were not spending so much it would not be necessary to raise the tax. I must not develop that argument, but I can, in passing, point out that taxation is the sequel to expenditure. It is only reasonable to point out how oppressively high this particular tax has become. When petrol is landed at our ports it is worth about 3d. per gallon. On that is piled a tax of 9d., equivalent to an ad valorem duty of

    1121
    300 per cent. The subsequent costs are reasonable. I am not one of those who think that we are charged a high price. The distribution of petrol is remarkably efficient, and petrol is ultimately placed at our disposal efficiently and economically. Nevertheless this tax of 9d. is almost half of the retail price, which would be much higher but for the fortunate fact that the heavy increases of taxation have taken place here during a period when petrol has been in over-supply, and there has been a glut. Largely owing to the lack of prosperity in the United States, the demand for petrol has not grown as was anticipated, and crude petroleum is very cheap. The time may come when it will jump violently and then we shall really feel the burden of this taxation. The Chancellor has been lucky, and possibly he had some anticipatory notice, because since the date on which he imposed the extra penny there has been a fall, so that we are bearing an extra burden of only one halfpenny a gallon as compared with the price before the Budget.
    I do not know whether hon. Members realise the magnitude of the total burden of taxation on motor transport in relation to other aspects of the industry. This year the Chancellor is proposing to acquire £94,000,000 by means of the petrol tax and the motor vehicle duties. That is a greater sum than people will pay for all the motor cars they buy this year, so that if the Chancellor abolished the motor vehicle duties and the petrol tax and claimed a tax on each vehicle when it was sold, he would have to impose a tax of 100 per cent., or rather more. I do not know of any industry or occupation, except the consumption of alcoholic liquor, where one is met with such a huge impost before one commences to indulge in one's pastime. As far as I can make out, the total value of motor cars, private and commercial vehicles, manufactured in this country is something under f £100,000,000, and on that we impose taxation of 100 per cent.
    I asked a friend of mine engaged in commercial transport for some figures. He told me that the average price of a double-decker bus is £1,730. These vehicles, which are looked after much more carefully than any of us could afford to look after our private cars, have a long life. They average about 35,000
    1122
    miles a year, and in the case of this company have a life of 250,000 miles, which means about seven years. They do about 7.3 miles to the gallon. Such a bus during its life will use 34,000 gallons of petrol. The tax on that amount is £1,284. The vehicle is taxed at about £70 per year, so that it pays £490 in its seven years' life. Such a vehicle, therefore, will pay during its life in tax on itself and on the fuel consumed £1,774, or £44 more than its original cost. I wonder what our friends the railway companies would say if, whenever, they built a locomotive, they had to hand over to the Chancellor a sum equal to the capital cost of it before they could run it. The railway interests might reply that they had to provide their own tracks. It is rather interesting to make a comparison with the motorist.
    The Deputy-Chairman: The hon. Gentleman is getting rather far from the subject of hydrocarbon oils.
    Mr. Williams: I agree, but I was trying to deal with the grievance which the motorist has. I remember seeing with some amusement in 1928 a poster in which the motorists were urged to vote for a tax on petrol. The poster was issued by the Automobile Association and urged a tax on petrol and not a tax on the vehicle. I was a junior Minister at the time and knew what was happening, and I could not help laughing because I knew the motorists were going to have the tax on petrol without the consolation of the vehicle duty being taken away. The petrol tax has never been hypothecated. It was restored by the right hon. Gentleman the Member for Epping (Mr. Churchill) for the purpose of financing the de-rating of industrial hereditaments and agricultural land. The motor vehicle duty was hypothecated for a time in the Road Fund, but the same right hon. Gentleman diverted part of it, and ultimately the whole of it was diverted, I think rightly. It is wrong to have a tax hypothecated.
    The Deputy-Chairman: The hon. Gentleman cannot pursue that point.
    Mr. Williams: I was about to relate the taxation on petrol to the large burden which is cast on the motoring industry. I agree that the line I was developing would be more appropriate on Second Reading, and I will not pursue it because I am reluctant to trespass on the

    1123
    Rules of Order. This burden, now approaching £60,000,000 a year, is a very heavy one. Hon. Members who drive cars and keep a record of their petrol consumption will be amazed to find what a large proportion of the cost of running a motor car is the cost of petrol. The hon. Member for Consett was, I think, correct when he said that the high cost of petrol prevents a large number of people of moderate incomes from indulging in what he called the pastime of motoring. Most people are not perturbed at the cost of buying a car, because a second-hand car can be bought very cheaply; what worries them is the cost of operation, and in that cost the tax on petrol is a very large item.
    I am saying this not for the purpose of voting against the Chancellor, because he has to balance his Budget. The time to deal with the situation is earlier in the Session, when we vote for Bills which impose new burdens. My remarks are not made in the hope of persuading the Chancellor to make any change, because I know that he cannot, but it is only right that he should realise that this new impost has given rise to a great deal of indignation. In common with other hon. Members I have received a great many communications from quite sober-minded people protesting against the height to which this tax has now risen, and only by giving utterance to our views on the subject plainly this year can we hope that the Chancellor will pursue such a course that when he introduces his Budget next year he will not put a further burden upon this essential commodity in modern civilisation. It is in that sense, and not in any other sense, that I have sought to occupy the attention of the Committee, and I am sorry that inadvertently, in seeking to give illustrations of the nature of the burden, I should have wandered from the strict lines of Order.
    4.48 p.m.
    Mr. Holdsworth: It is always interesting to listen to the hon. Member for South Croydon (Mr. H. G. Williams), and I agree with everything he said this afternoon except his statement that the Chancellor was "bound to balance his Budget." In the normal way he ought to do so, but no one can say that this is a balanced Budget. However, I cannot pursue that point, and I am not
    1124
    criticising the Chancellor on that ground. It is difficult to say anything new about this tax. Every year for seven years I have spoken on the Petrol Duty, and when we were considering the Ways and Means Resolutions I dealt with its history and shall not go over that ground again. To-day I want to deal with its effect upon transport in general, because I sometimes wonder whether we realise what a tremendous part the cost of transport plays in the costs of production. "Modern Transport," in an interesting article on 22nd January, stated that we spent £614,000,000 a year upon transport of all kinds in this country. It is the most important single industry in the country regarded from the point of view of expenditure. On passenger-carrying vehicles using petrol there is an expenditure of £233,000,000, and on goods vehicles using petrol of £155,000,000, making a total of £388,000,000 on petrol-driven vehicles.
    The Petrol Duty is not a tax on a luxury article. I believe the time has gone by when it can be said to be a luxury for a man to possess a motor car. In an age of speed, in which it is necessary to save time, a man has to have this means of transportation if he is to run his business efficiently. Motor transport for the carriage of goods is growing day by day. The penny increase in the Petrol Duty will mean an additional expenditure of £2 or £3 a year for private car owners using their cars to a moderate extent, and it will mean a new burden of £6,000,000 a year on petrol-driven vehicles. I had the running costs of a 10-ton lorry worked out, and found that, including depreciation, maintenance, and garage, 20 per cent. of the costs was due to taxation, and on a 6-ton lorry at least 15 per cent. A 10-ton lorry doing 40,000 miles a year pays £450 a year in taxation. A 6-ton lorry, running eight miles to the gallon, will pay in Petrol Duty this year £187 10s., and a licence duty of £70. The increase in the taxation on the petrol for that vehicle this year will be £21. Taking the taxation on petrol and the vehicle tax together, the taxation is 1½d. per mile for every mile that vehicle runs. In the case of a 10-ton lorry doing five miles to the gallon the taxation upon the petrol consumed this year will be £300 and there will be a vehicle tax of £150. The increased tax on petrol on that particular

    1125
    vehicle this year is£34. The total of taxation on that vehicle is 2d. for every mile run. In addition to that it pays the A licence duty, and there is the tax on the oil it consumes.
    The hon. Member for South Croydon gave figures of the total taxation which the motorist has to pay. The vehicle duty will yield £36,000,000 and the petrol duty £57,500,000, but in order to be fair we must knock £6,000,000 off the £57,500,000 for petrol used for other than transport. If that is done the total taxation which road transport will have to bear this year is £87,500,000. I cannot follow this point too far, but it is interesting to note that the total expenditure upon roads this year, according to information given to me in answer to a question in this House, will be £58,000,000, against a total of £87,500,000 raised from the taxation upon road vehicles.
    I have one point to make about the tremendous burden of this duty upon industry. I have received a communication from the cotton industry, and I am told by the statistician to that industry that 73 per cent. of the raw cotton used in Lancashire is carried by road and that 8 per cent. of cotton yarns and cotton cloth is transported by road. No industry in this country has had a bigger struggle for existence during the past few years than the cotton textile industry. There is urgent necessity to increase our export trade, not only in cotton goods but in all textiles. Anyone with experience of the cotton industry or the wool and worsted textile industry knows that since the War margins of profit have got less and less. There is tremendous competition, and I believe it is true, though I am open to correction on this point that quotations for cotton cloths are worked out to one-sixty-fourth of a penny per yard. That shows the severe competition there is, and the tremendous effort which has to be made by those in the industry in order to keep the export trade going.
    Do we realise how much transport enters into the cost of all manufactured articles? The raw cotton has to be transported to the yarn spinner, then from the yarn spinner to the weaver, from the weaver to the bleacher, and from the bleacher to the finisher. At every stage in manufacture the cost of transport is adding to the cost of the finished article. I recognise that the Chancellor of the
    1126
    Exchequer has to raise money. I am one of those who voted for every increase in armaments, because I thought they were necessary, and having done so I feel that it is my duty to assist in finding the money, but I would suggest to the Chancellor that taxation should not be put upon an industry before profits are made. In this case it is a running cost. This Petrol Duty adds not only to the costs of the transport industry itself but to the costs of every other industry in the country.
    I would like to repeat a point which I made on 3rd May, when I pointed out that 87 per cent. of the total increase in national expenditure between 1930–31 and 1937–38 has been found by the motor industry. I gave further particulars in that speech, and they have been refuted, so I take it they are true. It is a striking thing that this new industry, as it might be called, which is assisting all the industries of the country in the speeding up of manufacture, making it possible for them to carry less stock—because it has enabled that to be done—and assisting deliveries from door to door, should be the industry among all others which is chosen to bear this tremendous burden. I can only think that the Chancellor, when going through things which might be taxed in order to find a way of balancing the Budget—using that word in the Budget sense—decided that this was the easiest form of taxation to collect, but it is not merely a question of how easy a tax is to collect, the effect upon industry in general has to be considered. Although I have little hope of persuading either the Chancellor or the Financial Secretary to the Treasury to give way upon this particular Amendment, I hope that as soon as there is an opportunity of decreasing the taxation upon the motor industry that step will be taken. I remember reading Lord Snowden's second Budget Speech in 1931, in which he regretted having to put another 2d. upon petrol. Since that date the Petrol Duty, which was then raised to 4d., has had another 5d. added to it, making it 9d., and I trust that clue consideration will be given to this point in some future year when there is an opportunity of relieving what is really a grievous burden.
    5.0 p.m.
    Colonel Sandeman Allen: I would delay the Committee for a few moments to

    1127
    emphasise more or less what the hon. Member for South Bradford (Mr. Holds-worth) has just said. I hope that the Chancellor may be able to see an opportunity in future to reduce this duty, if he is unable to do so now. It is said in this country that we have solved the problems of production and consumption but not the problem of distribution; I cannot see that we are ever going to solve that problem if we continue to increase the taxes upon distribution. I agree that the amount which is paid by way of the Petrol Duty is more than sufficient to cover the cost of the roads. There is sufficient surplus to pay for the derating of the railways and to allow the railways to run their engines on untaxed oil. That does not take into consideration in any way the fact that the motor industry is also being taxed on income and on the profit that it makes. We tax it on its fuels, and on its existence by licence duties, and there is also the Income Tax on profits which may be made after the Chancellor of the Exchequer has raked off everything he possibly can. I hope that the Committee will bear in mind the point I have made, that I can see no solution of the problem of distribution along these lines and that the solution goes further away as taxes are increased upon the methods of distribution.
    5.2 p.m.
    Mr. Herbert Morrison: I regret that the hon. Member for South Croydon (Mr. H. G. Williams) will not be able to support us in the Division Lobby on this Amendment. He takes the view that if the Budget is to be balanced the money must be found. The hon. Member for South Bradford (Mr. Holdsworth) made the point that the Budget is not balanced; in any case, this is not the only way in which the money could be found. If the Amendment were carried it would mean that the Chancellor of the Exchequer would have to reduce his expenditure or find some other sources of revenue. The fate of this Clause does not so conclusively determine the balance between the expenditure and the income of the Budget.
    This tax was started with a note of apology by the right hon. Gentleman the Member for Epping (Mr. Churchill) some years ago, and with a touch of humour, as has been indicated. He made a joke
    1128
    about the motorists' claim that taxation should be on petrol, and he said: "All right, I will give you a tax on petrol," but he did not do anything about the other side of the matter. I very well remember Lord Snowden's profound regret that he had to make this tax which, in his view, was burdensome upon industry and enterprise. During the years, there has been a very great increase in the tax until it has now reached a high proportion of the capital costs and running costs of motor transport, particulars of which have been given by the hon. Members for South Croydon and South Bradford. The tax was justified at one time on the ground that the price of petrol had fallen and the additional taxation would therefore not be felt, but since that time there have been changes in the price-level of petrol, and on the whole the price is higher now than at that time. Consequently, the argument is by no means as true as it was.
    This tax involves, as my hon. Friend the Member for Consett (Mr. D. Adams) said, a severe tax upon private-car traffic and is particularly burdensome on the user of the small car. In relation to private-car traffic I admit that the argument that there is some element of luxury taxation cannot be ignored but, on the other hand, to many people in business the private car is important as an ancillary to the business, and the tax may damage them in that way. It constitutes a serious burden to the person of limited means running a small car, but it is an enormous burden to commercial traffic and goods transport and is being protested against year by year by people interested in those industries. I have had a considerable number of letters on the subject, as doubtless other hon. Members also have. If we add to the petrol-consumption tax the road-vehicle duty, as to which I am not complaining because it is used for a particular purpose, the overall taxation upon commercial motor transport is very serious.
    The same is true of road passenger transport, which already bears a substantial vehicle duty, as to which I do not complain. That tax was considered to be appropriate in the case of road passenger transport vehicles to enable them to earn their keep, but the Petrol Duty has no relationship to road maintenance in any sense of the term. It is a general tax upon a particular type of industry,

    1129
    which is already taxed far beyond the actual cost of the petrol consumed. That is an unusual feature which up till now was limited, I think, to intoxicating liquor. This tax has now reached a point where it is beyond the original cost of the petrol, and where the people in the industry and the community generally are entitled to protest.
    I have the figures to show what the tax means to a great public undertaking like the London Passenger Transport Board. Parliament has set up that great public authority, given it responsibilities and directed it to pay certain rates of interest upon the various classes of stock, but by this steadily rising Petrol Duty Parliament is making it exceedingly difficult for that public authority to carry out its responsibilities. It is not fair that Parliament should do so. This authority is paying very substantially in taxation in one way or another, but the money it pays in Petrol Duty is much bigger than any other taxation it pays into the public funds.
    In the year ended 30th June, 1937, the London Passenger Transport Board paid £742,617 in respect of local rates, railway freight rebates fund, land tax and tithe-rent charge. It paid, in respect of licensed vehicles duty, licence fees and road service licences, that is to say, taxation in relation to its function as a public service vehicle owner on the roads, £603,005. The duties upon petrol and other fuel, which we are discussing and which have no relationship whatever to the damage done by the vehicles of the board to the roads, and no relationship to those vehicles paying for their keep upon the road, which should be their legitimate contribution to the permanent way—an imperfect analogy to the permanent way of the railway companies—amounted to £1,422,782. As I have said, the tax which the board pays in relation to its function as a road-service undertaking, for running along the streets and getting the advantage of traffic signals, highway improvements, road maintenance, and so on, was £603,005. The additional 1d. upon the petrol tax will involve the board in an extra cost of about £180,000 in the coming year, bringing the total taxation in respect of petrol and other fuel into the region of £1,600,000.
    That is a terrific tax to put upon a public authority of this kind which has important functions to fulfil, arid if it goes on for long enough it will force the Board
    1130
    to reconsider the level of fares. It is quite speculative as to whether that would bring in more money and there would be a great public outcry about it. I urge upon the Chancellor of the Exchequer that it is time to leave off shedding tears and apologising about this tax, and time to do something about it. Chancellor after Chancellor has expressed regret at having to impose the tax, and the original Chancellor of the Exchequer who put it on apologised for it. This is a tax upon industry and transport, and it is therefore burdensome indirectly upon industry as a whole.
    5.13 p.m.
    The Financial Secretary to the Treasury (Captain Euan Wallace): The hon. Member for South Bradford (Mr. Holdsworth) began a speech containing some interesting figures, which I look forward to seeing on paper, by saying that there was nothing new to be said about the Petrol Tax; and I think the Committee will appreciate that on the broad principle of the tax and on the necessity of imposing the addition there is not very much that I could say which the Committee has not already heard on one or two occasions already. I wish, therefore, to devote my remarks for a few moments to the points raised by hon. Members in all parts of the Committee in the four or five verymuch-to-the-point speeches.
    The hon. Member for Consett (Mr. D. Adams), who moved the Amendment, devoted his speech to the effect of the petrol tax and therefore, a fortiori, of the increase in the tax, upon the small motorist. He went so far as to say that it was really shutting the working classes out of the pleasures of motoring—if indeed it is very much of a pleasure to motor at the week-end in present conditions. I think the real answer to his contention lies in the figures which the Chancellor of the Exchequer gave during the Debate on the Second Reading of the Bill, when he pointed out that cars which are taxed by horsepower—that is, excluding commercial goods and commercial passenger vehicles—increased from 1,308,000 in 1934 to 1,798,000 in 1937. I do not think there is any reason to anticipate that the steady increase in these numbers is going to stop. It is true, as any hon. Member can discover by comparing the rate of tax on petrol and the number of vehicles licensed in any year, that the duty on petrol has not had any appreciable effect

    1131
    in preventing expansion in the use either of private cars or of lorries and other vehicles.
    The second point made by the Mover of the Amendment was that the policy of a high petrol tax had forced manufacturers in this country to flood the market with small cars—
    Mr. David Adams: With other taxation.
    Captain Wallace: —and had therefore prevented the motor manufacturers in this country from developing an engine which would be suitable for export. It is a very interesting fact, to which reference has already been made this afternoon, that in 1928 exactly the reverse argument was put to the Government by the motor organisations. They suggested that the one bar to a rapid development of the kind of car which would sell well abroad was the horsepower tax, and at that time they took the view, rightly or wrongly, that it would be better to have the whole of the tax on petrol.
    When the hon. Member was talking about the hardship on the small motorist, I tried, with the help of a colleague beside me who is good at arithmetic, to work out exactly what this additional penny would mean to the small man who uses his car, as many do, just at the week-end. If he had a car which was capable of doing 30 miles on a gallon of petrol—and I believe there are a number of cars which can do that—he would be able to get in a week-end run of 360 miles for another is., or, say, a year's motoring of well over 7,000 miles for an extra £1. Much, therefore, as I sympathise, and as I think the Chancellor sympathises, with such people in having any additional impost placed upon them, I do not think the Committee will take the view that this extra tax is what might be called harsh or unconscionable.
    Mr. H. G. Williams: My right hon. and gallant Friend speaks of is. per week-end and £1 per year. Do I understand that he is calculating on the basis of there being only 20 week-ends in the year?
    Captain Wallace: As a matter of fact, a great many people do not get as many as 20 motoring week-ends in the year. My hon. Friend the Member for South Croydon (Mr. H. G. Williams) dilated with all his usual accuracy, supported with all his usual statistical armoury, on the
    1132
    hardships, first on the motorist and, secondly, on the transport industry, but he was kind enough to give, at the very opening of his remarks, the answer to the whole of his own speech when he said that of course this is a revenue tax, and the money has to be raised somehow. Evidently he did not see any better way of raising it.
    The hon. Member for South Bradford gave, as I have said, a number of extremely interesting statistics in regard to the cost of fuel in the working life of commercial vehicles. I would not for an instant attempt to criticise those figures, but the hon. Member made one extremely far-reaching remark when he suggested that we should adopt the principle that there should be no taxation before profits are earned. That might be all very well for a Government of the complexion of the present Government, but, if hon. Gentlemen opposite were to get into office, and were able to adopt their full-blooded policy of socialising the whole of industry, it is difficult to see where the profits would come in on which the tax was to be collected, and I am afraid we should come down to getting the whole of the money from the millionaire, who would very shortly cease to exist.
    The right hon. Gentleman who has just spoken made it clear that Mr. Snowden, when imposing the last increase upon these hydrocarbon oils, which raised the tax from 6d. to 8d., did so with very great regret, and he reminded us that in 1928 my right hon. Friend the Member for Epping (Mr. Churchill), when he was Chancellor of the Exchequer and inaugurated this tax for a particular purpose, also did so with regret. The present Chancellor of the Exchequer authorises me to say that he is following in their footsteps. [Interruption.] At any rate, whatever his personal feelings are at the moment, I do not think they are so strong as to induce him to authorise me to accept this Amendment. Although I might go on for a long time descanting to the Committee on the amount of revenue that has to be obtained, the total consumption of petrol, and so on, the issues are perfectly plain, and I will only conclude by saying that, if there is a case for keeping this Clause in the Finance Bill, as I firmly believe there is, that case is, of course, doubly strong against the proposal made in the Amendmer we are discussing, to reduce the tax ins of increasing it.
    Question put, "That the word increased' stand part of the Clause.
    The Committee divided: Ayes, 219; Noes, 145.

    Division No. 243.]

    AYES

    [5.24 p.m.

    Agnew, Lieut.-Comdr. P. G.

    Gledhill, G.

    Pownall, LI.-Col. Sir Assheton

    Allen, Col. J. Sandeman (B'knhead)

    Glyn, Major Sir R. G. C.

    Procter, Major H. A.

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

    Goldie, N. B.

    Radford, E. A.

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

    Gower, Sir R. V.

    Raikes, H. V. A. M.

    Assheton, R.

    Graham, Captain A. C. (Wirral)

    Ramsden, Sir E.

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

    Grant-Ferris, R.

    Rankin, Sir R.

    Astor, Viscountess (Plymouth, Sutton)

    Gretton, Col. Rt. Hon. J.

    Rathbone, J. R. (Bodmin)

    Atholl, Duchess of

    Gridley, Sir A. B.

    Rawson, Sir Cooper

    Baillie, Sir A. W. M.

    Grimston, R. V.

    Rayner, Major R. H.

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

    Guest, Hon. I. (Brecon and Radnor)

    Reed, A. C. (Exeter)

    Baxter, A. Beverley

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

    Reed, Sir H. S. (Aylesbury)

    Beamish, Rear-Admiral T. P. H.

    Hannah, I. C.

    Reid, Sir D. D. (Down)

    Beauchamp, Sir B. C.

    Harbord, A.

    Reid, W. Allan (Derby)

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

    Haslam, Henry (Horncastle)

    Rickards, G. W. (Skipton)

    Birchall, Sir J. D.

    Heilgers, Captain F. F. A.

    Ropner, Colonel L.

    Bird, Sir R. B.

    Hely-Hutchinson, M. R.

    Ross Taylor, W. (Woodbridge)

    Blair, Sir R.

    Heneage, Lieut.-Colonel A. P.

    Rowlands, G.

    Boulton, W. W.

    Hepburn, P. G. T. Buchan-

    Royds, Admiral Sir P. M. R.

    Bower, Comdr. R. T.

    Hepworth, J.

    Ruggles-Brise, Colonel Sir E. A.

    Briscoe, Capt. R. G.

    Higgs, W. F.

    Russell, Sir Alexander

    Brown, Col. D. C. (Hexham)

    Hoare, Rt. Hon. Sir S.

    Russell, R. J. (Eddisbury)

    Brown, Rt. Hon. E. (Leith)

    Holmes, J. S.

    Russell, S. H. M. (Darwen)

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

    Hopkinson, A.

    Salmon, Sir I.

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

    Hersbrugh, Florence

    Sanderson, Sir F. B.

    Bull, B. B.

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

    Scott, Lord William

    Bullock, Capt. M.

    Hudson, Rt. Hon. R. S. (Southport)

    Selley, H. R.

    Campbell, Sir E. T.

    Hulbert, N. J.

    Shakespeare, G. H.

    Carver, Major W. H.

    Hume, Sir G. H.

    Shaw, Captain W. T. (Forfar)

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

    Hunloke, H. P.

    Shepperson, Sir E. W.

    Cazalet, Thelma (Islington, E.)

    Hunter, T.

    Shute, Colonel Sir J. J.

    Channon, H.

    Hutchinson, G. C.

    Simon, Rt. Hon. Sir J. A.

    Chapman, Sir S. (Edinburgh, S.)

    James, Wing-Commander A. W. H.

    Smiles, Lieut.-Colonel Sir W. D.

    Chorlton, A. E. L.

    Jarvis, Sir J. J.

    Smith, Bracewell (Dulwich)

    Christie, J. A.

    Joel, D. J. B.

    Smith, Sir R. W. (Aberdeen)

    Clarry, Sir Reginald

    Jones, L. (Swansea W.)

    Smithers, Sir W.

    Cobb, Captain E. C. (Preston)

    Keeling, E. H.

    Somervell, Rt. Hon. Sir Donald

    Colville, Rt. Hon. John

    Kerr, Colonel C. I. (Montrose)

    Spans. W. P.

    Conant, Captain R. J. E.

    Kerr, J. Graham (Scottish Unit's.)

    Stanley, Rt. Hon. Lord (Fylde)

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

    Keyes, Admiral of the Fleet Sir R.

    Stewart, J. Henderson (Fife, E.)

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

    Lamb, Sir J. Q.

    Stourton, Major Hon. J. J.

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

    Law, Sir A. J. (High Peak)

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

    Courthope, Col. Rt. Hon. Sir G. L.

    Leech, Sir J. W.

    Stuart, Hon. J. (Moray and Nairn)

    Cox, H. B. Trevor

    Lees-Jones, J.

    Sueter, Rear-Admiral Sir M. F.

    Crookshank, Capt. H. F. C.

    Leighton, Major B. E. P.

    Tate, Mavis C.

    Cross, R. H.

    Lipson, D. L.

    Taylor, C. S. (Eastbourne)

    Crossley, A. C.

    Mebane, W. (Huddersfield)

    Thomas, J. P. L.

    Crowder, J F. E.

    M'Connell, Sir J.

    Thomson, Sir J. D. W.

    Cruddas, Col. B.

    Macdonald, Capt. T. (Isle of Wight)

    Titchfield, Marquess of

    Davies, Major Sir G. F. (Yeovil)

    McEwen, Capt. J. H. F.

    Tree, A. R. L. F.

    Davison, Sir W. H.

    McKie, J. H.

    Turton, R. H.

    De la Bère, R.

    Maclay, Hon. J. P.

    Wakefield, W. W.

    Denville, Alfred

    Macmillan, H. (Stockton-on-Tees)

    Walker-Smith, Sir J.

    Despencer-Robertson, Major J. A. F.

    Maitland, A.

    Wallace, Capt. Rt. Hon. Euan

    Doland, G. F.

    Makins, Brigadier-General Sir Ernest

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

    Donner, P. W.

    Manningham-Buller, Sir M.

    Ward, Irene M. B. (Wallsend)

    Dorman-Smith, Major Sir R. H.

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

    Wardlaw-Milne, Sir J. S.

    Drewe, C.

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

    Waterhouse, Captain C.

    Duckworth, Arthur (Shrewsbury)

    Maxwell, Hon. S. A.

    Watt, Major G. S. Harvie

    Dugdale, Captain T. L.

    Mayhew, Lt.-Col. J.

    Wayland, Sir W. A.

    Duncan, J. A. L.

    Mills, Major J. D. (New Forest)

    Wells, Sir Sydney

    Dunglass, Lord

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

    Whiteley, Major J. P. (Buckingham)

    Eckersley, P. T.

    Morris-Jones, Sir Henry

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

    Ellis, Sir G.

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

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

    Elmley, Viscount

    Morrison, Rt. Hon. W. S. (Cirencester)

    Willoughby de Eresby, Lord

    Emery, J. F.

    Neven-Spence, Major B. H. H.

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

    Emrys-Evans, P. V.

    Nicolson, Hon. H. G.

    Windsor-Clive, Lieut.-Colonel G.

    Entwistle, Sir C. F.

    O'Connor, Sir Terence J.

    Womersley, Sir W. J.

    Errington, E.

    O'Neill, Rt. Hon. Sir Hugh

    Wood, Hon. C. I. C.

    Erskine-Hill, A. G.

    Patrick, C. M.

    Wood, Rt. Hon. Sir Kingsley

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

    Peake, O.

    Wright, Wing-Commander J. A. C.

    Fleming, E. L.

    Perkins, W. R. D.

    Young, A. S. L. (Partick)

    Fremantle, Sir F. E.

    Petherick, M.

    Furness, S. N.

    Pickthorn, K. W. M.

    TELLERS FOR THE AYES.—

    Fyfe, D. P. M.

    Porritt, R. W.

    Major Sir James Edmondson and

    Major Herbert.

    Acland, R. T. D. (Barnstaple)

    Griffiths, J. (Llanelly)

    Parker, J.

    Adams, D. (Consett)

    Guest, Dr. L. H. (Islington, N.)

    Parkinson, J. A.

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

    Hall, J. H. (Whitechapel)

    Pearson, A.

    Adamson, W. M.

    Hardie, Agnes

    Pethick-Lawrence, Rt. Hon. F. W.

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

    Harris, Sir P. A.

    Poole, C. C.

    Attlee, Rt. Hon. C. R.

    Harvey, T. E. (Eng. Univ's.)

    Price, M. P.

    Banfield, J. W.

    Hayday, A.

    Ridley, G.

    Barnes, A. J.

    Henderson, A. (Kingswinford)

    Riley, B.

    Barr, J.

    Henderson, J. (Ardwick)

    Ritson, J.

    Betey, J.

    Henderson, T. (Tradeston)

    Roberts, W. (Cumberland, N.)

    Benn, Rt. Hon. W. W.

    Hicks, E. G.

    Robinson, W. A. (St. Helens)

    Benson, G.

    Hills, A. (Pontefract)

    Rothschild, J. A. de

    Bevan, A.

    Holdsworth, H.

    Salter, Dr. A. (Bermondsey)

    Broad, F. A.

    Hopkin, D.

    Sanders, W. S.

    Bromfield, W.

    Jagger, J.

    Sexton, T. M.

    Brown, C. (Mansfield)

    Jenkins, A. (Pontlypool)

    Shinwell, E.

    Buchanan, G.

    Jenkins, Sir W. (Neath)

    Silverman, S. S.

    Burke, W. A.

    John, W.

    Simpson, F. B.

    Cape, T.

    Jones, A. C. (Shipley)

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

    Cassells, T.

    Jones, Sir H. Haydn (Merioneth)

    Smith, Ben (Rotherhithe)

    Charleton, H. C.

    Jones, Morgan (Caerphilly)

    Smith, E. (Stoke)

    Chater, D.

    Kelly, W. T

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

    Clime, W. S.

    Kennedy, Rt. Hon. T.

    Smith, T. (Normanton)

    Cocks, F. S.

    Kirby, B. V.

    Sorensen, R. W.

    Collindridge, F.

    Lansbury, Rt. Hon. G.

    Stephen, C.

    Cove, W. G.

    Lathan, G.

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

    Cripps, Hon. Sir Stafford

    Lawson, J. J.

    Stokes, R. R.

    Dagger, G.

    Leach, W.

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

    Dalton, H.

    Lee, F.

    Summerskill, Dr. Edith

    Davidson, J. J. (Maryhill)

    Leonard, W.

    Taylor, R. J. (Merpeth)

    Davies, S. O. (Merthyr)

    Leslie, J. R.

    Thurtle, E.

    Day, H.

    Logan, D. G.

    Tinker, J. J.

    Dobbie, W.

    Lunn, W.

    Tomlinson, G.

    Dunn, E. (Rather Valley)

    Macdonald, G. (Ince)

    Viant, S. P.

    Ede, J. C.

    McEntee, V. La T.

    Walkden, A. G.

    Edwards, A. (Middlesbrough E.)

    McGhee, H. G.

    Walker, J.

    Edwards, Sir C. (Bedwellty)

    McGovern, J.

    Watkins, F. C.

    Evans, D. O. (Cardigan)

    Maclean, N.

    Watson, W. McL.

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

    Mander, G. le M.

    Wedgwood, Rt. Hon. J. C.

    Foot, D. M.

    Mothers, G.

    Westwood, J.

    Frankel, D.

    Maxton, J.

    White, H. Graham

    Gallacher, W.

    Messer, F.

    Wilkinson, Ellen

    Gardner, B. W.

    Montague, F.

    Williams, D. (Swansea, E.)

    George, Rt. Hon. D. Lloyd (Carn'v'n)

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

    Williams, E. J. (Ogmore)

    George, Major G. Lloyd (Pembroke)

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

    Williams, T. (Don Valley)

    Gibson, R. (Greenock)

    Nathan, Colonel H. L.

    Wilson, C. H. (Attercliffe)

    Green, W. H. (Deptford)

    Naylor, T. E.

    Woods, G. S. (Finsbury)

    Greenwood, Rt. Hon. A.

    Oliver, G. H.

    Grenfell, D. R.

    Owen, Major G.

    TELLERS FOR THE NOES.—

    Mr. Anderson and Mr. Groves.

    Motion made, and Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 227; Noes, 147.

    Division No. 244.]

    AYES

    [5.32 p.m.

    Agnew, Lieut.-Comdr. P. G.

    Burgin, Rt. Hon. E. L.

    Davison, Sir W. H.

    Allen, Col. J. Sandeman (B'knhead)

    Campbell, Sir E. T.

    De Chair, S. S.

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

    Carver, Major W. H.

    De la Bère, R.

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

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

    Denville, Alfred

    Assheton, R.

    Cazalet, Thelma (Islington, E.)

    Despencer-Robertson, Major J. A. F.

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

    Channon, H.

    Doland, G. F.

    Astor, Viscountess (Plymouth, Sutton)

    Chapman, Sir S. (Edinburgh, S.)

    Donner, P. W.

    Atholl, Duchess of

    Chorlton, A. E. L.

    Dorman-Smith, Major Sir R. H.

    Baillie, Sir A. W. M.

    Christie, J. A.

    Drewe, C.

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

    Clarry, Sir Reginald

    Duckworth, Arthur (Shrewsbury)

    Baxter, A. Beverley

    Cobb, Captain E. C. (Preston)

    Dugdale, Captain T. L.

    Beamish, Rear-Admiral T. P. H.

    Colville, Rt. Hon. John

    Duncan, J. A. L.

    Beauchamp, Sir B. C.

    Conant, Captain R. J. E.

    Dunglass, Lord

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

    Cook, Sir T. FL A. M. (Norfolk, N.)

    Eckersley, P. T.

    Birchall, Sir J. D.

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

    Ellis, Sir G.

    Bird, Sir R. B.

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

    Elmley, Viscount

    Blair, Sir R.

    Courthope, Col. Rt. Hon. Sir G. L.

    Emery, J. F.

    Boulton, W. W.

    Cox, H. B. Trevor

    Emrys-Evans, P. V.

    Bower, Comdr. R. T.

    Crookshank, Capt. H. F. C.

    Entwistle, Sir C. F.

    Briscoe, Capt. R. G.

    Croom-Johnson, R. P.

    Errington, E.

    Brown, Col. D. C. (Hexham)

    Cross, R. H.

    Erskine-Hill, A. G.

    Brown, Rt. Hon. E. (Leith)

    Crossley, A. C.

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

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

    Crowder, J. F. E.

    Fleming, E. L.

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

    Cruddas, Col. B.

    Fremantle, Sir F. E.

    Bull, B. B.

    Culverwell, C. T.

    Furness, S. N.

    Bullock, Capt. M.

    Davies, Major Sir G. F. (Yeovil)

    Fyfe, D. P. M.

    Gledhill, G.

    McKie, J. H.

    Salley, H. R.

    Glyn, Major Sir R. G. C.

    Maclay, Hon. J. P.

    Shakespeare, G. H.

    Goldie N. B.

    Macmillan, H. (Stockton-on-Tees)

    Shaw, Captain W. T. (Forfar)

    Gower, Sir R. V.

    Maitland, A.

    Shepperson, Sir E. W.

    Graham, Captain A. G. (Wirral)

    Makins, Brigadier-General Sir Ernest

    Shute, Colonel Sir J. J.

    Grant-Ferris, R.

    Manningham-Buller, Sir M.

    Simon, Rt. Hon. Sir J. A.

    Gretton, Col. Rt. Hon. J.

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

    Smiles, Lieut. Colonel Sir W. D.

    Gridley, Sir A. B.

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

    Smith, Bracewell (Dulwich)

    Grimston, R. V.

    Maxwell, Hon. S. A.

    Smith, Sir R. W. (Aberdeen)

    Guest, Lieut.-Colonel H. (Drake)

    Mayhew, Lt.-Col. J.

    Smithers, Sir W.

    Guest, Hon. I. (Brecon and Radnor)

    Mills, Major J. D. (New Forest)

    Somervell, Rt. Hon. Sir Donald

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

    Moore, Lieut.-Colonel Sir T. C. R.

    Spans, W. P.

    Hannah, I. C.

    Morris-Jones, Sir Henry

    Stanley, Rt. Hon. Lord (Fylde)

    Harbord, A.

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

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

    Haslam, Henry (Hornoastle)

    Morrison, Rt. Hon. W. S. (Cirencester)

    Stewart, J. Henderson (Fife, E.)

    Heilgers, Captain F. F. A.

    Neven-Spence, Major B. H. H.

    Stourton, Major Hon. J. J.

    Hely-Hutchinson, M. R.

    Nicolson, Hon. H. G.

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

    Heneage, Lieut.-Colonel A. P.

    O'Connor, Sir Terence J.

    Stuart, Hon. J. (Moray and Nairn)

    Hepburn, P. G. T. Buchan-

    O'Neill, Rt. Hon. Sir Hugh

    Sueter, Rear-Admiral Sir M. F.

    Hepworth, J.

    Patrick, C. M.

    Tate, Mavis C.

    Higgs, W. F.

    Peake, O.

    Taylor, C. S. (Eastbourne)

    Hoare, Rt. Hon. Sir S.

    Perkins, W. R. D.

    Thomas, J. P. L.

    Holmes, J. S.

    Petherick, M.

    Thomson, Sir J. D. W.

    Hope, Captain Hon. A. O. J.

    Pickthorn, K. W. M.

    Titchfield, Marquess of

    Hopkinson, A.

    Ponsonby, Col. C. E.

    Tree, A. R. L. F.

    Horsbrugh, Florence

    Porritt, R. W.

    Turton, R. H.

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

    Pownall, Lt.-Col. Sir Assheton

    Wakefield, W. W.

    Hudson, Rt. Hon. R. S. (Southport)

    Procter, Major H. A.

    Walker-Smith, Sir J.

    Hulbert, N. J.

    Radford, E. A.

    Wallace, Capt. Rt. Hon. Euan

    Hume, Sir G. H.

    Raikes, H. V. A. M.

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

    Hunloke, H. P.

    Ramsden, Sir E.

    Ward, Irene M. B. (Wallsend)

    Hunter, T.

    Rankin, Sir R.

    Wardlaw-Milne, Sir J. S.

    Hutchinson, G. C.

    Rathbone, J. R. (Bodmin)

    Waterhouse, Captain C.

    James, Wing-Commander A. W. H.

    Rawson, Sir Cooper

    Watt, Major G. S. Harvie

    Jarvis, Sir J. J.

    Rayner, Major R. H.

    Wayland, Sir W. A

    Joel, D. J. B.

    Reed, A. C. (Exeter)

    Wells, Sir Sydney

    Jones, L. (Swansea W.)

    Reed, Sir H. S. (Aylesbury)

    Whiteley, Major J. P. (Buckingham)

    Keeling, E. H.

    Reid, J. S. C. (Hlllhead)

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

    Kerr, Colonel C. I. (Montrose)

    Reid, W. Allan (Derby)

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

    Kerr, J. Graham (Scottish Univs.)

    Rickards, G. W. (Skipton)

    Willoughby de Eresby, Lord

    Keyes, Admiral of the Fleet Sir R.

    Robinson, J. R. (Blackpool)

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

    Lamb, Sir J. Q.

    Ropner, Colonel L.

    Windsor-Clive, Lieut.-Colonel G.

    Law, Sir A. J. (High Peak)

    Rosa Taylor, W. (Woodbridge)

    Womersley, Sir W. J.

    Leech, Sir J. W.

    Rowlands, G.

    Wood, Hon. C. I. C.

    Lees-Jones, J.

    Royds, Admiral Sir P. M. R.

    Wood, Rt. Hon. Sir Kingsley

    Leighton, Major B. E. P.

    Ruggles-Brise, Colonel Sir E, A.

    Wright, Wing-Commander J. A. C.

    Lipson, D. L.

    Russell, Sir Alexander

    Young, A. S. L. (Partick)

    Mebane, W. (Huddersfield)

    Russell, R. J. (Eddisbury)

    M'Connell, Sir J.

    Salmon, Sir I.

    TELLERS FOR THE AYES.

    Macdonald, Capt. P. (Isle of Wight)

    Sanderson, Sir F. B.

    Major Sir James Edmondson

    McEwen, Capt. J. H. F.

    Scott, Lord William

    and Major Herbert.

    NOES.

    Acland, R. T. D. (Barnstaple)

    Davies, S. O. (Merthyr)

    Hopkin, D.

    Adams, D. (Consett)

    Day, H.

    Jagger, J.

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

    Dobbie, W.

    Jenkins, A. (Pontypool)

    Adamson, W. M.

    Dunn, E. (Rother Valley)

    Jenkins, Sir W. (Neath)

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

    Ede, J. C.

    John, W.

    Anderson, F. (Whitehavan)

    Edwards, A. (Middlesbrough E.)

    Jones, A. C. (Shipley)

    Attlee, Rt. Hon. C. R.

    Edwards, Sir C. (Bedwellty)

    Jones, Sir H. Haydn (Merioneth)

    Bonfield, J. W.

    Evans, D. O. (Cardigan)

    Jones, Morgan (Caerphilly)

    Barnes, A. J.

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

    Kelly, W. T

    Barr, J.

    Foot, D. M.

    Kennedy, Rt. Hon. T.

    Betsy, J.

    Frankel, D.

    Kirby, B. V.

    Bann, Rt. Hon. W. W.

    Gallacher, W.

    Lansbury, Rt. Hon. G.

    Benson, G.

    Gardner, B. W.

    Lathan, G.

    Bevan, A.

    George, Major G. Lloyd (Pembroke)

    Lawson, J. J.

    Broad, F. A.

    Gibson, R. (Greenock)

    Leach, W.

    Bromfield, W.

    Green, W. H. (Deptford)

    Lee, F.

    Brown, C. (Mansfield)

    Greenwood, Rt. Hon. A.

    Leonard, W.

    Buchanan, G.

    Granfell, D. R.

    Leslie, J. R.

    Burke, W. A.

    Griffiths, J. (Llanelly)

    Logan, D. G.

    Cape, T.

    Guest, Dr. L. H. (Islington, N.)

    Lunn, W.

    Cassells, T.

    Hall, J. H. (Whitechapel)

    Macdonald, G. (Ince.)

    Charleton, H. C.

    Hardie, Agnes

    MoEntee, V. La T.

    Chater, D.

    Harris, Sir P. A.

    McGhee, H. G.

    Cluse, W. S.

    Harvey, T. E. (Eng. Univ's.)

    McGovern, J.

    Cocks, F. S.

    Hayday, A.

    Maclean, N.

    Collindridge, F.

    Henderson, A. (Kingswinford)

    Mender, G. le M.

    Cove, W. G.

    Henderson, J. (Ardwick)

    Maxton, J.

    Cripps, Hon. Sir Stafford

    Henderson, T. (Tradeston)

    Messer, F.

    Dagger, G.

    Hicks, E. G.

    Montague, F.

    Dalton, H.

    Hills, A. (Pontefract)

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

    Davidson, J. J. (Maryhill)

    Holdsworth, H.

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

    1138

    1139

    Muff, G.

    Salter, Dr. A. (Bermondsey)

    Tinker, J. J.

    Nathan, Colonel H. L.

    Sanders, W. S.

    Tomlinson, G.

    Naylor, T. E.

    Sexton. T. M.

    Viant, S. P.

    Oliver, G. H.

    Shinwell, E.

    Walkden, A. G.

    Owen, Major G.

    Silverman, S. S.

    Walker, J.

    Paling, W.

    Simpson, F. B.

    Watkins, F. C.

    Parker, J.

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

    Watson, W. McL.

    Parkinson, J. A.

    Smith, Ben (Rotherhithe)

    Wedgwood, Rt. Hon. J. C.

    Pearson, A.

    Smith, E. (Stoke)

    Westwood, J.

    Pethick-Lawrence, Rt. Hon. F. W.

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

    White, H. Graham

    Poole, C. C.

    Smith, T. (Normanton)

    Wilkinson, Ellen

    Price, M. P.

    Sorensen, R. W.

    Williams, D. (Swansea, E.)

    Ridley, G.

    Stephen, C.

    Williams, E. J. (Ogmore)

    Riley, B.

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

    Williams, T. (Don Valley)

    Ritson, J.

    Stokes, R. R.

    Wilson, C. H. (Attercliffe)

    Roberts, Rt. Hon. F. O. (W. Brom.)

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

    Woods, G. S. (Finsbury)

    Roberts, W. (Cumberland, N.)

    Summerskill, Dr. Edith

    Robinson, W. A. (St. Helens)

    Taylor, R. J. (Morpeth)

    TELLERS FOR THE NOES.

    Rothschild, J. A. de

    Thurtle, E.

    Mr. Mathers and Mr. Groves.

    Question put, and agreed to.

    CLAUSE 2.—(Preference for home produced oils.)
    5.41 p.m.
    Colonel Sandeman Allen: I beg to move, in page 2, line 9, to leave out "twelve," and to insert "six."
    The reason why I have tabled this Amendment is to get some explanation from the Treasury Bench as to what exactly they mean by saying in the Bill that "during the period of twelve years" the preference shall remain. Do they simply mean that, or do they imply further that the present high rate of tax on petrol shall continue for 12 years? If it is simply assistance for the home produced oils from shale and coal, I have no objection; but the implication that the 9d. tax on petrol is going on for 12 years seems to require some explanation. I have moved the Amendment in the hope that the Minister will be able to tell us that such is not the case, and that it is simply a matter of protection for the home industry.
    5.42 p.m.
    Major Owen: I beg to support the Amendment. I have spoken on this matter on previous occasions in this House, and I have dared to prophesy that the period first envisaged for this relief of home produced oils would not be sufficient. In the Debate on 25th July, 1933, I said:
    "You can produce any amount of oil from coal, just as you can produce any amount of sugar from beet; but at what cost? When the first subsidy was granted to sugar beet it was to be only for a period; but what happened? They came again for a little more. That is the danger. I fear that at the end of the four and a-half years if the 8d. Import Duty is still in existence Imperial Chemical Industries and others will come along and ask for an extension of the period."
    I proceeded to say:
    1140
    "I ask the House to give careful consideration to this matter because on the question of employment the number you put on by this process will be displaced in the oil industry."—[OFFICIAL REPORT, 25th July, 5933; col. 2466, Vol. 280.]
    It seems to me that what I have foreshadowed has come to pass, and to-day we are asked to tie the House of Commons to a subsidy to this industry for a period of 12 years at the current rate of the Customs Duty on imported oil. Since that date we have had the report of the Falmouth Sub-Committee on oil from coal. This report, if it has any value at all, proves conclusively that it is impossible to produce oil from coal on a commercial basis. I am quite ready—so is everybody in the Committee—to do whatever is possible to restore prosperity in the coal industry, but, as I pointed out in a previous Debate, I think the cost of doing so is far too great.
    I ask the Chancellor of the Exchequer to consider limiting this period by cutting it down to half at least. Next year, if the Chancellor of the Exchequer so wished, he could alter the period, but why should we to-day tie down the Committee to a period of 12 years. If this industry is going to be of any service to the country, it should be able to prove its worth before that time. I remember that during the debates in those days we were told that the production of oil from coal in this country would be of great benefit to the coal industry, and I should like to know from the Chancellor of the Exchequer how many extra miners have been employed in this country as a result of this process.
    The Deputy-Chairman: I do not want to interrupt the hon. and gallant Gentleman unduly, but I must point out to him that either we must restrict discussion very strictly to the point whether it be

    1141
    for 12 years or six years, which is now before the Committee, and discuss the general question of whether the policy is desirable on the Question that the Clause stand part, or, if we have the wider discussion now, the arguments must not be resumed when we discuss the Clause later. I am in the hands of the Committee.
    Major Owen: I hoped that we should be able to deal with the Amendment in the same way as we dealt with the Amendment on the previous Clause, namely, have a more or less general discussion, and that the various Amendments could then be put to the vote. I do not know whether you have expressed and Ruling on that point or not, and I should like to know.
    The Deputy-Chairman: I express no opinion on the subject, but will merely take whatever course is most convenient to the Committee in general. If it is agreed by the Committee, I am willing to take the wider discussion now on the understanding that the arguments are not repeated later.
    Major Owen: I am very much obliged. I felt that I was rather extending the scope of the argument in dealing with the matter which I have just raised. There were arguments put forward at the time when the then Prime Minister in 1934 announced this subsidy to the hydrogenation process in particular, but it included every other process of producing oil from coal in this country. There were speakers in the House at that time who seemed to think that it was the salvation of the coal industry. I ventured to differ, and I believe that if we read the Falmouth Report we shall find that that has not been proved to be the case. I will take, first of all, the low temperature carbonisation process, and quote paragraph 119 of the Falmouth Report:
    "The question then arises: What are the prospects of a really large-scale development of low temperature carbonisation?—and to this point the Committee have given careful consideration."
    Paragraph 120 says:
    "From the figures quoted in the Table in paragraph 109 it will be seen that the low temperature carbonisation method is first and foremost a coke-producing process, and that in consequence its commercial value is dependent on the possibility of disposing of
    1142
    the coke. This was accepted by the representatives of the Low Temperature Coal Distillers' Association."
    It says, in paragraph 123:
    "The Committee further examined the claim made by many advocates of low temperature coke that a big development of this process would bring about a much wished for revival in the coal industry."
    Paragraph 124:
    "The Committee have to report, however, in this connection, that the conclusions they arrived at were disappointing. In so far as low temperature coke might be used as a substitute for raw coal, very little increased demand for coal would ensue, as it is calculated that only 10 per cent. more coal would be required to give an equivalent amount of fuel and heat value."
    The Committee further say that the coal producers themselves were not very enamoured of this process because the result would be that people who now purchase coal for private purposes would no longer purchase it if coke from the low-temperature carbonisation process were available at low rates. What does the report say about the question of hydrogenation?
    "This programme"—
    that is, the programme of the Billingham experiment—
    "could only have been carried through by an undertaking having great resources, both financial and technical. It is a high testimony to the skill of all concerned that the plant is now virtually in full operation. In 1936, the production was about 120,000 tons of petrol, and the estimated production for 1937 is 130,000 tons, against a designed capacity of 150,000 tons.
    However, in spite of the most thorough investigation at each of the earlier stages in the development, difficulties which were not anticipated have been experienced in the large scale plant, which have involved the company in some expense and delay. With any process as novel as this, it is not surprising that this should he so and the experience of Billingham suggests very forcibly the necessity of accepting with caution any schemes of this kind involving very large capital expenditure, even if there is available, as in this case, great experience and data based on the most preparatory work."
    Here is a very important point, particularly as I had been arguing at that time that we must have supplies for our air-craft in time of war. In paragraph 150 the report of the Falmouth Committee says:
    "It may be mentioned that, apart from the difficulties arising from the working of the plant, twice since the plant started the quality of the petrol has had to be improved to meet the demands of the market for petrols

    1143
    with higher octane numbers. This has inevitably resulted in some reduction of the plant yields."
    Any petrol used in aircraft must have high octane numbers, and you cannot get that from petrol produced from coal. So that in fact, however much we may produce by the hydrogenation process, we would have to import oil from other countries before that oil could be used in our aircraft. It was argued at that time that, if we produced oil from coal in this country, it would be a measure of safety and security for us in time of war. What does the Falmouth Committee say with regard to that? In paragraph 289 they say:
    "Much stress has been laid, by those who advocate the encouragement of home production of oil, on the greater security which the country would obtain as compared with reliance on imported supplies. It is reasonable to assume that a large proportion of the tankers required for our oil imports would escape enemy attack. Furthermore, in the transport of seaborne oil, and also in the case of storage in this country, the risks would be spread over a very large number of units, and, though losses would be inevitable, the policy of storage and replenishment from overseas should provide adequate security for our oil requirements."
    In paragraph 290—and this is the point I made myself in the course of a speech in this House—they say:
    "In the case of hydrogenation plants, on the other hand, the risks would be concentrated. The plants must of necessity be large, and would therefore provide conspicuous targets and he extremely vulnerable to air attack."
    There is another objection, and that is the question of cost. In paragraph 230 the committee report:
    "In these circumstances, it is abundantly evident that, so long as the price of imported fuel remains in the neighbourhood of the present figure, the case for home-produced oil, judged by purely economic standards, falls to the ground. Hence it follows that if it is desirable for any of the reasons mentioned in paragraph 238 to produce oil from coal or other indigenous materials, Government assistance in one form or another must be forthcoming."
    Candidly, I should like to see something done for the coal industry in this country which would restore its prosperity, but, as I said on that occasion, I am afraid—and the facts have proved it since—that the low-temperature carbonisation method, the hydrogenation method, and the Fischer method are not likely to restore prosperity to the coal industry. They are not likely to give
    1144
    us an adequate or a safe supply in time of war. In addition to that, economically, it is going to cost the country and the Revenue an enormous amount, as has been explained already to the Committee this afternoon. The amount that is paid in taxation in respect of oil imported into this country is enormous, somewhere in the neighbourhood of £60,000,000 per annum. If we continue this process and apply it to all oils produced in this country, whatever may be the material from which that oil is produced, the cost to the country will be out of all proportion to the benefits the country will gain from it. I ask the Chancellor of the Exchequer seriously to consider whether it is in the interests of the country as a whole, of the coal industry, of the men and their families who depend upon the coal industry for their living and comfort to continue with this when we have at our disposal ample supplies of natural oil produced by British capital and British employes practically all over the world. It is work that employs hundreds and thousands of sailors in tankers, and in refineries put up by British capital, and I ask whether it is worth while to continue with this proposal and to extend the period for another 12 years?
    We were led to understand, and there were members of the House at that time who said, that in the course of four-and-a-half years the process would have been so much improved that they would no longer require this support from the State. That has been proved to be a completely wrong and mistaken idea. The process has not improved and the cost of producing this oil without the subsidy is altogether impossible. I therefore plead with the Chancellor of the Exchequer to limit the period to six years. I should be only too happy to think that this process could be perfected within a reasonable period. I for one, at any rate, in view of the depression in the coal industry, would not oppose it, but to continue it in the present circumstances, in face of the Falmouth Report, is an entirely wrong thing unless the Government are prepared to say that it is a subsidy and nothing else. I ask the Chancellor of the Exchequer to accept the Amendment and to reduce the period to six years.
    6 p.m.
    Mr. James Griffiths: I thank you for your Ruling, Captain Bourne, that we may discuss this subject in a large way. The Chancellor of the Exchequer was good enough, in reply to a question on 18th May, to say that he proposed to include a Clause of this kind in the Finance Bill because the Government had given consideration to the Famouth Committee's Report and had decided to accept its recommendations. One of the recommendations, which the hon. and gallant Member for Carnarvonshire (Major Owen) neglected, was that this preferential duty shall be stabilised for a period of 12 years. I share the views of the hon. and gallant Member in one respect, that on reading the report and then coming to the recommendations the report is in many ways a complete condemnation of any method of extracting oil from coal. On reading the document through, it is amazing to note that they make the recommendation that certain provisions should be made in order that the oil from coal industry might be maintained, and also developed.
    The Falmouth's Committee's Report, and the way in which the investigation was conducted, have left those of us who are interested in the problem completely dissatisfied. We are of the opinion that the committee approached the problem from far too narrow an angle, that it completely omitted to take very important considerations into account, and that the report could not have been better written if it had been commissioned by the oil interests of this country. We in the coal-mining industry have given much thought and time to this matter and are convinced that from the beginning the oil interests have done everything, and they are doing everything, to prevent this native industry being developed in this country. The Falmouth Committee hold out scarcely any hope for this new industry. They say that it is too expensive, too imperfect, and that there is no hope of the industry being developed on any successful lines, and yet at the end of their report they make a recommendation which, quite frankly, cannot be understood, having regard to the nature of the report. They suggest that there should be a continuance of the guaranteed preference for a period of 12 years from 1938, and that the rate should be increased from 4d. to 8d. per gallon, and that the guarantee should be extended to include Diesel oil for use in
    1146
    motor vehicles. It is that guarantee that is included in this Clause, and which the Chancellor of the Exchequer asks the committee to accept.
    The committee dealt with the two major processes of extracting oil from coal that are in use in this country and in the world generally. There is, first, the method of low-temperature carbonisation. They do not propose that there should be any further assistance given to that beyond the help given by the preferential duty, and they express the hope that under the shelter of this preference the industry may be developed in this country. The other process, the synthetic process, known as hydrogenation, has been dealt with, in our opinion, in a very unsatisfactory way. They do not recommend that the Government should take up the matter; all that they say is that they consider that it would be an advantage if a plant were established in this country to work the Fischer process, and they express the hope that somebody or other, some financiers, will come forward and put down the plant. If I was speaking to our own men I should call that the height of cheek, seeing that the committee have not gone into the matter as carefully as they ought to have done.
    This is the 'first investigation by a Government committee undertaken in connection with this problem, and we are of opinion that the committee have not done their job as thoroughly as they ought to have done. This synthetic process, this hydrogenation process, has much attraction as compared with the other process, because it leave no residue behind, all the coal being converted into oil. It is not a process of extracting oil from coal but of liquefying coal into oil. The committee suggest that it is desirable that a plant should be established in this country of a substantial size for the production of not less than 20,000 or 30,000 tons of primary products per annum, and they express the hope that someone will come forward and be prepared to find the money. I do not know whom they expect to come forward but I am afraid that after reading their report anyone would be disposed to turn it down.
    The committee say that they have heard a good deal of evidence in private. A large number of persons, experts and persons connected with companies operating processes, were asked to give evidence,

    1147
    and those persons requested that their evidence should be treated as private. Their evidence was given only on that consideration. That evidence, which was given in private by persons interested in the industry, has obviously swayed the report. The report can be understood and accepted only on the assumption that the evidence which is not revealed to us is overwhelmingly against this process.
    Major Owen: It has been submitted to the Government.
    Mr. Griffiths: I do not think the evidence has been submitted to them. It may have been submitted to the Committee of Imperial Defence, of which this committee was a sub-committee.
    The Chancellor of the Exchequer (Sir John Simon): That is so.
    Mr. Griffiths: Therefore, the Cabinet in making their decision are in no better position than the House.
    Major Owen: Oh, yes.
    Mr. Griffiths: I understood that the Chancellor of the Exchequer had not seen the private evidence that was before the Committee.
    Sir J. Simon: I do not want to state anything more positively than I know. Therefore, I am speaking subject to correction, if I do not state it rightly, but my understanding is that the Committee of Imperial Defence had all this material before them, and, as the hon. Member knows, members of the Cabinet who are specially concerned are members of the Committee of Imperial Defence.
    Mr. Griffiths: This House has not the evidence. All that we have is simply a paragraph in the report that the evidence was given in private. This is an important matter of national policy. Why should this Committee to-day, or the country, be asked to pronounce definitely upon this question of oil from coal on a report in which the evidence is kept from us? Who has the evidence? Imperial Chemical Industries. They have arrangements with the oil industry. The oil industries of Europe have a stranglehold on the industries that extract oil from coal. From the beginning the oil interests have watched this new development. They have gone sound every-
    1148
    where and have bought up pits. They have a stranglehold. No one can sell a gallon of petrol extracted from the oil from coal processes in this country except through the usual agencies. From the start this matter has been looked at more from the standpoint of safeguarding the oil interests than from the future prospects of the coal mines of this country.
    In accepting the report as it is there are certain aspects to which the committee have only given very cursory investigation and consideration. We approach this problem from the standpoint of the coal-mining industry, upon which the industrial life of this country in the last century was built up. In the last 10 or 12 years the coal industry has been faced with this great new competitive fuel, and we face the problem from the standpoint as to whether this new development, this new fuel, petrol, does take the place of coal. To the degree that it does, it closes our pits, displaces our men and creates a very serious community problem for us. From the national interest the right way to approach the problem is to consider whether it is possible to develop in our own industry, in our own country, from the raw materials that we have in abundance, an industry which can produce this fuel. If so, then we shall be able to maintain our mining communities and not destroy them as we are doing now. The Falmouth Committee has not done that. It has taken the question of cost purely on the question of the production of oil at this moment, at this stage in the development of this new industry as compared with the price of imported petrol. We say that the committee is not right in adopting that course. This new industry is in its experimental stage.
    Major Owen indicated dissent.
    Mr. Griffiths: The hon. and gallant Member shakes his head. We have asked the Secretary for Mines whether the plant at Billingham has reached the stage when a pronouncement can he made, and he has told us almost every time that it is still in an expermiental stage and that they were still carrying on experiments, that they were trying variants of the original process, and that the time had not come to pronounce definitely upon it. But the Falmouth Committee have pronounced definitely. They have accepted

    1149
    the relative cost at the present time and have used it to condemn the development of this process. We say that they ought not to have done that. The costs of extracting oil from coal are at their highest now, and there is every reason why we should continue experiments.
    There are many different kinds of processes, low-temperature processes, for extracting oil from coal, and people interested in those processes wrote to the committee and asked to be allowed to appear as witnesses. They asked to be allowed to give their evidence and to be permitted to explain their processes, but they were denied that opportunity by the Falmouth Committee. The committee selected a small number of companies to give evidence before them, and a small number of processes, and declined to accept evidence from a large number of other pioneers in this industry. We say that this Committee to-day, the Government and the country ought not to accept the report of a committee which refused to hear the evidence of scientists and engineers who have given years of work to these processes. If there is to be an investigation, let everybody have a chance. Why should the big combines and companies have all the opportunity?
    I had the pleasure of sitting on a committee set up by our own party to consider this subject. It has published a report, and I venture to say that it was a far better and more judicial investigation of this problem than was made by the Falmouth Committee. Everybody who had given years to the study of this problem and the working out of the processes was invited to give evidence. That is what should have been done by the Falmouth Committee instead of declining to accept a large volume of evidence from men who have given years and sacrificed much in order to develop their processes. In the circumstances I think we should accept their report with a good deal of reservation. The Falmouth Committee, in my view, dealt far too lightly with what is taking place in Germany and other countries. In Germany they have now reached the stage where they are actually extracting oil from lignite, brown coal. If German engineers can produce oil from brown coal, are we to take it that our engineers are so incompetent that there is no prospect of being able to develop the extraction of oil from coal, using the
    1150
    coal which we have in such abundance in this country?
    Mr. Lewis Jones: On a point of Order. I understood from the Deputy-Chairman that he would allow a rather wide discussion on this Amendment, and I would like to know for the guidance of the Committee whether in view of the speeches which have been made it is now open to anyone who takes part in these discussions to discuss in detail the Falmouth Report?
    The Chairman (Sir Dennis Herbert): I think not. I have listened to what the hon. Member for Llanelly (Mr. J. Griffiths) has said. I am always loath to interrupt unnecessarily and I think that the greater part of his argument is in order and relevant to the Clause generally, but I think the Committee should bear in mind that we cannot go into the whole of the details of the Falmouth Committee's report.
    Mr. Bevan: May I submit to you that the Chancellor of the Exchequer has said that this part of the Finance Bill has been incorporated in consequence of the recommendations of the Falmouth Committee, which recommendations followed the investigation which the committee made and the evidence it took? It seems to me that the Committee cannot usefully consider this part of the Finance Bill unless they are able to consider the evidence which influenced the Government.
    The Chairman: I congratulate the hon. Member on coming to the same conclusion as I have just announced.
    Mr. J. Griffiths: The Chancellor of the Exchequer, I think it was on 18th May, said that the Government proposed to accept the Falmouth Committee's report, and the Clause which we are now discussing is based on that report.
    Sir J. Simon: I agree, and I understood at the time that the hon. Member was glad of the decision and rather welcomed it.
    Mr. Griffiths: Yes, and I shall certainly vote against the Amendment. This is the only opportunity we have of discussing the Falmouth Committee's report.
    The Chairman: The hon. Member says that it is the only opportunity, but now is not an opportunity to discuss the Falmouth Committee's report.
    Mr. Griffiths: At any rate, the Government are proposing to accept one of their recommendations, and it cannot be thoroughly understood without having the report. I hope the Government will think again on this problem and will not accept the Falmouth Committee's report, about which there is a good deal of dismay and dissatisfaction in the country. The investigation was not properly completed. We shall vote for a continuance of this preference, because without it no industry of this kind can be created in this country. We hope that this industry will be developed.
    6.22 p.m.
    Mr. Hannah: I believe that I am about the most unsuitable person in the whole Committee to intervene in this Debate, being, as I imagine, the only Member of Parliament who does not possess a licence to drive a motor car, endorsed or unendorsed. I hope that I shall not be out of order in saying that my reason for intervening is to voice the strong discontent of some of my own constituents about the high taxation of motor fuel at the present time. In our Bilston area we have a number of places, I happen to live in one of them—
    The Chairman: The hon. Member must find a more suitable opportunity for discussing motor taxation.
    Mr. Hannah: My reason for objecting to the 12 years is because of the pessimistic view it appears to take. It implies that the high rates on motor fuel are going to last for all that time. I earnestly hope that there will come a time long before the 12 years have expired, when with peace re-established and when the world has returned to sanity, it will be possible very largely indeed to reduce these taxes.
    Mr. Ellis Smith: We have a long way to go.
    Mr. Hannah: We have, but I hope we shall get there under our present administration and, therefore, I support the Amendment in the hope that it will not be taken as an indication that these very high rates of taxation on motor fuel are to last for 12 whole years. I need hardly say that I hope that a purely native industry of extracting oil from coal will be satisfactorily built up. I should not for a moment support the Amendment if I thought it was in any way
    1152
    antagonistic to such a hope. There is no doubt that from the point of view of this country there is nothing more important than getting fuel which is wanted on so large a scale for transport, both by land and sea, from the resources in our own country and, therefore, in the hope that we shall have a materially lower scale of taxation in 12 years' time I hope the Committee will accept the shorter period and reduce it to six years.
    6.25 p.m.
    Mr. R. Acland: I should like to ask the Chancellor of the Exchequer whether the opening words of this Clause:
    "During the period of 12 years from the passing of this Act,"
    are the usual, normal and proper words to be found in a Finance Act at all? Is it right that in 1938 we should apparently be settling some of the details of the Budget speech in 1950? If this is normal and proper can the Chancellor of the Exchequer give the Committee any guidance as to the limits to which such a process may be extended? Will it be proper for the Chancellor of the Exchequer next year, in what may well be his last Budget speech for some time, to insert a Clause at the instance of the present Minister for Agriculture and his supporters that for the next 12 years the preference given to beef produced from indigenous cows or bullocks shall be ¾d. per lb.? Would that be a proper Clause to find a place in next year's Finance Bill? If not, why is this proper? Will the Chancellor of the Exchequer in supporting the Clause, as I suppose he will, make it perfectly clear that a Chancellor of the Exchequer on a future occasion has every bit as much right to alter this preference, up or down, as he has to alter the Income Tax up or down, and that this industry has no more a vested interest in a preference of 8d. than has Lord Nuffield in a preference of 33¼ per cent.? I think it is absolutely impossible and contrary to all constitutional practice to attempt in one Finance Bill to fix what shall or shall not be done in a future Finance Bill. What may happen? We may get in power a Government which would make a strong stand against these monopolists and break in pieces this business of holding up patents. It might release a whole series of patents for the use of this industry. There may be new discoveries, some of which may not be snapped up by the oil importing industries. The hon. Member

    1153
    for Rusholme (Mr. Radford) might discover or develop the production of some of these oils from potatoes, and he might come here and attack other companies which are making profits of 140 per cent. by the manufacture of some kind of spirit.
    Mr. Radford: The company with which I am connected has never made an ounce of alcohol from potatoes or from any other raw material. The hon. Member is talking absolute nonsense.
    Mr. Acland: I recollect a speech of an hon. Member on these benches who mentioned the figure, and I do not think it was contradicted then. My argument is that all sorts of things may be discovered and you may get companies making enormous profits out of oil from indigenous materials. Is it to be said that whatever happens no future Chancellor of the Exchequer will have the right to interfere with them until the Finance Bill of 1951? I hope the Chancellor of the Exchequer will give us an assurance that this Clause has no binding force whatever upon future Chancellors of the Exchequer.
    6.30 p.m.
    Mr. Bevan: I wish to make a few remarks only, as most of the ground has been covered very adequately by my hon. Friend the Member for Llanelly (Mr. J. Griffiths), who has devoted a great deal of attention to this problem. It is clear from the Falmouth Committee's Report that the recommendation upon which this Clause is based was either to some extent the result of representations made by the Committee of Imperial Defence or was arrived at very largely because of considerations of Imperial Defence. Otherwise, as my hon. Friend pointed out, the whole tone of the report would make the recommendation appear foolish, because throughout the report the committee comes down very heavily against the practicability of extracting oil from coal in Great Britain on a commercial basis. It is obvious that this plant, which it is recommended should be set up and should be supported by the preference, would not be established for technical reasons, because on page 42 of the report, the committee point out that the plant necessary for explorative technical work need not be as large as the one they recommend. Therefore, the recommendation is made for another purpose. Indeed, on
    1154
    the same page, it is stated in paragraph 209, which has strict relevance to the recommendation on which the Clause is based, that—
    "Such a plant would not only provide valuable technical and economic data, but it would enable the nucleus of a staff to be trained which would be available when a larger production was required, and would provide facilities for large-scale research to be carried out. It would be also of great assistance in planning further plants if the national interest called for them or commercial concerns desired at any time to establish this type of process."
    Therefore, the proposal is made, not because the committee consider that a plant consuming from 20,000 to 30,000 tons of coal per annum would be a commercial proposition, but because if such a plant were established in this country there would be available a trained staff for work of that sort. The necessity for such a trained staff is that at some time we might be involved in a conflict, that our resources of foreign oil might be cut off, and we might have to rely upon producing oil in larger and larger quantities, so that it would be necessary to have a staff which would be able to take charge of that work. The committee arrived at that recommendation and the Government accepted it, not for strict economic and commercial reasons, but for reasons of military strategy. To say that is, I think, to put the whole argument upon a fair basis, because if it were for commercial reasons the report of the committee would be different.
    If that be the purpose of the recommendation, how is it being implemented by the proposals before the Committee? The Government say that there should be a preference. For what reason? In the hope that a number of individuals having cash to spare will take a more optimistic view than the Falmouth Committee, for that committee have done their best to depress the hopes and expectations of anyone who might want to engage in this production. The Government say that this plant is needed in the vital national interest, and at the same time they publish a report which has the effect of militating against that national interest. I do not believe that, if the Falmouth Committee's Report is accepted, even with the preference anyone in this country will construct plant of this sort. Although I and my hon. Friends who are intimately associated

    1155
    with the mining industry cannot oppose this proposal, which is a small step to establish an oil-from-coal plant in Great Britain, nevertheless we are bound to say to the Government that a more maladroit and inadequate way of dealing with the problem could not have been devised. If a plant of this sort is necessary in the national interest, why do not the Government construct it? If this staff is necessary in order that our national wellbeing may be promoted, why do not the Government set up this plant? We are hoping that other people will take a much more optimistic view than the Falmouth Committee.
    There is some constitutional justification for the view expressed by the hon. Member for Barnstaple (Mr. Acland). I think it is a very bad practice to include in Finance Bills a lot of useless lumber. It is clear that one Finance Bill cannot bind another, and that it is not possible for anyone to have a guarantee going on from year to year. No one knows that better than the Chancellor of the Exchequer. If this Clause is carried, all that we shall have is an expression of the opinion of the Committee to the people who may enter this sort of undertaking that this preference ought to be continued for 12 years. That is all the constitutional soundness there is in this proposal. I do not know whether this is the best way of doing it, but it may be desirable or necessary to put on record the view of the Committee at this moment about the proposal. We cannot do anything that will tie future Finance Bills, and any future Chancellor will be absolutely free in this matter.
    Hon. Members on this side are deeply disappointed with the nature of the Falmouth Committee's report in so far as this Clause is based on it; we are greatly disappointed that hon. Members have not been given more information on which to base their judgment of this Clause; and we are deeply disappointed that the Government have not had more courage in dealing not only with this vital problem of national interest, but in finding for the coal industry other markets to replace those which modern technical developments are rapidly taking away from it. Valuable years are passing. If one is to form a judgment on the basis of what the Government are now doing, they themselves fear that we may be faced with
    1156
    a grave national peril in the not-very-fardistant future. If that be their view—and that is the only conclusion one can form from the enormous, unprecedented efforts they are making to rearm the country—it is sad that they are not taking bolder steps and bringing into existence a method of extracting oil from coal which might stand this country in good stead at a time of emergency.
    6.39 p.m.
    The Secretary for Mines (Captain Crookshank): I will abide by your Ruling. Sir Dennis, and not discuss the Falmouth Committee's report, but perhaps I may be allowed to make one or two references to it. I should like, in the first place, to express the indebtedness which everybody must feel to the members of the committee for the very thorough way in which they investigated the problem before them. The hon. Member for Llanelly (Mr. J. Griffiths) made some complaints on the subject of the evidence which he thought the committee ought to have heard and which it did not hear. If the hon. Member will study the report, particularly the introduction, in which he will see the principles upon which they took evidence, if he will look also at the end of the report where there is a list of those who gave evidence, and that a number of printed and other memoranda were also submitted, and if he will also bear in mind that the committee sat for a very long time in investigating this problem, which has been for so many years of great public importance, I think he will not carry his criticism on that score any further.
    This is not a party matter, since two hon. Members opposite who do not seem to like the Falmouth Committee's report have stated that they will support this Clause, which implements the chief recommendation of the committee. As to hon. Members on the Liberal benches it is not surprising that they take what is really a middle course. What the Clause suggests is that there should be a guaranteed preference of 8d. for 12 years, and what hon. Gentlemen on the Liberal benches say is that there ought to be a guaranteed preference of 4d. for six years. They halve both figures. The adoption of such a proposal would not tally with the recommendation of the Falmouth Committee, which was to make it possible for further work to proceed on this very important subject.

    1157
    The hon. and gallant Member for Carnarvonshire (Major Owen) raised the old discussion, which I do not intend to reopen, as to whether this is a subsidy. It it not a subsidy; it is a non-collection of certain revenue which this Committee decides should not be collected. Home-produced oil, whether it be light oil as in the past or whether it be Diesel oil for road purposes, will receive a measure of preference. The hon. Member for Barnstaple (Mr. Acland) asked whether this is a correct constitutional procedure. It is a fact that in previous Finance Bills provisions have been taken, for example with regard to the Ottawa Duties and Imperial Preference at the time when the right hon. Gentleman the Member for Epping (Mr. Churchill) was Chancellor of the Exchequer, for a period longer than the year with which the Finance Bills were directly concerned. There is not very much in that point. As a justification of this Clause, I would say that, first of all, I think that the country is still without sufficient experience of all the different processes to know for certain whether in a reasonable time they will be economically possible. The Falmouth Committee made that point very clearly. They also made the following point, which I put in defence of a longer period as opposed to shorter one, about the expenditure in the early stages:
    "One of the difficulties with the processes designed for the production of oil as the primary product is that not only are the large-scale plants expensive to build, but in the earlier stages, one of the main factors which renders them commercially unprofitable is the heavy allowance required to be made under the head of obsolescence. For, as improvements are discovered, it is often impossible to apply them without extensive alterations or reconstruction of plant."
    That also is pointed out in another part of the report which deals with Billingham, where the committee state that the company are still not yet in a position to derive the full benefit from the work they have already put in.
    Major Owen: Surely, what was stated in 1934 was that the experiment at Billingham had reached such a stage that now they would be able to produce oil from coal commercially. They have had four and-half years in which further to improve these methods, and now we are asked to give them an extra 12 years. When are we to come to and end of—
    1158
    whatever the hon. and gallant Gentleman may call it—what is, in fact, a subsidy, and a very substantial one, to that particular manufacturing plant at Billing-ham?
    Captain Crookshank: The hon. and gallant Member is quite right in saying that in 1934 it was stated that they could, extract oil from coal, but it was not until after the undertaking was given in July, 1933, about the guaranteed preference, that Imperial Chemical Industries decided to start building the plant. I think he is a little wrong in his dates. One of the reasons which I was adducing for this long period of guarantee was the high cost. Everybody who, has gone into this matter—and I know that many hon. Members have made a special study of it—knows that the capital expenditure involved is very high. It is a process which cannot be said to be finally established anywhere. Scientists in this and in other countries are at work upon it and one does not know what modifications in plant may be required in future which would have very important effects.
    It is also difficult to foresee at this stage developments which may result in bringing down the cost of production. In those circumstances the Government feel that we cannot afford to lag behind. Our scientists are not unknown in the world and we must give them and others engaged in this work a guarantee of this kind, behind which they can develop the process. The Falmouth Committee came definitely to the conclusion that a guarantee of this kind was the best way of dealing with the matter. While we are not discussing the question in detail at the moment, I would commend to hon. Members paragraphs 259 to 269 inclusive of the report. There, the Falmouth Committee make it clear that in their view a preference of this kind and for this length of time would be the best possible way of development. At the same time I must call attention to the fact that in paragraph 261 the committee agree that:
    "So far the results of the hydrogenation and synthetic processes are not sufficiently established to justify the spending of large sums of public money in building plants."
    Therefore, they favour a continuation of the form of assistance at present given by the guaranteed preference and as they point out in another part of the report—in paragraph 215—they have reason to think that with the assistance of that

    1159
    preference, private enterprise would be likely to find the capital for a plant of a commercial scale. Having examined the problem in detail and with information at their disposal which we readily acknowledge is not available to hon. Members, the committee arrived at those conclusions. That information was given in confidence to this body which was a sub-committee of the Committee of Imperial Defence. They had to consider a great many aspects of the question which it would not be proper to discuss in terms of evidence. I am sure that hon. Gentlemen all recognise that fact. Still they came to the unanimous decision that the step proposed in this Clause should be taken. The two hon. Gentlemen who spoke from the opposite side are really agreed upon that point. They have complaints about the Falmouth Committee not recommending something else, but they have not said that this is not a good thing to do and therefore it is with some confidence that I ask the Committee to accept the Clause.
    When the hon. Member asks me what effect the Clause will have in the future, I cannot say more than that if it is passed it will be a declaration by Parliament that it is desirable for this work to continue. It will be a declaration by Parliament that a guarantee for 12 years should be given, and that that is the right way in which to proceed. It will be a declaration in accordance with the unanimous recommendations of the Falmouth Committee and both the Government and tilt official Opposition are agreed upon it. In those circumstances I submit that it is a declaration which is likely to be of value. I know that hon. Members opposite below the Gangway are inclined to excuse themselves from being associated with that declaration but, taking the matter by and large, if the Government of the day and the official Opposition agree in such a Parliamentary declaration, I think it will be an assurance which will enable industry to develop the processes behind the protection of this preference.
    Mr. Bevan: We on this side do not wish to have it quoted against us in the future that we accepted the hon. and gallant Gentleman's statement, and I would ask him to read again paragraph 215 of the report. In his reference to it
    1160
    he gave the Committee the impression that the Falmouth Committee had been informed that the necessary money would be forthcoming if this proposal were adopted. May I read the paragraph? It says:
    "One witness appeared to be confident that if a guarantee for 12 years were given, private enterprise would find the capital for a plant of a commercial scale."
    I would point out that even if this Clause is passed, there is no contractual guarantee. The paragraph continues:
    "On the other hand, another witness who at first suggested that, in addition to a guaranteed preference, the Government should find or guarantee three-fourths of the capital for a commercial scale plant, finally wrote to the Committee and gave it as his considered view that the provision of capital for such a venture was not likely to attract outside investors."
    Captain Crookshank: I take no exception to the hon. Member reading out any part of the report. All I said was that the Falmouth Committee had had from one witness the impression that it might be possible with this guarantee to find the money from private enterprise. It is also true that in another paragraph, to which I also referred, they said that it was not suitable for public money to be invested in this concern at this stage.
    6.53 p.m.
    Mr. Dunn: With some of the comments made by the Secretary for Mines I find myself, to a certain extent, in agreement, but it must not be taken that we on this side are giving our whole-hearted support to the Falmouth Report. All I would say about that report is that we do not accept it, nor I think does anybody familiar with the question accept it, as the final word on this very important subject. We regard it as a restricted contribution to the solution of the problem, and the general view which we hold is that the report was more or less sabotaged and torpedoed by the oil industry in this country. That is as far as I want to go in that connection. I desire, however, to put the question of this Clause a little further than it has been put up to now. The Debate has centred largely round the question of the extraction of oil from coal and the report of the Falmouth Committee. I would like to ask the Chancellor of the Exchequer to look very closely into the question of power alcohol which is covered by this Clause.
    The Chairman: I do not think that the question of power alcohol arises on this Amendment.
    Mr. Dunn: I accept your Ruling, Sir Dennis, and will defer my remarks on that subject until the appropriate occasion.
    Colonel Sandeman Allen: In view of the statement by the Minister that this Clause has been put down for the purpose of encouraging the manufacture of oil from coal and not for the purpose of keeping the Petrol Duty at 9d. for 12 years, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    6.56 p.m.
    Mr. Graham White: I beg to move in page 2, line 27, to leave out "eight-pence," and to insert "fourpence."
    This Amendment is the natural sequel to the Amendment which was last under consideration. The previous Amendment dealt with the question of the time and this relates to the question of the amount of the preference and the original proposal was that if the rate was increased, the time was to be diminished. My hon. and gallant Friend the Member for Carnarvon (Major Owen), in supporting the previous Amendment, laid before the Committee certain arguments which were relevant to that Amendment and are also relevant to this Amendment. I do not propose to ask the Committee to listen to a restatement of those arguments.
    6.57 p.m.
    Mr. Acland: On this Amendment I wish to address a few words to hon. Members on this side above the Gangway. I understand that they are no more willing to support this reduction than they were willing to support us on the previous Amendment. May I remind them that, according to their own policy, they will shortly desire to take over the whole of this industry and pay compensation for it? If this preference were not guaranteed for 12 years, or if it were reduced, they would of course pay compensation at the appropriate rate, and the industry being one which does not make any particular profits, the compensation payable would not be particularly large. But if there is a guaranteed preference for 12 years, or, at any rate, something which gives the industry the right to say that it has been told by Parliament that the preference is
    1162
    likely to continue for 12 years, and if the rate is fixed at 8d. rather than 4d. then, when hon. Members above the Gangway come to carry out their policy they will have to compensate the owners of this big monopoly at the value which the Stock Exchange will attach to the industry, with a 12 years guarantee of 8d.
    I ask hon. Members to consider whether their refusal to support these Amendments is not contrary to the general line of their policy. I wonder whether it is the connection between the party above the Gangway and anything which concerns the coal industry which has resulted in their adoption of a new line of policy in this case. I suggest that it is a line of policy which they would never dream of adopting if we were discussing, say, a guaranteed preference of ¾d. a lb. on beef. They would never have dreamed of supporting a 12 years' guarantee in that case, and, if it had been moved at the rate of ¾d. a lb. guaranteed for 12 years, having voted against the 12 years, they would then move that it should be reduced from ¾d. to ⅜d.
    7.1 p.m.
    Mr. T. Smith: I may, perhaps, remind the hon. Member that we could not always rely on the Liberal party when we were in power. There were times when they were not quite consistent. How many times did we have criticisms from that party as to what ought and what ought not to be done with regard to the coal industry? Perhaps two or three of the most damaging critics in that party are now Ministers of the Crown. I remember the Minister of Labour being very scathing with regard to certain things, and the Secretary for War was not altogether uncritical of the Labour Government.
    Sir J. Simon: That was before the Popular Front.
    Mr. Smith: If there is one Minister who ought not to mention the Popular Front it is the right hon. Gentleman, because he has been rather acrobatic in his political career. If there is one Member of the Government who is swallowing the principles that he preached in days gone by it is the right hon. Gentleman, and I think he will agree with me.
    The Chairman: If the hon. Member thinks he has had a sufficient hit back at the Liberal party, perhaps he will come back to the Amendment.
    Mr. Smith: The position of the Labour party on this question of preference can be easily stated. I have said many times that I believe there is a future for extracting oil from coal when we are prepared to get down to certain basic things, and that one of the reasons why we cannot induce private capital to come into the industry is that so many investors in the past have been led up the garden.
    The Chairman: I think the hon. Member is now getting on to a wide discussion which we cannot have here. The Amendment is simply a question, if my arithmetic is right, whether for eight years out of the 12 the 8d. should be reduced to 4d.
    Mr. Smith: You are quite right, Sir Dennis, and no one is disputing your Ruling. We are not supporting the 8d. because we believe that it will solve the problem of oil from coal. When the Secretary for Mines tells us to read the Falmouth Report, he must keep in mind that we are not altogether satisfied. We are accepting what is suggested in the Clause because the mining industry is in such a tragic plight and we believe that, if the preference is given for 12 years, it will encourage further plans for extracting oil from coal. We are not complaining of the advice that has been given from below the Gangway but on this occasion we have to have some regard for expediency. The mining industry is far from being in a healthy state.
    7.6 p.m.
    Captain Crookshank: I do not think the Committee will require me to say more than that we cannot accept the Amendment. I have listened with interest to the lecture that has been addressed to the party above the Gangway and to their recollections of previous political history. But I should like to make one correction in what the hon. Member said. He spoke of this being a great concession to one of the greatest monopolies that there are, but the guarantee of this preference covers a variety of interests. It covers, for instance, the shale oil industry and many other processes.
    7.7 p.m.
    Mr. Mathers: I am glad that at last mention has been made of the Scottish shale oil industry. The prospect of a continuance of the 8d. preference for oil produced from shale affords an opportunity to that industry to develop in a
    1164
    way which I am sure will be beneficial to the area that I represent together with the Secretary of State for Scotland in West Lothian and Midlothian. To reduce the preference to 4d. would not only prevent that development which is now going on but would, I am informed by the trade union section, destroy the industry and bring it back to the very serious position in which it found itself immediately after the War. I hope the Committee will give unanimous approval to the continuance of the preference for the period mentioned in the Bill.
    Amendment negatived.
    Clause ordered to stand part of the Bill.

    CLAUSE 3.—(Excise duty on power methylated spirits.)
    7.9 P.m.
    Mr. H. G. Williams: I beg to move, in page 4, line 3, to leave out "ninepence," and to insert "fourpence halfpenny."
    My hon. Friends and I tabled this Amendment on the Report stage of the Budget Resolutions. We were not in any way inspired by the nature of the particular commodity but we felt, having always been convinced of the desirability of protecting production in this country, that it was wrong to deprive an industry entirely of protection. Our only opponent of any substance was the hon. Member for South Bradford (Mr. Holdsworth), who claimed that it was legitimate to impose this duty at 9d. on the ground that the production of power alcohol was in fact subsidised through the effect of the Excise rebate. Is it desirable that, since we are a protectionist country, we should encourage by means of protection the production of alcohol for the use of power purposes. It seems to me that, if our policy is to encourage the manufacturer of things that we can make here, clearly we ought to encourage the production of power alcohol. Under the last Clause we have committed ourselves for 12 years to encourage the production of petrol, though we all know that the degree of protection that it is to enjoy is enormous. It is 8d. in respect of something which on importation is worth a fraction over 3d. It is the greatest degree of protection given to anything. That enormous degree of protection is supported by hon. Members opposite on the ground that it assists the coal-mining industry, which is passing through a difficult time.

    1165
    They are all agreed that the production of petrol ought to be protected, but it is said that power alcohol is different. It is made from imported raw material, and that is used as an argument for not protecting this commodity. It seems to me a dangerous argument to use because 90 per cent. of our protection relates to the production of goods made from imported raw material. If that argument is accepted we ought at once to abolish the duty on all electrical goods, because they are made of imported copper; we ought to abolish all protective duties on cotton goods, because raw cotton is imported; we ought to abolish duties on woollen goods, because the bulk of the wool is imported, and we ought to abolish all protective duties on anything made directly or indirectly from wood. So that I hope no one will advance that argument. It may be perfectly sound to argue that, where an article is made from an imported raw material, it should not enjoy as much protection as when it is made from indigenous material, but there can be no rhyme, reason or sense in anyone who believes in Protection saying that a thing should not be protected because it is made from an imported raw material. It is interesting to speculate why there is so much support in certain quarters for the Chancellor's proposal as against my proposal to maintain a degree of protection for the industry. I have here a publication known as the Petroleum Press Service containing an article headed "Britain's Alcohol Duty." It concludes with these words:
    "At all events it is to be hoped that the Government will not be induced to swerve from their purpose by the vociferous objections of vested interests."
    "Vested interests" are always somebody else's interests; that is all that the term means. I wonder who is the author of that impressive sentence. I find that the Petroleum Press Service is published in three languages, English, French, and German, by the Petroleum Press Bureau, whose editor is Dr. Oskar Tokayer. I have nothing against that gentleman. I have no doubt he is a highly respectable gentleman and a competent journalist. He is, in fact, I am told—I hope I am not making a misstatement about him—a Hungarian gentleman, but it is strange when this country is urged by a Hungarian gentleman—acting for whom? The petroleum interests of the world,
    1166
    very largely foreign petroleum interests—not to be induced
    "to swerve from their purpose by the vociferous objections of vested interests."
    That is really almost a classical phrase, particularly when the same publication, when commenting on Clause i of this Bill, takes an entirely different view and denounces the Chancellor for having raised the duty on petrol by a penny; the vested interests are then the other way round. These people are not in the least degree high minded. Their sole object is that they do not wish to see built up in this country a motor fuel which is not petrol. I think, from the point of view of national security, it is a good thing that we should know how to produce an alcohol, mixed with other fuels, suitable for the propulsion of motor cars, even though at the moment it is; produced mainly from imported raw materials. In time of emergency it could be produced, more expensively, I agree, very largely from indigenous material. I am inclined to think that ultimately it may be produced from vegetable growths which at the moment we regard as waste, because alcohol is one of the few things in this life which, whether we like it or not, you cannot avoid, because it is associated with almost everything that grows. Therefore, there is the possibility that ultimately we may build up a great alcohol industry in this country for industrial purposes, based on materials different from those which have been more freely used in the past.
    It is alleged against the present absence of duty that one company—and until these Debates began I did not know that this company was largely associated with this mixture, because I think the bulk of its sales are in the North of England, and I have not in the past patronised its pumps—has made a lot of money. Therefore, the new theory is that if you find anybody making a lot of money, you must entirely take away any protection which they enjoy.
    Mr. Dalton: That is what you do with-the ships in Spain.
    Mr. Williams: If people like to have ships going from Marseilles to Valencia, and if those ships were formerly Greek and, after signing a few papers, shoved up the British flag, that does not have a great deal of bearing on this subject of motor alcohol. It is always terrible to

    1167
    become obsessed with one subject. [HON. MEMBERS: "Hear, hear."] I rejoice at those cheers, because they confirm my opinion that hon. Members opposite think this has something to do with ships in Spanish waters, but it has not. If this duty is raised to 9d. from nothing, I imagine that it will inflict a very grave blow at the production of this industrial material in this country, because if they are deprived of their protection, the chances are that the production will no longer continue. It is the case that alcohol is more costly to produce than petrol, and with a comparable duty I think the production in all probability might cease entirely or almost certainly be very heavily reduced.
    I cannot understand anyone, unless they are Free Traders, saying that this industry should have no protection at all. Arguing on the basis that we are for the time being a protectionist country, I cannot understand anyone contending that it should have no protection, because if they say that, they are acting merely in the interests of the foreign oil interests. If we accept the principle that there should be a measure of protection, we come down to the practical detail of how much. When, somewhere about 1922, an Amendment was made to the Finance Bill to make possible the use of alcohol industrially, and certain restrictions were imposed upon those who produced it, restrictions which are, I understand, expensive to administer, there was allowed to the producer of industrial alcohol a rebate which was intended to be enough, and not more than enough, to compensate the distiller for the extra expense to which he was put. Now if the rebate of Rd. per gallon of pure spirit—I think that is the figure—is in fact to-day, because of the larger scale of production, more than is wanted, that is a matter of detail to be argued out, and we should apply our minds to the problem of how much protection is needed.
    I have put down 4½d., not because I am fully acquainted with the details, because I am not; I do not know whether 4½d. is precisely the right amount, but I think, again on the assumption that the 8¾d. does not represent a subsidy, but is merely a refund of expenses imposed on the distillers by the Excise authorities and that when they receive 8¾d. they are in the same position as if they had received
    1168
    nothing and manufactured without restriction—on that basis, I think 4½d. is a fair amount of protection. If, on the other hand, it is the case that actually there is an element of subsidy in the 8¾d., on the ground that there is a larger scale of production now taking place, if it is the fact that the distillers can carry out these restrictions at less than it may be argued that the protection of 4½d. is more than sufficient, but that is a matter for technical considerations, with which I do not profess to be acquainted, and I imagine that the only person in a position to advise us on that point is the Chancellor himself.
    I hope this problem will be approached in this Committee to-day without that curious prejudice which I have seen in communications outside. I have every reason to believe that the oil interests have been exceedingly busy. I got a most interesting free lunch the other day, when a friend of mine, a great friend whom I have known for years, asked me to lunch. I knew that he had some connection with the oil industry. There was another gentleman there, who was exceedingly well informed on this subject; we had a very good lunch, and they tried to persuade me how misguided I was, but they were not successful. I do not blame them. It was a perfectly legitimate form of friendly bribery and corruption of the kind to which we are all subjected from time to time, but when we accept such bribery and corruption, we must be very sure we still keep our wits about us. I have observed letters written to the Press containing precisely the same kind of misleading material that I find in this document. I do not blame the oil interests for being busy with propaganda to save themselves. They do not want to see the total amount of petroleum imported into this country diminished owing to the fact that we are producing in this country an alternative spirit. Naturally they do not want that, and they are doing something which is quite legitimate in seeking to sell as much imported petrol as they can.
    Unfortunately, the British Empire is poor in petroleum, the bulk of our supplies of which must come from foreign sources, and I rejoice that on the previous Clause the Labour party did all they could to support the principle of reducing to some extent our dependence upon

    1169
    foreign sources. I hope the coal interests will not take a narrow view on this matter. There is plenty of room for them and for power alcohol. After all, in any event we shall have to import the bulk of our requirements for a very long time to come, and in the most favourable circumstances I cannot imagine coal and Scottish shale being able to provide us with more than a tenth of our requirements, so that it would be unfortunate if the coal interests in this House, because they regard power alcohol as a competitor to some extent, were not prepared to support those of us who think that this production should be maintained in this country and, within limits, increased.
    I fully realise the problem of the Chancellor. These duties, now producing £58,000,000 or thereabouts, represent a very important prop to the Treasury in these days, and the right hon. Gentleman is right, if he sees that particular production, entirely exempt from taxation, making great inroads in his revenue, in saying, "I cannot afford, from the point of view of the revenue, to allow this to go scot-free," but in protecting his revenue he ought not to destroy the production, and my plea with him to-day is this: He is right to impose on the production of this alcohol a measure of duty in order that the revenue will not lose unduly. On the other hand, he should not impose it at the full rate, because in that way he will destroy the production in this country.
    7.28 p.m.
    Mr. Amery: I think it is a matter of general agreement in this Committee that in so far as we can liberate ourselves from complete dependence on external sources of so important a fuel as petrol, we ought to do so; and we did accept that principle just now with regard to the production of substitutes from our indigenous mineral resources. It seems no less important to liberate ourselves, in so far as we can do so, by the use of vegetable resources, whether indigenous or imported, and I might mention that even to the extent that we rely on imported vegetable produce for the creation of this power alcohol, we are drawing upon a much wider range of production and one of which we have much larger facilities within our own Empire, than in dependence upon oil which is largely produced in foreign countries. In any case we are dealing with this simple position, that a
    1170
    new industry, which after many experiments and failures seems to have arrived at the right technical method, has in the last year or two been making marked strides. It promises to give steadily increasing employment and, indeed, to hold out some hope of ultimately displacing foreign petrol to the extent of something like 15 per cent. That is a clear advantage, both from the specific point of view of our dependence on foreign sources for this important fuel and, more generally, from the point of view that we are developing a British industry, which, as my hon. Friend pointed out, does not differ from many other industries in relying to a substantial extent on imported raw materials.
    The suggestion is that that progress should be stopped or severely checked in what is called the interests of the revenue. The whole point that I wish to make to the Committee is that that is an entirely false view to take of the interests of the revenue. The answer to that point of view was given very effectively a few minutes ago by my hon. and gallant Friend the Minister for Mines, when he said that preference was a question not of loss of revenue or subsidy, but of non-collection of a duty. It seems to me that it is in the interests of the revenue not to collect a duty if the collecting of that duty interferes with the development of national production and, therefore, with the development of all the sources of revenue upon which, in the long-run, we have to rely. Surely nothing could be more short-sighted than, for the sake of the immediate collection of revenue in respect of one particular tax, to check that national production upon which the revenue from all our taxation depends. My right hon. Friend who was representing the Treasury when we first brought this matter up and has now been translated to a higher sphere, used certain figures of the extent of loss which he anticipated—I think greatly exaggerated, and almost fantastic figures.
    Even if they were true, the figures of the loss of revenue on that particular tax would be the measure of the development and progress of the industry and, therefore, of the revenue which the industry would yield to Income Tax, Surtax, National Defence Contribution and wages. Just like any other industry, it would yield a far larger amount in the long run than anything

    1171
    that the Chancellor would lose in respect of that particular tax. I was glad to note that at the end of the Debate my right hon. Friend was so impressed by the strength of the arguments on this issue that he promised on behalf of the Chancellor that the matter would receive most careful consideration. It is a matter to-day, in principle at any rate, that vitally affects the whole future of our revenue. There was a time when the total burden of taxation was insignificant as compared with the national wealth, and when the natural consideration that influenced any Chancellor of the Exchequer was the convenience of collection and the completeness of the collection of any particular tax at issue. That is not the point we have to consider to-day. We are confronted with the fact that we have a total national expenditure of £1,000,000,000, or more if we include municipal and local expenditure. That vast expenditure, representing fully one-quarter of the total national production, shows no signs of being likely to diminish in future, whereas the production on which it is based may be menaced by many circumstances in our own economic situation and that of the world outside.
    Surely, in these conditions, the one thing on which the Chancellor of the Exchequer must keep his eye is strengthening the national production. No tax should be considered by him, however convenient its collection, if in any way it is likely to discourage national production. No tax should be rejected by him, however inconvenient or however small the revenue which it may collect, if its incidence contributed to stimulate the encouragement of national production. That is, after all, the principle we decided just now on Clause 2, and I hope that the Chancellor will be consistent to the extent of adopting the same principle with regard to the present Clause. I entirely agree with my hon. Friend that in so far as he can conveniently collect more revenue without checking further the development of this industry, there is no objection, but the Chancellor should maintain a preference to the amount that is essential to what ought to be his major purpose—the encouragement of production. Subject to that, if hecanincidentally draw some trifle of revenue from this industry, by all means let him do it, but let it not be done at the sacrifice of what
    1172
    ought to be the major object of every Chancellor to-day, namely, the promotion, strengthening and developing of our national industries.
    7.39 P.m.
    Mr. L. Jones: Every speech delivered this afternoon seemed to deplore the need for taxation, and the two speeches that we have heard on this Amendment have adopted the same trend of thought. I appreciate that the Chancellor's main concern in framing his Budget is to find the revenue to meet the expenditure of the country, and I, for one, support him in the proposal contained in this Clause for that reason in the first place. In the second place, I think that the fact that power alcohol has been free from this duty for so many years has given it considerable preference in the competitive market over other fuels. The hon. Member for South Croydon (Mr. H. G. Williams) suggested that this was a new industry which the Chancellor should encourage. Both the speeches we have heard contained a plaintive appeal to the Chancellor not to discourage a new type of industry. In 1931–32 there were produced in this country 18,331 gallons of power alcohol. In 1938–39 it is estimated that the production will be 9,333,000 gallons. That figure is arrived at from the amount which the Chancellor hopes to get from this duty.
    I suggest that it is a little absurd to suggest that this industry requires very much encouragement in view of the remarkable progress it has made during the last few years. The hon. Member for South Croydon suggested that this was a good opening for a home industry and that it might do good to certain other supplies of raw material produced at home. It is remarkable that for the last six or seven years the bulk of the raw materials used by this industry has been imported, most of it from foreign sources. The suggestion that the industry will do wonders for British raw materials, therefore, is not borne out by the facts and experience of the last few years.
    Mr. H. G. Williams: Will my hon. Friend agree that steel made in South Wales from Spanish ore should pay the same duty as imported steel?
    Mr. Jones: I should be glad to discuss steel with my hon. Friend at another time. For the time being, I want to keep to the subject on which I am

    1173
    addressing the Committee. In 1936–37 only 7.9 per cent. of the raw materials used in the manufacture of power alcohol in this country was home-grown. Very little of the remainder was from Empire sources. The hon. Member for South Croydon asked for the continuance of this protection to power alcohol. It is obvious that this duty which the Chancellor has included in the Finance Bill is essentially a revenue-raising proposal. The hon. Member for South Croydon seems to have forgotten that all petrol made in this country from imported crude oil pays the full rate of duty. Why should power alcohol have an advantage over other types of petrol? The right hon. Gentleman the Member for Sparkbrook (Mr. Amery) mentioned that some of the raw materials were from foreign sources. As a matter of fact, a large tonnage of crude oil imported for manufacturing petrol in this country comes from Empire sources. In particular, I would mention Trinidad.
    It is suggested by the hon. Member for South Croydon that some great blow will be given to this industry if the Chancellor insists on carrying through his proposal. In view of the fact that only 12 or 15 per cent. of alcohol is used in this petrol mixture, the effect of the proposal will be to increase the cost of production of power alcohol by one penny per gallon. It is still open to the power alcohol people to develop or to produce their alcohol for industrial purposes, and they do so at the present time in huge quantities, because alcohol used for industrial purposes is free from duty. References have been made also to the fact that certain preferences have been given to petrol manufactured from coal and shale. In connection with that the hon. Member for South Croydon thought it was desirable for this country to do what it could in the direction of self-sufficiency in petrol supplies. He was careful to avoid reference to the fact that in wartime it may be essential for us to have it for commercial aviation or for the Royal Air Force. I understand that his tune has been changed entirely since the discussion on this subject a few weeks ago. Power alcohol is not used for commercial aviation and blended petrol is not acceptable by the Royal Air Force. When we talk of petrol made from coal and shale and the preference which is given by the Chancellor in his proposals, it must be borne in mind that that was
    1174
    not intended to assist petrol as petrol, but was intended to assist the coal and shale industry. The power alcohol industry, in so far as it uses molasses, is assisted because that raw material is subsidised in the beet sugar industry to the extent of £2,000,000 per year.
    There is one other point, which I wish particularly to bring to the notice of Members representing mining constituencies. In the First Schedule there is a stipulation that when home production of motor fuel reaches 20 per cent. of home consumption figure the guaranteed preference to oil from coal will decrease by 1d. per gallon, with further decreases for every 5 per cent. increase in production. This must be a matter of some concern to those who are interested in the production of oil from coal. This power alcohol is blended with petrol to the extent of 15 per cent. During the last few years there has been a considerable increase in the production and consumption of power alcohol. If the tax which the Chancellor has proposed is withdrawn there will be a still further considerable increase in the production of power alcohol, and very shortly we may find that it amounts to 15 per cent. of the petrol consumed in this country. If power alcohol is responsible for 15 per cent. and the maximum set up in the Schedule is 20 per cent., there will only be 5 per cent. left for oil from coal—if it is to retain the preference—whereas at present there is produced from coal, shale and other home products as much as 7 per cent. Therefore, those interested in the production of petrol from coal and shale will have to be very wary of the proposal in this Amendment.
    The hon. Member for South Croydon noted that a number of references had been made to the Excise privilege which the power alcohol industry was receiving at the present time, and suggested that the 8¾d. was perhaps but little in excess of the increased expenditure which the producers had to incur. A good number of us think that the Chancellor might easily have reduced the 8¾d. When the 8¾d. was first agreed upon this was a small industry, and it is obvious that the cost of the process which it was essential for them to carry out to meet the demands of the Excise authorities must have been considerably more, per gallon, than

    1175
    it is, per gallon, at the present time now that the output has been increased so largely, and so I suggest that the industry already has a considerable preference on that Excise allowance, and I appeal to the Committee not to accept the Amendment. It would be absurd to say that this preference should be given to power alcohol if it reacts to the detriment of the production of oil from coal.
    7.48 p.m.
    Major Owen: I rise to support what my hon. Friend the Member for West Swansea (Mr. L. Jones) has said upon this Amendment, and I am in the happy position that on this occasion, at least, I am able to support the Chancellor of the Exchequer in placing this duty upon power alcohol. As the hon. Member for West Swansea has already said, there has been an enormous increase in its production within the last few years. In 1931 the production was only 18,381 gallons, but last year it had risen to 6,369,758 gallons, while this year the Chancellor estimates that 9,330,000 gallons will be produced. During those years the producers of this alcohol have had a special opportunity to make exceptional profits. There have been no Custom duties imposed on it, no tax of any kind, and, as other speakers have said, it has had the benefit of the 8¾d. Excise allowance. With such help it has made enormous strides. The hon. Member for South Croydon (Mr. H. G. Williams) said of power alcohol that it is a motor fuel which is not petrol. I think he is very much mistaken. He must know perfectly well that power alcohol is used only in conjunction with petrol, and at the outside there cannot be more than 15 per cent. of power alcohol added to petrol if the mixture is to be of any value as a motor fuel. Therefore, we have still to depend to a very large extent upon imported petrol. As he is in favour of Protection and Preference, why is it that he and the other supporters of this Amendment have not put down an Amendment to secure this preference of 8¾d. for the crude oil which is brought into this country from our own Empire and refined here? Why have they not proposed that there should be a preference for oil produced in our colony of Trinidad?
    Mr. H. G. Williams: Some years ago I tried to persuade some of the oil interests
    1176
    that it would be a good thing to refine in this country; but they do not want to incur great capital expenditure, and therefore the whole of the vested oil interests are overwhelmingly opposed to it. I should like to make them do it, but, unfortunately, I cannot.
    Major Owen: The hon. Member says that he is opposing the great oil interests.
    Mr. Williams: Certainly.
    Major Owen: If he thinks it is of benefit to the country to oppose them on that issue why does he not oppose them on the other?
    Mr. Williams: One battle at a time.
    Major Owen: Apparently he gives way to the big oil interests in one instance and in the other instance he dares them to do their worst. That is typical of the inconsistent attitude of those Members who are constantly asking for Protection for everything.
    There is one other aspect of this matter which has not been put forward. It was argued when this matter was first raised that if we produced molasses or power alcohol in this country we should be making ourselves more secure in time of war, but what is the position? Out of 10,000,000 cwts. of molasses which we imported into this country last year only about one-fifth came from our own Colonies. The 10,000,000 cwts. of molasses would require two and half times the amount of shipping tonnage which would be needed for the quantity of petrol. How are we going to spare that tonnage in time of war? It has been claimed that by manufacturing power alcohol here we should have a source of supply within our own country during war, but surely the right hon. Member for Sparkbrook (Mr. Amery) and the hon. Member for South Croydon know perfectly well that we cannot afford to use potatoes to produce alcohol in time of war, because they would be needed for food. The whole thing is really an attempt to try to deceive this Committee into thinking that the power alcohol industry is a poor struggling industry which can hardly make both ends meet, but by the admixture of 15 per cent. of power alcohol with 85 per cent. of petrol it has been able to make enormous profits, yet the moment the Chancellor says, "I should like a little of those profits" it begins to squeal. I have not the

    1177
    slightest sympathy with this Amendment, and I hope the Committee will reject it.
    7.55 p.m.
    Mr. Gledhill: I desire to support the Amendment and I do so following upon representations submitted to me by a large firm in my constituency. This firm have just had plans passed for the erection of a large power alcohol production plant and they inform me that the sudden imposition of this tax means that those plans will have to be scrapped.
    Mr. J. Griffiths: What is the name of the firm?
    Mr. Gledhill: The Trent Oil Products, Limited. The plans had to be passed by the Department of Customs and Excise and were only passed shortly before this imposition was introduced. The firm told me that they have made an offer to the Government to take over the plant, because if they went on with it themselves they would be mulcted in a severe loss. They are not prepared to go on with their plans for the purpose they have in mind, which was the mixing of power alcohol with petrol to produce a spirit of high octane value, the ethyl petrol of the well known imported brands. I wish to put that point to the Chancellor of the Exchequer and ask him to give it his further consideration, so that this firm may not be mulcted in a heavy loss. I submit that they are entitled to the same protection as we have given to those dealt with under Clause 2.
    7.58 p.m.
    Mr. Dunn: I rise to oppose this Amendment, because this proposal not to treat power alcohol on the same lines as ordinary petrol is dealt with for purposes of taxation has been viewed with very grave concern, especially after a study of the reports of the Petroleum Storage and Finance Corporation. I cannot understand the position taken up by the hon. Member for South Croydon (Mr. H. G. Williams). He was good enough to tell us that he took lunch last week with the oil companies, but he was not good enough to tell us that the week before he may have been taking lunch with the Petroleum Storage and Finance Corporation. Whether that was so or not I do not know, but it is fairly obvious that so far as the Member for South Croydon is concerned—and I am glad he is back in the Committee again—on this occasion he has
    1178
    a leg in each camp. I have been in the House only since 1935, but I have noticed that every interest of this kind seems to have seized upon the hon. Member for South Croydon. I remember on the Moneylenders' Bill—
    Mr. H. G. Williams: The hon. Member is under a misapprehension. I am very glad to say that I have never had recourse to moneylenders.
    Mr. J. Griffiths: Perhaps they have had recourse to you.
    Mr. Williams: No.
    Mr. Dunn: Those people have been successful in spoiling the Hire Purchase Bill, to a very large degree, and they had as their main advocate the hon. Member for South Croydon (Mr. H. G. Williams).
    Mr. Williams: On a point of Order. I do not mind having my leg pulled reasonably, but when the hon. Member makes a statement which he knows must be completely untrue it is time for me to say something. The Hire Purchase Bill was completely altered by the original proposer dropping 18 Clauses and substituting 12 new ones, as a result of negotiations in which I played no part whatever.
    Hon. Members: Hear, hear.
    Mr. Dunn: Some hon. Members said, "Hear, hear" to that, but the hon. Member for South Croydon will remember that he played an important part at every stage of the discussion of that Bill. We find him again now the chief advocate of the poor people who manufacture power alcohol.
    Mr. Gledhill: Why not?
    Mr. Dunn: The hon. Member might have told us a little more about the poverty of the people who were responsible in no small measure for financing, and probably assisting in the erection of the io important distilling companies in this country, and who, last year, paid a dividend of no less than 344 per cent.; and he would have the Committee believe that it is a wicked shame to ask corporations of this kind to contribute to the requirements of the country. It seems a scandal and a shame for good democrats and Tories, and people who are prepared to defend the country under all conditions,

    1179
    to be those who are begging the Chancellor of the Exchequer to allow to companies of that kind rebates in respect of petrol tax. The hon. Member pointed out that there was an Excise rebate of 8¾d. a gallon, and he said that the only advantage the companies would get would be, I think he said, equal to 1d. per gallon, after they had dealt with the registration process.
    Mr. H. G. Williams: I must really protest. The hon. Member has constantly made reference to me and, without any validity, put into my mouth words which I have not used. I never made any reference to a rebate. I must ask him to conduct the Debate in the normal way and without making false quotations.
    Mr. Dunn: That is the hon. Member's interpretation.
    Mr. Williams: I must ask for your protection, Captain Bourne. The hon. Member quotes statements which he alleges I made when I have made no statements of that kind. [An HON. MEMBER: "See it in the OFFICIAL REPORT."] I never made any statements about 1d. per gallon in my speech.
    Mr. Dunn: If I have misrepresented the hon. Member, I apologise.
    Mr. Williams: Thank you.
    Mr. Dunn: I understood the hon. Member, when he was dealing with this Excise Duty, to make reference to the fact that the only advantage that companies of this kind really got out of it was equal to 1d. per gallon, but if that is not his interpretation—
    Mr. Williams: I have tried to explain to the hon. Member, but perhaps he did not understand. The Excise rebate is 1d. That is made with the Excise authorities, and the people are subject to conditions as to the conduct of their production. Certain limitations have imposed upon them heavy expenses. You find exactly the same thing in the match industry, which is liable to a revenue duty. The 8¾d. was originally calculated as equal to the extra expense incurred. Therefore it is not a rebate, an advantage or a subsidy, if the sum was correctly calculated. The hon. Member does not seem to appreciate the significance of the rebate. At no stage did I make a reference to 1d.
    Mr. Dunn: Let me pass on to the real point which I wanted to make. The Excise rebate is 8¾d. and the exemption from tax, up to the time when the Chancellor proposed this tax, was 8d. per gallon, making in all is. 4¾d. per gallon, to companies of this kind, who made enormous profits last year equal to 344 per cent. Then they have the cheek and audacity to come to this House and ask to be allowed a special privilege. It is perfectly monstrous that the claim should come forward and I am glad that the Chancellor of the Exchequer has had the courage, in this period of national emergency, to insist upon a reasonable contribution from petrol companies as from other people.
    I would ask the Chancellor of the Exchequer to take the country into his confidence when he replies on this Debate, and to tell us exactly the ramifications of those people, so that the country may know exactly where it stands. If he will do that, I am certain that there will be a better understanding of the position than there is to-day. Only one wish I would express, because most of what I intended to say has been covered by a previous speaker; I am satisfied that if the Excise rebate on petrol taxation amounting to is. 4¾d. per gallon had found its way into the coal-mining industry, which has got into serious financial difficulties—there is no 344 per cent. dividend being paid in it—and is waning very rapidly, there being fewer men employed to-day than there were in 1936—
    The Deputy-Chairman: Coal does not come into the question of power alcohol.
    Mr. Dunn: I was making a comparison to show that if the same rebate had been passed on to the coal industry as has been passed on to the industry to which we have been referring, it would have meant a step forward in the production of oil from coal compared with the position at the present time.
    8.9 p.m.
    Sir Adrian Baillie: I should have thought that the replies given by the Chancellor of the Exchequer and the Financial Secretary to the Treasury when this matter was raised in the Budget Debate, would be sufficient to deter further attempts on the same lines. My hon. Friend the Member for South Croydon (Mr. H. G. Williams) made, as the gravamen of his advocacy of the

    1181
    Amendment, that the duties were protective. He will recollect that the duties were never intended at the outset to be protective but to be revenue duties.
    Mr. H. G. Williams: Which duties?
    Sir A. Baillie: The duties on petrol and hydrocarbon oils. My hon. Friend claims that if his Amendment is not carried, the protection which the power alcohol business has received will cease and the business not be possible. As far as these duties are primarily revenue duties, it is apparent that the rapid increase in consumption of this power alcohol, free from all duty or tax, must gravely endanger the revenue received from the petrol tax. It has been mentioned on more than one occasion that the company most concerned is sheltering behind the accidental and unfair taxation, and has made vast profits because of that shelter. I cannot believe that the taxation which is presently to be applied to that concern, if this Clause stands part of the Bill, will penalise them so vitally as to affect their further development.
    Another point made by my hon. Friend was that he hoped no one would bring forward the argument that power alcohol was produced from imported raw material. Well, I will make that point, but not for the reasons which he expected. Power alcohol, being produced from an imported raw material, is not entitled thereby to any more favourable treatment than petrol produced from imported crude oil. That should be obvious in logic. If the Chancellor of the Exchequer were to desire or were to be persuaded that the £44,000,000 which he hopes to get from the tax would be more equitably raised from other sources, that would be one thing; but so long as this tax is essential to his revenue, not only all petrol, wherever it is found, but all substitutes for petrol, must be taxed equally. I do not count the petrol which we get here from oil or shale because those sources are to a large extent non-expandable, or hydrogenated petrol, the preference on which is given merely for the benefit of research work.
    Surely it is clear that the policy of the Government in this matter is not to attempt to promote self-sufficiency in petrol but to give reasonable assistance to the coal and oil industries, on lines recommended by the Falmouth Committee. I am interested in these matters;
    1182
    I have been politically interested for a long while. In the last Parliament I represented a constituency which was not only a coal-mining but a shale-mining constituency. Reference has already been made on a previous Clause to the benefit which this tax has conferred upon the shale-mining industry in West Lothian and Midlothian. I fought this tax, but to-day I hope that nothing will be done to whittle down the value of it to the shale-mining industry and to the coal- and oil-mining industries at present being developed in this country. It is because I fear that if the power alcohol production of this country were to continue to receive these benefits it would weaken the benefit to our coal-and oil-mining industries, that I hope that the Chancellor will not swerve from his equitable purpose because of the claims which have been put forward—if I may allude to the hon. Member for South Croydon (Mr. H. G. Williams) again—and by the vociferous objections of vested interests.
    8.15 p.m.
    Mr. Radford: A number of references have been made during this discussion to one company which manufactures an alcohol blend of motor spirit. The company in question is one of which I am a director, and although it was not my original intention to take part in this Debate, as I had intervened already at two different stages, once on the Report stage of the Budget Resolutions and once on the Second Reading of the Bill, I feel I must reply to some of the things which have been said this evening. On both occasions I made it clear that I was not a disinterested party, but I felt that, where one is interested and reveals one's interest, the fact that one has knowledge which one can contribute makes it necessary to take part in the Debate. Since when it became a crime for a company to make a good profit, I do not know. I must confess that, on the Second Reading of the Bill, I was astounded when my right hon. Friend the Chancellor of the Exchequer had no reply at all which he could vouchsafe to my speech except—I do not want to be unfair or offensive—what I felt was rather a sneering reference to the fact that the company with which I was connected had made very handsome profits in the past year, which he described as being more than no per cent. on the company's share capital.
    Sir J. Simon: I should be very sorry if my hon. Friend thought for a moment that my reference was not quite fair. The reason why I did not deal at greater length with his speech in the Debate on the Second Reading was, frankly, that it did not seem to me that, in the Debate on the Second Reading of the Bill, to which but a single day had been given, very much time ought to be spent on what was essentially a speech on one detailed Clause in the Bill. With regard to my reference to the profits of this company, I have no objection to the making of profits which are properly earned, and my reference was purely in answer to the suggestion that, if this tax were imposed, someone or other was going to be ruined.
    Mr. Radford: I am much obliged to my right hon. Friend. I did not feel that I was entitled to hear his decision on this question of a duty on power alcohol on the occasion of the Second Reading of the Bill, but, as my right hon. Friend the Member for Sparkbrook (Mr. Amery) has pointed out this evening, on the Report stage of the Budget Resolutions a promise was made by the then Financial Secretary to the Treasury that he and the Chancellor of the Exchequer would reconsider their proposals in this regard in the light of the further information which they had then acquired, and I well remember that my right hon. Friend the Chancellor of the Exchequer bowed in acquiescence and agreement with the undertaking then given by the right hon. Gentleman who is now Secretary of State for Scotland. I remember how glad I was to see that graceful bow which my right hon. Friend made in support of what the Financial Secretary was promising.
    I am sorry that the hon. Member for Rother Valley (Mr. Dunn) is not here at the moment, but I heard his suggestion that it would be well if some light were thrown on this subject. As regards the vague talk that there has been about the company making a profit of 340 per cent., I would point out that that is on a small amount of deferred capital in is. shares, and is a very different matter from 340 per cent. on the total capital of the company. Other Members of the Committee have expressed a wish that a little light should be thrown on this subject, and I certainly consider that it is due
    1184
    to my hon. Friend the Member for South Croydon (Mr. H. G. Williams), and to others who have spoken in favour of a reduction of the duty, that I should supply that light. The first point I would make is that, while the capital of this company, as my right hon. Friend has said, is nominally £475,000, it has also a reserve fund of £350,000, which does not rank for any dividend, although it helps to provide the profits. The capital, therefore, is not £475,000, but £825,000. The profits that the company has made during its nine years of life have averaged £104,000 per annum. The profits that it made last year were entirely exceptional, and amounted to about half the total profits made in the nine years. Moreover, that money was not made, as has been stated, out of the alcohol blend; not more than a quarter of the company's business was in this alcohol blend, which is known on the market as Cleveland Discol. I wish that some of those hon. Members who have been so free with their innuendoes and sneers had remained in their places, so that they might hear the truth and see a little light.
    Mr. J. Griffiths: I sat by the side of my hon. Friend the Member for Rother Valley (Mr. Dunn), who has been called out of the Committee, and I saw the newspaper cutting from which he quoted an article in the "Daily Express." It was given very big headlines, and I presume the attention of the hon. Member has already been called to it.
    Mr. Radford: I am much obliged to the hon. Member. I saw what I think is best described as the contemptible and scurrilous article in question. I was brought into particular prominence in it, although there are some 1,200 shareholders in the company There was nothing really said in the article except mere tittle-tattle which was beneath contempt, and which I treated with the contempt it deserved.
    The references which have been made to the making of huge profits out of the sale of this alcohol blend are utterly erroneous and incorrect. I know that very influential oil interests have been very active in this matter, and, when it is not oil interests who are speaking, it is those who are interested in coal and do not wish to see power alcohol getting any share of the preference that is going,

    1185
    to be given under my right hon. Friend's present Bill. I am not imputing motives or making any charge; I am stating a fact. I have heard one hon. Member speak already who, apart from those who may have been briefed by oil interests, is a director of an oil company himself, but I am not going into that; we each have our own methods of doing business, and mine is to tell the House at the outset that I am interested. I have gathered not so much from this Debate as from private conversations that Members have had with me on this subject, the views that are held with regard to it. I have been told, "What your company has done has been to blend alcohol with petrol, and, because the alcohol bore no duty and the resultant mixture was sold on the same basis as pure petrol, the company has made pots of money."
    Mr. Lyons: Hear, hear!
    Mr. Radford: I am very glad that my hon. and learned Friend says "Hear, hear," because perhaps I may be able to disabuse his mind at any rate. There are about five companies who do this blending of petrol and alcohol and the reason why the company with which I happen to be connected has alone been brought into prominence in the Debate is because it happens to be the only public company among them, and, therefore, the figures of the others are not known. Also, that company does the biggest proportion of this blending. In our blend the proportion of alcohol which has borne no duty costs us far more than the petrol plus duty that is also contained in the blend. It is not an economy to put in alcohol which is duty-free; we should have made more money if petrol alone had been used. We do not make this power alcohol; it is made by distilling companies, from whom we buy it, arid tha price which we and all the other four or five companies who are doing this have had to pay for power alcohol, although it has been free from duty until 2nd May, was much higher than the cost of petrol plus the 9d. duty.
    Therefore, so far from this blend making lots of money, it is just the other way about; if we were not blending, but were selling pure petrol, we should make far more money, even after paying the 9d. duty. There is another point that I should like to make, because, although it is not the business of the House, I do not like
    1186
    to hear these remarks made, and should not like any Member of the Committee to go away with a false impression. Not more than a quarter of this company's business during the year in question was in alcohol blend. The rest was in straight petrol, and the conditions under which exceptional profits were made had nothing to do with the blending of alcohol, but were due to the relative price levels in the markets of the world and the retail price here, plus freights, which might go up or down.
    It is grossly untrue and unfair to make these statements and charges which hon. Members have made, based, in some cases, on inadequate briefing. Hon. Members from the Opposition Liberal Benches have been peculiarly active in this regard. [HON. MEMBERS: "They are not here."] They are not here now; but they have been as active as anybody. As my right hon. Friend the Chancellor of the Exchequer stated—I think it was on the Second Reading—the cost to any company which was blending alcohol with petrol of the proposed 9d. duty would amount to a little over 1d. a gallon. Fifteen per cent. of 9d. is 1.345d. I think that I can take the Committee into my confidence to this extent, and say that 1.345d. per gallon exceeds the profit that is made. That is the answer to these inspired figures which have been given by hon. Members. I felt it incumbent on me to answer these innuendoes with regard to the blending of alcohol with petrol, and in particular so far as they relate to the company with which I am associated.
    8.27 p.m.
    Mr. Hely-Hutchinson: I hope the Chancellor will not yield on this Amendment. The duty to which it relates is imposed solely in the interests of revenue. Let us consider it wholly from that point of view, without reference to its effect on manufacturing. Let us assume that the effect of imposing this duty would be to put an end to the manufacture of power alcohol in this country. The result would be that my right hon. Friend would get 9d. a gallon on imported alcohol, and he would save in addition the 8¾d. which he has to hand out on the alcohol manufactured in this country. Therefore, it would be an attractive proposition for the revenue. But what evidence is there that the effect of imposing this duty will be to kill manufacturing in this country? No argument

    1187
    has been adduced to show that it will. My hon. Friend the Member for South Croydon (Mr. H. G. Williams), who introduced the Amendment to reduce the duty to 4½d., himself admitted that 4½d. was a "shot." For anybody with the encyclopaedic knowledge of my hon. Friend to come before this House with nothing but what he admits is a guess, was surprising. It shows how consistent he is. He cannot have had luncheon with anybody on the other side in order to get the necessary information. He spoke about legitimate forms of friendly bribery and corruption, and reminded me of the American lobbyist who complained that "some of these politicians will not stay bought."
    For my part, I invited one of the vested interests on one side to have a drink with me, and I invited one of the vested interests on the other side to have luncheon with me. As a result of what I learned, I came to the conclusion that there was no justification for the removal of the duty now proposed. It is wrong to suppose that all the effect of this duty will fall on those companies such as that with which my hon. Friend the Member for Rushholme (Mr. Radford) is connected. There is the question of the profits of manufacturing as well as distributing. I am not prepared to support these figures in any detail, but I have been told that the all-in manufacturing costs of manufactured power alcohol in this country, after crediting the 8½d. a gallon received as rebate, amounts to something like 5½d. a gallon, and that that product, produced at a net cost of 5½. a gallon, is sold to such companies as that to which my hon. Friend the Member for Rushholme has referred at some such price as 1s. 2d. a gallon. Then his company comes along, and ekes out a precarious existence by selling it at 1s. 6½. a gallon.½
    Mr. Radford: Has my hon. Friend forgotten that the garage filling men have to live, and also the cost of deliveries over 30, 40 or 5o miles?
    Mr. Hely-Hutchinson: I appreciate that. I did not mean to imply that his company was making 4½d. a gallon profit; 4½d. a gallon is the gross figure with which he has to meet all the charges of the business. It is enough to suggest that this will not kill the industry in this
    1188
    country. Therefore, I do not think my hon. Friend the Member for South Croydon, and my right hon. Friend the Member for Sparkbrook (Mr. Amery) should weep these "hot, unnecessary tears."
    Mr. Amery: It was never suggested that the duty would kill the industry. The suggestion was that it would prevent development which was in the interests of the country.
    Mr. Hely-Hutchinson: If the industry will go on and the right hon. Gentleman will succeed in collecting the extra revenue, I think everybody will be satisfied.
    8.34 p.m.
    Mr. Lees-Smith: My hon. Friends and I have also had some discussions with people interested in this matter. We did not approach the topic with any prepossessions, either one way or the other, and it may be of interest to the Committee if I state the conclusions to which these discussions have now led me. There has been a good deal of discussion about this rebate of 8¾d. a gallon. It is fairly clear that now that rebate confers a very considerable advantage on this industry, something equivalent to a protective duty. This is a raw material and—this is my answer to the right hon. Gentleman the Member for Sparkbrook (Mr. Amery)—it has got this particular form of protection. A duty of 10 per cent. or 15 per cent. is about the average for other raw materials in this country, and this is in a better position that that which it ought to occupy.
    The argument has been adduced that if this special exemption were not allowed to continue the industry would be killed. The right hon. Gentleman the Member for Sparkbrook repudiates that, but I took down the actual words of the hon. Member for South Croydon (Mr. H. G. Williams), who is not now in his place. He certainly said that the chances are that production will not continue unless this special exemption is permitted. That argument has really been destroyed. There is only one company of importance concerned, and that company has succeeded in making profits equal to the whole of its paid up capital. We have had the most remarkable figures given by the hon. Member for West Swansea (Mr. L. Jones) that in 1932 the output was

    1189
    18,000 gallons and in 1938, 9,000,000 gallons. It therefore seems impossible for anyone seriously to suggest that an industry with this spectacular increase will not continue its production. I have noticed a considerable change in the arguments put before the Committee to-day. It is argued that there is a parallel between the special concessions given in respect of the production of oil from coal at Billingham, the shale oil industry and the low temperature carbonisation process.
    Mr. Radford: And benzole.
    Mr. Lees-Smith: And benzole. There is no parallel. It is no argument at all to say that the whole purpose is to encourage an industry to use indigenous raw material. This industry uses molasses as its raw material, 90 per cent. of which comes from abroad, three-quarters of it from outside the British Empire altogether. Therefore, there is no parallel. The real parallel is the treatment given to petrol made out of imported crude oil. That is not petrol made from an indigenous raw material but from an imported raw material, which is exactly comparable to power alcohol made from imported molasses.
    Colonel Baldwin-Webb: Would it alter the position if this raw material could be home produced vegetable matter—potatoes, for instance? It is possible that this sort of thing might be developed and might be the means of encouraging the agricultural industry to supply home produced vegetable matter.
    Mr. Lees-Smith: I will reply to the question of the hon. and gallant Gentleman after I have concluded the point I am making. The parallel is between power alcohol made from imported molasses and power alcohol made from imported crude oil. The removal of this exemption is exactly consistent with the whole plan adopted in regard to the production of petrol in this country. In reply to the question of the hon. and gallant Gentleman the suggestion now is that, at a time of national emergency, we should not depend upon molasses at all but upon potatoes. I should say that potatoes would be required for food. I remember everybody telling us that potatoes saved the nation during the War. It is a mistake to suggest that our man-power should be diverted to making this petrol from potatoes when it can be
    1190
    imported in very great quantities from abroad as long as we command the seas, and we have a Navy far more formidable than it was in 1914 compared with the Navies of the rest of the world.
    Colonel Baldwin-Webb: I do not suggest for a moment that that should apply only to war time conditions. I think that in peace time, also, we should help the agricultural industry and help employment here by using home produced vegetable matter, such as potatoes and other materials.
    Sir A. Baillie: Does my hon. and gallant Friend realise the uneconomic cost of producing power alcohol from potatoes, which is £60 a ton, as compared with £5 a ton when produced from imported molasses?
    Mr. Lees-Smith: This industry is not the hypothetical industry that the hon. Member opposite seems to imagine. I cannot see why he should desire to put thousands of pounds into the hands of an existing company. I have seldom heard a case so completely met in debate as has been the case of the hon. Member for South Croydon.
    8.42 p.m.
    Sir J. Simon: Perhaps I may intervene at this stage to say a word or two because, as my hon. Friend the Member for South Croydon (Mr. H. G. Williams) told the-Committee with great frankness and straightforwardness, when he first raised this matter and produced a number of complicated arguments, I or the Financial Secretary undertook that the matter would be looked into further. I have done my best to look into it with care, and, I can assure my hon. Friend, with complete impartiality. I have come to a very clear conclusion, and perhaps the Committee will allow me to state how I arrived at that conclusion in my own way. I may be forgiven if I state one or two elementary things necessary to an understanding of why I take the view that the Clause should not be altered. Petrol has been taxed in this country since the year 1928. It was undoubtedly a revenue tax. If there ever was a revenue tax it was the tax on petrol. It produces a great deal of money and is very important for the Chancellor of the Exchequer and for the country. At that time, in 1928, the production of power alcohol was infinitesimal. I will give the figures.

    1191
    In 1928–29 the total consumption of power methylated spirit, which is denatured alcohol for use in motor engines, was 15,000 gallons. That was at the time that we first started the tax on petrol. It climbed up in this sort of way. In 1932–33, as my hon. Friend the Member for West Swansea (Mr. L. Jones) said, the figure was 85,000 gallons, by 1935–36 it was 914,000 gallons, in 1936–37, it was 2,925,000 gallons, and the figure for last year is approximately 6,500,000 gallons.
    I think that on what we call ordinary principles, the arrangement that you would expect to be made for a tax for revenue purposes would be to put a tax on both commodities, that is, an equal tax upon say, both a tin containing petrol and another tin containing an alternative motor fuel, which is a mixture of petrol, 85 per cent., and some other material. That would seem the natural thing to do. It was not done in 1928 because the amount of power alcohol produced was so trumpery that it was not worth doing; but the quantities having grown according to the scale I have mentioned. I came to the conclusion, when I had to review this difficult subject of petrol taxation in connection with the Budget, that I was not justified any longer in leaving power alcohol out. The idea was simply this, that if you are engaged in collecting tax from the motorist there is a certain difficulty in saying that if he orders mixture A, it is to bear the tax on the whole contents of the tin, whereas if he orders some rival mixture it has to bear tax on only a portion of the tin.
    My right hon. Friend the Member for Sparkbrook (Mr. Amery) was right when he said that the production of power alcohol has made marked strides. I have been marking some of the strides. My right hon. Friend thought there was a prospect that it would ultimately displace petrol to the amount of 15 per cent. That is a very optimistic estimate, and my hon. Friend the Member for Rusholmc (Mr. Radford) agreed that it was, but if my right hon. Friend was right when he said that it will ultimately displace petrol to the extent of 15 per cent., then, surely, the Treasury were also right in taxing it, and they ought not to have been rebuked for doing so, because if 15 per cent. of the existing petrol consumed is to be replaced by
    1192
    power alcohol it means that you are replacing 200,000,000 gallons of petrol. Two hundred million gallons of petrol taxed at 9d. a gallon represents £500,000. Therefore, if we allowed the present state of things to go on we should reach a point where not only would the country lose a great deal of revenue but we should have the industry coming forward and, not unreasonably, saying: "You knew perfectly well that this development was going on, and now we consider that we have a vested interest and are entitled to carry on our competitive business without being taxed in respect of its alcohol quantity." Constituents of my hon. Friend the Member for Halifax (Mr. Gledhill), we have been informed, were starting to build a distillery in the hope that they would be abl e to produce this stuff, and that it would be untaxed. The prospect that this taxation was likely to happen must have been apparent to persons who were following the trade.
    Mr. Gledhill: The plans might have been held up.
    Sir J. Simon: I do not think they have any complaint against the authorities. It has been pointed out to the firm in question by the officials that if it is a case of distilling alcohol there are many ways in which alcohol is used, and I hope that what they have contemplated doing will be no loss to them.
    Then it is said, but I think the answer given by the right hon. Member for Keighley (Mr. Lees-Smith) was complete, that in imposing this new tax we ought to follow precedent and arrange for a measure of protection for power alcohol. I think I am right in saying that my right hon. Friend the Member for Sparkbrook went so far as to say that we ought to aim at freeing ourselves as far as we can from external sources of fuel. That seems to assume that you can use power alcohol and nothing else, but alcohol is simply an element that is added to petrol, not always petrol of the very highest quality. In order to use the power alcohol and to turn it into motor fuel considerable quantities of oil will still have to be imported, but we all hope very much that in the course of a few years we shall find a much more effective way of producing the oil from indigenous material.

    1193
    It has been said, quite rightly, that we do not give a preference to light oil which is refined in this country from crude oil, if the crude oil is imported. That is the true analogy to quote when it is suggested that we should give a preference to power alcohol because it is distilled in this country. The hon. and gallant Member for The Wrekin (Colonel Baldwin-Webb) asked a very natural question, a very practical one, whether it is not possible to imagine that this power alcohol might be produced from other vegetable materials, but, as the right hon. Member for Keighley said, we must look at the facts as they are and not be too fanciful. What are the facts? First, power alcohol, that is denatured alcohol, which is mixed with oil in order to make a motor fuel, is made from imported molasses. Last year there was not a pint of it that was made from home-produced molasses. There are such things as home-produced molasses, a by-product of the beet sugar industry. Those molasses are used economically for various purposes, such as the production of yeast and cattle food. The reason why home molasses are used for these purposes whereas imported molasses are used for distilling power alcohol is because, economically or chemically, it is found to be the best way of using these two sources of supply. I do not think the House of Commons would be justified in giving a further preference to the home-grown sugar industry, and I cannot conceive that it would be a reasonable thing in the circumstances to say that power alcohol, if it is distilled from home-produced molasses, which in fact it is not, shall escape duty or shall be given a lower duty, but that if it is produced from imported molasses it shall pay a higher duty.
    Molasses is a very bulky substance. Something like 3½ tons of molasses are required to produce one ton of the ultimate product, and for reasons which have been pointed out by the hon. Member for Maidstone (Sir A. Baillie) I do not think it is a practical proposition to use potatoes for the purpose of producing alcohol. If hon. Members consider the economics of the subject they will realise that there is very great difficulty in that suggestion. Moreover, there would be very great administrative difficulties in drawing a distinction between alcohol which has been distilled from home-produced material and alcohol produced from materials imported from abroad.
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    I have done my best to state the case quite impartially and I have considered it impartially. I was willing to believe that I had made a mistake and that there ought to be some modification, but we have to look at the matter from the general interest of the public. I have explained to the Committee the considerations which have made me think that the proposal which we make is right. I do not believe that it will have the effect of stopping the production of power alcohol, which is being produced at the greatly increased annual rate which I have explained and is not likely to be blocked because of the duty being imposed.
    Colonel Baldwin-Webb: Has my right hon. Friend considered what is taking place in other countries where they are endeavouring to produce power alcohol from home-grown vegetable matter?
    Sir J. Simon: I am much obliged to the hon. Member. I know that in some countries in Europe quite considerable advance has been made in producing alcohol from home-grown materials. It is a matter which is being closely examined by those concerned, but I cannot give any more detailed information about it now. I hope I have satisfied the Committee that my approach to this subject has been quite reasonable. I should have been perfectly willing to make this duty lower if there seemed to be good and sufficient reasons, and I am not taking up this attitude because I deny that there are cases in which there ought to be in the interests of the country as a whole a measure of protection. There are, but I do not believe on the investigations I have been able to make, that any case has really been made out for the present Amendment and I hope the Committee will decide to accept the proposal as it is in the Bill.
    Amendment negatived.
    Clause ordered to stand part of the Bill.
    Clause 4 ordered to stand part of the Bill.

    CLAUSE 5.—(Increased customs duties on tea.)
    8.57 p.m.
    Mr. Barnes: I beg to move, in page 5, line 16, to leave out "increased".
    During the discussions we have had on the first three Clauses we have heard the voice of large oil corporations pleading their case to the Committee, and they

    1195
    have not lacked keen advocacy. This Amendment does not raise an issue concerned with wealthy corporations, but it brings to the notice of the Committee the position of wage earners in relation to the additional duty on tea. I do not begrudge the Chancellor of the Exchequer a relief from the arduous duties of sitting on the Front Bench, but I should have preferred to have had his attendance when discussing this Amendment rather than when we were discussing the oil duties. I also noticed that during the previous discussions there was a complete absence of any appeal to the patriotism or a sense of obligation of these large and wealthy companies towards the State and the programme of rearmament, but I observe, on the other hand, that when a particular tax is being placed upon the wage-earners their patriotism is flattered and we have acknowledgments of their high sense of obligation and duty. That was the case when the Chancellor of the Exchequer was imposing this additional 2d. per lb. on tea. He ended his comments in this part of his Budget speech by saying:
    "I believe that there is a sense of willingness and even a pride in the humblest homes to take a share in this rearmament outlay."—[OFFICIAL REPORT, 26th April, 1938; col. 66, Vol. 335.]
    There was no suggestion that the wealthy oil magnates, whether they are producing power alcohol or oil from coal, take any pride in sharing this national obligation of rearmament, but we get an appeal to the humblest homes in the community. It is one of those vague, sentimental patriotic appeals. What are the humblest homes which are being called upon to accept this additional burden? I presume the Financial Secretary will not differ from this classification. I should say that they are homes where the breadwinner is unemployed, where the old-age pensioner lives, and a widow who is trying to bring up her children on the widows' and orphans' pension. I suppose they would be classified among the "humblest homes." We are all familiar with what we know as the charwoman. My experience has been that if you investigate the lot of the average charwoman you will find that she is very often a woman suffering under a considerable handicap. She may have an invalid husband, she may have lost her husband and have no pension. In any case the
    1196
    majority of women who go out working, having reached a mature age themselves and having to carry on their own domestic work as well, do not do so for the pleasure and the joy, but usually because of difficult circumstances. I suppose that type of person will be classified among the humblest homes in the country.
    Then there is the casual labourer, the farm labourer, and others who exist on very low and intermittent wages. These all, I suppose, would come under the Chancellor of the Exchequer's descriptive phrase, and will be proud to pay this additional burden towards rearmament. I want to say in all seriousness that I think the Chancellor of the Exchequer might have left words of that character unsaid. I do not think it improves the public life of this country for persons in prominent positions, even when they are imposing, sincerely as they may think, necessities of this kind on the country, to use language which I can only describe as cant and humbug.
    The Deputy-Chairman: I do not wish to restrict the hon. Member unduly, but I think I ought to point out that if we have a general discussion on this Amendment it must not be repeated on the Clause standing part of the Bill.
    Mr. White: Further to your Ruling, Captain Bourne, will you allow a discussion on the question of the preference to take place in the general discussion?
    The Deputy-Chairman: The Amendment in the name of the hon. Member for East Wolverhampton (Mr. Mander) and the hon. Member for East Birkenhead (Mr. White) clearly cannot be moved unless the word which it is now proposed to leave out is deleted. Therefore, it is obvious that any discussion on that should take place on this Amendment.
    Mr. Barnes: I was presuming, Captain Bourne, that following the precedent that had been established on previous Clauses, we should have a wide discussion on the first Amendment—
    The Deputy-Chairman: If the hon. Member will forgive me for interrupting him, I wanted to make quite clear that he realised that.
    Mr. Barnes: The next point I wish to make with regard to the statement of the Chancellor which I have quoted is that

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    the wage-earners generally are already contributing very heavily to the cost of rearmament. They are paying revenue taxes, on many of the necessities which they consume. They are paying through imposts under the Import Duties Act, levies on imported meat, subsidies in connection with wheat and sugar beet, and artificial prices arising from the marketing schemes. Therefore, it appears to me that there is no point in the Chancellor's statement that a contribution of this kind is equitable in any way in connection with rearmament. In the near future the same category of people will very likely have to pay a further 4d. a gallon on milk, penalised because of the fine weather. In making this case against the Tea Duty, I do not do so because I fail to recognise that other sections of the community are also paying heavy taxation at the present time. I recognise that completely, but there is a difference. The 3,000,000 persons who come within the Income Tax schedules, however difficult or onerous may be the burden of that taxation, are not individually or economically distressed as a result of it, and no hon. Member would dare to argue that they are. But the Committee should recognise that the people to whom the Chancellor referred when he spoke about the humblest homes in the community have a genuine, day-to-day and continuous struggle to make ends meet and to obtain the bare necessities of life. Therefore, it does not seem to me to be relevant to argue in favour of the Tea Duty by saying that all classes in the community are bearing heavy taxation.
    I urge the Committee to accept this Amendment for the following reasons. The Tea Duty is too heavy in proportion to other commodities. During the lifetime of the present Government there have been three imposts; first 4d. a lb., then an additional 2d. a lb., and now a further 2d. a lb. While the Tea Duty is one that it is easy for the Treasury to collect, it is unequal in its incidence in relation to the prices. The sum that it will yield on this occasion, namely, an additional 3,000,000 in round figures, is not a material factor in a Budget of £1,000,000,000. I submit that if a further £3,000,000 is necessary, it could be obtained with less hardship than is caused by placing the additional tax on tea. I have never considered that it is the responsibility of any hon. Member
    1198
    of the Opposition to say how taxation should be levied; that is the responsibility of the Government. However, I think I am entitled to make the general point that we are certainly living in a period in which there is expanding expenditure on all forms of pleasure, recreation, entertainment and luxuries. There has in recent years been a phenomenal growth in expenditure on all forms of competitions, pools and other exciting ventures. I feel that if public opinion could be consulted on a tax of this description, the vast majority of wage-earners would consider it more equitable that sources of this nature should be tapped, rather than there should be an additional tax on tea. Again I recognise that Income Tax is high, but the Financial Secretary cannot say that to raise another £3,000,000 from the Super-tax payers would reduce any of them into the category of the humblest homes of this country.
    Further, there is the question of prices. The prices of the bulk of the tea that is sold in this country range from 1s. 10d. to 2s. 6d. a lb., and not a great deal of tea is sold much beyond the prices of 3s. or 3s. 6d. a lb. I draw the attention of the Financial Secretary to the following percentages of burden. On tea at 2s. a lb., the percentage of the burden of the tax amounts to 33⅓ per cent. of the price of foreign-blended tea, and 25 per cent. of the price of Empire tea; at 2s. 6d. a lb., 27 per cent. of the price of foreign-blended tea, and 20 per cent. of the price of Empire tea; at 3s. a lb., 22 per cent. of the price of foreign-blended tea, and 16.6 per cent. of the price of Empire tea. On tea at 5s. a lb., the tax burden is 13 per cent. of the price of foreign tea and 10 per cent. of the price of Empire tea. It will be observed that the cheaper the price of tea, which the lower paid people are compelled to buy, the higher the percentage of tax.
    Captain Wallace: I apologise for interrupting the hon. Member, but I would like to make one thing clear. The hon. Member is quoting various figures, which are correct; but I think the Committee ought to realise that go per cent. of the tea which is purchased by everybody, including the working classes, is Empire tea, and that it is really only the lower figures that are relevant.
    Mr. Barnes: That may be the case, but it does not alter my main point, which

    1199
    is that the higher percentage falls on the lower-priced teas. I am quoting the two extremes. I thought the consumption of Empire tea was in the neighbourhood of 80 to 85 per cent., but even accepting the right hon. and gallant Gentleman's figure, I would point out that on tea priced at 2s. per lb. the percentage on Empire would be 25 per cent, or a quarter of the price, whereas taking the other extreme of tea at 5s. a lb., it would be only 10 per cent. or one-tenth of the price. I think I am entitled to make the point that the fact that this duty is easily collected by the Treasury does not justify the imposition of a heavy burden like this on such a commodity—a burden which works out so unequally in its incidence.
    When the Chancellor was imposing an additional 6d. in the £ on the Income Tax, we saw one of those instances of financial jugglery, if I may so call it, in the proposal to increase the wear-and-tear allowance to machine industry. I would end on this note—that we ought to consider the wear and tear suffered by the average housewife in carrying out her rather toilsome duties, especially when she is bringing up a large family. All who are familiar with working-class life know that it is to the cup of tea that the worn-out mother very often turns for a little quiet solace. I am not inclined as a rule to stress points of this description, but when I listened to the Budget statement, in which the country was asked to raise nearly £1,000,000,000 in taxation, and took into account all the increases in taxation which were proposed, I felt ashamed to be a Member of a House which could not find an additional £3,000,000 without putting an added duty on the cup of tea.
    9.18 p.m.
    Mr. White: We have already had a number of discussions on this duty and I welcome this further discussion as it will afford an opportunity to hon. Members opposite to explain, vocally, their support of this proposal which hitherto has displayed itself exclusively in the Division Lobby. I think, with one exception, the only speeches in defence of this tax have been delivered from the Front Bench. Those discussions have been extremely useful, and the speech to which we have just listened was an excellent summary of the grounds for the opposition to this
    1200
    tax, which is a wholly bad tax. There is nothing to be said in its favour from the point of view of the consumer, the taxpayer or the producer, whether in the Empire or elsewhere, and I hope no one will allow himself in future to make use of the phrase quoted by my hon. Friend about the pride which would be felt in the humblest homes in paying this tax.
    It is, of course—although the fact is not recognised by the Chancellor of the Exchequer—a partial tax. It is one of those "partial affections" from which, at the beginning of our proceedings, we pray daily to be delivered. The people who are certain to pay are the poorest of the poor. They will pay in a higher proportion than anybody else. They cannot escape because there is no cheaper tea to be obtained, and they use more of it. The right hon. and gallant Gentleman the Financial Secretary in an earlier discussion said that the average consumption was only 9¼ lbs. per head of the population and that consequently the tax would only amount to 1s. 6d., or some such amount. That is an average for the whole country. But there are many households, where pride is supposed to be felt in the payment of this tax, in which the only drink, excepting cold water from the tap, is tea, and the average consumption in those cases is very much above 9¼ lbs. per head. Therefore, from the point of view of the consumer it is a bad tax. It is unjust in its incidence, and no defence can be made for it on that ground.
    It is bad from another point of view. A few years ago the price of common tea at auction was 4½d., 5d. or 6d. per lb. When it was proposed in those days to put on a tax of 2d., arguments could be brought against it—no doubt the same arguments as we are using to-day—to show that it was a very serious matter. But to follow up that imposition with a further addition at this time when the price of common tea at auction is over is. per lb. is a much more serious matter. Hon. Members should bear in mind that when the last impost of 2d. was placed on tea, the price of common tea was less than it is to-day. The necessity for producing cheaper blends then concentrated buying upon cheaper qualities of tea and those qualities of tea were gradually forced up in price until, on top of the advance of 2d. per lb. in duty, there was a further advance of 2d. per lb. in the retail price. There was, in effect, a rise of 4d. per lb.

    1201
    It remains to be seen what will be the effect of this further increase in duty upon the price of the tea.
    The imposition of the duty this time was followed by an immediate rise of about ½d. per lb. in the price of tea at auction. Subsequently, the price fell away again and it is now, I think, somewhere about where it was when this additional duty was imposed or perhaps ½d. less. We have to remember that in these days the tea market is under control and the prospect of the release of further supplies may prevent a rise in price such as took place two years ago when the duty was raised by 2d. I hope the Chancellor of the Exchequer and the Financial Secretary will look into this matter and keep a watch on the situation, and if it is found that the price of common tea is being raised to an extent which may cause a further rise in the price of packet and blended tea, that they will consult with the control committee and take steps to see that supplies are released which will prevent any increase in price.
    This is also a bad tax from the point of view of the grower of tea, because the consumption of tea at the present time, unless possibly in the Indian market and to some extent perhaps in America, is not expanding. A considerable publicity campaign has been set upon foot, costing a very considerable sum, in order that the decline in consumption of recent years may be checked and, if possible, expansion brought about. So far that campaign has not led to anything more than retarding the decline. Tea has to compete in a way that it did not some years ago with an immensely costly and effective campaign of advertising in favour of all sorts of competing beverages, and there is no doubt that, from the point of view of the producer of tea, the increase in the tax is a very unfortunate circumstance. I should like to ask if any representation has been received from the Government of India with regard to it. I notice that meetings have been held in Calcutta and in Ceylon on the subject. It is not calculated to increase the enthusiasm between ourselves and tea-growers abroad that this increase, which is felt not to be fair or reasonable, should be placed upon this article.
    I have placed on the Paper an Amendment designed to equalise the duty as
    1202
    between Imperial and foreign-grown tea. There is a growing inclination and desire to do away with the disadvantage that accrues from the preference upon teas grown in India and Ceylon. It is an assumption to which everyone agrees at first sight that if you give an article a preference it must help it, but in the case of tea it is quite clear that to many growers and dealers there is a positive disadvantage arising from the preference. Several chairmen of companies in London have at their annual meetings expressed dissatisfaction with it, and have said it was time that the disadvantage put upon Empire tea by the preference should be done away with. I agree with them, because all that has happened is that the tea that has been displaced in the London market by the preference has displaced tea grown in India and in Ceylon in the Australia, American and other markets. I have had taken out figures showing the direction of tea from India and Ceylon since the preference was introduced. In 1929–30, the last year in which there was no preference, India and Ceylon tea almost monopolised the market in Australia and had a very much larger share of the United States market. Now they have not got those markets because they have been replaced by tea from Java and Sumatra and cheaper tea from Formosa and China. I have here a report on the working of the season 1937–38 with regard to the effect of Imperial preference and the direction of the exports from India and Ceylon. Referring to the Australian and New Zealand market it says:
    "Exports to these markets show a further slight shrinkage. India suffers under a crippling disadvantage in Australia as compared with Java through the effects of Empire preference in the United Kingdom, while the development of the export market to New Zealand is impeded by the continued preferential treatment in that Dominion in favour of Ceylon."
    Turning to the United States, it goes on:
    "Although exports to this country from India direct show a falling off, the total imports of tea into the United States show a useful increase as compared with the previous year. Here, again, the Empire preference in the United Kingdom adversely affects the expansion of India's tea trade with America."
    With regard to Egypt:
    "Being essentially dependent on low-priced tea, the Egyptian trade goes to the market offering tea at the cheapest rate. With the incidence of Imperial preference India has to

    1203
    a large extent lost this trade, and her exports to Egypt this season were almost negligible."
    The conclusion to which I come, after reading the opinions of those who grow and sell tea, is that the matter calls for further examination. I get the impression that the Treasury is imperfectly acquainted with the nature of the trade and the effects of the tax. If it is wished to place a tax upon tea which shall affect the whole community equally fairly and justly, it can only be done by taking control of the whole trade and see that one quality is sold at one price. For these, and other reasons, I support the Amendment.
    9.28 p.m.
    Mr. Silverman: I intervene only in order to deal with references subsequently made to my own speech in the discussion that we previously had on this matter. The hon. Member who has just addressed the Committee said that Members opposite have not spoken in support of this Duty. I think that is not quite the case. Two Members on that side who followed me made speeches and, if it is true that they did not advance many arguments in support of the Duty, at any rate they made some references to those who spoke from this side. I am sorry that neither of them is in his place to-night, but that is no fault of mine. I think the Committee knew very well that this matter would be debated again to-night, and I am afraid that I assumed in my innocence that those who had taken the trouble to refer to others on that occasion would be here on this occasion.
    One Member, the hon. Member for Elland (Mr. Levy), said that I had previously made contributions to the Debate and that I appeared to make my appeal, not to reason, but to passion and emotion. The hon. Member for Bolton (Sir J. Haslam), later in the Debate, said that it was always a poor thing in support of a case to overstate it, and that I had appeared to lead the House to believe that the imposition of this duty would cause the heavens to fall. I do not think the heavens will fall, and I do not think I said anything to lead anyone to believe that I thought the heavens would fall. With regard to the statement of the hon. Member for Elland that I was addressing my appeal to passion and emotion, to what else can you address your appeal in a matter of this kind? I most pro-
    1204
    foundly believe that this tax is a thoroughly mean and despicable thing. I do not know whether anyone thinks that that is an appeal to passion and emotion, or that it is possible to weigh up nicely, in terms of arithmetic or logical finance, whether or not a matter is mean and despicable. I think people are so constituted that they either recognise the meanness of a thing at sight or do not recognise it at all, and if there are people who do not think that to go to the poorest people in the land and take some of the very few coppers out of their pockets, and to cover that by some appeal to their patriotism or some statement that they are very proud that their destitution should be rendered still more destitute—if there are people who do not see how mean and despicable that is, I am afraid I cannot help them.
    I have no apology whatever to make for expressing my own view that it is in the highest degree a mean and despicable thing, for which no rational justification can be advanced or has yet been advanced. Ex hypothesi, you are dealing with people who are not merely poor, but who are either over the borderline of destitution or just upon it. You are asking them, in a Budget of £1,000,000,000, to find an extra £3,000,000 by an extra tax upon an article which is at one and the same time an article of food to them and in many cases their only luxury. You are charging it in a manner which makes the poorest pay most, which makes the lowest grade and quality of the article pay the highest tax, and which makes the charge greater in inverse proportion to the quantities which are bought; that is to say, those who must buy their tea in ounces and two ounces will pay more than those who are able to buy their tea in quarter-pounds, half-pounds, and pounds. These, I think, are facts; they are not an appeal to passion or to emotion, and they are not, I think, an overstatement of the facts as they are admitted to be. If those are indeed the facts, is there anyone whose social experience is so inadequate that he cannot realise that what is being done here is to impose an extremely heavy burden upon backs that are already overloaded and upon people who will find it a very great hardship indeed to add to those hardships which already they undeservedly bear?

    1205
    While dealing with that point, may I deal with one argument or, if not an argument, a piece of controversy that was used, I think, by the Chancellor himself, and which he thought to be conclusive against the opposition to this tax? He went back into the previous history of the tax, to an occasion on which the tax was reduced, and he quoted from speeches then made on this side of the House to show that that reduction in the duty was not received with gratitude but that people on this side regarded it as a very small thing indeed. With that kind of cold logic which loses all its appeal by being a purely formal logic, divorced of all reality, a kind of logic which appeals to the Chancellor and is his political stock-in-trade, he said that because on that occasion a reduction of the duty was not received with gratitude, an increase of the duty to the same extent must necessarily be a small thing. With the greatest respect in the world to what I admit to be an intellect higher than my own, I think that was the purest nonsense in the world.
    I have not the gift of the right hon. Gentleman's lucid expression, but I hope I have made myself clear. It may well be that if you already have an overburdened back, a very small increase will break it, whereas to take a very small amount off will make no appreciable difference, and that is the point. It is quite true that if you were to reduce the Tea Duty by 2d., you would not have introduced a great deal of improvement into the lot of the poorest and humblest people in this land, but if you add a further burden to it, you do an amount of harm that is greater, by reason of the heaviness of the burden which you are inflicting, than would be the corresponding relief if it were removed. It is Mr. Micawber's proposition all over again, that 6d. in the pound is a very small item, but 6d. above your pound of income is enough to put you in very great difficulty, whereas 6d. just under the pound leaves you very much where you were. I hope that, in whatever reply is made to-night to this discussion, that argument at any rate will not be used, that because a relief of 2d. in the pound was not thought to be a very great thing, it therefore follows that an increase of 2d. in the pound may not be a very great additional burden.
    1206
    The right hon. Gentleman, in winding up on that occasion, dealing with the point about the pride with which these destitute people will increase their burden in order to increase the amount of armaments in the world, which will spell their own destruction, said he thought they took a very great pride in their country. Of course they do. Who should take a pride in their country more than the people who make it? Certainly they do. They make the clothes that we wear, the houses that we live in, the factories in which our goods are produced, the ships which carry them to the four corners of the world, the docks; they provide the service behind the shop counters, the work in the factories, the laundries, the bakeries, the dressmaking establishments, the haircutters' shops. All the people who make life possible and decent, who for the best years of their lives have contributed to what measure of civilisation this country possesses, and who at the end of those years are left destitute with 10s. pension, which is not sufficient to relieve their destitution—certainly they are proud of their country. Is it for us to be proud of picking their pockets in those conditions? The question is not whether they are proud to make the contribution, but whether this House ought to allow them to make the contribution, and whether any self-respecting community would not without the slightest hesitation raise this paltry £3,000,000 in some other way which would leave no sting or shame behind it, and which would enable us to balance our Budget without feeling that the lot of the hardest-hit people in the country had been made a little harder.
    9.47 p.m.
    Mr. Barr: The case for a decrease in this impost has been so well stated -by my hon. Friend the Member for East Ham, South (Mr. Barnes), the hon. Member for East Birkenhead (Mr. White), and my hon. Friend the Member for Nelson and Colne (Mr. Silverman), that I do not propose to detain the Committee long. There is an element of unreality in those of us here who know so many of the comforts of life, and know so little of the distress with which every day the poorest of the poor are confronted as to supplies for their tables, trying to estimate what it means for them. The Chancellor of the Exchequer himself paid a tribute to this aspect of the problem when he said:

    1207
    "I well understand that even an extra halfpenny per week is a material and appreciable addition to the expenses of those with the smallest incomes."—[OFFICIAL REPORT, 26th April, 1938; col. 66, Vol. 335.]
    I do not think, however, that the Chancellor, or any of us, fully realise the meaning of a new impost like this on these poor people. Reference was made by my hon. Friend to a charwoman. I knew a charwoman, one of my congregation, who on a Saturday afternoon was left with two halfpennies of which she said she would spend one halfpenny on tea and one halfpenny on sugar. It is a common proverb that "nobody knows where the shoe pinches but he that has to wear it," and we should realise that the poor have a struggle, the awful severity of which is known only to themselves, and that the smallest impost might be an almost intolerable burden to them.
    Reference has been made to the statement of the Chancellor as to the pride with which this impost would be received among the poor when they realised that they were making this contribution to the rearmament programme. I think of some of my poor people—and I have in some respects one of the poorest and most poorly housed constituencies in the country—I think of them now as they are going to drink their tea if not with toast, at least with a toast in these terms: "Here's to the health of the Chancellor of the Exchequer; here's to the Minister of Defence; here's death to Hitler; here's death to Mussolini." But now they are not so sure that there is death in the cup for Mussolini. They would drink their tea and eat their bread with more gladness if the Government had given them occasion to say, "Here's death to unemployment; here's death to poverty; here's death to this house in which we are obliged to live." It is argued that tea is a luxury. It is a commonplace to say that the luxuries of one age become the necessities of another, and that is the position to-day.
    I would emphasise what has been said that the consumer, and especially the poorest of the consumers, pay not only the tax but something more. Here I would like to adduce the testimony of one who is very familiar with the subject, Provost James Paterson, Provost of Milngavie, who is in the tea trade, and who was the Scottish representative on the
    1208
    Tea Control Committee of the Ministry of Food during the War. He wrote to me after the Budget was introduced:
    "During 1929 to 1932 one customer of mine was retailing tea at 6¾d. and 8d. per lb., but these were abnormal prices. In the spring of 1932 tea was being regularly retailed at 10d. and is. per lb., these being the retail standards of the lowest priced teas. To-day the relative prices of these are 1s. 10d. and 2s. per lb., or an advance of is. per lb., showing a percentage increase of 120. This before the present Budget advance. This increase falls particularly hard on the poorer classes as teas in grades above this have not risen in the same ratio, many of them being only advanced by the increased rate of duty, that is, 4d."
    We object to this tax because it is an addition to the imposts on food, and is an indirect tax added to those which are causing a rise in the cost of living.
    We can defend this Amendment with a sense of consistency and loyalty to our own programme. We had an old cry, almost before the days of the advent of the Labour party—"A Free Breakfast Table." It has been loyally pursued by the Labour party from first to last. I should have had more satisfaction if we were advocating the abolition of the tax entirely. It is one of the objects of our movement, and one of those things about which no taunt can be thrown against us. There are very few parties in the State but are guilty of inconsistencies from time to time; at any rate, when we were in office we swept away entirely this impost on food in the Labour Budget of 1929.
    9.54 P.m.
    Sir Arthur Salter: I would like to state a few reasons why the Government should reconsider this proposal from a rather different point of view from that from which most Members have spoken. I do not propose to emphasise the weight of the burden of this increase, because naturally the Government would reply that in a Budget which included taxation on the scale and magnitude of this Budget a tax producing as little as this does cannot constitute a very heavy burden. I suggest the Government should reconsider it, not because the burden it imposes is very high, but because the tax in itself is open to serious objections. I ventured to congratulate the Government last year—and I do so again this year—upon introducing a Budget in which, for the first time for a long period, the proportion of indirect to direct taxation had fallen, and fallen considerably. It is a

    1209
    great improvement upon earlier Budgets, and I think it is a great pity that this Budget should have been marred by an exception which is so unimportant as this from the point of view of producing revenue.
    It is obvious that in comparison with direct taxation indirect taxation operates as an Income Tax inversely graduated, and that is specially true of an indirect tax upon a commodity when the consumption of it, as between rich and poor, is in quantity so nearly equal as in the case of tea, and when the tax is a quantity tax and not an ad valorem tax. The effect of that tax is an inversely graduated Income Tax, with the graduation becoming very steep indeed in the case of the poorer taxpayers. From the point of view of revenue I suppose that this tax was added as a kind of token tax; so much direct taxation having been added, it was necessary to put on this small addition to indirect taxation. I am all in favour of token taxes when the principle to be maintained is a good principle, but in a case like this, where the principle is open to very serious criticism, such a token tax is most objectionable. It is an additional irritation to the taxpayer—the indirect taxpayer—if he feels that he is being taxed not so much to provide revenue as to ensure that he does pay something in view of the very much greater payment—as I admit—to be made by the direct taxpayer. This tax being one which is to a rather exceptional extent even among indirect taxation one that operates, with an inverse graduation, most heavily on the working classes, I earnestly ask the Government to consider whether it is really worth while to persist with it, considering the small amount involved.
    9.59 P.m.
    Mr. R. J. Taylor: I want to add my protest against this tax. I listened to the hon. Member for Oxford University (Sir A. Salter) giving a very involved and intricate description of the difference between indirect and direct taxation, and I am not going to follow him in that, because while the ratio of indirect taxation to direct taxation has to some extent fallen it has not decreased to the extent it ought to have done. We are living in a time when profits are being made at an increasing rate, and the Chancellor could have found the money for armaments by
    1210
    the direct method much more easily than by an impost such as this. Reference has been made to the Chancellor of the Exchequer speaking of the pride that our people would feel in making a contribution towards rearmament. The previous Chancellor of the Exchequer, when he introduced the 2d. duty, though he did not use exactly the same words—because I do not think he would be capable of using the same words as the present Chancellor—used language which meant the same thing. He said that he had placed the 2d. on tea so that the poor people could feel that they were playing their part, doing their duty as regards the rearmament programme for the Defence of the country and of the Empire.
    I notice that those Liberals who have broken away from the old tradition had a conference the other day. The Chancellor was there, and so was the Secretary of State for War. The Secretary of State for War said that we were getting on beautifully with rearmament, that we were spending nearly £1,000,000 a day, though in our opinion it does not necessarily follow that we are getting the goods at that rate.
    At that same time that he was speaking about the humble people of this country feeling that they would want to do their duty, the previous Chancellor of the Exchequer was introducing the National Defence Contribution, and at that, I remember, the spokesmen opposite of the vested interests went On strike. They compelled the Chancellor of the Exchequer to withdraw his National Defence Contribution. They compelled him to make concessions to building societies, to make concessions to every vested interest, but not to any interest in which the working classes were concerned. There was no concession to the cooperative societies nor to any of the other humble people. If my memory serves me aright, the Chancellor only wanted to raise a few millions by National Defence Contribution—I think it was £15,000,000, but never mind the figure—but Members opposite protested that it would produce £100,000,000, and so that National Defence Contribution was withdrawn and a new National Defence Contribution substituted. The present Chancellor estimated that he would get £25,000,000 under it, but he has received only £20,000,000.

    1211
    This duty on tea is to raise £3,000,000, and I say that £2,000,000 or £2,500,000 of that will come from the poorest of the poor. Why did not the Government screw up National Defence Contribution? You would not need to have this impost then, because of the difference between the £20,000,000 and the £25,000,000. This point may not seem much in itself, but we go home every week and mix with our people, meeting the old age pensioners who tell us a most pitiable tale of how, after a long life of service to this nation, they are receiving 10s. a week. They tell us of their struggle to appear respectable in the eyes of their fellow-citizens. We also meet the man of 65 whose wife is not yet 65 and who has only the 10s. a week, and goes to the public assistance committee for the rent. There is the man who served through the War; the medical board always find that his trouble is old age, but he struggles along in most adverse circumstances. This is a heavy burden for such people.
    I have been looking at the Budget income which the Chancellor gets, and I find that he gets £7,000,000 in respect of tea. The outstanding item is sugar, £11,000,000. I turn to another duty, imposed by this Government upon beef and veal; the figure is £3,500,000. If I remember rightly, that money is raised by Import Duty upon chilled meat from the Argentine.
    The Chairman: I would remind the hon. Gentleman that we are discussing the duty on tea.
    Mr. Taylor: I have made my point, Mr. Chairman, which is that if you go through all the items comprised in the enormous sum of £221,000,000 which is raised, you find that the bulk is passed on to the working class and to the poorest of the people. It is a mean and miserable thing for the Chancellor of the Exchequer to raise £3,000,000, and to try to awaken some feelings of patriotism in people who have not a darned thing to fight for. The first time I was in this House, some years ago, the present Chancellor of the Exchequer sat on the Liberal benches, and I remember when he was lambasting the then Chancellor of the Exchequer the right hon. Gentleman the Member for Epping (Mr. Churchill), for raiding the Insurance Fund. My, how you have
    1212
    departed from those Liberal days. When I listen to you, you are now raiding the last penny from the poorest of the poor. I could understand the late Chancellor of the Exchequer introducing a proposal like this. To me, he always looks as cold as the fish for which he fishes, but I cannot understand you, Mr. Chancellor of the Exchequer—[HON. MEMBERS: "Order!"]—leaving your Liberal tradition.
    The Chairman: Less of the "you," please. The hon. Member will recollect that he is addressing the Chair.
    Mr. Taylor: Well, Sir Dennis, thinking of the right hon. Gentleman the Chancellor of the Exchequer, away back in the days when he was not in that position, I should have imagined he would have more kindly remembrance of those whose claims he used to advocate on the Liberal benches.
    10.11 p.m.
    The Parliamentary Secretary to the Treasury (Captain Margesson): I beg to move,
    "That the Chairman do report Progress, and ask leave to sit again."
    I do so in view of the announcement which the Prime Minister made to-day at Question Time.
    Committee report Progress; to sit again To-morrow.

  WAYS AND MEANS.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  DUTIES ON MOTOR CARS, MUSICAL INSTRUMENTS, CLOCKS, FILMS, &C.
  Motion made, and Question proposed,
  "That—

  (1) as from the twentieth day of August, nineteen hundred and thirty-eight, Section three of the Finance Act, 1925 (which imposes duties of customs on motor cars, musical instruments, clocks, films, etc.), and any other enactment which amends or expressly relates to that Section, shall cease to have effect;

  (2) the Treasury shall by order direct that, as from the said date, there shall be charged under Section three of the Import Duties Act, 1932, on all goods which immediately before the said date were chargeable with a duty of customs under Section three of the Finance Act, 2925,

  1213
  an additional duty of such an amount as will, with the general ad valorem duty, amount to the rate of duty so chargeable thereon immediately before that date;

  (3) any such order shall be deemed to have been made under the Import Duties Act, 1932, but for the purposes of Section nineteen of that Act shall be deemed not to be an order imposing a duty of customs;

  (4) Section five of the Import Duties Act, 1932, and Section two of the Ottawa Agreements Act, 1932 (which relate to Imperial preference), shall not apply to any such goods as aforesaid, but all such goods which, but for this provision, would be exempt from the general ad valorem duty and any additional duty shall, as from the said date, be charged with those duties at the preferential rate of two-thirds of the full rate."—[Mr. Oliver Stanley.]

  10.12 p.m.
  The President of the Board of Trade (Mr. Oliver Stanley): I do not think it is necessary for me to take up more than a short time in making plain the general effect of these proposals. Hon. Members will, of course, realise that this Motion is only the first stage, and that, if it is passed, upon it will have to be introduced a new Clause which will contain the full details. A statement on those details will be made more appropriately at that point. However, I think I can, quite broadly, make plain the general effect of this Motion. I do not think I need recall to hon. Gentlemen the long and chequered history of what are known as the McKenna Duties. They were imposed by a former Chancellor of the Exchequer, Mr. McKenna, during the War, and their purpose at that time was supposed to be to prevent the tonnage urgently required for war purposes being used for what were largely luxury imports. The classes of goods affected were motor cars, musical instruments, clocks, films, and accessories or parts of those categories.
  Afterwards, during the first Chancellorship of Lord Snowden, the McKenna Duties were removed only to be reimposed by the right hon. Gentleman the Member for Epping (Mr. Churchill) under the euphonious title of revenue duties. As revenue duties they existed down to the time when, in 1932, the first definite step was taken towards introducing a protective tariff in this country. When the Import Duties Act was introduced in 1932, it had the effect of placing upon all goods, with certain exceptions, a general ad valorem duty of 10 per cent. and, secondly, of allowing the industries concerned to make application to the Import
  1214
  Duties Advisory Committee for an addition to that ad valorem duty. When that Act was passed, these McKenna Duties were omitted from its operation. The effect of this Resolution, if passed, and of the Clause which will be founded upon it, will be to bring that part of our protective system which is now filled by the McKenna Duties into line with the rest of the protective system, and to give to the industries which deal in these commodities the same right that is enjoyed by all other industries in the country of making application to the Import Duties Advisory Committee, the Import Duties Advisory Committee submitting a report to the Government, and the Government, if necessary, submitting an Order to the House.
  It is difficult to think of any convincing argument against such a course. It is now a pure anachronism that these four types of commodities, for a purely historical reason, should be placed on a different footing from other commodities of a very similar character. There is no reason why motor car manufacturers should not be able to apply for an increased duty equally with iron and steel or engineering manufacturers. One can quite see the reason for the exclusion of the McKenna Duties from the Act of 1932. At that time the whole device of the Import Duties Advisory Committee, and the whole machinery of protective duties, was a new, untried and intricate piece of machinery, and where a number of industries were already enjoying, under the existing practice, a protective duty, one can understand why at that time they were left aside on the ground that they had already been dealt with. But that no longer applies, and for some time consideration has been given to the question of assimilating the two procedures, the McKenna Duty procedure, where a duty can only be varied by legislation, and the Import Duties Act procedure, where it can be varied, after investigation by the Import Duties Advisory Committee, by the passage of an Order through the House of Commons.
  It is true that until recently this distinction has been rather of an academic character. There has been no real dissatisfaction in any quarter with the general height of these duties, nor any suggestion that, if the alteration were made, there would in fact be any application to the Import Duties Advisory Com-

  1215
  mittee. But one cannot close ones eyes to the fact that during the last few months this question, which was an academic question, has become one of considerable public importance. Frankly, there has been a great deal of criticism by way of questions in the House, and a great deal of comment in the Press, as to the increased importation of one in particular of the commodities covered by the McKenna Duties. I am not now going to argue the merits, but there is no doubt that there is a question to be resolved. Whether that industry or any others, under this proposal to give them power to go to the Import Duties Advisory Committee, would be able to convince the Committee that there was a case for an increased duty, is clearly beside the point. What my right hon. Friend feels is that the time has come when, if it is thought that there is a question to be determined, these industries should be given the same opportunity of having it determined as is enjoyed by all the other industries of the country.
  Perhaps I might quite shortly explain the actual provisions of the Resolution. Hon. Members will see that it has four Sub-sections. The effect of the first Subsection is to do away entirely with the original Section of the Finance Act of 1925 which re-created these McKenna Duties, and a number of small amendments to that Section which have been made in subsequent Finance Acts in reference to this subject. That alteration will, for a reason which I will explain later, come into force on 10th August of this year. The general effect of the second Sub-section is that, since the duties under the old McKenna procedure are being swept away, duties of exactly the same level will be re-imposed by Treasury Order. There will be, therefore, no immediate practical effect, no immediate change of the incidence of duty. The only result will be, as I explained, to enable these industries to operate under the Import Duties Act, 1932. Sub-section (3) deals with a very small point. Unless some provision such as that was made, under Section 19 of the Import Duties Act, when the Treasury came to lay this Order, to which I have already referred, re-imposing these duties on the same level, it could be done only after an affirmative Resolution of the House. As the House will already have discussed it, both on this occasion and
  1216
  during the passage of the Clause, and as the form of the Order which the Treasury has to lay will have been prescribed in the Clause, we feel it will be a waste of Parliamentary time to demand that there should be an affirmative Resolution.
  Sub-section (4) is a little complicated, because it deals with Imperial Preference. The history of Imperial Preference is as follows: Originally it was laid down that the duty on goods coming in from the Empire should be charged at two-thirds of the rate of the full McKenna Duties. In 1926, I think it was the preferential difference in favour of the Dominions was stabilised for a period of 10 years, which has been since extended by subsequent provision, and will expire on 19th August this year. As a matter of fact, during the period considerable alterations have been made in the McKenna Duties. In many instances they are now below the original 33⅓ per cent., but, under this guarantee, over the 10 years the Dominions were still entitled to a preference based on one-third of the 33⅓ per cent.—a preference, therefore, which, in some cases, when the duty was reduced became of a higher ratio than that of one-third.
  When this guarantee expires, automatically the preferences to the Dominions will all go back to this level of one-third of the old rate. It is proposed, under Sub-section (4) of this Resolution, to lay that down, so that in future the rate charged upon Empire imports will be normally two-thirds of the rate charged on imports from abroad. That, I hope, makes clear the objects and the actual provisions of this Resolution, and I hope the Committee will be prepared to allow the Resolution to pass, in order that on it we may found a new Clause for inclusion in this Finance Bill.
  10.26 p.m.
  Mr. Pethick-Lawrence: The Resolution which is before the Committee, as the President of the Board of Trade has explained, does not of itself make any difference in the import duties in the way of their being imposed on these specific articles. The proposition is a change of procedure. Whereas the duties have been of a certain order under a certain method of procedure, the proposal of the Government is that in future they shall come under a different Act and be liable to change by a different method from what is the case at the present time. We on these benches have on many previous

  1217
  occasions explained our opposition to the method of the Import Duties Advisory Committee. We have taken exception to it on the ground that the House was deprived of an opportunity of adequate debate, and that the duties were imposed n advance of the decision of the House, and further, that, in many cases, the House was not supplied with any information which was at all adequate to enable it to make up its mind on the matters brought under review. I cannot feel that the situation in this respect has changed to-day from what it was when this procedure was originally proposed by the Government in the early days of the previous Parliament.
  We recognise, however, that the procedure the Government adopt with regard to the great mass of the articles which it is sought to protect is one which is, in fact, being invoked, and I do not know that there is any special ground for singling out individual articles for differential treatment. Moreover, there are very special reasons why this procedure is being proposed at the present time. The President of the Board of Trade made some reference to the matter, and it is in the common knowledge of the Committee that the real question is the importation n large numbers of a certain class of motor car to the detriment of the trade in this country. This large importation is being made possible at the present time by a peculiar form of financial assistance. I deliberately refrain from using the word "subsidy," but there is no doubt that considerable financial assistance is being given to enable these cars to compete in our market. What the precise character of that financial assistance is, it will be for someone to unravel and discuss. On the doctrines of pure Free Trade it has always been recognised that where an article enters into competition and is enabled to succeed in that competition by a definite subsidy given to it by the exporting country, the doctrines of pure Free Trade do not necessarily deter the importing country from placing the duty in those individual cases. Therefore, the proposed duty is in accordance with full Free Trade principles. This is a special case, and we on these benches recognise that if we were to oppose the proposal of the Government we should not be merely voting indirectly against a duty on these cars, but we should be
  1218
  voting for postponing the question and not enabling it to be discussed at an early date. In these circumstances, having taken all the matters into consideration, we have decided not to oppose the Government's proposal.
  10.32 p.m.
  Sir Percy Harris: I am surprised at the speech of my right hon. Friend. The very last thing that I wish to do is to generate heat, but I am surprised at the position put before the Committee. The proposition is moved not by the Chancellor of the Exchequer, who is responsible for the change in the method of taxation, but the President of the Board of Trade. I am particularly surprised at my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) for not taking exception to the changeover in procedure. The old duty dates back to 1915. It has, therefore, been in existence 22 years. If there is an urgent problem—the questions that have been asked suggest that it is an urgent problem—the right and proper thing for the Chancellor of the Exchequer to do is to come here with a new Clause in the Finance Bill and to impose an additional duty. If this matter is so urgent that people are being ruined, then let the right hon. Gentleman follow the procedure of the Finance Bill on an ordinary Budget Resolution, rather than the procedure of the Import Duties Act. If there is an inquiry necessary, the right hon. Gentleman is capable of finding a gentleman capable of doing it, or even of referring this matter—
  Mr. Charles Brown: If the Chancellor of the Exchequer adopted the policy suggested by the hon. Baronet, could we have a guarantee that we should have his support and that of his party for the proposition?
  Sir P. Harris: Certainly not, but I want to have a Clause that we can examine. We do not want merely to have to record the decrees of the Treasury, late at night, or in the early hours of the morning, without any power to amend the proposal. That proposition has been put forward in the last five or six years from the Front Bench opposite. What has converted them I do not know; it may be the new dispensation, or perhaps the new co-operation. All that happens is that we have an Import Duties

  1219
  Order presented to us late at night, although I give credit to the Parliamentary Secretary to the Treasury who has done his best to meet us in that respect by bringing forward this Resolution before 11 o'clock, but certainly at a comparatively late hour, all we can do is meekly to confirm or reject. If there is to be a change in the scale of duties, the right procedure is to go through the procedure of the Finance Bill, so that we can alter or amend the Clause as we think fit.
  These particular duties date back for 22 years. This is no struggling infant industry coming into being and calling especially for immediate attention in order to save its existence, nor is it one of the poorest industries. I can understand a strong case for special treatment for the textile or cotton industry which has had to face great difficulties during the last half dozen years, but this is the wealthiest industry in the country. It has had the advantage, except for two years when the Labour party dropped the duty, of this protection for 22 years. It has not only had the advantage of the 33⅓ per cent. duty, but it has had the artificial protection which is given by the horse-power tax, originally framed to keep out American cars which were of high horse power and which gave English motor manufacturers special advantages in the British market. There have been immense profits made out of the industry during the last 10 years. The Morris Company, the Austin Company and the Rolls Company have immense reserves which they may well utilise to assist the industry to meet this new competition.
  I say that if it can be proved that there is dumping—and curiously enough the Board of Trade was rather inclined to resist that suggestion at Question Time—or a conspiracy by a foreign government to ruin an industry, as far as I am concerned I should take no exception to special treatment or a special duty to meet the occasion. But if the Government are convinced that it is necessary to change the scale of duty let them follow the order of procedure of the Finance Act, bring in a new Clause which we can examine on its merits and amend as we think fit. This unsatisfactory and autocratic procedure of import orders is thoroughly undesirable, and ought to be opposed on every possible occasion. I say that the motor industry, which has enjoyed protection now for
  1220
  close on 20 years, which has had exceptional advantages, and which is a wealthy industry having large reserves, certainly should not be given this special privilege of being taken out of the Finance Bill and dealt with under the Import Duties Orders procedure. I think that the Committee which, after all, is the guardian of the public purse, should be jealous of handing over to a committee of three the ancient privilege of imposing taxation, which has been won after years of labour. This is one more case of a new method of taxation which is most undesirable, and to which I object.
  10.41 p.m.
  Mr. H. G. Williams: I know that I speak on behalf of a large number of hon. Members on this side when I tender thanks to the Chancellor of the Exchequer and the President of the Board of Trade for having proposed this procedure which, after all, does not finally commit the Committee or the Government to any subsequent action. It is merely by the chance of the method adopted in 1932 that the protective duties commonly known as the McKenna Duties, after the well known Liberal Chancellor of the Exchequer of that name, were not brought within the purview of the Import Duties Advisory Committee, which was set up to stop that system of logrolling which everybody recognises has sometimes been an undesirable feature of protective tariffs abroad. That system was devised very largely to meet the kind of objection which was from time to time made by the hon. Baronet the Member for South West Bethnal Green (Sir P. Harris). To-night, we all rejoice that at last Bethnal Green, I will not say has crossed the Rubicon, but put a foot tentatively in the Rubicon.
  I wish to thank the Chancellor of the Exchequer. I think this is a method which should be satisfactory to everybody. I should like also to pay a tribute to one or two Members of the Opposition. The hon. Member for Stoke (Mr. Ellis Smith) was, I think, the first hon. Member to draw attention to the recent events. He was supported by the hon. Member for Llanelly (Mr. J. Griffiths), and in a recent Debate, speaking from the Front Bench opposite, the hon. Member for Gower (Mr. Grenfell) pleaded in terms that were clear and unmistakable that what was happening should be stopped

  1221
  or that steps should be taken so that we could stop it. On this occasion, I think the great majority of hon. Members agree that we are facing a situation of a very undesirable character, and that His Majesty's Government should not be unarmed in dealing with this sort of menace. There is one question I wish to put to the President of the Board of Trade. It is a little difficult to understand the significance of all the words in the Resolution, but in the first paragraph there is a reference to
  "any other enactment which amends or expressly relates to that section"—
  that is to say, the section of the Finance Act, 1925. Does that reference cover motor tyres? Hon. Members may have forgotten that under the original McKenna Duties, when a car came into this country, the whole car was dutiable, and motor car parts were dutiable, except the tyres. For reasons which I understand had a significance during the Great War, the tyres were expressly exempted, not on economic but on political grounds. In 1928, the right hon. Gentleman the Member for Epping (Mr. Churchill1), who was then Chancellor of the Exchequer, decided to round off the duties by making the tyres a part of the motor car for the purpose of the McKenna Duties. I should like to ask the President of the Board of Trade whether this scheme will cover motor tyres separately, as well as every other part of a motor car.
  10.44 p.m.
  Captain W. T. Shaw: I wish to congratulate my right hon. Friend the President of the Board of Trade on the action which he has taken for the purpose of dealing with these Opel cars. The difficulty which has arisen in this matter is recent, but in my constituency there is a hardship which is far greater and which has more severely disturbed the people in that district than imports of Opel cars from Germany. I refer to the jute industry. I hope that the Government will take steps to find some way of dealing with that difficulty, so that the jute industry will get some reasonable protection.
  10.45 p.m.
  Mr. Acland: The party above the Gangway has surprised me twice to-day. This afternoon they did not not oppose the guaranteeing of a large sum of public money to a private monopoly, and now
  1222
  they have just told the Committee that here we have something which they hate, and which they have always hated, and yet, when the Government ask for more of it, they do not oppose it. I am particularly sorry because I had special reasons for hoping that the increased duty on motor cars—and that is really what we are considering—would have been brought forward in a different form from those Orders which are usually presented to us after 11 o'clock. I had hoped to move an Amendment to the proposed duty on cars which would have been, I believe, useful as a matter of principle, namely, an Amendment designed to associate some system of genuine public accounting with any industry which claimed the privilege of the duty. That seems a vitally important principle. Since I have been in this House there has never been an Import Duties Order presented to us in a form which enabled an Amendment of that kind to be moved, or which allowed us to attach any conditions as to wages, costings and conditions of labour in the industry, or to make any change at all in the form of the Order. When we began to hear this talk about Opel cars coming in I thought that a proposal for a duty would arise which would give an opportunity of moving such an Amendment and discussing the principle of attaching such conditions to industries which obtained the privileges of a duty.
  I think there is reason to wonder—I will not use the word "suspect"—whether this great motor industry of ours could not make a rather better show as regards its costs if it were really put to it. Very large sums have been given out by the motor industry, but perhaps not quite so large as the public outside has been led to believe, because I understand that every time £2,000,000 is given to some university or other, spread as it always is over seven years, so as to avoid Income Tax and Super-tax, the donor parts with £625,000 of his money, and by parting with that he is able to compel the Chancellor of the Exchequer to part with £1,375,000 of our money. In other words, these people who have been selling these cars and making very large profits are able, at their own sweet will, provided they put up £600,000 of their own money, to direct—at this time when every penny is required for armaments—very large sums of public money into

  1223
  whatever directions they may choose. I believe that in this way the owner of one of our large motor manufacturing industries has directed to objectives which seem good to him sums of money which amounted to the total of the increase in the Tea Duty. I had hoped that when the question of increasing the preferences and tariffs and other privileges of this industry came up we would have been able to discuss and thrash out a proposal for attaching conditions as to costings, and so forth, to those privileges. Of course the Government would have outvoted us, but I had hoped that there would have been an opportunity of raising these matters. Now the Government have come along with this proposal. I do not know whether they read my thoughts, and wanted to avoid any trouble of that sort, but our chance has now been cut away; the party above the Gangway apparently is going to let us down and we shall walk into the Lobby alone against this proposal.
  10.50 p.m.
  Mr. E. Smith: The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) and the hon. Member for Barnstaple (Mr. Acland) have chided our party for the attitude we have taken up. On this issue we are concerned about the people whom we represent and the working classes in general, and we are not letting them down. Many of my hon. Friends will be disturbed because the hon. Member for South Croydon (Mr. H. G. Williams) finds himself in agreement with us. I want to state the position as it affects us. We are living in a capitalist democratic State and we who are relatively young have the privilege of speaking here on behalf of the working class because of the sacrifices made by our ancestors during the past 100 years. Great struggles have taken place and great sacrifices have been made by those to whom we belong for the right of free speech, to establish the principle of collective bargaining and of the right to speak in this House and to build up our party. Owing to the development of monopoly capitalism in certain parts of Europe, and to the fact that they have forged a new political instrument, they are now resorting to practices which have for their object the undermining of established practices in this country. We see staring us in the face a menace to all that
  1224
  we stand for, and to the social services which have been wrung from the Tory party. We look upon this new form of political activity on the Continent as a menace to our lives. Therefore, we are forced to take up this attitude.
  May I remind hon. Members of the position in this country? It is true that the motor industry has been making exorbitant profits, and even within the framework of capitalist democracy we claim that a bigger proportion of those profits should have found their way into the pockets of the employés. Therefore, we say that, if it is right for us on this occasion to take a stand against the menace that is growing on the Continent, we are also right in making a stand for a bigger proportion of the profits of the trades that are receiving protection to come to the workpeople. Because we are acquiescing in this proposal it must not be taken that we are acquiescing in a wholesale policy of Protection. We see the menace in Europe, and what we are hoping is that this House will adopt a more scientific method of dealing with these matters.
  10.55 p.m.
  Mr. Stanley: I rise to answer briefly some of the points that have been made in the Debate. In reply to my hon. Friend the Member for East Croydon—[HON. MEMBERS: "South Croydon!"]—I mean South Croydon; I can never orientate him correctly—I would say that motor tyres were included by a subsequent Act in the category of McKenna Duties, and they will be included in the new Clause.
  Mr. H. G. Williams: Thank you.
  Mr. Stanley: I do not want to interfere in the private fight that has been going on between the United Front on the Opposition. I only want to say to the hon. Member for South-West Bethnal Green (Sir P. Harris) that although he has announced that he was surprised at the speech of the right hon. Gentleman opposite, I was not in the least surprised at the speech that he made. It was exactly what I had expected to hear. To the hon. Member for Barnstaple (Mr. Acland), I feel that my right hon. Friend and I rather owe an apology. I confess that we never realised, when we decided on this procedure, that one of its effects would be to deprive him of the opportunity of making

  1225
  a speech, but the part of it which we have heard this evening has been of very great interest, and now that we know that that would be one of the consequences, when we weigh that against the possible effects on these big industries of giving them the opportunity of presenting their case, we still feel that the advantages of the policy that we have advocated must outweigh the disadvantages to which the hon. Member has drawn our attention, and we must still, therefore, ask the Committee to agree to our proposal.
  10.57 p.m.
  Mr. Bellenger rose—
  Hon. Members: Divide!
  Mr. Bellenger: The right hon. Gentleman had far better have left unsaid what he has just said, and then it might have been possible for some of us to have kept silent. May I say to him and to other hon. Members that I for one am not at all satisfied with the method that the Government are taking in order to combat the menace which my hon. Friend the Member for Stoke (Mr. Ellis Smith) has explained? I am a Free Trader, or at any rate a freer trader, and I am not in favour of indiscriminate tariffs. I realise the special circumstances of this case, and I realise that if methods are to be adopted by foreign Governments such as are being adopted by Germany, we must take special measures to combat them, but I give the right hon. Gentleman warning that he must not expect that this party, or some of us, will support him in every action that he takes such as he is taking to-night.
  There is another side to this question, which my hon. Friend the Member for Stoke has touched upon, as well as the hon. Member for Barnstaple (Mr. Acland), with whom I am in very great sympathy on the point that he has put as to the conditions in these industries that we are protecting. I believe the time will come when the Import Duties Act will itself have to be revised, and very considerably revised, so that we shall not only get a greater measure of protection for the manufacturers and the employers engaged in these different industries, but so that we shall also get more fairness for the
  workers who are engaged in them. May I state my position if it comes to a Division to-night? I shall not support the Government, although many of my hon. Friends may do so. There have been occasions when I have not voted against the Government, for my own reasons, because I have thought that, although I could not support them, I could not vote against them, but to-night, although I realise that they are taking a cumbrous method of combating a very insidious form of competition directed from a totalitarian State, nevertheless I cannot support them in the Division Lobby to-night.
  11.0 p.m.
  Mr. Ede: I desire to associate myself with my hon. Friend the Member for Bassetlaw (Mr. Bellenger). It was a great pity that the right hon. Gentleman the President of the Board of Trade, in answering the hon. Member for Barnstaple (Mr. Acland), should have made it so emphatically clear that we could not avoid seeing that this procedure is adopted so as to avoid discussion on the great vital interests of industry which we regard as fundamental to any consideration of this problem. This is an industry which has to meet a peculiar and novel form of competition from abroad. There are grave doubts, which the right hon. Gentleman himself has voiced from that Box at Question Time and in part of his first speech this evening, as to the exact way in which this dumping is assisted in Germany. It is, therefore, very desirable that this House, in considering the problem, should have as free a hand as possible in dealing with it and in discussing it in a constructive manner. It is clear from the right hon. Gentleman's speech that he is delighted to have achieved the method whereby this can go through on the take-it-or-leave-it method which is associated with the Import Duties Advisory Committee's recommendations. Because of his attitude on this matter I also find myself unable to support the Government.
  Question put.
  The Committee divided: Ayes, 274; Noes, 16.

  Division No. 245.]

  AYES.

  [11.3 p.m.

  Agnew, Lieut.-Comdr. P. G.

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

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

  Albery, Sir Irving

  Anstruther-Gray, W. J.

  Attlee, Rt. Hon. C. R.

  Allen, Col. J. Sandeman (B'knhead)

  Asks, Sir R. W.

  Baldwin-Webb, Col. J.

  Banfield, J. W.

  Grant-Ferris, R.

  Petherick, M.

  Barr, J.

  Greenwood, Rt. Hon. A.

  Pethick-Lawrence, Rt. Hon. F. W.

  Batey, J.

  Grenfell, D. R.

  Pickthorn, K. W. M.

  Beamish, Rear-Admiral T. P H.

  Gridley, Sir A. B.

  Plugge, Capt. L. F.

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

  Griffiths, J. (Llanolly)

  Ponsonby, Col. C. E.

  Beechman, N. A.

  Grimston, R. V.

  Pownall, Lt.-Col. Sir Assheton

  Bernays, R. H.

  Groves, T. E.

  Price, M. P.

  Birchall, Sir J. D.

  Guest, Lieut.-Colonel H. (Drake)

  Procter, Major H. A.

  Bird, Sir R. B.

  Guest, Dr. L. H. (Islington, N.)

  Radford, E. A.

  Blair, Sir R.

  Hall, G. H. (Aberdare)

  Raikes, H. V. A. M.

  Boulton, W. W.

  Hambro, A. V.

  Ramsay, Captain A. H. M.

  Bower, Comdr. R. T.

  Hannah, I. C.

  Rankin, Sir R.

  Boyee, H. Leslie

  Harbord, A.

  Rathbone, J. R. (Bodmin)

  Briscoe, Capt. R. G.

  Haslam, Henry (Horncastle)

  Rayner, Major R. H.

  Broad, F. A.

  Haslam, Sir J. (Bolton)

  Reed, A. C. (Exeter)

  Bromfield, W.

  Hayday, A.

  Reid, Sir D. D. (Down)

  Brown, C. (Mansfield)

  Heilgers, Captain F. F. A.

  Reid, W. Allan (Derby)

  Brown, Col. D. C. (Hexham)

  Hely-Hutchinson, M. R.

  Ramer, J. R.

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

  Henderson, J. (Ardwick)

  Rickards, G. W. (Skipton)

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

  Heneage, Lieut.-Colonel A. P.

  Ridley, G.

  Buchanan, G.

  Hepburn, P. G. T. Buchan.

  Ritson, J.

  Bull, B. B.

  Herbert, Major J. A. (Monmouth)

  Roberts, Rt. Hon. F. O. (W. Brom.)

  Burke, W. A.

  Hicks, E. G.

  Robinson, J. R. (Blackpool)

  Campbell, Sir E. T.

  Higgs, W. F.

  Robinson, W. A. (St. Helens)

  Carver, Major W. H.

  Holmes, J. S.

  Ropner, Colonel L.

  Cary, R. A.

  Hopkinson, A.

  Ross, Major Sir R. D. (Londonderry)

  Cassells, T.

  Horsbrugh, Florence

  Ross Taylor, W. (Woodbridge)

  cazalet, Thelma (Islington, E.)

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

  Rowlands, G.

  Chapman, A. (Rutherglen)

  Hunloke, H. P.

  Royds, Admiral Sir P. M. R.

  Christie, J. A.

  Hunter, T.

  Ruggles-Brise, Colonel Sir E. A.

  Clarke, Colonel R. S. (E. Grinstead)

  Hutchinson, G. C.

  Russell, Sir Alexander

  Clarry, Sir Reginald

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

  Russell, S. H. M. (Darwen)

  Cluse, W. S.

  Jagger, J.

  Salmon, Sir I.

  Cobb, Captain E. C. (Preston.)

  Jenkins, A. (Pontypool)

  Salt, E. W.

  Colville, Rt. Hon. John

  Joel, D. J. B.

  Samuel, M. R. A.

  Conant, Captain R. J. E.

  John, W.

  Sanderson, Sir F. B.

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

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

  Sandys, E. D.

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

  Jones, L. (Swansea W.)

  Scott, Lord William

  Courthope, Col. Rt. Hon. Sir G. L.

  Jones, Morgan (Caerphilly)

  Selley, H. R.

  Craven-Ellis, W.

  Kirby, B. V.

  Shakespeare, G. H.

  Croft, Brig.-Gen. Sir H. Page

  Lamb, Sir J Q.

  Shaw, Captain W. T. (Forfar)

  Crooke, Sir J. S.

  Latham, Sir P.

  Shepperson, Sir E. W.

  Crookshank, Capt. H. F. C.

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

  Shute, Colonel Sir J. J.

  Groom-Johnson, R. P.

  Lee, F.

  Silverman, S. S.

  Cross, R. H.

  Leech, Sir J. W.

  Simon, Rt. Hon. Sir J. A

  Cruddas, Col. B.

  Lees-Jones, J.

  Simpson, F. B.

  Culverwell, C. T.

  Leighton, Major B. E. P.

  Smiles, Lieut.-Colonel Sir W. D.

  Daggar, G.

  Lennox-Boyd, A. T. L.

  Smith, E. (Stoke)

  Dalton, H.

  Lindsay, K. M.

  Smith, Sir Louis (Hallam)

  Davies, Major Sir G. F. (Yeovil)

  Lipson, D. L.

  Smith, Sir R. W. (Aberdeen)

  Davies, S. O. (Merthyr)

  Little, Sir E. Graham-

  Smith, T. (Normanton)

  Denville, Alfred

  Llewellin, Lieut.-Col. J. J.

  Somervell, Rt. Hon. Sir Donald

  Despencer-Robertson, Major J. A. F

  Locker-Lampson, Comdr. O. S.

  Sorensen, R. W.

  Dobbie, W.

  Loftus, P. C.

  Spears, Brigadier-General E. L.

  Doland, G. F.

  Lyons, A. M.

  Spens, W. P.

  Dorman-Smith, Major Sir R. H.

  Mabane, W. (Huddersfield)

  Stanley, Rt. Hon. Oliver (W'm'ld)

  Drewe, C.

  M'Connell, Sir J.

  Stephen, C.

  Duckworth, Arthur (Shrewsbury)

  McCorquodale, M. S.

  Stourton, Major Hon. J. J.

  Dugdale, Captain T. L.

  Macdonald, Capt. P. (Isle of Wight)

  Stuart, Hon. J. (Moray and Nairn)

  Duncan, J. A. L.

  McEntee, V. La T.

  Sueter, Rear-Admiral Sir M. F.

  Eastwood, J. F.

  McGovern, J.

  Tasker, Sir R. I.

  Eckersley, P. T.

  Maonamara, Capt. J. R. J.

  Taylor, C. S. (Eastbourne)

  Edmondson, Major Sir J.

  Maitland, A.

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

  Edwards, Sir C. (Bedwellty)

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

  Thomas, J. P. L.

  Elliot, Rt. Hon. W. E.

  Markham, S. F.

  Thomson, Sir J. D. W.

  Ellis, Sir G.

  Mothers, G.

  Tinker, J. J.

  Elliston, Capt. G. S.

  Maxton, J.

  Tufnell, Lieut.-Commander R. L.

  Emery, J. F.

  Maxwell, Hon. S. A.

  Turton, R. H.

  Emmott, C. E. G. C.

  Mayhew, Lt.-Col. J.

  Viant, S. P.

  Emrys-Evans, P. V.

  Metter, Sir R. J. (Mitcham)

  Wakefield, W. W.

  Entwistle, Sir C. F.

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

  Walkden, A. G.

  Errington, E.

  Mills, Major J. D. (New Forest)

  Walker-Smith, Sir J.

  Erskine-Hill, A. G.

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

  Wallace, Capt. Rt. Hon. Euan

  Fleming, E. L.

  Morrison, Rt. Hon. W. S. (Cirencester)

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

  Frankel, D.

  Munro, P.

  Ward, Irene M. B. (Wallsend)

  Fremantle, Sir F. E.

  Nall, Sir J.

  Warrender, Sir V.

  Furness, S. N.

  Neven-Spence, Major B. H. H.

  Waterhouse, Captain C.

  Fyfe, D. P. M.

  O'Connor, Sir Terence J.

  Watkins, F. C.

  Gardner, B. W.

  Oliver, G. H.

  Watson, W. McL.

  Gibson, Sir C. G. (Pudsey and Otley)

  O'Neill, Rt. Hon. Sir Hugh

  Watt, Major G. S. Harvie

  Gibson, R. (Greenock)

  Parker, J.

  Wayland, Sir W. A.

  Gledhill, G.

  Parkinson, J. A.

  Wedderburn, H. J. S.

  Gluokstein, L. H.

  Patrick, C. M.

  Wells, Sir Sydney

  Goldie, N. B.

  Peaks, O.

  Whiteley, Major J. P. (Buckingham)

  Gower, Sir R. V.

  Perkins, W. R. D.

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

  1228

  1229

  Williams, E. J. (Ogmore)

  Womersley, Sir W. J.

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

  Wragg, H.

  TELLERS FOR THE AYES.—

  Windsor-Clive, Lieut.-Colonel G.

  Wright, Wing-Commander J. A.C.

  Captain Hope and Lieut.-Colonel

  Winterton, Rt. Hon. Earl

  Young, A. S. L. (Partick)

  Kerr.

  Wise, A. R.

  Young, Sir R. (Newton)

  NOES>

  Acland, R. T. D. (Barnstaple)

  Jones, Sir H. Haydn (Merioneth)

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

  Evans, D. O. (Cardigan)

  Leach, W.

  White, H. Graham

  Foot, D.M.

  Owen, Major G.

  George, Major G. Lloyd (Pembroke)

  Roberts, W. (Cumberland, N.)

  TELLERS FOR THE NOES.—

  George, Megan Lloyd (Anglesey)

  Rothschild, J.A.de

  Sir Hugh Seely and Sir Percy

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

  Salter, Dr. A. (Bermondsey)

  Harris.

  Harvey, T.E. (Eng. Univ's.)

  Silkin, L.

  Question put, and agreed to.

  Resolution to be reported To-morrow; Committee to sit again To-morrow.

  HOUSING (RURAL WORKERS) AMENDMENT BILL.
  Order for Consideration of Lords Amendment read.
  Motion made, and Question, "That the Lords Amendment be now considered," put, and agreed to.—[Captain Margesson.]
  Lords Amendment considered accordingly.
  Lords Amendment: In page 7, line 12, insert new Clause (Additional provisions with respect to loans by local authorities.)
  (1) Where in pursuance of Section two of the principal Act a local authority give assistance by way of loan to the owner of a dwelling, then, subject to the provisions of this Section and to such conditions as may be approved by the Department the loan may, in lieu of being secured by a bond and disposition in security or other deed of security, be secured by an order (in this section referred to as a "charging order") made by the local authority providing and declaring the dwelling, or the dwelling and such other subjects belonging to the owner of the dwelling as the local authority and such owner may agree, to be charged and burdened with an annuity to repay the amount of the loan.
  (2) The annuity charged shall commence from the date of the order, and shall be a sum of such amount and shall be payable to the local authority or their assignees for such period of years, not exceeding twenty, as the local authority and the owner may agree.
  (3) A local authority shall not make a charging order, and a charging order shall not be effectual, unless—

  (a) the local authority have served on every person appearing in the Register of Sasines as the proprietor of, or as holding a heritable security over, the subjects or any part thereof to be charged and burdened with the said annuity, notice that if no objection is intimated to them in writing by such person within twenty-one days from the date of service of the notice, they intend to make such charging order; and

  1230

  (b) no objection has been so intimated by any person on whom notice has been so served.

  (4) The provisions of Section twenty-two of the Housing (Scotland) Act, 1925, shall apply to a charging order made under this section in like manner as they apply to a charging order made under Section twenty-one of the said Act, subject to the following and any other necessary modifications—
  (a) Sub-section (2) shall apply as if after the words "advances of public money" there were inserted the words—
  "(d) any rent charge secured on the premises by absolute order made under and in terms of the Improvement of Land Act, 1864;
  (e) any loan made for agricultural purposes in pursuance of the Agricultural Credits (Scotland) Act, 1929, by any company incorporated for the purposes of that Act, where such loan has been secured on the premises by a bond and disposition in security or other deed of security duly registered in the appropriate Register of Sasines; and
  (f) any charge on the premises created under any provision in any Act authorising a charge for recovery of expenses incurred by a local authority under section one hundred and twenty-five of the Public Health (Scotland) Act, 1897, or by a local authority or an owner under section twenty of the Housing (Scotland) Act, 1925, or section fifteen of the Housing (Scotland) Act, 1930";
  (b) Subsection (3) shall not apply.
  (5) For the purpose of this section a notice may be served by delivering it to the person on whom it is required to be served or by sending it by registered letter to such person at his usual or last known address, or if such person cannot be found, to the Extractor of the Court of Session. An acknowledgment endorsed on such notice or a copy thereof, by such person, or where the notice is sent by registered letter, a certificate subscribed by the clerk to the local authority that such notice was duly posted and having the Post Office receipt for the registered letter attached shall be conclusive evidence that such notice was duly served on the date stated in the acknowledgment or Post Office receipt.
  (6) In this section the expression "owner" has the like meaning as in section forty-nine of the Housing (Scotland) Act, 1930.
  (7) This section shall extend to Scotland only.
  11.13 p.m.
  Colonel Sir George Courthope: I beg to move, as an Amendment to the Lords Amendment, in Sub-section (4) (a) (d) after "Improvement of Land Act, 1864," to add:
  "or the Lands Improvement Company's Acts, 1853 to 192o."
  I understand that this manuscript Amendment to the Lords Amendment will be accepted by the Government, so that I need not take up more than a moment in explaining it. The proposed Lords Amendment is the result of a conference which was held a week or two ago in Edinburgh in order to arrange for the priority of loans which are authorised by the Bill and by the Housing (Agricultural Population) (Scotland) Bill. There was an agreement that certain classes of statutory loan should be protected and should retain their existing priority. The words in the Lords Amendment are intended to carry out that intention, but do not do so completely, and the Amendment which I move is proposed after consultation with my right hon. and learned Friend the Lord Advocate and is in order fully to implement an agreement about which there is no dispute or controversy.
  11.15 p.m.
  The Under-Secretary of State for Scotland (Mr. Wedderburn): This new Clause was inserted by the Government in another place. Representations in favour of the provisions which it contains were made to my right hon. Friend some time ago by local authorities in Scotland, supported by the Chamber of Agriculture and various other bodies, and, after some discussions at a conference on 26th May, which was attended by these bodies together with representatives of the Convention of Royal Burghs, the Lands Improvement Company, the Scottish Agricultural Securities Corporation, and a representative of the Writers to the Signet, the proposals in the new Clause were agreed upon. The general object of the Clause is to encourage local authorities to make more use of the power to give loans for the purposes of this Measure, and it does so by enabling authorities to make charging orders declaring the annuities to repay their loans to have prior ranking over other charges on the property. Before a local authority can make a charging order, they must give notice to all persons who have already
  1232
  made loans over the property, and, if any of those persons object, the local authority are precluded from making the charging order; and they cannot in any case make an order to take precedence over certain specified charges, such as loans made by the Lands Improvement Company and the Scottish Agricultural Securities Corporation. The Amendment of my hon. and gallant Friend arises out of this last provision; it is a purely drafting Amendment, and we are prepared to accept it.

  CHURCH OF ENGLAND ASSEMBLY (POWERS) ACT, 1919.
  Order read for resuming Adjourned Debate on Question [21st June]—
  "That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Parsonages Measure, 5938, be presented to His Majesty for Royal Assent."—[Sir F. Fremantle.]
  Question again proposed.
  11.18 p.m.
  Sir Francis Fremantle: Last night I was asked a question on the subject of where provision is made for the consent of the parochial church council being obtained. The answer is that there is no change whatsoever in the position of the parochial church council. The position is set out in Clause 3.
  Resolved,
  "That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Parsonages Measure, 1938, be presented to His Majesty for Royal Assent."

  CHIMNEY SWEEPERS ACTS (REPEAL) BILL.
  Read the Third time, and passed.
  The remaining Orders were read, and postponed.

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

ROYAL AIR FORCE.
  OFFICERS' PAY.
  OFFICERS' PAY.
  EX-OFFICERS' EMERGENCY RESERVE.
  EX-OFFICERS' EMERGENCY RESERVE.
  ALIENS (DOMESTIC EMPLOYMENT).
  ALIENS (DOMESTIC EMPLOYMENT).
  AIR-RAID PRECAUTIONS.
  AIR-RAID PRECAUTIONS.
TRANSPORT.
  LEVEL-CROSSINGS.
  LEVEL-CROSSINGS.
  RAILWAY TRAIN ACCOMMODATION (CURTAILMENT).
  RAILWAY TRAIN ACCOMMODATION (CURTAILMENT).
  MAIDENHEAD BY-PASS.
  MAIDENHEAD BY-PASS.
  PUBLIC SERVICE VEHICLES (SPEED INDICATORS).
  PUBLIC SERVICE VEHICLES (SPEED INDICATORS).
  ELECTRIFIED RAILWAYS (CHILDREN'S DEATHS).
  ELECTRIFIED RAILWAYS (CHILDREN'S DEATHS).
  WEST INDIES (ECONOMIC CONDITIONS).
  WEST INDIES (ECONOMIC CONDITIONS).
  PALESTINE.
  PALESTINE.
  BRITISH GUIANA.
  BRITISH GUIANA.
  KENYA.
  KENYA.
  NORTHERN RHODESIA.
  NORTHERN RHODESIA.
  STRAITS SETTLEMENTS.
  STRAITS SETTLEMENTS.
  INTERNATIONAL SUGAR AGREEMENT.
  INTERNATIONAL SUGAR AGREEMENT.
  ST. HELENA.
  ST. HELENA.
  BRITISH SOMALILAND.
  BRITISH SOMALILAND.
  COLONIAL DEVELOPMENT.
  COLONIAL DEVELOPMENT.
  MALTA.
  MALTA.
  COLONIAL CIVIL SERVICE.
  COLONIAL CIVIL SERVICE.
  SOUTH AFRICA (JAPANESE CLOTHING IMPORTS).
  SOUTH AFRICA (JAPANESE CLOTHING IMPORTS).
  DOMINIONS (REFUGEES).
  DOMINIONS (REFUGEES).
  AUSTRALIAN DAIRY PRODUCE (IMPORTS).
  AUSTRALIAN DAIRY PRODUCE (IMPORTS).
  KING GEORGE V MEMORIAL, WESTMINSTER,
  KING GEORGE V MEMORIAL, WESTMINSTER,
  EGYPT (BRITISH BARRISTERS).
  EGYPT (BRITISH BARRISTERS).
  REFUGEES (EVIAN CONFERENCE).
  REFUGEES (EVIAN CONFERENCE).
  UNITED STATES (DEPORTATION OF R. WATSON).
  UNITED STATES (DEPORTATION OF R. WATSON).
  SPAIN.
  SPAIN.
  PUBLIC COMPANIES (APPROVED DIRECTORS).
  PUBLIC COMPANIES (APPROVED DIRECTORS).
  STERLING-DOLLAR EXCHANGE.
  STERLING-DOLLAR EXCHANGE.
  CIVIL SERVICE (WOMEN).
  CIVIL SERVICE (WOMEN).
UNEMPLOYMENT.
  STATISTICS.
  STATISTICS.
  BENEFIT (SHIFT-WORKERS).
  BENEFIT (SHIFT-WORKERS).
  BLYTH.
  BLYTH.
  TERRITORIAL ARMY (GLASGOW CORPORATION).
  TERRITORIAL ARMY (GLASGOW CORPORATION).
POST OFFICE.
  UPMINSTER.
  UPMINSTER.
  ENGLAND-AUSTRALIA AIR MAIL.
  ENGLAND-AUSTRALIA AIR MAIL.
ROYAL NAVY.
  HIS MAJESTY'S SHIP "WALRUS" (GROUNDING).
  HIS MAJESTY'S SHIP "WALRUS" (GROUNDING).
  DESTROYERS.
  DESTROYERS.
  AIR ARM.
  AIR ARM.
  DISABLED EMPLOYÈ, WOOLWICH (W. J. EARLAND).
  DISABLED EMPLOYÈ, WOOLWICH (W. J. EARLAND).
  LIVERPOOL (ADVISORY COMMITTEE).
  LIVERPOOL (ADVISORY COMMITTEE).
Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Mervyn George, Lord Bishop of Coventry—Was (in the usual manner) introduced.
TATTON ESTATE BILL. [H.L.]
Reported, with Amendments.

LYMM GAS ORDER, 1938.
Special Order proposed to be made on the application of the Lymm Urban District Council:
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.

OSSETT CORPORATION BILL.
Read 3a, and passed.
LONDON COUNTY COUNCIL (MONEY) BILL.
Read 3a, and passed.

LIVERPOOL CITY CHURCHES ACT, 1897 (AMENDMENT) MEASURE, 1938.
THE LORD ARCHBISHOP OF CANTERBURY THE LORD ARCHBISHOP OF CANTERBURY moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Liverpool City Churches Act, 1897 (Amendment) Measure, 1938, be presented to His Majesty for the Royal Assent. The most reverend Primate said: My Lords, I know that your Lordships are anxious to proceed to other business and I will deal as shortly as I can with the Measure which I have to ask your Lordships to allow to be presented to His Majesty for the Royal Assent. The facts are very simple. They are contained in the Explanatory Memorandum submitted to the Ecclesiastical Committee by the Legislative Committee of the Church Assembly. Briefly they are that before the passing of the Liverpool City Churches Act, 1897, the Corporation of Liverpool were
128
authorised or liable to maintain and repair the fabric of various Churches in Liverpool and to discharge other responsibilities in connection with them. A similar liability in respect of certain churches rested upon the churchwardens of the Parish of Liverpool. By the Act it was provided that the Corporation and the churchwardens of Liverpool should commute these liabilities by the payment of certain sums. The greater part was to be paid to the Ecclesiastical Commissioners or to Queen Anne's Bounty to be held by them upon trusts specifically defined by the Act in favour of various Liverpool Churches. The balance was to be paid to the Ecclesiastical Commissioners and carried to a separate account called the Building and Endowment Fund, which was to be used in the discretion of the Commissioners towards the building and endowment of any new churches to be erected in the City of Liverpool.
By a subsequent Act the powers of the Commissioners were extended to making grants for the purchase of sites for new churches as well as for the building and endowment of churches, but all these churches and sites were within the boundaries of the City of Liverpool. Recently and inevitably great building operations have taken place in that City, particularly the latest Corporation housing scheme, and these extend outside the boundaries of the City. The Bishop of Liverpool is naturally and rightly anxious to make spiritual provision for the population thus removed from the City of Liverpool and has been concerned in the building of two new parish churches for which the sites have already been selected but, although these churches may serve districts partly within and partly without the City, the districts themselves and the sites are outside the City boundaries. The object of the Measure is to enable the Ecclesiastical Commissioners to make grants from this Building and Endowment Fund for the building and endowment of churches and the purchase of sites not only in but also near to the City of Liverpool.
There is no question as to the advantage of this Measure. The Ecclesiastical Committee in their Report say that:
"From the public point of view, there is little doubt as to the desirability of the Measure."

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It is quite uncontroversial. The City Council of Liverpool, the only parties who have any remaining interest, have passed a resolution approving of the Measure. But it is only right that I should call attention to an observation in the Report of the Ecclesiastical Committee—namely, an observation raising the question whether if this had been a Parliamentary Bill it would not have been treated as a Private Bill rather than a Public Bill and as to the propriety of a Measure taking the place of a Private Bill. Some time ago the noble Earl, the Chairman of Committees in this House, was good enough to call my attention to this point. I have had an interview with him and with the Chairman of Ways and Means in another place, and as a result I asked the Legislative Committee of the Assembly to arrange a conference with the Parliamentary authorities as to future procedure in the case of Measures of this kind, Measures which had they been Bills would probably have been regarded as Private Bills. I have every hope that some satisfactory procedure will be arranged for the future especially securing the rights of full publicity by advertisement and of appeal such as would have been and are provided under Private Bill Legislation.
By this particular Measure no private rights are affected. The only parties interested are the City Council of Liverpool, who, as I have already mentioned, are in favour of the Measure. This Measure only extends the scope of the existing discretion of the Ecclesiastical Commission. I might add that there is now no need for sites within the City of Liverpool, but there is pressing need for churches and sites outside the limits of the borough. I hope there will be no de lay in enabling the Bishop of Liverpool to carry out his plans for the good of the people in these large housing estates and that your Lordships may be willing to agree that this Measure should be presented to His Majesty for the Royal Assent. The Report of the Parliamentary Ecclesiastical Committee ends by saying:
"Apart from the above considerations"—
that is, on the question of a Private Bill—
"the Committee considered that the Measure does not affect prejudicially the constitutional rights of His Majesty's subjects, and that it is expedient that it should be allowed to proceed."
With regard to those considerations, I
130
venture to hope that your Lordships will be content with the assurance I have given that a conference will immediately take place to arrange a satisfactory procedure in the future. I beg to move.
Moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Liverpool City Churches Act, 1897 (Amendment) Measure. 1938, be presented to His Majesty for the Royal Assent.—(The Lord Archbishop of Canterbury.)
THE EARL OF ONSLOW: My Lords, the most reverend Primate has explained the little difficulty that has arisen and I need not detain your Lordships for more than a moment. The Report of the Ecclesiastical Committee has shown that in certain cases there may be difficulty in securing to any person who may possibly be affected by a Measure the same opportunities as those which they enjoy under Private Bill procedure. I think there is no doubt that if this Measure had been introduced as a Bill it would have been subject to the Private Bill Standing Orders and would have been proceeded with as a Private Bill. As the most reverend Primate has informed you he was good enough to arrange with the Chairman of Ways and Means and myself for a conference whereby it is hoped that arrangements may be reached which will not involve us in any possible difficulty in future cases. For that I would like to say how grateful I feel towards him. I do not think I need say more, except, of course, that I have no intention of raising any difficulty with regard to this Measure, which I fully recognise has been accepted by everybody concerned. So far as this particular case is concerned nobody can possibly suggest that any hardship has been caused to anybody whatever. If all Measures were like this there would be no difficulty, but possibly we may have more complicated ones in the future.
VISCOUNT BERTIE OF THAME: My Lords, it is with some diffidence that I rise to make some criticisms of this Measure, because the most reverend Primate has always shown me so much kindness that I would not wish to differ from him. This and the other Measures were on the Order Paper for discussion last Thursday, but they only appeared there overnight. I am glad that it was agreed

131
to postpone discussion of them, because obviously if the discussion had taken place last Thursday insufficient time would have been given for the consideration of the proposals. I should like to point out that there would certainly be a protest if ordinary Bills were taken at such short notice. It has to be remembered that every Bill has to go through various stages in this House, whereas these Ecclesiastical Measures only have one stage, at which they can either be approved or rejected.
As regards the Liverpool City Churches Measure I feel that the remarks in the Report of the Ecclesiastical Committee raise a matter of considerable importance, and I should like to read to you some of them in full. Paragraphs 3 and 4 say:
"From the public point of view there is little doubt as to the desirability of the Measure. The City Council of Liverpool has passed a resolution approving the amendment of the law which is proposed by the Measure. It is clear, however, that the Measure alters in terms the conditions under which the Fund is at present held.
"The Committee are of opinion that if these proposals were presented to Parliament in the form of a Bill, it would be treated as a Private Bill and not as a Public Bill, and they do not think that Measures of that character should, as a general practice, be dealt with through the present procedure of the Enabling Act. If in any case it is thought proper that the procedure should be adopted, then the Committee are of opinion that appropriate provisions in Private Bill procedure, such as giving to the public full notice by advertising in the Press, should be adopted. They understand that in this case this course has not been taken.
"Apart from the above considerations the Committee consider that the Measure does not affect the constitutional rights of His Majesty's subjects, and that it is expedient that it should be allowed to proceed."
"Expedient" is not a very pleasant word, and if I may use strong language in the presence of so many Bishops, I think that the observations of the Committee damn the Measure with faint praise. I think it rather weak of the Committee to set what appears to me a rather dangerous precedent, but as they have seen fit to acquiesce in the Measure, I do not propose to move its rejection, although I refrain from doing so with some misgivings, because once a precedent has been set it is easy to put up as good a case in other instances.
THE LORD ARCHBISHOP OF CANTERBURY: My Lords, I entirely
132
agree with my noble friend that if we had proposed to take this Measure last Wednesday (not Thursday) as originally intended, the time would have been too short, and I therefore entirely acquiesced, at some inconvenience, in giving your Lordships a full week to digest this Measure. The noble Viscount has only read a portion of the Report of the Ecclesiastical Committee, which I myself read. He will have noticed that I said I quite agreed that in future there should be some reconsideration of procedure in this matter. As to the use of the word "expedient" at the close of the Report of the Ecclesiastical Committee, I can only say that is the word universally used in every case by the Ecclesiastical Committee when it desires that a Measure should go forward.
On Question, Motion agreed to.

PARSONAGES MEASURE, 1938.
THE LORD BISHOP OF ST. EDMUNDSBURY AND IPSWICH THE LORD BISHOP OF ST. EDMUNDSBURY AND IPSWICH moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Parsonages Measure, 1938, be presented to His Majesty for the Royal Assent. The right reverend Prelate said: My Lords, I have to move in place of the noble Earl, Lord Grey, who is unable to be present, the Resolution of which he has given Notice, in reference to the two Measures on the Order Paper, that they be presented to His Majesty for the Royal Assent. The first is the Parsonages Measure, and on that I need not detain your Lordships more than a minute or two. It is in the main a Measure to consolidate the law with respect to the sale and purchase of and alteration of parsonage houses, the land adjacent to them, their drainage and other matters relating to them, but it contains also a few amendments of the law which are entirely of a domestic character, designed, as the result of experience, to make more definite in a few cases the provision of the law and in other cases to make the procedure run more smoothly. The Measure is to a certain extent a consolidated Measure. It consolidates the old Parsonages Measure, and the few amendments which have been made have been thoroughly discussed in the Church Assembly for a considerable

133
period, and I think were agreed to unanimously. It has the support of the Ecclesiastical Committee, which says, in the same words as the most reverend Primate used just now, that it is expedient that the Measure should pass, as no constitutional rights of any of His Majesty's subjects are affected.
Moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Parsonages Measure, 1938, be presented to His Majesty for the Royal Assent.—(The Lord Bishop of St. Edmundsbury and Ipswich.)
On Question, Motion agreed to.

ECCLESIASTICAL COMMISSIONERS (POWERS) MEASURE, 1938.
THE LORD BISHOP OF ST. EDMUNDSBURY AND IPSWICH THE LORD BISHOP OF ST. EDMUNDSBURY AND IPSWICH moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, This House do direct that the Ecclesiastical Commissioners (Powers) Measure, 1938, be presented to His Majesty for the Royal Assent. The right reverend Prelate said: My Lords, I beg to move the second Resolution, which is of ad similar character. This measure gives certain additional powers to the Ecclesiastical Commissioners of a miscellaneous character, all of which are enumerated in the somewhat long Title. One is that they should be the sole authority to regulate marriage and birth fees in connection with all the parish churches of the country, and to insist on tables of such fees being exhibited where necessary. There is a provision which enables the Ecclesiastical Commissioners, with the consent of the Lords of the Treasury, to increase the stipends payable to the First and Third Estates Commissioners up to a certain limit. They have at present only the stipends which were paid in 1850. There has been no increase since. Then there are several provisions which mainly centre round a provision by which the Ecclesiastical Commission propose to do what Queen Anne's Bounty has already done—namely, when they have to make payments to incumbents, to make them by quarterly payments and to consolidate the payments which have to be made, and to consolidate certain deductions which have to be made, so equalising the payments. It is again a matter of a domestic character which has received the full
134
approval of the Church Assembly, and is endorsed by the Ecclesiastical Committee.
Moved, to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, This House do direct that the Ecclesiastical Commissioners (Powers) Measure, 1938, be presented to His Majesty for the Royal Assent.—(The Lord Bishop of St. Edmundsbury and Ipswich.)
On Question, Motion agreed to.

COAL BILL.
Order of the Day for the further consideration of the Bill on Report read.
THE PRESIDENT OF THE BOARD OF EDUCATION (EARL STANHOPE): My Lords, I beg to move that this Bill be further considered on Report.
Moved, That the Bill be further considered on Report.—(Earl Stanhope.)
THE EARL OF DUDLEY: My Lords, before we proceed to the business of the afternoon I want to ask your Lordships' permission to make a protest against the very unorthodox and, in my submission, rather discourteous manner to your Lordships' House in which the Government hustled through an Amendment last night which stood in the name of the noble Marquess, Lord Lothian, and claimed it as one of their own. The Amendment in question appeared to be a consequential Amendment to the main Amendment of the noble Marquess, who did not move his Amendment, and who was not indeed in the House and therefore the Government, I presume, had not his permission to move this Amendment. It was in fact, I understand, a misprint and should have been standing in the name of the noble Earl, the Leader of the House. In view of the fact that it was a misprint, and of the fact that the many officials that the Government had at their disposal had failed to see that the Government's Amendments were properly marshalled on the List, it would have been more courteous of the Government to have deferred this Amendment to the Third Reading.
It was hustled through before anyone had time to realise that it was a Government Amendment or to look it up, and as it happened it was an Amendment to which I take exception myself. The difficulty I myself am in now is that, al-

135
though I can move to re-impose the original Amendment on the Third Reading, I am faced with the precedent that your Lordships will not reverse your previous decisions. This Amendment which, as I have said, stood in the name of Lord Lothian should only have been moved by him and I hope, when I seek to reverse your Lordships' decision on Third Reading, the unorthodox method of the Government will be taken into account and that I shall not be told that it is impossible to reverse the previous decision.
LORD HASTINGS: My Lords, before the noble Earl replies I would like in a word to emphasize what my noble friend Lord Dudley has said. A position of very real difficulty has arisen here. My noble friend Lord Lothian had put down in his name this particular Amendment, and it had been my intention and the intention of others of us to ask whether that Amendment could not be changed to cut out the words after "coal" in line 31 instead of the words after "coal" in line 30. We should have found ourselves in agreement with the omission of the words "or machinery or plant for coal mining."
THE LORD CHANCELLOR (LORD MAUGHAM): To which page is the noble Lord referring?
LORD HASTINGS: Page 51, line 30. It does create a position of very considerable difficulty. I repeat that we felt the omission of the words "or machinery or plant for coal-mining" was desirable. We were in agreement with the Amendment, but we were not in agreement with the omission of the words—
EARL STANHOPE: On a point of order, I suggest to the noble Lord that he is not entitled to go into the whole question of this Amendment which has already passed the House.
LORD HASTINGS: That is the difficulty. The Leader of the House emphasizes the difficulty in which we find ourselves. It is a very grave difficulty. The Government themselves created the difficulty by taking up the Amendment which we thought to stand in the name of the noble Marquess, Lord Lothian, who was not in the House and was not available for discussion about his own Amendment. I am truly at a loss to
136
know what to do about it. I quite admit that the Leader of the House is right in telling me that the matter has been disposed of and that it is no longer open for discussion. That is unquestionably so. At the same time I do not think the Government would like to leave the matter where it rests.
THE PAYMASTER-GENERAL (THE EARL OF MUNSTER): My Lords, the noble Earl, Lord Dudley, has raised a question about the Amendment which stood in Lord Lothian's name on the Paper and which should have been in the name of my noble friend the Leader of the House. I very much regret that this unfortunate printing error should have been made, but nevertheless I must say this. I fully believed that the noble Earl, his colleagues, and his advisers had carefully examined every Amendment which appeared on the Marshalled List in order to make themselves thoroughly acquainted with all the matters that were to be raised.
THE EARL OF DUDLEY: I have here a list of comments on all the Government Amendments which have been prepared by those Associations whom we are representing, but naturally that particular Amendment is not included because it appeared to be a consequential Amendment to the noble Marquess's Amendment.
THE EARL OF MUNSTER: The noble Earl might have made himself acquainted with all the Amendments on the Paper and not merely with those standing in the name of the Government and himself. When I moved this Amendment last night I drew attention to this unfortunate error, and I mentioned that the Amendment was put down to meet criticisms that had been made by the noble Earl, Lord Crawford, who originally drew attention to this subject. Moreover, the noble Earl, Lord Crawford, was in the House, and I have the clearest recollection that he remained most firmly embedded in his seat and said nothing at all on any point of this Amendment. I could therefore only conclude that it was an Amendment which was satisfactory to him. As your Lordships passed it without discussion, I should be very sorry to see this matter raised again and the House asked to alter a decision at which it has already arrived.
LORD HASTINGS: My Lords, there is no doubt we shall have to accept that statement because it is in accordance with the rules of the House, but I can only say that it is most arbitrary. The action of the noble Earl, Lord Munster, in taking up an Amendment which was not in the name of the Government and passing it through the House in the way it was done was in accordance with the rules, perhaps, but it was not in accordance with the custom of this House.
LORD BALFOUR OF BURLEIGH: My Lords, may I plead with the Leader of the House for a little elasticity in this matter? We are not great sticklers for rules of debate in your Lordships' House and, after all, this is a point of very minor importance—quite an academic point—as to what the qualifications of these good gentlemen should be. I would ask the noble Earl, Lord Stanhope, whether he cannot give my noble friend Lord Dudley the assurance for which he has asked, and that is that when we come to discuss this matter on Third Reading we may reach a decision with a completely open mind.
LORD STRABOLGI: My Lords, may I ask the Paymaster-General whether he has satisfied himself that all the Amendments on to-day's Marshalled List are under their proper names? I happened to be present when this episode occurred last night. I did not protest on behalf of my noble friends, but I should like to know whether there is any one who has the duty of going through this Marshalled List and seeing that everything is under the proper names before we start business.
LORD GAINFORD: My Lords, I was in the House at the end of the sitting last night. There were very few members present, and this Amendment was run through rather quickly by the noble Earl, Lord Munster, with the explanation he has already given to the House, but it was very difficult for us to see exactly what the point was at the moment. There have been precedents, I think, where a decision of this House has been reconsidered at a subsequent stage, and although we do not like that practice I think that in these exceptional circumstances it might be possible for the noble Earl, Lord Dudley, to raise this point on the Third Reading.
THE EARL OF CRAWFORD: My Lords, this Amendment is one in which I am interested. It was based on observations I offered during the Committee stage of the Bill. I am bound to say in justice to Lord Munster that he told me the Amendment had been misprinted in the name of another noble Lord and that he was going to move it in his own name, thereby preventing me from moving it in the name of Lord Lothian. I do not think it is a very serious state of affairs. Any Peer is entitled to reopen the subject on the Third Reading, as was indicated in unusually clear and explicit form by the Leader of the House last night. In these circumstances I think I may remain embedded in my seat.
THE EARL OF DUDLEY: My Lords, the only assurance I seek is that when I do raise the matter on the Third Reading I shall not be told it is impossible to reverse your Lordships' decision. I sought to find out what the point of the Amendment was as quickly as possible, but it was hustled through in a minute, and it was virtually impossible to look up the passage of the Bill referred to in time. I hope in the circumstances the Leader of the House will give me that assurance.
EARL STANHOPE: My Lords, may I begin by pointing out to Lord Dudley that this Amendment stood in the name of the Lord Chancellor and myself in the list circulated on Saturday? It was only in the Second Marshalled List that it was put down, unfortunately, under the name of Lord Lothian. Therefore, if the noble Earl had gone through the list on Saturday he would certainly have found all the criticisms necessary for the occasion. Apart from that, as I remarked yesterday and as my noble friend Lord Crawford has reminded the House, it is very much better to deal with these things on the next stage of the Bill. This is another case in point. There is no reason whatever why the House should not make an Amendment to an Amendment made on a previous occasion. We do not of course rescind decisions of the House which have been arrived at, but there is no reason why we should not make an amendment of some change made in the Bill already. Therefore my noble friend will have ample opportunity on the Third Reading to put forward suggestions in regard to this Amendment or other changes in the Bill.
THE EARL OF DUDLEY: I am very grateful to the noble Earl.
On Question, Motion agreed to.
Second Schedule:

SECOND SCHEDULE.
PROVISIONS FOR DEFINING PROPERTY AND RIGHTS WITH WHICH, AND MATTERS SUBJECT TO WHICH, COAL IS TO BE ACQUIRED.

PART II.
Vesting of rights to withdraw support.
6.—(1) In a case in which the fee simple in the coal or mine and the fee simple in land supported thereby was vested on the valuation date in the same person and no coal-mining lease of that coal or mine was then subsisting, there shall vest in the Commission with the coal or mine, such a right as is hereinafter mentioned, to the extent to which the existing owners of the coal or mine were competent on the valuation date to grant such a right by virtue of their interests in that land, that is to say, a right to withdraw support from that land so far as may be reasonably requisite for the working of any coal, subject to an obligation to make good, or to pay proper compensation for damage arising from such working to that land, or for damage arising from such working to buildings or works thereon.
(3) On an application under Section eight of the Mines (Working Facilities and Support) Act, 1923 (which provides for the imposition by the Railway and Canal Commission of restrictions on the working of minerals where a person having an interest in land is not entitled to support or to sufficient support for buildings or works), the applicant shall not be required to pay or give any compensation or consideration in respect of the imposition of restrictions appearing to the Railway and Canal Commission to be justified by circumstances due to the subsistence of a right to withdraw support vested in the Commission by this paragraph:
Provided that this sub-paragraph shall not have effect in the case of an application sent to the Board of Trade after the expiration of six months from the date of the first publication in relation to the right in question of the notice required by sub-paragraph (2) of this paragraph.
(4) Notwithstanding anything in Section thirteen of the Mines (Working Facilities and Support) Act, 1923, restrictions, the imposition of which appears to the Railway and Canal Commission to be justified as aforesaid, may be imposed under Section eight of that Act on the application of, and so as to vest the right to enforce the restrictions in, any such company, authority or body as is mentioned in the said Section thirteen.
LORD HASTINGS LORD HASTINGS moved, in sub-paragraph (1) of paragraph 6, to leave out all words after "obligation" and insert:
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"either

(a) to pay proper compensation for damage arising from such working to that land; or

(b) with the consent (which shall not be unreasonably withheld) of the person who would otherwise be entitled to claim compensation for that damage, to make good that damage to the reasonable satisfaction of that person and without expense to him;

which obligation shall extend to buildings and works on that land whether constructed before or after the vesting date."
The noble Lord said: My Lords, I am glad to be able to tell the House that this is an agreed Amendment, agreed as between the mineral owners, the mine-owners and His Majesty's Government. After very considerable difficulty these words have been arrived at, and unless the House desires me to go into and explain them, I will merely content myself with moving the Amendment with the remark that without doubt the noble and learned Lord the Lord Chancellor will be withdrawing the Amendment which stands in his name immediately following. I beg to move.
Amendment moved—
Page 55, line 17, leave out from ("obligation") to the end of line 19 and insert the said new words.—(Lord Hastings.)
LORD STRABOLGI: My Lords, on this point I must put in a protest on behalf of the Labour Party but not against the conduct of the noble Lord, Lord Hastings. His job is to get what concessions he can from the Government and to put them through. This Amendment only appeared on the Paper to-day. I saw my honourable friends in another place who represent the miners there this morning, and it has not been possible to get a considered opinion on all these Amendments which stand in the names of the learned Lord Chancellor, the Leader of the House, Earl Stanhope, Lord Hastings and the other Peers concerned. There are a great many of them. I did not know which were being taken and which were being dropped, nor did my honourable friends in another place. Therefore it has been impossible for my noble friends and myself on this side of the House to get any guidance or advice whatsoever. These Amendments deal with matters of technical importance of which we do not pretend to have any special knowledge, and it is therefore most difficult for us on behalf of the Opposition to offer any observations on these Amend-

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ments. The one just moved by Lord Hastings was moved without any explanation at all. He satisfied the Government, so I suppose it is not necessary to satisfy any one else; but I am going to ask the Government to explain what the Amendment means and tell us what effect it will have on the Bill and on the duties of the Coal Commission under it.
In connection with this matter it is my duty to make these observations to-day. As I have said, I and my noble friends met in consultation with my honourable friends who take a special interest in this Bill on behalf of the Miners' Federation. There have been three groups at work on this Bill since it reached your Lordships' House—the group who are advised and assisted by the royalty owners, the group who are advised and assisted by the mine-owners, and His Majesty's Government who have the assistance of the Department of Mines and all the experts they care to call in. Between them they have met and discussed the matter in a kind of Soviet outside your Lordships' House. "Soviet" is perhaps not the right word. This is not Sovietism; this is syndicalism. A syndicalist committee has met outside your Lordships' House—I say this of course without any reproach to anyone—and then we are presented with these results.
May I read out some of the words used by Lord Hastings in the debate last night? Referring to the Second Schedule and asking for its postponement, the noble Lord said:
"The Second Schedule was very controversial, and it has been the subject of interminable negotiations between the two parties interested in this Bill, those representing the royalty owners and those representing the coal-owners. They having come to agreement, then His Majesty's Government stepped in with an alternative proposal."
How dare they step in between these great forces? And we, these orphans, my noble friends and I on this Bench, apparently have no locus standi in this business at all. After all we are trying to represent, however inadequately, about 600,000 or 700,000 mine workers in this matter and also the Official Opposition. Our views are for what we consider to be the good of the nation as a whole. To continue what the noble Lord, Lord Hastings, said:
"They having come to an agreement, then His Majesty's Government stepped in with an
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alternative proposal. As that alternative proposal was put into my hands only after the tea hour this evening between five and six o'clock, it has of course been impossible to arrive at any agreement with those other parties who are deeply interested in this matter."
Then the noble Lord went on to ask that the Second Schedule should be postponed to to-day, which has been done.
Later on Lord Hastings said:
"While the House is dealing with the Report stage we cannot be discussing outside."
I make no complaint whatsoever of Lord Hastings and his friends taking extra advice from those who know the industry. That is not our complaint at all; but I must explain to your Lordships that it is difficult for us on the Opposition side to give an opinion on those Amendments which now have been agreed between the three parties. The Government who had the temerity to step in have now apparently come to an agreement and they have accepted Lord Hastings's Amendment. I must confess to your Lordships that when I saw my friends in another place who are miners' representatives I asked them their opinion upon the Government's Amendments. I said: "You will not have time to look at Lord Hastings's Amendments, but you may take it they are against your interests in any case. Give my noble friends and myself some guidance on the Government Amendments which only appeared on the Paper yesterday." I could only see my honourable friends to-day because yesterday I was otherwise engaged here. Now, apparently, the Government Amendment is not going to be moved. The Government are adopting Lord Hastings's Amendment. I want, if I may, to ask for a full explanation of its implications.
Secondly, I wish to say that as regards my noble friends and myself here we cannot give a considered opinion upon these Amendments. That does not mean to say we agree with them. They may be excellent; I do not know; but in the circumstances I have mentioned we shall have to let them go. In that connection I must remind your Lordships of what happened at the end of the Committee stage. Your Lordships will remember that Clause 12 was postponed so that noble Lords and their advisers outside could try to come to some arrangement, and finally an Amendment was put down

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on the very day that we discussed the matter in the name of the Minister of Education to line 39 on page 14, and another Amendment on line 2 of page 15. My noble friends Lord Addison and Lord Snell and myself had no opportunity of having these Amendments considered, but I did take advice about them, because I thought we might bring the matter up again at a later stage, and if I may I am going to read a few words of the opinion of a colleague of ours in another place who has as much knowledge of this particular industry as I believe any member of the House of Commons. He says:
"The effect of the two Amendments is to tie the hands of the Commission completely so as to secure the financial position in respect of the coal working business not being worsened. If that means anything it means that the Commission has got to deal with rent as if it was a mere accountancy charge in the books of the company; e.g., the owner would not have to pay himself royalties in a bad year; he must not be made to pay the Commission any-thing if he is to be in no worse position in a given year than he would have been. It is impossible to put a tenant in no worse position than a working landlord. The thing is really nonsense."
I have only just got this opinion. If we had been in possession of this opinion before we would, of course, have resisted these last-minute Amendments to Clause 12 on the Committee stage. I cite that as an example of what happened on the Committee stage. Now at the Report stage we are faced with these Amendments which may be of the utmost importance and I feel bound to make the Opposition view clear with regard to them.
THE LORD CHANCELLOR: My Lords, I confess the speech of the noble Lord fills me with surprise and, in a modified sense, with admiration because it so happens that this question of compensation had been discussed in this House on previous occasions up hill and down dale with the greatest care and ability, if I may say so, by a number of your Lordships. Anybody who listened to those debates and who considered the questions that were involved should have, I should have thought, no doubt at all as to the two matters, as I understand it, which this Amendment, which seems to be regarded as a nefarious bargain, is intended to deal with. There are two things. The first is this: when the surface is let down how should you put the surface owner,
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according to fair principles, in a position to have the damage done to the surface made good or to be compensated? And there was a question, which the noble Lord, Lord Hastings, urged with his usual skill, whether the clause in the Bill which would enable the person who had done the damage either to make good or to compensate was in fact just, because there were cases where he thought if that was left to the option of the person who had done the damage it might be unjust to the surface owner. Upon that the battle raged.
In many cases, as was pointed out, I am afraid, at some length on a previous occasion, the lessees have a staff man who goes in immediately a wall is cracked or a fence let down or water does not run properly in the drain and the damage is made good sometimes within forty-eight hours after the damage is done. In other cases a house is involved and, if it is a serious matter, instead of it being made good compensation is paid. The question is whether you should pay compensation or make good. This nefarious bargain, as it seems to be regarded, appears to be this, that where the surface owner consents the colliery company or the Commission, as the case may be, shall make good, and where he does not at once consent his consent is not to be unreasonably refused. In other cases there shall be payment in cash for damage done. How that can affect anybody except the surface owner and the lessee, and indirectly the Commission, I am unable to understand. Nobody can have any doubt on reading this very simple clause that so far as that is concerned that is all that is intended to be dealt with by the Amendment.
There was another point which from the point of view of the Government was a more serious point and one upon which the Commission was indirectly interested. Accordingly those persons who are interested in this measure becoming a success might well say that they wanted to understand what was being done. They had a perfect right to object to a liability being placed upon the Commission which they thought was not a fair one. That question again was discussed at great length, and the Government—I am afraid I was the principal spokesman on this matter—objected to any liability being placed on

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the Commission to pay or make good except in cases where the Commission had themselves granted the lease, because it was said that where leases were in existence at the date of vesting it was not fair that a liability should be placed on the Commission which might have arisen from circumstances entirely beyond their control. That is the second point which has been agreed.
It has been agreed on these terms, which I think are fair terms, that as between the persons mainly interested—namely, the surface owner and the colliery company—where the colliery manager is working under a lease granted by the Commission, the Commission should be liable directly or indirectly to pay the sum due to the surface owner. I remember having a little discussion with the noble Lord who has objected to these Amendments. He was taking the greatest interest in the matter then and I remember well, and if I may say so with regret as far as I am concerned, that the noble Lord scored a point over something I had said and I had to admit I was wrong. He said that colliery companies might go bankrupt and accordingly there might be a number of cases in which the surface owner, who from this point of view might be quite a poor man, would be unable to recover from the lessee the sum which the lessee was liable to pay because he had let down the surface. At that time the noble Lord betrayed, as I thought, full and complete apprehension of the points which were being discussed, but it appears that the lapse of a fortnight or so has resulted in his mind being a blank on all these topics and he professes to be unable to understand this exceedingly simple Amendment which is the result in one sense of a bargain, but not an unfair or in any way improper bargain.
The noble Lord, Lord Hastings, has put down an Amendment which the Government are able to accept, and the result will be that proper compensation is payable under paragraph 6 of the Schedule we are discussing for damage arising from the working of the land, or, with the consent of the person entitled to compensation which he may not unreasonably withhold, that damage is to be made good to the reasonable satisfaction of that person and without expense to him. The addition that the obligation shall extend to buildings and works on the land whether constructed before or after the
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vesting date is in effect mere drafting to make it clear that the land does include buildings, as it does not in some other places in the Bill, because buildings are the subject of the claim. The only comment I have to make is that I am not sure that the word "which" in the latter part of the Amendment is as good grammar as the words "and this" would be. That is a matter with which the noble Viscount, Lord Bertie, is generally concerned. It is a purely grammatical question. Upon the other points there is really nothing which calls for prolonged examination, nothing which is unfair or unjust, nothing in which the interests of the public are in the least degree jeopardised.
LORD HASTINGS: My Lords, I would not rise again, although I have the right to do so as the mover of the Amendment, except to take up one remark that fell from the noble Lord, Lord Strabolgi. He told us that he had informed his advisers in another place that any Amendment put down in my name must necessarily be contrary to their interests. I take great exception to that. I have endeavoured to explain that the mineral owners of to-day will be the surface owners of tomorrow and the surface owners' interests whether great or small are the same. Consequently on previous occasions as on this occasion what I have been endeavouring throughout to do has been to safeguard the interests of these surface owners. The fact that I have been successful in so doing should be a matter of congratulation from the noble Lord, Lord Strabolgi, because those whose interests he desires to represent are identical with the interests I represent. I trust he will not again commit himself to the statement that any Amendment which appears on the Paper in my name is contrary to the interests which he represents. It is not the fact. I apologise to the House, because I have endeavoured to save the time of the House by saying little about it, but it has had disastrous effects.
LORD STRABOLGI: May I say to Lord Hastings that I did not mean him to take it too literally? Certainly I did not mean to give him any offence, and so far from his Amendments being all contrary to the interests which I represent, both I and my noble friends have on more than one occasion supported him.
On Question, Amendment agreed to.
LORD GAINFORD LORD GAINFORD moved, after subparagraph (1) of paragraph 6, to insert:
"(2) The Commission shall on the occasion of their first exercising, or granting to a lessee the benefit of, a right vested in them by this paragraph give public notice that they propose so to do by advertisement in the London Gazette and in one or more newspapers circulating in the locality, and, in the case of buildings or works whose construction is begun after the date of the first publication of the notice the person for whom the buildings or works are to be constructed shall before the commencement of the construction thereof cause to be deposited with the Commission plans showing the design of and the proposed materials for and the method of construction of the foundations of such buildings or works and the Commission shall have the right of inspection of such foundations during their construction from time to time as they may reasonably require.
(3) If the Commission are of opinion that the proposals contained in such plans as aforesaid are not such as to minimise damage in the event of subsidence they may, within twenty-eight days of the deposit of the plans, propose to the person for whom the buildings or works are to be constructed that such alterations therein as they consider desirable for the purpose of minimising such damage shall he carried out and in that event the obligation to make good or to pay compensation referred to in sub-paragraph (1) of this paragraph shall be limited to damage which could not have been avoided had the aforesaid proposals of the Commission been adopted.
(4) The Commission shall pay the costs reasonably incurred by such person as aforesaid in connection with the deposition of plans in accordance with sub-paragraph (2) and the additional cost incurred in the construction of the buildings or works in complying with a proposal made by the Commission under sub-paragraph (3) of this paragraph.
(5) Any dispute as to any amount payable by the Commission under the preceding sub-paragraph shall, failing agreement, be determined by arbitration.
The noble Lord said: My Lords, the subject matter of this Amendment really arises out of the action of the Government in divorcing the interest in the minerals from the surface owner. The colliery owners are very well accustomed to having many claims for subsidence, and in many cases attempts are even made to exploit them by those who either rent or possess houses on the surface. This Amendment deals only with the question of buildings which are to be erected after a new lease. There are three main paragraphs. One deals with the necessity for the Commission to publish in the Press any new lease which has been made, so as to enable any person who is going to construct a building on the surface,
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above the coal, to give notice of his intention. The next paragraph requires that the Commission can in their wisdom take steps to see that proper foundations are laid to those buildings, so that undue subsidence does not take place in regard to those buildings. The next paragraph deals with the cost of the production of plans which are required by the Commission, and deals with costs due to the steps which have to be taken as a result of the Commission's actions. The last paragraph is merely the usual one enabling any dispute to be referred to arbitration.
What I want to emphasize is that this principle has been accepted by the Government, so far as I understand. The cords that are on the Paper are not words which are entirely in accordance with the views of the Government. They are words which have been agreed to between the owners of the surface and the Mining Association. We naturally took rather a different point of view from that of the owners of the surface. They will no longer possess the coal, and will have only one interest, which is to develop their surface as best they can, and have proper rights of protection in connection with their surface against the mineral owners. They are no longer in collusion with the mineral owners in trying to help in the development of the minerals, and consequently they look at a possible subsidence from a very different point of view. The mineral owners, on the other hand, are most anxious that no damage should occur on the surface if it can be prevented, because after all they have only two alternatives, either to pay compensation for all the damage which they have done to buildings on the surface as a result of their operations underground, or to sterilise their coal and leave support for those buildings, so that no subsidence can occur.
In actual practice we have found, as colliery owners, that in many cases where houses are erected on the surface only a very small expenditure is required in connection with the laying of cement foundations in order to prevent any subsidence occurring, or any damage being done to buildings owing to operations underground. This Amendment is necessary in order to enable the colliery owners to work the minerals, and it is also necessary in order to enable the Commission, who will possess the minerals, to be able

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to lease them and. see that they are worked. I am not going to press the Amendment on this occasion, because the Government apparently do not see quite eye to eye with us with regard to these words. The difference I believe is not in principle, but in regard to particulars. Owing to shortness of time it has been impossible for me to secure agreement between the mineral owners and the Government as to the exact final words which ought to be introduced in order to deal with this point. I therefore propose merely to move the Amendment formally, with a view to ascertaining the Government's view with regard to the principle, and I hope that in the interval between now and the Third Reading there will be no difficulty in agreeing an Amendment which can be passed without any discussion. I beg to move.
Amendment moved—
Page 55, line 19, at end, insert the said new sub-paragraphs.—(Lord Gainford.)
THE EARL OF MUNSTER: My Lords, the noble Lord who has moved the Amendment has explained quite fully the purpose of it. It is perfectly true to say that the Government believe that they will be able to meet my noble friend. After consideration of the Amendment which he has moved we had hoped to be in a position to bring forward an agreed Amendment on this occasion. The time has unfortunately been short, but I think there is very little now between the noble Lord and my right honourable friend the President of the Board of Trade, and if we can agree an Amendment I shall be only too pleased to bring it forward on the Third Reading, at which time I shall be very happy to explain the contents of it to my noble friend Lord Strabolgi, as well as to the rest of your Lordships. I hope therefore that Lord Gainford will withdraw this Amendment now and see whether this agreement can be reached with His Majesty's Government.
LORD HASTINGS: My Lords, the noble Earl, Lord Munster, who expressed the hope that he would be able to find words agreeable to Lord Gainford, will not forget that he has also got to find words agreeable to me; because the Amendment which stands on the Paper has been arrived at after very much discussion between the two interests which are vitally concerned in the matter, and any change of words which is agreeable
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to one section without being equally agreeable to another could clearly not have any prospect of passing through this House undisputed. I hope with him that words will be found which will be agreeable to all parties.
THE EARL OF MUNSTER: My Lords, I think it might even be possible to find words which would meet the wishes of my noble friend opposite, difficult as that seems to be at certain periods.
LORD GAINFORD: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HASTINGS LORD HASTINGS had on the Paper an Amendment to omit the proviso in subparagraph (3) of paragraph 6. The noble Lord said: My Lords, the original purpose of putting down this Amendment was to eliminate a paragraph which had become inappropriate owing to the action taken by the House in Committee. Since that Amendment was put down an alternative Amendment has been put down by the Lord Chancellor and the Leader of the House. I have given considerable study to that Amendment, and I may say that I like their Amendment very much, but after consulting with my friends in the matter I have come to the conclusion that it would be exceedingly difficult to find alternative words to this Amendment, and therefore I propose to retire from the contest, not to move my own Amendment, and to amend that which is in the name of the Lord Chancellor and the Leader of the House.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in sub-paragraph (3) of paragraph 6, after "Provided that," to insert "the Commission shall, on the occasion of their first exercising, or granting to a lessee the benefit of, a right vested in them by this paragraph, give public notice that they propose so to do by advertisement in the London Gazette and in one or more newspapers circulating in the locality, and." The noble and learned Lord said: My Lords, these words were struck out from the text by mistake in Committee, and it is necessary, really only as a matter of drafting, to reinsert them. I think they require no real explanation.
Amendment moved—
Page 55, line 35, after ("that") insert the said words.—(The Lord Chancellor.)
THE EARL OF CRAWFORD: Why is it necessary to publish in the London

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Gazette? I should have thought that all that was necessary was to publish in a local newspaper. To do it in the London Gazette seems to me quite superfluous.
THE LORD CHANCELLOR: My Lords, I understand there are people who make this their daily reading and desire to have an opportunity of seeing these things in the London Gazette, more particularly if they are not persons residing in the locality.
LORD ADDISON: My Lords, I hope this will be retained, because it is the practice of every Department to issue its notices in the London Gazette. Anyone who wants to know what a Department is doing will get notice of it in the London Gazette. It is exceedingly desirable for many reasons that this practice should be maintained, so that everybody will know where to look.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, the next Amendment is consequential.
Amendment moved—
Page 55, line 38, leave out from ("notice") to end of line 39 and insert ("to be so given").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of sub-paragraph (4) of paragraph 6, to insert "and such restrictions may be so imposed on the application of, and so as to vest the right to enforce the restrictions in, any company or other body or person carrying on an undertaking primarily for the supply of gas, electricity, water or hydraulic power for public purposes or to members of the public." The noble and learned Lord said: My Lords, this is a case in which I think I have to admit that on the previous occasion I used language in your Lordships' House which implied that I thought there were no reasons for any such provision. It is intended to deal with what may be, perhaps not very inaccurately, described as public utility companies having no statutory rights. In particular it was impressed on the Government that there were a number of such companies in Scotland concerned with the supply of water, gas, electricity and so forth, without any statutory powers. The contention I put forward was
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that they should get protection under the Act of 1923, and I am not at all sure that I was wrong; but, after having said that I would consider the matter, I came to the conclusion that it would be safer (because I was not quite confident that I was right) to insert words which would make it perfectly clear that these bodies, without the necessity of showing that public interests were involved, should be in the same position as the person who had statutory power and would therefore be entitled to make an application to the Railway and Canal Commission. Accordingly those persons can, subject to the conditions of the Act, apply to have imposed the restrictions which are necessary for safeguarding their undertakings.
Amendment moved—
Page 55, line 46, at end insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH had given Notice to move to add to paragraph 6:
"(5) If any person interested in any land supported by coal or a mine of coal shall suffer injury or damage to such land or to buildings or works thereon arising from the working of coal he shall have a right of action against the Commission in respect of such injury or damage except where the payment of compensation in respect of such injury or damage is provided for in a coal-mining lease subsisting on the valuation date."
The noble Lord said: My Lords, this Amendment deals with a matter which I am going to suggest to your Lordships is of the greatest possible importance to every property owner in the country. That of course applies to the question we have just been debating and as to which the Government have agreed to the insertion of words that we consider are reasonable. This is just as important as that, but it has this difference. The difference is that the need for this recourse which I am going to ask your Lordships to give was not, it seems, apparent to the Government until we reached the Committee stage of this Bill in this House. The Bill came all the way through another place and up to the Committee stage here without the Government having perceived the need for any security of this kind.
That illustrates the first point I want to make, which is that the Government have been really unconscious of the difficulties which this Bill of theirs is going to produce in the severance which it makes

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between the surface and the minerals. This Amendment is not quite the same as, but is similar to, an Amendment which I moved on the Committee stage the object of which was twofold. I wanted to give the surface owner, who was the former mineral owner and whose minerals are now going to be vested in the Coal Commission, recourse against the Coal Commission in the case of new leases granted by the Commission in future; and I also wanted to give him recourse against the Coal Commission in the event of the infraction by the lessee of the existing lease which exists at the time of transference—that is to say, the lessee who was the lessee of the former surface owner and who will in future be the lessee of the Coal Commission.
It may be that my Amendment was too wide, and it may be still that this Amendment is too wide. To recall the circumstances, I would remind your Lordships of the Amendment which was accepted on the Committee stage and which was proposed by my noble friend Lord Amulree. That provided that the Commission should have a right to obtain security from a lessee where they were giving a right to withdrawal of support. That was accepted by your Lordships, and this Amendment followed immediately afterwards. As I understood the course of the discussion, the noble and learned Lord on the Woolsack agreed that there might be something to be met, and he agreed to consider it between that stage and this and put down on the Paper an Amendment to meet the case. That Amendment which the Government have proposed, I expect, is the one which follows, and the only reason that I have made these remarks is to say that I appreciate that the Government have done something to meet the case which my Amendment was intended to meet, although not all. I wish to know whether the Leader of the House agrees that the right course in these circumstances is to proceed by way of Amendment to the Amendment, because I have tried put down some Amendments to rectify what I consider to be one blemish and one omission in the Government's Amendment. The noble Earl who leads the House has told us that it is unusual to proceed by way of Amendments to Amendments, but he may agree in these circumstances, with the Amendments actually on the Paper,
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that it is the convenient way of doing it. If the noble Earl agrees, I do not propose to move this Amendment, but would try to get what I want through the Amendments to the Amendment to be moved by the Lord Chancellor.
EARL STANHOPE: We think it would be the more convenient course if my noble friend so moved Amendments to the Government Amendment on the next page.
LORD BALFOUR OF BURLEIGH: In these circumstances I will not move this Amendment.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to insert after paragraph 6:
"7.—(1) Any person interested in land damaged by the working of coal in exercise of a right to withdraw support therefrom which vests in the Commission under either of the two preceding paragraphs subject to an obligation to make good or to pay proper compensation for damage arising from such working, and which has been granted by the Commission to a lessee, shall be entitled to enforce against the Commission any liability to pay proper compensation for or to make good that damage pursuant to that obligation which the lessee fails to discharge:
Provided that nothing in this sub-paragraph shall be constructed as rendering invalid any provision contained in a lease granted by the Commission requiring the lessee to indemnify the Commission against liability in respect of any such obligation as aforesaid, and the Commission may require the inclusion of such a provision in a lease which they are under obligation by virtue of Section twelve of this Act to grant.
(2) Any question as to the subsistence by virtue of either of the two preceding paragraphs of an obligation to make proper compensation for or to make good damage to any land, or as to the rights or liabilities of any person in respect of the enforcement of such an obligation so subsisting, shall be determined by arbitration."
The noble and learned Lord said: My Lords, as I mentioned when we were considering the previous Amendment, there were two great points, and this is the second of them. The question is how far the Coal Commission ought to be liable either by way of proper compensation or by making good any damage that might arise to the surface and buildings as the result of subsidence. This Amendment is an attempt to carry out what we stated the Government were seeking to do—namely, to go as far as we thought was just and proper in the direction of making the Commission liable for such damage or making good to the surface

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owner. The limit to which the Government can go is that mentioned in the proposed new paragraph. It is limited to cases where there is a right to withdraw support by reason of something which the Commission do, and in that case, subject to the conditions in sub-paragraph (1), the person damaged
"shall be entitled to enforce against the Commission any liability to pay proper compensation for or to make good that damage pursuant to that obligation which the lessee fails to discharge."
In the normal case the lessee will have, by lease granted by the Commission, a liability of that kind, but he may be unable or unwilling, or he may refuse in some circumstances, to make good that obligation, and upon that (I think for the first time in this country) a liability is now imposed upon the Commission as landlord—I mean imposed by Statute on landlords—to make good a liability which a tenant of theirs has omitted to discharge in relation to a letting down of the surface.
That is, I submit, quite a substantial concession on the part of the Government. Beyond that I cannot see how the Government can fairly be asked to go. Take a particular existing lease, which continues to be subsisting at the date of the vesting. The tenant has got certain obligations. The lease is one with which the Commission have nothing to do. He may have been acting in accordance with the terms of his lease, quite strictly, and as a result he may let down. He may be liable to pay compensation. His liability may be limited or, indeed, in some cases he may not be liable at all, because the landlord may have given him the right to let down the surface, or he believes he has such a right to let down the surface. In all these cases it does seem to the Government quite unjust and inequitable that a liability should be imposed on the new landlord—namely, the Coal Commission—to pay a debt, discharge an obligation, which has been incurred by a tenant who came on the scene before the Coal Commission were thought of. Accordingly, the right to claim against the Commission is limited in the way suggested.
I am not seeking for the moment to answer all the questions that arise, or particularly the question that will arise on the third Amendment put down by the
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noble Lord, Lord Balfour of Burleigh, but simply to justify the sub-paragraph as it stands. There is then a proviso that it is not to invalidate any provision contained in a lease granted requiring a lessee to indemnify the Commission. Unless that is put in it may be thought by certain persons that when the Coal Commission are granting the lease they are not entitled to impose a liability upon the tenant. That really is a question of negotiation between the Coal Commission and the respective tenant, and the tenant may prefer to get rather betters terms from the Coal Commission on the condition that he made good any damage to the surface or buildings on it.
Then in sub-paragraph (2) there is a provision, which again, was suggested and asked for by a number of noble Lords, that when any question of this sort arises as to the existence of an obligation under either of these two preceding paragraphs it shall be determined by arbitration. I think someone thought that there should be an alternative, an application to the Court. Perhaps your Lordships will allow me to say, having had a very large experience in cases of this kind in the Courts, that I cannot help thinking that it is not to the benefit of either party to go to the Court, unless it is absolutely necessary, in subsidence cases. They involve so much expert evidence, generally, I regret to say, of a most conflicting character. It is far better, if the parties can manage it, to get a first-rate arbitrator to go down to the mine and see what working has been done, inspect the plans, then go on the surface and see how much damage has really been occasioned. I think those who want applications to the Court should be told that in most cases, so far as my experience goes, such applications would not meet the case. They would be acting rather unwisely if they did not agree to arbitration, which I think is the best plan. That is the paragraph which is proposed on the part of the Government and I leave it to the noble Lord, Lord Balfour, to move his Amendments.
Amendment moved—
Page 55, line 46, at end insert the said new paragraph.—(The Lord Chancellor.)
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH had given Notice of three Amendments to sub-paragraph (1) of the proposed new paragraph—namely, after coal, to insert

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"(a)"; to leave out "which the lessee fails to discharge"; and to insert "and (b) contrary to the terms of a lease subsisting at the valuation date shall be entitled to enforce against the Commission any liability for payment of proper compensation arising from such wrongful withdrawal of support."
The noble Lord said: My Lords, I would like to say, because it clarifies the situation, that there is a printing error in my first Amendment as it appears on the Paper. It is the wrong kind of "a". It makes it rather difficult to follow. It should of course be an italicised "a" to correspond with the italicised "b" lower down. Your Lordships will forgive me mentioning that, because the Amendment is difficult to follow if you did not realise what I have just said.
THE LORD CHANCELLOR: Perhaps I may read the three Amendments of the noble Lord, Lord Balfour, as they are intimately connected.
LORD BALFOUR OF BURLEIGH: I rather want to take the Amendments quite separately, because I regard them as dealing with entirely separate matters, apart from the italicised "a".
EARL STANHOPE: Suppose we put in the italicised "a" and then the House rejects the last Amendment of my noble friend?
LORD BALFOUR OF BURLEIGH: I do not want to put in an italicised "a". I am quite willing to leave the "a" out. I understood that the learned Lord Chancellor wanted to take the Amendments together, but I wish to pass to the second Amendment in my name and to the third Amendment. First I will move the second Amendment.
EARL STANHOPE: I think that would be the simplest thing. What I was suggesting was that we should have the discussion of the third Amendment on the italicised "a", but it makes no difference.
VISCOUNT HORNE OF SLAMANNAN: My Lords, may I suggest to the Lord Chancellor that the word "constructed" in line 13 of the noble and learned Lord's Amendment ought to be "construed"—"provided that nothing in this sub-paragraph shall be construed"?
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved, in sub-paragraph (1) of the proposed new paragraph, to leave out "which the lessee fails to discharge." The noble Lord said: The noble and learned Lord on the Woolsack told us in moving his Amendment that this represents the limit to which the Government can go. I very much regret to hear that because I was hoping that we should get some further concession, and if I receive the support which I hope for on this matter I shall feel bound to press it to a Division. The paragraph as it stands applies to the normal lease granted by the Coal Commission in the future, and if I understand it aright it would also apply to a licence or liberty granted by the Coal Commission to a lessee under an existing lease. The provision is that recourse is given to the surface owner against the Coal Commission by which the Coal Commission are forced to make good damage which the lessee fails to discharge—the obligation which the lessee fails to discharge. Reading through the noble and learned Lord's Amendment I found it was all very good up to that point. Those words to my mind are an excrescence which your Lordships may fairly be asked to remove. It is like a wart on an otherwise not unhandsome face. I do not think it is an entirely handsome face, because it is lacking in one essential feature which will be put in by my other Amendment. Meantime we are now dealing with the excrescence.
It does seem to me fair that recourse should be given against the Coal Commission for these reasons. I was very glad to hear the noble and learned Lord say that for the first time there is now to be a liability imposed by Statute on this landlord to make good the liability of his tenant. That is so obviously right that the rightness of it never occurred to the Government until we pressed it on them, but it is all part of this tremendous new problem of the severance, and it is fundamentally fair. You are going to transfer this great body of property, all this coal, to the Coal Commission and the Coal Commission is something quite new. This coal has always before been owned by private individuals or companies and let to lessees, but you are now introducing an entirely new factor into the law of this country. At first the Government said they could not interfere

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with existing leases, nor with those existing provisions which would impose this liability on a landlord for the obligations of his tenant. The Government have now conceded the main principle and what I am asking for is only a very small further adjustment of that concession. I should like to know what these words "which the lessee fails to discharge" really mean. How far am I going to have to take the lessee before he can be said to have failed to discharge his liability? Have I got to take him all the way to the House of Lords? Of course in the ordinary way the lessee will discharge his liability, and I suppose in ninety-nine cases out of a hundred no difficulty will arise, but I can see that the lessee will be much more ready to give effect to his obligation if he knows that he is liable to be stirred up from above, that is, by his new landlord the Coal Commission.
Your Lordships have to remember that the situation of the surface owner is going to be a very difficult one. He is parting with a great deal of his control over his lessee. He is going to be in an extremely difficult position. One question I should like to ask the noble and learned Lord is if he will tell me whether the surface owner will have any right of access to workings under his ground. I know he has a right to plans, but I have not been able to find in the Bill anything definite—although it may well be there—that he will have any right of access. If he has not, I think he ought to have it, because he is going to be in a very difficult position without the intimate knowledge he at present has of what is going on underground from the six-monthly or annual reports of his mineral agents. It seems to me eminently fair that this recourse should be given against the Coal Commission simultaneously with recourse against the lessee. I cannot see that there can be any harm in it and I conceive it only to be fair having regard to the new relationship which is going to be created between the surface owner, the Coal Commission, the lessee and the agricultural tenant.
It is an understood matter I think in this country that in debates in this House or in another place one must be very careful not to make any attack on the Civil Service. They are in the position that if they are attacked they cannot
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answer for themselves. But I do not think it is unfair to say that civil servants are apt to have the defects of their qualities, and the insertion of these words to my mind is an example of depart-mentalism of a rather unfortunate kind. As I see these words they are in there largely to save the Coal Commission trouble. Quite clearly it will be much less trouble for the Coal Commission if the wretched surface owner has to cope with the lessee and exhaust his resources against him before he can turn against the Coal Commission. But the Coal Commission are going to be the big brother in all these mineral matters, and I think they ought to take over not only the plums in respect of royalties but the responsibilities and liabilities which today rest on the surface owner. I think this is a matter of the very first importance and I hope your Lordships will support the Amendment which is simply to remove this excrescence from the face of an Amendment which, otherwise, up to a point, is satisfactory.
Amendment to the Amendment moved—
Line 10, leave out ("which the lessee fails to discharge").—(Lord Balfour of Burleigh.)
THE LORD CHANCELLOR: My Lords, the noble Lord always seems to see behind an Amendment something which requires consideration, and I think in most cases his desire is fair and just, but I think in this instance he has not appreciated the legal effect. It is that effect which I think may possibly lead him to modify his views. If the words are struck out the result will be that the primary responsibility for making good damage, great or small, caused by the subsidence of surface by a working lessee, will be on the Coal Commission. The result will be if the words are struck out that if a man has a crack in a wall or if his fence is destroyed, or some damage is done to a building, or the drains do not work properly, he will have to communicate with the Coal Commission and to enter into correspondence with them. They will have to communicate with the working lessee to ask if he agrees that the damage in question is due to his workings, and in the result there must be a very substantial delay in giving to the surface owner what everyody wants to give him—namely, compensation, or the alternative of making good, as soon as possible. That

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is, I am convinced, the effect of striking out the words.
If that is so, I cannot believe that the noble Lord will insist on this Amendment, because he knows better than most of us that by far the greater number of these trivial cases of damage are remedied at once by the working lessee. There are staffs employed to do the work who are going round and making good every small damage that occurs to the surface. It cannot be to the interest of the surface owner that he has got to begin by shooting at the Coal Commission, who presumably have some important office in London, who may be far distant, who have to send somebody down to see what has been done; whereas the alternative if the lessee is responsible is that the lessee is on the spot, he is in the position of having people there watching the results of underground working, and it is perfectly easy for them in a very short time either to make good or to ascertain at very small expense the amount of the compensation which ought to be paid. It is on this ground that I do not think this Amendment would have the result which the noble Lord wants. I am strongly of opinion, and I urge it upon your Lordships, that, if you leave the words in, not one case in a hundred will ever come before the Coal Commission. The remaining ninety-nine will be settled by the lessees.
The paragraph which the Government have assented to makes it possible for the surface owner, if damage is done and he cannot get relief out of the lessee, to get that relief out of the Coal Commission. The noble Lord asked, how far has he got to go. I do not think that in practice there is any difficulty in answering that question. The paragraph as it stands makes the lessee primarily liable to discharge the liability. He is the man who has done the work which has let down the surface, and unless the surface owner agrees to its being done he goes to the lessee and says: "Such and such damage has been done, make it good." The paragraph is not so worded that the lessee has got to be pursued to the House of Lords. If a reasonable demand is made upon him and he does not comply with it the lessee has failed in discharge, and there will be an opportunity for the surface owner to apply to the Coal Commission. There will be no difficulty at all. In these circumstances I hope the noble Lord, whatever course he takes with re-
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gard to the next Amendment, will see that the present Amendment is really not so drawn as to have the effect for which he seeks.
LORD ADDISON: My Lords, I think the noble Lord, Lord Balfour, said correctly that this was a matter of first-rate importance which he has raised. It is. I hope your Lordships apprehend that the noble Lord wants to place upon the new big brother a different amount of responsibility altogether from that which applies to the existing small brother. The existing brother, to keep to the formula of the noble Lord, is the existing royalty owner, the landowner. He has certain obligations, and it is right and proper, of course, that the State, if the Commission are really in fact to be the State, should be a good landlord; but that is not a reason for saddling upon the Commission a responsibility which does not now fall upon a landlord, even a good landlord, and which a good landlord does not now recognise as his responsibility. That is what this Amendment would do, and so it is a matter of first-rate importance, because it would really result in this, so far as I understand it. To use the words of the noble Lord, it is the duty of the landlord to make good the defects of his tenant, if the tenant defaults. The lessee in this case would enter into an agreement, and part of his agreement would be to make good surface deficiencies if they occur, and so on. But this Amendment would have the effect of making the Coal Commission responsible for the defects of the lessee, who has entered into a right and proper agreement with the Commission. It opens up a vista of claims upon the national Commission, and would be a standing encouragement to lessees to ignore their own obligations. It would place upon this State big brother an entirely different class of responsibility from that which hitherto has attached to the existing small brother. It is indeed a matter of first-rate importance, and for once the Party to which I belong find themselves on the side of the Government.
LORD HASTINGS: My Lords, I had some considerable difficulty in following the arguments of the noble and learned Lord, and I was wondering whether in fact he has himself appreciated the different sets of circumstances which not only

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may but certainly must arise after the passage of this Bill into an Act of Parliament. It would, of course, be true to say that a surface owner whose coal is now in lease to a company will be often, after the passage of this Bill, in almost constant relation with that colliery company. That I think is inevitable. It is also valuable. In so far as that set of circumstances is likely to prevail, and to continue, the only difficulty there that arises will be to prove that the lessee has failed to discharge certain obligations, and I think my noble friend Lord Balfour is right in saying that a lessee who disputed his failure would have to be taken to such Court as might finally declare that failure or the reverse. That, of course, would be exactly what now is existing in the event of a lessee disputing his failure. There is nothing new in that.
But conceive of a case, and it will be the universal case in the course of time, where the Coal Commission issue a new lease. The Commission select the tenant. They will not ask the surface owner whether he approves of that tenant or does not approve. He will be required under the Amendment which has been put into the Bill by Lord Amulree to accept a tenant only of a class who will be able to pay compensation of a proper character. That is in this Schedule now. But the owner of the surface will be unrelated to that colliery tenant altogether. How is the surface owner of the future to obtain satisfaction for the letting down of his land by a lessee—not a lessee of his own but a lessee of the Coal Commission—with whom he is not in relation, and by whom he is owed no obligation, unless he has a right to go to the Coal Commission itself and to be able to demand in law compensation for the damage done to his surface by the lessee not of himself but of the Coal Commission?
It would seem almost the inevitable procedure. I am unable to understand how the surface owner will be able to get compensation for damage other than by that procedure. And it would occur to me as being right and proper that the Coal Commission should have a statutory liability to the surface owner in respect of minerals worked by a lessee of the Commission. Lord Addison seemed to think that the Coal Commission were being invited to accept a liability which does not now rest upon the mineral owner
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of the present day. It seemed to me that that was the wrong end of the stick. It is not suggested that the royalty owner of the day has a liability in this matter of his tenant. The tenant has a liability to the surface owner. The tenant will have a liability in the future not to the surface owner but to his own landlord, and that is the State, and by this Amendment the surface owner is enabled, so to speak, to move the Coal Commission to operate the liability which the tenant of the Coal Commission owes to the surface owner as the person who has suffered damage. I fail to visualise in the Lord Chancellor's Amendment any means whereby the surface owner can recover compensation from the tenant of the Coal Commission otherwise than by what is proposed in the Amendment moved by Lord Balfour of Burleigh. I beg to support what my noble friend has moved.
VISCOUNT HORNE OF SLAMANNAN: My Lords, I do not desire for a moment to labour a matter which perhaps has already been made abundantly clear by the very lucid speeches which have been made from these Benches. But let us try to find what principle lies behind this proposal, which indeed the Government have accepted. In the ordinary case the present-day royalty owner goes against his tenant or lessee who has let down his surface and done damage to his buildings—quite properly goes against that lessee, because he has got an interest in that lessee, he has selected him. If a lessee not very reliable, not very substantial in the way of means, comes along and seeks to get a lease of the coal, the royalty owner is in the position of rejecting that lessee and making his choice. But when the coal is severed from the surface he no longer has any ability of selection. He has to take the tenant who is forced into the position by the Coal Commission. That may be a very unreliable person. Accordingly, the Government have recognised this fact—I take it that upon no other ground could they have accepted the suggestion made by my noble friend Lord Balfour of Burleigh and have said that the Coal Commission, which puts the tenant into the position in which he is able to do damage to the surface proprietor, shall be responsible for all the damage which is done. That is the principle which lies behind the whole thing.

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If you once accept that it is perfectly plain also that the body against whom you must have recourse must be the Coal Commission. And—again taking the view that you may have a very unreliable lessee imposed upon you by the Coal Commission—it would be a monstrous thing if the owner of the surface were to be compelled to go through all the Courts of the land before it could be said that the lessee had failed to discharge his obligation in his liability to the surface owner. It might involve the surface owner not merely in a great deal of worry and trouble, but also in expense, which he might never be able to recover. That is the position in which he would be. There are many expenses incurred in the Courts which the successful litigant is not able to recover, and all that is imposed here upon the Commission is liability for the damage which occurs to the surface.
I was, however, very greatly impressed by the practical difficulty which was suggested by the noble and learned Lord on the Woolsack when he said: Is everything that takes place to be brought up before the Commission? I should have thought that in a practical world and in this practical country a practical means could be devised of getting over that difficulty. It would be very easy to put a paragraph in the Bill to suggest that in every case of notification to the Coal Commission of any damage that has taken place the surface owner should at the same time notify the lessee and give him an opportunity of making good the damage. Some phraseology of that kind might be put in as a practical method. But I think it would be very unwise and very unjust if we were to allow a surface owner to be put into the position in which he had, in the language of the law, to discuss a lessee who might not be a man worth powder and shot, but who might give him a great deal of trouble. I think the surface owner should on no account give up his direct access to the Commission for any damage which has been occasioned to his surface.
LORD STRABOLGI: My Lords, I think the noble Viscount, Lord Home, has overlooked his own Amendment which he had on the Paper jointly with Lord Balfour of Burleigh, and which did insist that where the lease so provided the surface owner had to go to the lessee.
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Then apparently the Government put down their Amendment, the two noble Lords see the Government Amendment, which is virtually the same as their own, and then they try to improve upon the Government Amendment by putting the whole of the onus on the Coal Commission. Where the lessee has an obligation, obviously the surface owner must go to the lessee, and that is admitted in the previous Amendment by the noble Lords, Lord Horne and Lord Balfour of Burleigh, which was withdrawn. Then why do they ask more from the Government now by seeking to amend the Government's Amendment in this way? As the noble and learned Lord has said, I took an interest in this matter on the Committee stage. I am grateful to the Government for this Amendment, and I hasten to come on this occasion to their support.
THE EARL OF CRAWFORD: My Lords, I think this short conversation has very well illustrated the difficulties inherent in the separation of surface from minerals. The speech of the noble and learned Lord on the Woolsack was almost defeatist to that extent. Good gracious! Whatever is the good of thinking you could come up to the absentee landlords in London to get your grievances redressed and to deal with a lessee whose name you may not ever know? I ask one question. Would the noble and learned Lord on the Woolsack kindly answer Lord Balfour's question as to the right of the surface owner to inspect the underground working? I can find no right of that sort in the Bill. Unless he has that, he does not know when the mineral owner below ground is going to approach the barrier of his property. The result would be that damage would take place without the surface owner having the power to protest. At the present moment that difficulty does not arise, at least only in one per cent. of the cases of coal being worked. It seems to me a very serious thing indeed that this, like so many other things, has been overlooked, because it is clear that from the very inception the Government thought it quite easy to buy coal, but it had not the remotest idea that it would have to buy the right to lower the surface as well.
THE LORD CHANCELLOR: My, Lords, may I answer the last question? I have to remind your Lordships that there is no right of action whatever as

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regards working underground unless and until damage results. The effect of this is, and has always been, that you cannot complain because people are working under you; but the instant subsidence takes place on your property, causing damage, you then have a right of action, and in some cases you have an immediate right to an injunction. In practice, what happens is that as soon as you know—and people who are accustomed to these occasions know very quickly—that something underneath your premises is causing some subsidence and causing some injury, you are entitled to a writ, and you are entitled on proper application to inspect the underground working. But there is no right, and there has never been a right, to inspect underground workings in the case of an ordinary surface miler merely because the surface owner knows that some workings are taking place in subjacent property.
We are doing nothing except what is common form in these cases, and it is quite a mistake to suppose that in every case at the present time the surface owner is the person who has granted the lease. Your Lordships must know perfectly well that surface and minerals in countless cases have been severed for over one hundred years, and in these cases the surface owner will be in exactly the same position under this Bill as the surface owner who owns the surface but who does not own the minerals. May I say a word in answer to Lord Hastings? I concede that the man who has been the owner of the surface and the minerals, and is the man who granted the lease, is not in such a good position to know if damage is going to be occasioned to him after the severance has taken place, but he is in exactly the same position to know that damage has been occasioned to him as he always has been. That is the cause of action. It is not working underground, but working underground with the effect of causing damage.
Now may I say something in answer to my noble friend Lord Home? In the first place I should like to congratulate him on the discovery that the word "constructed" is really a misprint for the word "construed," which apparently the Government had not discovered. It shows the great care with which the noble Viscount has read these Amendments.
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But having paid him that compliment, I must go on to say that I am quite unable to see the force of the argument which he has presented on this particular Amendment. It does not seem to me, with all respect to him, that he has answered the considerations I put forward in the smallest degree. The question is, in a case where the Coal Commission have granted a lease to a tenant, with an obligation on the tenant to make good any damage that shall be occasioned, whether the surface owner who has been damaged shall go first to the Coal Commission or shall go first to the man who has done the damage. It is the person whose working has caused the damage, not the Coal Commission, and I am wholly unable to see why in such a case he should not go against the person who has done the damage, who is at his very gate, whom he knows. I cannot believe that a surface owner who originally was the coalowner, who has got a colliery company working on his land, with all the various things on the surface that are incidental to the operation of coal-mining, cannot ascertain or does not know his name.
If a wall has cracked quite recently, and he sees a shaft close by and sees the ordinary stuff coming up day by day, is it not obvious that the sensible thing is to go to the secretary or some other person at that place and say, "Look here, you are letting down my house, you have cracked my wall, you must make good, or pay compensation." It is a complete mistake to suppose that, having done that, you have, in order to have your right against the Commission, to sue the man who has done the damage either in the High Court, the County Court, the Court of Appeal, or the House of Lords. With great respect that is fantastic. The section has said nothing of the sort. The section says if the lessee fails to discharge, and if you make a proper claim against a man, whether he be a working lessee or anyone else on the land, and he does not within a reasonable time comply with it, he is failing to discharge, and on that being so you have the right to go against the Commission.
I cannot help expressing my opinion very strongly that the striking out of these words would be unjust and unfair, and would not in the least carry out any object except this—namely, to cause trouble. You put the primary responsi-

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bility on the Coal Commission in striking out these words. Many people who suffer damage will think they have to go against the Coal Commission first because you have made it first, and in that case the consequence will be simply this. Correspondence with somebody in London, and the Commission will have to communicate with the lessee. The Coal Commission will not know how much damage is done. That is what the lessee will know. I ask your Lordships to leave the matter as it is at present, and let people do what Lord Home says is the sensible thing to do—proceed against the man who has done the damage and not proceed first against the Coal Commission, who have not done the damage and who know neither the damage which has been done nor the quantum of it, nor what should be done to make good.
VISCOUNT HORNE OF SLAMANNAN: May I ask the noble and learned Lord a question?
SEVERAL NOBLE LORDS: Order, order.
VISCOUNT HORNE OF SLAMANNAN: By leave of the House, may I ask a question? The question is, supposing the lessee refuses to acknowledge that the damage has been done by his workings, would it then be right for the surface owner to go straight against the Commission, or can the Commission reply that the lessee has not failed to discharge?
THE LORD CHANCELLOR: I am not able to say what the position would be in every case, but in the normal case, where the surface owner is claiming in respect of cracks or damage done to the surface, and the fact is that these cracks have been occasioned shortly after working by the working lessee, if the lessee declines to acknowledge any liability I venture to think that is an obligation which the lessee fails to discharge. It would still be open to the Coal Commission in that case to say that the damage has not been done within the terms of paragraph 7, but if the damage has been caused and is damage within paragraph 7, then the Coal Commission would be liable, and none the less the lessee who made excuse for not performing the obligation.
LORD BALFOUR OF BURLEIGH: My Lords, I am quite sure your Lordships' House was very glad to have two
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speeches on this important matter from the noble and learned Lord on the Woolsack, and I hope the same consideration will be extended to myself or my friends if we ask the House to allow us to do so also. I confess that the full reply which was given by the noble and learned Lord has not convinced me that the position of the surface owner is really met by this Amendment. As the noble Lord said, we are talking now about a lease which the Coal Commission will give to a lessee to work coal under a surface owner's grant. The surface owner will have no part or lot in the choice of that lessee. We have convinced the Government that he ought to have recourse against the Coal Commission. Now the question is the order of recourse. Of course, I agree that in ninety-nine cases out of a hundred the matters will be settled between the lessee and the surface owner, but I maintain that the Coal Commission ought to accept the responsibility right away from the word "Go," if I may say so. There is nothing in this Amendment about communications being sent to the Coal Commission in the first instance about a ditch which wants clearing; there is nothing in this Amendment about assessing the damage. All it does is to put the responsibility equally on the Coal Commission.
I was astonished to hear the noble and learned Lord on the Woolsack say that the surface owner would be no worse off so far as this question of damage is concerned. The noble and learned Lord forgets that he said that the surface owner was not concerned—so I understood him to say—with the fact that minerals were being worked under his ground until damage was done. But he is intimately concerned at present. He is getting reports every year from his mineral agent, he knows precisely what is going on, and he is intimately concerned with everything that goes on under his ground because he is drawing that income. Now the need for regular mineral reports is being taken away, and he will not know nearly so intimately what is going on, but he is just as much concerned with the risk of subsidence. You have to remember the position in which the surface owner is going to be. As I said to your Lordships on a previous stage of the consideration of this Bill, he is going to be on one side of the fence, with the Coal

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Commission and the lessee on the other side of the fence, and it is sometimes going to be very difficult to establish against a lessee that damage has in fact been done. Lots of lessees will not be ready to stand up to their obligations; many of them will be very hard to convince.
It is quite easy for the Lord Chancellor to talk about cracks appearing, as though it were a matter of easy ascertainment—as though a crack appeared and you knew at once that the damage had been caused by the working underneath. So often there are doubtful cases; and I do maintain that these words "which the lessee fails to discharge" are entirely unsatisfactory and unnecessary, because, as my noble friend has pointed out, they are so indefinite. We do not know what they mean in the case, we will say, of a claim which is resisted by a lessee. All surface owners may not be perfect individuals. Well, all lessees are
Resolved in the affirmative, and Amendment to the Amendment disagreed to accordingly.
not perfect individuals. They are not all ready to admit liability even in cases where that is clear, and still less in cases where it is not clear. The Coal Commission have given the lease, and the Coal Commission ought to be ready to take the responsibility right from the start. I feel that unless the noble and learned Lord on the Woolsack can promise me something, I shall have to press this question to a Division. We were asked on the last occasion to postpone it, and we did, but I think that this debate has revealed a very unsatisfactory state of mind on the part of the Government, and unless I can get a very definite promise of something to meet this undoubted difficulty I shall have to ask your Lordships to divide.
On Question, Whether the words proposed to be left out shall stand part of the Amendment?
Their Lordships divided:—Contents, 51; Not-Contents, 38.

CONTENTS.

Maugham, L. (L. Chancellor.)

Stanhope, E.

Fermanagh, L. (E. Erne.)

Wicklow, E.

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

Hailsham, V. (L. President.)

Gorell, L.

FitzAlan of Derwent, V.

Hare, L. (E. Listowel.)

Bath, M.

Goschen, V.

Harlech, L.

Dufferin and Ava, M.

Halifax, V.

Heneage, L.

Zetland, M.

Samuel, V.

Holden, L.

Ullswater, V.

Hutchison of Montrose, L.

Albemarle, E.

Jessel, L.

Bessborough, E.

Aberconway, L.

Kenilworth, L.

Birkenhead, E.

Addington, L.

Lawrence, L.

Feversham, E.

Addison, L.

Perry, L.

Iddesleigh, E.

Arnold, L.

Rennell, L.

Iveagh, E.

Biddulph, L.

Rushcliffe, L.

Lucan, E. [Teller.]

Boston, L.

Sackville, L.

Midleton, E.

Cautley, L.

Snell, L.

Munster, E.

Clanwilliam, L. (E. Clanwilliam.)

Strabolgi, L.

Plymouth, E.

Strathcona and Mount Royal, L.

Spencer, E.

Clwyd, L.

Windlesham, L.

NOT-CONTENTS.

Portland, D.

Hereford, V.

Gainford, L.

Wellington, D.

Home of Slamannan, V.

Gerard, L.

Hastings, L.

Aberdeen and Temair, M.

Annesley, L. (V. Valentia.)

Howard of Glossop, L.

Askwith, L.

Lamington, L.

Bathurst, E.

Balfour of Burleigh, L. [Teller.]

Middleton, L.

Dartmouth, E.

Mildmay of Flete, L.

Dudley, E. [Teller.]

Basing, L.

Mowbray, L.

Fitzwilliam, E.

Bingley, L.

Oriel, L. (V. Massereene.)

Lindsay, E.

Brancepeth, L. (V. Boyne.)

Saltoun, L.

Mar and Kellie, E.

Cromwell, L.

Sandhurst, L.

Scarbrough, E.

Darcy (de Knayth), L.

Shute, L. (V. Barrington.)

Doverdale, L.

Teynham, L.

Falmouth, V.

Fairfax of Cameron, L.

Waleran, L.

Wigan, L. (E. Crawford.)

LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved, in sub-paragraph (1) of the proposed new paragraph, after "discharge"

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immediately preceding the proviso, to insert "and (b) contrary to the terms of a lease subsisting at the valuation date shall he entitled to enforce against the Commission any liability for payment of proper compensation arising from such wrongful withdrawal of support." The noble Lord said: My Lords, I would first like to offer my congratulation to the Government on having been saved by His Majesty's Opposition, who happen to be here in full force to-day, otherwise they could not have performed that rather notable feat. They have just done it. This Amendment is intended to have the effect of giving recourse to the surface owner against the Coal Commission in the case of an infraction of a lease subsisting at the time of valuation. The reason for this Amendment is that if a lessee under such a lease improperly withdraws support the remedy for the surface owner is not under the lease but is at Common Law. It seems to me to be right and in accordance with the principles which are now admitted by the Government, although perhaps not quite to the extent which I should like, that the Coal Commission should have that responsibility. I anticipate that the noble and learned Lord on the Woolsack will say that this lease has nothing to do with the Coal Commission. I cannot accept that point of view. I think it has a great deal to do with the Coal Commission. It is true that the lease was granted by the present surface owner, it may be many years ago, but the Coal Commission are going in future to be the recipients of the royalties which are paid under that lease, and I think they must take their share of responsibility for such unpleasant parts of the lease as exist as well as the plums.
The argument resolves itself once more into the big brother argument, and I do not think I need develop it at any great length, but I would like to emphasize once more to your Lordships the fundamental change which is being effected by this transfer to the Commission. It seems to me most unfair to take the line that because the surface owner may have had the misfortune to have a bad tenant he is to be left to struggle with that position, and that the Commission are to take the royalties and leave him, as it were, to stew in his own juice. I will not add more at this stage, but with those words I beg to move the Amendment.
Amendment to the Amendment moved—
Line it, insert the said words.—(Lord Balfour of Burleigh.)
THE LORD CHANCELLOR: My Lords, again I am afraid I am unable to agree on behalf of the Government to this Amendment, but for somewhat different reasons. As I understand it, the object of the Amendment is to impose upon the Coal Commission a liability for everything done by the lessees who had leases with which the Commission have had nothing at all to do as regards the granting of them, provided that the damage done is damage in respect of which compensation is payable and the liability is in respect of something done contrary to the terms of the lease. I am puzzled altogether to understand the precise meaning of this. The Commission are to be liable if the tenant has done something contrary to the terms of the lease. He may, of course, be entitled to let down subject to payment of compensation or he may have a lease under which he is not liable for having let down. The words of the Amendment are "contrary to the terms of a lease subsisting at the valuation date." I do not quite understand why the noble Lord puts in the valuation date and not the vesting date. In such a case the Commission are to be liable in respect of all these matters.
Tenants do no doubt occasionally commit breaches of the conditions and terms on which they get a lease, and, as I have said before, I am unable to see why the Coal Commission should be liable in such cases. I have already explained to the House, I hope not at wearisome length, that the Government are quite unwilling and unable to accept liability for something done by lessees from whom they have so to speak inherited as from the date of the vesting of the property in them. I am afraid I have already wearied your Lordships on this point. The Government can go no further than the Amendment which stands in my name and that of the noble Earl the Leader of the House.
LORD STRABOLGI: My Lords, may I ask the noble and learned Lord Chancellor or the Leader of the House a question that has a bearing on this important Amendment moved by Lord Balfour? The question relates to the whole of the

175
matters we are now discussing. As I understand it, in future the Commission own these coal seams and they lease them to people who are going to work them, to mineowners.
THE LORD CHANCELLOR: May I interrupt the noble Lord? We are dealing here apparently, not with leases granted by the Coal Commission, but with leases granted by their predecessors.
LORD STRABOLGI: It is a rather complicated matter and perhaps I can ask my question when we deal with the Amendment as a whole.
LORD BALFOUR OF BURLEIGH: My Lords, perhaps I ought to have developed my point more fully in moving the Amendment. I am not quite sure that the noble and learned Lord on the Woolsack is so innocent as he would have your Lordships believe. The case I have in mind is that of a lessee who withdraws support where he had no right to withdraw support. I have in mind a man working a shallow seam where pillars of coal are stipulated in the lease to be left for the protection of surface buildings. It happens to be a particularly valuable seam and the lessee is not a very scrupulous fellow. This is a case within my own knowledge. He goes after that seam and does damage which the lease was so drafted as to prevent him doing. Once again we come to the difficulty that the surface owner will not have the access he used to have. He will not have his mineral agent going every six months to look round and see what is going on. He will have the greatest difficulty in bringing home to the lessee this infraction of the lease. Once again I must tell your Lordships that it is not so simple as it appears to the noble and learned Lord. He says that at once when a crack appears you know that damage has been done. Those of your Lordships who have lived in mining areas and have had experience of these matters know that it is not quite so simple as all that. It is a very difficult matter to bring home responsibility even in a case which turns out to be a flagrant case.
Why the Government cannot do the fair, decent thing to these wretched surface owners who are having their property stolen at forty per cent. of its market value I cannot understand. It really
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makes me very angry. If the royalty owners had had a square deal it might not have been so bad, but not only have they had a deal which I think perhaps soon the country will begin to understand is a very raw deal, in the words of my noble friend, but in addition to that the Government by this proposal go on scaling them down and scaling them down, putting them in the wrong, making things as difficult for them as they possibly can. I can only say once again that this is a measure of which the Government ought to be, and I think probably in their hearts are, ashamed, but I cannot get your Lordships to agree with me and I do not think it is much use pressing the point to a Division.
Amendment to the Amendment, by leave, withdrawn.
LORD STRABOLGI: My Lords, before the main Amendment is finally agreed to I should like, if I am in order, to ask a question about it. This is the last opportunity before we part with the Second Schedule. As one of the saviours of the Government I would like to presume on that position and ask a question which really supports what has been so ably argued by the noble Lord, Lord Balfour of Burleigh. I am not speaking now of the great landlord who has leased coal for generations. I am thinking of the small freeholder who has bought his house or cottage.
LORD BALFOUR OF BURLEIGH: If the noble Lord had thought of that before he would have voted for my Amendment and we might have carried it.
LORD STRABOLGI: I am thinking of it now. I go a great part of the way with the noble Lord, but on this occasion my noble friend Lord Addison persuaded me against it. Here you have the case of coal which is taken over by the Coal Commission and from time to time the Coal Commission lease it to various companies w ho work it. Earlier in to-day's discussion the noble Lord, Lord Gainford, moved an Amendment, the principle of which was accepted by the Government but which was not inserted in the Bill, to provide for notice being published in the London Gazette and in local newspapers. That notice was to be given by the Commission on the occasion of their first exercising their right to grant a lease. I ask your Lordships to suppose that some years have

177
elapsed, that the coal has been leased to perhaps two or three different tenants, and damage occurs through subsidence. I am the owner of a small freehold house which is damaged. How do I know who has caused the damage? By this Amendment I shall have to apply in the first place to the lessee, to the local secretary of the coal mining company. But how do I know who it is? I am a busy man, may be a small shopkeeper, who does not follow these things. Will it he known in the locality whenever a lease is granted, and will it be known when that lease alters the right of support? I am thinking, as I say, of small householders, perhaps thousands of them, who have suffered grievously in the past. They will know that there is this all-powerful Coal Commission in London to whom they can in the last resort apply, but meanwhile they have to go to the local people. What steps do the Government propose to let it be known to whom they should apply?
THE LORD CHANCELLOR: My Lords, the case where there is more than one colliery company working an underground seam is not usual, but I think that is the case under the hypothetical house with which the noble Lord is concerned. There are not many such cases, but I agree that I ought not to shirk the question because there are such cases. Usually one seam is let to one lessee and another seam to another lessee. Sometimes, however, there are as many as three or more people working under the ground in question. One colliery corn-pang perhaps is working a narrow seam and another company is working a wider seam. There is at the present time considerable difficulty in. such a case, when damage to the surface occurs, in determining who is liable, but I do not think myself that that difficulty will continue. I am expressing here an opinion which I think is right, and doing my best without notice of the question to answer it. I do not myself think that the difficulty will continue if paragraph (7) as it stands on the Amendment Paper is put into the Bill, for the reason that the owner of the house or cottage would, if he were a wise man, apply to each of the lessees who are working under his premises and request each of them to pay him for the damage that has occurred. If one of them replies, all is well.
LORD STRABOLGI: I am sorry if I have not made myself clear. That was not my point. I was putting the case of one company. There is a change. The original company is perhaps liquidated and a new company formed to take over the lease. How are small local people to know that a new tenant has taken over the lease?
THE LORD CHANCELLOR: I confess that I had not understood that that was the noble Lord's point. The answer to that, I think, is that the existence of a new lessee would be known in the neighbourhood. If a company goes into liquidation that would be known.
LORD STRABOLGI: A voluntary liquidation?
THE LORD CHANCELLOR: Yes, even if it is a voluntary liquidation. If something of that sort takes place he might unfortunately take the view that the wrong person is liable, and if so the answer may be that the persons responsible are those who went out a week, a month, or a year ago. In those circumstances the person to whom the claimant went would very likely decline responsibility, rightly or wrongly, and if within a reasonable time he failed to discharge the liability, then the Coal Commission would come in. I think that the paragraph is so drawn that there is no real difficulty in such a case. The paragraph does not say that the lessee has got to be unsuccessfully sued or anything of that sort. He has got to fail to discharge his liability before you have recourse to the Coal Commission.
On Question, Amendment agreed to.
Third Schedule:

THIRD SCHEDULE.
PROVISIONS AS TO COMPENSATION PAYABLE UNDER SECTION SIX OF THIS ACT.
THIRD SCHEDULE.
  PART III.

    VALUATION.
    Claims and Valuation Proceedings.
    11.—(5) As soon as may be after giving effect to the preceding provisions of this paragraph in the case of any holding the Board shall settle their valuation thereof and shall give notice of their valuation in the prescribed form to the claimant and to each of the persons intervening if any, and in the case aforesaid, to the Commission. The said notice to the claimant or any person intervening shall

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    contain an intimation of the right of the person to whom it is given to have the valuation reviewed under the provisions of paragraph 12 of this Schedule.
    14. The Central Valuation Board shall have power to make, with the approval of the Board of Trade, rules as to the procedure to be followed in giving effect to the three last preceding paragraphs and for prescribing anything that is therein directed to be prescribed, and in those paragraphs the expression "prescribed" means prescribed by rules made under this paragraph.

PART IV.

  PAYMENT AND DISPOSAL OF COMPENSATION.
  Disposal of compensation as between beneficial interests.
  20.—(1)
  (2) In the case of a holding that consists of or comprises an estate or other interest subject to a settlement within the meaning of the Settled Land Act, 1925, or to a trust for sale the proceeds whereof are subject to a settlement by way of succession, the trustees of the settlement or the Court, and in the case of the Court on the application of any beneficiary under the settlement, may require and cause the compensation, or the part thereof attributable to that estate or other interest, as the case may be, to be laid out, invested, accumulated, and paid in such manner as, in the judgment of the trustees or of the Court, as the case may be, will give to the beneficiaries under the settlement the like benefit therefrom as they might lawfully have had from that estate or other interest, or as near thereto as may be, regard being had, when the circumstances so require, to the fact that that estate or other interest was property of a wasting character:
  Provided that—

  (a) where a payment on account of the compensation for the holding has been made under the preceding paragraph before the vesting date, the net income accruing to the trustees before the vesting date from the investment of the sum paid, up to an amount sufficient to make good to the capital of the settlement the interest on that sum brought into account under the last preceding paragraph against the capital of the compensation, shall be set aside as capital of the settlement;

  (b) subject as aforesaid no part of the income of the compensation shall be required or caused by virtue of this subparagraph to be set aside as capital of the settlement.

  (3) In the case of a holding that comprises an estate or other interest subject to a mortgage, the compensation (other than any part thereof that is attributable to an estate or other interest not subject to the mortgage) shall be held and disposed of in like manner as if it had been money arising under a power of sale conferred by the mortgage.
  (5) Money representing compensation attributable to an estate or other interest subject to such a settlement as is mentioned in subparagraph (2) of this paragraph, or vested in trustees on or for charitable, ecclesiastical or public trusts or purposes, may, notwithstanding anything in the relevant trust instrument, be invested not only as authorised by law or by the trust instrument but also in or on the debentures or debenture stock or the preference or wholly or partially guaranteed stock or shares of any company incorporated by a special Act of, or provisional order confirmed by, or by or under a public general Act of, the Parliament of the United Kingdom, or incorporated by Royal Charter, being a company which has paid dividends upon its ordinary capital at the rate of at least three per cent. per annum for at least the five years next before the time of investment (of which fact a letter purporting to be signed by the secretary of the company or by a banker or member of a firm of bankers or by the secretary or manager of a joint stock bank or of any branch thereof shall be sufficient evidence):
  VISCOUNT HORNE OF SLAMANNAN VISCOUNT HORNE OF SLAMANNAN moved to insert the following new paragraph:
  "11.—(1)In the case of any holding in respect of which an apportionment of rent is prescribed under Section ten of this Act the Regional Valuation Board shall make the apportionment as soon as may be after notice of registration in relation to the holding has been given to them under the last preceding paragraph and shall give notice thereof in the prescribed form to the claimant, to any persons intervening and to the lessee (which expression for the purposes of this paragraph means the person who at the valuation date was liable to pay the rent to be apportioned).
  (2) Within the prescribed period after service upon him of the notice of apportionment the claimant or any person intervening or the lessee may give notice in the prescribed manner to the Board of Trade that he claims to have the apportionment referred to and determined by the High Court and if any such notice be given the apportionment shall be so referred and determined in accordance with rules to be prescribed."
  The noble Viscount said: My Lords, this is a matter upon which I may hope finally to gain the meed of the Lord Chancellor's favour. It is a matter purely concerned with simplifying procedure. It arises out of the provisions of Clause 10 of the Bill, and I think the House will be glad to find Clause 10 now in the shape in which the Lord Chancellor has put it, rather than in the condition in which it was sent up from another place. Clause 10 provides for the case where there is a severance of interests owing to the fact that the Coal Commission have acquired the coal, but where the interests have been divided,

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  and the Coal Commission have only acquired a part of those interests. In those circumstances it is incumbent upon the Regional Valuation Board to apportion the rent reserved in the lease. My argument starts from that point. It is incumbent upon the Regional Valuation Board to apportion the rent reserved in the lease. Now I come to the question of the procedure which people have to follow who are involved in severance of interest under Clause 10.
  The scheme of the Bill seems to be this. First of all, the previous owner has to give notice of a claim within the prescribed time. If he gives a notice of claim he receives the registered particulars of the coal in question. Thereupon he puts in a valuation, an estimate of the value, of the coal which belongs to him. Thereafter the Regional Valuation Board deal with the claimant's estimate and provide a draft valuation of their own. If the owner objects to that valuation, what he then does is to seek an interview or an opportunity of being heard before the Region al Valuation Board. Then comes a final decision by the Regional Valuation Board, and if the claimant is dissatisfied with that he goes to a referee. That I take it is the scheme put forward in the Bill. Keeping in mind that the Regional Valuation Board have to apportion the rent, it is perfectly plain that in the circumstances I have described the claimant may be assessing the value of his coal upon a totally wrong basis, or upon a totally different basis from that of the Regional Valuation Board, who have apportioned the rent reserved in the lease in a totally different fashion. I would like to suggest that it would be only common sense to cut a part of this procedure, and to follow the method advocated in my Amendment.
  That method is this, that as soon as the Regional Valuation Board have apportioned the rent reserved in the lease they should give notice to the claimant of the apportionment that they have arrived at, and that thereafter he should put in his claim upon the basis of the rent so apportioned, or otherwise. If he objects to the apportionment of the rent which has been arrived at by the Regional Valuation Board, he should at that stage, at once, if he wishes to dispute the matter, take it before the High Court, where a final decision would be given. That would
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  appear to be, with other circumstances in the Bill, the method which is adopted in Clause 10, and so I do not think the noble and learned Lord on the Woolsack would suggest that this is procedure which had not been contemplated. Accordingly, I venture to move the Amendment which is in my name on the Paper. I have described shortly what is the result of the first paragraph and also of the second paragraph, and then the ordinary procedure would follow.
  It would prevent what it seems to me would necessarily follow—namely, a whole lot of appeals to referees, which need never occur if you allow the claimant to know from the beginning the apportionment of rent at which the Regional Valuation Board have already arrived. It is senseless that a claimant should put in a claim, or an estimate of valuation, for himself, when he does not know what it is that he has got to meet. Accordingly, I suggest that you should cut a lot of the procedure by adopting the method which I propose. Then there would follow as a consequential Amendment the words which appear on the Paper providing for the appropriate time w hen these procedures would be followed. I hope that the Lord Chancellor will accept this simplification of the procedure in the Bill.
  Amendment moved—
  Page 66, line 21, at end insert the said new paragraph.—(Viscount Home of Slamannan.)
  THE LORD CHANCELLOR: My Lords, it is with great regret that I cannot on behalf of the Government assent to this Amendment moved by my noble friend in such persuasive accents, but I really cannot. For one thing, if I correctly understand it, it is in conflict with Clause 10, which has already been approved by the House on this stage of the Bill. I am not sure that my noble friend appreciates the fact that under Clause 10 the provision is that where there is not a separate rent reserved of surface and minerals
  "the rent reserved by the lease shall he apportioned, and the parts of that rent to be apportioned to the several parts of the premises shall, in default of agreement between the Commission and any other person entitled in reversion,… be determined by an arbitrator selected by agreement between the parties."
  Then follows subsection (2) providing that:

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  "(2) Where an apportionment of the rent reserved by a lease has been made for the purposes of a valuation of a part of the premises under the Third Schedule to this Act, an arbitrator shall have regard to that apportionment for the purposes of a determination under the preceding subsection."
  That is quite inconsistent with what the noble Lord proposes in the present Amendment.
  In the first place, he requires the Regional Valuation Board to give notice in a certain form to persons intervening and to the lessee and then, after the prescribed period, the claimant or any person intervening or the lessee may give notice to the Board of Trade that he claims to have the apportionment referred to and determined by the High Court. The House has already agreed to a clause under which every question of apportionment is to be determined by an arbitrator, and, if I may say so, I express the opinion that the House very wisely acted in providing for this apportionment to be made by an arbitrator and not by the Court. Because if you go to the Court to value the premises comprised in a certain holding of the surface and the mine underneath that surface for the purposes of an apportionment of rent, the Court does not know anything about it of its own knowledge. The Court knows something, perhaps a great deal, about the law relating to minerals, but nothing about that particular holding, either its surface, or its value, or the minerals. The result is that you have then a conflict of evidence on the two sides, which may be very expensive, and which may of course lead to a further application to another Court. Now if you have got an arbitrator, who is to determine a question of fact, in which there is no law involved, the decision of that arbitrator on the question of fact binds both parties. He makes an award, and you cannot have any of the trouble of an appeal unless there is some question of law, or unless you get him in the course of the arbitration to state a case.
  All these facts are perfectly well known to my noble friend, and the main result of the Amendment which he has moved is that, instead of having this apportionment question simply determined once for all by an arbitrator agreed between the parties, or if necessary appointed by an independent person, the parties are to be
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  involved in all the trouble and expense of an application to the Courts. It is for these main reasons, and certain other reasons which are not of so much importance, that I am unable to accept this Amendment, and I ask your Lordships to keep the matter as it was left yesterday when Clause 10 was amended by an Amendment of which your Lordships ought to be well aware.
  VISCOUNT HORNE OF SLAMANNAN: My Lords, I apologise for my temerity in venturing to aspire to paint the lily of this Bill, and accordingly I beg to withdraw this Amendment.
  Amendment, by leave, withdrawn.
  EARL STANHOPE: My Lords, the next Amendment in my name is drafting.
  Amendment moved—
  Page 67, line 10, leave out ("the case") and insert ("either of the cases").—(Earl Stanhope.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER: My Lords, the next Amendment is drafting.
  Amendment moved—
  Page 67, line 14, leave out ("where in the case") and insert ("where in either of the cases").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS had given Notice of an Amendment in sub-paragraph (5) of paragraph II, to leave out "case" and to insert "cases." The noble Lord said: My Lords, I think that is probably an omission on the part of the Government draftsman.
  THE LORD CHANCELLOR: May I suggest that it should be "either of the cases"?
  LORD HASTINGS: I agree. I move it in that form.
  Amendment moved—
  Page 67, line 24, leave out ("case") and insert ("either of the cases").—(Lord Hastings.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, in sub-paragraph (5) of paragraph 11, after "Commission," to insert "and (in the second case aforesaid in which notice has to be given to the Commission) to all persons interested in the valuation of all other holdings in the Valuation Region." The noble Lord said: My Lords, the House will be

  185
  familiar with the fact that the concession which the Government made in respect of freehold coal created a demand for the insertion in this Schedule of words which would enable the Commission to appear before a person experienced in the valuation of minerals where the Commission had some reason to suppose that the coal in the property of the freehold coalowner had been under-valued. In Committee the Government inserted words, which are to be found in sub-paragraph (4) of paragraph u, to this effect:
  "if the claimant, or in the case aforesaid, the Commission, so require in the prescribed manner and within the prescribed period, the Board shall give him or them an opportunity of being heard by a person experienced in the valuation of mineral,…"
  It is quite evident that after the valuer has made his valuation and the Commission are allowed to appear, and appear successfully, before the person appointed to hear the Commission's objections to that valuation, it is only fair and proper that the other persons who would be affected by an alteration in the valuation should similarly have the right to be heard.
  The diminution of the valuation, or the increase of the valuation, which is what the Commission would presumably be seeking, would deduct from and diminish the amount of compensation money available to the remainder of the mineral owners in that area. In such cases I feel certain that the noble and learned Lord will sympathise with the view of the mineral owner that such diminution or deduction should not be made unless, and until, these other persons who are affected thereby have the opportunity of representing their view. It would be a valuable view to the arbitrator because they, and they alone, could speak of the values attached to other collieries of the same character in that area. I feel that the noble and learned Lord will agree with the principle I am endeavouring to advocate.
  But there is another way out of this which I would like to suggest to the noble and learned Lord as being possibly the better. Yesterday, when we were debating Clause 12, an Amendment was inserted in the Bill by the noble and learned Lord himself on page 14, line 32. It is to be found on page 8 of the First Marshalled List of Amendments in our hands yesterday. The Amendment reads:
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  "The right under this section to a grant of a lease of any coal or mine shall be conditional upon the applicant's satisfying the requirements of the Third Schedule to this Act as to the registration of particulars thereof under the Registration Act and the making of a claim for compensation for the fee simple therein, and to his complying with the provisions of that Schedule that impose upon him any duty in connection with the valuation of the fee simple therein."
  The insertion of that new paragraph in the Bill last night appears to me to make unnecessary the provisions on page 67 of the Bill under which the Commission has the right to appear before a person experienced in the valuation of minerals, for the reason that if the freehold coal-owner has been compelled under this new paragraph to satisfy the requirements of the Third Schedule of this Bill, there cannot in my view be any point on which the Commission could object and desire to appear before an independent person.
  If the noble and learned Lord takes the same view, and I am hopeful he may because I expect the reason why he put that paragraph into the Bill last night was to obviate any possibility of an infraction of the rules of valuation, he may be inclined to agree with me that it would be simpler to rely on that new paragraph and to take out of sub-paragraph (4) on page 67 of the Bill the special provisions under which the Commission may appear before a person experienced in the valuation of minerals. In that case the Amendment to which I am now speaking would become redundant and unnecessary. That is my impression, and no doubt the noble and learned Lord will give attention to the point. At the moment I am merely advocating that the power given to the Commission to appear before this person experienced in the valuation of minerals is an authority which should be shared by other persons affected. I hardly think it should be necessary to argue the justice of that any further. If the noble and learned Lord thinks that the new paragraph already meets the case I shall he very glad to withdraw my Amendment, conditional on the withdrawal also of the special Amendment put in on Committee.
  Amendment moved—
  Page 67, line 25, after ("commission") insert the said words.—(Lord Hastings.)
  EARL STANHOPE: My Lords, I am afraid the Government do not quite see their way to accept this Amendment, and

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  for this reason. My noble friend will remember that we put in the previous Amendments because, as was pointed out on the Committee stage, once you leave the freehold coal owner in the position of being no better or worse off as the result of the Bill there is no reason why he should take any interest in the valuation of his coal property. That is why it was put in that the Coal Commission should have the right to appear. I am not quite sure, in regard to the Amendment put in yesterday, whether that would be quite sufficient without the Amendments which were put in on the former occasion in this particular Schedule which we are discussing, because I am not sure that the Coal Commission would be satisfied that the procedure of Clause 12, on the Amendment moved by the noble and learned Lord yesterday, could in fact he carried out unless they have the right to appear.
  As regards the particular point of my noble friend's Amendment which we are now discussing, of course he will realise that no coalowner has the right to see the valuation of any other coalowner in his particular region. All properties are valued separately and then added up together in the region. It makes an entirely different case if anyone interested can see another valuation. My noble friend's words are very wide indeed—"all persons interested in the valuation of all other holdings." These words are so wide that we could not possibly accept them, apart from anything else. It would mean that the valuation of freehold coal would be inspected by everyone else in the region, because everyone in the region would be interested in that particular valuation. I do not know what the views of freehold coal owners would be on this matter, but I should think there would be considerable objection from their point of view if all the valuations of their properties were to be left open to inspection by anyone interested while all the other valuations were kept from them. For these reasons the Government cannot accept this Amendment.
  LORD HASTINGS: My Lords, I find myself in agreement to a certain extent difficulties would arise if this particular with the Leader of the House in this matter. Quite clearly very considerable
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  Amendment were accepted and the valuations became accessible to all persons interested. At the same time there is a point in what I have been endeavouring to explain to the House that it is not really proper that the Commission should have the right to appear and anything they say to go unrefuted. Surely it would be easier and better to establish that subsection in Clause 12 in such a form that the very clumsy method which already appears on page 67 of the Bill, and which would be made even clumsier if my Amendments were accepted, were rendered, both of them, entirely unnecessary. The particular method here, I think it will be admitted by the Leader of the House, is clumsy. It was put in when certain circumstances required that words of that character should be put in, but I am strongly of opinion that the paragraph put in last night has taken away the necessity, and if it has not entirely taken it away, it looks to me as very much easier to strengthen that subsection in Clause 12 than to accept either my Amendments or to insist on the Amendments that now appear on page 67.
  I do not intend to press this Amendment, but I would invite the noble Earl, if he would be so good, to consider that particular aspect of the matter with the idea of simplifying this part of the Bill. If he finds it possible to agree that the provision inserted in Clause 12 is sufficient or, if not, to strengthen it in such a way as will enable these clumsy points to be taken out of the Bill that are already there, I shall be grateful to him. I will leave the matter, if I may, in the hands of the noble Earl, hoping he will find that that is the best way out of a very difficult situation.
  EARL STANHOPE: I shall be most anxious to consider it again, because the point which my noble friend has just raised, as to whether this is necessary in view of the Amendment which we made yesterday, had not occurred to me, and therefore I should like to think it over.
  LORD HASTINGS: I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  LORD HASTINGS: My Lords, my Amendment to paragraph 12 is part of the same point, and I do not propose to move it.
  LORD HASTINGS LORD HASTINGS moved to insert the following new sub-paragraph:
  "(2) Before any rules are made under this paragraph a draft thereof shall be laid before both Houses of Parliament, and the rules shall not be made unless both Houses by Resolution approve the draft either without modification or addition, or with modifications and additions to which both Houses agree, but upon such approval being given, the rules may be made in the form in which they have been approved and shall be of full force and effect."
  The noble Lord said: My Lords, this is really an Amendment of very great importance. I am not under the necessity of arguing at any length the need for something of the kind, because already the Government by inserting another form of the same Amendment has admitted its need, and we can shorten the proceedings to that extent. I take it that the Government do recognise that the submission of those valuation rules to both Houses is really absolutely essential—that the rules which the Central Valuation Board may make are quite vital to the interests of the royalty owners, and that it would be grossly improper that a Board of the character which is created under this Bill should have authority to make rules without submission to any superior authority. That is admitted by the Amendment put down in the names of the noble and learned Lord on the Woolsack and the Leader of the House. It therefore is only a question between us whether the words of the Amendment which I have on the Paper are preferable to the words of the Amendment which the Government have put on the Paper.
  The words of my Amendment require an affirmative Resolution of both Houses; the words which the Government have put down require a negative Resolution of both Houses. As very many members of this House know, this is an old bone of contention. I would be sorry to say how many times I and others have argued this particular point in the House. There have been occasions when we have carried our point and affirmative Resolutions have been agreed to, but not often. More frequently the form adopted, the accustomed form, is that which now stands in the names of the noble and learned Lord, the Lord Chancellor, and the noble Earl the Leader of the House. I would very greatly prefer the form in which my own Amendment is drawn, but I have to recognise that these rules will be non-recurrent: only once will they come before
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  both Houses; and whereas in some cases rules have a habit of slipping through both Houses because neither House is awake to their importance, in this particular case, with active associations presumably still to be in being and the importance of the rules being as great as it is, there is no very great risk in permitting the negative Resolution, by reason of the fact that those associations will surely not let them go through without examining them very closely. For those reasons and those reasons only—because I do greatly prefer the affirmative Resolution—I do not propose to press my Amendment to a Division and am prepared to accept the Amendment which stands in the names of the noble and learned Lord on the Woolsack and the Leader of the House. I am very glad to acknowledge that the Government admit the absolute necessity of these rules being submitted to the supervision of both Houses of Parliament.
  Amendment moved—
  Page 69, line 26, at end insert the said paragraph.—(Lord Hastings.)
  VISCOUNT ELIBANK: My Lords, before the noble Lord finally withdraws his Amendment—
  LORD HASTINGS: I have not withdrawn it yet.
  VISCOUNT ELIBANK:—I should like to ask this. As I read the Amendment moved by the noble Lord, Lord Hastings, that provides for the rules being either modified or agreed to as they stand. His Amendment reads:
  "the rules shall not be made unless both Houses by Resolution approve the draft either without modification or addition, or with modifications and additions to which both Houses agree."
  The Amendment which stands in the name of the noble and learned Lord the Lord Chancellor and the noble Earl, Lord Stanhope, does not provide in any way for the modification or amendment of the rules. As I read that Amendment those rules will be laid before your Lordships' House and if there is no objection to them within thirty days they will automatically come into force. There is nothing in that Amendment to allow for modification. Perhaps I am wrong. I rise merely to put the point before the noble and learned Lord on the Woolsack moves his Amendment.
  THE EARL OF MUNSTER: My Lords, in reply to the question which has just been asked by the noble Viscount, I understand that you can modify under the procedure which is adopted in our Amendment. As regards what was said by my noble friend opposite, Lord Hastings, we, of course, realise as he does that these rules will be of major importance, but after careful consideration of the Amendment which he has put down we did come to the conclusion that it was better that this matter should be dealt with by negative Resolution rather than by affirmative Resolution. I am grateful to the noble Lord for saying that he proposes to withdraw the Amendment which he has on the Paper and to accept the Government Amendment in place thereof.
  LORD HASTINGS: The noble Earl must not assume for a moment that I accept his contention that the Amendment in the name of the noble and learned Lord the Lord Chancellor and the noble Earl, Lord Stanhope, is a better version. It is not; it is definitely worse. All I said was that in the circumstances of which I am very well aware, and having regard to the difficulty of carrying these provisions for affirmative Resolutions, I was prepared reluctantly to withdraw my Amendment in favour of that to be moved by the Lord Chancellor. But I do not like it and I would far prefer my own. I beg leave to withdraw.
  Amendment, by leave, withdrawn.
  EARL STANHOPE EARL STANHOPE moved to insert in paragraph 14:
  "(2) Rules made under this paragraph shall be laid before each House of Parliament for a period of thirty days during the Session of Parliament and, if either House before the expiration of that period resolves that the rules be annulled, the rules shall be of no effect, but without prejudice to the validity of anything previously clone thereunder or to the making of new rules:
  Provided that, in reckoning any such period of thirty days as aforesaid, no account shall be taken of any time during which both Houses are adjourned for more than four days."
  The noble Earl said: My Lords, I beg to move. Perhaps the noble Lord opposite will think that this is as near as the Government can get to the Amendment proposed by those who dwell on Olympus.
  Amendment moved—
  Page 69, line 26, at end insert the said sub-paragraph.—(Earl Stanhope.)
  THE EARL OF CRAWFORD: My Lords, my noble friend the Earl of Munster, referring to the Amendment in the name of the noble Lord Lord Hastings, which permitted modifications and additions, said that the Amendment standing in the name of the noble and learned Lord on the Woolsack and the noble Earl the Leader of the House covered that point.
  THE EARL OF MUNSTER: May I apologise to your Lordships? I made an error there. I understand that under our Amendment these rules cannot be modified but that they can only be accepted or rejected en bloc.
  THE EARL OF CRAWFORD: That is the whole point. In those circumstances it is necessary to move an Amendment to this Amendment, after the word "annulled" to insert the words "or amended," or something of that sort. Perhaps the noble Earl will accept that. I beg to move it. The Amendment of the noble Lord, Lord Hastings, which he has just withdrawn—rather incontinently I thought—provided that an immense mass of rules and regulations is not to be laid before Parliament and accepted or rejected en bloc, as the Government propose, but that it shall be dealt with as circumstances may demand. In some cases additions ought to be made; in other cases modifications or amendments should be made. Under the Amendment which the noble Earl has now moved, the rules are placed before one House of Parliament and the other House in succession and they have got to be taken as a unit, as a whole. That really seems to be quite ridiculous and quite indefensible. If an amendment is necessary, if a blunder is exposed, we are not to be at liberty to amend those rules in either House but we have to reject them or accept them in toto. I am only quoting the noble Earl, Lord Munster. He said that these words in the Government Amendment were as good from that point of view as those of Lord Hastings. I say they are not. I think the Lord Chancellor ought to give us an assurance that Parliament should be allowed that flexibility which it ought to have.
  LORD GAINFORD: Surely if there is an error and objection is taken to it by both Houses of Parliament it ought to be amended. There ought to be an opportunity not only for annulling one rule,

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  but also at any rate of retaining those rules which are good, or of amending them. There should be an opportunity of amendment as well as of complete rejection by Parliament.
  VISCOUNT ELIBANK: My Lords, I think I am in order in speaking on this Amendment. When I put the question the noble Earl, Lord Munster, stated quite definitely that modifications might be made under the Amendment which is now before your Lordships' House; but now we are told the rules must be taken en bloc. I feel sure that my noble friend Lord Hastings would not have withdrawn his Amendment had he known that. I think the Government should meet us by agreeing to a perfectly reasonable and legitimate suggestion that their Amendment should be amended to include modifications which they themselves might regard as perfectly reasonable. I hope the Government may see their way to do this. I support what the noble Earl, Lord Crawford, has said, and if he goes to a Division I shall have great pleasure in going into the Lobby with him.
  THE LORD CHANCELLOR: My Lords, may I say a few words about the position with regard to rules of procedure and other similar rules which are put before another place? I am instructed that it is quite impossible, according to the procedure in that place, to amend or alter rules put before it, and for this reason. There is a Resolution either in an affirmative or negative form. There is no Committee stage to deal with it similar to a Committee stage on a Bill, with the result that the Resolution either has to be carried or it has not, and there is an end of it. You may put in what you like, but in the other place, I am instructed by people very well acquainted with this matter, you cannot amend in practice. However, what happens is this. If there is an alternative Resolution in regard to rules somebody makes an objection, and there is a debate, and the rules are ruled out or objected to or not proved or whatever is the right term, and then there is an immediate re-submission of the rules in a new form. Practically the same thing would happen if, on the negative form proposed by the Government, the rules were put before the other place and somebody objected to them on particular grounds. But the notion that
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  in that place you can discuss rules and amend them in detail is impossible owing to the procedure which exists under the rules of the House. That at any rate is my information and understanding about the difficulty, though it is a little unfortunate, I agree. I think noble Lords who object to the Government Amendment on that ground are really objecting on grounds that have no sound basis if what I have stated is correct.
  THE EARL OF CRAWFORD: My Lords, the noble and learned Lord must allow me to say that we are not governed by procedure in the House of Commons, and if this House cares to insert after the word "annulled" the words "or amended" we are entitled to do so.
  THE LORD CHANCELLOR: It would have no effect.
  THE EARL OF CRAWFORD: If, on the other hand, the House of Commons likes to turn out the Amendment after we have-inserted it we can differ from the House of Commons, and if those words then remain in it will be the duty of the House of Commons so to adjust their procedure that they shall entitle themselves to amend these rules. These are not a few trumpery rules about some Home Office regulation. These are rules which govern a valuation of £60,000,000 to £80,000,000 of property. I have served many years in the House of Commons and I do not believe for a minute that the House of Commons would ever allow itself to let a blunder go through just because its own procedure was ineffective.
  THE LORD CHANCELLOR: They could object to the lot.
  THE EARL OF CRAWFORD: I do not understand. Do the Government realise what a hopeless mess and confusion they are going to put their Commission into in two or three years time? It is said "You make a blunder in the rules, then turn the whole lot out." But weeks and months will have been wasted if that is to be the case, and I propose, if your Lordships will allow me, to see what happens if I can get the words "or amended" put into the Amendment. Let us see then what happens in the other place. From my own knowledge of the House of Commons I believe they will adjust their rules when they see the immense importance of the issue concerned,

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  and will not preclude themselves from amending a rule which is defective. We have had enough blunders in this Bill already to make us a little anxious to see that our rules are right.
  VISCOUNT HORNE OF SLAMANNAN: My Lords, I am greatly in sympathy with the noble Earl, but does he realise how this provision would read as he would propose to amend it—"if either House before the expiration of that period resolves that the rules be annulled or amended the rules shall be of no effect." Does the noble Earl see that even the amended rules will be of no effect? I think the words could not remain in that form.
  THE EARL OF CRAWFORD: I assumed that Lord Munster was correct in saying that Lord Hastings' Amendment was covered. I just extemporised the words which I have suggested, but at least I have put my grievance before your Lordships. The words would require considerable amendment.
  LORD HASTINGS: There is a very interesting point of procedure arising here. Anybody who has been in this House for any length of time has heard this discussion half a dozen and more times before. I have heard it argued that with the affirmative Resolution power to modify was impossible owing to the rules of another place. I am sure the annals of the House could be searched and that reason would never have been given. Do the rules of another place only refer to negative Resolutions? Because if that is so clearly it is a very strong reason for insisting upon the affirmative Resolution which gives power to amend. I do not know whether the noble Earl the Leader of the House would see fit to answer that particular point. Is there a difference in the power of another place under its rules to deal with an affirmative Resolution in the matter of amendment? Is there a difference under the rules in respect of that and a negative Resolution, which, we are informed by the noble and learned Lord on the Woolsack, cannot be touched by way of an amendment? If there is there is an obvious remedy to our difficulty.
  EARL STANHOPE: Frankly I do not know. What does surprise me is that both the Amendment in the name of the
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  noble Lord, Lord Hastings, and that in the name of my noble and learned friend and myself are common form, both of them. Therefore it appears that with an affirmative Resolution you apparently can make modifications, but in the case of a negative one you cannot. I am afraid it was I who misled my noble friend the Earl of Munster in saying that we could make an alteration under a negative Resolution. I understood at the moment that that was so. I should like to consider the matter again before the next stage and see what can be done in the matter. I quite see the point made by my noble friend the Earl of Crawford, although I do not think if we were to propose an alteration in a common form proviso that that would be the best way to get another place to agree.
  LORD HASTINGS: I hope the noble Earl will recognise that I withdraw, and do not permit my Amendment to be negatived, so that I shall have liberty to put it down again.
  EARL STANHOPE: I was going to suggect that neither the noble Lord's Amendment nor the Government's Amendment should be put, but that the matter should be raised again on Third Reading.
  THE EARL OF CRAWFORD: In those circumstances I should not ask that the Amendment be put.
  Amendment, by leave, withdrawn.
  LORD CROMWELL LORD CROMWELL moved, in subparagraph (2) of paragraph 20, to leave out "the proceeds whereof are subject to a settlement by way of succession." The noble Lord said: My Lords, I am proposing this Amendment because there seems to be no reason for confining the powers of trustees for sale to cases where the proceeds of sale are subject to a settlement by way of succession. There will be cases where compensation will be received by trustees for sale although there may be no settlement by way of succession. In many of such cases if there had been no trust for sale the acquired interest would have been settled land and the powers of this paragraph would be exercisable by the trustees of the settlement.
  Amendment moved—
  Page 74, line 33, leave out ("the proceeds whereof are subject to a settlement by way of succession").—(Lord Cromwell.)
  THE LORD CHANCELLOR: My Lords, the noble Lord, if I may respectfully say so, has dealt very briefly with matters which are highly complex and which require most intimate knowledge of legislation passed in the years 1922 and 1925. I can only say, as the matter has only recently been brought to my notice, that I am not satisfied that it is proper to leave out these words. I should like an opportunity of reconsidering the matter with the assistance of my advisers, and if necessary the clause can be put in proper form at the last stage of the Bill. Perhaps in those circumstances the noble Lord will see fit to withdraw his Amendment now.
  LORD CROMWELL: My Lords, I am very grateful to the noble and learned Lord, and I beg leave to withdraw.
  Amendment, by leave, withdrawn.
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in sub-paragraph (2) of paragraph (20), to leave out "the Court" and to insert "any Court having jurisdiction in relation to the execution of the trusts of the settlement." The noble and learned Lord said: My Lords, this is a short form of one of the Amendments put down on the Paper by the noble Lord, Lord Cromwell. One of those Amendments in the name of the noble Lord we think distinctly useful in clarifying the Bill and enabling the rights of the parties to be determined in a case where there was a settlement or in some similar circumstances. As your Lordships will see on page 8 of the Marshalled List there is an Amendment in my name and the name of the Leader of the House in which we have borrowed or stolen from the Amendment of the noble Lord, Lord Cromwell, some of his suggestions. I had thought that the noble Lord was willing to accept the Amendments which I had suggested to him as being sufficient to carry out the objects—the technical objects, so to speak—which he had in view. He has, however, put down some rather elaborate Amendments which I understand have precisely the same effect as the Amendment standing in the name of the noble Earl, Lord Stanhope, and myself. This Amendment which I am now moving to sub-paragraph (2) is one of those Amendments which carry out, I think, that which the noble Lord, Lord Cromwell, has in view, and I would suggest that this Amendment in my name be accepted.
  Amendment moved—
  Page 74, line 35, leave out ("the Court") and insert ("any Court having jurisdiction in relation to the execution of the trusts of the settlement").—(The Lord Chancellor.)
  LORD CROMWELL: My Lords, I am quite prepared to agree to the suggestion of the noble and learned Lord.
  On Question, Amendment agreed to.
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in sub-paragraph (2) of paragraph 20, to leave out "when the circumstances so require, to the fact that that estate or other interest was property of a wasting character" and insert:
  "to the terms of the settlement and to all relevant circumstances affecting the premises in which the holding subsisted including:—

  (a) the terms of any subsisting coal-mining lease and the operation of any provision therein contained as to undergettings, short workings, and other like matters;

  (b) the period within which coal being worked might have been expected to be worked out or coal not being worked might have been expected to come into working and to be worked out; and

  (c) the extent to which, having regard to those circumstances, the premises ought to be regarded as property of a wasting character:"

  The noble and learned Lord said: My Lords, this carries out a suggestion made in a previous Amendment in the name of the noble Lord, Lord Cromwell, and I am very happy to propose it.
  Amendment moved—
  Page 74, line 44, leave out from ("had") to the end of line 45 and insert the said new words.—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  LORD CROMWELL LORD CROMWELL moved to leave out proviso (b) in sub-paragraph (2) of paragraph 20. The noble Lord said: My Lords, this Amendment covers a rather different point. It is suggested that if the proviso remains it is inconsistent both with the power to direct the compensation to be accumulated and with the direction that regard is to be had to the period within which coal not being worked might have been expected to come into working. It loads the dice in favour of the present tenant for life, who may at the moment be receiving no income or only a very small income from the coal. It does not appear right to fetter the discretion of the trustees and the Court in this way. The question will arise not merely in the

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  simple form of apportionment between income and capital but also in more complicated cases where there are successive tenants for life.
  Amendment moved—
  Page 75, line 12, leave out proviso (b).—(Lord Cromwell.)
  THE LORD CHANCELLOR: My Lords, I am not able to agree with this Amendment. Proviso (b) says that subject to a number of interests
  "no part of the income of the compensation shall be required or caused by virtue of this sub-paragraph to be set aside as capital of the settlement."
  Your Lordships will appreciate that there are complex settlements which relate to the disposal of compensation as between beneficial interests. Particularly they arise where for instance there is a tenant for life of coal from a colliery which has but a short life. So long as it exists he ought to have an interest equivalent to the whole of the income which would be gained from the colliery during its life. All that this proviso is intended to do is to provide that unless the Court has reason to decide that certain of the compensation ought to be set aside as capital, there is nothing in this clause which requires it to be done. The proviso is inserted from abundant precaution it may be, but it is inserted because, as your Lordships know, at the present time the tenant for life plainly is not entitled to the whole of the rent and profits, and in some cases a quarter and even more has to be set aside as capital. I think it is safer that this proviso (b) should be retained.
  LORD CROMWELL: As a tenant for life I am glad to hear what has fallen from the lips of the Lord Chancellor, and in the circumstances I will ask leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  LORD CROMWELL LORD CROMWELL moved, in paragraph 20, to insert the following new sub-paragraph:
  "(3) All applications to the Court under sub-paragraph (2) of this paragraph shall be made, in accordance with rules of Court, to the Chancery Division of the High Court:
  Provided that—

  (a) the powers of the Court may, as regards compensation payable in respect of an estate or other interest comprised in a holding wholly situate in the County Palatine of Lancaster or the County Palatine
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  of Durham be exercised also by the respective Courts of Chancery of those Counties Palatine;

  (b) where the amount of the compensation, or the part thereof attributable to such estate or other interest as is referred to in sub-paragraph (2) of this paragraph, does not exceed the sum of £500, the powers of the Court may be exercised by any County Court within the district whereof is situate any part of the holding;

  (c) where the Commission makes payment of the compensation to the proper officer of any Court, the powers of the Court shall be exercised by that Court."

  The noble Lord said: My Lords, as your Lordships will see I am acting on advice, and I am advised again, on this question, that the jurisdiction of the Court cannot be dealt with in the simple manner proposed by the Amendment moved by the Lord Chancellor in Committee. The question of which Court has jurisdiction to execute the trusts of the settlement will, as between High Court and County Court, depend on the value of the whole of the settled property, realty and personalty. It may very well happen that a settlement of property of great value (the trusts of which could only be executed by the High Court) may include a small parcel of coal, the compensation paid in respect of which is less than £500. It is suggested that the amount of the compensation, not the value of the settled property, should determine the jurisdiction. Moreover, where the compensation is paid into Court that Court alone should have jurisdiction. In any case it is undesirable that there should be room for any doubt on the question of jurisdiction.
  Amendment moved—
  Page 75, line 16, at end, insert the new sub-paragraph (3).—(Lord Cromwell.)
  THE LORD CHANCELLOR: My Lords, the view of the Government is that it is unnecessary to provide that these applications should go to the Chancery Division, because it would be left to the Rules Committee to deal with, and it is not now the practice, as I understand it, to state in Acts of Parliament the Division to which a particular matter should be referred. The Rules Committee is a powerful body, and it may in some circumstances think that a particular matter should go to one Division and sometimes to another. That is the only reason why that part of the Amendment is objected to, because in practice there

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  is no doubt that in effect the rules will provide that these matters should go to the Chancery Division of the High Court. Until the noble Lord spoke I was not aware that one of his objects was to prevent a matter of this kind going to the County Court. I think if it were a very small matter it would be well that it should go to the County Court; but if you left it open I imagine the Rules Committee can easily provide that if a matter is one of complexity there shall he a right of transfer from the County Court to the High Court. The reason why I do not like to assent to it now is this, that although, as the noble Lord justly said, some of the matters would be exceedingly difficult and require great consideration, others may be of the greatest simplicity and quite within the competence of the County Court to determine. I would suggest that we might leave it there, and leave it to the Rules Committee to decide the Court before whom the matter is to go, and if necessary to provide for power to transfer from the County Court to the High Court.
  LORD CROMWELL: After what has fallen from the Lord Chancellor as to the practice I am not prepared to press the Amendment. Whether my advisers will agree I do not know, but I now ask leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  LORD CROMWELL LORD CROMWELL moved, in subparagraph (3) of paragraph 20, after "shall," to insert ",if paid to the mortgagee." The noble Lord said: My Lords, I beg to move this Amendment and I will listen to the Lord Chancellor explain the Government's view of it.
  Amendment moved—
  Page 75, line 19, after ("shall") insert (", if paid to the mortgagee").—(Lord Cromwell.)
  THE LORD CHANCELLOR: This Amendment is one which the Government think is unnecessary, and may have a. result which is not intended. The proposal is in effect that where a mortgagee permits payment to the borrower instead of compensation to himself nothing should be said as to the rights in the compensation money. It is thought that the better course is to provide that the money shall in every case be treated as if it had arisen from an exercise of the mortgagee's power of sale and to leave any subsequent
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  arrangement to be made between the mortgagee and the borrower. The Government must oppose the Amedment.
  LORD CROMWELL: My Lords, I beg leave to withdraw.
  Amendment, by leave, withdrawn.
  LORD HASTINGS LORD HASTINGS moved, in sub-paragraph (3) of paragraph 20, to leave out "like manner as if it had been money arising under a power of sale conferred by the mortgage" and insert:
  "such manner as (in default of agreement between the mortgagee and the mortgagor) on an application made to the High Court by the mortgagor within one month alter the compensation has been paid, the Court may direct.
  In dealing with an application under this paragraph the Court shall have regard to the amount ascertained and certified by the Regional Valuation Board as the value of the holding as compared with the sum paid under this Act as compensation for the holding and to the fact (unless proved to the contrary to the satisfaction of the Court) that the passing of this Act was not within the contemplation of the parties to the mortgage when it was entered into, and shall make such order or give such directions as appear to the Court to be requisite to secure that where the estate or other interest subject to the mortgage is shown to the satisfaction of the Court to have been depreciated in value directly owing to the operation of this Act the loss arising from that depreciation shall be borne as nearly as may be in equal proportions between the mortgagee and the mortgagor, taking into account the amount of the mortgage debt in relation to the amounts of the certified valuation and the compensation respectively under this Act."
  The noble Lord said: My Lords, this Amendment is one which touches neither the finances, nor the framework, nor the machinery of this Bill. It is an economic question of course, a legal question no doubt, but more particularly a big social question. The effect of the method of valuation adopted by the Government will be to cause a scaling down as between the amount of the valuation and the amount of the compensation paid. That is inevitable. I have protested, and many another has protested, against this particular method of valuation, and here is one of the most unfortunate consequences which must arise from the adoption of this method. If an individual is to have his property compulsorily acquired and to be paid the value of that property as ascertained by competent persons, and that value falls short of the sums required to meet that owner's commitments, there is of course no one to blame. He has to bear that loss himself as best he may, or,

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  if his property falls short of the charges made upon it, automatically the chargee loses a certain amount of the money which he has either invested or loaned because his security fails to meet the charge.
  But here is a totally different set of circumstances. The value of the property may be in fact ample to meet all charges. But, having been ascertained, it is then subjected to a scaling down process to enable it to be fitted in with the properties of other owners to a figure previously fixed, and by so much as the value of the properties of other owners in that region may be high, by so much will each individual be scaled down, so that in fact the compensation moneys received by any individual, although they may be fair as between individual and individual in the region, will not bear any relation to real value. That is a really appalling principle to have permitted to creep into an Act of Parliament. It is going to establish a precedent dangerous to every form of property in this country, but here and now is not the opportunity or the moment for discussing that again. I have already said a great deal upon that subject, and we still have the Third Reading before us upon which no doubt much more can be said. But not now. All I desire to say to the House now is that the effect of adopting this method of valuation will be to scale down the property of certain individuals to a figure which will disable them from meeting the charges upon that particular form bf property.
  Now how is that to be dealt with? I have suggested that it be dealt with in the way in which my Amendment is drawn. It is not to be supposed that I, any more than any other noble Lord, contemplates with equanimity interference with debt—a thoroughly dangerous principle in itself, and not one which I would care to advocate, unless necessity drove me so to do. But what exactly are you going to do with an individual who at the moment is reasonably affluent by reason of the fact that his income from mineral royalties is sufficiently in excess of that proportion of the income which is required to meet commitments, or interest on commitments, that is, when there is a sufficient balance for himself to be living in reasonably affluent circumstances—what are you going to do when the principal is so greatly reduced in
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  amount that the share of it which is taken by the chargee absorbs the whole, and the royalty owner, now reasonably affluent upon the balance of the income from these royalties, after the passage of this Bill and the occurrence of the vesting date, is left not only penurious but conceivably bankrupt? What exactly do you do in a case of that kind?
  His Majesty's Government have the responsibility, not I, and it is a very unpleasant responsibility which faces them. I cannot bring myself to believe that if they can find any way or means out of such an impasse they will not be ready to take it, because the mere circumstance of a previously reasonably affluent individual appearing before the Court and pleading bankruptcy or inability to meet his commitments, owing to an action of the Government, is not the kind of circumstance which this or any other Government would care to face, neither is it proper that Parliament should allow such a condition of affairs to occur, if it can prevent it. My Amendment, somewhat crudely perhaps, proposes in effect that the charges of an estate of that character should share pari passu in the loss occasioned by the action of the Government to the royalty owner. That is to say, if the royalty owner should have the valuation made of his property scaled down by, say, twenty-five per cent., the charges on that property should also be scaled down by the same amount.
  And there is a good deal of authority for advocating such a solution. I have here a note on this subject which I will take the liberty of reading to the House, because it will be almost impossible to make it understandable if I were not so to do, it being largely extracts from legal decisions:
  "It will be argued that a reduction by Statute of a mortgage debt is without precedent, but this Bill is without precedent in its provisions that after a fair valuation of market value has been made compensation may be scaled down to an undefined and uncertain extent.
  It is an accepted rule of English law that where performance of contract has been rendered impossible by Act of Parliament the contract becomes unenforceable. This principle is very clearly set out in Lord Halsbury's 'Laws of England,' in the second edition of which, edited by Lord Hailsham, the following passage appears in Volume 7, page 218 (Article on Contract):—
  'Where performance of a contract has been rendered impossible by Act of Parliament passed after the contract was made,

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  the promisor is excused from performing his promise unless it appears that he intended to bind himself with reference to the future state of the law, for the presumption is that the parties intend to contract with reference to the law as existing at the time the contract is made.'
  On the same page there follows a long list of cases to support this statement of the law. One which is of particular interest in the present connection may be quoted. It is Brown versus London Corporation, and is reported in 13 C.B. (N.S.) page 828."
  This is a very interesting point, and I think the House will be glad to hear of this because it does largely substantiate the case I am trying to make:
  "The Corporation of London were conservators of the Thames from Staines Bridge and levied tolls upon vessels navigating the river between Staines and London Bridge. The Corporation borrowed money for river improvement and raised large sums on bonds secured by the tolls and duties payable as annuities until the repayment of the principal money. Then the Thames Conservancy Act was passed transferring to that body the control of the tolls upon the security of which the bonds had been entered into. The Corporation ceased to make payments upon their bonds. They were sued in the year 1862 on ten bonds of £2,000 each. The Court held that no action would lie: and on appeal this decision was upheld.
  "This case was made stronger by the fact that the Thames Conservancy Act was a private Act to which the Corporation of London was a party, and it was argued on behalf of the plaintiff that the general rule of law releasing the makers of the bonds does not apply where the impossibility of fulfilment arises from some act superinduced by the party himself, as in this case from the provisions of an Act of Parliament which was passed at the instance of the defendants in the action, the Corporation of London.
  "Chief Justice Cockburn in delivering the judgment of the Court said that the Act in question dealt with public rights and matters of great public interest and could hardly be looked upon as a private agreement and he added, 'The Act of Parliament therefore having transferred the tolls out of which the bonds in question are made payable from the Corporation to the Conservators appointed by the Act, we are of opinion that the Corporation are no longer liable to be called upon to satisfy the claim arising therefrom.'"
  There is apparently considerable legal justification for suggesting, what is no more than a suggestion, that amelioration should be given to those royalty owners who find themselves unable, not by any default or causation of their own, but unable through Act of Parliament to meet their liabilities. That is exactly what happened in the case I have quoted to your Lordships. It is exactly what must happen in a number of cases after the passage of the Coal Pill into law. There
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  must inevitably be cases where the charges upon income, when capitalised, must absorb the whole, and in some cases more than the whole, of the compensation moneys payable under the system of valuation which His Majesty's Government have thought fit to adopt—because in fact it is no system of valuation. It is compelling actuality of valuation to relate itself to a figure previously fixed, and whereas we had in the earlier part of this debate the happy optimism of some who spoke of scaling up, long since we have all realised there can be nothing but scaling down, scaling down which will be veritably destructive of some.
  There are cases with which Parliament and public are almost too familiar where no hardship of so gross a kind will arise, because there will be other resources enabling the borrower or mortagee to meet all commitments, but there are very many cases of which Parliament, Press, and public do not seem to realise the existence—small royalty owners, men whose resources, when deprived of their royalty income, are practically non-existent. It is these persons who will have borrowed money for one purpose or another, good or bad, whose predecessors in title were induced to put charges upon their royalty income for the benefit of members of the family, and whose mortgages and charges together are going to absorb the whole or more of any compensation which this Bill is going to give to them. It is undeniable that these cases are bound to arise. It is very difficult to quote to this House individual cases without giving a clear indication of where they come from and it is a rather delicate matter to do; but I would never be guilty of venturing to mislead the House in any way, and I feel sure I would be credited with no such desire. I can assure the House that a number of cases have been presented to me which fully justify me in saying to the House that these cases of hardship will arise in considerable numbers, cases of the gravest hardship.
  How are we to deal with them? I have suggested that chargees should have their charges reduced pari passu with the amount of the reduction which is to be applied to the royalty owner himself as between the valuation and the amount of compensation payable. It may not be the best way. I readily acknowledge that since I first raised this matter, which was on the Second Reading, I have had

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  discussions outside this House with persons qualified to advise in the matter, and I have submitted it to the noble and learned Lord on the Woolsack himself. I acknowledge with the greatest readiness the extreme difficulty that arises in dealing with matters of this kind. I do not even suggest that my particular method is the best. All I do wish to do is to inform the House that these cases must arise, and at least to divest myself of responsibility of causing them to arise. If the House thinks nothing can be done in the matter, then the House must take its own responsibility, but that responsibility rests veritably on His Majesty's Government.
  They are, by advocating this Bill and presenting it to your Lordships and to Parliament, going to create a condition of affairs which is cruel. The hardships which this Bill will cause to some at the instance of His Majesty's Government are gross, and the responsibility is theirs. I have this Amendment on the Paper, and although in many ways I regret very much having put it down, because I should be as sorry as any man to see any portion of a debt repudiated, I have put it down because I can find no alternative method of dealing with the particular hardship which is to be created. If His Majesty's Government can find a better way I shall be most glad to welcome it. Inasmuch as hitherto they have not met me in any way in regard to this point, I have put this Amendment on the Paper, and I now beg to move it.
  Amendment moved—
  Page 75, line 19, leave out from ("in") to end of line 2r, and insert the said new words.—(Lord Hastings.)
  LORD CRANWORTH: My Lords, I would venture to appeal to His Majesty's Government to give some consideration at all events to what my noble friend has said. The reason why I specially do so is this. I believe I am typical of a great many members of your Lordships' House. I am not a royalty owner in any sense or form, but before the last Election I was persuaded that it was a right and proper course for His Majesty's Government to acquire these royalties for the nation, and in accordance with that persuasion I appeared on the platform and advocated that course. But it was never put to me by any soul, nor do I believe it was the
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  intention of His Majesty's Government, that the royalty owner should be paid out otherwise than on a full and fair scale, and I feel that in that matter, not only have I let other people down, but that I have some extent been let down myself. I feel a certain responsibility in the matter. I do not suppose that there are five per cent. of the members of your Lordships' House who believe that these royalty owners have received a full and fair deal. Outside the Front Bench I have heard only one speech which said so, and that was a speech made by the noble Viscount, Lord Samuel; and those of you who were present will, I think, agree with me that it was very far indeed from being a convincing one. I know it may be said that to a certain extent in the early stages this was the fault of the royalty owners. All I can say is that I am not concerned with that, nor is this the place to go into it. I have been concerned, and I think your Lordships will be concerned, that a full and fair deal should be given to the royalty owners, as I believed was the intention of His Majesty's Government when they went to the country.
  The particular Amendment which is now before the House is one which it is probably almost impossible to accept as to its letter, but I think something might be done to meet its spirit. After all, what have these men done who have mortgaged their property in this way? They have done nothing that was not perfectly legitimate, and, it may be, more than legitimate; it may have been an absolute necessity for them. After all, I should think that half the businesses in this country must at one time or another have mortgaged some portion or the whole of their assets in order to maintain or extend their works and to provide work for the population. Have these men done more than that, that they should be singled out in this way to suffer ruin in some cases, as I know that in some cases it will be? Those cases may be few—I hope indeed that they are very few—but that there are some I am well assured. In all earnestness and, may I say, on behalf of those many people who like myself on the platform at the General Election advocated this measure and who are after all supporters of His Majesty's Government, I ask for their sake that His

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  Majesty's Government will give really serious attention to the Amendment of my noble friend.
  THE LORD CHANCELLOR: My Lords, this Amendment is one which the Government cannot possibly accept, and if they were to accept it here it is quite impossible that it would be accepted in another place. I must begin by saying this, that the Government do not accept the view that the compensation payable to the royalty owners is other than right and proper compensation. I am not going to argue that again, but I do not agree with the view that because their income is no doubt going to be substantially diminished it follows that the capital value which they receive is other than the fair capital value of their interest in the coal. I have argued that before and I will not argue it again. But assume, against my submission and against the submission of His Majesty's Government, that in fact as a result of the compulsory sale to the Coal Commission, the amount to be received by a particular royalty owner or by a number of royalty owners is less than the real value of the property, and assume that in some past era those royalty owners have mortgaged their property and that the result is that the margin upon which the mortgagee relied disappears owing to the apparent reduction in the value of the property forming the security for the mortgage; then the contention is that in every case the rights of the mortgagees should be reduced, and the argument is supported by certain views of the subject of contract law.
  The noble Lord, Lord Hastings, has cited some cases which to me at any rate, with all respect to him, appear to have nothing in the world to do with this case. A man who has property which he has mortgaged is still liable to comply with his contract if for any reason the security turns out to be worth much less than he supposed, or if as the result of a fire and, it may be, the default of the insurer the value of the property sinks to nothing, or if as the result of a compulsory purchase the amount payable by the authority which purchases the property is no longer enough to discharge the mortgage. It certainly cannot be suggested that there is in those circumstances any ground for saying that it is impossible for him to comply with his covenant for payment. A man has mortgaged his coal royalties,
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  we will say, for £10,000, and he has covenanted to pay to the mortgagee the principal of £10,000 and interest it may be at 5 per cent. There is nothing in the circumstance that the security has diminished to make it impossible for him to comply with his covenant.
  And, moreover, we are dealing here with all sorts of cases. For all I know the mortgage in question is one for which there is not only the security of the royalty but there may be the security of other property as well. Again there are cases where the mortgagor is known to be a man of great means and the mortgagee has never bothered to consider the precise value of the coal in question. He has not employed a valuer; he has shrugged his shoulders and has said to himself, "I know perfectly well that if as the result of the agitation which has been going on for forty years this property is taken away for less than its real value, or if it is entirely confiscated" (as some persons have contended is the fair thing to do) "yet there will be the covenant of the noble Lord who happens to be the mortgagor," or whoever else it may be—some humble but wealthy commoner; and the mortgagee has thought to himself, "Well, that is enough for me, and I do not care two straws what happens to the security in question."
  Cases of that sort have to be borne in mind if you put before the Legislature the argument that a contract entered into in a perfectly formal way by a mortgagor with a mortgagee should be altered, and that in a sense, as the noble Lord fairly said, it should be repudiated under the guise of assistance by the Legislature on the ground that the security has been unfortunately diminished, which is the assumption that I am making for this purpose. I cannot conceive the justice of that; and I would add that this particular form of property has been threatened for forty years, and that if the mortgagor has only this sort of property to rely upon for his support and for the payment of the mortgagee, it is a most unfortunate circumstance, one which I agree is exceedingly hard and one which I on behalf of the Government would bitterly regret, but I cannot help saying that this property has always been property which was liable to be purchased either by the Government or by a Coal Commission, These are circumstances which must have been known to any prudent person, and

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  should have been considered in relation to the financial obligations which the mortgagor undertook when he mortgaged the property to some third party. At any rate I do not propose to argue it any further. I can only say it is quite impossible for this Government, and I believe for any Government, to consent to the Amendment which the noble Lord has moved.
  LORD HASTINGS: My Lords, what has fallen from the noble and learned Lord is no less and no more than I expected, but it does not alter the facts of the case one little bit. The facts remain as I stated them, and when the noble and learned Lord tells us that for forty years and more this property has been under threat of compulsory purchase, I can only tell him that until a year or two ago the people of this country, both the lenders and the borrowers of money, were content to rely upon the strength and integrity of the Conservative Party, and they never expected that the Party which they supported all their lives would let them down in the way it has. That is the reason why the mortgagors and the mortgagees have not paid regard to the conditions to which the noble and learned Lord referred from his place just now.
  I know that it is no use my attempting to press this Amendment to a Division. Frankly, I do not like the Amendment myself for the reasons that I gave. It is just as distasteful to me to repudiate debt as to any other noble Lord in this House, but I am glad that the Government and not myself have the responsibility for the hardship which is going to be inflicted upon some of their own supporters. I am glad that it is they and not I who are going to have to listen to what will be said of them when the first of these bankrupt mortgagees goes into the Court and has the opportunity of expressing his views upon the act of State which has forced him there. All that he says will be no less than the truth, and there will not be found any noble Lord able to deny what I have stated here, that it is the action of this Government which has forced him into penury. I hold that that is unjustifiable. I have done my best to prevent it. I recognise that I have failed, and I once more repeat that I am glad it is not my responsibility. I beg to withdraw the Amendment standing in my name.
  Amendment, by leave, withdrawn.
  THE EARL OF DUDLEY THE EARL OF DUDLEY moved, in subparagraph (5) of paragraph 20, after "on" ["on the debentures"] to insert "the stock or other securities of any local authority in the United Kingdom, or the stock, shares or other securities of any statutory undertakers within the meaning of Section thirty-two of this Act." The noble Earl said: My Lords, on the Committee stage of the Bill, when the noble and learned Lord on the Woolsack inserted this long provision in the Bill, I sought to widen the powers of trustees in regard to the investment of the compensation money in order that those tenants for life who were suffering the loss of income might be able to acquire as large a dividend as possible to recoup them for their losses. At that time I moved an Amendment which was unacceptable to the Government. The noble and learned Lord Chancellor was good enough to say that he would examine the question between then and this stage of the Bill. Since then he has been kind enough to receive me and those who advise me legally on this subject, and I hope that the words in this Amendment of mine are acceptable to him. The first part, as your Lordships will see, refers to stock or other securities of any local authority in the United Kingdom, or the stock, shares or other securities of any statutory undertakers as those words are defined in an earlier portion of the Bill. I beg to move.
  Amendment moved—
  Page 76, line 5, after ("on") insert the said words.—(The Earl of Dudley.)
  THE LORD CHANCELLOR: My Lords, I am glad to acknowledge that the noble Earl has been of great assistance in this matter. I think there is no real objection to this Amendment and on behalf of the Government I accept it.
  THE EARL OF DUDLEY: My Lords, I am very grateful indeed to the noble and learned Lord Chancellor for the courtesy he has shown in this matter, and for having accepted this Amendment on behalf of the Government.
  On Question, Amendment agreed to.
  THE EARL OF DUDLEY THE EARL OF DUDLEY moved, in subparagraph (5) of paragraph 20, to insert immediately before the proviso:
  "or the ordinary or other stock or shares of any company incorporated as aforesaid, being a company which has paid dividends upon its

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  ordinary capital at the rate of at least four per cent. per annum for at least the ten years next before the time of investment (of which fact such a letter as aforesaid shall be sufficient evidence):"
  The noble Earl said: My Lords, this Amendment is consequential on the previous one, and amplifies it in regard to other stocks or shares of any company incorporated as aforesaid, being a company which has paid dividends upon its ordinary capital at the rate of at least four per cent. per annum for at least the ten years next before the time of investment. I hope the noble and learned Lord on the Woolsack will not object to this which is consequential on the other Amendment already agreed to.
  Amendment moved—
  Page 76, line 16, at end insert the said words.—(The Earl of Dudley.)
  THE LORD CHANCELLOR: My Lords, this Amendment also is one which the Government accept.
  On Question, Amendment agreed to.
  LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved to insert the following new paragraph:
  "Expenses of Surface Damage Claims.
  22. The Commission shall pay the costs and expenses reasonably incurred by any person after the vesting date in connection with a claim for compensation in respect of damage arising from the working of coal to the land buildings or other property of such person and to which he may be entitled under the provisions of paragraphs 5 and 6 of the Second Schedule to this Act."
  The noble Lord said: My Lords, with the exception of the small concession which my noble friend obtained from the Government a moment ago my noble friends and I on this stage of the Bill have been like the fishers of old who toiled all the night and took nothing. This is the last occasion on this stage of the Bill when an Amendment will be moved from this side of the House, and in spite of the lateness of the hour I am afraid I must detain your Lordships for a few moments while I explain what the purpose of this Amendment is. It is the same Amendment that was on the Paper in my name on the Committee stage, and on that occasion the Lord Chancellor was good enough to say that the Government would give careful consideration to it before this stage, and that they would endeavour to meet the point on the Report stage. I need not, therefore, tell
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  your Lordships what a very bitter disappointment it has been to me to find the Government now saying that they can do nothing whatever to meet the grievance which I was under the impression even they were unable to deny existed in this matter.
  Let me remind your Lordships of what actually happens. I am afraid it is elementary to most of your Lordships who know about these things, but, as the Government do not seem to know what happens, I am afraid it is necessary to explain. When a coalowner lets his coal with the right to let down the surface given to the lessee he generally protects himself by a provision that that lessee shall pay compensation. There are three parties. There is the owner of the coal, who is also the surface owner at the present time; there is the mineral lessee; and there are the agricultural tenants. It is a matter of day to day management that there is co-operation between these three parties to keep the surface right in respect of the subsidence which is going on. There are ditches to be kept clean, walls to be repaired, and all the minor damages which are going on all the time. There are also other matters. There is a possibility that water on which the landlord or the tenant depends for his cattle may disappear as the result of mineral workings. There is the possibility that ditches may be silted up by water which the mineral tenant pumps out and which may carry silt and mud with it. There is a constant succession of questions which raise points of divided liability and which are entirely due to the working of the minerals underneath.
  The royalty owner, at present the owner of the surface, has of course his mineral agent who makes regular reports, and the owner is kept constantly in touch with day-to-day circumstances. That is no longer going to happen. He is not going to have the regular reports, and to that extent he will be saved the expense of his mineral agent's report as to the amount of coal which has been taken out and reports on other matters affecting the surface which he receives regularly from time to time; but everything will go on just as before. The transference of the coal to the Commission will not prevent all these matters continuing to happen. These are expenses which have in part or in whole been capitalised and deducted from the compensation which

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  this owner is going to receive. It is a very difficult thing to distinguish between the expenses which have been paid to the mineral adviser in respect of the routine examination underground and in respect of the surface matters which are going to continue. The extent to which these expenses will continue in the future will vary in proportion as the mineral lessee is a good or a bad one. Even if he is a good tenant ready to stand up to all his obligations these expenses will continue, and competent estimates which I have received from firms who manage clients' affairs of this kind tell me that probably in the case of a good mineral lessee twenty-five per cent. of expenses which have hitherto been borne will continue. In the case of a mineral lessee who is not so good, and who is only too ready to evade his obligations if he can, it is estimated that no less than fifty per cent. of these expenses will be continued. There will also be occasions when there will be special expenses, as for instance at the end of a lease, when the lease provides that there shall be compensation paid for surface damage which has accrued during the lease.
  All these expenses will still have to be borne by the former coalowner, who is still the surface owner, and I cannot see how anybody can deny that expenses will continue which have in fact been capitalised and deducted. I am afraid it will not console me in the least if the noble and learned Lord on the Woolsack tells me that the Mineral Owners' Joint Committee who gave evidence in regard to these matters before the Greene Committee must have been aware of that and accepted the figure of 4.47. I do not recognise, as your Lordships know, that Committee as representing me in any way, and moreover I question their competence. I think this is a point which was overlooked. I do not think that anything like a ratio of 4.47 for management ought to have been deducted, and I feel quite confident that it includes expenses of a kind which will continue. There are solicitors' fees, surveyors' fees and fees for mining engineers who may have to be specially employed to go underground. The noble and learned Lord, the Lord Chancellor, still has not been able to tell us whether or not we shall have the right to send mining
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  engineers underground. I feel myself that it is quite evident that where we formerly had reports from mining engineers regularly keeping us informed, we shall have to pay someone regularly to keep watch on the surface. We did not have to watch the surface in the same way before, because we knew automatically what was going on. Now we shall have to keep watch on the surface to see as early as we can subsidences and other things which are the consequence of mineral working of which we shall have no means of getting warning. The Coal Commission will let coal under the surface to people we do not know, and we shall have no means such as we used to have of finding out what is going on and securing protection.
  I hope the noble Lord, the Lord Chancellor, will not talk as he did on a previous occasion about Court actions. This is not a question of going into Court and winning a case and receiving damages. Even if it were, the damages would be insufficient. You can only get taxed costs and costs up to the moment when the late tenant made an offer. But the main burden is not any action that may go into Court, it is the day-to-day management of the surface due to the minerals being taken out. If the noble and learned Lord says that is surface management which was not deducted, I can only ask him where surface management ends and where mineral management begins. Take the case of coal which is being taken out at a shallow depth—ten or fifteen fathoms. Every time coal is taken out the surface above moves quite extensively. I do not know whether there is yet any definition of what is surface and what is not, but quite clearly coal ten or fifteen fathoms below the actual surface of the ground must be included in any sort of definition of surface.
  I venture to hope, in spite of the fact that the Government have not put any Amendment on the Paper, that they still intend to try and do justice in this matter. I was interested to hear, in reply to the mover of the last Amendment, the noble and learned Lord on the Woolsack compare the action of the Government to that of a fire. I thought it was an extremely apposite comparison. I am not quite sure that the noble and learned Lord realised quite how apposite it was. This fire will consume our property and take away 40

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  per cent. of it. I will not press the matter further, because I hope that the noble and learned Lord will realise that here is a case which really must be met, and I still cling to the hope, which I expressed at a very early stage in these debates, that the Government intend to be fair. My faith in that intention has been shaken, I am bound to admit, during the course of our debates. There is here an opportunity for the Government to restore the faith in their integrity and in their desire to be fair, and I hope that they will take it with both hands. I beg to move.
  Amendment moved—
  Page 27, line 20, at end insert the said new paragraph.——(Lord Balfour of Burleigh.)
  THE EARL OF MUNSTER: My Lords, I thank the noble Lord. I quite understand one thing, and that is that this Amendment relates entirely to expenses for surface management. It is the same Amendment which the noble Lord moved on a previous occasion, when the noble and learned Lord, the Lord Chancellor, suggested that he thought there might be something in the criticisms that Lord Balfour had made. Since that time we have been very carefully, with our advisers, into the whole question of the costs which were deducted from the original figure to make the global figure of £4,430,000. The noble Lord will remember that they were the Mineral Rights Duties, the Miners' Welfare Levy, the rates in Scotland, and the cost of management. Having deducted all these figures the total figure was reached of £4,430,000. I mention that figure of £4,430,000 because I thought it was a figure which was generally accepted by nearly everybody who has been taking part in the discussion over this Bill, but the noble Lord, Lord Balfour, and the noble Marquess, Lord Lothian, in the interesting letter which they wrote to The Times, to-day, misquoted that global figure as £4,300,000 It was nothing of the sort.
  The deduction to which I have referred as management expenses was a percentage agreed to represent the deduction normally claimed and allowed on that account for the assessment of tax on income from coal ownership, as being the cost of management of coal properties exclusive of surface. If we had, as I said on a previous occasion, been quite certain that we were in the wrong and that
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  the deductions for surface management had been made, then it would have been our duty to put something back in the Bill to meet noble Lords, but I have not the slightest hesitation in my own mind, from the advice given to me by those who attended the meetings between the mineral owners' representatives and the officials of the Treasury and of the Mines Department, that there was no deduction made which was for the expenses of the surface. The noble and learned Lord, the Lord Chancellor, has asked me to remind Lord Balfour to look at Clause 51 of the Bill in which he will see that permission to inspect the plan of working, which will give the necessary information, can be obtained. I hope that the noble Lord will not press this Amendment because I am perfectly certain that there has been no manifest unfairness to the mineral owners.
  LORD DARCY (DE KNAYTH): My Lords, really I think we have got down to a position where largely we are arguing about words. I think, with great respect to the noble Earl, Lord Munster, that his reply has thoroughly begged the question. These are expenses attributed directly to underground operations, and are hardly to be attributed to the continued expenses of royalty owners on the surface. I would give an analogous case. Supposing it were not an underground operation, but an operation on the highway. Supposing a person were run into by a motor car and his leg were broken. Could it then be said that the cost of his surgeon's bill in setting that leg is not a cost of an accident on the highway but merely a cost of continuing his expenses in bed? That there are twelve people in this country who would accept such a theory I very much doubt. My principle is simply this, that these figures were included in the global figure, and the Amendment merely requires that the fund should be properly applied.
  LORD HASTINGS: My Lords, it did not surprise me that Lord Munster told the House that he had been advised in certain terms, in respect of what had or had not been done in the negotiations which proceeded between the Mineral Owners' Joint Committee and the officials of the Treasury and the Department of Mines, because all through this Bill, and the preparation of this Bill, and the negotiations thereon, these advisers have not

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  been in any way reluctant to seize the opportunity which the Government gave to them at the same time of despoiling the royalty owners and of laying hands upon the industry itself. It does not surprise me that the advice they have given to the noble Earl should be as biased at the end as their advice was at the beginning. So much for their advice. I tell your Lordships here and now that it is grossly inaccurate, and bears no relation to the actual fact.
  THE EARL OF MUNSTER: Can the noble Lord prove that it was inaccurate? It would be interesting to have his observations.
  LORD HASTINGS: I will tell the noble Earl now that the figure of 4.47 was mentioned in the negotiations and was finally agreed as being the figure at which mineral agents' expenses should be fixed, that is to say, the expenses of management. That figure of 4.47 was taken to include the whole expenses of management attachable to the ownership of minerals. There was no other qualification. It is a certain fact that a part, and a particular part, of the duties of a mineral agent is to examine the plans of a colliery company's workings, so as to establish, or fail to establish, a case for his employer against the coal company in respect of surface damage. No surface land agent is competent to check up those plans, and it is only the surface agents who in the future will be employed unless funds are placed at the disposal of the mineral owner with which to pay persons competent to check up the plans. It is quite purposeless to endeavour to secure compensation from a colliery company in respect of surface damage, unless you have some person available who can go through the underground working plans with the colliery manager, and agree or disagree with him as to whether or no that damage has been caused by colliery workings. Only a mineral agent is competent to do that.
  Those mineral agents' salaries have in the gross been deducted from the amount allotted to the royalty owners under the global figure of £4,430,000. No provision has been made by which these mineral agents can in future be paid and it is absolutely inevitable that the mineral agents must be paid a retaining fee by
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  the mineral owners, otherwise they cannot substantiate any claim for damage. Why tell the House that you have been advised that such and such a thing was done, and such and such an expense deducted, when on the face of it it cannot have been? These expenses have got to continue, and no money is allowed out of which they can be met. This Amendment is absolutely essential to the creation of a state of affairs which will be just. The noble Lord, Lord Balfour, will unquestionably press the Amendment, and I beg the House to support him in this, for it would be grossly improper and most unfair that the owners should be mulcted twice over in the same expenses and then be put off by being told by the noble Earl that his advisers tell him that these expenses have already been discounted and provided for, when it is not in accordance with the facts.
  LORD BALFOUR OF BURLEIGH: My Lords, before the Question is put I must say a word in reply to the noble Earl. I am glad to know that at least he read my letter in The Times this morning. I am sorry if there was a small slip in it, but perhaps now he is a little more seised of the justice of our case than he was before. He says that surface management expenses were not deducted and therefore there is no hardship in allowing them to continue. Does not that just show what a disadvantage it is that the Greene Committee's Report has not been published?
  THE EARL OF MUNSTER: With great respect this has nothing to do with the Report of the Greene Committee. This £4,430,000 was arrived at long before the Greene Committee was set up.
  LORD BALFOUR OF BURLEIGH: Then let me suggest what the 4.47 per cent. was, and I am inclined to suggest to the noble Earl that the 4.47 per cent. which was deducted for expenses was the average of expenses of management of minerals which were deducted by owners for claims for repayment of Income Tax. Is that so? The noble Earl assents. Then the case is made, because that 4.47 per cent. for mineral management includes the very expenses I have described, and the case for a double deduction is made. I am much obliged to the noble Earl, and I ish to press the Amendment to a Division.
  On Question, Whether the proposed new paragraph shall be there inserted?
  Resolved in the affirmative, and Amendment agreed to accordingly.
  EARL STANHOPE: My Lords, the next Amendment is drafting.
  Amendment moved—
  Page 78, line 13, leave out ("of this Schedule").—(Earl Stanhope.)
  THE EARL OF MUNSTER: My Lords, the next Amendment is consequential.
  Amendment moved—
  Page 80, line 7, insert:
  ("(v) Paragraph 20 shall have effect as if for any reference to an estate or other interest subject to a settlement within the meaning of the Settled Land Act, 1925, there were substituted a reference to an estate or other interest subject to a trust within the meaning of the Trusts (Scotland) Act, 1921, or to an entail or to a liferent.").—(The Earl of Munster.)
  Fourth Schedule [Lease Consolidation Schemes]:
  EARL STANHOPE: My Lords, the first Amendment on this Schedule is drafting.
  Amendment moved—
  Page 82, line 21, leave out from the beginning to ("any") in line 22 and insert—
  ("The said lease shall, notwithstanding anything in subsection (2) of Section eleven of this Act, not include").—(Earl Stanhope.)
  THE EARL OF MUNSTER: The next Amendment is also drafting.
  Their Lordships divided: Contents, 24; Not-Contents, 19.

  CONTENTS.

  Wellington, D.

  Elibank, V.

  Gainford, L.

  Hereford, V.

  Gerard, L.

  Dudley, E. [Teller.]

  Hastings, L.

  Fitzwilliam, E.

  Addington, L.

  Heneage, L.

  Grey, E.

  Balfour of Burleigh, L. [Teller.]

  Mowbray, L.

  Lindsay, E.

  Redesdale, L.

  Wicklow, E.

  Cranworth, L.

  Saltoun, L.

  Darcy (de Knayth), L.

  Sandhurst, L.

  Bertie of Thame, V.

  Fairfax of Cameron, L.

  Teynham, L.

  Wolverton, L.

  NOT-CONTENTS.

  Maugham, L. (L. Chancellor.)

  Mount Edgcumbe, E.

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

  Munster, E.

  Holden, L.

  Bath, M.

  Spencer, E.

  Jessel, L.

  Dufferin and Ava, M.

  Stanhope, E.

  Kenilworth, L.

  Lamington, L.

  Feversham, E.

  Clanwilliam, L. (E. Clanwilliam.)

  Strathcona and Mount Royal, L.

  Iddesleigh, E.

  Lucan, E. [Teller.]

  Fermanagh, L. (E. Erne.)

  Windlesham, L.

  On Question, Amendment agreed to.

  Amendment moved—
  Page 83, line 26, leave out ("who is competent to grant a lease in the terms of a draft") and insert ("whose grant or concurrence is requisite to the taking effect of a lease").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER: My Lords, the next Amendment is drafting.
  Amendment moved—
  Page 83, line 28, leave out ("of any premises to which the draft relates") and insert ("as respects any premises comprised therein").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER: My Lords, the last Amendment on this Schedule is also drafting.
  Amendment moved—
  Page 83, line 29, leave out ("a lease in the terms of that draft") and insert ("the lease").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  Fifth Schedule [Grant of leases to freeholders in possession of coal, immediately before the vesting date]:
  THE LORD CHANCELLOR: My Lords, the two Amendments on this Schedule are to remedy a drafting omission. In the original drafting we omitted the fact that the parties concerned had to execute a lease security, I beg to move.
  Amendments moved—
  Page 86, line 11, leave out ("and") and insert ("or")
  Page 86, line 13, leave out paragraph 4 and insert—

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  ("4. Subject to any agreement between the parties named in the draft of a lease substituted security or other instrument settled under this Schedule, it shall be the duty of each of those parties, on being required by any other of them so to do, to execute a lease security or other instrument in the terms of the draft.")—(The Lord Chancellor.)
  On Question, Amendments agreed to.
  Sixth Schedule:

SIXTH SCHEDULE.

  AMENDMENTS OF 20 & 21 GEO. 5. C. 34, S. 13.
  1. In Section thirteen, after subsection (1) thereof, there shall be inserted the following subsection:—
  "(1A) The following provisions shall have effect with respect to any scheme submitted to the Board of Trade by the Coal Commission—
  (a) the scheme shall provide for the consideration to be given to each of the constituent companies from which property is to be transferred (hereinafter referred to as a transferor company) being given out of the securities of the new company or of the constituent company to which that property is transferred, as the case may be (hereinafter referred to as the transferee company) and not otherwise …
  2. For subsection (2) of the said Section thirteen there shall he substituted the following subsection:—
  "(2) In relation to any scheme submitted to the Board of Trade under this section by the Coal Commission, the Act of 1926 shall have effect as if for the proviso to subsection (2) of Section seven thereof and Section eight thereof (which both relate to the consideration of schemes by the Railway and Canal Commission) there were substituted the following proviso, that is to say:—
  "Provided that the Railway and Canal Commission—
  (b) shall not have power to make, or require to be made, in the scheme modifications inconsistent with any provisions required by the enactments relating thereto to be included in schemes submitted to the Board of Trade by the Coal Commission …
  EARL STANHOPE EARL STANHOPE moved, in paragraph (a) of the substituted subsection (1A), to leave out "not otherwise" and insert ",except in so far as may be otherwise agreed between all the transferor companies and the transferee company, only out of such securities,". The noble Earl said: My Lords, this Amendment is really to give effect to a promise I made to the noble Earl, Lord Dudley, on the Committee stage so that where everyone is agreed cash should be given
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  when an amalgamation is made, it should be possible for cash to pass.
  Amendment moved—
  Page 87, line 2, leave out ("not otherwise") and insert the said new words.—(Earl Stanhope.)
  LORD TEYNHAM: My Lords, I actually moved this Amendment on the Committee stage, and I should like to take this opportunity of thanking the Government for meeting us on this point.
  On Question, Amendment agreed to.
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph (b) of the substituted subsection (2) in paragraph 2, to leave out "any provisions required by the enactments relating thereto to be included in," and insert "the enactments relating to the matters which are required to be provided for by." The noble and learned Lord said: My Lords, this is not quite a drafting Amendment. I have to admit that when this point was before the Committee I was unable to agree there was any necessity for anything of the kind. But I had some little doubt in my mind, and after considering the matter very carefully I thought it wiser that the point raised should be met by the Amendment in question.
  Amendment moved—
  Page 88, line 17, leave out from ("with") to ("schemes") in line 18, and insert the said new words.—(The Lord Chancellor.)
  On Question, Amendment agreed to.
  Seventh Schedule:

SEVENTH SCHEDULE.

  AMENDMENTS OF 20 & 21 GEO. 5. C. 34, SS. 5 AND 8.
  9. At the end of the said Section five the following subsection shall be inserted:—
  "(11) Any appointment to be made by the Board of Trade under this section of a person who is thereby required to be a member of the legal profession shall be made after consultation with the Lord Chancellor."
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of paragraph 9, to insert "or where the appointment is of the chairman of a district committee of investigation for a district in Scotland, after consultation with the Lord Advocate." The noble and learned Lord said: My Lords, we have come to the last Amendment on this important stage, and I find it is one

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  where I am able to remove an injustice which might have been done to Scotland. The clause as it stood named the Lord Chancellor as the person nominating the arbitrator, and it was found that where the chairman of a district committee of investigation in Scotland was concerned the appointment should be made in consultation with the Lord Advocate. I beg to move.
  Amendment moved—
  Page 92, line 15, at end insert the said new words.—(The Lord Chancellor.)
  On Question, Amendment agreed to.

BUSINESS OF THE HOUSE.
EARL STANHOPE: My Lords, before we adjourn, perhaps I had better remind your Lordships that it is proposed that we should meet to-morrow at three o'clock.
LORD HASTINGS: May I ask when the Third Reading of the Coal Bill will be taken?
EARL STANHOPE: I am proposing to put it down for Tuesday of next week.
House adjourned at a quarter past eight o'clock.