Sitting of 9 February 1939

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

HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).
The VICE-CHAMBERLAIN OF THE HOUSEHOLD (Mr. GRIMSTON) reported His Majesty's Answer to the Address, as followeth:
I have received your Address praying that, in pursuance of the Supreme Court of Judicature (Consolidation) Act, 1925, two Judges may be appointed to the High Court of Justice to fill vacancies in the King's Bench Division thereof, and I will issue directions in accordance with your desire.

ELECTRICITY SUPPLY, INVERNESS.
Sir Murdoch MacDonald: I beg to present a Petition to this honourable House from the citizens of the Royal Burgh of Inverness appealing for power from the Electricity Commissioners to enable the Burgh to purchase the additional plant necessary for the extension of its electricity undertaking and seeking assurance that any legislation introduced by the present Government will not give any privately-controlled Corporation powers to acquire compulsorily the undertaking in view of the facts set out in the Petition

PRIVATE BUSINESS.
London Rating (Site Values) Bill,
Title of Bill set down for Second Reading read.
Mr. Speaker: As due notice of the Second Reading of this Bill had been given on behalf of the Promoters for this day, the name of the Bill appears on the Order Paper. As I ruled yesterday, since the Bill raises questions of public policy of great importance and affects interests of vast magnitude, which are more than local, the Bill ought to be introduced as
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a Public Bill, and cannot be allowed to proceed as a Private Bill. Accordingly, the Bill must be withdrawn.
Whereupon the Order for Second Reading was discharged, and the Bill withdrawn.
Southern Railway Bill (by Order),
Read a Second time, and referred to the Examiners of Petitions for Private Bills.

ORAL ANSWERS TO QUESTIONS.
  UNEMPLOYMENT.

    DOCK WORKERS, HARTLEPOOL AND LIVERPOOL.
    Mr. Pilkingtonasked the Minister of Labour whether he has yet had reports of the Hartlepool experiment as to unemployed men having to sign on only once a day; and, if so, whether he will now extend this practice to Liverpool?
    The Minister of Labour (Mr. Ernest Brown): I would refer the hon. Member to the reply given to his question on 1st December, 1938, to which I have nothing to add.
    Mr. Pilkington: Can the right hon. Gentleman give any date when he hopes the report will be in his hands? Can he expedite it?
    Mr. Brown: I cannot say. It depends upon local circumstances, but representations are being made so that the matter may be dealt with at an early date.
    Mr. Day: Is it intended to extend this practice?
    Mr. Brown: We will wait and see the result of this experiment.
    Mr. George Griffiths: Cannot the right hon. Gentleman see the hardship to these people who have to walk miles to sign on once every day for about four shillings?
    Mr. Brown: There is a much larger question involved than that. The House knows that there is no more difficult question than this in the whole of labour legislation.
    Mr. Robert Gibson: What is the highest number of times a man has to sign on?
    Mr. Brown: Perhaps the hon. and learned Member will put that question down.
    Mr. Loganasked the Minister of Labour whether he is prepared to offer once-a-day signing-on facilities instead of two, as now operate for all dock labourers in Liverpool; or, alternatively, consider making some concession to those men living on housing estates on the outskirts of the city of Liverpool?
    Mr. Brown: As I indicated in reply to a previous question on this subject, I think it would be premature to introduce once-a-day signing for dock workers in Liverpool. Nor do I think that the distance of the men's homes from the calling-on places is entirely relevant. In general they must attend the calling-on places if they want to get work, and, if they are unsuccessful, it is only a short distance from there to the office where they sign on.
    Mr. Logan: Is the right hon. Gentleman aware that this matter has now been pending eight years, and that some of these men live about four miles away, and is there any reason why the men should have to go this long distance? Cannot the Department do something in this matter?
    Mr. Brown: The hon. Member knows quite well that the question is not only one between London and the local area, and that in Liverpool there have been differences of opinion on this subject between some of those affected.
    Mr. Logan: After eight years' consideration, is not the Minister able to do something in regard to this matter?
    Mr. Brown: The answer is, as I have already said, that I think it is premature.
    Mr. Pilkington: How long has the experiment been going on so far?
    Mr. Brown: I would like to have notice of that question, but speaking from memory, I think about one year. But the experiment has not gone quite as smoothly as those in favour of it would have desired.

    EXCHANGE SERVICE (TEMPORARY STAFF).
    Mr. Pilkingtonasked the Minister of Labour whether he will consider appointing unemployed men, who have the
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    adequate knowledge, to do the extra work at Employment Exchanges for National Service registration, rather than ask the present personnel to work overtime?
    Mr. E. Brown: It is the normal practice in the Exchange service to engage temporary staff from the unemployed when there is a temporary increase of work, and this practice has been followed on the present occasion. I am afraid, however, that it is impossible to avoid some amount of overtime on the part of the trained staff of the Department.
    Mr. Gallacher: Is it not the case that there is no increase of work owing to the fact that National Service registration is deplorable?
    Mr. Brown: That is not so. The hon. Member makes assertions quite often in this House for which he provides no evidence whatever.
    Mr. Day: Has there been much registration?
    Mr. Brown: There has been a great deal.

    ASSISTANCE BOARD, BOOTLE (STAFF AND ACCOMMODATION).
    Mr. Erringtonasked the Minister of Labour whether he is aware that there is an inadequate staff and waiting-room accommodation at the office of the Unemployment Assistance Board at 65, Balliol Road, Bootle; and will he take steps to remedy these defects?
    Mr. E. Brown: I am informed by the Unemployment Assistance Board that their office at Bootle was enlarged in October last by the addition of the premises of 63, Balliol Road to those of 65, Balliol Road, and that the accommodation at that office is now adequate.
    Mr. Errington: Can the right hon. Gentleman say whether he is now satisfied as to the staff accommodation?
    Mr. Brown: I understand that the accommodation for the staff is ample.

    STATISTICS.
    Mr. Lawsonasked the Minister of Labour whether he has any statement to make on the large increase in unemployment revealed in the figures announced this week; and whether the Government have any plans to deal with this matter?
    Mr. E. Brown: The increase in registered unemployed to which the hon. Member refers is, I am sure, regretted in all parts of the House, but it would be a mistake to exaggerate its significance. It was due in large part to the fact that the increase in unemployment that normally follows the cessation of Christmas activity was accentuated this year by bad weather on the day of the count. As regards the second part of the question, I would refer the hon. Member to the statements of Government policy that have been made. That policy will be pursued with unabated vigour.
    Mr. Lawson: Is it not true to say that this increase, in line with the very small decrease in the autumn, shows that employment is in a bad state?
    Mr. Brown: I should not take that as a whole statement of the case. The hon. Member will realise that the House is most seriously concerned about the long-term unemployed, and if he will take any comparable figures he will notice that the long-term unemployed are steadily decreasing. They are now 289,000.
    Mr. Lawson: Have the Government any plans for the long-term unemployed?
    Mr. Brown: I understand that we are debating the matter on Thursday next.
    Mr. Lawson: Will the right hon. Gentleman be in a position to give us the plans then?
    Mr. Brown: I shall make a very full statement.
    Miss Wilkinson: The right hon. Gentleman says that this increase is due to the bad weather. One of the largest increases is in the distributive trades. How can bad weather affect people in shops?
    Mr. Brown: The hon. Lady is misinformed. The building industry, public works, contractors and the stone-quarrying industry, which were all affected by the bad weather, together account for an increase of 81,487 among the insured population between the ages of 16 and 64, or nearly half the total increase.
    Mr. Shinwell: When the number of unemployed is reduced in good weather do the Government take the credit?
    Mr. Brown: We neither claim the credit nor the discredit.

    BRIDGEND ARSENAL (IMPORTED LABOUR).
    Mr. E. J. Williamsasked the Minister of Labour whether he is aware of the grave feeling of unrest at Bridgend Arsenal over the importation of Irish and foreign labour whilst local labour is available; and what steps he proposes to stop this practice?
    Mr. E. Brown: I am making inquiries into the matter and will communicate with the hon. Member.
    Mr. Williams: Does not the right hon. Gentleman agree that the importation of outside labour into the distressed areas is a bad principle when thousands of persons in these areas are unemployed?
    Mr. Brown: I will make inquiries into this matter. The hon. Member knows that the question has been raised before, and he also knows that for heavy contractual work of this kind, this sort of labour has been employed.
    Mr. Williams: Will not the right hon. Gentleman agree that as a matter of policy the importation of outside labour should not take place when there is an adequate supply of local labour?
    Mr. Brown: The policy of the Government and of the Exchange system, so far as the Exchanges are used for the employment of labour, is that local men should get the first preference, then those in the district and others outside afterwards.
    Mr. Thorne: Is not the employment of local labour insisted upon in the contract?
    Mr. Brown: From his knowledge of the industrial side the hon. Member must know that there are many difficulties in the way.
    Mr. Lawson: Is it not a fact that when grants were made by the Unemployment Grants Committee on various occasions the contractors were told that they had to employ local labour or lose the contract?
    Mr. Brown: I should not like to give an answer offhand. Perhaps the hon. Member will put that question down.
    Mr. Buchanan: Will the right hon. Gentleman see that the Irish are not treated any worse than the Czechs?
    Mr. Brown: I should not like to be drawn into that comparison. I think the

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    whole House would prefer that where the local labour is suitable it should get the preference.
    Several Members—
    Mr. Speaker: If there are so many supplementary questions on each question, we shall never get on.

    TRAINEES (WORKMEN'S COMPENSATION).
    Mr. Shinwellasked the Minister of Labour whether trainees who meet with accidents while in training at Ministry of Labour training centres are treated as coming within the scope of the Workmen's Compensation Act; and who is responsible for the payment of compensation?
    Mr. E. Brown: Men in training at Ministry of Labour training centres are not employed persons within the meaning of the Workmen's Compensation Acts, but it is the practice to make an ex gratia payment to any man who sustains an injury which, if it had occurred during employment, would have given him a claim to compensation under these Acts.
    Mr. R. Gibson: Can the right hon. Gentleman say how these ex gratia payments compare with the amounts payable under the Workmen's Compensation Acts?
    Mr. Brown: Perhaps the hon. and learned Member will put that question down.

    JUNIOR INSTRUCTION CENTRE, LEIGH (ACCIDENT).
    Mr. Tinkerasked the Minister of Labour whether his attention has been drawn to the case of a youth attending the junior instruction centre, Leigh, who met with an accident during the course of instruction in August, 1938; that he was totally incapacitated for six weeks and that during that time he was disallowed unemployment benefit; that he has now made application for recompense for his injury but both the Ministry of Labour and the education authority disclaim responsibility; and will he consider what steps he can take to put this matter right as it is causing concern among the other youths who are attending instruction?
    Mr. E. Brown: I am aware of this case about which I have already written to the hon. Member. Junior instruction centres are conducted by local education autho-
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    rities, and I am advised that no liability rests with the Ministry in respect of accidents occurring at such centres.
    Mr. Tinker: Will the right hon. Gentleman get into touch with the local authority and see whether something can be done in this case in the way of an ex gratia payment?
    Mr. Brown: I should not like to express an opinion as to a local authority's liability, but I understand that the question of a compensatory payment is one for a local authority. On behalf of the Ministry I will say that if the local education authority decides to make a payment, I will gladly consider making a contribution towards it.
    Mr. Leach: Does not this make it clear that the men fall between the devil and the deep sea?
    Mr. Tinker: In view of the unsatisfactory nature of the reply, I beg to give notice that I intend to raise this matter on the Adjournment at the earliest opportunity.

    PROPOSED NEW EXCHANGE OFFICES, REDHILL.
    Mr. Toucheasked the Minister of Labour what steps are being taken to provide new offices for the Employment Exchange at Redhill?
    Mr. E. Brown: The search for a site is being energetically pursued.

    DISABLED EX-SERVICE MEN.
    Sir Smedley Crookeasked the Minister of Labour whether he will consider the advisability of taking special steps to reduce the number of 12,798 disabled ex-service men registered at Employment Exchanges as unemployed who are considered fit for light work only; and whether special attention will be paid to the cases of the 11,192 disabled ex-service men who have been on the register for 12 months or more?
    Mr. E. Brown: These are matters which receive my constant attention and I shall continue to take such steps as are possible, in co-operation with the King's Roll National Council which, as my hon. Friend knows, gives careful consideration to all such questions.
    Mr. Lipson: Will my right hon. Friend consider making representations to the proprietors of multiple stores as to the

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    possibility of some of these men being given employment by those stores?
    Mr. Brown: I am sure that all possible opportunities are pursued not only by the exchanges themselves in carrying out their duties, but by the committee which keeps regularly in touch with the interests of the disabled men.
    Viscountess Astor: Could not the Minister ask Messrs. Littlewood's, who get so much money out of the working people, to give these men some jobs?

    NEW INDUSTRIES.
    Mr. Priceasked the Minister of Labour how many new industries have come to the Special Areas and how many to the distressed areas during 1938; and the approximate number of persons employed by these industries?
    Mr. E. Brown: I will make inquiries and write to the hon. Member as soon as possible.
    Mr. Price: Will the Minister also give information as to how many new industries have come as a result of the formation of site companies, and how many have come otherwise?
    Mr. Brown: If the hon. Member desires any additional information, I will let him have all I can.

    COMMISSIONER FOR SPECIAL AREAS.
    Miss Wilkinsonasked the Minister of Labour how much time per week the Commissioner for the Special Areas is giving to the work of his department?
    Mr. E. Brown: I have made no inquiries on this point nor do I propose to do so. It is enough for me to testify to the great value of the services which the Commissioner devotes to the Special Areas without remuneration.
    Miss Wilkinson: Is the Minister aware of the widespread dissatisfaction with the Commissioner's department about the difficulties of getting in touch with him, and will the Minister consider wishing this officer on to the Charity Commissioners or somebody else, and replacing this old dear by somebody who is young and energetic?
    Mr. Brown: I do not share any one of the sentiments expressed by the hon. Lady. The services rendered by the
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    Special Commissioner are admirable and greatly appreciated in all parts of the country.

    EMIGRATION (ASSISTANCE).
    Mr. T. Smithasked the Minister of Labour whether he is prepared to make it possible for the Unemployment Assistance Board granting or advancing money to an applicant who desires to emigrate to the Dominions under an approved scheme?
    Mr. E. Brown: I am not quite sure precisely what the hon. Member has in mind. I would suggest that he should discuss the matter with me or the Board.
    Mr. Gallacher: Will the Minister also discuss with the hon. Member the question of making grants to bring home those who are stranded in the Dominions?

    ENGINE-BUILDING INDUSTRY.
    Miss Wardasked the Minister of Labour whether he is aware that there has been a reduction of 509 in the number of men and apprentices employed by the North-Eastern Marine Engineering Company, Limited, of Wallsend-on-Tyne, since July last, owing to the decline in merchant shipbuilding; and, in view of the importance of these men's services to the engine-building efficiency of the country, what steps does he propose to take to deal with the situation?
    Mr. E. Brown: I understand there have been discharges from this firm, but my information is that practically all the men discharged were engaged without delay by other firms in the district.
    Miss Ward: In view of the importance of the engine-building industry of this country, will my right hon. Friend convey that reply to the President of the Board of Trade in order that he may expedite a statement of Government policy in this respect?
    Mr. Brown: The hon. Lady has already made representations about this matter to the President of the Board of Trade, and no doubt my right hon. Friend will take note of her request to-day when he sees it in the OFFICIAL REPORT.

  AIR-RAID PRECAUTIONS.
  Mr. George Hallasked the Minister of Labour whether a person receiving unemployment allowances from the Unemployment Assistance Board will suffer any

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  reduction in their allowance should they take children or others into their houses under the Government evacuation scheme?
  Mr. E. Brown: As the hon. Member's question relates to the arrangements proposed under the Government evacuation scheme, I would ask him to await the reply to the similar question relating to public assistance which he has addressed to my right hon. Friend, the Minister of Health.
  Mr. Duncanasked the Minister of Health whether, in the assessment of accommodation available for evacuated children in the receiving areas, he can say whether the accommodation is to be on a temporary or a permanent basis?
  The Minister of Health (Mr. Elliot): The survey of accommodation which is at present being conducted by local authorities is primarily directed to ascertaining to what extent householders would be willing to receive children into their homes. The standard which has been suggested for adoption is one calculated to ensure the maintenance of proper housing conditions during any period for which it may be necessary to retain the children.
  Mr. Duncan: Is it not likely to be a wrong calculation if one child per room is taken as the standard, rather than the cooking and other domestic arrangements which are a truer guide to the accommodation available? If this accommodation is to be on a temporary basis, will it not be easier to deal with cooking and other domestic arrangements than it would be if it were on a permanent basis; and will the Minister, therefore, reconsider the matter to see whether it should not be on a temporary basis, so that it would be possible to get more children out into the country?
  Mr. Elliot: In the first place, I think it desirable to continue the census on the basis on which we are now working. Confusion would be caused if we altered the basis now. Having got this information, I will naturally consider whether any further classification might be adopted.
  Mr. George Hallasked the Minister of Health whether householders in receipt of public assistance will suffer a reduction in the amount received from the public assistance committee should they take
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  children or others under the Government evacuation scheme?
  Mr. Elliot: I am in sympathy with the view implied in this question and in the hon. Member's similar question No. 5 addressed to my right hon. Friend the Minister of Labour, and he can be assured that any steps necessary to give effect to it will be taken by the Government if and when the occasion arises.
  Mr. Perkinsasked the Minister of Health whether it is his intention to make the requisite funds available for the provision of essential standby electrical plants for hospitals and other essential institutions?
  Mr. Elliot: I assume that my hon. Friend is alluding to standby plants required for use in the event of failure of the normal supply in time of war. In so far as equipment of this kind is of no substantial peace-time use to the institution, a contribution to the cost may be made by the Exchequer, but I am advised that normally provision should be made against the possibility of breakdown in peace-time, and, therefore, the question of grant would not arise.
  Mr. Silvermanasked the Minister of Health how many first-aid posts, including decontamination centres, have been established in the ctiy of Liverpool; how many the local authority have undertaken to establish; and how many, in the opinion of his department, are immediately necessary?
  Mr. Elliot: The city council have not yet formally submitted to me their scheme for first-aid posts and cleansing centres but I understand that they have so far allocated 27. Of these 21 are at hospitals or other medical premises which could function at very short notice. The adaptation of the remaining six, the allocation of additional posts, and the provision of mobile units are at present receiving consideration. The council's proposals have been under frequent discussion with my hospital officer and I have no reason to believe that they will not be adequate.
  Mr. Silverman: Can the right hon. Gentleman say whether the position now is that 35 have been deemed to be necessary, that 10 have been deemed to be immediately necessary, but do not exist,. and that the local authorities on 8th December postponed consideration of the matter indefinitely?
  Mr. Elliot: The hon. Member seems to be giving me information rather than asking for it.
  Mr. Silverman: I am asking whether the statement which I have just made does, in fact, represent the position or not?
  Mr. Elliot: If the hon. Member had listened to the beginning of my answer, he would know that I said that the city council have not yet formally submitted their scheme to me.
  Mr. Silverman: But is the statement in my question correct that, on 8th December last, the local authority postponed consideration of this matter indefinitely?
  Mr. Elliot: I am unable to say that.
  Lieut.-Colonel Sir Thomas Mooreasked the Minister of Health whether he proposes to utilise empty mansions and other suitable empty properties throughout the country for purposes of evacuation; whether any survey has been made of such properties; and, if so, with what result?
  Mr. Elliot: Local authorities have been asked to complete by the end of February a survey of all available accommodation, including empty houses. I shall then consider, in conjunction with the evacuating and receiving local authorities, to what use special categories of accommodation, including large houses and empty houses, can best be put.
  Sir T. Moore: In view of the fact that there are 139 questions on the Order Paper to-day, I do not propose to ask supplementary questions to any of my three questions, so as to give other hon. Members a chance of getting answers to their questions.
  Mr. Caryasked the Minister of Health whether, in connection with billeting arrangements under evacuation schemes, householders will be permitted to give preference to their own relatives, including children, from vulnerable areas; if so, whether definite instructions to this effect will be issued, and, in such cases, the persons concerned will be accommodated in Government-commandeered transport or will be expected to make their own travelling arrangements?
  Mr. Simmondsasked the Minister of Health whether he will confirm that
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  householders who, in time of war, will be called upon to accept persons from evacuated areas, will have a recognised prior right to nominate their relatives and friends to occupy vacant rooms in their houses?
  Mr. Elliot: If, as I gather, my hon. Friends have in mind private arrangements by individual householders for the reception and care of children, and persons necessary for their care, from evacuable areas, there will be no objection to the making of such arrangements and the survey provides for the noting of any such arrangements. It would not, however, be practicable to provide transport officially for those who are making their own travelling arrangements.
  Mr. Perkinsasked the Lord Privy Seal whether he proposes to provide any financial help towards the cost of providing shelters and essential equipment for firms doing essential defence work?
  The Lord Privy Seal (Sir John Anderson): This matter is so closely bound up with legislative provisions which it is proposed to introduce defining the obligations of employers in regard to air raid precautions that I am afraid I can only ask my hon. Friend to await the introduction of a Bill.
  Mr. Pilkingtonasked the Lord Privy Seal how many sandbags have been indented for by local authorities; and how many have been supplied?
  Sir J. Anderson: 108,000,000 have been indented for by local authorities and 85,000,000 have already been supplied.
  Mr. Joelasked the Lord Privy Seal what precisely are the present instructions issued by his Department to local authorities with regard to the question of paying instructors and lecturers under the air-raid precautions scheme; and from how many districts he has received reports that the recent instruction that such persons should be paid has been resented by many of the persons concerned, including doctors?
  Sir J. Anderson: Local authorities have always been encouraged to arrange, so far as practicable, for the training of A.R.P. personnel by voluntary instructors, but experience has shown that it is

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  impossible in many areas to find a sufficient number of persons in a position to give the necessary time for this purpose without remuneration. I have no evidence to show that the payment of A.R.P. instructors is generally resented.
  Mr. Joel: Is the right hon. Gentleman aware that in Dudley there is resentment on the part of air-raid wardens and other volunteers over the fact that payment is made to gas instructors and doctors and that the latter have themselves asked the local authorities to rescind their decision to pay them?
  Sir J. Anderson: I have heard of that, but I do not think that it is quite reasonable.
  Mr. Wakefieldasked the Lord Privy Seal whether he has considered the recommendations made by the Institution of Structural Engineers, in paragraph 55 of their report, issued last year, upon air-raid precautions; and can he make a statement?
  Sir J. Anderson: The recommendations of the Institution of Structural Engineers in the report to which my hon. Friend refers are being considered together with information available from other sources. Some of the suggestions made by the institution do not agree with recommendations from other sources, and the points of difference are at present the subject of full-scale tests.
  Sir William Jenkinsasked the Lord Privy Seal what steps he has taken to assist the depressed areas of West Wales in giving orders for the necessary steel required for shelters under the air-raid precautions scheme; and will he give the quantity ordered and the names of the works up to date?
  Sir J. Anderson: In allocating orders for steel air-raid shelters consideration is given to the manufacturing facilities afforded by all Special Areas, and a large share in the initial orders for galvanised corrugated sheets has gone to firms in West Wales. I will send the hon. Member the further information which he wishes.
  Mr. Duncanasked the Lord Privy Seal whether he will arrange for copies of all circulars and memoranda sent to local authorities in connection with air-raid precautions to be sent also to all Members of this House?
  Sir J. Anderson: I have arranged that copies of ail such circulars and memoranda shall in future be available in the Vote Office.
  Mr. Duncanasked the Lord Privy Seal whether he will include in the circular to be issued to local authorities regarding steel shelters advice regarding the strengthening of basements and information regarding the issue of equipment and arrangements for grants for this purpose?
  Sir J. Anderson: The distribution of the steel shelters will begin in certain areas before the end of this month, and a circular restricted to information regarding these shelters has therefore been issued as a matter of urgency to the local authorities affected. Arrangements are being made for the survey of basements and the provision of material for strengthening them, and I hope to be in a position shortly to issue a further circular to local authorities dealing with this part of the shelter programme.
  Mr. Duncan: Will my right hon. Friend hasten that circular, because in London, at any rate, the question of dealing with basements is even more important than the provision of steel shelters?
  Sir J. Anderson: I will do all I can in that matter.
  Mr. R. C. Morrison: Will the right hon. Gentleman say whether householders who receive those shelters are expected to erect them now or to keep them ready?
  Sir J. Anderson: The circular, already issued and now available, is perfectly explicit on that point.

  COST-OF-LIVING INQUIRY.
  Miss Wilkinsonasked the Minister of Labour when he estimates that the result of the recent inquiry into the cost of living will be available; and when it is proposed that they shall be the basis of the official index statistics?
  Mr. E. Brown: The tabulation of the data contained in the budgets which have been collected by means of this inquiry is proceeding as rapidly as possible, but I regret that I am not yet in a position to state by what date statistics summarising the information obtained will be ready for publication. The revision of the basis

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  of the cost of living index cannot be undertaken until a summary of the results of the inquiry is available. As I have previously stated, over 50,000 budgets giving particulars of full weekly expenditure, and over 150,000 returns of weekly expenditure on clothing, have been collected. The examination and tabulation of this material is a task of great magnitude, but every effort is being made to expedite the progress of the work with a view to the publication of the results of the inquiry at the earliest possible date.
  Mr. Thorne: Does not the Minister think that it is desirable that he should make inquiries into the budgets of the people who are out of work?
  Mr. Brown: That was not the view of the very powerful Advisory Committee which advised me on this matter.

  AUXILIARY FORCES (LOCAL AUTHORITIES' EMPLOYÉS).
  Rear-Admiral Beamishasked the Minister of Health whether he will introduce legislation to safeguard the pensionable position of employés of local authorities serving in the auxiliary forces; whether any such safeguards now exist for civil servants so serving; and what is the reason for the withholding of such privileges from the first-mentioned citizens?
  Mr. Elliot: Steps are being taken to prepare legislation with the object stated in the first part of the question for introduction in the event of an emergency by the Government of the day if they so decide. As regards civil servants, I must refer my hon. and gallant Friend to my right hon. Friend the Financial Secretary to the Treasury.
  Rear-Admiral Beamish: Is my right hon. Friend aware that these men employed by the local authorities are paid in exactly the same way, by rates and taxes, by their fellow-citizens, and therefore are entitled to equal treatment?
  Mr. Elliot: As I have said, legislation on this matter is being prepared for introduction.
  Mr. Petherick: Will the legislation be passed in anticipation of an emergency, to come into force when an emergency arises, or only in the event of war?
  Mr. Elliot: That is a question which applies generally to all emergency legislation, and would be at the discretion of the Government of the day.
  Mr. Petherick: Would it not be advisable to pass such legislation now in order that the men may know their position?

  CENSUS.
  Rear-Admiral Beamishasked the Minister of Health whether he has any intention of altering the particulars to be stated in the Census returns, in order to provide more information as to the composition and origins of the population; and what opportunity will be provided for Members to propose such alterations?
  Mr. David Adamsasked the Minister of Health whether it is his intention to restore, in the 1941 Census, two questions omitted in the 1931 Census, namely, the declaration of birthplace and of the place of work; whether he is aware that information as to the place of work is essential for the economic development of transport facilities; and whether he will, in general, guarantee that false economy shall not be allowed to jeopardise the value of the next Census, and how far preparations for the 1941 Census are now advanced?
  Mr. Elliot: The programme of inquiries to be included in a Decennial Census is reconsidered on each occasion and finally decided after a review of ail the proposals which have been put forward. While executive preparations are now being made for the 1941 Census enumeration, the settlement of the Census inquiries has not as yet been undertaken, since experience suggests that it is preferably carried out at a time somewhat closer to the actual Census date. The suggestions contained in the questions and any others which I may receive from hon. Members will be noted for consideration. Inquiries as to both birthplace and nationality were included in the 1931 Census.
  Mr. Day: Is there a special reason for this Census?
  Mr. Barr: Will the right hon. Gentleman bear in mind that it is an established custom in this country that no sectarian or denominational questions should be put in the Census, as is done in certain other countries?
  Mr. Elliot: Yes, Sir.
  Mr. Adams: Will the right hon. Gentleman answers the last part of my question, as to how far the preparations are advanced for the next Census?
  Mr. Elliot: The executive preparations are considerably advanced, but the actual question of the 1941 Census paper has not yet been taken into consideration.
  Mr. Day: Is there any special reason for the early preparation of this Census?
  Mr. Elliot: It is desirable that the executive arrangements should be advanced so that, if necessary, the Census could be taken before 1941.
  Mr. Dayasked the Minister of Health what instructions have been issued to the various officers of municipal authorities asking them to make the necessary preparations for an early Census of the population?
  Mr. Elliot: Officers of local authorities have been asked to take charge locally of the arrangements now being made for the recruitment of enumerators for the 1941 Census.
  Mr. Day: Can the right hon. Gentleman say whether this is intended to form a basis for compulsory national service?
  Mr. Elliot: No, Sir.

  OLD AGE PENSIONERS (PUBLIC ASSISTANCE).
  Mr. Tinkerasked the Minister of Health whether he will consider getting a tabulated statement showing what each local authority pays by way of public assistance to old age pensioners; what percentage of the rates for each area this represents; and the number and the cost for England and Wales?
  Mr. Elliot: I do not think I should be justified in imposing on local authorities the labour and expense which the compilation of such a statement would involve.
  Mr. Tinker: Is the Minister aware that this matter is causing great concern, and that hon. Members would like to know exactly what is being paid by local authorities in public assistance to old age pensioners, in view of the demand for an addition to the pension?
  Mr. Elliot: There is much information which we should like to get from the local authorities, but the local authorities them selves resent the continuous increases in clerical duties which are imposed upon them.
  Mr Buchanan: But is the right hon. Gentleman not aware that this question of old age pensions has now become a most acute political issue; and in view of that fact and the likelihood of controversy arising upon it, possibly at an Election, does he not think that it would be well for the House of Commons to have this information?
  Mr. Elliot: I have given the matter consideration, and, so far, I do not think that I should be justified in calling for this information.
  Mr. A. Jenkins: Is the Minister aware that the local authorities have already prepared this information, and that it is only a matter of communicating with them in order to obtain it?
  Mr. Elliot: If the local authorities made representations to me, I should naturally give them consideration.
  Mr. Gallacher: Is the Minister aware that the Kirkcaldy local authority is calling a conference on this question?
  Mr. Jenkins: Was not the reason first given that it would impose too great a liability of labour upon the local authorities to supply this information; and now that the right hon. Gentleman knows that the local authorities have the information, will he take steps to see that it is supplied to the House?
  Mr. Elliot: I simply said that I did not think I would be justified in imposing upon local authorities the labour of supplying the information.
  Mr. R. J. Taylor: Does the Minister not think that he would be justified in doing so, if only to disabuse the minds of hon. Members of the belief that he is afraid to do it?
  Mr. Manderasked the Minister of Health the number of old age pensioners in Wolverhampton, Wednesfield, and Willenhall who are in receipt of help from public assistance committees in order to supplement their pensions?
  Mr. Elliot: On 1st January, 1939, the latest date for which particulars are available, there were 786 old age pensioners in Wolverhampton County Borough in receipt of poor relief. I am unable to furnish figures for Wednesfield and Willenhall, as the returns made to my Department of the number of persons in receipt of poor relief do not contain separate particulars for parts of an administrative county.
  Mr. Mander: In view of the very large number of persons affected by this in Wolverhampton, would not the simplest plan be to increase the amount of old age pensions; and will the right hon. Gentleman be glad to consider that suggestion.
  Mr. Shinwell: May I ask the right hon. Gentleman whether he obtained the information contained in his reply by applying to the local authority; if so, is there any difficulty in applying to other local authorities for the corresponding information from their areas; and in the event of hon. Members asking specific questions about specific local authorities will be obtain the information?
  Mr. Gallacher: If the local authorities were as hard-hearted as the Government, what would happen?
  Mr. Tinkerasked the Minister of Health whether he has considered a resolution from Atherton Urban District Council asking for an increase in the rate of old age pensions and spinsters', widows', and orphans' pensions; and how many similar resolutions he has had from other local authorities?
  Mr. Elliot: I have received the resolution to which the hon. Member refers, and consideration is being given to it. Thirty-one similar resolutions have been received from other local authorities.
  Mr. Tinker: When may we expect a decision from the right hon. Gentleman when he has considered it?
  Lieut.-Colonel Acland-Troyte: Can my right hon. Friend say what the cost will be?
  Mr. Paling: Is the right hon. Gentleman aware that an overwhelming number of people are now of the opinion that the time is ripe for an increase in old age
  1112
  pensions, and will he take active steps to put it into operation?
  Mr. Markhamasked the Minister of Health what is the number of old age pensioners in the City of Nottingham; and how many of these are in receipt of Poor Law relief?
  Mr. Elliot: I regret that the information asked for in the first part of the question is not available, as the records of pensioners are not kept on a territorial basis. On 1st January, 1939, the number of old age pensioners in receipt of poor relief in Nottingham was 2,816.
  Mr. Markham: Can my right hon. Friend say what would be approximately the nearest area for which figures would be available?
  Mr. Elliot: Not without notice.

  PUBLIC HEALTH.

    RIMROSE BROOK DRAINAGE SCHEME.
    Mr. Erringtonasked the Minister of Health what progress has been made in regard to the Rimrose Brook drainage scheme; whether he can give any reason for the present delay; and whether he can give an approximate date for its completion?
    Mr. Elliot: I approved the first part of the scheme last November and I understand that tenders in respect of this are expected this month. The second part required further consideration, but this was approved and authority given for tenders this week. I regret that the information at my disposal does not enable me to answer the last part of the question.
    Mr. Errington: In view of the danger to health, will the right hon. Gentleman do all he can to accelerate the scheme?
    Mr. Elliot: Yes, Sir. I have, in fact, given approval and authority for the tenders has gone in both cases.

    DOMICILIARY MIDWIVES' SERVISE.
    Mr. G. Griffithsasked the Minister of Health the names of local supervising authorities in England and Wales under the Midwives Act, 1936, showing which of these authorities provide a domiciliary midwives' service by direct employment of midwives' by arrangements with nursery associations, or by a combination of

    1113
    both, respectively, stating the numbers employed in each category and how many midwives are employed by arrangements with welfare councils; the percentage of births attended by midwives; and the percentage of these cases in which medical assistance was required by the midwife?
    Mr. Elliot: As the names of 188 local supervising authorities are involved, I am sending the hon. Member a statement giving the particulars for which he asks.

    MENTALLY DEFECTIVECHILDREN,KENT.
    Mrs. Adamsonasked the Minister of Health whether he is aware of the inadequate accommodation provided by the Kent County Council for mentally-defective children, and that at a recent meeting the Dartford and District Guardians Committee, because of numerous complaints, requested the Kent County Council to provide extra facilities for such children in north-west Kent; and whether he will take the matter up with the Kent County Council so that suitable provision for this rapidly-growing area may be made?
    Mr. Elliot: Yes, Sir. The Board of Control have for some time been in communication with the county council on the need for further accommodation for mental defectives, especially children, now in public assistance institutions. I am informed that the extensions at Ley-bourne Grange Mental Deficiency Colony are being expedited, with the result that two Villas for children are expected to be ready during the coming summer.

    NURSING SERVICES.
    Sir Joseph Lambasked the Minister of Health whether any decision has been made on the recommendations contained in the recent report of the Inter-Departmental Committee on Nursing Services; and whether he can say when he can make an announcement on this subject?
    Mr. Elliot: The recommendations of this Committee are being examined in my Department, but I am not yet in a position to make any statement on the subject.
    Sir J. Lamb: Has my right hon. Friend noticed in the report that the reason given by the Commission for their interim report was the urgency of the question of the augmentation of salaries and of the question of hours worked?
    Mr. Elliot: Yes, but I think my hon. Friend is aware that there are many bodies involved, and it is very desirable that full consideration should be given to the matter before decisions are taken.
    Sir J. Lamb: Is it not a fact that those bodies have given consideration to this matter, are waiting for a lead from the Minister, and are being held up at the present time because that lead has not been given?

    GENERAL MEDICAL COUNCIL.
    Mr. David Adamsasked the Paymaster-General, as representing the Lord President of the Council, whether it is his intention to hold an inquiry into the relationship between the General Medical Council, the Medical Practitioners Union, and the general public, in view of the fact that this union has issued a memorandum proposing that some entirely new body should take over the functions of the General Medical Council?
    The Paymaster-General (Earl Winter-ton): The answer is in the negative.

  VOLUNTARY PENSIONS SCHEME.
  Mr. R. Gibsonasked the Minister of Health how many applications for pensions with special benefits were made in England and Wales under the 1937 Act, prior to the closing date on 2nd January, 1939, and how many of these applications have been granted?
  Mr. Elliot: The number of applications received in England and Wales for admission to the new voluntary pensions scheme on the special terms offered to initial entrants was 693,136, of which 375,000 were received after 1st December, 1938. Up to 1st February last, the latest date for which the figures are available, 254,589 applications had been admitted.
  Mr. Gibson: What is the approximate proportion of the possible number of applications; and is the Minister satisfied with the response which has been made?
  Mr. Elliot: I think the response made, particularly in the closing stage, was very remarkable indeed and very satisfactory. I cannot give any information as to the proportion, because a great many have yet to be decided.
  Mr. Gibson: I was referring to applications and not to those which have been granted.
  Mr. Elliot: As to the applications, I should have liked to have seen more people taking advantage of the offer. Still, I think 693,000 is a very good number.

  PUBLIC ASSISTANCE.
  Mr. R. G. Taylorasked the Minister of Health the number of persons who were in receipt of public assistance in England and Wales, giving outdoor and indoor numbers, respectively, as at July, 1931, and January, 1939?
  Mr. Elliot: On Saturday, 21st January, 1939, there were in England and Wales 151,503 persons in receipt of institutional relief and 933,769 persons in receipt of domiciliary relief, making a total of 1,085,272. The corresponding figures for Saturday, 18th July, 193r, were 193,929, 778,101 and 972,030. These figures exclude rate-aided patients in mental hospitals, persons in receipt of domiciliary medical relief only and casuals.
  Mr. Taylor: Will the right hon. Gentleman put this to the credit side when claiming what has been done by the National Government?
  Mr. Elliot: The provision made for the poor in this country is a very creditable thing.

  BRITISH ARMY (ESTABLISHMENT).
  Mr. Vyvyan Adamsasked the Prime Minister whether, in order to enlarge the deterrents against aggression, and in order to demonstrate our physical ability to make good our unequivocal intention of assisting France to maintain the integrity of her territories, he will substantially increase the establishment of His Majesty's Army?
  The Prime Minister (Mr. Chamberlain):The development of the rearmament programme so far as the Army is concerned will be dealt with by my right hon. Friend the Secretary of State for War when introducing the Army Estimates for 1939, and I would ask my hon. Friend to await that occasion.
  Mr. Adams: May I ask the Prime Minister whether the despatch of a Continental expeditionary force forms any part of our plans?
  The Prime Minister: No, Sir.
  Miss Wilkinson: Why is it necessary to increase the forces against aggression when the right hon. Gentleman so actively encourages it?
  Mr. Adams: To what is my right hon. Friend saying "No"? Did my right hon. Friend say "No" to my request that he should answer my question, or in answer to the question whether an expeditionary force forms any part of our plans?
  The Prime Minister: My answer referred to my hon. Friend's question whether I could give him an answer, and I said, "No"

  OFFICIAL SECRETS ACT, 1920 (AMENDING BILL).
  Mr. Dingle Footasked the Secretary of State for the Home Department whether it has yet been decided to introduce legislation amending Section 6 of the Official Secrets Act, 1920?
  Sir Percy Hurdasked the Home Secretary what steps have been taken towards implementing his undertaking to amend the penal provisions of the Official Secrets Act, as affecting journalists in the discharge of their professional duties?
  The Secretary of State for the Home Department (Sir Samuel Hoare): His Majesty's Government have given careful consideration to this question and have decided to introduce a Bill to amend Section 6 of the Official Secrets Act, 1920. In view of the state of business in this House, the Bill will be introduced in the House of Lords.
  Mr. Foot: Will the right hon. Gentleman say how soon the terms of the Bill will be available?
  Sir S. Hoare: I should hope, on an early day next week.

  FILM CENSORSHIP.
  Mr. Manderasked the Home Secretary the number of occasions during the last two years on which the British Board of Film Censors has consulted his Department for information or advice?
  Sir S. Hoare: There were two such occasions so far as can be traced.
  Mr. Mander: Can the right hon. Gentleman say whether the advice of the Home Office was accepted on those two occasions, and whether this is in effect a secret, unofficial, political, film censorship?
  Sir S. Hoare: The answer to the hon. Gentleman's second supplementary question is "No" As to the first, I could not say without notice.

  INQUEST, OXFORD.
  Mr. Ellis Smithasked the Home Secretary whether his attention has been directed to the inquest held on the railway platelayer at Oxford on 2nd January, 1939, and to the observations made by the coroner; why the dead man's representative was not allowed to speak at the inquest; and will he inquire into the matter?
  Sir S. Hoare: At the inquest in question there were representatives of two trade unions. As regards the representative of the union to which the deceased man had belonged, no difficulty arose. As regards the representative of the union to which the driver and fireman of the engine concerned in the accident belonged, the coroner took the view that he ought to restrict himself to questions relating to regulations and technical matters. There would seem, however, to be little, if any, ground for differentiating the positions of two representatives in such a case, and the coroner, with whom I have been in communication, tells me that in any future case he is prepared to follow the usual practice.

  EIRE (VISITORS TO GREAT BRITAIN).
  Mr. Erringtonasked the Home Secretary whether there is in force any system of police registration for those who enter this country from Eire; and, if not, whether he will initiate such a system to facilitate adequate supervision in the case of undesirable characters?
  Sir S. Hoare: The provisions requiring visitors to this country to register with the police apply only to aliens. There is no power to apply a similar requirement to British subjects.
  Mr. Errington: Does my right hon. Friend realise that it takes the police several weeks to trace certain political extremists who come from Southern Ireland?
  Sir S. Hoare: I am not quite sure to what particular cases my hon. Friend refers, but if he will send me particulars, I will look into them.

  JACOB PANITZ.
  Mr. Petherickasked the Home Secretary (1) whether it is intended to carry out the recommendation for the deportation of Jacob Panitz, recently convicted at Canterbury of assaults upon a magistrate and a police officer;
  (2) how many times Jacob Panitz, recently convicted at Canterbury for assault, has previously been convicted; whether he has been recommended for deportation; and why he has not been deported?
  The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): This man has numerous previous convictions, but it is impossible to deport him because there is no country of which he has any claim to be a national. He was born in a place which is now part of Lithuania, but he came to the United Kingdom as a child and never acquired Lithuanian nationality.

  SILICOSIS.
  Mr. James Griffithsasked the Home Secretary whether he is aware that the Medical Board under the Various Industries (Silicosis) Scheme certified that the death of William Rees Davies, Pontyates, Llanelly, was caused by silicosis accompanied by tuberculosis, and that the claim for compensation on behalf of his dependants has been rejected by his employers on the ground that the deceased was not employed within the three years prior to his death; and whether he will take steps to amend the silicosis orders so as to make it possible to secure compensation to the dependants in such cases?
  Mr. Lloyd: My right hon. Friend has inquired into this case, which is a very hard one. He has also obtained other information as to cases affected by the three-year rule, and has communicated with representatives of the employers on

  1119
  the question of modifying it. When their replies are received, he will consider further what would be the best method of meeting cases of hardship.
  Mr. Griffiths: When the hon. Gentleman is considering any proposals, will he consider the practicability of making any changes retrospective in order to meet the hardships involved in cases like that?
  Mr. Lloyd: I think possibly my right hon. Friend might have given consideration to that matter, but I doubt whether his powers under the Act would allow him to do as the hon. Member suggests.

  DEMONSTRATIONS, WESTMINSTER.
  Mr. Gallacherasked the Home Secretary whether he is aware that on 31st January a queue of people waiting outside the public entrance of the House of Commons for the purpose of interviewing their Members was dispersed by mounted police; that individuals who tried to explain to police officers that they were on legitimate business to their Members were jostled away and assaulted; and whether he will cause inquiries to be made as to where the responsibility lies for orders being given to the police which resulted in peaceful citizens being denied access to their elected representatives?
  Mr. Silvermanasked the Home Secretary whether he has inquired into complaints as to the conduct of the police in Parliament Square, Whitehall, and Piccadilly, on the evening of 31st January last; whether unnecessary violence was used; how many persons were obstructed or assaulted by police officers; and whether persons desiring to interview Members representing them in this House were forcibly prevented by police officers from so doing?
  Mr. G. Straussasked the Home Secretary whether he has considered the complaints made concerning the batoning by the police of peaceful citizens in Parliament Square and Abingdon Street on 31st January; and will he set up an impartial committee to investigate these charges?
  Sir S. Hoare: On the evening of 31st January, an organised attempt was made to evade the prohibition of mass demonstrations in the neighbourhood of Parliament. After a meeting had been held in
  1120
  Chenies Street, a procession marched to Cambridge Circus. The demonstrators then made their way in separate groups to Parliament Square, and, in accordance with a plan outlined by a speaker at the meeting, a number of them attempted to justify their presence by a pretence that they happened simultaneously to wish to take advantage of the facilities ordinarily available to individual members of the public for interviewing Members of Parliament. Other demonstrators paraded in the vicinity of the Houses of Parliament chanting slogans. It was the duty of the police, both under the Sessional Order and the general law, to disperse this crowd of demonstrators. The inquiries which I have made as to the steps taken by the police for this purpose indicate that they carried out their duty in a reasonable manner and with commendable restraint and patience. Later a number of the demonstrators collected in Piccadilly Circus and a number of men and women tried to obstruct the traffic by lying down in the roadway. As a result 51 persons were arrested.
  My information is that at no time were truncheons drawn or used, and I can find no ground for the suggestion that there was any unnecessary violence. If specific complaints are sent to me, I will, of course, investigate them, but on the information I have at present, I can find no ground whatsoever for the suggestion that there is a case for a committee of inquiry.
  Mr. Gallacher: Is not the Minister aware that there have been, through the Press, many complaints from people who had no association with any demonstration to the effect that some of the police officials were responsible for gross and unnecessary violence, and if evidence of this kind is submitted to him, will he institute an inquiry into what happened?
  Sir S. Hoare: I can imagine a good many complaints being made to the Press about the police, but I cannot undertake to pay attention to them unless specific information is given to me to show that there is justification for the charges being made.
  Captain Peter Macdonald: Will my right hon. Friend deal with the cases in the same way as they are dealt with in Moscow?
  Mr. G. Strauss: Is the right hon. Gentleman aware that a large number of serious allegations have been made against the action of the police by many respectable citizens, civil servants and others, and in view of those serious allegations is it not plainly in the interests of the police as well as of the public that an impartial inquiry should be made?
  Sir S. Hoare: No, I am not aware of any such allegations.
  Several hon. Members
  Mr. Silverman: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.
  Captain Ramsay
  Mr. Speaker: When an hon. Member gives notice to raise a matter on the Adjournment that should put an end to further supplementary questions.
  Sir Henry Morris-Jones: Is it in order for an hon. Member to give notice that he will raise the matter on the Adjournment before the supplementary questions have been disposed of?
  Mr. Speaker: We have had several supplementaries.
  Captain Ramsay: In view of the fact that nobody on this side had an opportunity of asking a supplementary question, may I ask my right hon. Friend a question?
  Mr. Speaker: Order. The supplementary questions which I allowed were those by Members who had questions on the Paper. They were the only ones asked before notice was given that the matter would be raised on the Adjournment. As far as I am concerned that puts an end to the matter.

  MOTORING OFFENCES (FINES).
  Commander Sir Archibald South byasked the Home Secretary whether his attention has been called to the case of Mr. J. Bennie, who, on 15th October, 1938, at the South-Western Police Court, was fined£8 for exceeding the speed limit, having been previously convicted three times for the same offence but on no occasion having exceeded 40 miles per hour; whether he is aware
  1122
  that a few weeks later at Bow Street another defendant who had four previous convictions, one of which was for careless driving, was fined£1 for exceeding the speed limit; and whether, in view of the difference of treatment meted out to offenders in different courts, he will take steps to secure uniformity of treatment to persons convicted of motoring offences?
  Sir S. Hoare: Yes, Sir; my attention has been called to the two cases referred to, but it would not be proper for me as Home Secretary to advise the exercise of the Royal Prerogative merely for the purpose of standardising sentences passed by the courts in the exercise of the discretion entrusted to them by Parliament. I fully appreciate, however, the desirability of securing, so far as is practicable, a common standard in the treatment of offenders, and I am in communication with the Chief Magistrate of the Metropolitan Police Courts in the hope that he may be able to give some assistance in the solution of this problem.
  Sir A. Southby: Does my right hon. Friend appreciate the widespread sense of injustice which the public feel at the wide differences in the sentences which have been passed recently in the Metropolitan police courts?
  Sir S. Hoare: I think I had better not comment on the matter.
  Mr. Leach: Will the right hon. Gentleman agree that the only way to get the uniformity he seeks is to have motoring offences tried by non-motoring magistrates?

  JEWISH FIRMS (GERMAN EMPLOYES).
  Mr. Manderasked the Home Secretary whether he is aware of the attempts that have been made by the German representatives in London to forbid German subjects in this country to work for Jewish employers; and whether he will take steps to prevent this racial discrimination?
  Sir S. Hoare: I am aware that allegations have been made that German subjects have been advised not to work for Jewish employers. If the hon. Member will supply me with particulars of any cases of which he has heard, I will have inquiry made.
  Mr. Mander: I will certainly do that, but is the Home Secretary aware of the great difficulty in bringing any of these cases forward, because if any publicity is given to them the relatives in Germany are made to suffer. Will he bear that in mind and not allow this intolerable interference with the rights of citizens in this country?

  LICENSING TRADE (LIQUOR SHOPS).
  Mr. Arthur Hendersonasked the Home Secretary whether he is aware that there has been a large increase in the number of liquor shops which trade under retail excise licences, although the Royal Commission on Licensing, 1929–31, recommended a measure of control which was designed to prevent the present frustration of the justices licensing schemes by these shops; and whether he would be prepared to introduce a one-clause Bill to carry out the Commission's recommendations?
  Mr. Lloyd: My right hon. Friend is aware that the number of such shops has increased from 1,687 in 1930 to 1,920 in 1938, but as at present advised he does not consider that it is necessary to introduce special legislation solely to give effect to this single recommendation of the Royal Commission.
  Viscountess Astor: Is the Home Office aware that the Royal Commission also made a recommendation as to clubs, which are greatly on the increase; and is it also aware that convictions for drunkenness are going up and still the Government are doing nothing about the recommendations of the Commission?
  Viscountess Astor: Is the Home Office aware that the Royal Commission also made a recommendation as to clubs, which are greatly on the increase; and is it also aware that convictions for drunkenness are going up and still the Government are doing nothing about the recommendations of the Commission?
  Mr. Thurtle: Is it not a fact that the increase of these shops constitutes a public convenience?

  LIFTS (INSPECTION).
  Mr. Thorneasked the Home Secretary whether he intends to give the local authorities power to inspect lifts in use at hotels and blocks of houses?
  Sir S. Hoare: In a Bill which is being promoted by the London County Council, provisions have been inserted which, if approved by Parliament, will give the council certain powers of control. Any question of general legislation must await the result of this step.
  Mr. Thorne: As that Bill will ask only for powers to deal with lifts in the London County Council area, will the right hon. Gentleman give power to factory inspectors to deal with this matter throughout the country?
  Sir S. Hoare: It will be well first to test the opinion of the House on the London County Council Bill.

  REFUGEE CHILDREN (ADOPTION).
  Sir T. Mooreasked the Home Secretary (1) how many refugee children have been adopted in this country by people of British nationality since 1st January, 1938;
  (2) to what extent and under what conditions adoption is permitted in respect of immigrant refugee children; and whether such children as are, or may be, adopted will thereby acquire now or in the future British nationality?
  Colonel Wedgwoodasked the Home Secretary under what statute it is illegal for British citizens to adopt children from Germany, and/or stateless children; and whether he will now take steps to except refugees from this disability, especially in the case of orphans?
  Sir S. Hoare: The Adoption of Children Act, 1926, provides that an adoption order shall not be made in respect of an infant who is not a British subject. As at present advised I cannot undertake to introduce legislation to amend the Act on this point. I understand that many refugee children have been received temporarily into British homes but no information is available as to the number of such cases.
  Colonel Wedgwood: Is it not desirable that British people who are so charitably inclined should be encouraged to adopt or semi-adopt these children in this country?
  Sir S. Hoare: There are objections against the adoption of foreign subjects by British subjects owing to the differences in the nationality laws in the various countries. This question was taken into account when the Adoption Bill was passed, and at present I do not see any case for amending the Statute.
  Colonel Wedgwood: Does the right hon. Gentleman wish to encourage this form of charity in this country or not?
  Sir S. Hoare: Obviously, I cannot encourage any form of charity which is against the law.

  COURTS OF SUMMARY JURISDICTION (FINSBURY).
  Miss Cazaletasked the Home Secretary whether he is aware that, consequent on the report of the Departmental Committee on Courts of Summary Jurisdiction in the Metropolitan Area, it is proposed in the near future to transfer, inter alia, the whole of the work carried out by the lay justices of the Finsbury division of the county of London, to the Clerkenwell police court; and, as considerable hardship will be borne by a large number of rate defaulters, averaging 1,500, when such defaulters are required to attend the quarterly sittings of the lay justices at Clerkenwell police court instead of the Town Hall, Islington, will he reconsider this matter?
  Sir S. Hoare: The matter is still under consideration, and I am not in a position to make a statement at present.

  DRUNKENNESS (LONDON).
  Sir William Waylandasked the Home Secretary the number of proceedings and convictions for drunkenness in the county and city of London, respectively, during the calendar year 1938?
  Mr. Lloyd: In the County of London the proceedings numbered 17,109 and the convictions 14,838. In the City the proceedings numbered 195 and the convictions 154.
  Viscountess Astor: Is it not true that since 1932 convictions for drunkenness have gone up and that the profits of the brewers are£12,500,000 more?

  PRISONERS' LETTERS.
  Mr. Edmund Harveyasked the Home Secretary how frequently, under present prison regulations, may prisoners write and receive a letter during the course of their sentence?
  Sir S. Hoare: The intervals at which letters are allowed varies from one week to four weeks according to the division or class in which a prisoner is placed and to the stage which he has attained under
  1126
  the progressive stage system. Each letter written entitles the prisoner to a reply. All prisoners are also allowed a letter on admission and transfer.
  Mr. Thorne: Will the Home Secretary consider the advisability of giving these people a week-end at home?
  Sir S. Hoare: Obviously that is quite a different question.

  STEAMSHIP "MARIA DE LARRINAGA."
  Mr. Logan(by Private Notice) asked the President of the Board of Trade whether he has any further information to give the House as to the steamship "Maria de Larrinaga," with a crew of 38 Liverpool men, last reported sinking in mid-Atlantic?
  The President of the Board of Trade (Mr. Oliver Stanley): The "Maria de Larrinaga" of Liverpool sent out an SOS message last evening from a position in the North Atlantic, and several vessels reported that they were proceeding to her assistance. The latest report is that the Dutch steamship "Veendam" arrived in the vicinity at about 10.45 this morning and is searching for the distressed vessel.

BUSINESS OF THE HOUSE.
Mr. Attlee: May I ask the Prime Minister whether he will state the business for next week?
The Prime Minister: The business will be:
Monday: Committee stage of the Cancer Bill; Further consideration of the Czecho-Slovakia Bill.
Tuesday: Report and Third Reading of the Prevention of Fraud (Investments) Bill; Committee stage of the Bacon Industry (Amendment) Money Resolution.
Wednesday: Consideration of private Members' Motions.
Thursday: Consideration of the Opposition Motion of Censure on Unemployment; Report and Third Reading of the Mining Industry (Welfare Fund) Bill.
Friday: Consideration of private Members' Bills.
If there is time, on any day, other Orders may be taken.

SELECTION (STANDING COMMITTEES).
  STANDING COMMITTEE B.
  Colonel Gretton reported from the Committee of Selection; That they had added the following Ten additional Members to Standing Committee B (in respect of the Access to Mountains Bill): Lieut.-Colonel Acland-Troyte, Sir Murdoch MacDonald, Mr. McKie, Mr. Maclean, Mr. Malcolm MacMillan, Mr. MacNeill Weir, Lord William Scott, Sir R. W. Smith, Mr. Snadden, and the Solicitor-General for Scotland.

  STANDING COMMITTEE C.
  Colonel Gretton further reported from the Committee; That they had added the following Ten Members to Standing Committee C (in respect of the Census of Production Bill) [Lords]: Colonel Baldwin-Webb, Mr. Trevor Cox, Mr. Cross, Mr. Edwards, Sir Arnold Gridley, Sir John Haslam, Mr. Hopkinson, Mr. Lawson, Mr. Marshall, and Sir Arnold Wilson.
  Colonel Gretton further reported from the Committee; That they had added the following Fifteen Members to Standing Committee C (in respect of the Limitation Bill) [Lords]: the Attorney-General, Mr. Bernays, Mr. Butcher, Sir Geoffrey Ellis, Mr. Emrys-Evans, Mr. Foot, Mr. Grenfell, Mr. Macquisten, Mr. Marshall, Sir David Reid, Mr. Silverman, the Solicitor-General, Mr. H. Strauss, Mr. Tinker, and Mr. Charles Williams.
  Reports to lie upon the Table.

ORDERS OF THE DAY.

  CURRENCY AND BANK NOTES BILL.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]
  Clause 1 ordered to stand part of the Bill.

CLAUSE 2.—(Valuations of assets of Issue Department.)
3.48 p.m.
Mr. Mabane: I beg to move, in page 2, line 25, at the end, to insert:
"and accordingly at the end of Sub-section (3) of Section twenty-four of the Finance Act, 1932, there shall be inserted the words 'and may cause any funds in the account to be transferred to the Issue Department of the Bank of England for the purpose of counteracting any difference between the assets of the Issue Department and the total number of Bank of England notes.'"
It may be that this Amendment standing in my name and that of several of my hon. Friends is technically unnecessary. It has been put down in order to clear up a point upon which some of us were in some doubt. Clause 2 provides, in Sub-section (3), that sums may be transferred from the Exchequer Equalisation Account to the Issue Department of the Bank of England. If such transfers are made, presumably the sums transferred will then belong to the Issue Department of the Bank. Some of us, recollecting the conditions in which the Exchange Equalisation Account was introduced, wondered whether the original purpose of it included powers to make such transfers, and if reference is made to Sub-section (3) of Section 24 of the Finance Act, 1932, it does appear that the use to which the funds of the Exchange Equalisation Account may be put are limited to this, that the Treasury may only
"cause any funds in the account to be invested in securities or in the purchase of gold in such manner as they think best adapted for checking undue fluctuations in the exchange value of sterling."
It may be that this Bill will override that provision, and in that case, no doubt, the words of my Amendment are unnecessary, but it did seem to some of us that if the words proposed were added it would emphasise the fact that now the Exchange Equalisation Account has been
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given a dual function, a function which, I think, most Members of the House will welcome. It goes beyond, checking undue fluctuations in the exchange value of sterling and becomes an important instrument in the management of our currency internally. Therefore, in order to clear up what seems to me a point of some doubt, and, secondly, in order to emphasise the beneficent purpose of this Bill, this Amendment was put down.
3.51 p.m.
The Financial Secretary to the Treasury (Captain Euan Wallace): My hon. Friend was right in his suggestion that the Chancellor might consider his Amendment unnecessary. In the Chancellor's view, it is. Clause 2 (3) of this Bill really takes the place of Section 25 (3) of the Finance Act, 1932, which provided that whenever gold was purchased or sold for the account of the Issue Department the difference between the market price and the old fixed value of 85s. per fine ounce should be made good to the Issue Department from the Exchange Equalisation Account, or, in the converse case, be made good to the Account from the Issue Department. This provision in the Finance Act, 1932, is now being repealed. In the Finance Act, 1932, it was not considered necessary to qualify Section 24 (3) by any reference to Section 25 (3) and in the Chancellor's view it is no more necessary now to qualify Section 24 (3) by reference to Clause 2 (3) of the present Bill. Section 24 (3) of the Finance Act, 1932, can and must be read in conjunction with Clause 2 (3) of the new Bill in precisely the same manner as it has always been read hitherto in conjunction with Section 25 (3) of the Finance Act, 1932.
I fully appreciate that the purpose of the Amendment may be to suggest that the use we propose to make of the Exchange Equalisation Account under the new Bill for carrying differences week by week in the total value of the assets of the Issue Department is inconsistent with the purpose of the account as laid down in Section 24 (3) of the Finance Act, 1932. I gather that that is the point made by my hon. Friend. The answer to that criticism is that there is no greater and no less inconsistency than has been the case hitherto with fluctuations in the price of gold. It is true that the Exchange Equalisation Account will now also be responsible for differences in the

1163
value of securities in the Issue Department. Since holdings of gold and securities are so very closely allied in the Issue Department and in the Exchange account, there is no good reason why securities should be treated differently from gold. Therefore, I hope that my hon. Friend will see that, as he suggested, his Amendment is not really necessary. Perhaps he will be good enough to withdraw it.
3.55 P.m.
Sir John Wardlaw-Milne: Before my hon. Friend replies to that appeal I rise to say that I quite appreciate what my hon. and gallant Friend has just said. It may be, provided that the Bill is always interpreted with Section 24 (3) of the Finance Act, 1932, both being read at the same time, that it is not necessary to add the Amendment to the Bill, but I hope he will forgive my saying that when we are completely altering, as we are, the original object of the Exchange Equalisation Account and giving it another and wider interpretation as well as more work to do, it seems rather a pity that something should not be added to the Bill to make clear, without any reference to any other Act previously passed, what it is we want the Exchange Equalisation Account to do in the future. I am not asking my hon. Friend to press his Amendment, because it is clearly a matter of drafting and of interpretation, but it seems a little curious not to take the more convenient method of stating clearly in the Bill what we mean to do.
3.57 P.m.
Mr. Holdsworth: I would ask whether the statement made by the previous speaker is correct, that we are making a complete alteration with regard to the Exchange Equalisation Account. I understand the Bill to be an alteration better described as for bookkeeping purposes. I do not think it ought to go out from this House that the Bill is altering any fundamental function of the Exchange Equalisation Account. The public will be very interested to know whether there is to be any fundamental change or not.
3.58 p.m.
Sir William Davison: I know that the Chancellor dislikes legislation by reference as much as I do, but this is almost a similar case. I wonder whether it would be possible for him to insert some indication in the Bill to show that this Clause is to be read with the Section to which
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he refers, so that when the Bill is before the public, or those who have to administer it, they will see the thing before them, and will not have to turn up a number of Finance Acts.
3.59 p.m.
The Chancellor of the Exchequer (Sir John Simon): I should like to say a word or two out of courtesy to the hon. Gentlemen who have just made observations. I do not think we really differ from the Committee, but after this short interchange of views I hope that my hon. Friend will not seek to press his Amendment. I rather take the view which has been expressed by my hon. Friend the Member for South Bradford (Mr. Holds-worth). I cannot affirm that this modest little Bill is effecting such a tremendous change; it really is not. The situation merely is that the Exchange Equalisation Account is already liable to suffer from any fall, as well as to reap the advantage of any rise, in the market price of gold, which is contained in the Issue Department. Both accounts are run on behalf of the Government. There can be no question of there being any loss between one account and the other. They are really two different functions which are operated in close contact.
What is happening now, in the same way, is that a drop or a rise in the value of the securities in the Issue Department will also be taken care of—if I may use the expression—by the Exchange Equalisation Account. I certainly do not accept the suggestion that we are doing anything which is structurally revolutionary. It is not really the fact. There remains the question put to me, as to whether it is desirable to make the Bill plainer than it is. I think the Bill can fairly be acquitted of the crime of legislation by reference. Clause 2 is so simple that any one can follow it. I would be very unwilling to complicate it and spoil its appearance by introducing references to another Act of Parliament. Then I am asked whether the Bill is to be read with the Finance Act, 1932. The Finance Act is mentioned in the Schedule, and in view of the fact that a particular part of that Act is repealed I think even the most casual-minded commentator will assume that the rest of the Finance Act, 1932, remains. I hope, therefore, that the Committee will not make this a matter of controversy, and that the Amendment will be withdrawn.
4.2 p.m.
Sir J. Wardlaw-Milne: I do not desire to prolong the discussion and I do not quarrel with what the Chancellor of the Exchequer has said, but I do maintain—I do not think there is any real difference on the point in the Committee—that the functions which the Exchange Equalisation Account are to carry out in future are, if not revolutionary—I did not use that word—at least a complete change from past procedure, a change which I personally welcome. But it is to my mind a very definite change and something for which we can all be thankful.
Sir J. Simon: An advantage.
Mr. Mabane: In view of the statement that has been made, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That the Clause stand part of the Bill."
4.4 p.m.
Mr. Tinker: I would like the Chancellor of the Exchequer to give us some further explanation than that which he gave on Monday. I tried on Monday to get a grasp of what this high finance meant and I have spent some time since in re-examining the speech of the Chancellor of the Exchequer. I ask him to be helpful now by telling us something about this Issue Department. So far as I can gather, we have discovered£94,000,000 more in value than we had before; that is to say, we have gone from£126,000,000 to£220,000,000. So to all intents and purposes we have that extra sum in hand. What I ask is, to what particular purpose is this money being applied? Is it for the purpose of helping to clear up what we may term the National Debt, or is it for some social use, such as old age pensions or anything of that kind? As we have£94,000,000 extra money the nation must have some idea what use will be made of it. If it is merely a book-keeping transaction, just a question of accounts, one must ask why there is any necessity to-day for causing all the trouble of revaluing forwards and backwards repeatedly?
Members of this House and the country ought to have a better grasp of the position than I have at the moment. It may be that other hon. Members are more advanced in questions of finance than I am, for I am entirely at a loss to know why the change is taking place unless
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it is for the purpose of this£94,000,000 being put to some better use than that to which it was formerly put in the vaults of the Bank of England. Will the Chancellor enlighten the class that is before him, for we are like a class, as we were on Monday when we were listening to him? Will he try once more to make a little plainer what this money will be used for? Will he say to us to-day, "Well, you have bothered a lot about old age pensions. I shall grant you£66,000,000 of this£94,000,000 to provide an increase of pensions." To raise that question was my object in rising.
4.9 p.m.
Mr. Bellenger: I am sure that all of us have considerable sympathy with my hon. Friend the Member for Leigh (Mr. Tinker) in continuing what the Chancellor of the Exchequer himself said in introducing this Bill—that this is a very intricate subject and not one that can be easily understood even by the alleged apostles of high finance or by those experts of which this House contains many. I have risen merely to ask for information on two points. A few moments ago an hon. Member opposite remarked on the changed functions of the Exchange Equalisation Account. It is no use saying that this Bill has no effect on that account, or that the Bill affects it only to a minute degree. As I have hitherto understood the Exchange Equalisation Account its purpose was to level out the fluctuation in sterling, and in so far as it may have kept sterling stable no doubt it has also had some effect on the currency position in this country. But now the Exchange Equalisation Account is to be used to a certain extent to guarantee—if I may put it that way—the stability of the currency. It is quite evident that when the backing in the Issue Department depreciates, when the value of the securities, of gold or other assets drops, certain transfers will be made from the Exchange Equalisation Account to the Issue Department.
As part of the function of the Exchange Equalisation Account in the past was to iron out fluctuations in sterling, we have had information given to us only periodically. I believe I am correct in saying that the gold holdings in the Exchange Equalisation Account are made known once in every three months, and that is three months later than the date for which the figures are given.
Sir J. Simon: Six months.
Mr. Bellenger: Six months. That makes the matter worse from my point of view. As the Exchange Equalisation Account is now to be used to some extent to back the currency, I wonder whether the Chancellor will be prepared to give more frequent information as to the gold holding in the Exchange Equalisation Account. When the Bill was given its Second Reading certain hon. Members, including my hon. Friend the Member for Bishop Auckland (Mr. Dalton), said that at last we had "debunked" gold, and I said at the time that I doubted the accuracy of the statement. I am confirmed to some extent by the words which the Chancellor of the Exchequer himself used on Monday. The right hon. Gentleman then said:
"We shall do much better if we do not show ourselves to the world as having something like£400,000,000 of bank notes covered by Government securities when in fact a substantial fraction of them is covered by gold." —[OFFICIAL REPORT, 6th February, 1939; col. 673, Vol. 343.]
So it is evidently in the Chancellor's mind that gold still has its old potent effect, because he wants to show the world that our gold holdings in the Issue Department, and the value of currency in terms of gold—which he says is the only value the world can understand—are substantial. If that is the purpose of the right hon. Gentleman regarding our currency I ask him, why not give that same impression to the world by letting the world see what enormous stocks of gold the Exchange Equalisation Account holds? I ask him whether he would be inclined to give that information a little more frequently than it is given now.
The other question I want to put is this: As hon. Members know, the assets of the Issue Department of the Bank will be valued every week, and according to the fluctuation up or down certain transfers will take place between the Issue Department and the Exchange Equalisation Account. I would like to know where we shall see the effect of that. Will it be given in the Bank Return? At the moment we have no chance of seeing how the flow is taking place to or from the Exchange Equalisation Account. Perhaps it is only a matter of accountancy, but I submit that it is a very important matter for those who are studying the position from the point of view of the stability of sterling and the currency.
4.13 P.m.
Sir J. Simon: I must say a few words in reply to the two hon. Members. The hon. Member for Leigh (Mr. Tinker) did me the compliment of saying that he has been re-reading the speech which I had to inflict on the House on Monday. I did my best to avoid a lecture, for I wish to be counted amongst the learners, but I had to state it as clearly as I could and I was very grateful for the attention that hon. Members gave to what is a difficult subject. I do not think I can undertake at any length to expound the matter further now, but there are two observations I wish to make in answer to the hon. Member, and I hope he will take it as a contribution towards a fuller elucidation. First of all the hon. Gentleman asked, "What is it you are doing? What is this all about? Is it the case: that by this method you find that you possess in some form£80,000,000 or£90,000,000 which you did not possess before?" That is a very natural question. The short answer is this, and I will put it in an analogy which is probably more within the experience of ordinary people.
It is not at all an uncommon thing in a business, either small or large, or in any enterprise concerned with accounts, to attribute to some of the assets mentioned in the accounts a value which is really smaller than the value they actually enjoy. It is a prudent way of stating the amount of the assets. They are very often described as concealed reserves—not concealed in a bad sense for there is no swindling about it; but it is a prudent thing for certain purposes, if to be conservative is prudent, to be sure that you do not overvalue those things which you hold. In business people very often write down the value—one can see the reason for it—against a rainy day.
What has happened in regard to the Issue Department is really something of that kind. The Department holds a considerable quantity of gold, and, if it is to state its actual position to-day, it must attribute to that amount of gold a bigger value than it has hitherto been in the habit of doing. Hitherto it has been making what is sometimes called a prudent under-valuation. When, however, you have a great account which belongs to the State and which is in close connection with the Issue Department, it is necessary to bring the two into line, and just as, in the case of that account,

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we try to the best of our ability to state the values rightly and fairly, so we are proposing here, since in fact gold has greatly changed in value in terms of sterling, to state its value correctly instead of stating it incorrectly. Although, however, the value is higher than has hitherto been stated, it does not increase the sum total of anybody's possessions, but merely puts a right value on this asset instead of a wrong value.
The statement is made that by this valuation we have acquired a great deal more money to spend, but that is not so. All that has happened is that in the account the asset has been given its proper value, whereas previously the value has been understated. I share very warmly the hon. Gentleman's feeling, and I wish from the bottom of my heart that by this operation we found ourselves with another£80,000,000 or£90,000,000 which we could spend for some generally satisfactory purpose, whatever it may be. That, however, would not be a sound or, indeed, an honest thing for me to do, because really it does not mean that we have any more to spend than we had before. If we want to spend more, we must raise it by honest methods, whatever it costs. In my view it is a great advantage to have this gold in the Issue Department valued correctly, but it does not follow that by so doing we suddenly acquire a lot of new wealth; and, that being so, I am afraid we must face the fact that this is not one of those operations which immediately translate themselves into relief and benefit for any section of the community, much as I wish that it could.
Mr. Tinker: May I put the converse position? If the value of gold fell from 85s. to, say, 70s., would the right hon. Gentleman consider it necessary to impose taxation to meet the deficiency? It seems to me that, if it works in one way, it must work in the other.
Sir J. Simon: It is, of course, partly because of the possibility of changes in value that this Bill makes a further connection between the Exchange Equalisation Account and the Issue Department, and one of the reasons, no doubt, why they ought to be so connected is that the possibility must be faced of there being some variation. I am afraid we cannot get away from that, though I am sure we all wish we could.
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by regarding this as a sort of unexpected golden egg which has hitherto escaped attention and which the Chancellor of the Exchequer has discovered and can now distribute for the relief of the population.
Mr. Aneurin Bevan: That does not answer my hon. Friend's question as to what would happen if the value of gold fell.
Sir J. Simon: I should say that a fall in the valuation would not in itself result in that consequence, but, of course, if it goes further and further, the asset held would naturally lose value.
Mr. Bevan: If it rises further and further, the asset gains more value.
Sir J. Simon: I am sure the hon. Member would agree with most of what I have said. The hon. Member for Basset-law (Mr. Bellenger) made, not for the first time, an observation on the statements issued with regard to the Exchange Equalisation Account. I think I remember that in an earlier Debate he took a prominent part in discussing how far we could publish statements about the Account. As my right hon. and gallant Friend the Financial Secretary said at the end of the Second Reading Debate what we are now doing would not justify a change in the amount of disclosure that we can make as to the Exchange Equalisation Account procedure, and, although I know that the hon. Gentleman's inquiry is made in nothing but the public interest, still there are other people who, no doubt, are curious as to the exact movements of sterling, but who are not necessarily so entirely inspired by public spirit. My duty is to do everything I can to avoid giving such information as would assist speculators who are trying, at a loss to the State, to make profits on the swing in the value of sterling. Whatever I publish is not going to provide such assistance. It is no good having an Exchange Equalisation Account for the purpose of damping down as far as may be the fluctuations in sterling, if we publish information which is going to increase the fluctuations that we are trying to decrease. It was after much consideration that I made an announcement last year or the year before as to the publication which would be made. It has worked out very satisfactorily in the view of the Public Accounts Committee, and I think it will continue

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to work satisfactorily. I am sorry, however, that I cannot think that that would be a reason for giving any additional information beyond that which we now give.
Mr. Bellenger: The right hon. Gentleman is under some misconception as to the purpose of my question. He has referred to questions which I have put to him previously in this House about the Exchange Account, but I think there is an idea in his mind, which, indeed, he has expressed to me, though not openly in the House, that what I want to get is the day-to-day operations of the Exchange Account. Nothing is further from my mind. I can see as well as he can that it would be impossible to carry on business in that fashion if the whole world were to see the operations that were taking place in the Exchange Account. What I am asking him is merely this: Evidently he has found it suitable, although late in the day—certainly not when the Exchange Account was first introduced—to give certain information once every six months. All I am asking is that he should reduce that period, so that, in his own words, the whole world can see how much gold we have—apparently he wants the whole world to realise that, and that is the reason why he gives these figures every six months—and also that others may observe that the transactions which take place between the Exchange Account and the Issue Department are not such as may, perhaps unjustifiably, lead to inflation.
Sir J. Simon: If anyone has the impression that the arrangements will be such that only once every six months, and then three months late, the situation with regard to gold will be published, they are quite wrong. The Bank of England publishes the state of the Issue Department once a week. It is made up every Wednesday, and published every Thursday, and, if anyone wants to know exactly how much gold there is in the Issue Department, they do not have to wait for six months or three months; they can have it every Thursday. There is the information for the whole world to see. When I said, I think with the general approval of other hon. Members, that it did not seem to me desirable artificially to state to the world once a week that our bank notes depended mostly on securities, and only to this
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limited extent on gold, I was referring to the fact that once a week the Bank of England return states the value of the gold in the Issue Department. That, I think, has very little to do with the Exchange Equalisation Account.
The other point which the hon. Member put, and to which also my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) referred, was as to whether we are really changing the function of the Exchange Equalisation Account. If we were, it would be quite a serious matter, but in this sphere we must speak with a due sense of proportion. The Finance Act, 1932, which set up the Exchange Equalisation Account, said that it was for the purpose of ironing out these fluctuations; but, having said that, in the very next section—Section 25, Sub-section (3)—it says:
"Whenever any gold is purchased or sold on account of the Issue Department during the existence of the Account, the amount by which the price of the gold exceeds the fixed value thereof shall, in the case of a purchase, be made good to the Issue Department from the Account, and, in the case of a sale, be made good to the Account from the Issue Department."
That has been the law from the first moment that the Exchange Equalisation Account began to exist. The Issue Department may acquire more gold. Usually it will acquire it by purchase from the Exchange Equalisation Account, but it might acquire gold from some other source. Whenever it acquires gold, there is a certain price to be paid for it. In the accounts of the Issue Department the value of the gold is written down at 85s. an ounce. The difference has to appear somewhere. Where has it appeared? It has appeared in the Exchange Equalisation Account, whether the Account sold the gold or not. That is to say, from the first minute of its existence the Exchange Equalisation Account has been used for a purpose other than the ironing out of fluctuations; it has always been used as the place to which you could turn if there were any balancing figure to be provided for in respect of one of the elements in the Issue Department. The balance, indeed, was a pretty big one, because 85s. is a very different thing from 148s., and the whole of that difference has from the beginning been found inside the Exchange Equalisation Account.
What is the extent of the change that is now taking place? I agree that there

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is a change, but do not let us exaggerate it. Whether we think it is good or bad, it is really a very slight change. It is saying that, by parity of reasoning, when you are dealing with the other element which is an asset in the Issue Department's Account, the element which does not move up and down at a tremendous pace, but which may slowly grow or slowly decrease, that element also shall be kept at a constant level by being to that extent connected with the Exchange Equalisation Account. I said at an earlier stage that this was a useful little Bill and that is what it is. It is not a Bill which transforms the purpose of the Exchange Equalisation Account. For my own part, I should look at it very carefully before agreeing to anything of that kind, for the reputation of the Exchange Equalisation Account is one of our great sources of strength. We were the first country to show the world how to do it. It is being done with great skill, and we owe a great deal to the devoted men, whose work is never published, who watch this matter and serve the country so well in trying to maintain our currency value. It is a pity, therefore, for anyone, even light-heartedly, to say that it is being completely transformed. It is not. It is a tiny thing that is being done, and I think that on the whole it will produce a better and more scientific result. I hope very much that my sudden burst of enthusiasm will not have the result of prolonging the Debate, and, if the Committee can now see their way to give us Clause 2, I shall be very grateful.
4.30.p.m.
Mr. Dalton: The position now is that in the weekly Bank Return the gold is to be valued on a true, as distinct from an artificial, basis, and the return will show the total value, at the current sterling price, of the gold stock in the Issue Department. Will there also be put in, in order to save people having to perform an operation of simple arithmetic, a statement of what is the sterling value every week, or shall we be left to work it out? There would be a certain convenience in inserting in the bank return not only the total value of the gold but the price per ounce on which the valuation was made.
4.31.p.m.
Sir J. Simon: I am not quite sufficiently informed at the moment to be able to answer the question. As the hon. Member
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knows, the Issue Department account is a statutory account, and I am not sure how far the actual form of it, the framework of it, is statutory. In any case, it is a matter on which we would wish to consult the Bank of England. I have no doubt that all concerned in the business know the figure very accurately, but it is true that many of us do not. I cannot give a promise at the moment, because I am not sure whether the form is a statutory one; but, whether or no, I quite appreciate that it is convenient for those who study the return to know what is the divisor.
Question, "That the Clause stand part of the Bill," put, and agreed to.
Clauses 3 and 4 ordered to stand part of the Bill.

CLAUSE 5.—(Short title, commencement and repeal.)
4.34 p.m.
Mr. Mabane: I beg to move, in page 3, line 15, at the end, to add:
"(4) The enactment set out in the Second Schedule to this Act is hereby amended to the extent mentioned in the third column of that Schedule."
It might seem to some that this Amendment and the consequential Amendment—to move a Second Schedule to the Bill—are rather more important than the Amendment I moved earlier. On the other hand, it might well be argued that the Amendment, if accepted, would have very little practical effect, because the powers conferred on the Treasury by this Amendment, it might be argued, are powers that they exercise now without having the statutory right to do so. But I am sure my right hon. Friend the Chancellor will, at all events, recognise that the Amendment is a compliment to him and to the Treasury, because the effect of it is to give the Treasury powers beyond those which they now possess, and if the Committee were to accept this Amendment it would be saying that it was quite prepared to trust the Treasury as the most effective manager of our currency that can be found within our borders. I do not think the case for the Amendment need be argued at any length. By the Currency and Bank Notes Act, 1928, in Sub-section (2) of Section 2:
"The Treasury may at any time on being requested by the bank, direct that the amount of the fiduciary note issue shall for such

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period as may be determined by the Treasury, after consultation with the bank, be reduced by such amount as may be so determined."
That is to say, the Treasury are given power to reduce the fiduciary issue, but only after being requested so to do by the bank. The first effect of this Amendment is to make it unnecessary for the request to have been made by the bank to the Treasury before the fiduciary issue can be reduced. The second effect of this Amendment is in the contrary sense. In Section 8 (1) of the Currency and Bank Notes Act, 1928, there is the provision:
"If the bank at any time represent to the Treasury that it is expedient that the amount of the fiduciary note issue shall be increased to some specified amount above two hundred and sixty million pounds, the Treasury may authorise the bank to issue bank notes to such an increased amount …."
The second effect of my Amendment is, after
"If the bank at any time represents to the Treasury "
to add the words
"or if the Treasury at any time represents to the bank."
That is to say, the Amendment, if accepted, would give the Treasury power to increase the fiduciary issue without any preliminary move in that direction having been made by the bank.
Having explained the effect of my Amendment, I think it does not seem necessary to argue it at great length, because it is clear that the effect is to give a rather more complete statutory power of managing the currency to the Treasury than now exists. I am informed by my friends in the City that, in fact, the Treasury already exercise such powers, and that if at any moment the Treasury deem it expedient that the fiduciary issue should be increased to decreased, they do not expect any objection from the bank to that course being adopted. If that be so, my Amendment clearly is of little effect, but it does at least give statutory effect to what my friends in the City tell me is at present the practice.
Many of us remember those Debates in 1931 and 1932 when hon. Members held strong views on the matter of gold and the influence of currency policy on our industrial policy. It was clear that this House, having recognised that the country had passed through a long period of
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deflation, with disastrous effects, did not desire any new deflationary period to be possible. I do not think this House would welcome any form of inflation, but I am sure it is far more frightened of deflation. This Amendment, in my view and the view of those who support me, precludes the possibility of the Bank of England pursuing a currency policy contrary to what many of us might consider the best industrial interests of this country.
4.39 p.m.
Sir J. Simon: I could not accept such proposals as those which my hon. Friend has put before the Committee, or any proposals which seek, in any way, to alter the very responsible position of the Bank of England in connection with our currency. I think I follow the proposal which my hon. Friend makes, but it is plain, of course, that that proposal does not properly find a place in a Bill which is simply dealing in the ordinary way with matters of currency machinery. There is also the consideration that I do not think it would be at all a businesslike arrangement to make this change. I do not consider that the Treasury are in a better position to know the immediate facts than the Bank of England. The reason for which it might be wished to alter the total of the assets in the Issue Department would be in order thereby to alter the total of notes. Sometimes it does happen that there is a greater public demand which would justify or require that provision being made on the assets side of the account. Who has reason to know that there is such a demand, and how does such a demand show itself? The demand shows itself through the requests made to the Bank of England by the joint stock banks and other banks for an increasing outflow of notes. I do not for a moment accept the suggestion that the Chancellor of the Exchequer is in a better position to know that than the Bank of England. Therefore, I think it is quite proper for the bank, and not the Treasury, to initiate changes in the fiduciary issue. There is a further point which my hon. Friend may allow me to mention. His proposal only refers to the change in the fiduciary issue, but it would be entirely ineffective for the purpose he has in mind. You could equally well increase the note issue by increasing the gold holding. I hope

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that my hon. Friend, having ventilated a very interesting point, will not press the Amendment.
4.44 p.m.
Mr. Dalton: I have been interested in the duel which has just taken place between the right hon. Gentleman and one of his followers. We on this side have always felt that where the interests and judgment of industry come into conflict with the interests and judgment of finance capital, the former should be allowed to prevail. We think that the bankers have too much and the industrialists too little to say on questions of banking and monetary policy generally. I do not know whether the hon. Member for Huddersfield (Mr. Mabane) is going to withdraw his Amendment, but if he persists in it I will ask my hon. Friends to give him their support. In spite of the fact that the Chancellor of the Exchequer may have been able to make certain debating points of detail, we believe that, broadly speaking, the hon. Member is on a good point.
It would be out of order to develop the past history of these events which many of us have in mind, but certainly during recent years the setting up of the Exchange Equalisation Account and the placing of it under the Treasury as distinct from the Bank of England has encouraged the hope that the Treasury were getting on top of the Bank of England, and that Mr. Montagu Norman was getting his orders in the last resort from the Government, and that the Government were being guided by fresh-minded Treasury advice to a greater extent, and by old-fashioned bank advice to a less extent, than a few years ago. In the second Amendment, if I have understood it aright, the hon. Member for Huddersfield wishes to give greater powers than at present exist or greater facilities and quicker methods of achieving what is desired when an increase in the Fiduciary Note Issue is in question, and I understand, from the comment of the Chancellor of the Exchequer that it is the hon. Member's intention to make it more easy and more speedy to secure an increase in the Fiduciary Note Issue. That seems to be a very desirable object. I am not very greatly impressed by the argument which the Chancellor used, and which we have often heard before, that the demand for these notes is a matter
1178
which is, so to speak, automatic. The way he stated the case, and the way the case often is stated, is that the demand for these notes is independent entirely of the fixation of the Bank Rate, and so on, but in the view of many of us that is not so at all. The demand for notes is, no doubt, due in the last resort to a number of causes together, and at least one is undoubtedly cheap money. If the Governor of the Bank of England should unhappily be able to persuade the Government of the day that they should put up the Bank Rate, that would have a repercussion on the note issue. It would check the demand for notes and the Fiduciary Issue would be reduced. Without developing that argument at any length, certainly my hon. Friends on this side of the House will look sympathetically upon any change which will have the effect of further increasing the control of the Government and the Treasury over the Bank. We hope that at a later stage control will be established firmly and legally over the Bank of England, and that in this country the Central Bank will be reduced to that status of subordination to the Government which it occupies in a great number of other countries and, indeed, in other British countries in several of the Dominions. The present legal position of the Bank of England is an anachronism and is against the public interest. We want to see it under the control of the State. Therefore, we welcome any step which strengthens the Treasury at the expense of the Bank of England and contributes towards the termination of the present position. But, of course, we have it in mind that Mr. Montagu Norman, or his successor, or other officials of the Bank of England should have access to the Chancellor of the Exchequer to put their point of view. If the hon. Member for Huddersfield will show a certain intractability and intransigeance, in spite of the cracking of the whip by his leader, we will back him up in the Division Lobby.
Mr. Mabane: I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.

NEW CLAUSE.—(Alteration of rate at which bank may requisition gold.)
The rate at which any person required by the bank to sell gold bullion to the bank under the provisions of Sub-section (2) of Section eleven of the Currency and Bank Notes Act, 1928, shall sell the same to the bank shall, instead of the rate mentioned in that Sub-section, be the price at which gold was valued for the purposes of the last valuation under Section two of this Act.—[Colonel Nathan.]
Brought up, and read the First time.
4.51 p.m.
Colonel Nathan: I beg to move, "That the Clause be read a Second time."
The object of this Clause is to bring into line with the present market value of gold, and, indeed, with the proposals contained in this Bill as to the valuation of gold for the purposes of the Issue Department, the price at which the Bank of England may requisition gold in accordance with the provisions of Section 11 (2) of the Currency and Bank Notes Act, 1928. Under that Act the bank has certain rights as to the requisitioning of gold and the price payable by the bank in the event of the requisition. Though the term is not actually used in that Sub-section, the price arising out of the joint operation of that Section, and of Section 4 of the Bank Charter Act is 85s. per fine ounce of gold. That price has persisted as long as there has been a right vested in the bank to requisition gold from certain persons, subject to the qualifications mentioned in the statute. It was reasonable and right that that should be so at a time when the gold actually held by the bank itself was valued at that figure.
The price of gold was until the last few years relatively stable; the fluctuations were insignificant. The reason why the price of 85s. was fixed as the price at which the requisition might be made was, it may be assumed, that that was the price at which gold was valued by the bank, and that it was, in fact, the current market price. The law provided that the Bank of England should be entitled to buy gold at the current market price. It is the object of my Clause to ensure that that procedure shall be adopted in future, as it has been in the past. It would of course have been a striking anomaly if, during the last few years when the price of gold was rising steeply above 85s. the bank had been under the compulsion of paying the market price for gold in the event of a requisition, while immediately
1180
upon acquiring it it would have to have written off the list the difference between 85s. per ounce and the market value, or, alternatively, the Exchange Equalisation Fund since 1932 would have had to have borne the loss. Certainly I might say, as a matter of practical business, that in the City of London the opinion has been widely held that, if the bank should at any time feel itself called upon to requisition gold, it would not be requisitioned at the statutory price of 85s. but would in fact be requisitioned at a figure approximating to the market value.
It is upon that footing that very large and important transactions have been carried out in the way of lending money upon the security of gold. Until relatively recent times there would have been no difference in this respect between the holders of gold in the United Kingdom and the holders of gold outside the United Kingdom, for the market price would have been the same for the holders inside the United Kingdom and the holders outside the United Kingdom. That was the position up to 1931, and the only difference in the rights of this class of holders was that, in the case of United Kingdom holders, the bank could compulsorily take over their gold at that price, whereas as far as foreign holders were concerned, they would have to buy it at that price, there being no obligation upon the foreign holder to sell. The Financial Secretary, in his closing statement on the Second Reading of the Bill, said:
"It is not proposed to alter that Statutory provision.…the object of which is simply to prevent gold hoarding."—[OFFICIAL REPORT, 6th February, 1939; col. 709, Vol. 343.]
If my right hon. Friend would be good enough to look at Section 11 of the Currency and Bank Notes Act, 1928, he will see that the purpose of the Section is rather exceptionally set out. It is stated that with a view to the concentration of the gold reserves and to the securing of economy in the use of gold, in effect, the bank is to have the right to requisition in certain instances. The importance of the Section lies not in the price at which the bank may buy, but its purpose is fulfilled by giving the bank the right to buy it compulsorily, and it is that which prevents what the right hon. and gallant Gentleman referred to as hoarding, and without reference to the question of the actual price. In fact, the actual price, at the time when the

1181
1928 Act was passed and until we went off the Gold Standard, was the market price, and I am now suggesting in this Clause that the situation which existed until 1931, and which was interrupted by the vicissitudes and new experiences of the situation in which we were involved after going off the Gold Standard, should now be restored to what it was before.
I would point out to the Government the very extraordinary position that would result if this were not done. The value of gold physically in this country but owned by persons not in the United Kingdom, retains its value whatever the market price may be, say, 148s. an ounce, and it cannot under this Bill be bought from them at any price below that at which they are willing to sell, whereas the value of gold physically in the United Kingdom and held by United Kingdom holders is compulsorily placed at the fixed figure of 85s. per ounce. It is a figure, by the way, which would enable the bank immediately to write up its assets upon the acquisition of this gold at the expense of the United Kingdom holder as compared with the holder who is not in the United Kingdom. The provision that there should be compulsory powers in the Bank of England as long as the Bank of England maintains its present status under our financial system, seems to me to be a thoroughly right and proper one. The circumstances envisaged by the Section of the Act of 1928 is right and proper and should not be touched. The only point is the price at which the bank should buy, and it should be brought into line with the exchange position as regards the gold held by the bank itself. I would quote the words of the Chancellor of the Exchequer on Monday last. He said that the effect of the Bill will be that
"there will be applied to the gold in the Issue Department what is its real current value and not the somewhat antiquated thing which can be traced back through the days when we were on the Gold Standard."—[OFFICIAL REPORT, 6th February, 1939, col. 671, Vol. 38.]
If it is necessary that the Bank of England's gold, which it holds to-day, should be brought up to the market value, what possible argument can be advanced against the bank paying the same price for the gold which it requisitions from United Kingdom holders?
Sir J. Simon: May I ask the hon. and gallant Member whether his proposal
1182
would apply to a hoard of 20,000 sovereigns?
Colonel Nathan: There is exemption up to 10,000, but I think the right hon. Gentleman will find—I speak subject to correction—that where coins are concerned they are to be taken at their nominal value.
Sir J. Simon: I wanted to know whether if the hoard took the form of 20,000 sovereigns, or 10,000 sovereigns if you like, they could be taken at 85s., but that if it consisted of exactly the same quantity of bullion gold, it should be taken at 148s.
Colonel Nathan: The market value of the sovereigns is 148s. per oz., and the bank when they requisition the gold should do so at 148s. an ounce. I am sure the right hon. Gentleman will not wish to quarrel with me on the exact wording of the Clause, the purpose of which I have tried to make clear. If he will accept the purpose of the Clause, there will be an opportunity for him to ask the Parliamentary draftsman to put the Clause into a better shape. My object is not to commit myself or to ask the Chancellor of the Exchequer to commit himself to the particular form of words on the Order Paper, but to obtain his acceptance of a principle which seems to me to be sound, which the Clause makes sufficiently clear, which I hope I have made clear, and which has given rise to a good deal of discussion and some anxiety in the City of London. I have respectable authority, no less than the "Economist" of last Saturday, in support of the proposal which I have put forward. The "Economist" said:
"Though the point is not specifically covered in the Bill, the right of the authorities to buy compulsorily at 85s. per ounce any gold holding over£10,000 owned by a resident of the United Kingdom will presumably lapse."
I am not suggesting that there should not be the compulsory right but that it should be exercised at the market value instead of on the purely artificial value of 85s. per ounce. I must emphasise the new situation that has been created in the differentiation between foreign holders and British holders. A foreign holder will retain a value of 148s. per ounce, but the Government will be putting the United Kingdom holders to a disadvantage compared with the foreigner, because they will have to accept 85s. The

1183
foreigner can go to any bank and lodge gold at 148s. per ounce and raise money upon it for commercial and banking purposes. If the Government refuse my Amendment, gold in the hands of a British holder will only have a market value of 85s., and no bank will advance to the British holder more than 85s. per ounce thereon, so long as there is any liability for that gold to be taken compulsorily at 85s.
There is another point which I should like to raise, quite independently of the merits of this particular proposal. I suggest to my right hon. Friend that he will need an Amendment of some such kind as I have suggested, for under the Act of 1928 the price payable by the bank on compulsory purchase is to be ascertained by reference to Section 4 of the Bank Charter Act; but by Section 4 (2) of the present Bill it is declared that Section 4 of the Bank Charter Act shall cease to have effect. But the present Bill goes a great deal further than that, because in the Schedule it repeals Section 4 of the Bank Charter Act. The result is that whereas under the Act of 1928 the reference for the purpose of finding the price will have to be made to that Section of the Bank Charter Act, by repealing that Section in this Bill, Parliament will have deleted it from the Statute Book. It will, therefore, not be there to refer to. That is a question which is independent of the merits of my actual proposal, but it is one which I suggest calls for the consideration of my right hon. Friend, and I submit it for his consideration.
5.7 p.m.
Mr. Bellenger: I should like to give an illustration in support of the arguments advanced by my hon. and gallant Friend. Large companies, apart from individuals, or it may be individuals in those companies, are in the habit of holding some of their reserves in gold. They can hold them also in gilt-edged securities if they want, and take the risk of those securities going up or down; but if they feel, as they are entitled to feel, that gold is a much more secure and stable asset in which to invest their reserves, they are entitled to do so by buying gold. I believe some of them do that. What is to be the effect if the provision in the Clause is allowed to remain and the bank can call on gold reserves if they are over£10,000 at 85s. per ounce? It means,
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in effect, confiscation. I should have thought the National Government would have been the last body of people in the world to attempt to confiscate the reserves of their own friends.
Can the Chancellor of the Exchequer see what propaganda value he is giving to us in the Labour party? Can he not see the effect in the City of London at the next Election when the Labour party put up candidates and appeal to the business men whose reserves in gold have been confiscated at 85s. an ounce, when they have probably had to pay 148s. an ounce? It will not then be Socialism that will be feared, but the National Government. I suggest that the last thing any hon. Member would wish to see disappear from this House would be that ancient institution, the representation of the City of London; but that may be the effect if the Chancellor of the Exchequer does not see the substance in the argument put forward so cogently by my hon. and gallant Friend. I hope that for that reason he will accede to the request we have made, and allow those who wish to invest their reserves, small or large, in gold, to have the market price if the bank desire the gold for their own purposes some time or other. I can well understand the necessity for avoiding hoarding, but the bank should not be entitled to prevent that by confiscating a certain part of an individual's assets invested in gold. I hope the right hon. Gentleman will give a satisfactory answer from our point of view.
5.10 p.m.
Mr. Price: I should like to support the proposed new Clause. I understand that there are a great many companies who have based and valued their assets on the assumption that any future operations in gold or any assets they have based on gold would be valued at a higher figure than the 85s. laid down in the Bill. If it was necessary for them to write down to 85s., as it would be necessary if the Amendment were not accepted, the effect would be deflation. They would be restricted in their future operations, and that would have a very ill-effect at the present time, particularly as we have 2,000,000 unemployed and are in a trough of depression. How far we are down the trough, and whether or not we are going along the bottom, only the great experts can say, and possibly even they do not know.
Mr. Ede: They are generally wrong.
Mr. Price: The Bill as a whole has the general effect of writing up the value of gold for the purpose of making it possible for the Exchange Equalisation Fund the better to protect the currency. In other words, we have a bigger and broader basis on which to carry on. The Amendment seems to me merely to extend to those institutions, businesses and companies who happen to be dealing in gold, the principle of making it possible for them also to operate upon a wider basis. It may not have a very big effect, but at least it would have the effect in this time of depression of making an expansion possible for the borrowing capacity of these businesses. It is well known that in times of depression it is advisable for the banks, the Bank of England in particular, to go out into the open market and buy securities. That is called open market operation, and is done to expand credit and make it possible for there to be a greater basis of commercial operations. Those are well known financial measures adopted at a time like this. We could do the same thing, on a small scale it is true, something like the open market operations, to expand the basis of borrowing in order to meet the general industrial position. It might not be big but at least it would be something, and I hope the Chancellor of the Exchequer will give serious consideration to it.
5.15 p.m.
Captain Wallace: Anyone who listened to the explanation of this new Clause by the hon. and gallant Member might have gathered the impression that my right hon. Friend the Chancellor of the Exchequer had inadvertently perpetrated an appalling injustice in the Bill. As the hon. and gallant Member will imagine, there is a good deal more than meets the eye in this apparently innocent proposal. Before I deal as briefly as its importance will allow me with the Amendment, let me clear up the point which the hon. and gallant Member brought to my notice at the close of his speech. I am advised that there is legal authority that the repeal of one Section of an Act does not affect Acts which incorporate that Section by reference, and, therefore, his point as to the repeal of a particular Section of the Bank Charter Act is adequately dealt with. The hon and gallant Member in moving the new Clause laid particular stress on
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Section 11 of the Currency and Bank Notes Act, 1928. That Section is deliberately retained by the Government of set purpose. Its object was to concentrate all the gold reserves in the national interests, and I hope hon. Members will bear that fact in mind in considering this new Clause.
It is obvious that the most effective use can only be made of the country's reserves of gold if they are concentrated under the control of the monetary authorities of the country. The first Sub-section of Section 11 provided that it should have effect so long as Section 1 (1) of the Act of 1925 remained in force. That part of the Act of 1925 provided that the bank should no longer be bound to pay its notes in gold and was the provision which effectively prevented the use of gold for internal circulation. In fact, the concentration of the gold reserve is only possible so long as gold is not required for internal circulation. I should make it clear that the Section only applies to gold held by "any person in the United Kingdom"; it does not apply to gold held by persons resident abroad, and the bank cannot therefore acquire compulsorily gold in this country which is owned by persons outside the United Kingdom. The concentration of domestically owned gold has now, for all practical purposes, been achieved. But I think the Committee will agree that it is important that any gold held in the future by residents in the United Kingdom should be available to the central authorities if necessary. It is also still important that nothing should be done to encourage fresh hoardings of gold, particularly at a time when the Chancellor of the Exchequer has taken special steps, through the banks and other channels, to stop speculation both in gold and in the foreign exchanges.
Let us face the fact that the hoarding of gold is an unsocial act. First, it diminishes the effectiveness of the central control on our gold reserves. Secondly, if private or business funds are held in gold rather than invested in securities or deposited in the banks, then the money available for financing industrial, commercial and governmental requirements is pro tan to reduced. I imagine that hon. Members opposite would regard that as a bad thing. In the third place, the hoarding of gold not only implies but fosters distrust in the country's currency. For all these reasons

1187
it is desirable in the highest degree that the monetary authority of this country should remain armed with every reasonable deterrent against gold hoarding and this Section 11 is for this purpose. Legal deterrents and prohibitions against the hoarding of gold exist in most other countries. I do not think, in view of what has been said, that hon. Members in any quarter of the House are in favour of gold hoarding here or elsewhere.
The hon. and gallant Member's arguments, which prima facie are plausible if not reasonable, are that the powers conferred on the Bank of England by Section 11 are unreasonable, since they enable the bank to buy gold at 85s. per fine ounce when the market price is about 148s. If there is, however, to be any legal deterrent at all to the hoarding of gold it would really be futile to allow the bank to purchase gold merely at the current market price. Such a provision might in fact mean that the bank would actually pay a hoarder more than the gold had cost him, and as we are agreed that hoarding is an anti-social act we do not want to run any risk of giving encouragement to anybody to hoard gold. Everyone knows what the law is and has been on the subject for the past 10 years and nobody can have any grievance against my right hon. Friend if this provision is applied to him. For these reasons I hope the Committee will reject the Clause.
Colonel Nathan: How does the argument of the Financial Secretary run in view of the fact that when the 1928 Act was passed 85s. was the market price, and until 1931 the bank was under an obligation to pay the market price? How is it that only since 1931, and then only because of fortuitous circumstances, has a discrepancy arisen between the market price and the statutory price? How is it that what was right in 1928 ceases to be right in 1939? If the market price was right in the one year why is it not right in the other? Has the Financial Secretary paid sufficient attention to the great disadvantages to British holders unless my Clause be accepted?
Captain Wallace: I realise the point of the hon. and gallant Member's argument. All I say is that there has been placed in the hands of my right hon. Friend a considerably stronger deterrent against what is admitted to be an un-
1188
social act, and I do not think my right hon. Friend is much inclined to throw it away.
Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Addition to s. 11 (2) of Currency and Bank Notes Act, 1928.)
There shall be added at the end of Subsection (2) of Section eleven of the Currency and Bank Notes Act, 1928, the following words:
"The term 'person in the United Kingdom' shall not include a lank or company incorporated and having its principal place of business outside the United Kingdom by reason only of the fact that such bank or company has a branch or agency within the United Kingdom."
and the said Sub-section shall be read and construed accordingly.—[Colonel Nathan.]
Brought up, and read the First time.
5.26 p.m.
Colonel Nathan: I beg to move, "That the Clause be read a Second time."
There is no question of principle involved in this proposal, but I hope I may be allowed to trace the history of this matter. When the 1928 Bill was introduced it read:
"Any person owning any gold."
I emphasise the words "any person." When the Bill was in Committee Sir Laming Worthington-Evans, who was in charge of it, moved after the word "person" to insert the words "in the United Kingdom," as he said:
"To make it clear beyond a shadow of doubt that this Clause is not intended to interfere with the holding of gold in England on behalf of foreign banks or firms. That is the intention of the Clause. It is not quite clear and we are adding these words."—.[OFFICIAL 'REPORT, 17th May, 1928; col. 1389, Vol. 217.]
I still do not think the matter is quite clear, and I have had brought to my notice real difficulties and doubts which arise. What is "any person" in the United Kingdom, or, alternatively, what is a person who is not in the United Kingdom in such circumstances as these? You have great foreign institutions and banks like the Société Generale de Paris, the Banque Beige, the Swiss Banking Corporation and the Guarantee Trust, which may hold gold in this country. They may hold it through, and in the custody in this country of, their English branches. If the Guarantee Trust hold gold in the hands of the Westminster Bank no question would arise; they would not come

1189
under the Bill. If they hold gold in the custody of the Guarantee Trust in London would they or would they not come under the Bill? My proposal is to clarify the position. I think it must be the intention of the Legislature than a branch of what is a bona fide bank abroad is to be treated as if it were part of the bank carrying on business abroad, and not as an independent person in the United Kingdom.
5.29 p.m.
Sir J. Simon: The hon. and gallant Member says that he has come across instances in which this question has arisen. Naturally he raises the point. I do not think I can agree that we should now embroider the provision passed by the House of Commons in 1928. It is true that at the time the language used was more general and simply said "any person," and that the Minister who was then dealing with the matter Sir L. Worthington-Evans, made the observations which the hon. and gallant Member has quoted, and proposed the insertion in the 1928 Act of the phrase "person in the United Kingdom." I do not think it would be wise or useful for the Committee to endeavour further in this Bill to provide as to how those words apply, because the hon. and gallant Gentleman has an instance or two in mind in which he thinks there may be a difficulty. The phrase "person in the United Kingdom" is fairly plain, and if there were a case of difficulty, I think the matter would be decided according to the circumstances of the case. I do not think we can safely put in a provision that the term shall not include a bank or company incorporated by reason only of the fact that such a bank or company has a branch or agency in the United Kingdom. If we did that, the next thing we should have to do would be to define what is an agency or a branch.
As far as I know, the provision in the law as it stands has not raised any difficulty ever since it was inserted. That provision, when it was inserted ten years ago, dealt, and naturally dealt, with persons in the United Kingdom. Every lawyer knows how that should be applied in the case of incorporated bodies. Every case where there is a person in the United Kingdom who is the owner is covered. If there be a case where the property is held but is not owned by a person in the United Kingdom, it is not
1190
covered. If there be a difficulty, it is rather a matter to be decided according to the circumstances of the case than by further Amendments to the Bill. I am afraid I cannot accept the Clause, but I will look into the point which the hon. and gallant Gentleman has mentioned, and if there be any real difficulty about it, I shall do my best to deal with it.
5.33 P.m.
Colonel Nathan: Does the right hon. Gentleman realise that in the case of a foreign bank owing gold held by its branch in this country, the statement which he has just made is an invitation to every such bank forthwith to withdraw its gold from this country?
Question, "That the Clause be read a Second time," put, and negatived.
Schedule agreed to.
Bill reported, without Amendment; read the Third time, and passed.

CZECHO-SLOVAKIA (FINANCIAL ASSISTANCE) [MONEY].
Considered in Committee under Standing Order No. 69.
[Sir DENNIS HERBERT in the Chair.]
Motion made, and Question proposed,
"That, for the purpose of any Act of the present Session to authorise the Treasury to repay to the Bank of England sums advanced by that bank to the National Bank of Czechoslovakia together with interest thereon and to enable effect to be given to two agreements copies whereof were laid before this House on the thirty-first day of January nineteen hundred and thirty-nine, namely,—

(a) an agreement (in this Resolution referred to as 'the first agreement') made between His Majesty's Government in the United Kingdom and the Government of the Czecho-Slovak Republic; and

(b) an agreement (in this Resolution referred to as 'the second agreement') made between His Majesty's said Government, the Government of the French Republic and the Government of the Czecho-Slovak Republic;

it is expedient to authorise—

(i) the repayment to the Bank of England out of the Consolidated Fund of sums amounting to ten million pounds advanced by that bank to the National Bank of Czecho-Slovakia together with interest thereon at the rate of 1 per cent. per annum;

(ii) the raising of money and the creation and issue of securities in connection with

1191
the repayment aforesaid, so that any such securities shall be deemed for all purposes to have been created and issued under Subsection (1) of Section one of the War Loan Act, 1919;

(iii) the release of the Government of the Czecho-Slovak Republic from any liability under Article one of the first agreement in respect of the sum of four million pounds;

(iv) the issue out of the Consolidated Fund of any sums required by the Treasury for fulfilling a guarantee given by them in pursuance of the second agreement in respect of a loan to be raised by the Government of the Czecho-Slovak Republic, and the payment into the Exchequer of any sums received by way of repayment of any sums so issued;

(v) the payment into the Exchequer of any sums received in pursuance of Article three of the first agreement, and the application of any sums so paid into the Exchequer in redeeming or paying off debt." —(King's Recommendation signified.)—[Captain Wallace.]

5.36 p.m.
Captain Wallace: The Committee will be sufficiently familiar with the general principles of the Bill and with the arrangements which will be authorised by this Financial Resolution, and I do not propose again to go over those general questions which were discussed at fairly considerable length and with a great deal of sincerity in the House only two days ago. Naturally, the Committee would like me to explain briefly how the Resolution carries out the various provisions in the Bill. The sum of£10,000,000 has been advanced by the Bank of England to the National Bank of Czecho-Slovakia. That is the foundation of the whole business. Paragraph (i) of the Resolution authorises the repayment of this sum to the Bank of England by the Treasury, together with interest at 1 per cent. per annum from the dates on which the bank advanced this sum to the date when the Treasury repays it. Of course, that cannot be done until the Bill has received the Royal Assent.
The money will be paid out of the Consolidated Fund, and Paragraph (ii) is simply a machinery provision, in a form which will be familiar to hon. Gentlemen, giving the Treasury power to raise money for this purpose. Both paragraphs (i) and (ii) of the Resolution relate to Clause 1 of the Bill.
When the advance has been repaid by the Treasury to the Bank of England, the Czecho-Slovak Government will regard it as having been advanced to them by His Majesty's Government, and they
1192
will, therefore, be indebted to His Majesty's Government for£10,000,000, together with the amount of the interest which we shall have paid to the Bank of England. Paragraph (iii) which relates to Clause 2 (1) of the Bill gives the Government authority to release the Government of Czecho-Slovakia from any liability in regard to£4,000,000 of the£10,000,000; that is, in fact, the free gift to which reference was made two days ago. The£6,000,000 which will still remain outstanding from the capital amount advanced will be repaid to His Majesty's Government by the Czecho-Slovak Government out of the proceeds of the Guaranteed Loan as soon as they are received, together with interest at 1 per cent. per annum for the period between the date of repayment by the Treasury to the Bank of England and the date of repayment by the Czecho-Slovak Government to the Treasury when they have got the proceeds of their loan. The Czechoslovak Government will also repay to His Majesty's Government, from the same source, the interest of 1 per cent. per annum on the original£10,000,000 which the Treasury will have paid to the Bank under the arrangement authorised by paragraph (i) of this Resolution. Paragraph (v) authorises the payment into the Exchequer of the sums which His Majesty's Government will receive under these arrangements and the application of them for the redemption of debt.
The only paragraph which I have not yet mentioned, paragraph (iv), which refers to Clause 2 (2) of the Bill, authorises the payment out of the Consolidated Fund of any sums for which His Majesty's Government may become liable under the guarantee which is to be granted under that Clause; that is, in respect of the loan which is to be raised in London by the Czecho-Slovak Government as soon as possible and which is to be jointly and severally guaranteed by His Majesty's Government and the French Government. Paragraph (iv) provides also for the payment into the Exchequer of any sums which may be received as repayment to His Majesty's Government of payments made under the guarantee; that is, in the event, which we hope and believe will never happen, of the French Government and His Majesty's Government becoming liable at some period for payments under this joint and several guarantee, it would enable the Exchequer to be paid back without

1193
coming to the House again with another Financial Resolution. In view of the Debate which has already taken place on the Bill, I hope that hon. Members will not think I am treating them perfunctorily in thus confining my explanation to what I may call the bare bones of the Financial Resolution.
5.43 p.m.
Mr. David Grenfell: The right hon. and gallant Gentleman the Financial Secretary to the Treasury has explained, I am sure to the satisfaction of the Committee, the Financial Resolution now before us. He need not have apologised for presenting the skeleton to us, for it is the skeleton that we wish to see, and not the softer clothing that is sometimes wrapped round this subject. The House has assumed an obligation, and I am sure that nobody looks upon this skeleton with any considerable fear or disturbance. The provision is not a large one, and its application is fully understood. A day or two ago, hon. Members on this side came to the conclusion that they would not divide the House on the Bill, and I do not propose now to cavil or quarrel about the Financial Resolution. However, I think the Committee is entitled to have a few more details as to the way in which control will be exercised at various stages over the dispensation of the funds to be provided. We know that the machinery is strictly in accord with the intentions of the House and that there will be a very strict control with regard to the expenditure and the distribution of the money to be applied for these purposes.
It is intended to finance the emigration from Czecho-Slovakia of a large number of people who are destitute and homeless, and who must make a new start in life far from the land of their birth and the land in which they have established claims of citizenship and domicile. Some of these people are in this country, and I am sure that hon. Members will be relieved to know that not only is this financial provision being made, but that also an organisation is being built up which will give full effect to the purposes of the loan with regard to emigration. These things depend very much upon the kind of organisation which we ourselves are able to maintain. In passing, I make this plea that Members of the House should play their part in making this organisation as effective as possible. With effective
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organisation, we can see that this loan is spent to the fullest advantage for the purposes for which it is intended. As I say, an organisation is now being built up and people in this House and outside it have joined in taking the necessary steps to provide means of transport and settlement for the considerable numbers of refugees involved. I would extend a very wide invitation to all Members to take an interest in seeing that this work is properly carried out. If that be done, I believe we shall find that no mistake has been made by us in providing this sum for purposes in which we should be interested as much as anybody—purposes which will be to the benefit of the people of this country as much as to the advantage of the direct objects of the expenditure.
With regard to road-making and other forms of expenditure in Czecho-Slovakia, reference was made the other day to changes in the frontiers of that State. We would like to know whether the frontiers have now been stabilised so that there will be no further changes to the detriment of this small people. I am expressing a personal view when I hope that changes may be made to the advantage of the remaining portion of Czecho-Slovakia, but that is not a subject for discussion to-day. Considerable inconvenience and onerous injustices have been caused to this small people by the disabilities arising out of changes in the frontier line. These have called for considerable readjustments in the local, national and economic life of the people. There are cases where, in a journey of 40 or 50 miles, the frontier has to be traversed 12 or 14 times. There have been some most ridiculous changes to the complete disadvantage of the Czechoslovak people, and with only strategic advantages to those who are masters in these territories now. It is highly important that some of this money should be spent in rectifying the transport difficulties which have ensued upon changes affecting both roads and railways. The amount is so small that probably nothing could be done to meet the difficulties in connection with railway transport, but with a sum of£4,000,000, or possibly£6,000,000, properly supervised and watched, much could be done in the way of making new roads and deviations and straightening and adjusting roads which have been affected by the contortions of

1195
the new frontier. A considerable amount might be done at the expense of building, say, five or six miles of road, to improve the general utility of a road 50 or 60 miles long.
I know something of these frontiers from having seen them and having examined the maps as they were being changed from day to day. Indeed, I think that the busiest industry in Czechoslovakia in October last was that of the cartographers. Maps were being made and re-made to conform with changes which were being made daily and almost hourly outside the city of Prague itself. Inside a few days all kinds of different colours appeared on the same old background. One had only to live in the atmosphere of Prague in those days to realise what tremendous inconvenience geographically, topographically and economically was being caused to the people who became the subjects of those changes. I express the hope with some confidence that the control to be exercised over this loan will be effective. The Financial Secretary has disclosed to us the skeleton of the main proposals, but he has left as yet undisclosed the skeleton of the scheme for administration. That we have not examined as closely as we might have, but I feel sure, having regard to the general form of the scheme of control, as we know it, that it will not be possible to dissipate the loan in any unnecessary or wasteful expenditure. If this money is spent as I think it might be spent, under proper control and direction, I do not think there is any reason why we on this side of the House should express any disapproval of the Resolution.
5.50 p.m.
The Chairman: Before the Debate proceeds any further I ought to give expression to a difficulty which arose in my mind while the hon. Member for Gower (Mr. Grenfell) was speaking. We are now dealing with a new practice. This is a case in which previously a Bill would have been founded upon a Financial Resolution. Under the practice which obtained until recently, the Financial Resolution would have been taken first and all those matters to which the hon. Member has referred—and which are not referred to in the Resolution, though they are germane to it—would have been proper subjects for discussion on the Financial Resolution. In this case,
1196
those matters have already been discussed fully on the Second Reading of the Bill. In discussing this Resolution, therefore, the Committee are fully aware of all those matters which are set out in the Bill itself, and which have been not only discussed, but approved on Second Reading. Therefore, though I give my Ruling with some hesitation, on a new point which I have not had time to consider, I think I must rule that under the new procedure in cases of this kind the only subjects which can be debated are those which come definitely within the terms of the Resolution, and that the Debate cannot extend to other matters which were proper subjects of discussion on the Second Reading, and would have been proper subjects for discussion on the Financial Resolution, if it had been taken before the Bill was introduced. But these other matters not covered by the Resolution, and discussed on the Second Reading, cannot now be debated again.
5.53 p.m.
Mr. Mander: I shall, of course. Sir Dennis, observe your Ruling, and I do not think it would be useful after the full Debate of Tuesday to go over the same ground again. There are just one or two points which I wish to mention. The first arises out of the events of the last few months. While it may be that he who gives quickly gives twice, apparently we may take it that he who gives slowly only gives one-seventh, because that, in effect, has been the result of delay in this case when we consider the sum which we are invited to vote now compared with the former figure of£30,000,000. The Prime Minister says that he regrets nothing that has happened in the last few months, but it is very difficult for anyone else to feel the same satisfaction with regard to the matter which is dealt with in this Resoluton. However, we have got a very substantial sum here compared with what is available in the cases of other refugees. We have a sum of£4,000,000 for dealing with the 10,000 or 15,000 or 20,000 refugees from Czecho-Slovakia, and undoubtedly it will be possible to render those people substantial assistance. Further, it will be a precedent and will provide experience which should be useful in relation to efforts made for other refugees. Therefore, one cannot help feeling glad that such a sum is available for this purpose.

1197
It would clearly be out of order to make any reference to the French part of the loan, but I hope I may be allowed to ask the Minister who replies, to say whether the financial arrangements which are being made with the French Government for taking over responsibility for the Czech loan, will facilitate the placing of money at the disposal of the Czech Government for dealing with refugees. It is obvious that the difficulties of distinguishing between what will and will not be useful to Germany from a military or an economic point of view will be immense. Those in control and the liaison officer will have a very difficult task to perform. The Czech Government, as was said the other day, are obliged to do what they are told, but I am sure of this. Whatever effect intensive propaganda may have on people of German race in persuading them to accept a particular regime, no kind of propaganda, however long-continued, will have any effect on the minds of the Czech people. I believe that they will keep alive their own ideals until the moment comes, which they hope will not be long in coming, when the hideous nightmare of Nazi-ism will be brought to an end once and for all.
5.56 p.m.
Mr. Boothby: While I had wished for something on a larger scale than this Resolution, I agree with the hon. Member for East Wolverhampton (Mr. Mander) that it cannot do any good to minimise this sum. The refugee problem in Europe is so formidable to-day that it is difficult to know how we are to deal with it in the long run. Clearly, we shall have to make these efforts for several years ahead and in so far as we have had direct action by the British Government, this sum undoubtedly represents a greater contribution to a particular refugee problem than has been made by any Government since the question arose. We ought to recognise that if this sum is properly administered—and I agree with the hon. Member for Gower (Mr. Grenfell) that we must all join in an effort to see that it is properly administered—it will be a great contribution to the solution of an extremely difficult problem.
I would repeat what I said on the Second Reading. I do not think it does any good to Czecho-Slovakia or anybody else to keep on saying that she is merely a vassal State of Germany and in complete subservience. The Czecho-Slovak
1198
State has given a wonderful demonstration of courage, discipline and unity during the last six months, and I do not subscribe to the view that there is not a considerable future before that State. I would like the Financial Secretary when he replies to give us one assurance. He cannot, of course, commit the Government to lending any more money, but I hope he will commit them to doing everything in their power on the commercial side, to help Czecho-Slovakia in respect of the trade in the difficult years which lie immediately ahead. I hope it will be made clear that the Government regard Czecho-Slovakia not as a sort of lost cause, but as a very industrious country, which has put up a great show during the last few years and with which we may expect in the future to do a profitable and growing trade. The Czechs were compelled to submit to certain military disadvantages arising out of the strategic situation in Central Europe, but that does not mean that we should regard their cause as hopeless. This Resolution makes a substantial contribution to dealing with the particular problem of refugees which oppresses them at the moment, and I hope that it is the intention of the Government to go further and do everything in their power in the future, to help Czecho-Slovakia to maintain a free and independent economic life in Europe.
6.0 p.m.
Sir J. Simon: We have had a short though useful Debate, and I find myself very much in the spirit of the observations which have been made by others who have taken part in it. I am very glad indeed that my hon. Friend the Member for East Aberdeen (Mr. Boothby) should have asked that we should really look at this contribution with some sense of proportion. It is in fact a most material contribution. This is an age when it becomes so easy to talk about millions that we do not perhaps realise quite how much a million is. I am sure, having examined this particular Czechoslovak refugee problem with some care, that the contribution which is being made—made at the expense of the British people—and the contribution which is being made by the French Government too, is one which is very substantial; and we serve no useful purpose at all if we do not insist that it is a really

1199
substantial help, given very willingly, but given in very difficult times.
The question asked by the hon. Member for East Wolverhampton (Mr. Mander), in regard to the White Paper, apparently was not sufficiently answered by my speech on Tuesday. The contribution made by the French Government is, by the express terms of the agreement as printed in the White Paper, to be devoted to the help of the refugees under arrangements which correspond to the arrangements which we have made. Of course, the British liaison officer is only entitled to concern himself with the British contribution, but my hon. Friend will find that stated in Dr. Pospisil's letter on page II of the White Paper:
"as regards the amounts in francs which will become available to the Czecho-Slovak Government as a result of the assumption by the French Government of responsibility for the interest service of the 5 per cent. Bonds 1937–42. the provisions of Annex IV to this letter will apply in addition to those of paragraph 3 of the present letter."
Turning over, he will find, on page 13, in Annex II:
"The amount in francs which the Czechoslovak Government would have had to provide for the interest service of the 5 per cent. Bonds 1937–42, if the French Government had not assumed responsibility therefor, will be utilised for the same purposes as the allocation under paragraph 1 (a) above."
I think we may feel sure that our friends in France have been as careful to secure that the money is properly used as we have been ourselves.
I would like, if I might, to associate myself with what was said by the hon. Member for Gower (Mr. Grenfell) when he spoke about interesting ourselves in this matter. I think we ought to regard this effort which we are co-operatively making as an effort which, I believe, is going to help in this most terribly sad situation. Only to-day I opened two letters from people whose identity is unknown to me, who have come from that country, showing a most tragic interest in the question whether this provision will help the writers' son and wife. One of the letters can have been sent to me for no other reason as far as I can see, except that the person who writes to me bears the same name as I do, as if that would make some sort of appeal.
I think everybody here ought to feel that our responsibility is not discharged because we have voted a sum of money.
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We have selected a very experienced gentleman, whose acquaintance with financial questions gives him very special qualities, to go to Prague and to act for the British Government. I know him well and have had many talks with him on the subject, and so have my officials in the Treasury, and I am sure that Mr. Stopford—that is his name—is going to discharge his duty in Prague most ably, as far as one man can. He will be in constant communication with us here, and his reports will come to us, and we shall at least have an opportunity of knowing what his difficulties are and how he is getting on. I think I was justified in saying the other day that the White Paper showed that we really had been able to work out in much more detail than might have been expected the way in which this money should be used, and, of course, we intend to do our utmost in the matter. I agree that it is of real importance that it should go out from this House and Committee that we make this provision believing that it will be carefully used for the purposes for which it was intended and that we make it with complete good will and in the confidence that the Czecho-Slovak State is a State which, passing through a difficult phase, none the less has a determination to live and provide for its own population. I should like there to go out from this House and Committee an expression of our real sympathy, and we are entitled to speak of our sympathy in this matter, because we are putting down good hard money to try and do something to make that sympathy good.
Miss Rathbone: Before the right hon. Gentleman resumes his seat, will he clear up one point? Will Mr. Stopford or anyone here have any control over the choice and priority of those refugees who benefit by this money? What I mean is this: It is well known that there are degrees of urgency. There are certain groups of refugees who are in much more serious danger and living under much more distressed conditions than others. Hitherto, since the British Committee over here have had to put up all the money for bringing these people over, they have naturally had the choice of those people, and they have made that choice in correspondence with the committees of different groups of refugees in Prague, but I do not quite understand how that will be in future, whether it is to be de-

1201
cided over here or by the committees in Prague that there are certain lists of people who ought to be got out as quickly as possible. Is there any security that those people will be got out and that people may not be given preference here, people who will be able to pull strings or for some other reason, who are in less danger and in less need of getting out, but who have more favour with the Czech Government? Will the right hon. Gentleman tell us a little about how these refugees who will benefit by this sum will be selected?
Sir J. Simon: I think the hon. Lady is referring to that part of the problem which it is hoped to deal with by the method of emigration?
Miss Rathbone: Yes.
Sir J. Simon: We believe that the money provision that has been made will enable emigrants to leave promptly as they acquire, if they can acquire, permission to go elsewhere. It is no good saying "Here is the money; you may go," until the individual knows where he is going to, and the settlement of this question, I would have expected, would be to a large extent the cause of anxiety and delay. I think the arrangements are such that we may be sure that there will not be what my hon. Friend calls preference to give people a chance of going who are in no great anxiety and leaving others behind who are in greater peril. I think the influence that is exercised at the other end, where the permission has to be obtained, together with the presence of Mr. Stopford in Prague, will certainly secure that this matter is administered in due order. We must show respect for and confidence in the authority of the Czech Government, and we cannot treat the Czech Government as if it were under tutelage. We are doing our best, in cooperation with the Czech Government, to do what is right by individuals as far as we can.
I feel pretty sure—and the hon. Gentleman opposite can speak with greater knowledge of this than I can, because he has been in Prague—that the spirit of this Refugee Institute in Prague, now that it has got more money and now that it has got interests in this country and France watching what it is doing, and now that we have our own representative in Prague, will be all that we could wish,
1202
I think we can assume, and I think we shall get the best out of it by assuming that this task will be carried out without prejudice and with the desire to help the people concerned as quickly as possible.
Question put, and agreed to.
Resolution to be reported upon Monday next.

BACON INDUSTRY (AMENDMENT) BILL.
Order for Second Reading read.
6.12 p.m.
The Minister of Agriculture (Major Sir Reginald Dorman-Smith): I beg to move, "That the Bill be now read a Second time."
I think it will probably meet the convenience of the House if I recall the main principles of the financial provisions of the Bacon Industry Act, 1938, which received the Royal Assent last July. Under this Act for a period of three years pig producers are to be insulated from the effects of variations in the costs of pig feeding stuffs in respect of pigs sold to curers under the contract system set up by that Act. To achieve this, curers are required to pay certain fixed prices for pigs during those three years. When the price of a prescribed standard ration rises above 8s. 6d. per cwt., curers have to add to the pig price an additional sum, which, subject to one qualification, they are entitled to recover from the Exchequer. Where the price of the ration falls below 8s. 6d., curers have to deduct a sum from the pig price and are required, again with a qualification, to pay that deduction to the Exchequer. The qualification in each case is the quantity of bacon made from the pig.
Parliament realised that one cannot require curers to pay fixed prices for pigs without having regard to the amounts which they in turn receive for their products. For example, the market conditions might operate in such a way as to make it quite impossible for the curers to pay the statutory pig prices, and accordingly, provision was made in the Act for insulating curers in a similar way from rises and falls in bacon prices. Certain notional bacon prices, referred to in the Bill as "standard bacon prices," were assumed for this purpose, and where the average price of bacon, as ascer-

1203
tained in accordance with regulations, falls below the standard price, the difference is made up by the Exchequer. Where the ascertained price rises above the standard price, the curer pays the difference to the Exchequer. Further, as an incentive to efficiency and economy, both in pig production and in bacon curing, the pig prices and the standard bacon prices are to be reduced in the second and third years. So far as the curers are concerned, the effect of tapering the prices is that the curing margin per cwt. of bacon will be reduced by 5d. at the end of the first year and by a further 10d. at the end of the second year, or 1s. 3d. in all.
The curer's source of income from pigs is derived not only from the sale of bacon, but from the sale or manufacture of those parts of the pig called the offals, which are not made into bacon. The return to curers from the offals is an important element in the curing margin, and by far the most important by-product of the offals is lard. It is estimated that lard constitutes about three-quarters of the total value of the offals. When the financial structure of the new bacon plan was under examination it was felt that the returns from offals could be left to look after themselves. Accordingly no provision was made in the Act for the stabilisation of such returns. There was, I believe, a reasonable expectation, which was shared by the leaders of the industry, that lard prices would be maintained. In 1937 the average price of the best quality of imported lard was about 68s. per cwt. The average price over a considerable preceding period was about 65s.
The expectation that lard prices would maintain themselves was not, however, realised. Indeed, before the Bill was introduced prices began to weaken and they dropped steadily throughout 1938, reaching 48s. in December and averaging 52s. for the year. It is true that imports of lard were 2 per cent. less in 1938 than in 1937, but imports from the United States increased by 66 per cent. over the preceding year. There has been an increase in the pig population of the United States, which started in the spring of 1938 and will probably continue at an accelerated rate in 1939. Consequently it is expected that with an increase in the import of lard from the United States, which appears to be the dominating factor
1204
of the lard price situation in this country, lard prices will remain weak for some time to come. The House will realise, therefore, the effect which a decline in lard values will have on the ability of the curers to pay the fixed prices for their pigs required by the Act.
The position of the curers, of course, will be made worse by the removal of the duty on lard under the Anglo-American Trade Agreement. The Government, therefore, have come to the conclusion that if the full intentions of the Bacon Industry Act are to be implemented, lard should be brought under a price insurance scheme. It is recommended that certain notional lard prices should be taken, in the same way as the standard bacon prices, as the bases from which payment to curers by the Exchequer and by curers to the Exchequer should be assessed. For the first year the notional lard price will be 65s. per cwt. as indicative of the average lard prices ruling when the financial structure of the Act was settled. The principle of tapering, which is applied to the pig prices and to the standard bacon prices, will equally be applied to the notional lard prices, and in the second year the notional lard price will be reduced to 63s. and in the third year to 59s. per cwt. This will have the effect of increasing the reduction in the curing margin to yd. in the; second year and is. 4d. in the third year, or 1s. 11d. in all.
Careful estimates indicate that a lair measure of the effect of the fluctuation of lard prices on the return of curers as a whole is 1d. per cwt, of bacon for each shilling variation in the price per cwt. of lard. It is proposed, therefore, in this Bill that for each is. by which the price of lard, to be ascertained in accordance with regulations, falls below the notional lard price, id. shall be added to the standard bacon price. Similarly, for each 1s. by which the ascertained lard price rises above the notional price, the standard bacon price will be decreased by id. The Bill does not represent any departure from the intentions of the Bacon Industry Act. Its purpose is not to provide an addition to the curers' margin but to complete the price insurance plan embodied in the principal Act. namely, that in order to enable curers to pay the fixed pig prices they should have some assurance against reduction in the curing margin which results from the operation

1205
of the Act. It is only right that the lard price insurance should operate from the date on which the curers' liability to pay the pig prices began, and it is proposed, therefore, that the provisions of the Bill should be made retrospective. This means that the lard price insurance scheme will date from the commencement of the contract system, namely, 1st December last.
This Bill deals with two other Amendments of the principal Act. The first one seems to me somewhat technical. It is contained in Sub-section (3) of Clause 1 and deals with the arrangements for weighing bacon for the purpose of assessing the Exchequer payments and receipts. The intention of the Act was to enable the curer to recover the whole of the food cost subsidy paid by him to the producer if he turned the whole of the curable part of the pig into bacon, as is done in the production of Wiltshire bacon. It was necessary, therefore, to assume the proportion of the pig that represents the whole of the curable meat. Tests taken out at a number of factories show that the weight put into cure in the production of Wiltshire bacon is, on the average, 78 per cent. of the dead weight of the pig. This, of course, is the average. Some carcasses will "dress out" at more than 78 per cent., others a little less.
The Act contemplates that the curer shall supply proof of the weight of bacon made from each pig. If curers are compelled to weigh separately each part of a carcass that becomes bacon it will mean that no curer will be able to recover the whole of his food cost payments, even although he turns the whole of the curable part of the pigs into bacon, because some of the carcasses will dress out at less than 78 per cent. It has been found that the detailed work of weighing and recording separately the proportions of bacon made from individual pigs might seriously slow down factory operations and may, in fact, increase curing costs. To get over this difficulty, Sub-section (3) of Clause 1 of the Bill provides that the pieces of bacon made from a number of pigs may be weighed together and that the proportion of bacon made from each pig shall be deemed to be the same as the proportion made from all the pigs. It is desirable that this alteration should apply as from the beginning of the contract system, and accordingly the House will be asked to make the Sub-section retrospective.
1206
The other Amendment relates to the curing of imported pigs and carcasses with which Sub-section (3) of Section 19 of the Act deals. It was the intention of the Act that curers should be free to buy and cure imported pigs and carcasses so long as it could be shown that these had been taken into account for the purpose of any system of import control for the time being in operation. It has been found, however, that the Act was drawn rather too narrowly to enable the Minister to specify in regulations, for the purposes mentioned, certain voluntary arrangements which have been arrived at, particularly with Dominion countries, which are now in force in regard to imported supplies. It is proposed, therefore, to amend Sub-section (3) of Section 19 of the Act so that the regulations can be made in more general terms without interfering with the existing voluntary arrangement or departing in any way from the intention of the principal Act. A variety of arrangements have been made and it has been difficult to get one formula to meet all of them. Here again I am asking that this arrangement should be made retrospective. These are the principal points in the Bill. I hope that they will not be very contentious and that this will be a sufficient explanation of the terms of the Bill.
6.25 p.m.
Mr. T. Williams: I am glad to see that the right hon. and gallant Gentleman's Department has been fairly successful in disciplining the Minister even on his second speech. The question of price insurance is not a very new one. It has been debated in its various forms, but I note that the Minister has now finally accepted the price insurance plan as determined by the Ministry of Agriculture and as embodied in the Bacon Act, 1938. If the right hon. and gallant Gentleman has now deserted all his past associations or affiliations with price insurance plans and has adopted the bacon price insurance plan, hon. Members will know exactly what he means when be brings forward any further price insurance plan to deal with agricultural commodities. This Bill is not controversial since, if hon. Members accept a price insurance plan—the only doubt being in the determination of the original figures assumed by the Department—I do not quite see how we can object to the conception of

1207
an insurance plan such as the one embodied in the Bacon Act and maintained by this Bill.
An important point emerges to which I ought to draw the attention of the House and of the Minister in particular, namely, that this Bill is not only designed to amend the Bacon Act, so that the curer can have the same insurance guaranteed for the offal that he previously had for the rest of the carcass, but is introduced because of the Trade Agreement with the United States. The right hon. and gallant Gentleman made a passing reference to the fact that the 10 per cent. duty on imported lard is to be removed, and he said that the position would be made worse when the duty was removed. Those of us who sit on these benches, ever since I have been in the House, well in the teens of years, have been made to believe by hon. Gentlemen sitting opposite that whenever we impose a duty on an imported article it is the foreigner who pays the duty. I have heard the Prime Minister and almost every Member on the other side declare at one time or another that merely to impose a duty on an imported article is not to impose upon the consumer of the commodity here, but to compel the foreigner to pay the duty. We now have it on the authority of the Minister of Agriculture that when a duty is imposed upon foodstuffs such as lard the consumer in this country pays and not the foreigner, and that if we remove the duty the position of the bacon curer will be made worse.
The Bill is partially meant to compensate the bacon curer for any loss he may sustain as a result of the removal of that import duty. We should bear that in mind, and I hope that the Minister will not hesitate to tell his colleagues in the agricultural industry and the spokesmen of that industry that duties do invariably impose burdens upon the consumers of the commodities. The burden which the passing of this Bill will impose is comparatively small. According to the Financial Resolution it is estimated at round about£150,000 in the first year; the obligation in successive periods will be determined, of course, by the price of lard. The removal of any burden from the consumers of a foodstuff and its transfer to the Treasury will be welcomed by every Member on these benches and we
1208
entirely agree with that part of the Measure, but I have one or two questions to ask in connection with the price plan as related to the Bacon Act and to this new Bill.
The price for the first period assumed in the Bacon Bill was 94s. 9d. per cwt., and we now know that the right hon. Gentleman assumes 65s. a cwt. to be the fair price for lard. Will he give us the figures over a period of years, either before 1930 or since 1933, so that Members may determine whether 65s. is a fair and reasonable price? It may be as near to a fair average price as the Department could estimate, and I know that where figures are concerned their assumptions are invariably correct, but we are entitled to know why they fixed upon 65s. If the price of lard remains at the standard figure of 65s. there is no price variation for bacon, but if lard rises to 70s. there would be a reduction of 5d. in the price of bacon, and if lard fell to 60s. obviously the curer would call for an increase of 5d. in bacon prices. But suppose lard goes down to 55s. or 50s., will the curer, that is, the seller of lard, have any further interest in the price of lard, since he knows that the Treasury will compensate him for any further reductions? I am sure the Minister and hon. Members in all parts of the House will appreciate the substance of that question. What I should like to know is this, putting it quite plainly: Has the Minister—or have the Department—anything in mind to safeguard the position of the Treasury should the price of lard fall to an abnormally low figure? If it is an insurance scheme we ought to know that it is fair to the curer of bacon on the one hand and equally fair to the Treasury on the other.
Referring to the second Amendment, that to Sub-section (3) of Section 1, the right hon. Gentleman truly said that it was merely a matter of convenience to curers, and to the extent that the Amendment prevents an increase in the price of bacon we welcome it; but I understand that bacon curers—and I am not here to advocate their cause—already have numerous problems facing them, some of which may be dealt with later in this Debate, and it is not for this House to impose further burdens upon them. The third Amendment, relating to imported carcasses, raises one or two points which I wish to bring out. The new arrange-

1209
ments with regard to imported carcasses may have some definite relation to the known bacon position at the moment. I need not tell the right hon. Gentleman that the Bacon Marketing Board has almost broken down, that the scheme embodied in the Bacon Act, 1938, is almost breaking down and being brought to a close. I do not know the actual figures of output at the moment, but I understand from those who are able to express an opinion that while the Government anticipated an output of 2,100,000 pigs last year that number has not been contracted for, and that there is a reduction of approximately 600,000 pigs. I do not know whether those figures are correct, but I understand that the output of pigs fell enormously below the assumed figure embodied in the Act of 1938.
The output of British bacon is decreasing, and we also find ourselves in a difficulty about maintaining our imports of bacon. So long as our farmers are not producing the appropriate numbers of pigs they are creating definite financial problems for bacon curers, are causing an increase in the price of imported bacon, and also causing an increase in the imports of carcasses, chilled and frozen, and in the price of them, whether those carcasses are sold for pork or turned into bacon. From 1936 onwards there has not only been an increase of about 7s. 6d. per cwt. in the price of imported bacon but also an increase of somewhere over 8s. in the price of imported frozen and chilled carcasses. There is, of course, a relationship between the Bacon Act and this new Bill, and since I gather that even farmers in the right hon. Gentleman's own county are combining for the purpose of destroying the Bacon Marketing Board I am wondering whether the figures embodied in the Bacon Act and the figures embodied in this Bill will really compensate curers for the functions they are now performing.
I do not want to ask the right hon. Gentleman for higher subsidies for bacon curers. If I invited him to do anything at all it would be to insist that the Bacon Development Board should get on with the business of rationalising the curing industry, for there alone lies real hope for this industry; but even with the best rationalised curing system in the world if farmers themselves are not going to be loyal to the curing side of the industry, after the Government have assumed an
1210
output of pigs and what the price of bacon ought to be, and made a further assumption of what the standard ration for the feeding of pigs ought to be, the whole scheme is bound to break down. Already I understand, on account of the shortage, pigs are being diverted from where they have been reared to various other parts of the country, to the annoyance of pig producers and even to the annoyance of curers, and that, in fact, the net result of the Bacon Act, 1938, is chaos in the industry from top to bottom.
I should like the right hon. Gentleman or the Minister of Pensions, or whoever replies, to tell us whether this Bill, being tacked on to the Act of 1938, and completing the price insurance scheme, is really going to stabilise the pig and bacon industry. We on this side doubt it very much. We feel that the Government have never been strong enough to face up to their responsibilities. The right hon. Gentleman has a very difficult row to hoe. We wish him well in his task and we advise him to go back to reorganisation within the industry itself if we are to get stability in this many-sided industry. I repeat that we here have no desire to oppose the Bill and wish it a speedy passage to the Statute Book, and if it can help we shall give it our blessing, but we do not think that it will stabilise the bacon industry.
6.41 p.m.
Sir Arnold Wilson: Until I heard the speech of the hon. Member for Don Valley (Mr. T. Williams) I was under the impression that nothing that I should wish to say upon the Bill could be in order, because the Bill is narrowly drawn, but I am led by his concluding remarks to observe that to call for loyalty on the part of the farmers to the curers is to stretch the imagination rather far. The curers have not as yet given the farmers a fair deal, and the organisation of the board as it stands puts such power and authority into the hands of large curers, and so penalises small curers, that farmers can scarcely be expected to fall in readily with the scheme. It compels them, against their will, against their interests and to their financial loss, to send great numbers of pigs distances of 150 to 200 miles to large and wealthy curing firms and thus leading to the virtual destruction of small or medium-sized curing establishments which for the past 20 years or so have been established

1211
within 10 or 15 miles of their farms. In the counties of Hertfordshire, Essex and Cambridgeshire 8 to 10 per cent. more pigs are being produced than in 1935, but the curers in those counties are getting far fewer pigs than ever before. Farmers in my own county of Hertfordshire have been compelled to transfer pigs to Calne and to Ipswich at great cost, and some detriment of the bacon itself, taking them away from old-established firms, one of which was partly a farmers' co-operative concern and had existed for the last 20 years. It is not to be expected that farmers will be loyal to curers who have a scheme which gives such great advantages to a few very large firms.
Rationalisation is not merely a question of size, and I am sure the hon. Member for Don Valley will not regard rationalisation as calling for fewer and larger establishments, because there is a great deal to be said for being able to send a pig to a factory only four or five miles away and to be able to do it in one's own vehicle, in one's own time, and at the very hour, almost, when it happens to suit both curer and farmer. There is great discontent among farmers in Hertfordshire at the present position. There is a great feeling of injury at being asked to send pigs, to the number of many thousands, 100 or 200 miles by rail, by a circuitous route, and at considerable cost, while local curing establishments are starved of pigs. Hertfordshire is one of the Home Counties. It has an assured market for every pound of pork and bacon that can be produced from local pigs, either on the spot or in London and its suburbs, and we want all our pigs to be slaughtered, cured and dealt with on the spot. I agree that this Bill does not in any way deal directly with that point, and I only hope that it will not be regarded as a final instalment of the amendments that are required to the Bacon Act as a whole if that Measure is to be a success. There is no one on this side of the House, and no farmers, who do not wish the right hon. Gentleman well in his task and who do not recognise that the Bacon Industry Act was passed with the best possible intentions. It should not be regarded, as the hon. Member for Don Valley half hinted, as any fault of the farmers if the anticipations of the Government have not been fulfilled. Farmers have done their best, and if the scheme
1212
has not worked it should not be regarded as due to the perversity of the farmers, the wickedn3ss of the curers or the inefficiency of the Government.
6.46 p.m.
Mr. J. Morgan: I gathered from the Minister that the Bill was introduced mainly because of variations in the factors and circumstances expected to operate when the principal Bill was brought in. I take it that the amount of money that is expected to be necessary to meet the liabilities incurred under this Bill is based upon the contractual obligations of the farmers in regard to pigs; but when one looks at the Amendment to Section 19, one gets the suggestion that powers are now required by the Minister in part to meet circumstances that arise from obligations entered into in various ways, and in part also because there is a marked development, particularly recently, going on for some reason or other in respect of the importation of whole frozen carcasses for ultimate curing in this country. I would like to know a little more clearly what the Minister has in mind as to the suggestion that there is need to supplement the curers' supply of pigs, and whether or not the Minister's powers will be exercised to enable the curers to use imported carcasses in increasing quantities, as may be required to make up the deficiencies that are occurring, and will occur in the contracted supplies from the farmers.
The essence of the Bill depends upon the standard of the original Act. If for any reason the original Act has broken down, or if at the present time any parties to that arrangement find themselves unable to comply with the contracts which were entered into under that Act, the propositions which are presented to us tonight are also likely to break down. I would like the Minister to satisfy himself that the farmers intend to complete their contracts under the principal Act, enabling the Sections that he intends to amend to be carried out.
My information is that the Pigs Board, which is one of the executors, as it were, to the operation of the principal Act and to the Bill, is itself actually in difficulties, and has been holding inquiries within itself as to whether or not it is capable of ensuring to curers a supply of pigs at all; and that actually it is discussing this very question at this moment. If that is

1213
the case, I feel that the Minister should look a little more closely into the present affairs of the Pigs Board before he commits this House even to this Bill. It may be that one of the main structures supporting the proposals of the Bill will give way in a very short time. That situation ought to be dealt with before we are finally committed to approving the terms of the Bill.
It is, of course, not for me to suggest why the farmers are in this mind, and why they are not willing to be made parties even to completing the undertakings with which we are asked to deal to-day. They have reasonable ground of complaint. Some of them are complaining that they signed their contracts under misapprehension. They had no idea, when they signed for their pigs to be sent to a factory, that the animals were to be sent to any factory that the Pigs Board might decide upon. They thought there was to be a pool from which pigs for this allocation were to be drawn and that, in the main, the contracted pigs would be directed to factories where good will and long association rested between them and the farmers. Consequently, many of the farmers are now seriously contemplating defaulting under their contracts. They are prepared to risk the full penalties under the powers granted to the various boards, rather than proceed with their contracts. That seriously interferes with and involves the proposals before us this afternoon. I submit that the figure in the Bill is dependent upon the complete and anticipated fulfilment of the contracts that farmers are presumed to have made with the curers.
Further than that, I suspect that the curers have come before this House through the Minister again because they now find themselves in such a difficult position with regard to their throughput send overhead costs that they must look in every direction, even to offal, to secure their position; and that they have been forced to do so by the probability that in the coming year they will not be able to secure a throughput of pigs that will enable them to earn a profit, or even to cover their costs. I suspect that there will be pressure very soon upon the Minister, under the Amendment that he proposes to make to Section 19, to exercise those powers in order to let in as many frozen carcasses as possible from almost any country in the world, that
1214
the curers may deal with them. The introduction of the Bill is an indication that they are in such a dreadful plight under the commitments they have made to the farmers, and because of the way in which the administration of the schemes is worked out, that they are running to the Treasury, so to speak, for further subsidies for offal. Hitherto, when the farmer sold a pig, he sank the offal, gave it, more or less, to the curers or to the buyer of the pig, but now we find that the curer is having to protect himself in this way.
I wonder how far the completion of these proposals is affected by the fact that curers are themselves now evading the regulations and the terms laid down in the principal Act, and are going outside the scheme by paying more for the pigs on the open market by some means which it is difficult yet to state. They are paying 2s. per score more for pigs, and more than that for Irish pigs. They recognise that the contract system looks like breaking down. My own purpose is not so much to criticise the Measure but to suggest that the Minister should take an early opportunity of examining the premises on which the Bill is based in order to see whether the structure which supports the Bill is sound enough to carry it to a conclusion. Personally. I have very grave doubts.
6.55 p.m.
Sir William Wayland: The unfortunate fact about the pig industry is that there has been no combination between curers and farmers. I will not say that the history of the Pigs Board has been anything but a happy one, and I am not going to say that farmers have always played the game, because in many instances they have not done so. The complaint of the Pigs Board is that when the price of pork was the higher price they paid for pigs on the market and the farmers sold them in the market for pork. I will not say that the majority of farmers did so, but there was a sufficient number, and the consequence was that the scheme fell down. With regard to the curing situation, I do not believe that any small curer suffers. I am confident that if you want to make the curing business a success you will need to have large curing establishments. The overhead costs are much less and the curer has a far greater chance of reducing the price of turning pork into bacon than has the small curer.

1215
Numbers of the small curing establishments have been closed. In my constituency there was one that could not possibly make both ends meet owing to the overhead charges. We want to be able to produce in this country, almost all the bacon that we require, and it is quite possible to do so. At the present time we produce only a very small percentage. If we can get that happy combination in which all parties are pulling together, farmers and curers, with help given by the Treasury, I am confident that the industry will, in a comparatively short time, be able to make a profit all round.
6.58 p.m.
Mr. A. V. Alexander: We are indebted to the Minister for what I may call a very good Departmental explanation of the machinery of the Bill, but I feel certain that he will not feel at all aggrieved at the point made by my hon. Friend the Member for Don Valley (Mr. T. Williams) as to the fiscal revolution contained within his machinery Amendment. I do not want to dwell upon that point to-night, but upon some of the difficulties which become revealed in the bacon curing industry to-day by the very terms of the Amendment which is put before us. The Government have gone so far in this Bill as to recognise that the trade agreement with the United States of America will handicap the bacon curers on the fixed margin that was postulated in the Act of 1938, and they propose a relief estimated at about£150,000 a year. I do not believe that that amount of money will relieve one large and substantial bacon curer I know of in this country from incurring a loss on bacon curing this year. That is the first result in the first bacon year of the Act of 1938. I recognise that the right hon. and gallant Gentleman was not in charge of the Measure last year, but the Government Front Bench should remember that on this side we may quite well say, "We told you so."
Directly you begin to think of that position, if you are revising the general margin, as my hon. Friend put it, because there are doubts about the original figure, it seems to me that the Government are lacking in their duty unless they come to the House with a much wider and bolder policy to prevent the industry going altogether. In regard to that, I want to take up the point that my hon.
1216
Friend put. No one can deny that the real producer of pigs for bacon, the man in the industry who has been accustomed to produce pigs on his farm for the bacon industry, was very satisfied when the Ministry of Agriculture announced last year the amount of the subsidy and the manner of its application so far as the producer was concerned. I well remember the statement made at the annual meeting of the Pigs Marketing Board when the report was put to them of what was going to happen by some of the older and more skilled producers. They said, "If you cannot make pigs for bacon pay on this subsidy you had better give it up altogether, because it is very good indeed."
However, the first fact that emerges is that with that splendid offer, from the producers' point of view, the farmers do not contract. It is no good for the hon. Member for Hitchin (Sir A. Wilson) to retort that it is not a question of loyalty. It is true that the farmers have not responded and that, under a price insurance scheme, they have failed to contract for the pigs required for this industry. We are 600,000 pigs short, for the year, of the figure postulated in the Act of 1938. I should like to know, first of all, exactly how the Ministry propose to apply the powers in the varied forms in which they take them now under Clause 2 of the Bill. Are they really intending to use those powers to make it easier for the curers to obtain imported carcasses suitable for bacon curing such, for example, as the very fine type of carcase that is coming from New Zealand? We all want to induce more employment upon the land, more production of pigs and a more stable agricultural population, nevertheless if the Government have first induced the provision of bacon-curing factories and facilities at high capital cost and leave the curers with their overheads, surely even for the protection of the farmers who have contracted and still want their pigs to be cured, you must see that the factories are run at a reasonable throughput in order to keep them in being and to see that the industry does not fall altogether.
There were one or two smaller, but nevertheless important, matters which arise upon this adjustment. I have said that the£150,000 that you now propose will not be sufficient to adjust the price margin to the curing industry but, even without asking the House for more

1217
money, I feel certain that, if the Ministry could devote a little attention to the administration of this scheme, it might do something to improve matters. Take, for example, the extraordinary cost to the industry of administration. I do not know whether the Minister has had time to examine the volume of documents which have to be filled up by bacon curers for every single consignment of pigs. You want a separate staff for the whole business, and this comes out of the price margin. You have to deal with a railway consignment note, and an invoice with it, for live pigs. You have to send an advice note to the Bacon Board. You have to supply three copies of a grade ticket for deliveries under long contracts. You have to send in your claim in respect to pigs conveyed by road in your own vehicles. You have to supply a statement of the conveyance of pigs by hired road haulage. You have to send in a statement of all pigs conveyed by sea. You have to send in a claim in respect of pigs conveyed from the railway station to the place of slaughter. You have to make a return of bacon produced from home pigs, as apart from others. You must have a return of the producers supplying all supplementary pigs—all that to be filled in in triplicate. You must arrange for three copies of a form setting out the marking of carcases and parts of carcases—home supplies. You must arrange for three copies of marking of carcases and parts of carcases—imported supplies. You must arrange for a return of transfer of home-produced pigs, carcases or parts of carcases. You must make another return of producers offer of Class I pigs—board, curers and producers copies. Finally, you must make a return of group contractors offer of Class III pigs.
Really the whole machine is more harness than horse. It makes the whole thing ridiculous. It becomes ridiculous because the Ministry were not sufficiently wise to accept the Opposition Amendments in Committee on some of the main provisions dealing with transport and things of that kind. The hon. Member for Hitchin was right in his remarks about the re-allocation of pigs under the contract as a hardship upon the farmers whom he represents, but there is also a considerable hardship upon the bacon curer in the same respect. Instances have been quoted by some of my hon. Friends in the last few days. It is a common
1218
thing under the re-allocation scheme for pigs, which ought to go normally to a nearby factory at a cost of transport of 6d. a pig, to be sent too, 150, or 175 miles. It costs from 12s. to 15s. a pig and, in consequence, although, of course, the particular curer does not pay the 12s. or 15s.—he has a flat rate—the whole flat rate of the scheme is up until on the transit shrinkage allowance as well as the transport charges you have already a minimum flat rate of 2s. 9d. a pig over the whole country, a rate which it seems to me is likely to have to undergo amendment. The whole basis of the thing is ridiculous unless the Ministry can go behind the scenes and get these two boards together and get a little common sense into the machine. I recognise that it may mean that the Amendments postulated in this Bill might have to be added to and that you would have to amend the Act of 1938 to make it more sensible, but unless something can be done about it one of two things is bound to happen.
I believe all parties welcome the proposal that we should have serious and well-run rationalised factories. I agree with the hon. Member for Canterbury (Sir W. Wayland) that you cannot tackle the problem of bacon supplies with small, scattered factories. If you are to make them successful you have not to postulate your Bacon Marketing Board machinery and arrangements to meet the needs of one or two people in industrial areas. You have to deal with rationalisation on the basis of putting your factory in the pig-producing area. While we recognise and welcome that, what is going to happen is that farmers will continue to be doubtful about the scheme. You will lose the confidence of farmers like those mentioned by the hon. Member for Hitchin who have been co-operating, without State help, for 20 years to run their own factory. I have a letter from one of the farmer shareholders of that factory saying that he will have to let the whole thing go or deliberately break the law. If you lose that confidence, the whole scheme goes. The other alternative is to try to slip out gradually, and not let it go all at once, by trying to collect the real costs of the curer from the consumer and see the trade in British bacon gradually slip right away instead of tackling the situation that you set out to tackle, and that was to obtain a regular annual level supply of tank-cured bacon which

1219
would take the place of the well-known graded quantities that we have been getting from Denmark and similar sources. I am sorry to have to say to the right hon. and gallant Gentleman—he has not been there very long—that something has got to be done, and done quickly, if you are to save the industry from complete disaster.
7.12 p.m.
The Minister of Pensions (Mr. Ramsbotham): The right hon. Gentleman has used this comparatively short Bill as a peg upon which to hang a fairly comprehensive criticism of the general administration of the bacon industry. I think that his criticism is a little harsh, considering that the industry itself, under the Bacon Industry Act, 1938, has been operated only for a comparatively short time. The actual contracts commenced on 1st December, and there has been some two months' experience of it. I am sure that even in the case of the co-operative societies rather more than two months are allowed for a new venture before criticising it so harshly. At the same time I agree that, if the industry is to he successful, the farmers have to co-operate loyally and respond to it. My hon. Friend the Member for Canterbury (Sir W. Wayland) talked about farmers not playing the game. I agree that, if the producers do not play the game, in the nature of things it will not be very long before there is no game to play, and what the right hon. Gentleman says in that respect should be weighed carefully by all sections of the agricultural community. I think he was correct as to the probable effect of Clause 2, though the Clause is more of a drafting nature than otherwise. Section 19 (3) is intended to enable registered curers to convert into bacon imported pigs or pork, included in any scheme of regulation of import. The arrangements are of very widely different types and various degrees of formality, and it has been found that, for the purpose of enabling the Minister to carry out what it was the intention of the -House that he should carry out, that section was too narrowly drawn. It is for that reason that the Amendments in the Bill are now proposed, and they will have the effect which the right hon. Gentleman anticipates.
1220
The hon. Member for Don Valley (Mr. T. Williams) suggests that the reason for this Bill lies in the agreement recently made with the United States. I do not think he is quite correct in that view. The fall in the price of lard is quite irrespective of that agreement. I would not say that the agreement has not affected it, but the real reason for the fall is the increased pig population of the United States. I admit that it was not foreseen at the time by the Ministry or by the leaders of the curing industry, but, now that it has occurred, it is obviously necessary, as my right hon. and gallant Friend pointed out, to complete the price insurance scheme, which hitherto has been based only on the bacon portion of the pig.
The hon. Member for Don Valley wished to have some indication of the eventual liability of the Treasury. The price of lard was 65s. per cwt. for the first year, and this Bill is based on an average of the prices for the 16 years from 1922 to 1938, which I think is a fairly sound basis so far as safeguarding the Treasury is concerned. It is true that none of us can foresee to what extent the price of lard may fall; it has fallen, I believe, on one occasion, as low as 30s. per cwt.; but we have to remember that the actual arrangements are only for three years, and in any event there is a "taper" Clause, so I think that in the circumstances, without abandoning the price insurance scheme altogether, the Treasury are adequately safeguarded.
My hon. Friend the Member for Hitchin (Sir A. Wilson) criticised the transport arrangements, and it is true that there have been difficulties and anomalies in their working. The allocation has caused difficulties. But, at the same time, it must be remembered that, in this practically new service, over 80 per cent. of the pigs have been allocated to curers of the producers' choice. I admit that I would rather it were a larger figure, but, bearing in mind the difficulties with which the board were faced at the outset, and the comparative speed at which it had to be Done—
Mr. Alexander: I am sure the Minister would not wish to convey a wrong impression. It may be that 80 per cent. of the producers' contract pigs have gone to the bacon factories to which they were originally consigned, but it is the case

1221
that in some areas the proportion was not much more than 50 per cent., and it is not quite fair to leave out those cases where there was that grievance.
Mr. Ramsbotham: I do not say that that average figure was maintained everywhere, but, taking the whole country, and considering the speed and the difficulty of the operation, I do not think the allocation has been so unfair as perhaps in certain quarters it might have been imagined to be, and I very much hope that, with experience, the difficulties to which the right hon. Gentleman referred w ill be removed. The scheme has been going for but a very short time, and a certain amount of patience must be exercised. I would remind my hon. Friend the Member for Hitchin that, on the question of transport charges, he was speaking from the point of view of the producer; but, after all, as the right hon. Gentleman has pointed out, it is the curer who pays the transport charges, and a great deal of my hon. Friend's criticism was really laid at the door of the producer and not of the curer.
Mr. Alexander: I am sorry to interrupt the hon. Gentleman again, but I should like this point, which was raised by the hon. Member for Hitchin, to be cleared up. Is anything going to be done to relieve the hardship entailed upon farmers in his constituency who, having for 20 years co-operated voluntarily, having put their money into their own factory and grown pigs for their own factory, now have their pigs taken away from them and sent from Essex and Hertfordshire to Calne?
Mr. Ramsbotham: I quite follow the point put by the right hon. Gentleman. That is one of the grievances which have come to light during the working of the contract. All I can say is that it is now very well known to the Pigs Board and to the Ministry, and every step will be taken in the future to see that anomalies of that kind are, if possible, removed.
The hon. Gentleman for Doncaster (Mr. J. Morgan) seemed to think that the reason why we supported the inclusion of the lard price was that the curers, owing to some lack of foresight or some mistake on the part of the Government, were finally forced to look to the offal to recoup them. I do not know whether the hon. Member is familiar with the pig industry or not, but I believe it has always been the fact that the curer
1222
has looked more to the offals than to the bacon to provide the margin of profit on which he exists. I have not the figures, but, speaking from memory, I believe the margin of profit over a considerable period is something like 16s. or 17s. per cwt., to cover the costs of manufacture, transport and so forth, and that, of this sum, from 6s. to 7s. is derived from bacon and from 9s. to 10s. is derived from offals. As the hon. Member knows, in the Bacon Industry Act, 1938, it was anticipated that the price of lard would remain stable at 65s., and no action was taken last summer to insure it; the curers and everyone else were perfectly happy on that basis. The price of lard has now fallen to an extent which makes matters very difficult for the curer, seeing that he used to rely on the offals for two-thirds of his margin of profit. It is not a question of the curer being driven to it; it is merely a question of an unexpected fall in the price of lard, which has put the curer in a very difficult position. The hon. Member for Doncaster also gave the impression that the farmers were dissatisfied with the Pigs Marketing Board. I can only say that all the members of the Pigs Board except, I believe, one, have recently been returned by their electors unopposed.
Mr. J. Morgan: Might not the fact that they were unopposed reflect a certain degree of indifference as to who got there?
Mr. Ramsbotham: I could not quite accept that. I myself, in the unlikely event of my being returned unopposed, should regard it as an indication of very great satisfaction on the part of my constituents. If there were any very grave dissatisfaction, I should have expected the producers to put up candidates in order to remove the people whose conduct had been unsatisfactory. This is not a very extensive Bill. The three Amendments in question will remove certain anomalies which have been found to exist and which it is worth while to remove, and I hope the House will give the Bill a Second Reading.
Question, "That the Bill be now read a Second time," put, and agreed to.
Bill read a Second time.
Bill committed to a Committee of the Whole House for Monday next.—[Captain Dugdale.]

LIVESTOCK INDUSTRY ACT, 1937.

  SHEEP, MUTTON AND LAMB (IMPORT REGULATION) ORDER, 1939.
  7.26 p.m.
  The Parliamentary Secretary to the Board of Trade (Mr. Cross): I beg to move,
  "That the Sheep, Mutton and Lamb (Import Regulation) Order, 1939, dated the 4th day of January, 1939, made by the Board of Trade under the Livestock Industry Act, 1937, a copy of which was presented to this House on the 31st day of January, 1939, be approved."
  This Order carries out a decision of the Government, announced by the Minister of Agriculture on 20th December last, to make all imports of live sheep and of mutton and lamb subject to licence. The Order covers imports of sheep and lambs and of mutton and lamb, other than mutton or lamb offals separate from the carcase or mutton or lamb in airtight containers. It applies to imports from all sources. It continues the quantitative regulation of imports from foreign countries, and enables effect to be given to the recommendations of the Empire Meat Council in regard to supplies of sheep, mutton and lamb to the United Kingdom which come from Empire countries. Further, the Order enables quantitative regulation to be applied to these supplies in the event of the Empire Meat Council failing to reach agreement. The Board of Trade have issued general licences under this Order to firms importing mutton and lamb in replacement of those which they have held in pursuance of the Ottawa Agreements Order. These licences are issued subject to compliance with the foreign quotas.
  I have to inform the House that the Empire Meat Council, after a number of meetings, the last of which was held yesterday, have failed to come to a unanimous conclusion as to the imports of mutton and lamb for the current year. The situation which has arisen in consequence is being considered by the Government, and I hope it will be possible to make a statement at an early date. The House will appreciate that I cannot add anything further to-night. The Government's consideration will be pressed forward as rapidly as possible, and in the meantime the Order is in force, so that any quotas which may be decided upon can, if necessary, be enforced. I may say finally that I have reason to believe
  1224
  that we may look to the Governments of Australia and New Zealand to co-operate with us in ensuring that any quotas that may be decided upon shall not be exceeded.
  7.29 p.m.
  Mr. T. Williams: In view of the statement which the hon. Gentleman has made, might I ask whether, since the council have failed to reach any decision, this Order could not be withdrawn until a Government statement can be made? We know, of course, that part and parcel of the Order is a reservation of power to the Government, in case of a breakdown of negotiations, to determine what the future imports of sheep, mutton and lamb shall be, and, seeing that the recent deliberations have broken down and no agreement has been reached, would it not be within the power of the hon. Gentleman to withdraw this Order until a statement can be made by the Government? For my part, I do not see any great necessity for forcing the Order through the House, since it is now in fact in operation. The Government will have to determine for a period what the imports of sheep, mutton and lamb shall be. What point, therefore, is there in forcing the Order through at this moment?
  As I understand it, the Order makes no fundamental difference in the situation, except that, while in the past it has been the duty of the Government to negotiate with Empire countries regarding the imports of sheep, mutton and lamb over a certain period, under the terms of the Order it will be left to the producers of the various Empire countries to meet together and decide what quantities they think ought to be imported, and to make recommendations to the Government, who will be expected to accept those recommendations. If I am wrong, perhaps the hon. Gentleman will correct me. If that is the correct interpretation, then, despite the fact that the Minister of Agriculture took a very prominent part in the discussions at Sydney, I am not sure that this is not a retrograde step. I can quite understand a body of producers meeting together for the purpose of determining how not to destroy their own market, but to allow a body of producers to determine what quantities of any foodstuffs we shall import is not only making a leap in the dark, but one in the wrong direction.

  1225
  The only other thing I should like to ask is this: Are the licences issued under the terms of this Order identical with those issued in the past, when so-called voluntary agreements had been entered into for imports of sheep, mutton and lamb for certain periods? Have the Government considered the possibility that when they enter into such arrangements with Empire countries for periods of three months, six months, or 12 months, as the case may be, the licences ought not to be issued to individuals but to the Governments, or, to put it another way, are the licences issued to importers transferable in any set of circumstances?
  7.32 p.m.
  Mr. W. Roberts: I am disappointed that we were not given a little more information about this proposed scheme. It is a new development with which the Minister of Agriculture has not been very much associated, yet we have had no explanation as to how the new scheme was to be worked. All we have been told to-day is that the negotiations have broken down through the inability of the Empire Meat Council to come to a unanimous decision. I feel that the House is entitled to be informed a little as to what the proposals are. The Empire Meat Council, I thought—I may be wrong—was representative of Governments, and not of the producers organisations themselves. If that is so, it raises the question, which has been already put, as to whether these licences are to be granted by the Council to individual importers or to the Governments of the countries concerned. There is another question. What is the total amount of mutton and lamb which is going to be allowed into this country? That has surely to be decided before the allocation of the total quantity of import is arrived at. We have had no information as to what that total quantity is to be. According to this Order, the Board of Trade are authorised to delegate authority to this Council; but we should be told what directions the Board of Trade are going to give, what indication the Government are going to give to the Council as to the quantity of imports of mutton and lamb that is to come into this country.
  I am not hopeful that this type of control will raise the price of mutton to the English farmer as much as some people seem to expect. My information is that
  1226
  New Zealand produce has maintained its price very well in the last year. I do not think that New Zealand lamb has come into this country in the last year in increased quantities—Australian lamb has. I understand that the price of New Zealand lamb has actually gone up in the wholesale markets in London during the past year. I would like to know whether, in those circumstances, any kind of calculation has been made as to what reduction of imports is intended, and what estimate has been made as to the effect of such a reduction on English mutton and lamb prices.
  I believe that the decreased price for English mutton and lamb during the last 18 months is due to the increased production, which has created a glut on the market. The decrease in the price has not been translated to an equal fall in the retail price to the consumer, and that bad marketing has affected the demand for English mutton and lamb. We have been considering a problem which is in some ways similar to this. A mere reduction of bacon imports without a bacon marketing scheme would not have solved the problem for the English pig producer Similarly, by a mere reduction of imports of mutton and lamb we shall not solve the British sheep producer's problem. There is one other small question that I would like to ask. I notice that tinned mutton and lamb and offals separated from the carcass are not to be covered by this proposal. It happens that the imports of these have gone up consider ably during the past year. Imports of tinned mutton and lamb have gone up by 107,000 cwts., and of offals by 6,000 cwts. That is a total increase of over 160,000 cwts., which is about one-third of the total increase in the imports during the year. How does this proposal deal with that, and for what reasons are these products excluded from the procedure laid down? The main point upon which we should like more information is as to what directions are to be given to the Empire Meat Council as to how licences are to be issued, and to whom are the licences to be granted when any decisions are arrived at?
  7.40 p.m.
  Mr. J. Morgan: I feel that this is one of the most dangerous proposals for the purpose of aiding agriculture that have been brought forward in this House for a long time. I say that sincerely. I

  1227
  cannot imagine the Board of Trade having, in fact, sponsored this except under pressure from the agricultural interests of the country. I do not want to be misunderstood; I am not getting up merely to carp and find difficulties. Take the position as it has been in regard to mutton and lamb in the last year. The assumption in the minds of farmers is that if you deal with imports you can in some automatic way improve the position of the home producer, who has passed through a very difficult time. There was an increase in the quantity of mutton brought into the country last year, but it kept its own price level throughout the year; in fact, there was a slight rise in the price of imported mutton at a time when mutton prices in this country were falling rapidly. The story of lamb is even more interesting, as was indicated by the hon. Member for North Cumberland (Mr. W. Roberts). The quantity of imported lamb declined by about 18,00o cwts., but it realised something like£260,000 more. It actually increased its price in the face of a falling demand for English lamb.
  What will happen if we begin to regulate imports of mutton and lamb? It is happening now with beef, and it is going to happen in regard to mutton and lamb. At the moment a certain reputation has been earned by the English, Scottish and Welsh farmers for certain kinds of lamb and mutton in their own market. If we regulate the imported article the importers—or the exporters in the countries concerned—will leave behind that kind of mutton and lamb which is of a lower quality, and will tend to bring into this country the high quality meats. That will take from the home farmer his high quality trade. To the extent that this happens—assuming that the farmer does nothing else to improve his own position—this tendency over the last year will show itself, and the imported article will tend to improve its price level while the home-produced article will tend to worsen in price.
  What is the problem of the home producer? He has in this last year produced a surplus, and for various reasons has been unable to market that surplus. He had a drought at the beginning of the year, he was forced on to the market in the summer with a very difficult season, and he could not hope to hold his price against the imported article under those
  1228
  conditions. Some machinery should be provided, not for the exporter from the Dominions to regulate supplies, but for the home farmer to regulate supplies. It was the surplus production of the home producer that created the problem, and one should apply remedies to the person and the area in respect of which the problem was created.
  Take another danger that lurks in this simple proposal. One knows the kind of people who deal in mutton and lamb in this country. They are among the most astute business men in the country. They have their interests consolidated; they can direct their interests in a given set of circumstances, so that they have, and will increasingly have under these powers, control over operations, against a diffused number of farmers all trying to find a market through various channels. What will they do to get over the difficulty of having to import under the quota basis? They may come to the President of the Board of Trade before long and suggest, as the curers have just done in the Bill we have been considering, that the whole thing be done by weight and not by carcase. You will find that all the best cuts are brought into the country and that all the worst cuts are left out of the country, and they will again be capturing the quality trade that is available in this country from the farmer.
  What is the suggestion which must be brought at this time into a discussion on this issue? What is the argument which has probably to be put before the people who have to assent to this policy for it to go through in the way that the Government would like? The inducement is being held out to them that if they can send less here for the same amount of money, why worry? They must at least be given a guarantee that they will get the same amount of money. The President of the Board of Trade is aware of the fact that they must be assured of at least the same income. Therefore they are being pressed to accept a proposal that will guarantee them as much money but for a less product. Where do the consuming interests come in, and why force them to give satisfaction to Denmark in this way? Is the consumer getting any satisfaction? There are in this country thousands of families who are unable to get bacon. They cannot get bacon although the same volume of money is being paid for bacon from overseas. We

  1229
  have driven bacon off the tables of thousands of homes by the system to which we have been committed in this way.
  I suggest that, before the Minister of Agriculture commits himself too closely to this idea of regulating products which are, in fact, maintaining price levels, he should not disturb the factors which actually keep the bottom to the market. In the last year it was the imported mutton and lamb that held the market for the British producer here at home. If it had been left to the British producer, bad as it was, he would have been worse off probably without it. What is the characteristic of the imported mutton and lamb? As far as New Zealand and Australia are concerned, it comes from two breeds of sheep alone, cross-breeds. You can go the whole length of New Zealand, as I have had the pleasure of doing, and also to Australia, and find only two breeds of sheep. In this country there are some 21 breeds of sheep, and a dozen types of sheep turn up in a single market and the butcher is incapable o f doing a certain kind of trade or even of competing at all for some types of lamb and mutton available in the market. It is not his class of trade. There is no standardisation about the supply of mutton and lamb in this country. It is the overwhelming characteristic of the exporting countries that they fix their standards so that they fit into the requirements of the trade in such a way as to get them their market.
  I would rather hope, as my hon. Friend suggested, that this Order would be withdrawn for the time being, but I am also not disposed to oppose the Order. I should like to be satisfied particularly that it was not to be left as it is, but that the farmer himself would take steps to face up to a situation which he cannot remedy by merely trusting to the regulation of imports in this way. He is going to put a premium on the imported article and at the same time he is taking no real steps to help his market or to defend it or to remove his surplus. His problem is to remove his surplus, a rid some kind of machinery ought to be erected to see that the surplus is disposed of in a satisfactory way. There are plenty of people who can do with it, and therefore he could improve his own position. I do not feel that he is trusting to this type of Measure to improve his posi-
  1230
  tion in regard to mutton and lamb; actually in the long run, he will only worsen it and give guarantees to his competitors.
  7.51 p.m.
  Lieut.-Colonel Heneage: I hope very much that the Government will not withdraw the Order as suggested by Members of the Opposition. The sheep industry, which has been very badly hit in the constituency which I have the honour to represent, will be glad to know that the Government have been taking this line. I realise that the Import Order is actually in operation, and it would have a very bad effect if, at the request of the Opposition, the Order were to be withdrawn. The arguments of the Opposition apparently tended to show that the stopping of imports, especially if they should come from New Zealand, from which there is an importation of high-class mutton and lamb, would not improve the lot of the British farmer. I do not at all agree. They also say that there are too many breeds of sheep. That may or may not be true, but it was not until the restriction of imports of bacon took place that it was possible to obtain a good breed of pig in this country. The breeds of pigs, so far as bacon is concerned, have improved out of all recognition, and I believe that that will also be true in regard to sheep. I congratulate the Government upon taking this step, and I hope that they will not be alarmed if they do not get a unanimous decision of the Empire Council, which, I think is almost impossible. In Lincolnshire we all depend upon the new Minister of Agriculture to play his part, and I hope that the President of the Board of Trade will also play his part. Therefore I certainly welcome this Import Order.
  7.53 p.m.
  Mr. Cross: The hon. Gentleman the Member for Don Valley (Mr. T. Williams) asked me whether my right hon. Friend had the power to withdraw this Order.. There is no power to withdraw the Order. As I understand the position, the Order remains in force for a limited number of days, and I think that the hon. Member realises very well that it then runs out unless in the meantime it has the sanction of the House. I am hoping that within a comparatively few days it will be

  1231
  possible to announce the decision of the Government in this matter. The Order will remain in being in the meantime to enable the Government to take whatever action they desire. The hon. Member put to me a number of questions on the subject of licences. The licences remain the same with this difference. There have to be new licences in so far as Dominion imports are concerned. As regards foreign countries licences are issued to importers, and so far as the Dominions are concerned licences are issued to the Customs permitting the imports from the Dominions on the understanding that at a later stage the latter would co-operate if necessary in the administration of quotas from the exporting end. It is purely a matter of administrative convenience, as I understand that on some occasions it proves to be better and more convenient to control the imports from the Dominions' end.
  The hon. Gentleman the Member for North Cumberland (Mr. W. Roberts) asked me one or two questions concerning the total amount of mutton and lamb which it was proposed to import. He will appreciate that they are questions which I am not in a position to answer because the Government have not yet come to a decision on the matter. He also asked why tinned mutton and lamb are not included in the quota, and I am informed that the reason is that they are not found to compete with other forms of mutton and lamb, and consequently do not affect the stability of the market. Hon. Members have also raised questions as to the object of having any quota of imports at all. Our main object in imposing quotas would be to secure the stability of the market for mutton and Iamb in so far as imports affect the market. Imports are not the only factors affecting the market for mutton and lamb in this country. The price of wool and the price of by-products are certainly also very important factors. The object, therefore, of quantitative regulation of imports is to make a contribution to the stability of the market at home while at the same time bearing in mind the interests of consumers. I submit to the House that, in the event of a quota being imposed, the knowledge that imports are to be limited eliminates a certain possible source of lack of confidence.
  Question put, and agreed to.
  Resolved,
  "That the Sheep, Mutton and Lamb (Import Regulation) Order, 1939, dated the 4th day of January, 1939, made by the Board of Trade under the Livestock Industry Act, 1937, a copy of which was presented to this House on the 31st day of January, 1939, be approved."

IMPERIAL TRADE AGREEMENTS.

  OTTAWA AGREEMENTS (IMPORTATION OF MEAT) AMENDMENT ORDER, 1939.
  7.58 p.m.
  Mr. Cross: I beg to move:
  "That the Ottawa Agreements (Importation of Meat) Amendment Order, 1939, dated the 4th day of January, 1939, made by the Board of Trade under Section 7 of the Ottawa Agreements Act, 1932, a copy of which was presented to this House on the 31st day of January, 1939, be approved."
  This Order is only a corollary to the Order which we have just passed. Hon. Members will appreciate that the last Order makes the importation of live sheep, mutton and lamb into the United Kingdom whether Dominion or foreign subject to licence, and the meat Order of 1932, which covers frozen mutton and lamb from foreign countries, becomes redundant. The effect of the Amendment Order is to exclude frozen mutton and frozen lamb from the operations of the original Order.
  Question put, and agreed to.
  Resolved,
  "That the Ottawa Agreements (Importation of Meat) Amendment Order, 1939, dated the 4th day of January, 1939 made by the Board of Trade under Section 7 of the Ottawa Agreements Act, 1932, a copy of which was presented to this House on the 31st day of January, 1939, be approved."

IMPORT DUTIES (IMPORT DUTIES ACT, 1932).

  EGGS NOT IN SHELL.
  7.59 p.m.
  Mr. Cross: I beg to move,
  "That the Import Duties (Substitution) (No. 1) Order, 1939, dated the sixteenth day of January, nineteen hundred and thirty-nine, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the thirty-first day of January, nineteen hundred and thirty-nine, be approved."
  This Order relates to eggs not in shell. Goods which are neither on the free list nor are chargeable to additional duty are liable, as the House is aware, to a 10 per cent. ad valorem duty unless they are

  1233
  liable to Key Industry duty or budgetary duty. In some cases, however, it is more convenient that the duty should be charged upon weight or some other measure of quantity instead of on value. There is power to make an order, called a Substitution Order on the recommendation of the Import Duties Advisory Committee substituting specific for ad valorem duties. The specific duty must be calculated so as to work out at approximately 10 per cent. ad valorem. If there is a change in the general level of values the Import Duties Advisory Committee can recommend a change in the specific rates of duty but they can only do that at intervals of at least six months. These powers are under the Finance Act, 1933. A Substitution Order was made in May, 1934, imposing a scale of specific duties on eggs not in shell. This covers the various forms of preserved eggs whether liquid or dried, namely, eggs liquid or frozen, including glycerinated eggs, dried whole eggs, dried yolk and dried albumen. These commodities are used in the bakery and confectionery trade.
  The present Order revokes these specific Egg Duties and puts in their place the general 10 per cent. ad valorem Duty. The reason is that the specific duty had ceased to be appropriate to the values of the imports, and the market conditions of the present time are too unstable to permit of fixing new specific duties in place of the old one. This instability is due very largely to the war in China, from which country most of these imports come. Speaking generally, the prices of imported preserved eggs have risen, and consequently the duties have become too low. The Order is purely a matter of machinery, to substitute one form of duty for another, in order that the appropriate amount of duty may be collected.
  Question put, and agreed to.
  Resolved,
  "That the Import Duties (Substitution) (No. 1) Order, 1939, dated the sixteenth day of January, nineteen hundred and thirty-nine, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the thirty-first day of January, nineteen hundred and thirty-nine, be approved."

INSULATED IRON OR STEEL STAPLES.
8.1 p.m.
Mr. Cross: I beg to move,
"That the Additional Import Duties (No. so) Order, 1938, dated the twenty-first day
1234
of December, nineteen hundred and thirty-eight, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-first day of December, nineteen hundred and thirty-eight, be approved."
This Order relates to insulated iron or steel staples. This is a very small industry, but there is no reason why on that account it should not receive protective treatment. The staples are ordinary coppered steel staples, fitted with insulating fibre, and are largely used in the electrical and wireless trades. The manufacture of the staples is carried out in this country by two firms, which are keen competitors one with the other. In the past the home market was mainly in the hands of German and American firms, but the British firms brought their machinery and methods to such a pitch of efficiency that they were able to capture practically the whole of the home trade. That was at a time prior to the import duty. That condition continued until the trade became subject to severe Japanese competition a few years ago.
The House will appreciate that I cannot disclose the individual returns of firms, but in 1937 the sales of the home manufacturers in this country fell by 7½ per cent. and last year they fell by a further 9½ per cent. below even the figure in 1937. With regard to imports, separate figures have been given since 1936 and are published in the Appendix. The imports from Japan in 1937 were five times as high as in 1936. The average value in that year was about 11d. per 1,000 staples, exclusive of duty. Imports fell by about one-half last year, which was probably partly caused by the knowledge that an application for increased duties had been made and was under consideration, and doubt as to whether it would be granted and as to the date upon which such additional duty if granted would become effective. Nevertheless, the imports in 1938 were twice as large as in 1936 and the Japanese price averaged about 11d. per 1,000 staples. There has been a falling off in exports, as stated in the recommendation. It is clear from the average values of imports and from quotations which have been seen by the Import Duties Advisory Committee, that Japanese staples are now being consigned to this country at something under Is. per 1,000, and in order to bridge the gap between this price and the reasonable

1235
home selling price, a duty of at least 1s. 8d. per 1,000 is required. The Import Duties Advisory Committee recommend accordingly. The home manufacturers, they advise, are well able to meet all the demands of the home market. They are efficient, they have modern machinery, and their prices are reasonable in relation to costs. The Import Duties Advisory Committee are satisfied that the duty they recommend will not have any adverse effect upon any other industry.
8.6 p.m.
Mr. Noel-Baker: I should like to make a few observations on this Order and also upon the Order which follows. Both these Orders seem to us to be open to many of the objections we have urged in the past in relation to other similar Orders. They are part of a policy which we think has been ineffective for the purpose of curing unemployment or of bringing efficient organisation into British industry. The memorandum on the weft pile velvets industry gives some evidence in support of that view. We do not, however, propose to vote against these Orders, because of the country of origin of the great majority of the imports with which they deal. Virtually, as the Minister said, the competition which it is desired to prevent comes from Japan.
The Order now under discussion affects a not very large interest, only£1,456 worth of imports in 1937, which was a peak year, but it involves a very great principle. The Parliamentary Secretary has given the least convincing statement in support of the measures to effect a reduction of the sales of Japanese goods in this country. If he had come to the House and stated frankly that these imports are produced by sweated labour and that we want to boycott them as part of our policy of dealing with sweated labour, we should have had much more sympathy with the proposal. If he had said that this is a measure of retaliation against the general treatment now being given to British interests in the Far East by Japan, we should have had more sympathy. If he had spoken of the oil interests of Manchuria and of the unfair treatment which American, British and Dutch oil interests in the rest of China were receiving from Japan, we should have been more interested. An expert wrote the other day that:
1236
"Fair competition and equal opportunity have disappeared wherever the Japanese flag has recently been hoisted over Chinese territory."
At Question Time there have been many inquiries from supporters of the Government about the discrimination now being made by the Japanese against British trade and shipping in the Yangtse and the Pearl rivers. We have heard at Question Time of the great damage that has been done by the Japanese forces in China to British interests by looting, damage in respect of which the Government have put in claims for£250,000, which are unpaid.
The reason why we attach importance to these small Orders is of a wider and more fundamental character than the mere subject of the Orders. We support them because the imports against which they are directed come from a country which is engaged in aggression, and because that aggression is financed by imports such as those which our country is now taking from the aggressor country. We are apt to forget the character of the Chinese war. An Englishman, just returned from China, has written:
"It is probable that the quietest day on the Far Eastern fronts is bloodier than the worst day in Spain."
Mr. Deputy-Speaker (Colonel Clifton Brown): It is not open to the hon. Member on this Order to discuss the character of the Chinese war.
Mr. Noel-Baker: I realise that, and I have said all that I wish to say on that subject. I am, however, explaining the reasons why we are not opposing these two Orders. It is germane to the argument I am putting forward to explain that Japan could not conduct her aggression unless she was able to export her manufactured goods to other countries.
Notice taken that 40 Members were not present; House counted, and 40 Members being present—
Mr. Noel-Baker: I was arguing that Japan is absolutely dependent on the importation of raw materials, oil, minerals and machinery from abroad, without which she could not possibly conduct war. She can buy these goods only from abroad if she can export her manufactured goods to other countries. We have urged from the beginning that there

1237
should have been a general international boycott of Japanese exports. We said that if there had been general agreement on that matter, Japanese aggression would end. I do not think that anyone would say that Japan could have resisted such a boycott for 18 months. However, that policy has not been adopted. There has, however, been a private boycott which has been effective in a very considerable degree. It has already reduced the Japanese gold reserve from 411 metric tons in January, 1937, to 232 in July, 1938, and has had a very serious effect on her position by curtailing imports of raw materials. We say that such a policy could quite safely have been carried out. I hope the Government will come to share those views, because we know they regard the situation in China with great anxiety. It is because these Orders are, in practice if not in intention, a tiny measure of unilateral economic sanction that we do not oppose them.
Question put, and agreed to.
Resolved,
"That the Additional Import Duties (No. 10) Order, 1938, dated the twenty-first day of December, nineteen hundred and thirty-eight, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-first day of December, nineteen hundred and thirty-eight, be approved."

WEFT PILE VELVETS.
8.14 p.m.
Mr. Cross: I beg to move:
"That the Additional Import Duties (No. 11) Order, 1938, dated the twenty-ninth day of December, nineteen hundred and thirty-eight, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the thirty-first day of January, nineteen hundred and thirty-nine, be approved."
This Order renews for one year the existing specific duty of 10d. per square yard on cut weft pile fabric made wholly or partly of cotton. This material consists of cotton velvet or velveteen and is used for dresses and other purposes. The industry is carried on by an old established branch of the Lancashire cotton industry. It is a highly specialised industry and gives very large employment of labour per unit of output. A specific duty was rendered necessary early in 1936, not because of the reasons suggested by the hon. Member for Derby (Mr. Noel-Baker) but for another reason which he deplored namely that Japanese goods had appeared on our market at
1238
prices against which the British manufacturer could not compete. Moreover, the home market was also diminishing owing to changes in fashion and the competition of new manufactures of other kinds.
When the duty was first imposed the Committee took the view that the industry could improve its competitive power by reorganisation and the imposition and the renewal of the duty was on the understanding that there should be closer co-operation among the four sections of the industry—namely, the weaving, cutting, dyeing and merchanting. This view was fully shared by the bulk of the concerns in the industry and fair progress was made in the year 1937, a more prosperous year, when the industry felt itself in better fettle. Four sectional associations were formed to cover the four sections together with a co-ordinating Velvet Council. These units have been functioning regularly. At the end of 1937 the Import Duties Advisory Committee, appreciating the progress that had been made, recommended a renewal of the duty for a further year in order to afford further time for con tinned reorganisation with the object of achieving more orderly marketing and more economic production.
But in 1938 there was a severe setback in the cotton industry, and in the cotton velvet industry, under the pressure of competition from manufacturers who are outside the organisation; prices were cut and the voluntary scheme of price control broke down. In these circumstances it was impossible to make progress in reorganisation, and the Import Duties Advisory Committee came to the conclusion that it would be undesirable to remove the duty without considerable notice in view of the depressed condition of the industry. They held this view the more strongly since it was the evident desire of the industry to establish closer co-operation, as and when circumstances made it possible for them to do so.
Mr. Alexander: Who are the manufacturers outside?
Mr. Cross: There is one who is a regular weaver of velvet cloth and a number of other concerns who have velvet looms which they do not run ordinarily but which they run the moment there is any improvement in price. In the circumstances I have described the com-

1239
mittee recommend an extension of the duty to the end of the current year and they declare in their recommendation their intention to examine the position with a view to obviating the need for asking for further extensions of the duty. In particular, if the present enabling Bill proposals become law, a sectional scheme could be brought forward by this industry and this would greatly facilitate the avoidance of further extensions of the duty. It only remains for me to say that the duty has been effective in excluding Japanese products. The imports are not separately shown but they are extremely small, and at the present time prices, whilst at one moment a little higher and at another moment a little lower, are in general at the same level as before the duty was imposed.
Question put, and agreed to.
Resolved,
"That the Additional import Duties (No. 11) Order, 1938, dated the twenty-ninth day of December, nineteen hundred and thirty-eight, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the thirty-first day of January, nineteen hundred and thirty-nine, be approved.'
The remaining Orders of the Day were read, and postponed.

ADJOURNMENT.
Resolved, "That this House do now adjourn."—[Major Herbert.]
Adjourned accordingly at Twenty Minutes after Eight o' Clock.

  GAMING MACHINES (PROSECUTIONS).
  GAMING MACHINES (PROSECUTIONS).
  MUNICIPAL AND COUNTY ELECTIONS.
  MUNICIPAL AND COUNTY ELECTIONS.
  REFUGEES.
  REFUGEES.
  MURDERS AND DEATH SENTENCES.
  MURDERS AND DEATH SENTENCES.
AGRICULTURE.
  LAND FERTILITY SCHEME.
  LAND FERTILITY SCHEME.
  ALLOTMENTS
  ALLOTMENTS
  PIGS
  PIGS
  MILK.
  MILK.
  LIVESTOCK INDUSTRY ACT.
  LIVESTOCK INDUSTRY ACT.
  VETERINARY EDUCATION
  VETERINARY EDUCATION
  COMMODITIES (COST OF PRODUCTION).
  COMMODITIES (COST OF PRODUCTION).
  FOOT-AND-MOUTH DISEASE.
  FOOT-AND-MOUTH DISEASE.
  WHEAT AND BARLEY.
  WHEAT AND BARLEY.
  SHEEP INDUSTRY.
  SHEEP INDUSTRY.
  FISHING INDUSTRY.
  FISHING INDUSTRY.
PUBLIC ASSISTANCE.
  OLD AGE PENSIONERS.
  OLD AGE PENSIONERS.
  WORKMEN'S COMPENSATION RECIPIENTS.
  WORKMEN'S COMPENSATION RECIPIENTS.
  VOLUNTARY CONTRIBUTORY PENSIONS
  VOLUNTARY CONTRIBUTORY PENSIONS
  POOLE SANATORIUM SCHEME (MIDDLESBROUGH)
  POOLE SANATORIUM SCHEME (MIDDLESBROUGH)
  HOSPITALS (EMERGENCY LIGHTING)
  HOSPITALS (EMERGENCY LIGHTING)
  DIPHTHERIA IMMUNISATION.
  DIPHTHERIA IMMUNISATION.
  SPAIN.
  SPAIN.
  WAR RISKS (COMPENSATION AND INSURANCE)
  WAR RISKS (COMPENSATION AND INSURANCE)
  NEW INDUSTRIES (FINANCIAL AID)
  NEW INDUSTRIES (FINANCIAL AID)
  FOOD, DRINK AND TOBACCO (REVENUE)DUTIES
  FOOD, DRINK AND TOBACCO (REVENUE)DUTIES
  AIR-RAID PRECAUTIONS
  AIR-RAID PRECAUTIONS
  NATIONAL VOLUNTARY SERVICE.
  NATIONAL VOLUNTARY SERVICE.
  NAVAL AND MILITARY PENSIONS AND GRANTS
  NAVAL AND MILITARY PENSIONS AND GRANTS
  OFFICIAL SECRETS ACT, 1920 (PROSECUTIONS)
  OFFICIAL SECRETS ACT, 1920 (PROSECUTIONS)
  ADMIRALTY DEPOT, CROMBIE (WORKER'S DISMISSAL)
  ADMIRALTY DEPOT, CROMBIE (WORKER'S DISMISSAL)
  ROSYTH GARDEN CITY TENANTS
  ROSYTH GARDEN CITY TENANTS
  POST OFFICE SAVINGS BANK (STAFF)
  POST OFFICE SAVINGS BANK (STAFF)
  AIRCRAFT INDUSTRY (AERONAUTICAL ENGINEERS)
  AIRCRAFT INDUSTRY (AERONAUTICAL ENGINEERS)
  BRIDGEND MUNITION WORKS (LABOUR).
  BRIDGEND MUNITION WORKS (LABOUR).
UNEMPLOYMENT.
  ASSISTANCE (WORKMEN'S COMPENSATION RECIPIENTS)
  ASSISTANCE (WORKMEN'S COMPENSATION RECIPIENTS)
  ORKNEYS TUNNEL.
  ORKNEYS TUNNEL.
  TEAM VALLEY TRADING ESTATE.
  TEAM VALLEY TRADING ESTATE.
  POST OFFICE SAVINGS BANK ADVANCES.
  POST OFFICE SAVINGS BANK ADVANCES.
  WESTERN ISLES (ASSISTANCE ALLOWANCES).
  WESTERN ISLES (ASSISTANCE ALLOWANCES).
  BENEFIT (JOHN MEEK, HAGGS, STIRLINGSHIRE).
  BENEFIT (JOHN MEEK, HAGGS, STIRLINGSHIRE).
EDUCATION.
  BROADCASTING FOR SCHOOLS.
  BROADCASTING FOR SCHOOLS.
  HIGHWORTH, WILTSHIRE.
  HIGHWORTH, WILTSHIRE.
  SPREAD-OVER HOLIDAYS (EXAMINATIONS).
  SPREAD-OVER HOLIDAYS (EXAMINATIONS).
  STAFFORDSHIRE.
  STAFFORDSHIRE.
  SECONDARY AND POST-PRIMARY EDUCATION (COMMITTEE'S REPORT).
  SECONDARY AND POST-PRIMARY EDUCATION (COMMITTEE'S REPORT).
  BLACK-LIST SCHOOLS, WALES.
  BLACK-LIST SCHOOLS, WALES.
  PART III AUTHORITIES.
  PART III AUTHORITIES.
  SCHOOL MEALS.
  SCHOOL MEALS.
  CLINICS.
  CLINICS.
  SCHOOL CLASSES, WALES.
  SCHOOL CLASSES, WALES.
  BRIDGEND (GIRLS' SCHOOL).
  BRIDGEND (GIRLS' SCHOOL).
  TEACHERS (UNEMPLOYMENT).
  TEACHERS (UNEMPLOYMENT).
  "MEIN KAMPF" (CIRCULATION IN INDIA).
  "MEIN KAMPF" (CIRCULATION IN INDIA).
  OMNIBUS PASSENGERS (TWELVE-JOURNEY FARES).
  OMNIBUS PASSENGERS (TWELVE-JOURNEY FARES).