Sitting of 12 July 1939

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

PRIVATE BUSINESS.
Provisional Order Bills [Lords] (No Standing Orders applicable),
Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, brought from the Lords and referred on the First Reading thereof, no Standing Orders are applicable, namely:
Ministry of Health Provisional Order Confirmation (Bethesda) Bill[Lords]
Ministry of Health Provisional Order Confirmation (Bradford) Bill [Lords].
Bills to be read a Second time tomorrow
Senior Public Elementary Schools (Liverpool) Bill (Standing Orders applicable thereto not complied with),
Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred pursuant to the Order of the House of the 3rd day of July, the Standing Orders, which are applicable thereto, have not been complied with, namely:
Senior Public Elementary Schools (Liverpool) Bill.
Report referred to the Select Committee on Standing Orders.
Stroud District Water Board, etc., Bill [Lords,]
Read the Third time, and passed, with Amendments.

ORAL ANSWERS TO QUESTIONS.

  ANGLO-FRENCH-RUSSIAN CONVERSATIONS.
  Mr. Dayasked the Prime Minister whether, in view of the negotiations proceeding between His Majesty's Government and the Governments of France and Russia, he can state whether the Franco-Soviet Treaty of Mutual Assistance of 2nd May, 1935, the Franco-Rumanian Treaty of Friendship of 10th June, 1926, and the Franco-Yugoslav Treaty of Friendly Understanding of 11th November, 1927, are still in existence without alterations?
  The Under-Secretary of State for Foreign Affairs (Mr. Butler): So far as His Majesty's Government are aware, the answer in each case is in the affirmative.
  Mr. Day: Can the right hon. Gentleman say whether any inquiries have been made or whether any suggestions have been made as to alterations?
  Mr. Butler: No, Sir.
  Mr. Vyvyan Adamsasked the Prime Minister whether he has any statement to make on the Anglo-Russian negotiations for a common front against aggression?
  Mr. Noel-Bakerasked the Prime Minister whether he will make a statement concerning the negotiations with the Government of the Union of Soviet Socialist Republics for a treaty of mutual assistance against aggression?
  Mr. Neil Macleanasked the Prime Minister whether he can make any definite statement of the progress of the British Soviet discussions; and, if not, whether there is any possibility of a time-limit being set to these protracted negotiations?
  The Prime Minister (Mr. Chamberlain): I have at present nothing to add to the statement I made on this subject two days ago.
  Mr. Noel-Baker: In view of the fact that these negotiations have now being going on for three and a-half months, and in view of the fact that in the early weeks at least the Russian Government showed very great willingness to come to some

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  agreement, will His Majesty's Government perhaps consider the early publication of all the proposals put forward on both sides, in order that this House and public opinion may judge where the responsibility lies?
  The Prime Minister: Probably before we have done there will be publication of the proposals that have been put forward, but I do not think that at the present time it would be desirable to do anything which might lead to further recriminations.
  Mr. Maclean: Is it not the case that the public in this country are very much concerned as to who is to blame for these protracted negotiations, and will the right hon. Gentleman give a chronology of the negotiations that have taken place so that any blame can be attached to the proper quarter?
  The Prime Minister: I do not think that while negotiations are in progress it would be a good thing to enter into arguments as to who is to blame.
  Mr. Noel-Baker
  Sir William Davison: On a point of Order. Would you ask the hon. Member's attention to be drawn to the fact that there are other Members in the House besides himself who have a number of questions on the Paper, and that he takes an undue amount of the time of the House?
  Mr. Noel-Baker: May I, with great respect, in view of the importance of the matter, ask the Prime Minister whether he will consider publication, not with a view to stimulating recriminations, but in order that public opinion might assist towards a solution of this problem, upon which the peace of the world probably depends?
  The Prime Minister: No, Sir.

  FAR EAST (SITUATION).
  Mr. Dayasked the Prime Minister whether he has had a report of the arrest on Sunday, 2nd July, of Mr. E. T. Griffiths, second mate of the British steamer "Yochow," in the Japanese concession at Tientsin; and whether he can state the reason given by the Japanese authorities for this arrest?
  Mr. Butler: Mr. Griffiths was arrested in the ex-German Concession at Tientsin on 2nd July on a charge of insulting a Japanese sentry. Representations were made by His Majesty's Consul-General, and Mr. Griffiths was released on the morning of 7th July.
  Mr. Day: Can the right hon. Gentleman say whether Mr. Griffiths has been asked to hold himself in readiness for further examination?
  Mr. Mander: If the British Government cannot protect British subjects in the Far East, had they not better make way for some Conservative Government that can protect them?
  Mr. Noel-Bakerasked the Prime Minister whether His Majesty's Government have yet received any reply from the Japanese Government to their demands for the release of the British military attach è, Colonel Spear?
  Mr. Butler: No, Sir, but His Majesty's Ambassador is continuing his efforts to obtain Colonel Spear's release.
  Mr. Arthur Henderson: Is it not quite contrary to the accepted views in regard to diplomatic immunity that this British military attaché should even be held under arrest by the Japanese?
  Mr. Butler: That might be taken to be the case.
  Mr. Wedgwood Benn: Is it true that Colonel Spear is to be submitted to court-martial?
  Mr. Butler: We have seen a statement made by a Japanese spokesman, and His Majesty's Ambassador has been instructed immediately to find out whether this statement represents the official view of the Japanese Government.
  Mr. Shinwell: Why cannot the British Government arrest one of the Japanese representatives in this country?
  Sir Archibald Sinclair: Are we to understand that the British Government propose to enter into diplomatic negotiations, with a Government while the military attaché of His Majesty is being threatened with court-martial? Is not that in very striking contrast with the behaviour of His Majesty's Government when certain engineers in Moscow were arrested?
  Mr. Butler: We must first find out whether the statements are, in fact, as reported.
  Mr. Kirkwood: In the event of your finding out what the statements are —
  Mr. Speaker

  GERMANY (ESPIONAGE CHARGES).
  Mr. Arthur Hendersonasked the Prime Minister whether his attention has been drawn to the official charges of espionage made by the German Government against His Majesty's Government in general, and the former British Consul-General in Vienna in particular; and whether he has any statement to make in relation to such charges?
  Mr. Butler: My Noble Friend has seen in the German Press certain charges of a general character which he strongly repudiates. I have nothing to add to my reply to my hon. Friend the Member for East Lewisham (Sir A. Pownall) on 26th June about the former British Consul-General in Vienna.
  Mr. Henderson: Is it not rather extraordinary that the German Government should make these statements in their official Press without making any official representations to His Majesty's Government?
  Mr. Butler: It is very much to be regretted.
  Sir A. Sinclair: Are His Majesty's Government asking the German Government to formulate the charges?
  Mr. Butler: I am not aware whether the right hon. Gentleman is referring to the general charges or to this particular instance?
  Sir A. Sinclair: To this particular officer who has been held up to opprobrium.
  Mr. Butler: I referred to this particular officer in my original answer, and I stated that there is no reflection on the Consul-General, whose character and work are held in the highest esteem.
  Sir A. Sinclair: But the German Government have made a reflection. Are the British Government asking the German Government to formulate their charges?

  DANZIG.
  Mr. Manderasked the Prime Minister whether he will make it clear that the bringing into Danzig by Germans, contrary to Statute, of artillery capable of threatening Gdynia would be regarded by Great Britain, France and Poland as an act of aggression, and would be resisted?
  The Prime Minister: I have nothing to add to the full statement which I made on 10th July setting forth the attitude of His Majesty's Government towards the Danzig question.
  Mr. Mander: Is the Prime Minister able to say whether he is satisfied that artillery of this nature has not so far reached Danzig?
  The Prime Minister: Perhaps the hon. Gentleman will put that question down.

  AERIAL WARFARE (CIVIL POPULATION).
  Mr. A. Hendersonasked the Prime Minister whether he can now make a statement on the survey recently carried out by Departments of His Majesty's Government into the question of the aerial bombing of civilian populations in time of war; and whether his attention has been drawn to the proposals recently made by ex-President Hoover for preventing such bombings?
  Mr. Butler: In reply to the first part of the question, I have nothing to add to the answer given by my right hon. Friend the Chancellor of the Duchy of Lancaster to the hon. Member for West Leyton (Mr. Sorensen) on 14th June. The answer to the second part is in the affirmative.
  Mr. Henderson: Is it not a fact that this survey was first announced in February last year, nearly 16 months ago, and is it not time that the Government were in a position to give some information to the House on this matter? How are they getting on with this survey?
  Mr. Butler: My right hon. Friend the Chancellor of the Duchy of Lancaster gave several reasons why there has been some delay in making this survey. I would refer the hon. and learned Member to the statement of principle made by His Majesty's Government on this subject at the last meeting of the League Assembly, in September.
  Mr. Henderson: In view of the explanation now put forward, do not the Government consider it desirable immediately to get into contact with other Governments, with a view, if possible, to securing general agreement as to the necessity of preventing the bombardment of the civilian population?
  Mr. Butler: The view as to such desirability is, I am sure, shared by every Member of this House, but it is necessary to await the conclusion of this survey before making any further statement.
  Mr. Henderson: When is the survey likely to be concluded?
  Mr. Butler: I hope, as soon as circumstances permit.

  BRITISH SUDAN (INTERNED ITALIAN SOLDIERS).
  Mr. Ammonasked the Prime Minister the number of Italian soldiers who have been, or are, interned in the British Sudan owing to their having crossed the border from Abyssinia as a result of the fighting during the past six months?
  Mr. Butler: My Noble Friend has asked His Majesty's Ambassador in Cairo to furnish him with a report on this matter.

  LORD PERTH (EMOLUMENTS).
  Mr. Bellengerasked the Prime Minister why the emoluments to be drawn by Lord Perth in his present office exceed the salary of his old office as His Majesty's Ambassador?
  Mr. Butler: Lord Perth's total emoluments in his present office are appreciably less than those which he received in Rome.
  Mr. Bellenger: Will the right hon. Gentleman say what was the salary enjoyed by Lord Perth, as I asked in the question?
  Mr. Butler: The salary of Lord Perth in Rome was £ 2,500. In addition, he received frais de représentation which amounted to a considerable sum.
  Mr. Bellenger: Will the right hon. Gentleman say whether, in basing Lord Perth's salary, not only his ordinary salary of £ 2,500 a year was taken into account, but these additional emoluments
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  to which the right hon. Gentleman has just referred?
  Mr. Butler: All those considerations were borne in mind when Lord Perth's present emoluments were considered and decided.
  Captain Alan Graham: Is not the work achieved more important than the salary?

  EX-GERMAN CONSUL, LIVERPOOL.
  Mr. Kirbyasked the Prime Minister whether Herr Walther Reinhardt, formerly German Consul-General in Liverpool, has yet left this country?
  Mr. Butler: Yes, Sir.

  RAW MATERIALS (DISTRIBUTION).
  Mr. N. Macleanasked the Prime Minister whether any discussions are taking place between representatives of Britain and France and representatives of the Axis Powers with a view to reaching an agreement on the distribution of raw materials?
  Mr. Butler: No, Sir.

  ANGLO-JAPANESE TREATY.
  Mr. N. Macleanasked the Prime Minister whether the terms of the Anglo-Japanese Treaty, now in operation, have been published; and when they were submitted to Parliament for ratification?
  Mr. Butler: I presume that the hon. Member refers to the Anglo-Japanese Treaty of Commerce and Navigation signed in London on 3rd April, 1911. The treaty was presented to Parliament in April, 1911, and published in June, 1911.
  Mr. Maclean: May I point out, on a point of Order, that the Minister is under a misunderstanding? I am not referring to the Treaty of 1911, but to the Treaty that was concluded after the Washington Conference in 1921. Can the right hon. Gentleman give me any particulars regarding that, as that is the Treaty that is now in operation?
  Mr. Butler: The presumption upon which I based by answer was with regard

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  to the Treaty of 1911. If the hon. Member will put down another question, I will give him an answer about the Treaty of 1921.
  Mr. Maclean: Are we to understand that the whole diplomatic policy of this Government is based on the Treaty of 1911

  ROYAL AIR FORCE.

    CONTRACT, GLASGOW.
    Mr. J. J. Davidsonasked the Secretary of State for Air what firm submitted the lowest tender for No. 1 contract at the Rolls-Royce works, Hilling-ton, Glasgow; whether the lowest tender was accepted; and whether steps will be taken by the Air Ministry to maintain the cost tendered?
    The Secretary of State for Air (Sir Kingsley Wood): The lowest tender was submitted by Messrs. Sir Lindsay Parkinson and Company, Limited, and has been accepted. In regard to the last part of the question, the firm are bound under the contract to complete the work for the sum tendered.
    Mr. Davidson: Is the right hon. Gentleman aware that the firm already, under a previous contract, undercut all other firms and after a month had the contract torn up? Will he see that this is avoided with regard to this contract?
    Sir K. Wood: If the hon. Gentleman puts a question down with regard to the form of contract I will gladly answer it.
    Mr. Davidson: There is one down.

    EDALE (STEEL WORKS PROPOSAL).
    Mr. Marshallasked the Secretary of State for Air whether the proposal by a Sheffield firm to build a steelworks at Edale has now been abandoned; and whether he can assure the House that the Government have no intention of reserving the site for a Government factory?
    Sir K. Wood: The proposal has been abandoned by the firm in question, and my Department has no intention of reserving the site for Air Ministry purposes.

    MARRIAGE ALLOWANCES.
    Mr. T. Smithasked the Secretary of State for Air whether, as is the case
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    with the Militia, marriage allowances are paid to men in the Royal Air Force who are 20 years of age or over?
    Sir K. Wood: Yes, Sir.
    Mr. Smith: Has this information been conveyed to the Royal Air Force?
    Sir K. Wood: I believe so.
    Mr. Smith: Thank you.

    BIRTH CERTIFICATES.
    Mr. Silkinasked the Secretary of State for Air whether he is aware that it is the practice for persons desiring to join the Air Force who have not a birth certificate available to be charged 3s. 7d. a copy if they obtain it at Somerset House, or 5s. Id. if it is obtained from the local registrar of births, deaths, and marriages; and whether, in view of the hardship involved in the case of persons 'who are unemployed or of limited means, he will take steps to enable persons volunteering for the Air Force to obtain a copy of their birth certificate without charge?
    Sir K. Wood: Verification of the date of birth of any man desiring to enlist in the Royal Air Force, Royal Air Force Volunteer Reserve or Auxiliary Air Force can be obtained without charge by the recruiting officer from the General Register Office. The second part of the question does not, therefore, arise.
    Mr. Silkin: Is the right hon. Gentleman aware that I have in my hand a letter in which the sum of 5s. 7d.has been demanded for a certificate for this purpose? Will he look into the matter and see that it is not repeated?
    Sir K. Wood: Yes, Sir. Perhaps the hon. Member will let me have the letter and I will make immediate inquiries.

    SEALAND STATION (FOOD SUPPLY).
    Mr. F. Andersonasked the Secretary of State for Air whether he will give a fortnight's normal menus for the food supplied to men of the Royal Air Force at Sealand aerodrome; and whether any complaint has been received with regard to the supply of food and its service at this Air Force station?
    Sir K. Wood: I regret that copies of the menus are not available in my Depart-

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    ment, but I have given instructions for them to be obtained and I will send them to the hon. Member when they are received. No complaints have been received in regard to the food or its service at this station.
    Mr. Anderson: Is any machinery in existence for dealing with the complaints made by the men? Are inspections made without the knowledge of the officers concerned in this matter, and, if so, will the right hon. Gentleman make further inquiries, in particular with regard to the Sealand Camp?
    Sir K. Wood: Machinery exists for the ventilation of complaints by airmen, through the airmen's representative on the messing committee, which meets each week, or through the orderly officer when he visits the dining-room.

    ELECTRICITY SUPPLY (CHARGES).
    Mr. De la Bèreasked the Minister of Transport whether he will introduce legislation to make it obligatory on the electricity supply companies to charge no higher rate per unit for electricity supplied through slot-meters than is charged through the ordinary supply meters?
    The Minister of Transport (Captain Wallace): I am informed that any difference in the rate per unit is usually attributable, not to a higher charge being made for the electricity supplied through pre-payment meters, but to the inclusion of an amount for meter rental, which in the case of quarterly meters is charged separately, and for any other charges which may be due for such services as assisted wiring.
    Mr. De la Bère: Is my right hon. and gallant Friend aware that three years have passed since the McGowan report, that there are 9,000,000 users of electricity in this country mostly dissatisfied, and that promise after promise has been made; and will he say why the Government do not fulfil their pledge to end the electricity muddle once and for all?
    Captain Wallace: If my hon. Friend will refer to the answer I gave not very long ago he will find the exact position.
    Mr. De la Bère: Does my right hon. and gallant Friend realise that that position is most unsatisfactory?
    Captain Wallace: I think my hon. Friend has said that before.
    Mr. McGovern: Is it not an anomaly that people who pay cash are treated more harshly than those who take credit?

  TRANSPORT.

    ROAD SCHEMES, GLAMORGANSHIRE.
    Sir William Jenkinsasked the Minister of Transport what number of schemes dealing with narrow roads, dangerous corners and new bridges is sanctioned for the county of Glamorgan for the current year; what number for the next two years, and the estimated cost; and what is the estimated cost of new schemes to be carried out during the next two years?
    Captain Wallace: Twelve schemes estimated to cost £42,163 have been approved for commencement this year on the trunk roads in the county of Glamorgan. A further five schemes estimated to cost £322,930 are in course of preparation. Twenty-four schemes on county roads estimated to cost £288,000 are at present in progress. Sixteen schemes, estimated to cost £151,000, have been formally approved but not yet commenced, and 18, estimated to cost £272,000, have been approved, in principle, for commencement before 1st April, 1940. As I have only just received the county council's proposals for the fifth year of the five-year programme, I am not at present in a position to give the total number and cost of schemes submitted by the county council that may be sanctioned this year or in the next two years.

    NEATH BY-PASS.
    Sir W. Jenkinsasked the Minister of Transport whether he has completed his negotiations with the various interests in the matter of the Neath River Bridge; and when he is likely to sanction the scheme in order to find local employment when the armament rush will be reduced?
    Captain Wallace: I hope to complete the negotiations and to make an Order under Section 1 (3) of the Trunk Roads Act for the Neath By-pass at an early date. This will enable me to put the work in hand when circumstances permit.

    SEVERN SCHEME.
    Sir W. Jenkinsasked the Minister of Transport whether there are any steps

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    taken to proceed with the Severn Bridge scheme in preparing plans, estimates, etc., as a matter of necessity between England and Wales for transport purposes and an opening between South of England and South Wales; and whether he will take the responsibility for carrying out the scheme?
    Captain Wallace: My predecessor informed the Gloucestershire County Council in February of this year that he was prepared to make a grant of 75 per cent, towards the cost of a further investigation which is now proceeding as to the best means of crossing the River Severn below Gloucester by bridge or by tunnel. The responsibility for carrying out a scheme rests with the local authorities. In view of the need for concentrating the financial resources of the country upon its most urgent requirements, and particularly upon defensive armaments, I am not in a position at present to offer a contribution towards the cost of constructing a crossing.
    Mr. A. Jenkins: Is not that reply contrary to that which was given by the Minister's predecessor? I understood that, provided that the local authorities could agree upon a scheme, the Government were prepared to pay 75 per cent.
    Captain Wallace: If the hon. Gentleman will read my answer and the reply of my predecessor he will see that they are perfectly consistent.
    Mr. James Griffiths: Does that answer indicate that the Government are not now prepared to give financial assistance towards a scheme for a Severn bridge, even if the scheme is agreed upon by the local authorities?
    Captain Wallace: Not at the present time, and bearing in mind the present financial position. A very clear answer was given by my right hon. Friend a few months ago.
    Mr. David Grenfell: Does not the right hon. and gallant Gentleman agree that the provision of a tunnel or a bridge—particularly a tunnel—would in itself be an important contribution to National Defence and food supply?
    Captain Wallace: Yes, Sir, but where are we to get the money?

    FACILITIES, GLASGOW—INNELLAN.
    Mr. Robert Gibsonasked the Minister of Transport whether he is aware that there is serious complaint of lack of travelling facilities between Glasgow and Innellan during the summer months, particularly by persons residing in Innellan whose occupations are in Glasgow and neighbourhood; and whether he will make the appropriate representations, to secure better transport facilities?
    Captain Wallace: I am not aware of any such complaint. If the hon. and learned Member will give me evidence of any lack of facilities I will look into the matter.
    Mr. Gibson: Is the right hon. and gallant Gentleman not aware that there is no train from Glasgow with a connection to Gourock between 6 and 7 o'clock, and that that is very inconvenient to business people; and will he look into the matter?
    Captain Wallace: I have said that I will look into the matter.

    LLANELLY AND BURRY PORT.
    Mr. J. Griffithsasked the Minister of Transport the reasons why the authorities for the ports of Llanelly and Burry Port have not been invited to submit proposals to his Department in connection with port facilities in the event of an emergency; and whether he will give consideration to these two ports and invite the authorities concerned to co-operate in this essential work?
    Captain Wallace: There is no intention at present of requiring the authorities concerned to incur expenditure in connection with additional facilities at these two ports, and I do not therefore propose to put them to the trouble of submitting schemes. The hon. Member may rest assured, however, that, in the event of an emergency, both authorities will be invited to co-operate in making such use of these ports as circumstances require.
    Mr. Griffiths: Is the right hon. and gallant Gentleman aware that these local authorities think that they may be excluded because they are the only ports in South Wales which are not owned by the Great Western Railway Company; and, in view of that feeling, will the Minister invite representatives of the authorities to submit proposals?
    Captain Wallace: I should like to make it clear that the hon. Member is labouring under a misapprehension. There is no idea of discriminating against these ports. The real fact is that the facilities at both the ports for handling merchant shipping are inadequate, as the maximum draught they can accommodate is only 20 feet. If the ports can be used we shall be delighted to do so, but it does not seem sensible to the Government that, in view of the limited facilities to which I have referred, we should ask the authorities to submit schemes for additional facilities.
    Mr. Griffiths: Is the right hon. and gallant Gentleman prepared to receive representations on the matter?
    Captain Wallace: I am always delighted to receive representations from the hon. Member.
    Mr. Jenkins: Is it not a fact that the Minister has been asked to receive a deputation? Is he aware that proposals relating to these and other ports in South Wales have been submitted to the Minister and that he has been asked to receive a deputation to deal with the matter?
    Captain Wallace: I was not aware of that, but any time that hon. Members opposite wish to see me I shall be delighted to see them.
    Mr. Jenkins: Did I not make the application to the Minister himself, in person?
    Captain Wallace: Very likely.

    TRAFFIC SIGNS, GREENOCK.
    Mr. R. Gibsonasked the Minister of Transport whether he is aware that there are frequent misunderstandings and difficulties on the part of drivers of vehicles at the traffic island at the West Station, in Greenock, caused by the insufficiency of directional indicators there; and what steps he proposes to take in this matter towards securing the safety of the public and the assistance of drivers of vehicles?
    Captain Wallace: I was not aware of any difficulties experienced by drivers at the traffic island in question, which is provided with three illuminated bollards with "Keep Left" signs for the guidance of traffic. I will, however, make inquiries to see whether any improvement can be made.

  ROYAL NAVY.

    HIS MAJESTY'S SUBMARINE "THETIS."
    Lieut.-Commander Fletcherasked the Parliamentary Secretary to the Admiralty whether he has any statement to make concerning the progress of the salvage of His Majesty's Submarine "Thetis"?
    The Parliamentary Secretary to the Admiralty (Mr. Shakespeare): The damage which was sustained last week during a gale by the steamship "Zelo," which is being used as a lifting craft, has now been made good, the ship has returned to the wreck, and the salvage operations have recommenced.
    Lieut.-Commander Fletcher: Can the hon. Gentleman say whether any charges are falling upon public funds at the present moment in connection with these salvage operations; or are they being borne by Messrs. Cammell Laird?
    Mr. Shakespeare: I would rather that the hon. and gallant Gentleman put a question down regarding that point.
    Mr. Leonardasked the Parliamentary Secretary to the Admiralty whether he is aware that about the year 1916 it was decided upon expert advice to place bulkheads immediately abaft the torpedo tubes in submarines; whether such bulkheads were placed in the "Thetis"; and, if not, when such a policy was discontinued, and why?
    Mr. Shakespeare: The answer to the first part of the question is in the affirmative. In all submarines since that date, including "Thetis," such a bulkhead has been fitted.
    Mr. Leonard: Is the bulkhead referred to in the hon. Gentleman's answer a bulkhead of a general type, for general protection? Is it not the case that the bulkheads introduced in 1916 were of a type specially designed to deal with accidents to torpedo tubes?
    Mr. Shakespeare: Every bulkhead is in the form of a safety device.
    Rear-Admiral Beamishasked the Parliamentary Secretary to the Admiralty whether he will provide facilities for a display and description of the models of submerged torpedo-tube arrangements and also of Davis escape apparatus for the

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    benefit of Members of this House, either at once or after the report of the "Thetis" inquiry?
    Mr. Shakespeare: My noble Friend is trying to arrange a visit to Fort Blockhouse for a party of Members of Parliament, which he hopes will serve the purpose my hon. and gallant Friend has in mind.

    CRUISERS.
    Lieut.-Commander Fletcherasked the Parliamentary Secretary to the Admiralty whether it is proposed to approach the United States of America and the French Governments with a view to gaining freedom to lay down eight-inch gun cruisers before 1942, in view of the fact that German cruisers now being completed are greatly superior to any cruisers we possess or are building?
    Mr. Shakespeare: The German Government was entitled under the Anglo-German Agreement of 1935 to build up to a maximum of five eight-inch gun cruisers. I have no information that this maximum is being exceeded. There are, therefore, at present no grounds for approaching the Powers to whom we are bound by treaty, with a view to our being released from our treaty obligations.
    Lieut.-Commander Fletcher: Is it not the case that the five cruisers which are being completed by the German Government are superior to any cruisers that we have afloat or any that we have building at the present moment; and what steps is the Naval General Staff taking to meet that situation?
    Mr. Shakespeare: That, of course, must be a matter of opinion, but the circumstances as regards the number of German cruisers have not altered as compared with the time when the Anglo-German Naval Agreement was made.
    Lieut.-Commander Fletcher: Will the hon. Gentleman examine the details as to the range and guns of these ships, their underwater protection and their armour? In view of the facts, is it a matter of opinion that these ships are superior to our ships? Is it not clearly the case that they are superior?
    Mr. Shakespeare: The hon. and gallant Gentleman misunderstood my point. I said it was a matter of opinion, and clearly I could not give an answer now; but there
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    has been no change in the circumstances by which Germany could have one-third of the total tonnage of cruisers.
    Mr. A. V. Alexander: Would it not be wise not only in view of the point raised by my hon. and gallant Friend, but in view of the fairly substantial information that is now coming through about Japanese building, to obtain the necessary notification from the other parties to enable us to increase our cruiser strength?
    Mr. Shakespeare: All that I said was that there was no ground at present for breaking the naval holiday in respect of these cruisers, which, on the whole, is of great benefit to the naval Powers that are observing it. We should have to have very strong grounds for seeking to use the escalator clause in order to break this cruiser holiday.
    Sir A. Sinclair: The hon. Gentleman says that there is no change in circumstances, but surely there is a change of circumstances in the denunciation of the Anglo-German Naval Treaty by the German Government? The hon. Gentleman also says that the power of these cruisers as compared with our own is a matter of opinion, but surely it is a matter on which there is only one opinion?
    Mr. Shakespeare: The right hon. Baronet will recall that the German Government have said that they intend to adhere to the policy of the Treaty, which means that the naval holiday in respect of these cruisers will continue.

    FLEET VISITS.
    Lieut.-Commander Fletcherasked the Parliamentary Secretary to the Admiralty the last date when a ceremonial visit was paid by the Navy to Dutch ports; and if it is proposed to arrange such a visit in the near future?
    Mr. Shakespeare: Ships of the China Station visit ports in the Netherlands East Indies from time to time each year, and will, subject to circumstances, continue to pay such visits.
    Lieut.-Commander Fletcher: Will the hon. Gentleman be good enough to reply to my question as to when ships of our Navy last paid a visit to Dutch ports?
    Mr. Shakespeare: I am sorry that the question was misunderstood. There was an unofficial visit by His Majesty's Ship "Hastings" to Holland last year.
    Lieut.-Commander Fletcher: Will the hon. Gentleman consider an official visit in the near future?

    RECRUITS, NEWFOUNDLAND.
    Mr. Dayasked the Parliamentary Secretary to the Admiralty particulars of what arrangements have now been made for the purpose of recruiting desirable recruits from Newfoundland for His Majesty's Navy; and the number of applications that have been received and accepted for the 12 months ended the last convenient date?
    Mr. Shakespeare: From time to time the Commander-in-Chief on the station arranges for one of His Majesty's ships to call at Newfoundland so that facilities for entry may be given to the men who have applied for entry into the Royal Navy. The question of extending these facilities is under consideration. During the 12 months ended 30th June, some 85 applications have been received. Exact information of the numbers entered is not immediately available, but the number is about 25. I will inform the hon. Member of the exact figure as soon as this information is obtained.
    Mr. Day: The hon. Gentleman says that these calls take place from time to time. Can he say how often?
    Mr. Shakespeare: I should think about three or four times a year.

    SUBVERSIVE LITERATURE.
    Mr. Montagueasked the Parliamentary Secretary to the Admiralty whether the published notices on His Majesty's Ship "Resolution" and other naval ships warning men against Communist propaganda and instructing them to surrender leaflets and other material if received have had any recent result; and whether similar notices and instructions are or will be issued respecting Fascist propaganda?
    Mr. Shakespeare: Subversive literature is occasionally found in His Majesty's ships and establishments, but it is not possible to say whether its discovery is a direct result of the published notices. With regard to the second part of the hon. Member's question, steps will be taken to deal with subversive literature emanating from any other source should the need arise.
    Mr. Leach: Can the hon. Gentleman say what is subversive propaganda? Is the Bible included?
    Mr. Shakespeare: It is very difficult to define, but very easy to know when you see it.
    Mr. Montague: Does the hon. Gentleman's reply mean that propaganda of the Communist party is necessarily and always subversive? What is the meaning of "subversive"?
    Mr. Shakespeare: I never said anything of the kind.
    Mr. Alexander: Does the hon. Gentleman really mean, by subversive propaganda, any propaganda that the Government do not like?

    TIME-EXPIRED MEN.
    Mr. Leslieasked the Parliamentary Secretary to the Admiralty the number of men who left the Navy last year on the expiration of 12 years' service; and the number who subsequently were placed on the reserve list?
    Mr. Shakespeare: The number of men who left the Navy on the expiration of 12 years' service, during the 12 months ending 31st March, 1939, was 1,948, of which 1,752 were naval ratings and 196 marines. None of these men had any liability to serve in the Reserves, and, as ratings other than those who have served a 12-years' engagement join the Royal Fleet Reserve, it is not possible to give the information asked for in the second part of the hon. Member's question without a disproportionate amount of work.
    Mr. Leslie: Is the hon. Gentleman aware that quite a number of these men leave after the expiry of 12 years because they see no chance of promotion? Is class bias rampant in the Navy?
    Mr. Shakespeare: Whatever they may have done in the past, I could not accept that position now. Promotion in the Royal Navy is quicker than it has ever been.
    Mr. Alexander: Will the hon. Gentleman take the opportunity to-day of saying how valuable the reserve service of these men is, and will he endeavour to see that their conditions when they are

    2231
    called up, as they have been recently, are improved? They are very bad.
    Mr. Shakespeare: Certainly I am always pleased to look into the conditions.

  PALESTINE.

    ASSAULTS ON JEWS.
    Colonel Wedgwoodasked the Secretary of State for the Colonies whether the nine cases of alleged unprovoked assaults on inoffensive Jews by Britishers in civilian clothes all took place in Jerusalem; and whether the rank and file of the British Army in Palestine wear civilian clothes?
    The Secretary of State for the Colonies (Mr. Malcolm MacDonald): The answer to the first part of the question is in the affirmative. As regards the second part, I understand that it is the privilege of all ranks of the British Army to wear plain clothes when off duty, although in Palestine there is little opportunity for this.
    Colonel Wedgwood: In that case has the right hon. Gentleman still any doubt that these outrages were the work of the police and not of the Army; and would not the best cure for this, perhaps, be that these inoffensive Jews should be a little less inoffensive?
    Mr. MacDonald: I cannot add to the answer I gave to the right hon. and gallant Gentleman's previous question.

    ILLEGAL IMMIGRANTS.
    Colonel Wedgwoodasked the Secretary of State for the Colonies whether, in view of the fact that the allocation for ordinary legal immigrants into Palestine in five months, namely, 3,645, is at the rate of 8,748 a year, or 10,000 a year less 1,252 deducted for illegal immigrants, he will state why only 1,252 was deducted seeing that some 15,000 have been landed illegally in the last six months, namely, by the official Zionist organisation 4,500, by the Re visionist organisation 7,000, and by in dependent chartered ships 3,500?
    Mr. M. MacDonald: As was foreshadowed in the recent White Paper, the deduction of illegal immigrants from the current immigration quota was based on
    2232
    the ascertained number who had succeeded in entering Palestine between 1st April last, and the date on which the quota was issued. The figure was calculated on this basis. I would add that the information at my disposal points to considerably lower figures of illegal immigrants during the last six months than those given in the question.
    Colonel Wedgwood: Can the right hon. Gentleman say what the lower figures are?
    Mr. MacDonald: Not with any accuracy, because a considerable number of the illegal immigrants have got in without being detected by the authorities; but all our information goes to show that the figure is considerably lower than the very high figure given by the right hon. and gallant Gentleman.
    Mr. Stephen: Will the Minister assure us that he will not take the same steps against the Jews as the right hon. and gallant Gentleman wants to take against the Irish?

    MANDATES COMMISSION (REPORT).
    Captain Cazaletasked the Secretary of State for the Colonies whether the Mandates Commission of the League of Nations have now agreed upon their Report on the Palestine Mandate and the White Paper; and whether he has taken any steps to bring to their attention the advantage it would be to the British people if arrangements could be made for the publication of the Report before the end of July?
    Mr. Manderasked the Secretary of State for the Colonies whether he has now received copies of the Report and evidence given before the Mandates Commission of the League of Nations on the subject of the Government's White Paper proposal with regard to Palestine?
    Mr. T. Williamsasked the Secretary of State for the Colonies whether he has any statement to make on the consideration of the White Paper on Palestine by the Permanent Mandates Commission; and when the Commission's Report will be available?
    Mr. Noel-Bakerasked the Secretary of State for the Colonies whether His Majesty's Government have yet

    2233
    received the corrected minutes of the discussion of the Permanent Mandates Commission on the subject of Palestine and the recent White Paper?
    Mr. M. MacDonald: A copy of the draft of the Commission's observations on the White Paper reached me some days ago; copies of the draft minutes of the private discussions of the members of the Commission reached me this morning; and I am still awaiting a copy of the corrected minutes of the discussions which the members held with me. The Commission have asked His Majesty's Government's comments on the two first documents, which will be sent as soon as possible, when the Commission will no doubt complete their report. I am unable to give any estimate of when the report is likely to be published; this is a matter for the Commission themselves, but I have no doubt that they will publish it as soon as is practicable after its completion.
    Captain Cazalet: In view of the report that there has been a considerable difference of opinion among members of the Mandates Commission does not my right hon. Friend think that it would be in the common interests of all that the report should be published as soon as possible so that we may know what these differences were?
    Mr. T. Williams: In view of the fact that five members of the Permanent Mandates Commission declared that the White Paper was incompatible with the mandate, and that the Secretary of State was charged with turning the mandate upside down, would it not be better for all parties if the report of the proceedings was published at once?
    Mr. MacDonald: When the report of the Permanent Mandates Commission is completed and published the hon. Member is very likely to discover that his information is incorrect. With regard to the question of early publication it is important that the publication of the report should not be delayed longer than is essential or necessary, but clearly it is impossible to contemplate the date of publication before the report is completed.
    Mr. Williams: May the House be assured that the report will be published before the House adjourns early in August, so that no further steps may be taken by His Majesty's Government in
    2234
    regard to the League Council until this House has been able to express itself on the report?
    Mr. MacDonald: I have made inquiries into the possibilities, and they have led me to a conclusion which makes it impossible for me to give an assurance. I should be very doubtful whether, if proper time is allowed for consideration of the report, it would be possible to get through the physical business of publication before the beginning of August. With regard to the second part of the question, this is not the report on which action is taken by His Majesty's Government in regard to this policy, except after consideration by the League Council. It is a report to the League Council and the appropriate next step would be discussed with the League Council.
    Mr. Arthur Greenwood: In view of what is now perfectly obvious from the "public Press that there is likely to be a difference of opinion between the Permanent Mandates Commission and His Majesty's Government and in view of the delay that there is bound to be before the Council has this matter before them, will the right hon. Gentleman give an undertaking that he will take no action prior to discussion in this House?
    Mr. MacDonald: His Majesty's Government have not taken any action prior to discussion in this House. There has been discussion in this House, and the policy of the White Paper was approved by this House. Therefore, action has only been taken following discussion and decisions in this House.
    Mr. Greenwood: I must press the right hon. Gentleman on this matter. That is perfectly true. On the other hand, the House did not know then the views of the Mandates Commission, nor does it now. The question I am asking the right hon. Gentleman is this: After the matter has been before the Council of the League, will he stay his hand with regard to any definite action until this House has had an opportunity of discussing the report of the Mandates Commission and the decision of the League Council?
    Mr. MacDonald: As the right hon. Gentleman appreciates, the point which will arise is not one between members of the Permanent Mandates Commission and His Majesty's Government, because

    2235
    the members of the Permanent Mandates Commission report to the Council. The discussion will be between the Council of the League and His Majesty's Government. Certainly, I will give an assurance to the House that if, as a result of a discussion by the Council, the situation regarding the policy is altered, His Majesty's Government will not proceed with any matter affected by that situation until there has been a further chance of the House expressing its views.
    Mr. Greenwood: I am sorry still further to press the right hon. Gentleman, but that is only a 50 per cent, answer. I am asking the right hon. Gentleman whether, whatever may be the result of the discussions between the League Council and His Majesty's Government, no action will be taken with regard to Palestine before the matter is discussed by the-Members of this House.
    Mr. MacDonald: I certainly could not give that assurance. Let us assume for a moment that the League Council approves of the policy being pursued by His Majesty's Government. As that policy has already been approved by this House, I can see no reason in those circumstances for going back on the policy. What I do say is, that if any decision reached by the Council suggests any modification in the policy which has been approved by this House, then certainly His Majesty's Government will feel it necessary to come before this House again before taking further action with regard to this particular matter.
    Mr. Mander: In view of the fact that the reply of the Minister was given to my original question, may I be permitted now to put one supplementary?
    Mr. Speaker: The reply was not given to the hon. Member alone, but also to the questions of other hon. Members.
    Mr. Mander: They were all taken together. May I ask the right hon. Gentleman whether he is able to deny the statement which has appeared in the world's Press to the effect that five out of seven members of the Permanent Mandates Commission have condemned the British Government's policy, and that during the course of the proceedings he withdrew the Hogarth message as the result of the discussions which took place there?
    Mr. MacDonald: Obviously, I have no authority to speak on behalf of the Permanent Mandates Commission—
    Mr. Mander: Can you deny that?
    Mr. MacDonald: —nor can I foreshadow what is in their report.
    Mr. Mander: Do you not know?
    Mr. MacDonald: All that I ventured to suggest was that when the hon. Member for the Don Valley (Mr. T. Williams) has a chance of studying the report after publication he will very likely find that his information is incorrect, and I think that I can give the same reply to the hon. Member for East Wolverhampton (Mr. Mander).
    Mr. T. Williams: On account of the unsatisfactory nature of the right hon. Gentleman's reply, I beg to give notice that I shall raise the matter on the Adjournment.

    ECONOMIC DEVELOPMENT, SCOTLAND.
    Mr. Davidsonasked the Prime Minister whether he intends in the near future to set up a Royal Commission to inquire into, and make recommendations on, the economic and agricultural development of Scotland?
    The Prime Minister: I am not in a position to add to the reply which was given to the hon. Member's question on 22nd March last.
    Mr. Davidson: Is the right hon. Gentleman aware that this reply will create great dissatisfaction at the Convention of Scottish Nationalists to be held in the near future? Does he not think it is a bad thing for this country to have many people in Scotland dissatisfied with the way that the Government are controlling things here?

    FOREIGN MILITARY OFFICERS (VISITS).
    Lieut.-Colonel Sir Thomas Mooreasked the Prime Minister whether he will consider issuing invitations through the appropriate Departments to distinguished officers of the fighting forces of Germany and Italy, and any other country considered desirable, to visit Britain in the near future and see our defence forces and establishments at work?
    The Prime Minister: It has been the custom from time to time for distinguished officers of the fighting forces of foreign countries to visit this country for the purpose of seeing our Service establishments, and this practice is being continued.
    Sir T. Moore: Would my right hon. Friend not consider extending the practice to both senior and distinguished officers of these various countries, because of the fact that, in our opinion, it might tend to remove misunderstandings and doubts—
    Mr. Speaker: That is a very long supplementary.
    Mr. Kirkwood: Is the Prime Minister aware that in June, 1914, there was a big deputation to this country from Germany, both from the Admiralty and the Army and from Krupps' works, but that the War broke out in August, 1914?

    HOUSE OF COMMONS (RE-ASSEMBLY).
    Mr. V. Adamsasked the Prime Minister whether, since the House of Commons will shortly be separating for a period which is certain to be critical internationally, he has in contemplation any other methods than the conventional channels of re-summoning the House?
    The Prime Minister: No, Sir.
    Mr. Adams: Does my right hon. Friend recall that last year the most serious developments occurred when this House was up and was unable to exercise its duty of influencing the executive?
    The Prime Minister: Last year the House was called together before the expiration of the actual period.
    Mr. Adams: Are we likely to be in session when another congress is in progress at Nuremberg?

    COLONIES.
    Mr. Sorensenasked the Prime Minister whether, in order to minimise the chances of war arising from inter national rivalry for colonies as purely national possessions, he will make a statement of the means by which the Government propose to carry out their policy to
    2238
    proceed as far upon the economic side as has already been done on the political side, in making wider application of the principles which now obtain in the mandated territories?
    The Prime Minister: If the hon. Member will read the speech recently made by my Noble Friend the Secretary of State for Foreign Affairs as a whole, he will see that the suggestion mentioned in the question is contingent upon the attainment of some agreement on common methods and aims of Colonial development. This being so, it is obviously premature for His Majesty's Government to make any statement of the kind which the hon. Member suggests.
    Mr. Sorensen: While appreciating the Prime Minister's reply and the contingencies to which he has referred, might I ask whether it would not be valuable to the whole world to know what are our principles in regard to colonies, in respect of this country and other countries, too, and is he aware that, in fact, the Labour party has put forward its policy on this question?
    The Prime Minister: I am not aware that it has produced any effect.

    QUESTIONS TO MINISTERS.
    Sir John Mellorasked the Prime Minister whether he has directed any alteration in the practice of treating questions relating to the service of foreign loans issued in the United Kingdom as Foreign Office questions, and whether in future such questions should be addressed to the Chancellor of the Exchequer?
    The Prime Minister: No, Sir. The decision as to which Minister should reply to any hon. Member's question about foreign loans must depend on the terms of the question.
    Sir J. Mellor: Does not that reply place hon. Members in a certain difficulty in considering on which day they should seek a reply to questions of this character?
    The Prime Minister: My hon. Friend will be able to get information at the Table as to the Minister to whom he should address his questions.

  FOOD DEFENCE PLANS.

    FEEDING-STUFFS (CATTLE).
    Mr. De la Bèreasked the Chancellor of the Duchy of Lancaster whether he will consider financing a scheme for feeding-stuffs for cattle on somewhat similar lines to the scheme which the Government are now operating for the storage of wheat?
    The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison): The scope of the Government scheme for reserves of essential commodities is under constant review, including the case of animal feeding-stuffs and I will bear my hon. Friend's suggestion in mind.
    Mr. De la Bère: Is my right hon. Friend aware that constant review carries us nowhere, and will he give us some assurance that there is some definite, concrete, crystallised plan?

    RESERVES.
    Mr. Anstruther-Grayasked the Chancellor of the Duchy of Lancaster whether he can give an assurance that there are no essential commodities of which there is not a supply in this country sufficient for at least three months without imports?
    Mr. W. S. Morrison: In the case of nearly all essential raw materials, the trade stocks and Government reserves are more than adequate for three months' consumption on the basis of estimated war requirements, and in the few cases where this not so, the necessary steps are being taken to cover the position. As regards foodstuffs, I can assure my hon. Friend that, wherever practicable, stocks have been or are being brought up to at least the standard mentioned in the question.
    Mr. Loftus: How much of the three months' stock is trade stock, and how much has been purchased by my right hon. Friend's Department?
    Mr. Morrison: I could not give that information. I am able to give the general assurance asked for in the question, but could not give particulars without danger to the public interest.
    Mr. Shinwell: Are we to understand that the Government's policy is limited to three months' supply?
    Mr. Morrison: I never said that.
    Mr. Tinkerasked the Chancellor of the Duchy of Lancaster whether, in the food defence plans, steps are being taken to enable old age pensioners to have reserves of foodstuffs so that in an emergency they would be in a position similar to the rest of the population who have been advised by him to build up reserves of essential foodstuffs?
    Mr. Morrison: No special arrangements of the kind suggested by the hon. Member are in contemplation. The Government's plans, for the maintenance of adequate supplies of foodstuffs for the country and for their proper distribution, are farmed generally and for all sections of the community alike. In these plans no account is taken of the reserves which may be accumulated by householders in advance of an emergency. I regard these reserves as an additional source of security, which may be particularly useful in relieving any temporary strain on local distribution, such as might arise owing to the sudden influx of population in reception areas. I should hope that in the event of such a strain persons who have been able to provide reserves in their homes would use them with a view to relieving, in the common interest, the pressure on the shops for the time being.
    Mr. Tinker: May I ask the right hon. Gentleman whether, in considering this important question, he will keep in mind the fact that there are 230,000 old age pensioners who have to apply for Poor Law relief every week, and that it is impossible for them to get in any reserves at all; and I would ask the Government to bear that in mind?
    Mr. Morrison: I am aware that there are many people who cannot accumulate reserves not only because of lack of means, but, in many cases, because of lack of accommodation. The Government plans are framed to give equal distribution to all sections alike.
    Mr. George Griffiths: Did not the Prime Minister's letter yesterday give to these old age pensioners tremendous hope for the future?

    WHEAT STORAGE.
    Mr. De la Bèreasked the Chancellor of the Duchy of Lancaster whether,

    2241
    in connection with the Government's reserve wheat storage plan, he can give the names of the advisory committee who have been appointed to decide on the question of deterioration of these reserves and the necessity for replacement, and whether he can give an assurance that the members of this committee are entirely unconnected with the milling concerns who are carrying out the Government's wheat-storage scheme?
    Mr. W. S. Morrison: As I indicated in the reply which I gave to my hon. Friend on 5th July, the decision to replace any particular part of the Government wheat reserve is taken by the Food (Defence Plans) Department. The Department take the decision after a report has been received from the firm of Cargo Superintendents, and after consultation with the advisory committee. The membership of the advisory committee is as follows:
    Mr. Arthur Robinson (Chairman), Sir Norman Vernon, Bt., Mr. J. V. Rank, Mr. J. McFadyen representing the milling concerns, and two representatives of the Food (Defence Plans) Department.
    Mr. De la Bère: Does my right hon. Friend realise that some of these gentlemen are directly interested in this business, and is he not aware that this matter is really a grave scandal?
    Mr. Morrison: As my answer indicated, I am aware that these gentlemen whose names I mentioned assist the Government on this committee and represent the firms which do the work for the Government; but I am quite unaware of what is stated in the second part of the question—indeed, I am able to deny it categorically.
    Mr. De la Bère: This is a matter of the utmost importance. Is my right hon. Friend not aware that this sort of thing cannot be allowed to go on, and that I will not sit still and see it go on?

    JAPANESE CANNED SALMON.
    Mr. Loganasked the Chancellor of the Duchy of Lancaster whether he is aware that there are stored in Liverpool 250,000 cases of Japanese salmon, each case containing 96 tins unlabelled; is this storage intended for emergency rations; and will he see that the tins are labelled with the place of origin before he issues them to the public?
    Mr. W. S. Morrison: As my right hon. Friend the President of the Board of Trade stated on 27th June, the Food (Defence Plans) Department has not purchased and has no intention of purchasing any Japanese canned salmon. There is, therefore, no question of the Department issuing Japanese salmon to the public.
    Mr. Logan: Is the right hon. Gentleman aware that these goods are sold in Liverpool, and is he able to confirm the statement made yesterday by the President of the Board of Trade, when he said:
    "where unlabelled tins of foreign produce bear the word 'Can' at the time of importation, they are not released from Customs charge unless an indication of origin is also affixed."—[OFFICIAL REPORT, 11th July, 1939; col. 2075, Vol. 349.]
    Is it not correct that these cans are there in their millions, and, if they are not Government stores, I want to know what they are doing in Liverpool? I have in my hand a can out of the store?
    Mr. Morrison: All that I can say is that none of these cans are mine. If the hon. Gentleman has any question to ask about labelling and marking, that is not a matter for my Department.
    Mr. Logan: When I put down this question it was transferred to this particular Department. I hardly thought that that was right and proper on an important question like this. [Laughter.] It is no laughing matter. An erroneous statement was made yesterday by the Minister responsible in this matter, and I want to ask whether —
    Mr. Speaker: The hon. Member is making a statement.
    Mr. Logan: On a point of Order. I wished to put this question to the responsible Minister, and I was told at the Table that it was one for the right hon. Gentleman to answer. I am now getting no answer, and I have incontrovertible evidence that there is a ramp in millions of these tins going on in the City of Liverpool. I want to know, Mr. Speaker, whether I may have the privilege of putting a question to the right and proper Minister now?
    Mr. Speaker: The hon. Member had better put down another question.

    COLD STORAGE ACCOMMODATION.
    Major Milnerasked the Chancellor of the Duchy of Lancaster why the Government are pot making full use of the considerable cold-storage accommodation available in this country, particularly outside London?
    Mr. W. S. Morrison: I assume that the hon. Member has in mind the use of cold storage accommodation for reserves acquired under the Essential Commodities Reserves Act. The cost of storage is one factor which is considered in connection with the selection of foodstuffs and in which cold storage shows at a disadvantage. Edible oils, canned meat and canned fish, for example, are being stored at a cost much less than that of cold storage.
    Major Milner: Is it not the fact that not 50 per cent, of the cold storage accommodation is now being made use of, and that there are many commodities which could be satisfactorily stored there?
    Mr. Morrison: I told the hon. Gentleman that the question of cost had to be taken into account, and the object is, in general, to secure the highest possible food value for the money expended. The cost of cold storage is enormously greater than the other methods of storage to which I have referred, and I am aware that there is an excess of cold storage accommodation at the present time.
    Major Milner: Is it not the fact that food storage accommodation is being reduced year by year because the Government are not taking advantage of it?

    SILICOSIS.
    Mr. James Griffithsasked the Pay master-General, as representing the Lord President of the Council, what progress has been made by the committee investigating the incidence of silicosis in the anthracite coalfield; and whether he can indicate when their investigations will be completed and their findings published?
    The Paymaster-General (Earl Winterton): The work is proceeding satisfactorily on the lines indicated in my replies to the hon. Member of 23rd February and 19th April. The second phase of the investigation has been completed, five collieries in the anthracite
    2244
    area and two in the steam coal area having been examined. The results are now being analysed, and show the need for extending the investigation to a small number of other collieries of different types. Arrangements have been made to do this in the autumn, and it is hoped that the whole of the field work will be completed before the end of the year.
    Mr. Griffiths: Is the right hon. Gentleman aware that the incidence of silicosis still increases, and that for the first six months of this year it shows an increase over the comparable period of last year; and in view of the reply which he has given that the field work will not be completed until some time in the autumn, and presumably there will be long discussion after that, can he give any indication when the report will be completed, and will he take steps to expedite it?
    Earl Winterton: I fully sympathise with the importance which the hon. Gentleman attaches to this matter, and, with the approval of the Lord President, I am satisfied that there has been no avoidable delay. It is a very difficult and intricate matter, and I cannot give any indication when the final report will be received, because after the field work is completed, which, I hope, will be by the end of the autumn, time will be required for some analysis to be made.
    Mr. Griffiths: Has the right hon. Gentleman satisfied himself that this investigation has not been unduly delayed because of the shortage of personnel in the committee?
    Earl Winterton: Yes, Sir; I am very pleased that the hon. Member has asked that question, which is a very proper one to ask. I am convinced that there has been no avoidable delay, and, in fact, you cannot hurry an investigation of this sort.

    CYPRUS (ARCHBISHOPRIC).
    Mr. Hannahasked the Secretary of State for the Colonies whether he can hold out any hope of an early settlement of the difficulties in connection with the Cyprus archbishopric?
    Mr. M. MacDonald: I can give no indication as to when the present difficulties in regard to the election of an Archbishop in Cyprus are likely to be resolved. I am,

    2245
    however, anxious to see the existing deadlock resolved, and am considering what steps can usefully be taken by the Government to that end.
    Mr. Hannah: Is it not to be hoped that with the appointment of a new Governor of Cyprus this matter may be speedily settled, both from the point of view of the Autocephalous Church and of British prestige throughout the Levant?
    Mr. MacDonald: It is a matter to which I have asked the new Governor to give special attention when he arrives in the Island.
    Mr. Mander: Is there no one in the Government Whips' Office suitable for this job?

    SARAWAK (DEFENCE).
    Captain Pluggeasked the Secretary of State for the Colonies to what extent the British Government is pledged, in case of emergency, to protect the existence of Sarawak; and whether the Government of Sarawak has ever made any contribution to the maintenance of the British Defence Forces?
    Mr. M. MacDonald: Under the Agreement of 1888 it was provided that the State of Sarawak should continue to be governed and administered as an independent State under the protection of Great Britain. As regards the second part of the question, no British Defence Forces are maintained in Sarawak, and, therefore, no question has arisen of a contribution being made from Sarawak funds for the purpose mentioned.
    Captain Plugge: Can the right hon. Gentleman say whether there are any facilities for the Navy and the Air Force in Sarawak?
    Mr. MacDonald: That is another question. Perhaps the hon. and gallant Member will put it down to the appropriate Minister.

    INCOME TAX (SICKNESS AND DISABLEMENT BENEFIT).
    Mr. Greenwood(by Private Notice) asked the Chancellor of the Exchequer whether he proposes to take any action with respect to the decision of the Special Commissioners for Income Tax that sick-
    2246
    ness and disablement benefit from approved and friendly societies, trade unions and other bodies are liable to Income Tax?
    The Chancellor of the Exchequer (Sir John Simon): I saw certain comments on this matter which were communicated to the Press this morning but I am informed that they are materially inaccurate. The decision referred to involves no new point of principle at all. Nor is the practice changed. Income Tax, where due in such cases, is not and will not be deducted at the source. The actual case was that a permanently disabled individual with a not inconsiderable private income which is supplemented by substantial payments derived from an insurance company and a friendly society. His total income is much above the exemption limit and the payments, which are treated by the Special Commissioners as in the nature of annuities, have continued for some years. It is not the practice to charge benefits for periods of less than a year, no recipient with an income under exemption limits can be affected and no new field of taxation is opened by the decision. I may add that benefits under the National Health Insurance Acts and Unemployment Insurance benefits are not treated as liable to Income Tax, nor will they be.
    Mr. GreenwoodWill the right hon. Gentleman cause to be produced before the House, if possible to-day, the actual statement of the ruling of the Special Commissioners, because, as I understand it, the statement that appears in the Press is somewhat in conflict with the statement that he has made.
    Sir J. Simon: It certainly is in complete conflict with the statement that I have made. What has been communicated to the Press suggests that some general ruling has been laid down which applies to trade unions and other things. Nothing of the sort has been done. It is a decision about an individual case affecting a gentleman of not inconsiderable income, and there is no ground whatever for saying that any new principle is involved.
    Mr. Greenwood: Would it not be true to say now that the ruling and the decision in the case of this particular individual will govern the cases of a very large number of other people with not such substantial incomes, who may suffer

    2247
    and will suffer in the future from hardship because, as I understand the ruling, any income that they get from approved societies or trade unions, as the case may be, will be assessable for Income Tax purposes?
    Sir J. Simon: There has been no general ruling either in regard to income from trade unions or any of the other bodies mentioned. This was a particular case which was decided by the Special Commissioners as a particular case. It is quite certain that it does not involve any new principle at all, but it has led to a misapprehension which I regret should have been created by the communication to the Press.
    Mr. Greenwood: The right hon. Gentleman will recognise that this question does not apply to taxation at the source. Is it not the case that this particular ruling creates a precedent under which large numbers of individuals may in future suffer hardship?
    Sir J. Simon: I really think not. I understand that the Commissioners merely confirmed the assessments. Each case is decided on the facts of the case. The position is exactly the same as in 1925 or any later year, and it is a complete confusion to suppose that some new principle is involved.
    Mr. Rhys Davies: The right hon. Gentleman has admitted in his statement that disablement benefit paid by benefit societies will come in for Income Tax purposes. Does he not see that such disablement benefit is simply in the nature of a return of contributions paid for the benefit?
    Sir J. Simon: I am afraid that the hon. Member has not followed my statement. I have not made any such admission. In the present case the taxpayer was a person drawing a supplement to his income and had done so for years, not in consequence of National Insurance or any similar Act, but as the result of a private contract with an insurance company, and with, I think, a friendly society, and on the facts of that case the Commissioners thought that what he was receiving was an annuity. He had received it for years. This has no application to the ordinary case of receiving temporary benefits from Grade unions or friendly societies.
    Mr. Buchanan: In view of the fact that the decision has created some apprehension among trade unions who pay superannuation benefit, and have done for some years, will the right hon. Gentleman make available in full the decision arrived at in order that we may examine it and see its implications?
    Sir J. Simon: I have done my best to make the position clear, and I shall have an opportunity of getting more information. I am quite certain that those who have informed me are accurate about this case. I do not think it is usual to publish the details of an individual case, and it is for that reason that I have not given the actual figures of income.
    Mr. Buchanan: In view of the fact that one decision given by an officer governs the cases of other people, will the right hon. Gentleman, without disclosing the man's name, make available the decision arrived at in order that we may examine its implications?
    Sir J. Simon: I really think the House should be prepared to accept the statement I have made. Anxiety was aroused by the statement in the Press. I noticed the statement before I got the question put to me and I made inquiries this morning, and I have seen those who are responsible. I am perfectly satisfied that the statement I have made is right. It is quite contrary to practice to publish the details of individual cases before the Special Commissioners, and I think it is the law that I should not do so. The law has not been altered in the least, and those who are exercised about trade unions may sleep comfortably in their beds.
    Mr. Benn: Has the right hon. Gentleman formed any estimate of how much the Treasury will receive as a result of the decision of the Special Commissioners?
    Sir J. Simon: It may amount to a few shillings.
    Mr. Benn: I am not talking about this particular case.
    Sir J. Simon: It is a decision which is exactly in accord with what has been the practice for the last 10 or 12 years.
    Mr. Logan: In regard to the ordinary contributions for National Health Insurance and special voluntary contributions,

    2249
    am I to take it that additional benefits or any benefits which come from sickness will not be taxable in regard to Income Tax?
    Sir J. Simon: I do not think the decision deals with that, but I am sure the hon. Member is right when he speaks of benefits which arise under the national health Acts or the Unemployment Insurance Act. I am not precisely informed about the other case, but, in any event, nobody can be touched by this provision unless they are over the Income Tax exemption limit.
    Mr. Buchanan: Is the right hon. Gentleman not aware that trade unions and others have been paying superannuation benefits year after year, and that the sums in the past have not been counted in for Income Tax purposes; and that this decision makes that amount liable for Income Tax?
    Sir J. Simon: The hon. Member has just said that these trade union benefits have not been taxed in the past. I will undertake that there will be no change in administration in the future.
    Sir T. Moore: In view of the precedent which has now been established, may I complete my interrupted supplementary question?
    Mr. Speaker: Neither at this time nor at any other time.

BUSINESS OF THE HOUSE.
Mr. Greenwood: Can the Prime Minister tell us how far he proposes to go to-night in the event of the 11 o'clock Rule being suspended?
The Prime Minister: We hope to make good progress to-day and to complete the business up to and including the Motion with respect to Greenwich Hospital and Travers' Foundation.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."— [The Prime Minister.]
The House divided: Ayes, 241; Noes, 137.

Division No. 237.]

AYES.

[3.59 p.m.

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

Channon, H.

Entwistle, Sir C. F.

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

Chapman, A. (Rutherglen)

Errington, E.

Albery, Sir Irving

Chapman, Sir S. (Edinburgh, S.)

Erskine-Hill, A. G.

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

Chorlton, A. E. L.

Evans, Colonel At (Cardiff, S.)

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

Christie, J. A.

Evans, D. O. (Cardigan)

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

Churchill, Rt. Hon. Winston S.

Fildes, Sir H.

Anstruther-Gray, W. J.

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

Fleming, E. L.

Aske, Sir R. W.

Clarry, Sir Reginald

Furness, S. N.

Assheton, R.

Clydesdale, Marquess of

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

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

Cobb, Captain E. C. (Preston)

Gilmour, Lt.-Col. Rt. Han. Sir J.

Barrie, Sir C. C.

Colman, N. C. D.

Gluckstein, L. H.

Beamish, Rear Admiral T. P. H.

Colville, Rt. Hon. John

Glyn, Major Sir R. G. C.

Beauchamp, Sir B. C.

Conant, Captain R. J. E.

Goldie, N. B.

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

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

Gower, Sir R. V.

Bennett, Sir E. N.

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

Graham, Captain A. C. (Wirral)

Bernays, R. H.

Cooper, Rt.Hn. A. Duff (W'st'r S.G'gs)

Granville, E. L.

Bird, Sir R. B.

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

Grattan-Doyle, Sir N.

Blair, Sir R.

Croft, Brig.-Gin. Sir H. Page

Gridley, Sir A. B.

Boothby, R. J. G.

Crookshank, Capt. Rt. Hon. H. F. C.

Grimston, R. V.

Boulton, W. W.

Crossley, A. C.

Gritten, W. G. Howard

Bower, Comdr. R. T.

Crowder, J. F. E.

Guinness, T. L. E. B.

Brass, Sir W.

Cruddas, Col. B.

Gunston, Capt. Sir D. W.

Briscoe, Capt. R. G.

Culverwell, C. T.

Hannah, I. C.

Broadbridge, Sir G. T.

Davison, Sir W, H.

Hannon, Sir P. J. H.

Brocklebank, Sir Edmund

De Chair, S. S.

Harbord, Sir A.

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

De la Bère, R.

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

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

Denman, Hon. R. D.

Haslam, Henry (Horncastle)

Bull, B. B.

Denville, Alfred

Haslam, Sir J. (Bolton)

Bullock. Cap. M.

Despencer-Robertson, Major J. A. F.

Heilgers, Captain F. F. A. -

Burgin, Rt. Hon. E. L.

Doland, G. F.

Hely-Hutchinson, M. R.

Butcher, H. W.

Donner, P. W.

Hepburn, P. G. T. Buchan*

Butler, Rt. Hon. R. A.

Dorman Smith, Col. Rt. Hon. Sir R. H.

Hepworth, J.

Caine, G. R. Hall-

Drewe, C.

Higgs, W. F.

Campbell, Sir E. T.

Dugdale, Captain T. L.

Hoare, Rt. Hon. Sir S.

Cartland, J. R. H.

Duncan, J. A. L.

Holdsworth, H.

Carver, Major W. H.

Eastwood, J. F.

Holmes, J. S.

Cary, R. A.

Edmondson, Major Sir J.

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

Cazalet, Thelma (Islington, E.)

Elliston, Capt. G. S.

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

Cazalet, Capt. V. A. (Chippenham)

Emmott, C. E. G. C.

Hulbert, Squadron-Leader N. J.

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

Emrys-Evans, P. V.

Hunloke, H. P.

Hunter, T.

O'Connor, Sir Terence J.

Spans. W. P.

Hurd, Sir P. A.

Orr-Ewing. I. L.

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

Jennings, R.

Palmer. G. E. H.

Stewart, J. Henderson (Fife, E.)

Jonas, Sir H. Haydn (Merioneth)

Peake, O.

Strauss, H. G. (Norwich)

Jones, L. (Swansea W.)

Peat, C. U.

Strickland, Captain W. F.

Keeling, E. H.

Perkins, W. R. D.

Stuart, Hon. J. (Moray and Nairn)

Kellett, Major E. O.

Peters, Dr. S. J.

Sueter, Rear-Admiral Sir M. F.

Kerr, Colonel C. I. (Montress)

Pickthorn, K. W. M.

Sutcliffe, H.

Kerr, Sir John Graham (Sco'sh Univs.)

Pilkington, R.

Tasker, Sir R. I.

Lamb, Sir J. Q.

Plugge, Capt, L. F.

Tate, Mavis C.

Lambert, Rt. Hon. G.

Ponsenby, Col. C. E.

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

Loach, Sir J. W.

Pownall, Lt.-Col. Sir Assheton

Thomas, J. P. L.

Laos-Jones, J.

Proctor, Major H. A.

Thornton, Sir J. D. W.

Leighton, Major B. E. P.

Radford, E. A.

Thornton-Kemsley, C. N.

Levy, T.

Ramsay, Captain A. H. M.

Titchfield, Marquess of

Liddall, W. S.

Ramsden, Sir E.

Touche, G. C.

Lindsay, K. M.

Rankin, Sir R.

Tryon, Major Rt. Hon. G. C.

Lloyd, G. W.

Rathbone, Eleanor (English Univ's.)

Tufnall, Lieut.-commander R. L.

Loftus, P. C.

Reed, A. C. (Exeter)

Wallace, Capt. Rt. Hon. Euan

Mabane, W. (Huddersfield)

Rickards, G. W. (Skipten)

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

MacAndrew, Colonel Sir C. G.

Ropner, Colonel L.

Ward, Irene M. B. (Wallsend)

MacDonald, Rt. Hon. M. (Ross)

Rosbotham, Sir T.

Wardlaw-Milne, Sir J. S.

Macdonald, Capt. P. (Isle of Wight)

Ross Taylor, W. (Woodbridge)

Warrender, Sir V.

McEwen, Capt. J. H. F.

Royds, Admiral Sir P. M. R.

Webbe, Sir W. Harold

Maitland, Sir Adam

Ruggles-Brise, Colonel Sir E. A.

Wedderburn, H. J. S.

Makins, Brigadier-General Sir Ernest

Russell, S. H. M. (Darwen)

Wells, Sir Sydney

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

Salmon, Sir I.

Whiteley, Major J. P. (Buckingham)

Markham, S. F.

Salt, E. W.

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

Maxwell, Hon. S. A.

Salter, Sir J. Arthur (Oxford U.)

Willoughby de Eresby, Lord

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

Samuel, M. R. A.

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

Mills, Sir F. (Layton, E.)

Sandeman, Sir N. S.

Windsor-Clive, Lieut.-Colonel G.

Mills, Major J. D. (New Forest)

Sanderson, Sir F. B.

Winterton, Rt. Hon. Earl

Mitchell, Sir W. Lane (Streatham)

Schuster, Sir G. E.

Wise, A. R.

Mitcheson, Sir G. G.

Scott, Lord William

Wood, Rt. Hon. Sir Kingsley

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

Selly, H. R.

Wright, Wing-Commander J. A. C.

Mooring, A. C.

Shaw, Captain W. T. (Forfar)

York, C.

Morgan, R. H. (Worcester, Stourbridge)

Shepparson, Sir E. W.

Young, A. S. L. (Partick)

Morris-Jones, Sir Henry

Shute, Colonel Sir J. J.

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

Simon, Rt. Hon. Sir J. A

TELLERS FOR THE AYES.—

Nall, Sir J.

Smith, Bracewell (Dulwich)

Captain Waterhouse and Mr.

Neven-Spence, Major B. H. H.

Smith, Sir R. W. (Aberdeen)

Munro.

Nicolson, Hon. H. G.

Snadden, W. McN.

NOES.

Adams, D. (Consett)

Gallacher, W.

MacLaren, A.

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

Gardner, B. W.

Maclean, N.

Adamson, Jennie L. (Dartford)

Garro Jones, G. M.

Mainwaring, W. H.

Adamson, W. M.

George, Megan Lloyd (Anglesey)

Mander, G. le M.

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

Gibson, R. (Greenock)

Marshall, F.

Ammon, C. G.

Green, W. H. (Deptford)

Mathers, G.

Anderson, F. (Whitehaven)

Greenwood, Rt. Hon. A.

Maxton, J.

Banfield, J. W.

Grenfell, D. R.

Messer, F.

Barnes, A. J.

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

Milner, Major J.

Barr, J.

Griffiths, G. A. (Hemsworth)

Montague, F.

Batey, J.

Griffiths, J. (Llanelly)

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

Beaumont, H. (Batley)

Hall G. H. (Aberdare)

Naylor, T. E.

Bellenger, F. J.

Hall, J. H. (Whitechapel)

Noel-Baker, P. J.

Benn, Rt. Hon. W. W.

Hardie, Agnes

Paling, W.

Benson, G.

Harris, Sir P. A.

Parkinson, J. A.

Bevan, A.

Hayday, A.

Pearson, A.

Broad, F. A.

Henderson, A. (Kingswinford)

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

Bromfield, W.

Henderson, J. (Ardwick)

Price, M. P.

Brown, C. (Mansfield)

Henderson, T. (Tradeston)

Quibell, D. J. K.

Buchanan, G.

Hills, A. (Pontefract)

Richards, R. (Wrexham)

Burke, W. A.

Hopkin, D.

Ridley, G.

Cape, T.

Jenkins, A. (Pontypool)

Riley, B.

Charleton, H. C.

Jenkins, Sir W. (Neath)

Ritson, J.

Chater, D.

John, W.

Roberts, W. (Cumberland. N.)

Cluse, W. S.

Jones, A. C. (Shipley)

Robinson, W. A. (St. Helens)

Collindridge, F.

Kennedy, Rt. Hon. T.

Rothschild, J. A. de

Cove, W. G.

Kirby, B. V.

Sanders, W. S.

Daggar, G.

Kirkwood, D.

Sexton. T. M.

Dalton, H.

Lathan, G.

Shinwell, E.

Davidson, J. J. (Maryhill)

Leach, W.

Silkin, L.

Davies, R. J. (Westhoughton)

Lee, F.

Silverman, S. S.

Davies, S. O. (Merthyr)

Leonard, W.

Simpson, F. B.

Day, H.

Leslie, J. R.

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

Dobbie, W.

Logan, D. G.

Sloan, A.

Dunn, E. (Rother Valley)

Lunn, W.

Smith, Ben (Rotherhithe)

Ede, J. C.

Macdonald, G. (Into)

Smith, E. (Stoke)

Edwards, Sir C. (Bedwellty)

McEntee, V. La T.

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

Edwards, N. (Caerphilly)

McGhee, H. G.

Smith, T. (Normanton)

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

McGovern, J.

Sorensen, R. W.

2252

2253

Stephen, C.

Viant, S. P.

Williams, T. (Don Valley)

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

Walkden, A. G.

Wilmot, John

Stokes, R. R.

walker, J,

Windsor, W. (Hull, C.)

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

Watkins, F. C.

Woods, G. S. (Finsbury)

Taylor, R. J. (Morpeth)

Watson, W. McL.

Thorne, W.

Wedgwood, Rt. Hon. J. C.

TELLERS FOR THE NOES. —

Thurtle, E.

Welsh J. C.

Mr.Whiteley and Mr. Groves.

Tinker, J. J,

Westwood, J.

Question put, and agreed to.

DOCKING AND NICKING OF HORSES (PROHIBITION).
Sir Ralph Glyn: I beg to move,
"That leave be given to bring in a Bill to prevent the docking and nicking of horses and importation of docked and nicked horses."
It will be unnecessary to take up the time of the House by any lengthy argument. It is, I think, sufficient to say that a similar Bill passed through all its stages in another place last Session and that it was during the progress of the Bill in another place that certain Amendments were made which the promoters of this Bill intend to adopt. The actual operation of docking under the Animals (Anaesthetics) Act of 1919 is happily now illegal, unless performed by a veterinary surgeon, and at the time the animal must be completely subject to the anaesthetic. I want to make it clear that that part of it has been met. But what has not been met is the subsequent torture that animals undoubtedly go through after having been docked when they are out at rest and are subject to the vexation of flies and so on.
We further contend that docking is unnecessary. It has been said that it is fashionable, but at this time it is impossible to feel that one ought to stand for any fashion in which any cruelty is involved. Fashions of the past must disappear if they are bought at such a high price. The only excuse that can be given, as far as I can make out, apart from that of fashion, is that it takes more time to keep an animal clean. In other words that is giving way to laziness and I do not think that it is a sufficient excuse. The other point is that in the anatomy of the horse the fly muscle, as it is called, is by nature extended only halfway down the length of the animal, and nature has ordained that the tail of a horse in its natural state shall be used for keeping off flies and noxious insects from the rest of its body. Hon. Members will recall that when in the country on a hot day or in thundery weather they have seen horses standing head to tail, which is nature's way of
2254
helping co-operative effort to keep the animals free of flies. If, therefore, you dock the tail and the flies sting, the animals get impatient, they stamp, they get fretful and in time the experience breaks down their nervous system and makes them ill-tempered.
I feel, therefore, that in asking the House to agree to the introduction of this Bill we are only setting right something which every country in Europe has adopted, and the fact that there are fewer horses in no way removes the responsibility that we have to see that the horses that remain lead happy and natural lives. The Bill is a short one, and I venture to hope that it will have the unanimous support of the House. The first Clause is one for prohibition of docking. The second Clause provides that there shall be a certificate obtained from a veterinary surgeon if the health of the horse is affected, for instance by some breaking of the vertebrae of the tail which makes it necessary to remove it, or if there has been some disease developed in the tail; in other words, docking in future will be part and parcel of veterinary science for health reasons and health reasons alone. The third Clause is a penalty Clause, which involves a £25 fine or three months' imprisonment. The fourth Clause deals with the importation of animals, and there are certain Amendments which were moved in another place relating to circus horses, animals for stage purposes, and so on. The fifth Clause is the definition Clause, the sixth is the short title, and the seventh proposes that the Act shall come into force on 1st January, 1940.
That, in brief, is what the promoters propose to ask the House to pass. We feel that the Bill will get rid of an ugly, cruel and, indeed, vulgar custom. In conclusion, I would say that in these days when we look round the world there is enough sorrow and suffering and indeed cruelty and I think we should remember that horses serve man, that they are gentle and obedient animals and that the least we can do to dumb creatures is to give

2255
them that treatment for which this country has always been famous. In March at Munich, at a conference of the veterinary services of Europe, it was unanimously agreed that these proposals should be made law. Owing to the rapidity of the passage of laws in totalitarian countries Germany has already adopted the proposals, and I very much regret that we have to be a little bit behind owing to the nature of our procedure. All I ask now is that we should make up for lost time, and I ask the House to give permission for the Bill to be introduced.
Bill ordered to be brought in by Sir Ralph Glyn, Mr. Ralph Beaumont, Sir Ernest Bennett, Mr. S. O. Davies, Sir Robert Gower, Sir John Haslam, Mr. Arthur Henderson, Dr. Howitt, Mr. Maxwell, Lieut.-Colonel Sir Thomas Moore, Lieut.-Colonel Moore-Brabazon, and Mr. Perkins.

DOCKING AND NICKING OF HORSES (PROHIBITION) BILL,
"to prevent the docking and nicking of horses and importation of docked and nicked horses," presented accordingly, and read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 197.]

MESSAGE FROM THE LORDS.
That they have agreed to,—

Ministry of Health Provisional Order (Burnham and District Water) Bill,

Ministry of Health Provisional Order (Slough) Bill,

Ministry of Health Provisional Order (Swaffham Water) Bill,

North West Midlands Joint Electricity Authority Provisional Order Bill, without Amendment.

Amendments to —

Milford Haven and Tenby Water Bill [Lords], without Amendment.

MESSAGE FROM THE LORDS.
  CIVIL DEFENCE BILL.
  That they have agreed to the Amendments made by the Commons to certain of their Amendments to the Civil Defence Bill, without Amendment.
ORDERS OF THE DAY.

  FINANCE BILL.
  As amended (in Committee, and on re-committal,) further considered.
  4.15 p.m.
  Mr. Pethick-Lawrence:On a point of Order, Mr. Speaker. I understand that you do not intend to call the first Amendment and the two consequential Amendments to Clause 20 (Charge of armament profits duty) which appear on the Order Paper in my name, for the reason that you take the view that they are out of order. May I respectfully submit to you certain grounds which, I suggest, show that the Amendment is in order? I understand that the Amendment is ruled out of order on the ground that it might increase the charge. I venture to suggest that it does not increase the charge and that it only cuts through the cumbersome procedure of the Bill. I draw your attention to certain words in the Clause. The Clause states, in Sub-section (1), that the tax is to be placed
  "on so much of the excess as arises from armament contracts";
  and Sub-section (2) states that this excess
  "shall be ascertained by reference to the proportion which the turnover under armament contracts bears to the total turnover."
  It is clear from the wording of the Bill that it is anticipated that this proportion may not give correct results, and, therefore, there are two provisos, which lay down that if that proportion should prove to be unjust, either because it is too great or too small, a different procedure shall be adopted; and that procedure is designed to arrive at a more correct ascertainment of the proportion of the excess profits which is due to armament profits. All that I propose to do in my Amendment is to cut through that cumbersome procedure of first arriving at a proportion which has little connection with the object which it is intended to reach and then subjecting that to a further investigation, and to suggest that the same consideration which must form the basis of the further analysis secured by the provisos shall come into operation straight away. I do not propose that the amount of the excess profits due to armament contracts shall be fixed any more than is done by
  2278
  the Clause. All I propose is that it shall be ascertained by reference to the proportions which I propose in the Amendment.
  Therefore, I suggest for your consideration. Sir, that all my Amendment does is to cut through the procedure of the Bill, which first of all fixes an entirely inadequate and inappropriate method of ascertainment, and then proceeds to say that if either party thinks that is inappropriate, it can discover the true relationship by another process. I propose that that process shall be taken from the beginning, while not leaving out the two provisos which, if any injustice still remained, could still set it right. For these reasons, I submit that my Amendment would not increase the charge, and consequently, that it is not out of order.
  Mr. Speaker: In considering the Amendment I thought at first that it would not make any difference one way or the other, but, after fully considering it, I arrived at the conclusion that, at any rate, it would put those who would become liable to the duty in a more onerous position than they would have been under the Bill as it left the Committee, and that, if the Amendment had any effect at all, it might have the effect of increasing the charge upon those liable to the duty. In considering the matter of charge, it is my duty to consider not only whether an Amendment would increase the charge, but whether it might increase it. That is the reason I intimated that the Amendment was out of order.
  Mr. Pethick-Lawrence: May I put one more point to you? I suggest that, far from putting these people to more trouble, it would put them to less trouble, because under the Bill as it is, first of all a decision is made in one way and subsequently it can be upset either by themselves or, alternatively, by the Commissioners, by reference to the very facts which are omitted in the first instance under the Bill and which, under the Amendment, would be taken into account.
  Mr. Speaker: I still think that the Amendment would place those persons in a more onerous position than they would be under the Bill as it left the Committee, and that the effect might be to make a charge.

  FINANCE BILL.

    CLAUSE 21—(Meaning of "armament business" and "armament contract".)
    4-20 p.m.
    Sir Herbert Williams: I beg to move, in page 23, line 32, at the end, to insert:
    "Provided further that if any person proves to the satisfaction of the Commissioners that his turnover for any year does not exceed £200,000 in respect of armament contracts, then notwithstanding that his receipts for that year in respect of such contracts may exceed such sum, he shall not be deemed to be an armaments manufacturer for the purpose of this part of this Act."
    I think the purpose of this Amendment will be clear to the House. Under this Clause, the preliminary procedure is to decide whether or not a firm is liable to this tax, because the Minister, who is in the best position to know what the receipts of the firm have been, first of all declares to the Commissioners that in a particular accounting period, the total receipts for business under armament contracts is not less than £200,000. As an initial procedure, that has a great deal to be said for it, because that is a first fact that is easily known to the Minister. But let us consider what follows. Suppose that there was a case of a firm which in one year did a good deal of work, and that as a result of some delays, arising possibly out of discussions with regard to the accounts, the payments for that work all came in the following year, and that in the second year a certain ammount of work was done the payments for all of which were made during that year. The result would be that a firm which was by intention outside the scope of the tax—what we are really after is the people whose effective turnover in respect of armament contracts is £200,000 a year—and the turnover of which, in respect of armament contracts, was not much more than half the amount would, in fact, be brought under the tax by the sheer chance of the dates on which the cheques were paid.
    It might even be that in the case of firms whose accounting period ended on 31st March, the mere fact that the warrant from the Paymaster-General was despatched on 1st April instead of 31st March might decide the question whether they were to bear the tax or not. It seems to me that that is rather stupid. I cannot believe it is the intention that
    2280
    the tax should depend upon such a fortuitous circumstance as the date on which a certain account is made up. The intention is to bring in people who have contracts beyond a certain magnitude, and this provision might by chance bring in other people. On the other hand, there ought really to be a further Amendment—I know that I cannot move it, because it might increase the charge, and that it could be done by the Government only if the Bill were recommitted—to provide that a firm which had done £200,000 worth of business on armaments in a year should not escape by the mere chance that the payments were not spread over a single accounting period. As the Bill stands, I think it is really unsatisfactory. I hope I have made my point clear.
    Captain Strickland: I beg to second the Amendment.
    4.24 p.m.
    The Chancellor of the Exchequer (Sir John Simon): My hon. Friend the Member for South Croydon (Sir H. Williams) has explained briefly and at the same time clearly the point of the Amendment, and I think everybody will have followed the argument he has put; but there is this to be said on the other side. Under this provision, we are simply selecting the people who will come within the list of those who will be taxable, and we want to have a simple test which can be applied without doubt or challenge, because it will depend on facts which are within the knowledge of the Crown. That is the reason we select the test of receipts, for the spending Departments know what is the amount which, in a given year, they have paid to a particular firm or company. It is within their own records. It is not a matter, apart from accidents, which could ever be subject to any controversy. Therefore, it is a very good test for the purposes of selection and for the purposes of rapidity of administration.
    If I recollect rightly, my hon. Friend did put down an Amendment, on the Committee stage, to substitute turnover instead of receipts as the test, but obviously he could not move such an Amendment because it might have had the effect of increasing the charge and bringing in people who would not satisfy the test of turnover, but would satisfy the test of receipts. My hon. Friend, who is always ingenious and persuasive, now

    2281
    proposes that both tests should have to be satisfied. That proposal no doubt is in order, for if it had any effect at all, it would exclude from the possibility of taxation some people who otherwise would be liable. Nothing can be said on the point of Order, for the effect of the Amendment would be to let out some people who, under the Bill as it stands, would be included. While I agree there is nothing very scientific in saying that the test shall be £200,000 receipts in a year, wherever one draws the line, one is bound to have border cases on the merits of which one can argue a good deal, but I hope the House will take the view that, for the sake of simplicity, certainty and rapidity of administration, the test we have proposed is the right one and should not be complicated by a further provision that, even though this simple test was satisfied and there were receipts of more than £200,000 in a year from the Crown, nevertheless the individual should be outside the risk of taxation because he could show that his turnover in that year was not quite so much. I agree that the two things are not quite the same. I think there would be a tendency for them to correct themselves as between one year and another, but I hope the House will take the view that for practical purposes we have established a very reasonable test, and for those reasons, I am very unwilling to see it changed.
    Captain Strickland: Has my right hon. Friend given consideration to the case of two firms which do exactly the same amount of Govrenment contract work within a three-year period? The first firm does £150,000 in one year, £100,000 in the second year and £100,000 in the following year, and gets paid for the first two years in the second year, which brings the amount up to £250,000 receipts, so that the firm has to pay tax on the profits on £50,000. The second firm does exactly the same amount for three years, but gets paid each year, and escapes the tax. May I ask my right hon. Friend whether there is not any possibility, in his administrative capacity, of his adjusting what must obviously be an extraordinarily unfair comparison between those two firms?
    Sir J. Simon: I appreciate the contrast made by my hon. and gallant Friend the Member for Coventry (Captain Strick-
    2282
    land). I do not say it is not a fair illustration to give, but after all, the test of £200,000 is not the same thing as imposing the tax; it is merely a preliminary test for making a list of those whose cases are to be considered. I think the thing will correct itself in the second year as against the first. At any rate, I should be extremely sorry to see this complication introduced here, for it would inevitably introduce what might be lengthy arguments as to the proper calculation of turnover, which is not necessarily a very simple thing, instead of applying, as we seek to apply, a test which, as far as possible, would be automatic.
    4.30 p.m.
    Sir Frank Sanderson: Could not this whole thing be clarified if, instead of taking the amount of the payments received during any one year, you were to take the value of the goods delivered and invoiced during the year? The intention of my right hon. Friend is to levy a tax upon the total amount of goods delivered during a given period, say one year. If that is to be taken on the basis of payments received, this point arises. The Government might receive deliveries of goods valued at £50,000 in one year, and a further delivery valued at £50,000 the following year, but payment for the two deliveries might be made at one time, that is to say it is possible for payment of the whole £100,000 to fall within one financial year.
    4.31 p.m.
    Mr. John Wilmot: May I ask whether it would be in order to ask the right hon. Gentleman a question at this stage about an undertaking which I understood him to give during the Committee stage in respect of this Clause? The matter is slightly outside the terms of the Amendment. The question is whether he has considered including in the sums to be taken into account in arriving at the figure of £200,000, orders placed by local authorities and not by His Majesty's Government.
    4.32 p.m.
    Sir J. Simon: I can speak again only by leave of the House, and, indeed, I think I have already transgressed once in that respect. The point put by the hon. Member for Kennington (Mr. Wilmot) is, I venture to think, one which does not arise on this present discussion. There

    2283
    was a reference during the Committee stage to the difficulty of introducing local government contracts and my right hon. Friend the Minister-designate of Supply dealt with the point elaborately. In reply to my hon. Friend the Member for Ealing (Sir F. Sanderson) I would say that his point is really the same point as that made by my hon. Friend the Member for South Croydon (Sir H. Williams). He is, in fact, urging that we should substitute turn-over for receipts, or at any rate that we should relate the test to turn-over instead of relating it to receipts. I think it is plain that that would be a very much more complicated test to apply. There is great force in the argument that we should, if we can, make the preliminary list rapidly and simply. I hope it will turn out—indeed I think it will turn out—that the scheme proposed in the Bill will work with substantial justice. I agree that there will probably be a certain number of border-line cases, but I am going to see how it works out and if indeed it is found that cases arise which give occasion for saying that this method is working inequitably and improperly, then, of course, the matter will have to be reconsidered.
    4.34 p.m.
    Sir Arnold Gridley: May I put to the Chancellor of the Exchequer one aspect of this problem which may not have occurred to him or to his advisers? Those of us who are familiar with engineering contracts which extend over considerable periods, know that it is common for a firm to receive a payment of so much per cent, of the contract price on the delivery of the plant or equipment, and a further proportion when the plant has been erected and has started to work. Thus, a considerable percentage, say 10 per cent, to 15 per cent., may be left over for 12 months, and accordingly the receipts for the goods may not all come into the same year. That is one reason why those of us who are familiar with this business thought it would be fairer to the Exchequer and quite fair to the manufacturer, if turn-over were accepted as the basis of this taxation rather than receipts. When all is said and done, those of us who have to produce our balance sheets at the end of each year, ought to be able to compute accurately what reserves we required to make for Income Tax, for National Defence Contribution
    2284
    and for this new tax. It will not be so simple for us to do that, if we are uncertain whether we are going to be caught by this tax in a particular year or not. If the turn-over exceeds £200,000, which can easily be ascertained, then we shall know that we are liable to the tax. Therefore, I suggest that this Amendment ought to receive more careful consideration than it appears to have received up to now.
    Sir H. Williams: Having regard to the undertaking of the Chancellor of the Exchequer that he will consider any problem that arises in the course of the next year, and also having regard to the fact that the matter can be effectively dealt with in next year's Finance Bill, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 22—(Computation of standard profits.)
    4.37 p.m.
    Sir H. Williams: I beg to move, in page 24, line 12, to leave out from "thirty-six," to the end of the Subsection, and to insert "or the year nineteen hundred and thirty-seven."
    This Amendment and certain Amendments which follow it on the Order Paper form one group, and I shall endeavour to explain their purpose as briefly as possible. The basis of computation in the Bill is that the firm or the person to be subjected to taxation can select as their standard year, their year of account which ends in either 1935 or 1936; or they can take the average of 1935 and 1937, or they can take the average of 1936 and 1937. The one thing they are not permitted to do is to take the year 1937. I think it is fairly obvious why the Chancellor of the Exchequer has left out 1937. Naturally it is not calendar years that we are considering. This has reference to a year which will vary from firm to firm, because it is the year of account which ends some time during 1937—it may end on 31st January in the case of one firm and on 31st December in the case of another.
    The year 1937, as a whole, was a year of rather good trade and in the case of most firms it was a year of reasonably profitable trade. It was not, incidentally, a year in which armament contracts were very important. They cannot have been

    2285
    to judge by what we had not got in September last, which was a substantial period after 1937. Armament contracts cannot have been an important contributory factor to the general level of profits in 1937. As I say, that was a year of good though not of overwhelmingly good trade. It was, at any rate, a year of substantially better trade than we have known for some time past. The Chancellor of the Exchequer, primarily because it would diminish his revenue if they did so, has decided that these people shall not compute their profits for this purpose in relation to this year of fairly good trade. The Chancellor's point is that he wants to get as much as he can out of this tax. The primary object of all Chancellors is to get as much as they can. That is what they are there for and the more successfully they perform that task, the more we admire them. On the other hand, I am satisfied that in particular cases the exclusion of this year 1937—which, to many firms, was a good year in ordinary, normal trading, having nothing to do with armaments—will involve a certain measure of injustice. I find it a little difficult to understand on what ground of principle, apart from the ground of endeavouring to get as much as possible out of the tax, the Chancellor has introduced the rather novel idea of offering these alternatives in this form, and the Amendment proposes to include the year 1937.
    Captain Strickland: I beg to second the Amendment.
    4.41 p.m.
    Mr. Noel-Baker: This Amendment would change the standard year by reference to which excess profits may be calculated for the purposes of this duty. As far as the Amendment goes, taken by' itself, I, personally, am opposed to it. I am much less inclined, however, to oppose the arguments by which the hon. Member for Duddeston (Mr. Simmonds) supported a similar proposition in Committee. He then pointed out that a great part of the yield of this duty will be paid, not by what are normally known as armament firms, but by firms which were not doing armament work at all during these three standard years. I think the hon. Member touched on a point of great importance. Broadly speaking, during the years 1935, 1936 and 1937 there was no industrial mobilisation. There was no
    2286
    organisation of the ordinary engineering and other firms of the country for armament production. They were engaged in making their normal peace-time goods, and it was those firms which are normally known as armament firms, which were producing the vast majority of the country's defence requirements.
    I think I can show that the Chancellor's proposals, as they stand, may work unfairly as between armament firms proper and other firms which are now engaged in making arms. Indeed, I think I can show that it would be wrong and unjust, and certainly undesirable from the public point of view, to have one standard only. Everybody recognises that the great majority of firms concerned will choose the last of the Chancellor's four offers, namely, the average of the years 1936 and 1937. I think even the hon. Member who moved the Amendment would agree that even for ordinary firms that is not unjust. That average is not far below the peak of prosperity which ordinary engineering firms have been able to achieve in recent years. But for armament firms that average is a great deal more than just; it is extremely favourable. It covers a period during which their orders from the home Government and from foreign Governments, their production and their profits, had all been tremendously expanded when they already stood at a very high level indeed. I ventured to recall to the Chancellor in Committee—and as it is germane to my point, I am afraid I must weary him with a repetition of it—that in 1934 Government expenditure on defence was £113,000,000, and that the average expenditure of the two years 1936 and 1937 was £230,000,000, or more than double that of 1934.
    Sir H. Williams: Does the hon. Gentleman mean the year which ended on 31st March, 1938?
    Mr. Noel-Baker: Yes. Of course it overlaps a little, but it includes nine months of 1937. Not only had the expenditure on armaments and munitions doubled; it had more than doubled because we had not reached the stage of expanding our man power very much. In point of fact, if we examine the figures we find that, by 1937, expenditure on armaments and munitions was about four times what it had been in 1934. That is not the end of

    2287
    the story. The share of the private firms had also greatly increased, proportionately to that of the Royal Dockyards and arsenals. I think it is true to say that, by 1937, orders to private armament firms were approximately six times what they had been in 1934, which was the last year of the normal period as far as armaments are concerned. The greater part of that additional business had gone to the ordinary Admiralty, War Office and Air Ministry contractors. No doubt they put out some component parts to subcontractors, but, broadly speaking, up to that time their sub-contracts were nothing very great.
    That means that the firms which are normally known as armament firms were by 1937 at a high peak of prosperity; their profits and their dividends show that that was the case. I cited in Committee 30 firms engaged in armaments work whose total of profits had risen from £3,800,000 in 1934 to £11,750,000 in 1937, that is, had increased by three times, or rather more. There had been an increase of £8,000,000 of profit on the same capital—because there had been very little increase, if any, of real capital—and they were making quite good normal profits on their capital in 1934. That total excluded the aircraft firms, and I was able to show that those firms had also had a great increase in orders and profits by 1937, and that, in fact, they were paying dividends of 20, 30 or 40 per cent.
    Before the end of the Committee I proposed to the Chancellor that he should consider whether it would be possible to take a different standard year for armament firms proper and that 1934 would perhaps be the right year. If he would take 1935 I should be content and I think it would be an improvement, though I venture to think that 1934 is the right year. With his usual courtesy the Chancellor promised that he would consider the question, and he left me with some hope that he might say something about it on the Report stage, and that is why I am raising it now, but he was very far from promising to make a change. Indeed, he did advance certain reasons against the acceptance of the year 1934 as a general standard for all firms, and some of those reasons applied also against the acceptance of 1934 as the standard even for
    2288
    armament firms. The Chancellor said that the year 1937 was before our great armament expansion began, that it was only the beginning of what he called the quinquennium of our rearmament plan. With great respect that really begs the question. The quinquennium has nothing to do with it. We have to take the point from which rearmament began, and if the orders to private firms had by 1937 increased by six times over what had been the normal for the preceding 12 years I venture to think that, for the purposes of this new tax, that is rearmament expansion, and expansion on a very considerable scale, and if the firms were paying dividends of 20, 30 or 40 per cent, that is profiteering for the present purposes. I am not blaming the firms. The Government allowed them to do it, they must look after their finances, but it was profiteering of which, for the purposes of this tax, he ought to take account.
    The Chancellor also said that it was as a result of the expansion of the quinquennium that the costings system, which was our principal guarantee against profiteering, had failed to operate, that it was because of the immense increase of output due to the development of the five-year plan that the principal guarantee had not operated as it was hoped that it would operate in preventing excess profits. To that there is a double answer. First, there is the answer that before 1937 the costings system was less efficacious than it is to-day. The second answer is that, even by what he himself contends, the sixfold increase in orders must have broken down the efficacy of that principal guarantee against profiteering, and I think that is the reason why profits and dividends had risen to such a high point by 1937.
    I think that the Chancellor's reasons for rejecting the year 1934 as a standard for armament firms proper are not conclusive. I trust that he will agree that there is a case for establishing a different basis for armament firms, and that perhaps 1934, or at the latest 1935, would be right. I hope he will not reply that there would be a difficulty in determining which firms ought to be made subject to this standard year. I do not think there would be any difficulty about it. I suggested in Committee that he might take the contractors who were on the Admiralty, the War Office and the Air

    2289
    Ministry lists as armament firms, but perhaps an even simpler plan would be to include all firms who in the standard year, 1934 or 1935, received £200,000 worth of armament orders. I think that would work extremely well and without injustice to anyone concerned.
    I would press this on the Chancellor, because if he refuses some change of this kind I think he will be creating a system which the country will regard as a sham. It has been calculated by an expert in a Conservative paper that under this system Vickers would last year have paid only £70,000 Excess Profits Duty, in spite of the tens of millions of pounds worth of armament orders they must have had, and surely that is a result which would bring the whole system of this new taxation into well-merited derision. When the Prime Minister proposed it he said that it was to meet the views of the Labour party. Our views are that the profit should be taken out of war and the preparations for war, and that we should not now, in this time of crisis, allow an increase in the power or the wealth of a vested interest which draws great profits from the armaments which the nation now needs. The tax as it now stands will do remarkably little to meet any of these purposes, and therefore remarkably little to fulfil the Prime Minister's statement.
    I hope the Chancellor will remember that in the Peace Ballot 94 per cent, of those who voted desired that the private manufacture of armaments should be abolished altogether and they would certainly desire that profiteering should be really got rid of; yet I venture to doubt whether there has ever been greater profiteering out of armament manufacture except in the early days of the last War, than there is to-day. I hope the Chancellor will not complete his armament record which at Geneva was not, in the view of some people, a very happy one, by maintaining a scheme which in reality would be a sham. The proposals are lamentably inadequate.
    Sir H. Williams: On a point of Order. May I ask whether we are having a Second Reading Debate or a discussion upon my Amendment?
    Mr. Speaker: The hon. Member has been getting a long way from the terms of the Amendment.
    Mr. Noel-Baker: I am sorry to be out of order. I was really trying to elicit from the Chancellor a statement on something which he said that he would consider in Committee, and as there was a certain argument which he used in his final statement I thought I might be allowed to put the answer to that argument. But I have finished. I would end by begging the Chancellor to say that he will not accept the Amendment.
    4.54 p.m.
    Sir J. Simon: If I were to address myself to the Amendment which is now before the House I doubt whether I should be able to deal with the matters raised by the hon. Member for Derby (Mr. Noel-Baker), but as he has mentioned them I will trespass so far outside the rules of Order as to assure him that I did consider the suggestion which he made in the Committee stage that I should draw a distinction between armament firms and non-armament firms, and that firms should have a different standard year according to whether they were in the one class or the other. On reflection, I do not think it is a good suggestion. For one thing, I do not think it is true to regard all those who are now making armaments as falling into two simple categories, those who are armament firms and those who are not armament firms, because there are infinite gradations between the two. There are firms who did some armament work in addition to their principal work, others who did next to nothing, and others who did none at all. In the circumstances I think there is no doubt that the course we have taken in the Bill is the right one, and that is to have some common formula for the standard year, to give an adequate number of well selected alternatives, and to provide that in certain cases where this may cause manifest hardship there should be a reference to the Board of Referees.
    The hon. Member for Derby was not concerned very much with discussing the Amendment, but with discussing other things, but as regards the Amendment itself, that, too, I have considered since the Committee stage. Another hon. Friend of mine made this proposal during the Committee stage, and I then opposed it but undertook to look into it further, and that I have done. I certainly do not think that the year 1937

    2291
    standing by itself should be regarded as a normal year for armament purposes. The hon. Member for Derby, who has the figures very much at his finger ends, pointed out how the totals have risen, and I do not think that we could regard that year by itself as what we might call a normal year. On the other hand, as I have pointed out, we are trying in this Bill by simplification to produce a plan for fixing a standard which does not introduce—at any rate does not introduce in the case of old companies—a reference to interest on capital. I am sure that is a wise decision, because whatever rate of interest you allow on that capital it cannot be more than a very rough approximation. We have to use this method as regards new businesses or the increases of capital in old businesses, but if in the case of established businesses we have not to make this calculation of capital and a percentage on it it is a much better plan.
    Therefore, we have provided no less than four alternatives. I do not think I can accept the suggestion of the hon. Member for Derby that in every case people will choose one of them, the one which he referred to as the most favourable one. In many cases that may be so, but not in all cases. We have offered the alternative of the year 1935, or the year 1936, or the alternative of either of two averages, the averages of 1935 and 1937 or of 1936 and 1937. My hon. Friend the Member for South Croydon (Sir H. Williams) has done something which is very rare with him: he has made a mistake in the reading of the Bill. He said that for this purpose you might imagine that the year ended at any month, but for the purpose of fixing the standard it is the calendar years which are referred to. You have to take the accounts of a business—if they do not make up their accounts to 31st December—and divide them in such a way as will produce the figure for the calendar year. That, however, is a small point.
    I think the four alternatives we have offered will turn out to be about fair. It is true that there was a very considerable increase in the amount which the State spent on armaments in the latter of these years. In the fiscal year 1936–37 the amount was £186,000,000, and in the next fiscal year, 1937–38, it had risen to
    2292
    £262,000,000; and as we all know, and I have more reason to know it than anybody else, the amounts have risen since then in the most fearful way. There is no question, therefore, that 1937 is the year in which we began to feel the effect of the armaments drive, but it is equally true to say that it does not reflect the full effects of it. I take the view that it is when you get to production on a very large scale that you find yourself at the greatest risk of there being excessive profits which call for taxation. I think, therefore, that the proposals that we make are right.
    In arguing here for the provisions of the Bill, I am between the devil and the deep sea—I do not attempt to allocate the parts—in one quarter I am asked to go further in one direction, and in another quarter I am asked to go not so far. I have taken the middle of the road. It is the safest place, and that is where I propose to remain.
    Amendment negatived.

    CLAUSE 23.—(Provisions as to computation of profits and capital)
    Sir J. Simon: I beg to move, in page 26, line 12, after "the," to insert "standard period or."
    I am sorry to have to confess that there is a slip in the drafting of the Bill which has only just been observed. It illustrates one of the very commonest forms of error in ancient manuscripts and indeed in modern copying, when the copyist is copying a text in which the same phrase occurs twice and, when he reproduces it, he imagines that he has already got to the second occasion when in fact he has only got to the first, and the result is that he leaves out the necessary words that ought to be repeated. Sub-section (2) says:
    "Where a standard period or chargeable accounting period is not a period for which the accounts of a business have been made up."
    You are dealing with two altenatives, one the standard period, and the other the chargeable accounting period. The Sub-section goes on:
    "and such aggregation of any such profits or losses or any apportioned part thereof shall be made, as appears necessary, to arrive at the profits arising in the."
    Then it ought to be "standard period or chargeable accounting period," but

    2293
    only "chargeable accounting period" has been printed, and "standard period or" is left out.
    Mr. Pethick-Lawrence: I am still very vague as to the effect of putting the words in.
    Sir J. Simon: If you have a standard period, the calendar year, 1936, then, in the case of a company which does not make up its accounts to 31st December, 1936, you will have to build your standard period up by taking the appropriate parts of two different accounts. In the same way, if you want to arrive at a chargeable accounting period and it is not the period to which the accounts are made up, the same thing would arise. This is a provision that, supposing that were so, such division and apportionment to specific periods of the profits and losses, and such aggregation of any such profits and losses, shall be made as appears necessary both for arriving at the standard period and for the purpose of arriving at the profits in the chargeable account. It is merely saying that if you have not the figure as a single figure—as a whole—and have to build it up, you shall build it up by taking the appropriate sections both before and after and putting the two together, and thus compose your single period.
    Amendment agreed to.

    CLAUSE 24.—(Succession and amalgamation.)
    5.6 p.m.
    Mr. Spens: I beg to move, in page 26, line 23, after "that," to insert:
    "(a) where the change consists of the death or retirement of a partner, or the taking in of a partner, the persons carrying on the business after the change may, by notice in writing to the Commissioners, elect that the business shall not be deemed to have been discontinued and that a new business shall not be deemed to have commenced; and."
    The following Amendment deals with the same point. One refers to partnership, and the other to companies and corporations. My hon. Friend the Member for Eastbourne (Mr. C. S. Taylor) raised this point on the Second Reading, and pointed out that, as the Bill was drafted, it might be possible for present owners of certain businesses which have been in existence for a very long time to find themselves under a very great hardship compared with their competitors in cases where there had been an alteration in the
    2294
    ownership since 1st July, 1936, because any alteration in ownership made the business a new business, and, therefore, the basic profit standard would be arrived at on the percentage of profit on the average capital employed in the business and not on the actual result of past working in the material years which would be applicable had the business continued throughout in the same ownership. I apprehend that, as the right hon. Gentleman has said that the percentage on a capital basis is a rough-and-ready rule, and it is made applicable to new businesses in any event, it is not intended to be too kind to those businesses which have been started up since 1st July, 1936. But, be that as it may as regards new businesses, it is clear that there are certain businesses which have been going on for a very long time and have changed ownership since July, 1936, and which, in fact, employ a comparatively small amount of working capital and whose profit results in the past are substantially higher than would be a percentage based on their working capital in this or any future year. Therefore, you get this position, that you might have a business which has been in existence for 40 or 50 years whose basic profit standard, if assessed and calculated on the basis that it remains in one ownership, might work out at £50,000 or £60,000, according to the option which the owners took, but which, if it is to be treated as a new business on a percentage standard, might find itself with a basis of something substantially less.
    The fact that one company, because there happened to have been a transfer of ownership since July, 1936, would be liable to pay a much greater sum in taxation than a competitor must inevitably handicap it severely against that competitor. Therefore, it is for my right hon. Friend and the House to consider whether or not a mere transfer of ownership should have such possibly very hard results on a particular firm. There is no good reason why, if the transfer is only a technical change of ownership, that result should follow. In the old Excess Profit Duty legislation of 1915 it was recognised that you might have changes of ownership which were really only technical from the point of view of the tax such as the introduction of a partner, or the transference of the business from a private to a public company, or from one

    2295
    person to another, the earning capacity and the direction of the business remaining wholly undisturbed. In that legislation certain provisions were put in to deal with this, and it is on those provisions that these two Amendments have been based. The first merely provides that, where the change only consists of the death or retirement of a partner, or the taking in of a new partner, the business shall be treated as if it had gone on without any disturbance. The second deals with a case where the change of ownership has been an actual transference in law from one person to another, or one company to another, and where the business, or the main part of the business, has been so transferred and goes on undisturbed it is suggested that the present owners may make application to the Commissioners to have themselves treated as if the business had remained in one ownership throughout and the Commissioners are given power to agree to that either in toto or on terms, or to refuse it. A right of appeal is given to the taxpayer against a refusal, or against the imposition of some term or modification that he regards as unfair.
    Mr. Boulton: I beg to second the Amendment.
    .5.14 P.m.
    Sir J. Simon: I think there is a good deal to be said for these Amendments. I do not think the first is likely to have any very considerable operation in practice. Enterprises that have been paid £200,000 a year for armament contracts would not usually be found to be partnerships. It seems to me that if there were such cases, it is manifestly good sense that you should not say that the business of the partnership, carried on perhaps for many years and carried on after the death or retirement of one of the partners, ought to be regarded as a new business. It is an almost accidental circumstance that the members of the partnership have changed. If the business is being carried on as before, it seems very gratuitous to say that it is a new business, for what may be an accidental cause, such as a change in partnership. If you did so, you would increase the number of cases in which you would have to rely on a valuation of capital, when you need do nothing of the kind, if the business is one which is carried on notwithstanding that a partner
    2296
    has dropped out or been changed. I do not regard that as an important point, because I do not think it will arise in practice.
    The other Amendment is certainly more important, and here again I am anxious that we should consider whether this provision is rightly safeguarded. I would not consent to insert the bald provision that whenever one company sells its undertaking, or part of its undertaking, to another company, the business shall in all cases be treated as a continuing one. That would leave open the door to some cases which we should not be disposed to let out. But undoubtedly there are cases, which can be easily imagined, in which there has been a transfer from one company to another, a reconstruction or something of the kind, where, under suitable safeguards, it appears to me to be wise and right to treat the business as a continuous business, so that you will be able to rely on the standard profit basis. But I would call particular attention to the words of the Amendment at the end of the first paragraph: "Subject, however, to such modifications … as may be just." I think we can trust the Commissioners here, and on appeal the Board of Referees, to see that any necessary adjustment is made, and if the necessary adjustment is made in a case which calls for it, I would ask the House to approve of the principle.
    We are seeking to impose Armament Profits Duty on a business. It would never do to say that the business should be looked at without considering who the owners are. That might give the opportunity to owners, after they had made perhaps a great big profit, to dispose of their business to a newly created company and claim that they were newborn, starting at that moment all over again, with results that would not be satisfactory or fair to the Revenue; but in cases where the business was carried on before 1st July, 1936, and it, or the main part of it, was then transferred before 1st April, 1939, to another person, I think it is for the better working of this particular system—and I shall not lose revenue by it—if we say that the Commissioners, if they are satisfied that the business carried on after the transfer is substantially the same as that carried on before, may decide to treat the business as continuous

    2297
    for the purpose of standard profits, with the precaution "subject to such modifications as may be just." The Commissioners, I am certain, while desiring to do what is fair and right, will at the same time be able to watch the interests of the Revenue in the matter, and if there be a subject of further dispute, the matter can go to the Board of Referees, in whom, I think, we can have the greatest confidence.
    But I do not want there to be any misunderstanding on the part of any business now being carried on by a newly created company. It does not at all follow, because it has been transferred from the old to the new company, that in all cases it will be treated as a continuous affair, without modification, but there may be cases in which it is right to do so, and where it is right to do so, I would very much sooner rely on a standard based on the actual experience of the business in profits than have to substitute unnecessarily an alternative standard for the calculation of profits.
    5.21 p.m.
    Mr. Pethick-Lawrence: With regard to the first Amendment, the one now before the House, I do not think anyone can have any doubt that it is sound. With regard to the second Amendment, I think that in all probability, and with the safeguards that are imposed, it will not work out with unfairness either to the Revenue or to the taxpayer, and, therefore, I see no objection to either Amendment.
    Amendment agreed to.
    Further Amendment made: In page 27, line 30, at the end, insert:
    "(4) Notwithstanding anything in the foregoing provisions of this Section, where a business was carried on immediately before the first day of July, nineteen hundred and thirty-six, and that business, or the main part of that business, was transferred after the said day and before the first day of April, nineteen hundred and thirty-nine, by the person carrying it on to another person, the Commissioners, if they are satisfied that the business carried on after the transference was not substantially different from the business or part transferred, may, on the application of the person carrying on. the business after the transference, treat that person, for the purposes of the provisions of this Act relating to the computation of standard profits, as if he had carried on the transferred business or part of a business as from the date of the commencement of that business, subject, however, to such modifications (including modifications as respects the computation of capital) as may be just:
    2298
    Provided that if the Commissioners refuse an application under this Sub-section or if the applicant is dissatisfied with any modifications made by the Commissioners, the applicant may appeal to the Board of Referees."— [Mr. Spens.]

    CLAUSE 25.—(Duty to give information.)
    5.22 p.m.
    The Minister without Portfolio (Mr. Burgin): I beg to move, in page 28, line 8, after "business," to insert "in the United Kingdom."
    This is a drafting Amendment.
    Amendment agreed to.
    5.23 p.m.
    Captain Strickland: I beg to move, in page 29, line 8, at the end, to insert:
    "(6) Where any person for the purpose of enabling himself to perform an armament contract has entered into another contract with any other persons for the supply by them to him of unidentifiable materials or things, those other persons may demand proof from the first-named person that the things they have supplied under the contract have in fact been used for the purpose of the armament contract aforesaid, and falling such proof being given by the first-mentioned person, a contract to supply those things shall not be deemed to be an armament contract."
    The purpose of the Amendment is to make quite sure that a sub-contractor shall be able to get a square deal with regard to armament contracts. It is quite possible that a contractor may be giving out orders to various sub-contractors. In the course of the supply of materials to the contractor, the subcontractor may not be aware whether the goods that he supplies to the main contractor are indeed subject to taxation as part of an armament contract or whether they are materials used for other purposes. It is to enable the sub-contractor to obtain, by legal right, from the contractor some sort of proof that the goods that he has supplied are indeed used for armament purposes that I move the Amendment. It is not an obstructive Amendment at all, but it is to secure that the sub-contratcor may have some legal right to proof of his liability to Armament Profits Duty.
    Mr. Hely-Hutchinson: I beg to second the Amendment.
    5.25 p.m.
    Mr. Burgin: The object of the Amendment, as the Mover has said, is to ensure that sub-contractors are treated fairly,

    2299
    He did not explain quite who was to be satisfied with the proof, and I think the House would appreciate at once that if the man who was to be satisfied was to be the sub-contractor, it would be a little anomalous, for the House would give to the sub-contractor, himself and alone, the power to say whether or not he came within the tax. I hope my hon. Friends, when I have been able to explain to them a little of the manner in which the tax is to be operated with regard to sub-contractors, will feel that their fears are without foundation and that the Bill contains the proper elements of proof for which they are asking. Let me explain shortly this chain of contracts and sub-contracts, and let me begin by saying that whether or not a sub-contract comes within Armament Profits Duty does not depend on that sub-contractor being satisfied. It is in the last resort a matter for determination by the Minister and is not a matter dependent upon a certificate or somebody's statement. It is an anlysis of facts determined by the Minister after hearing any person who is rendered responsible.
    I think everybody in the House realises the enormous part which sub-contracts play in the Defence programme. The main contractor in contract with one of the Defence Services or with the Ministry of Supply proceeds to order from his various suppliers, who in turn procure their material from those further down the scale. The whole chain is a difficult one. That chain must be definitely and absolutely established to bring these sub-contracts within the tax at all, and if that chain breaks down at any particular point, everything below that breakdown should clearly have the benefit of the doubt. That is the way in which the administration of a tax of this kind must be carried out. I would ask my hon. Friends to realise that one of the reasons why in the Clause defining what is an armament contract there was inserted a proviso enabling certain articles and materials to be excluded was precisely this administrative difficulty of tracing the chain of sub-contracts too far down.
    Let me take one example of the sort of difficulty of administration with which my Ministry may find itself confronted. It is not unusual for one or other of the large firms of mass production motor car
    2300
    makers to be engaged also on armament work. There is a whole variety of bolts, screws, nuts, and small, interchangeable parts which are ordered in bulk at the beginning of a season and from time to time replenished, which bolts, nuts, and screws can be used interchangeably, either for the mass production motor car or for the armament contracts which are being carried out. There will come a point at which it is quite impossible to differentiate in the use to which that common bolt is to be put, and, therefore, this tax has to be administered as a sensible, practical matter. You take your main contractor and put him under an obligation to tell his sub-contractor, and you put each subcontractor under an obligation to tell others further down the scale, and it is the Minister who determines whether or not the person and the sub-contract, the articles and materials, come, in the specific case, within the tax.
    Mr. Pethick-Lawrence: The Minister says, "We put him under an obligation to tell the sub-contractor." To tell him what? That the bolt is to be used as an armament?
    Mr. Burgin: You have to tell him that the supply is ordered for armaments. It is in the Bill, in Clause 25, which deals with this subject. It puts upon him the duty of telling the sub-contractor that the contract in respect of which he has been asked to undertake sub-contracting work is to fulfil an armament contract. It is in Sub-sections (2) and (3). If hon. Members look at Sub-section (2) of the Clause they will see that it says:
    "It shall be the duty of any person who, for the purpose of enabling himself to perform an armament contract, had, whether before or after the passing of this Act, entered into another contract with any persons … for the supply of anything by them to him … to send to those persons, as soon as may be after the passing of this Act, or, as the case may be, after entering into the contract, a notice in writing stating that the contract has been entered into for that purpose."
    Mr. Pethick-Lawrence: I suppose that it covers the case which the right hon. Gentleman gave of the man who had ordered a number of nuts and bolts, part of which he wanted for armaments and part for other work, but I do not see that it is so covered.
    Mr. Burgin: We are trying to consider a wide variety of information. The duty

    2301
    of giving information is absolute. I was dealing with the case of a man who bought the bolts before he had this information. I say that there will inevitably come a point in the contract below which you cannot go further. That was one of the reasons why I thought that coal would probably have to be excluded as well as public utility services, because of the difficulty of dealing with the user to which the fuel was put, as a matter of practical administration. I am endeavouring to tell those who moved the Amendment that it is a canon of taxation that you must have liability determined clearly and not open to doubt, and that if there is doubt the taxpayer ought to be given the benefit of the doubt.
    In this tracing of the sub-contracts right down the scale the Minister has the last word in determining whether or not a contract comes within the definition. The words proposed in the Amendment are, therefore, unnecessary. They would be difficult to work. You cannot make liability to taxation depend upon whether somebody does or does not supply proof, and there is no sanction in the Amendment upon someone who has proof, but omits to send it. There are all kinds of difficulties like that. I ask my hon. Friends to accept my assurance that the only way in which you can apply this proposal to a whole chain of sub-contracts is by making sure that the links in that chain are firmly established. That being so, it is not necessary for the subcontractor to have proof submitted to him.
    5.34 P.m.
    Sir H. Williams: I was not in my place when this Amendment was moved and I thank my hon. Friend very much for moving it. I agree with some of the strictures of the Minister that the drafting is not too good, but I am not clear about the whole position, and I do not think that the Minister has answered the question put to him by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) about the mixed bag of nuts and bolts. I, say, as a principal contractor, place an order, which may be for a large sum, of nuts and bolts, or, may be, supplies of steel or copper. Part of that supply is subsequently incorporated in an armament contract and a large part in other
    2302
    contracts. What is then my duty? I have ordered £10,000 worth of raw material, and so far as I can see about £2,000 worth of it is to be used in connection with the armament contract and the remainder on ordinary civil work. What information do I pass on to the gentleman from whom I bought those things? Do I tell him that they are wanted for an armament contract? If I do, that is an incomplete statement. Somehow or other this matter has to be traced through.
    I am dealing with materials which are ordered at the general stores of the factory. Every factory, you will find, has a store with hundreds and sometimes thousands of bins containing a great variety of articles of a standard character which are drawn on in the process of manufacture. Somehow, a system of costing will have to differentiate between the stores which are used for armament contracts and those which are not, and the news will have to be passed down the line. The Minister explained how the machinery relating to armaments contracts would work. I hope that he will answer the question put to him by the right hon. Gentleman opposite.
    Mr. Burgin: I can speak again only with the permission of the House. The case put by my hon. Friend the Member for South Croydon (Sir H. Williams)—if I followed it correctly—was that of a purchaser of raw materials who bought without the knowledge of the use to which those raw materials were to be put. That purchase of raw materials is not an armament contract.
    Captain Strickland: I do not think that my right hon. Friend understands the point. This is an armaments contractor purchasing from a sub-contractor. The point that we put was that he purchases a quantity of raw material or some product which, as the Minister has said, might be used for one purpose or for another. In fact, a certain proportion of it is ultimately used in armament work and a certain proportion for other purposes. The question which we put is: What is the precise duty of the armament contractor in relation to the subcontractor in reference to this mixed bag of materials?
    Mr. Peat: May I be allowed to elaborate this point, in respect to a main con-

    2303
    tractor who employs a number of subcontractors? He may not get all his bolts or nuts or steel from one subcontractor, but from a number of subcontractors. He may put them all into store. I gather that he is not going to segregate them into different compartments some of which will go to armaments and some to civil work. How can he divide it up between his sub-contractors? It is an almost impossible physical task.
    Mr. Burgin: I thought I was coming to that point by my own method. When the armament contractor buys in bulk with the knowledge in his own mind of the part to be applied to armament work, that purchase in bulk is an armament contract. I think that is quite fair. A contractor is under an obligation to give notice of the purchase of the raw material only if he buys it for the purpose of fulfilling an armament contract. Purchase in bulk without reference to an armament contract does not render the vendor of the raw material liable as an armament contractor at all. The man who bought in bulk without reference to the ultimate destination of the goods is not made party to an armament contract at all. That is quite clear from the interpretation of Clause 25 of the Finance Bill. Of course, where one is dealing with such a subject as steel the probability is that the steel will be ordered specifically for the purpose of supplying an armament contract, and to the extent to which the classification of the shapes or types of steel is determined, so the purchaser will have the duty of an armament contractor, that of saying that his purchase is for the purpose of an armament contract.
    Mr. Pethick-Lawrence: This seems to me, as Alice said, curiouser and curiouser. It now seems that if a man wants £10,000 worth of articles for an armament contract he has only to add £1,000 worth more, which he is going to use for something else, in order to free the whole £11,000 from being an armament contract.
    Sir H. Williams: In view of the discussion which has taken place, I beg to ask leave to withdraw the Amendment. It is quite manifest that we shall require a better solution than the one that has been arrived at.
    Amendment, by leave, withdrawn.

    CLAUSE 26.—(Application to armament profits duty of Fifth Schedule to Finance Act, 1937, etc.)
    5.41 p.m.
    The Financial Secretary to the Treasury (Captain Crookshank): I beg to move, in page 29, line 25, to leave out "and," and to insert:
    "(c) the power of the Commissioners to make regulations with respect to the hearing of appeals under Part II of the said Schedule shall extend to the hearing of appeals and the deciding of any matters by the Board of Referees under this Part of this Act; and."
    This is purely a machinery Amendment in order that the Commissioners may have power to make regulations in respect to the hearing of appeals. They are empowered under Sub-section (1) of the Clause to do that for the purpose of appeals before the Special Commissioners, because we have applied the provisions which cover appeals in the case of the National Defence Contribution. Those provisions, however, do not cover appeals to the Board of Referees, and in order that regulation may be made for that purpose this Amendment is moved.
    Amendment agreed to.

    CLAUSE 28.—(Interpretation, etc.)
    5.42 p.m.
    Mr. Burgin: I beg to move, in page 30, line 43, at the end, to insert:
    "(i) the expression 'articles and materials' includes water, gas, electricity and hydraulic power."
    I gave an undertaking when the Bill was in Committee that these public utility services would be excluded. As a matter of drafting we exclude them best by operating under the proviso on page 23, line 25. To enable us to do that I have to insert some definition which will bring these strange substances within the words "articles and materials." I do not like to make electricity an article and material. I am not sure that there is yet any accurate definition of electricity. The Amendment enables me to exclude, under the proviso, these services. Immediately the Bill becomes law it is the intention in one of the Orders made under the proviso to exempt these public utility services. I hope that the House will feel able to accept the Amendment.
    Amendment agreed to.

    CLAUSE 30.—(Estate duty on certain interests arising on death.)
    5.44 p.m.
    The Solicitor-General (Sir Terence O'Connor): I beg to move, in page 32, line 9, to leave out from "Commissioners" to "that" in line 12.
    The purpose of this Amendment is to implement an undertaking which was given during the Committee stage of the Bill. I went into the question then at very great length.—I am afraid at rather undue length.—and I therefore do not propose to repeat now what I then said. The substance of the Amendment that we are making is to provide that if it can be shown that the disposition of the property which is the subject-matter is not made
    "with reference to, or with a view to enabling or facilitating, the purchase or provision of the annuity or other interest,"
    the Clause cannot operate. The burden is put upon the persons to prove that they are not associated in any way, and that should be sufficient. That was the opinion which I then gave.
    5.45 p.m.
    Mr. Benson: I am not prepared to accept this Amendment, because it seems to me that it excludes two very important factors in deciding whether a particular disposition has been made for the purpose of creating an interest arising at death. As the Bill was originally drafted, there were three tests—first, whether the money derived from the deceased person was in the possession of the person who was entitled to it; secondly, whether it was in his resources; and, thirdly, whether the disposition was made for the purpose of facilitating the provision of an interest. Two of these tests have been knocked out; it does not matter now whether the person is entitled to the money or not, or whether it is in his possession or not at the time when the annuity is purchased. All that is left is the question of motive. I assume that the Clause as originally drafted was the work of the gentlemen who look after our direct taxation, and who are very able and experienced persons. They do not draft these tax avoidance Clauses casually and without consideration; I assume that, in drafting such a Clause, they have before them a large number of copies of dispositions and the like, and a large number of instances of tax avoidance. They start with the idea of preventing the specific cases of which they already have evidence, and they
    2306
    take care to put in just so much as will catch the cases of which they have evidence. We know from experience that, whenever we attempt to stop up a hole in advance, our proposal is invariably rejected by the Government on the ground that they have no evidence that that particular form of evasion is taking place, so I assume that, when we find in a Clause certain specific tests, those tests have been considered necessary as a result of the experience of men who are continuously coming across the forms of avoidance that are dealt with.
    I do not think that the Solicitor-General, in his speech in Committee, made out a case for the elimination of these two tests. It is true that he quoted the hypothetical case of a medical student who received from his father an allowance of £200 or £300 a year to carry him through his studies, and who might put aside a certain proportion of that amount to insure his father's life. That strikes me as a very problematical case, and I should be very surprised if the Solicitor-General could dig up an actual instance where it had happened. The Amendment leaves only one test, the test of motive. The question is whether the disposition was made for the purpose of facilitating or helping in the provision of an interest arising at death. Such a thing is extraordinarily difficult to prove, and, when you are trying to prove what was the motive of a dead man, there is little or no evidence that you can call on either side. It is, however, very easy to manufacture evidence as to an ostensible motive. The question of motive has been discussed before. The Finance Bill of 1936 dealt with the transference of assets abroad, and one of the tests there was the motive of the transfer—whether it was or was not mainly the avoidance of tax. The actual phrase is that a man should be free of tax if he could show
    "to the satisfaction of the Special Commissioners that the transfer and any associated operations were effected mainly for some purpose other than the purpose of avoiding liability to taxation."
    That is practically the wording of the present Clause, mutatis mutandis. But what happened? That wording was found to be utterly inadequate, and in 1938 the Chancellor had to strengthen the Clause. He gave the instance of a man who transferred his assets abroad, going through all the various and elaborate methods that

    2307
    are usual in tax avoidance. He formed an American company; he took care that the income arising from the assets transferred abroad was not remitted to this country; he did everything that the normal tax avoider does. But he went to the Special Commissioners and explained that the real reason why he had gone through all these elaborate and artificial arrangements was, not that he wished to avoid taxation, but that he was afraid the Socialists might at some time come into power, and he did not know what would happen to his money if they did. And the Special Commissioners accepted that fantastic statement and decided that that was his real motive. If the Special Commissioners have to be satisfied, and if they are satisfied as easily and readily as that, it seems to me that the Clause is not worth putting in the Finance Bill.
    If a disposition is made for the purpose of financing an insurance policy, all that the disponer has to do is to set out elaborately in the deed his reasons for making the disposition. He can state in black and white that he makes the disposition to his son or daughter in order that they may maintain, in a state that he considers fitting and adequate, such-and-such an estate or house; or he may make a marriage settlement in which he says that he thinks his son ought to have such-and-such a status and that he will provide the money. That is a definite statement which may apparently be quite reasonable. Who is to say, as regards a marriage settlement, what a parent thinks is the right amount to settle on his child on marriage? We are not dealing here with small matters, but with large amounts. He can say that £5,000,
    £10,000, £15,000 or £20,000 a year is a reasonable amount to settle on his child on marriage. He may think that £10,000 a year is a reasonable amount for his son to live on, but he may add another £2,000, £3,000, £4,000 or £5,000 for the purpose of providing money with which to purchase an annuity or insurance. How can the Special Commissioner sort that out? The son has only to say his father has embodied in the deed of disposition that he thinks this is the amount he ought to have on marriage. How can it be disproved? This Amendment is going, if I may use the expression, to take the "guts" out of the Clause.
    I do not think it is possible for an insurance on the life of some other person to be purchased without that person's knowledge and without his consent, or, where it is being purchased by someone in receipt of funds from the insured person, without his connivance. There might possibly be cases such as were suggested by the Solicitor-General in Committee, but, in the vast majority of cases, where the individual who insures has in his possession funds derived from the person at whose death the interest arises, it is almost invariably the case that those funds have been provided for the purpose, among others, of enabling the insurer to insure the life of the person from whom the funds were derived. Therefore, I sincerely hope we shall vote against this Amendment, which destroys the efficacy of the Clause.
    Question put, "That the words proposed to be left out stand part of the Bill."
    The House divided: Ayes, 122; Noes, 213.

    Division No. 238.]

    AYES.

    [5.59 p.m.

    Adams, D. (Consett)

    Cluse, W. S.

    Hall, G. H. (Aberdare)

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

    Collindridge, F.

    Hall, J. H. (Whitechapel)

    Adamson, Jennie L. (Dartford)

    Cove, W. G.

    Hardie, Agnes

    Adamson, W. M.

    Cripps, Hen. Sir Stafford

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

    Anderson, F. (Whitehaven)

    Daggar, G.

    Hayday, A.

    Banfield, J. W.

    Dalton, H.

    Henderson, A. (Kingswinford)

    Barnes, A. J.

    Davies, S. O. (Merthyr)

    Henderson, J. (Ardwick)

    Barr, J.

    Dobbie, W.

    Henderson, T. (Tradeston)

    Batey, J.

    Dunn, E. (Rother Valley')

    Hills, A. (Pontefract)

    Beaumont, H. (Batley)

    Edwards, Sir C. (Bedwellty)

    Hollins, A.

    Bellenger, F. J.

    Edwards, N. (Caerphilly)

    Hopkin, D.

    Benn, Rt. Hon. W. W.

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

    Jenkins, A. (Pontypool)

    Benson, G.

    Gallacher, W.

    Jenkins, Sir W. (Neath)

    Bevan, A.

    Gardner, B. W.

    John, W.

    Broad, F. A.

    Gibson, R. (Greenock)

    Jones, A. C. (Shipley)

    Bromfield, W.

    Green, W. H. (Deptford)

    Kennedy, Rt. Hon. T.

    Brown, C. (Mansfield)

    Greenwood, R(. Hon. A.

    Kirby, B. V.

    Burke, W. A.

    Grenfell, D. R.

    Kirkwood, D.

    Cape, T.

    Griffiths, G. A. (Hemsworth)

    Lathan, G.

    Charleton, H. C.

    Griffiths, J. (Llanelly)

    Lawson, J. J.

    Leach, W.

    Oliver, G. H.

    Stephen, C.

    Lee, F.

    Paling, W.

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

    Leonard, W.

    Parkinson, J. A.

    Stokes, R. R.

    Leslie, J. R.

    Pearson, A.

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

    Logan, D. G.

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

    Taylor, R. J. (Morpeth)

    Lunn, W.

    Price, M. P.

    Thorne, W.

    Macdonald, G. (Ince)

    Pritt, D. N.

    Tinker, J. J.

    McEntee, V. La T.

    Quibell, D. J. K.

    Viant, S. P.

    McGhee, H. G.

    Rathbone, Eleanor (English Univ's.)

    Walker, J.

    McGovern, J.

    Ridley, G.

    Watkins, F. C.

    MacLaren, A.

    Riley, B.

    Watson, W. McL.

    Maclean, N.

    Ritson, J.

    Welsh, J. C.

    Mainwaring, W. H.

    Robinson, W. A. (St. Helens)

    Westwood, J.

    Marshall, F.

    Sanders, W. S.

    Whiteley, W. (Blaydon)

    Maxton, J.

    Sexton, T. M.

    Williams, T. (Don Valley)

    Messer, F.

    Shinwell, E.

    Wilmot, John

    Milner, Major J.

    Silverman, S. S.

    Woods, G. S. (Finsbury)

    Montague, F.

    Simpson, F. B.

    Young, Sir R. (Newton)

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

    Smith, Ben (Rotherhithe)

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

    Smith, E. (Stoke)

    TELLERS FOB THE AYES.—

    Naylor, T. E.

    Smith, T. (Normanton)

    Mr. Groves and Mr. Mathers.

    Noel-Baker, P. J.

    Sorensen, R. W.

    NOES

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

    Despencer-Robertson, Major J. A. F.

    Mabane, W. (Huddersfield)

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

    Dorman Smith, Col. Rt. Hon. Sir R. H.

    MacAndrew, Colonel Sir C. G.

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

    Drewe, C.

    MacDonald, Rt. Hon. M. (Ross)

    Anstruther-Gray, W. J.

    Dugdale, Captain T. L.

    Macdonald. Capt. P. (Isle of Wight)

    Aske, Sir R. W.

    Duggan, H. J.

    Macmillan, H. (Stockton-on-Tees)

    Assheton, R.

    Duncan, J. A. L.

    Maitland, Sir Adam

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

    Edmondson, Major Sir J.

    Makins, Brigadier-General Sir Ernest

    Barrie, Sir C. C.

    Ellis, Sir G.

    Mander, G. le M.

    Beamish, Rear-Admiral T. P. H.

    Elliston, Capt. G. S.

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

    Beauchamp, Sir B. C.

    Emrys-Evans, P. V.

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

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

    Entwistle, Sir C. F.

    Maxwell, Hon. S. A.

    Bennett, Sir E. N.

    Erskine-Hill, A. G.

    Meller, Sir R. J. (Mitcham)

    Bird, Sir R. B.

    Evans, D. O. (Cardigan)

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

    Boothby, R. J. G.

    Fildes, Sir H.

    Mills, Sir F. (Leyton, E.)

    Boulton, W. W.

    Fremantle, Sir F. E.

    Mills, Major J. D. (New Forest)

    Bower, Comdr. R. T.

    Furness, S. N.

    Mitcheson, Sir G. G.

    Bracken, B.

    George, Megan Lloyd (Anglesey)

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

    Brass, Sir W.

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

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

    Brisooe, Capt. R. G.

    Gower, Sir R. V.

    Moreing, A. C.

    Broadbridge, Sir G. T.

    Graham, Captain A. C. (Wirral)

    Morgan, R. H. (Worcester, Stourbridge)

    Brocklebank, Sir Edmund

    Granville, E. L.

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

    Brooke, H. (Lewisham, W.)

    Grattan-Doyle, Sir N,

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

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

    Greene, W. P. C. (Worcester)

    Munro, P.

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

    Gridley, Sir A. B.

    Neven-Spence, Major B. H. H.

    Bull, B. B.

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

    Nicholson, G. (Farnham)

    Bullock, Capt. M.

    Grimston, R. V.

    Nicolson, Hon. H. G.

    Burgin, Rt. Hon. E. L.

    Gritten, W. G. Howard

    O'Connor, Sir Terence J.

    Butcher, H. W.

    Guinness, T. L. E. B.

    Orr-Ewing, I. L.

    Campbell, Sir E. T.

    Gunston, Capt. Sir D. W.

    Peake, O.

    Cartland, J. R. H.

    Hannah, I. C.

    Peat, C. U.

    Carver, Major W. H.

    Hannon, Sir P. J. H.

    Perkins, W. R. D.

    Cary, R. A.

    Harbord, Sir A.

    Pickthorn, K. W. M.

    Cazalet, Capt. V. A, (Chippenham)

    Haslam, Sir J. (Bolton)

    Pilkington, R.

    Channon, H.

    Heilgers, Captain F. F. A.

    Ponsenby, Col. C. E.

    Chapman, A. (Rutherglen)

    Hely-Hutchinson, M. R.

    Pownall, Lt.-Col. Sir Assheton

    Chapman, Sir S. (Edinburgh, S)

    Heneage, Lieut.-Colonel A. P.

    Procter, Major H. A.

    Chorlton, A. E. L.

    Hepburn, P. G. T. Buchan-

    Radford, E. A.

    Christie. J. A.

    Hepworth, J.

    Ramsden, Sir E.

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

    Higgs, W. F.

    Rankin, Sir R.

    Clarry, Sir Reginald

    Holdsworth, H.

    Reed, Sir H. S. (Aylesbury)

    Cobb, Captain E. C. (Preston)

    Holmes, J. S.

    Roberts, W. (Cumberland, N.)

    Colfox, Major Sir W. P.

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

    Ropner, Colonel L.

    Colman, N. C. D.

    Hunloke, H. P.

    Rosbotham, Sir T.

    Colville, Rt. Hon. John

    Hunter, T.

    Ross Taylor, W. (Woodbridge)

    Conant, Captain R. J. E.

    Hurd, Sir P. A.

    Royds, Admiral Sir P. M. R.

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

    Jarvis, Sir J. J.

    Ruggles-Brise, Colonel Sir E. A.

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

    Jones, Sir H. Haydn (Merioneth)

    Russell, S. H. M. (Darwen)

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

    Jonas, L. (Swansea W.)

    Salmon, Sir I.

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

    Kerr, Colonel C. I. (Montrose)

    Salt, E. W.

    Craven-Ellis, W.

    Kerr, H. W. (Oldham)

    Samuel, M. R. A.

    Croft, Brig-Gen. Sir H. Page

    Kerr, Sir John Graham (Sco'sh Univ's.)

    Sandeman, Sir N. S.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Lamb, Sir J. Q.

    Sanderson, Sir F. B.

    Cross, R. H.

    Lambert, Rt. Hon. G.

    Schuster, Sir G. E.

    Crowder, J. F. E.

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

    Seely, Sir H. M.

    Cruddas, Col. B.

    Leech, Sir J. W.

    Selley, H. R.

    Culverwell, C. T.

    Lees-Jonas, J,

    Shaw, Captain W. T. (Forfar)

    Davison, Sir W. H.

    Leighton, Major B. E, P.

    Shepperson, Sir E. W.

    De Chair, S. S.

    Levy, T.

    Simon, Rt. Hon. Sir J. A.

    Denman, Hon. R. D.

    Liddall, W. S.

    Smith, Sir R. W. (Aberdeen)

    Denville, Alfred

    Lloyd, G. W.

    Smithers, Sir W.

    2310

    2311

    Snadden, W. MCN.

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

    Wedderburn, H. J. S.

    Somervell, Rt. Hon. Sir Donald

    Thomas, J. P. L.

    Whiteley, Major J. P. (Buckingham)

    Somerville, Sir A. A. (Windsor)

    Thomson, Sir J. D. W.

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

    Spears, Brigadier-General E. L.

    Thorneycroft, G. E. P.

    Willoughby de Eresby, Lord

    Spens. W. P.

    Titchfield, Marquess of

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

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

    Tryon, Major Rt. Hon. G. C.

    Winterton, Rt. Hon. Earl

    Stewart, J. Henderson (Fife, E.)

    Tufnell, Lieut.-Commander R. L.

    Wright, Wing-Commander J. A. C.

    Strauss, H. G. (Norwich)

    Wakefield, W. W.

    York, C.

    Strickland, Captain W. F.

    Wallace, Capt. Rt. Hon. Euan

    Young, A. S. L. (Partick)

    Stuart, Hon. J. (Moray and Nairn)

    Ward, Irene M. B. (Wallsend)

    Sueter, Rear-Admiral Sir M. F.

    Wardlaw-Milne, Sir J. S.

    TELLERS FOR THE NOES.—

    Tasker, Sir R. I.

    Waterhouse, Captain C.

    Lieut.-Colonel Harvie Watt and

    Tate, Mavis C.

    Webbe, Sir W. Harold

    Captain McEwen.

    Question, "That the Clause stand part of the Bill," put, and agreed to.

    Bill to be read the Third time To-morrow.

  MILK INDUSTRY (No. 2) BILL.
  Considered in Committee.
  [Colonel Clifton Brown in the Chair.]

  MILK INDUSTRY (No. 2) BILL.

    CLAUSE I.—(Payments to producers and boards in respect of quality milk.)
    6.7 p.m.
    Mr. T. Smith: I beg to move, in page 2, line 37, to leave out "accredited milk, standard milk."
    I move this in order to get from the Minister some indication as to what is meant by accredited milk and standard milk. As I understand it, it is a kind of low-grade milk which will qualify for subsidy. Is there any guarantee that it will be clean; and if not, why not?
    6.8 p.m.
    Mr. Price: I want to put a question as to why accredited milk and standard milk are classified here as "quality milk"? Up till now premiums have been paid, largely out of funds found by the Milk Marketing Board by putting a levy on those who do not qualify. Those who have passed the standard test and have accredited milk of a low bacterial content are paid by those who have not. The passing of this test ought to be general, and I do not see why it is necessary that there should be a grant in this case. It should be possible for the Milk Marketing Board to finance the scheme by itself. We want to assist as far as possible in the improvement of milk and the increase of those who qualify as producers of accredited milk, but I am inclined to think that it would be better if some scheme were evolved for financing those who find it difficult to become accredited milk producers to do so. Tuberculin tested milk is a different thing altogether; and, so far as that is concerned, I am agreed that there should be a Government subsidy.
    6.12 p.m.
    The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): The accredited milk producer, in order to get his licence, must satisfy the licensing authority, first, as to the general health of the milch cow, and, secondly, as to his arrangements for producing milk: as to the structure and cleanliness of the building and the cleanliness of the implements. For standard milk there are much the same conditions. The herds of accredited producers are subject also to periodical inspection, and the milk is subject to tests. A high standard is set as far as cleanliness is concerned—the same standard as tuberculin tested milk. With regard to the question raised by the hon. Member for the Forest of Dean (Mr. Price), our desire, and the desire of the Milk Board, is that we should get to a position where nothing below the standard of accredited milk shall be sold or liquid consumption; but we have first to do that by encouragement, by making it possible for those producers to go all out to increase the standard of their milk. There are certain things which producers have to do to get to the accredited standard. The Government think it better to try to get them to improve, and to hasten on the time when we can in fact get the proper milk supply that we all want.
    6.14 p.m.
    Mr. T. Williams: While the Minister's explanation is very clear and understandable, I am not sure that this Committee is justified in providing an encouragement in this particular form. What the Minister says is that periodical inspection takes place on certain farms. The inspector must be satisfied as to the general health of the dairy herd—as distinct from any tuberculin test—and that the buildings are reasonably good and fairly clean. The health of the herd is fairly good, there has been a tuberculin test, and the buildings are reasonably clean and so on. It

    2313
    really ought to be incumbent upon the producer of milk to fulfil every one of those conditions without being bribed to do it. We are obliged here and there to encourage people to do what society demands they should do without any encouragement at all, but why we should provide a bribe for a farmer who merely keeps his cattle in a decent state of health and his buildings reasonably clean, I really do not know. He expects a high price for his milk, apart altogether from doing it, and I am not sure that we can justify this form of encouragement. It may be that the general health of the herd is fairly good but it may equally be that every head of cattle within that herd would react to a tuberculin test. If all the herd reacted to the tuberculin test, the premium would be paid. Is that not so?
    Sir R. Dorman-Smith: Samples are taken.
    Mr. Williams: Samples are taken, but what tests are applied for this particular category? In the table to the Schedule in page 15 of the Bill these words are recorded in respect of the milk for which the particular premium is paid:
    "Accredited or Standard Milk which is not Tuberculin Tested or Certified Milk and is not milk from an attested herd."
    There the attested herd is something different from the accredited herd, and the accredited herd may react to the tuberculin test and get a premium. There is no guarantee that this really is pure, clean milk. I do not want to reduce the standard or quality of milk. Cleanliness of buildings apparently is a condition for the receiving of this premium. Hon. Members must know that there are thousands of farms in this country where the buildings are hopelessly out of date and wholly inefficient, and no inspector would pass them as being clean within the meaning of the statement made by the Minister a short time ago. I went to a farm in my division last Sunday week in order to look round the farm buildings, and to express an opinion, if I felt so disposed, as to what I thought of the buildings and the whole of the farm. I had not seen for a long time a more disgusting sight than those farm buildings. I went into the farmer's domestic premises and saw both the farmer and his wife. Everything was as
    2314
    clean as a new pin. Nothing was left to be desired in their home, but the farm buildings were in such a wretched condition that no inspector who did his duty could declare that the milk came within the category of being taken from cows housed in clean buildings.
    Even if this Committee were to declare that it is right and proper to encourage farmers to produce clean milk and to keep their buildings as clean as possible, there are tens of thousands of farmers who, through no fault of their own, cannot fulfil these conditions. On the particular farm to which I have referred the landlord will not put the buildings into a decent state of repair. He will not give the tenant farmer written consent to spend a few hundred pounds upon putting the buildings into a decent state, and the producer therefore cannot qualify for this premium. His case can be multiplied by thousands all over the country.
    My major point is that when milk passes through a certain test where it can be shown that the farmer has spent money on new buildings, new machinery and equipment, and has gone to the expense of producing a high grade quality of milk, the House of Commons is not only doing the right thing, but is wholly justified in lending encouragement in that direction. I have a letter here from a Welshman who knows something about the production of milk but I am not too sure what exactly lurks behind his mind, and perhaps the Minister will tell me when I quote from his letter. He declares that in certain areas in Wales their herds are absolutely tubercular free—not one of the cattle reacts to a tuberculin test—but because they do not come within one or other of the categories that are in the Schedule they do not qualify for a premium at all. That may seem somewhat astounding to the Minister or it may even be amusing, but there it is. He goes on to say:
    "You have heard so much about Grade A and T.T. milk. Let me remind you that neither the Grade A producer nor the certified grade producer has reached the standard of a certain ordinary milk producer who has reached the record low amount of 200 bacteria. That being so, why spend money on these grades when the money could be utilised to better advantage in other directions?"
    I do not quite know the background for this contention. The right hon. and gallant Gentleman's explanation was only

    2315
    partly satisfactory. In explaining the object of this Schedule to my hon. Friends I think he might have issued a word of warning to milk producers all over the country, and to landowners who have a duty and responsibility to their tenant farmers, that we want quality milk produced all over the country, and that where it reaches a high grade, Parliament is willing to provide a premium, but that where it qualifies only because the buildings are good and modern and up to date and clean, no premium is called for and no premium will be paid. We are encouraging milk production in the wrong direction, and I am not at all satisfied that Parliament is justified in paying a premium for these two particular categories.
    6.24 p.m.
    Captain Heilgers: I feel that as I happen to be one of the accredited producers myself I should say a few words in reply to the hon. Gentleman the Member for Don Valley (Mr. T. Williams). I would point out to him that it is not only a matter of buildings, but, as the Minister said, of a very rigorous inspection of all the cows four times a year. Any cow that is seriously affected with tuberculosis is bound to be spotted by the inspector. [An HON. MEMBER: "Only seriously affected."] Only the cows that are seriously affected are likely to give tubercular milk. We are not only inspected in that way, but we have a test four times a year and if we fail to pass the test we lose the grant. There is much more than that in it. We have to groom the cows until they shine like a new pin every time before they are milked. The cows have to be perfectly clean in every possible way, and in addition we have to sterilise all the utensils that are used for the milk, which is the most perfect way of killing germs. We are put to all the trouble of keeping extra men to clean the cows, to see that all the utensils are sterilised and to keep the cow-houses and buildings in a perfectly clean condition. It is not a question of our being bribed by the 1¼d. to undertake these precautions but rather it is a question of whether the 1¼d. is sufficient to cover the expense to which we are put. I should say that it is very doubtful whether it is sufficient.
    I would remind hon. Gentlemen opposite how we arrived at this stage of
    2316
    graded milk. I happened to be the chairman of the committee that dealt with the question in my county, so I have had some experience of it. It took years of agricultural education and clean milk competitions and so forth to make people alive to the need for clean milk. It was only when we had the whole county awakened to the need for clean milk that we were able to start the graded milk scheme, and the same applies to other counties as well. The hon. Member for Don Valley told us a story about a certain set of buildings which he said were in a disgusting condition. You will always find that sort of thing; there are always exceptions. There are bad landlords but there are also a great many good landlords.
    Mr. MacLaren: No.
    Captain Heilgers: Whatever applies in the division which the hon. Member represents does not apply in mine. We have done our best to provide the public with clean milk in the form of graded milk, and if there are landlords who will not put their buildings in order, I can only suggest that, by reason of the fact that we have encouraged the production of graded milk, we shall in time force those bad landlords to improve their buildings, because otherwise they will not be able to let their farms for milk production. I warmly support the proposal for a bonus to producers who are taking an enormous amount of trouble to provide a good, clean, pure milk supply for the public, and I hope that nothing will be done to discourage them.
    6.29 p.m.
    Mr. Charles Brown: The hon. and gallant Gentleman the Member for Bury St. Edmunds (Captain Heilgers) has clearly demonstrated to the Committee that there has been a large quantity of milk which at any rate is not fit for human consumption. He has pointed out the process which has to be gone through in order to make the milk fit for human consumption. There are still some of us in this Committee who believe that there is a good deal of milk offered for sale which is not fit for human consumption, if you apply certain tests to that milk.
    Captain Heilgers: May I remind the hon. Member of the enormous fall there has been in the tuberculosis figures in this country in the course of the last 25 years?
    Mr. Brown: That exactly proves my case and merely reinforces the point I am trying to make, that, if this process goes on to a further degree, we may hope greatly to reduce the figures of tuberculosis from what they are to-day.
    Captain Heilgers: I am sorry to interrupt the hon. Member again, but he is not quite clear as to what I said. I said that in the last 25 years—the accredited milk has been going only for the last three or four years—there has been an enormous drop in tuberculosis, which means that the milk supply in this country, much of which the hon. Member says is unfit for human consumption, must have improved very much, because it was not accredited up to four years ago.
    Mr. Brown: If the hon. and gallant Member cares to put it that way, well and good, but it does not affect the argument that I want to put. My hon. Friend the Member for Normanton (Mr. T. Smith) has just said to me, in a Yorkshire phrase, that the Government are still subsidising mucky milk. I am inclined to agree with him. The expression is a very effective one, but it approximates in some cases to the truth. Sooner or later the Minister of Agriculture will have to lay down certain standards about cow-sheds. What may hon. Friend the Member for Don Valley (Mr. T. Williams) had in mind, and it has been confirmed by the hon. and gallant Member, was that cowsheds in some parts of the country are in a very bad condition, and in dealing with them there seems to be divided authority. I know of one case where the local sanitary inspector for the urban district council went round and examined some cow-sheds and asked that certain things should be done, so that they could be brought up to the required standard; but he was overruled by the county agricultural committee and its official. Therefore, there is divided authority as to what is required and desirable.
    If we are to have a really clean milk supply, about which we are all agreed, then the hon. and gallant Member will agree with me when I suggest to the Minister of Agriculture that sooner or later he must lay down very definite standards about cow-sheds, and see that they are enforced, but he will not be able to do that if there is to be divided authority and differences of opinion. I am certain that in many cases there is very
    2318
    great difference of opinion between the sanitary inspectors of rival authorities, particularly in regard to farm buildings. I should like to hear what the Minister has to say about that.
    6.33 p.m.
    Colonel Clarke: The hon. and gallant Member for Bury St. Edmunds (Captain Heilgers) raised two or three points to which I should like to add. He was mentioning the extra cost involved to the farmer in producing accredited milk. There is the cost of the sterilising plant.
    The Deputy-Chairman: I would remind the hon. and gallant Member that we are not discussing cost.
    Colonel Clarke: I was only trying to make the point that the farmer is put to extra cost in producing this accredited milk, and that therefore there is justification in his being rewarded by the extra money he gets for producing the accredited milk. Would that be in order?
    The Deputy-Chairman: That would be in order as an illustration.
    Colonel Clarke: The farmer has to buy sterilising plant, which may cost £40 or £50. Milkers are scarce to-day and as a result of the extra work put upon the milkers in producing accredited milk they may threaten to leave, and that very often causes the farmer to raise their wages. If he is wise he pays them extra wages anyhow. Again, one-third of our farmers are owner-occupiers. Two hon. Members opposite, one of whom was the hon. Member for the Forest of Dean (Mr. Price) suggested that the landlord or the owner-occupier should have something to recompense him for money spent on buildings. One-third of the fanners being owner-occupiers they do get something.
    Mr. Price: I did not quite mean that. I meant that there was a strong case for those who were not able to improve their buildings, and that the tenant should be allowed to have money advanced to him from the Milk Marketing Board, and that that should be a charge before the rent was paid.
    Colonel Clarke: I am sorry if I did not quite express the hon. Member's view, but I think in this case they are getting something in respect of the money they have spent. They get the allowance of 1¼d. Lastly, in regard to

    2319
    the case which the hon. Member for Don Valley (Mr. T. Williams) raised about certain farm buildings. Did he see the lease? Was that farm let as a milk farm, or was it the case that it was originally let as an ordinary farm and the farmer subsequently went into milk and now he wanted a great deal of money to be spent on the farm?
    Mr. Williams: The answer to the hon. and gallant Member's question is in the negative.
    Colonel Clarke: I would ask further, are they producing accredited milk now?
    Mr. Williams: If the farm was producing accredited milk or tubercular attested milk he could not qualify for the premium because the buildings through which the cattle had to go would disqualify him from getting a premium or anything else.
    Colonel Clarke: I think the farmer is entitled to get a little more money, considering the expense he is put to. I hope that the Amendment will not be accepted.
    Amendment negatived.
    6.37 p.m.
    Mr. T. Williams: I beg to move, in page 3, line 11, to leave out "or entitled to the benefit."
    I move the Amendment with a view to obtaining information. I should like to know whether the licence is granted to the person or to the farm. It is conceivable that I might be the owner of a licence, and I might therefore qualify for any one of these premiums, or I might not have acquired my licence and still might be entitled to a licence and to the benefit of the licence while I am on one particular farm. While I am qualified for the licence or qualified to be entitled to the benefit of the licence I might leave a perfectly clean farm and migrate to a farm such as the one I have described earlier, where no farmer in those circumstances could qualify for any of these three sets of premiums. I want to know whether the licence is to be granted to the person as such or to the farm as such, and whether that licence is transferable if the farmer moves from one farm to another.
    6.39 p.m.
    Sir R. Dorman-Smith: As I understand the situation, the licence is granted to a
    2320
    person in connection with a farm, I do not think that you can get any licence unless the conditions with regard to buildings and other things are fulfilled. The licences in question are licences granted, under the Milk (Special Designations) Orders, made under the Milk and Dairies (Amendment) Act, 1922. So far as England is concerned these orders will, as from 1st October, 1939, have effect as if they were regulations made under the Food and Drugs Act, 1938, which repeals the 1922 Act. Section 97 of the Food and Drugs Act provides that:
    "Where a person who holds a licence under this Act or any regulations there under dies, the licence shall, unless previously revoked or cancelled, enure for the benefit of his widow, or any other member of his family, until the expiration of two months, after his death, or until the expiration of such longer period as the licensing authority may allow."
    It is accordingly necessary to cover cases such as those for which Section 97 of the Food and Drugs Act provides, where there is a beneficiary of the licence who is not the holder of it, and it is for this purpose that the words, "or entitled to the benefit," are included.
    Mr. Williams: After that explanation, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.

    CLAUSE 2.—(Payments from Exchequer to boards in respect of milk sold at reduced prices.)
    6.42 p.m.
    Colonel Baldwin-Webb: I beg to move, in page 4, line 28, at the end, to insert:
    "Provided always that before making any payment to a Milk Marketing Board under this Sub-section the Minister shall satisfy himself that the board has obtained the agreement of such body or bodies as in his opinion are representative of Milk Producer Retailers in Great Britain as to the terms on which the milk shall be distributed."
    The object of the Amendment is to draw attention to the fact that producer-retailers who distribute not less than 20 per cent. of the milk produced are not represented on the Milk Marketing Board. I should like a statement from the Minister on that matter. Many of us inside and outside the House, fee) that these people should have representation.
    6.43 p.m.
    Major Procter: There was standing in my name an Amendment which has not been called, and therefore I take this opportunity of suing on behalf of the milk distributors and the producer-retailers. There is a very grave injustice being done in not making the producer-retailers and the distributors parties to the contract. Under these schemes for supplying cheap milk to public elementary and secondary schools and also to expectant and nursing mothers and children under five years of age, the Minister may, out of moneys provided by Parliament, pay any sum that he thinks fit, not exceeding the amount which in his opinion represents the loss incurred by the board; but there is nothing in the Bill that provides for any loss being made by the producer-retailers and distributors. I do not desire in any way to imperil the supply of cheap milk to school children and to expectant and nursing mothers, because this is one of the outstanding achievements of the Government in doing something practical to establish a. fine state of health in the country.
    Surely this great achievement, which is a monument to the National Government, should be paid for by the Government itself instead of by the distributors and the producer-retailers. At the present moment they get 8d. per gallon. It took nearly two years to raise it by a penny from 7d. to 8d. What have they to do for that? They have to provide the bottles, put in half-a-pint of milk, put the tops on the bottles, clean the bottles, make good the wastage and then transport the milk to the various places where it is to be consumed, and they have to meet a loss on every bottle of milk which they distribute. The producer-retailers and distributors are prepared to do their part and to share part of the loss. What I am asking is that the Government instead of only consulting them should bring them in as a party to the agreement, instead of in this high-handed manner compelling them to distribute milk. It should be compulsory for the Board, in regard to this benevolent cheap milk scheme, to obtain their agreement instead of merely consulting them.
    6.48 p.m.
    Mr. Price: I hope the Minister will not accept the Amendment. The hon. and gallant Member who moved it referred
    2322
    to grievances of the producer-retailers. He said that they are not sufficiently represented in matters concerning milk production and distribution. The difficulty, of course, is to get an organisation which really represents them. In my own county the branch of the National Farmers' Union have a special committee of producer-retailers and also of wholesale producers, and the two committees work together most amicably. As far as the council is concerned, we have no trouble whatever. I do not think the grievances mentioned by the hon. and gallant Member are serious. Neither do I think the distributors have any serious grievance. I gather that the hon. and gallant Member for Accrington (Major Procter) was arguing that they are suffering from the competition of those schemes which supply milk to schools and to nursing mothers.
    Major Procter: All I am asking is that they should be not only consulted but should be made parties to the agreement. Instead of coercing them, they should be made parties to the agreement in the same way as producers.
    Mr. Price: I believe that they are consulted already and that they do work amicably in the schemes. After all, they must realise that without these cheap milk schemes they would not get such a large supply of milk, and if they have to take a smaller profit I do not think it will ruin them.
    6.51 p.m.
    Sir R. Dorman-Smith: I cannot possibly accept the Amendment. I cannot follow the reasoning that the producer-retailer, or indeed any retailer, is suffering hardship because of the present situation. They are not forced to come into the scheme at all; it is quite voluntary on their part. My desire is to get these cheap milk schemes going as quickly as possible, and if we have to enter into agreements and consultations it would be a long time before we could get them into operation. As far as I can see, the Milk Marketing Board represents the producer-retailer. I am well aware of the controversy in regard to the representation on the Milk Marketing Board, but that is another story. I hope that no further obstacles will be placed in the way of getting these cheap milk schemes going, and I hope the Amendment will not be pressed.
    6.52 p.m.
    Rear-Admiral Beamish: I am not entirely satisfied with what the right hon. Gentleman has said. I am the last person to stand in the way of the promotion of these cheap milk schemes, but I feel it is necessary to support the principle of the Amendment, because it seems to me to be vital to hold the balance between the producer, the distributor and the consumer. I think that the producer is most certainly satisfied, and is represented in a remarkable way on the Milk Marketing Board. I have taken the trouble to look into the question of retailers in general, and from the information I have been able to acquire it seems clear that in the past they have been coerced into accepting a sum which has not covered the expenses of distribution. I think it is deplorable that something approaching the actual price that is paid to the producer has to be expended before you can distribute the milk to the consumer, and I would support anything if I thought it would bring down these costs. Be that as it may, a genuine and perfectly good case is put forward by the distributors that at the present time the Bill does not sufficiently safeguard the interests of the producer-retailer.
    On the Second Reading Debate the right hon. Gentleman said that discussions were taking place and that he hoped agreement would be reached. I listened to what the right hon. Gentleman said this afternoon, and I did not get a great deal of comfort out of it. I have a feeling that the distributor may be left out and will be in the same difficulty as he has been hitherto. I agree with the right hon. Gentleman when he said that the results amply justify any expenditure which is necessary to the operation of the scheme. I support that view; at the same time, I would like to enter my protest against leaving out of the Bill safeguards for the distributor. I hope the right hon. Gentleman will do everything he can to safeguard those interests more than the Bill does at the present.
    6.55 P.m.
    Mr. T. Williams: I am pleased that the Minister has not seen fit to accept the Amendment. First of all, it demands that before any scheme can be applied the Minister must satisfy himself that the board representing the producers has secured the agreement of the distributors,
    2324
    in other words, the distributors of milk can hold up any scheme in any part of the country. Clearly, no Minister of Agriculture could allow the distributors of a commodity to have the power to hold up any one of these cheap milk schemes. The hon. and gallant Member for Accrington (Major Procter) wants them to have the power to make or break any of the schemes for distributing milk to elementary school children and expectant mothers.
    Major Procter: That is not the intention. The intention of the Amendment is that distributors shall not be forced to accept an uneconomic price, and all I ask is that in this great benevolent work the producer-retailer shall not have to pay for it, but that it shall be paid for by the National Government.
    Mr. Williams: The hon. and gallant Member must not forget that the Amendment demands that agreement must be obtained from the distributors before any scheme can apply. It is not necessarily an uneconomic service. The hon. and gallant Member who moved the Amendment and the hon. and gallant Member for Accrington have not taken any note of the fact that, largely due to the Milk Marketing Board and Government assistance, liquid milk sales have increased by 100,000,000 gallons. Parliament has helped the distributors to increase their business enormously. The hon. and gallant Member for Accrington has told us of the wonderful service which the distributors perform but he did not tell us that in 1913 the milk distributor was content with 6⅞d. per gallon, and that to-day the milk distributor is getting 11d. It is true they have to put it into bottles, but they are getting nearly double the price. In any case I am certain that the cheap milk scheme for school children which will be largely organised by local authorities, will be regarded by them as a desirable scheme which ought not to be held up by the distributors.
    Rear-Admiral Beamish: May I ask whether the hon. Member agrees that a commercial firm whether it is the Cooperative Society or any other firm should distribute milk at an uneconomic rate? I say it is deplorable that it should cost so much; but the facts are obtainable.
    Mr. Williams: I do not want any milk distributed at an uneconomic rate. I am

    2325
    not worried about the milk distributor. I am worried about the milk getting to the women and children who need it. If the ordinary distributors as part of their service are not anxious to join in this good health service, it will not be so great a problem for local authorities to provide the machinery for distribution where the ordinary distributor can remain outside. The right hon. Gentleman is quite right in not accepting the Amendment on the Paper, whatever the intentions of the hon. Gentleman may be.
    Colonel Baldwin-Webb: I should just like to say that the last thing which is intended is to impede the scheme which the hon. Member has in mind. We all hope that at some early date agreement may be reached.
    7.0 p.m.
    Sir Ernest Shepperson: I hope that we shall not have too much sympathy for the distributors. I have had a case brought to my notice where, after paying railway carriage, the man was getting 6d. per gallon and milk was being distributed at 2s. a gallon. Therefore, I hope we shall not have too much sympathy for the distributors, because they can look after themselves.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    7.1 p.m.
    Mr. T. Williams: Before this Clause passes I should like the right hon. Gentleman to provide some enlightenment as to when these schemes are likely to be put forward. So far, all we have had from the right hon. Gentleman is a statement that they are hoping that a scheme will start very shortly. What kind of a scheme is it likely to be? Will it apply to the whole country or is it a scheme that is to be recommended to every local authority in the country? Is it to be a standardised scheme or will it vary in different parts of England and Wales? So far, information has not been forthcoming. In view of the delay in England and Wales, largely due, I am afraid, to those distributors who have not been helpful in producing these schemes, we have no scheme in England, although for three months similar schemes have been in operation in Scotland. Can the right hon. Gentleman give us any idea when a scheme or a number of schemes are likely
    2326
    to start in this country, and can he outline what kind of scheme he has in mind?
    7.4 p.m.
    Sir Joseph Lamb: Can the right hon. Gentleman give us any indication when these payments are to be made? What period will elapse? It is not generally realised that the board has had to sustain a very considerable loss owing to delay in the payments they have received. Milk supply up to 31st May amounted to £1,100,000. They had to spend that money the whole of the time, and there has been a considerable loss to the board because they have really been financing the Government in the carrying out of these schemes. There has been an actual loss of nearly £4,000 to the board, and if the money they had expended had been invested at 2½ per cent. it would have realised £8,718.
    7.5 p.m.
    Mr. Hopkin: Would the Minister be so kind as to tell the Committee where he stands with the board regarding his powers under Section 2 (l, b)? In introducing the Milk Bill the Minister said he was then engaged in conversations with the Milk Board but he was not at that time able to say exactly how he was to exercise his powers. This is the most important matter for the cheap milk schemes, because it is very certain that at least 1,000 of these schemes will be started all over the country. It is reasonable to suppose that every large town will have its cheap milk scheme. Under the Bill as it stands at present it means that at least 1,000 separate accounts will have to be kept and it will, in my submission, be quite impossible to say how the board stands on those accounts, as to whether they are losing or are going to gain through them. The power has now been given to the Minister for him to stand between the board and the people who sell to it, so that he will say the amount which has to be paid.
    I ventured to offer the Minister a suggestion which, if I may say so, was a very sound one. It was that, instead of all this enormous number of accounts, it would be far better and far cheaper for the Minister to say, "We will fix the price, say, at is. 2d.," or some other agreed price which he will fix with the board. It would be a most invidious distinction to cast upon the board to put them in the position of saying, "We can-

    2327
    not take part in any cheap milk scheme because we cannot afford to lose money on these milk schemes." It would be casting on the board a reflection which, I think, would be most unfair. It is for that reason that I ask the Minister how far he has gone with the board; has he been able to come to any agreement with them; and, if so, is he now able to give the Committee the terms of the agreement?
    7.9 p.m.
    Sir R. Dorman-Smith: I said in my Second Reading speech that I hoped that while this Bill was still before the House I should be able to give the information required. I do not think I was over-optimistic, but to-day I am afraid I cannot give the information for which the hon. Member for Carmarthen (Mr. Hop-kin) has asked. The negotiations are very far advanced, and I still hope that while the Bill is still before the House I shall be able to give some information.
    Mr. T. Williams: Negotiations between whom?
    Sir R, Dorman-Smith: There are lots of people involved—the board, the Treasury and my Department. I do hope that I shall not now be pressed. We have just altered the form, and I think we shall be able to get agreement. I am optimistic about it. The scheme will be a general scheme. It will be recommended to the local authorities that the board will be prepared to sell at such-and-such a price and the local authorities will buy from the board. The reply to the hon. Member for Stone (Sir J. Lamb) is that the local authorities will probably pay the board monthly. We shall pay for the accounting period, which will be agreed between ourselves and the board. If the Committee will not press me on the actual terms I shall be obliged, and I hope that I shall be able to carry out my hope which I expressed on Second Reading.

    CLAUSE 3—(Payments to be made from Exchequer to boards in respect of milk used in manufacturing butter and cheese.)
    The Chairman (Sir Dennis Herbert):The Amendment in the name of the hon.
    2328
    Member for Carmarthen (Mr. Hopkin)— in page 5, line 7, leave out "half-year" and insert "month"—is out of order.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    7.11 p.m.
    Mr. Hopkin: May I ask the Committee to pay attention to the terms of Clause 3, because, in my submission, this Clause is one of the most important in the Bill. It proposes to make a very great and a vital change in the machinery of the Milk Marketing Board, and for that reason I would invite the attention of the Committee. For the reasons which I hope to put forward, I think that this Clause is a thoroughly bad one. I am quite prepared to believe that the Minister desires to make the milk scheme a success. I am quite ready to believe, also, that the Ministry do not desire to put any unnecessary difficulties in the way of the Milk Board, but under Clause 3 hon. Members will notice that, instead of monthly payments, the whole system has been changed regarding the payment of Government assistance on manufacturing milk to six-monthly payments. That is a very great change, and a change for the worse.
    May I also ask the Committee to consider this: how is the system worked at present? The Milk Marketing Board gets, first of all, the price as it is obtained for liquid milk. Then it gets the price obtained for all the manufactured milk, milk manufactured for butter, cheese, cream, ice cream, condensed milk, milk powder, and so on. Then it has to make a calculation for the milk that is sold as milk in schools. After this a further calculation will have to be made for the cheap milk scheme. When all these calculations have been made, plus, as it is at present. the amount which it is to receive from the Government for the manufacturing milk, then it is able to send what amount the farmer is to receive on the whole of his liquid milk. What is the change? The change is that, instead of as it is at present—the ascertainments to be made monthly—they have to be made after six months. I want to ask the Minister, what is the reason for this change? Why has it been found necessary to alter the system that everybody agrees works well at present? At the present time, the board works on

    2329
    monthly pools, and pays the farmers monthly. If the Clause is passed in its present form, during five months out of six months it will be impossible to fix the final price that the farmers ought to receive. The Committee ought to know what is the real reason for upsetting the present system, which works well. At the end of the month, the farmer knows exactly where he stands, but under this Clause there will be five months in which he will not know how much he is to receive from the Government by way of assistance in regard to manufacturing milk.
    Let us suppose that at the end of the six months, as a result of fluctuations up and down during that period, ¼d. per gallon will come to the board on 125,000,000 gallons. The amount will have to be spread over the whole of the liquid market. Who is to receive that money? How is the Minister going to distribute it? Will it be put into the next pool price? If so, I can foresee that there will be a crop of actions against the Milk Marketing Board and the Minister, because to do that would be illogical and entirely wrong, because the money would be given to people whose proportions of milk for that month might be entirely different from the proportions which they had put into the pool before. Who is to get the money? The answer, of course, is that in the case of each farmer the board will have to go back for six months and see what proportion that farmer has put into the pool over the previous six months. Why have that tremendous amount of book-keeping and accountancy? What will be the advantage of it? Will it be to the advantage of anybody that this new system should be tried?
    I submit that the Clause cannot be worked equitably. With the best will in the world, at the end of the six months, the Milk Marketing Board, or whoever has to distribute this amount of money, must do so more or less by a guess. Already the board have 135,000 separate accounts. Why does the Minister throw upon them this wholly unnecessary work of keeping each individual accounts and finding it out over the last six months? In this matter it is not a question of money. I believe the Minister mentioned that it is only a matter of £20,000. This is the only check we have on this sort of
    2330
    thing, and I hope that hon. Members will see that this is a vital matter for the producers. If this Clause goes through, it will be bound to undermine that feeling of security and confidence which the farmers have in the board at the present time. I hope the House will agree that, unless the Minister has some reason which, so far, he has not divulged, it is unnecessary to change a system that works quite well at the present time.
    7.20 p.m.
    Mr. York: I should like to ask for your advice, Sir Dennis, on the subject of the Amendment in the name of the hon. Member for Carmarthen (Mr. Hopkin). Am I to understand that it will be impossible at any later stage of the Bill to move this Amendment or a similar Amendment?
    The Chairman: I must not answer the hon. Member more than informally, because the next stage of the Bill will be a matter for Mr. Speaker, and not for me; but I would point out to him that it would require a new Money Resolution in order to move the Amendment in that particular form.
    Mr. York: I apologise for my ignorance of the procedure, but it seems to me that if we allow the Clause to pass as it stands, and with the present wording of Subsection (1), we shall do a grave injustice. I find myself in great difficulty on the matter. If we allow the Clause to go through, I believe that the Milk Marketing Board will have its entire accounting system thrown out of joint, and the only advantage to the country will be that the Treasury's accounts will be somewhat simplified. I ask my right hon. Friend whether he cannot give some indication that it will be possible at some time to alter a few words in the Clause so as to help the Milk Marketing Board out of a very grave difficulty.
    7.22 p.m.
    Sir R. Dorman-Smith: It is true that there has been a change both in the way in which we make payments and also in the approach to the whole problem of how assistance should be given to the industry. Under previous Acts, the assistance has been given monthly, directly on the manufacturing milk. We have now changed the emphasis on the type of assistance that is being given. The main assistance is now to be given on the quality milk, and the method of paying

    2331
    on the milk that is put into the manufacture of butter and cheese is in the form of price insurance in order to prevent the receipts of the Board on those quantities from dropping below a certain figure. Therefore, if there is to be this price insurance, it seems to me important that we should take it over a period and not month by month. Inasmuch as we have changed the method of giving assistance, it seems to the Government to be of real importance that we should take the longer period to determine what the payments under the system of price insurance should be.
    Mr. Hopkin: If it is done purely on the ground of the amount, and as the Minister has himself said that the amount at stake is only £20,000, surely he will place on the other side the fact that it causes inconvenience and makes it impossible equitably to distribute the money when it is received.
    Sir R. Dorman-Smith: That is not a new feature of the board's operations. At the present time, the board work their factory organisation on a six-monthly basis, and it might just as well be argued that it is impossible in that case to give back the exact amount. It is true that, probably, the board's accounting arrangements will have to be adjusted. I fully appreciate the difficulties which the board will have to face from the accounting point of view, but I do not think it will be impossible for them to face those difficulties, working on a broad basis, in much the same way as they do with their factory organisation. We are giving them a tremendous amount of assistance on quality milk, and I think they readily understand that if they are to get the payments on quality milk which we are going to refund them, they will also be in the position of having to take payment for their milk which goes into butter and cheese over a period, and not monthly.
    Mr. Hopkin: Will the right hon. and gallant Gentleman answer my question as to whom he proposes that this money should be at the end of the period? At the end of six months, it will be known how much is to be paid to the Milk Marketing Board. To whom will the money be paid? Is it to be put into the next pool price, and if so, how can that be equitable?
    Sir R. Dorman-Smith: It will be paid to the Milk Marketing Board, and it will be for them to dispose of it in the best possible manner.
    Mr. York: I do not see how the board are going to spread the money they will receive over the price which the producers will receive.
    Sir R. Dorman-Smith: I have pointed out that this is not an entirely new problem for the board, since they have the same problem with regard to their factary organisation. I am certain they will be able to overcome the difficulty in much the same way.
    7.27 p.m.
    Captain Heilgers: Am I right in assuming that this will be the position? In future, the Board are going to deal, over a six-monthly period, with a sum that will probably aggregate £50,000 in regard to the butter and cheese deficiency payments, but as they will deal with a sum of between £55,000,000 and £60,000,000 in all, the £50,000 which they are going to have over a six-monthly period will not be likely to dislocate their accounts to any great extent.
    7.28 p.m.
    Colonel Clarke: May I add to what the hon. Member for Carmarthen (Mr. Hopkin) has so ably said, that this is a matter which interests not only the Milk Marketing Board, but every farmer as well? I have been approached by a number of farmers who have told me that they hoped it would be possible for the system to remain on a monthly basis and not to be on a six-monthly basis.

    CLAUSE 4— (Limitation of quantity of milk in respect of which Exchequer payments may be made.)
    7.29 p.m.
    Mr. T. Williams: I beg to move, in page 8, line 18, to leave out "and twenty-five."
    This Amendment seeks to reduce by 25,000,000 gallons the amount of 125,000,000 gallons allocated for butter and cheese for which the subsidy can be collected. I had better make it clear at once that there is not a great deal of money involved in this Amendment. It is

    2333
    concerned Infinitely more with principle than with money. I listened with interest to the very fine speech of my hon. Friend the Member for Carmarthen (Mr. Hopkin) on valuation and distribution and variations, and the grave and profound difficulties which would beset the Milk Marketing Board when this Bill came into operation. I have made a rapid calculation based on the known facts and the Financial Memorandum, and I find that for the present year the amount of money likely to accrue from the Treasury to the Milk Marketing Board is about £50,000. There are 150,000 producers and the amount is 6s. 8d. per annum, or 3s. 4d. per half year, and if that is not divided into monthly periods I can appreciate the shock which the Milk Marketing Board will get.
    The point of the Amendment may be explained thus. From the commencement of the milk subsidy scheme, it has always been my opinion that, to the extent to which Parliament subsidised milk for manufacturing uses, unless simultaneously with any new production which was encouraged we found an outlet for the increased output in the liquid market, then to that extent, the liquid milk consumer is called upon to subsidise manufacturing milk. We have always argued with the right hon. Gentleman's predecessors, and we repeat the argument to him, that it is wrong policy on the part of any Government to subsidise milk that goes into manufacture, until they have explored every conceivable avenue to find a way of increasing the consumption of liquid milk. I recognise that Clause 2, which continues the school milk scheme and makes provision for the extension of similar facilities to expectant and nursing mothers and children under five, is all to the good, but as long as we permit the Milk Marketing Board to divert 250,000,000 gallons of milk to the factories, at an average of about 5¼d. per gallon, while the liquid milk consumer is paying 2s. 4d. a gallon, we are operating in the wrong direction. Lord Astor, in a statement circulated to Members of Parliament some time ago, worked out the figures, and after careful calculation, reached the conclusion that as the result of a large volume of milk being diverted to factory use, the liquid milk consumer in this country is virtually subsidising factory milk by 3d. a gallon. That is
    2334
    a considerable item. If we were to put that 3d. per gallon on to the potential saving which could be made by an efficient distributive system, and if we were to add the results of elimination of the most uneconomic producers, the chances are that the price of liquid milk would reach a point at which millions of families who cannot at present buy enough for their elementary needs would be able to obtain liquid milk at a suitable price. That would in turn be reflected in the pool price to the farmers and would put them on a better financial basis than they are on, even with this subsidy.
    The right hon. Gentleman may say, if we are willing to subsidise 100,000,000 gallons to go into the manufacture of butter and cheese, why not subsidise the additional 25,000,000 gallons? The answer is readily given. We think there ought to be some limit on this subsidy for manufacturing milk. We recognise that there is a period in the spring when, as a result of climatic conditions, the output of milk is in excess of what the liquid milk market can absorb under present conditions and at present prices. Therefore, some temporary arrangement might be made for dealing with that surplus during that exceptional period. But to reach a figure of 250,000,000 gallons and to subsidise that amount, attracting milk to a market which is unable to absorb it at present prices and with the wages of workpeople and unemployment benefit and old age pensions what they are to-day—that, we say, is to operate in the wrong direction. We do not want to amend the Bill fundamentally. We agree with the broad, general principle of Clauses 1 and 2. We recognise that there may be something in Clauses 3, 4 and 5, but to go to excess as theśe Clauses do is entirely wrong. I regard this as a serious Amendment and if my hon. Friends agree, I shall not hesitate to go into the Division Lobby in support of it as a protest against the principle of subsidising manufacturing milk before having examined all the possibilities of increasing liquid milk consumption in this country.
    7.37 p.m.
    Mr. Price: I support the Amendment, which I regard as an important part of the campaign to put the Milk Marketing Board in a sound position, and at the same time to help the dairy industry in

    2335
    the only way in which it can be helped. As things are, one of the reasons for the high price of liquid milk is undoubtedly the fact that we are subsidising manufacturing milk. All steps that can be taken towards encouraging liquid milk and discouraging manufacturing milk are steps in the right direction. There must be a surplus owing to natural conditions during the spring and summer, and that surplus must be dealt with in some way, but we should regard any arrangement to deal with the surplus only as temporary and as a means to keep things going until there is a better consumption of liquid milk than there is at present. That alone will put the Milk Marketing Board in a sound position and also assist the dairy industry.
    I think there is an improvement in this direction at present. The latest figures which I have received show that the quantity of manufacturing milk in the year which ended in March, 1937, was 342,000,000 gallons. In the following year that figure fell to 250,000,000 gallons, largely owing to the effect of drought. It rose again in the year which ended March, 1939, but not to the figure of earlier years, the quantity being 317,000,000 gallons. There appears to be a tendency for the quantity of manufacturing milk to decrease. At the same time the average price of liquid milk rose from 15.25d. to 16.08d. which shows that the subsidising of manufacturing milk tends to keep the liquid price too high. I have here a report of the Children's Minimum Council containing a statement which was sent to the Minister of Agriculture a few days ago. They state definitely, and I think with considerable justification that:
    "In present circumstances any expansion in production is likely to act as a check on consumption. It means simply that there is more milk to be disposed of. The bulk of it goes to the manufacturing market, and the price of liquid milk to the consumer is raised in order to compensate the farmers for the proportion sold at a loss. The expansion of demand and ultimately of production is thus checked. This vicious circle must be broken."
    Mr. MacLaren: Hear, hear.
    Mr. Price: I think many of us will agree with that statement although we may not all agree with the method by which it is to be done, and I know that my hon. Friend the Member for Burslem (Mr.
    2336
    MacLaren) has his own particular method to deal with it. We are justified in moving this Amendment, if only to call attention to the undesirability of encouraging too much production to go into manufacture. I suggest that we must put a ceiling on the amount which goes into manufacture and that any step towards reducing the quantity used for manufacture and forcing the Government to encourage by all sorts of schemes the consumption of liquid milk, is a step in the right direction.
    7.42 p.m.
    Captain Heilgers: I was a little surprised to hear the hon. Member for the Forest of Dean (Mr. Price) taking the line which he has taken. I represent a division of an Eastern county, and we should be only too glad if the Milk Marketing Board's operations were confined to liquid milk. As it is, we have to carry milk for manufacture in the West and get in consequence a lower price for our milk. Almost all the manufactured milk comes from counties in the West. I think it is reckoned that the surplus in the industry is about 10 per cent. in the winter, but in the flush months of May and June, the industry may have to carry a much bigger surplus. Everyone will agree with hon. Members in wanting to have more liquid milk drunk, but I would remind them that the more liquid milk is drunk, the bigger surplus there must be. The making of butter and cheese is, after all, the work of fanners in this country, and at agricultural shows one can see this work being done by skilled operators. I should be very sorry to see those crafts dying out and if we are to put our nation on to an A.1 basis—or in present circumstances I should say if we are to continue our nation on an A.1 basis—we should encourage not only the consumption of liquid milk, but also the consumption of good farmhouse butter, than which nothing could be better for the younger generation.
    7.45 p.m.
    Mr. Hopkin: I rise to ask for information. I am sorry that I cannot understand the Amendment. As the Clause stands the position seems to be this: The Government say to the farmers, "You produce milk which satisfies the liquid milk market, and 250,000,000 gallons beyond that which goes into manufacturing, and we will pay you a subsidy.

    2337
    But if by any chance you produce more than that you produce it at your peril and must like the price which you can get for it, which will be very small." As I understand the Amendment it says, "We desire to lower the amount on which you are paid from 250,000,000 gallons to 200,000,000 gallons." That will make it all the worse for the farmer, in this sense, that the Government will then say, "We do not desire you to produce any more than 200,000,000 gallons for manufacturing purposes." But is not that a policy of scarcity, is not that just the opposite of what we really want? The only alternative that I see to putting the subsidy on the manufacturing milk is to say to the farmer, "Produce as much milk as you like and we will see that you shall not lose by it." Having set out on a policy of plenty the Government will be equally well able to say, "We will see that the greater part of this milk goes to feed the women and children who most want it."
    I should have thought that that would have been the policy; to reduce the amount on which a subsidy is paid would be a policy of scarcity. An increase of consumption in the liquid milk market is the thing we all desire, no matter in which part of the Committee we sit, but is there any hon. Member who can tell the Milk Marketing Board of any method which they are not employing to increase the liquid milk market? Is there any portion of the manufacturing milk now being used for chocolate, for ice cream, for condensed milk, for milk powder, which could be used in a better way? I do not think so. Therefore, the amount of manufacturing milk which is carried to-day by the Milk Marketing Board is the absolute minimum, unless, of course, we want to see the amount that is produced all through the country cut down, and that, I think, is not a policy which would commend itself to Members of this Committee.
    7.48 p.m.
    Sir J. Lamb: I hope that the Minister will resist this Amendment. It does not actually determine the amount of milk which shall go for manufacturing purposes, but it puts a ceiling to the amount and, in fact, reduces the ceiling, and there might be a reduction in production if the quantity of surplus milk became so great that the ceiling was reached. The Com-
    2338
    mittee must not think that the Milk Marketing Board have any desire to divert to manufacturing purposes milk which could be sold for other purposes. It is to their advantage to sell as much of it as possible as liquid milk, because there they have the higher market. There is no danger of the Milk Marketing Board diverting milk to the manufacture of cheese and butter if they can dispose of it for any other purpose. An hon. Member said that an arrangement should be made for a temporary manipulation, and that is true to a certain extent, but when the quantity of liquid milk is so great that there is a surplus, we cannot say that that surplus must be used for butter and cheese, because factories have to maintain a certain nucleus of staff, otherwise they will not be there when we require them on other occasions.
    If there is a surplus above the 200,000,000 gallons what are we going to do with it? The milk is there. If it is not going to be utilised even for butter and cheese, which is the least profitable manufacturing use, there will be a further loss, and in that case the Milk Marketing Board will have to consider increasing the price of liquid milk, and we do not want that. It will be seen, therefore, that there is a danger of defeating the object we all have in view, and that is to obtain cheaper liquid milk.
    7.52 p.m.
    Mr. John Morgan: I suppose that had we put down an Amendment to increase the quantity of milk it would have been ruled out of order on the ground that we were adding to the financial commitments of the taxpayer, and therefore my hon. Friend will understand that a discussion of the surplus milk problem could only be obtained by putting forward an Amendment in these terms. How to deal with the surplus milk is really the crux of the milk problem. That a farmer should have to sell one-third of his milk for manufacturing purposes at a price which in no case covers his costs of production is thoroughly unsatisfactory, especially when thousands upon thousands of people cannot afford to buy liquid milk at its present price. It is admitted that milk at 2s. 4d. a gallon is too dear for quite wide sections, and necessitious sections, of the community, and the point of this Amendment is to draw attention to the problem, and

    2339
    to suggest that there are better ways of using that surplus milk than turning it into even chocolate or cream. To overlook that is to miss the whole point of the argument.
    Why have the Government put in a ceiling figure? Obviously they want to put a restriction on the production of butter and cheese in this country. That may be satisfactory from the point of view that New Zealand and other countries are better suited to produce butter and cheese, and can at the same time be squeezed out of a market in which we can, perhaps, utilise the milk more satisfactorily than in the production of butter and cheese, which are in the lowest category of milk products. Import restrictions have now been placed upon processed milk products, presumably to drive more milk from the production of butter and cheese into the production of processed milk commodities. If that is so the Government are admitting that they are trying to increase the manufacture of processed milk products and they are not showing as real a desire to shift some of this surplus milk into other categories than manufacturing, as we should like to see.
    We gratefully acknowledge the provision which is made in the Bill for special schemes but we regret very much that there seem to be difficulties, outside the control of the Minister, over the development of those schemes. Presumably milk for those schemes will be available at anything between is. and is. 4d. a gallon and will represent a very definite economic increment to the farmer, while at the same time meeting the requirements of large sections of necessitous people, including children. We hope that these schemes will go forward speedily and will remove the necessity for diverting so much of this milk to manufacturing purposes. After all, there should be no need to carry more surplus than the Milk Marketing Board require as a reserve supply for the liquid milk market. We admit the need for a surplus, anything up to20 per cent., to carry the daily and seasonable variations in demand, but over and above that steps should be taken to try to force this extra milk to be used for more economic purposes. The Amendment suggests that the quantity of milk for butter and cheese should be reduced to 200,000,000 gallons. Automatically that would force the Milk
    2340
    Marketing Board to get that milk into some other market. We have no objection to the board putting pressure upon the Government; they have exercised useful pressure in the past. In my opinion they are as anxious as anybody else to have surplus milk used more economically and more sensibly.
    The point is, have the Government any other reason for fixing this ceiling figure than that of getting milk used more economically in the processing sections? In other words if they want to build up an emergency reserve of tinned milk they ought to indemnify the Milk Marketing Board for that service, not so much supporting the butter and cheese market as supporting the processed milk market if they are trying to get the board to supply milk to manufacturers who have some sort of understanding with the Government to build up reserves. That is another point arising out of this Amendment—that if the Government are interested in any way in promoting reserves of processed milk it is a service for which they are not paying the Milk Marketing Board and they should look into the matter. Over and above that we see in this Bill elements of hope that the surplus milk is going to be dealt with in a better way both from the point of view of the public and the producer. While we on this side are dissatisfied that such a large volume of milk should be going into manufacturing use, our attitude to other Sections of the Bill indicates our whole-hearted support of the plea of the Minister that milk should be used more sensibly and economically in any other direction.
    7.57 p.m.
    Sir E. Shepperson: I think every Member of the Committee is only too anxious to see the' consumption of liquid milk increased. Hon. Members opposite ask whether we are doing all we can to increase the consumption of liquid milk. I submit that we can increase its consumption if we cheapen the price to the consumers. Can we cheapen the price to them? I submit that we can if we remove the levy that is now charged upon liquid milk and pass the levy on to the manufactured milk products at present coming into this country.
    7.59 p.m.
    Sir R. Dorman-Smith: It is true that nobody wants to put more milk into

    2341
    manufacture than is absolutely essential. I think we are all agreed upon that. I think, also, the Bill does hold out hope that a good deal of milk will be used in the cheap milk schemes. No limit has been set on the amount of money which can be expended on them. But there is more to it than this. If you are going to have a prosperous liquid milk market and you are going to get your producers to produce enough to serve that market, you must have a reserve pool, variously estimated, but let us say round about 20 per cent. all the year round. It may go up to very much more in some periods. If you are going to have that reserve you must have some method of dealing with it as time goes on; therefore you have to maintain some manufacturing industry, otherwise goodness knows what will happen to your reserve. You must have a certain amount of milk going into manufacture the whole time in addition to that 20 per cent. in order to keep the manufacturing industry itself working, or else it will probably close down. It is not just a question of saying, "We want to sell liquid milk and we shall go on selling it so that there will be no surplus at all." It is not quite as easy as that. If you increase the amount of milk going into liquid consumption you also increase not the percentage but the volume which you have to deal with in manufacture in some process or other.
    Mr. Morgan: Is the right hon. Gentleman suggesting that the farmer should carry subsidies in order that the manufacturers may be kept in business?
    Sir R. Dorman-Smith: The committee of investigation found that the cost of the reserve up to 20 per cent. was in fact borne by the consumer, and that over that amount the producer was bearing the burden. Therefore I do not think the consumer has any complaint on that. We are trying to allow for all the possible contingencies that may come about so that the producers can carry on and perform their full function in keeping this reserve pool, and we arrived at this figure of 125,000,000 gallons for butter and cheese based on past experience of what may happen if in fact we go on increasing liquid milk consumption. We hope we shall not have to get up to this figure. We are taking such steps as we can to enable the Milk Marketing Board to get the milk into higher categories of manu-
    2342
    facturing commodities. We are doing that by making the market for our home producer by restricting imports from overseas and I think there is a lot in what the hon. Member for Doncaster (Mr. Morgan) said. If we can do that and keep our producers out of the butter and cheese market all the better, but if by any chance they have to go there it is only fair that the country should say they will provide for this amount of 250,000,000 gallons in case it needs to be used.
    8.4 p.m.
    Mr. A. V. Alexander: I think we should come back to the principle behind the Amendment. I take it, although the Ministry is moving in short spasms of temporary legislation from time to time, they are still supposed to have a long-term policy for agriculture in view and, if there is a long-term policy in view, it surely ought to be a well-balanced policy. In the case that my hon. Friend the Member for Don Valley (Mr. T. Williams) put, he certainly implied to me, and I am sure must have carried that implication to many others, that there is a point beyond which it is entirely uneconomic, not only from a national but from an agricultural point of view, to encourage milk for manufacture. A very able pamphlet published recently on the problems of agriculture cites a White Paper issued by the Baldwin Government in 1926 which says that this policy of subsidies was bound to be inequitable, bound to work out unevenly, and that the subsidy was bound to be given to people who had no need for it because of the variety of the character of land and of production in different varieties of circumstances, and it therefore came down against it.
    Here is a case in point. You deal with this problem of what is now termed surplus milk. Take the figures prior to the introduction of the milk marketing scheme. As far as I have had experience of dealing with the balancing of supplies for the liquid milk market, prior to the milk marketing scheme there was far less milk available. What happened? There has been first a rise in price plus a guaranteed market provided by the Milk Marketing Board. If you examine the returns between 1932 and 1937 the figures speak for themselves. At the very time when we were hoping to get a better price

    2343
    for producers for the liquid market they had to face the increasing amount of milk put into the board's hands, for which they are bound to find a market under the scheme and which has been continuously pulling down the pool price. But to suggest that the amount which has been put on the market as surplus is necessary is quite another thing. In fact, if we were having a proper consumption per head of the population of liquid milk, you could find a market for a much larger supply. But to deal with the economics of the situation, which is what the Minister is trying to do in this proposal, it has diverted a great deal of general agricultural effort into one channel of production of milk where it ought to have been properly carrying on its functions in a wider sense. That is the position, and you might just as well face up to it.
    Take the question of the variety of costs—the thing that the Conservative Government had in mind in 1926. I appeared for 36 days before the Committee of Investigation, from whose report the Minister quoted. I had passing through my hands all the costs of production of milk so far as they were available to the committee. So far as they were reliable is another matter, although we owe them a debt of gratitude for much of the excellent, and in some cases voluntary, work done by representatives of the universities. But the actual figures of costs of production on the farms varied from a figure below 6d. a gallon up to is. 2d.—an enormous margin. You are guaranteeing a price backed up by a subsidy to whoever is producing milk, whether they require a subsidy or not. That is one of the inherent difficulties that you have to deal with. We know that the Minister has difficulties to face and we are not quarrelling wholly in principle with the method, but we say that in detail he really should begin to so set his limit to the subsidy to be paid that there is some prospect of reducing the surplus milk diverted into manufacture at the cost of keeping up the price of liquid milk. That is the intention of the Amendment.
    This is not a party issue. We have had charming speeches, and well put, from the hon. Member for Don Valley, who has become such a tower of strength to us, from the hon. Member for Doncaster
    2344
    (Mr. J. Morgan) and from the hon. Member for Carmarthen (Mr. Hopkin)—I sometimes wonder where he really stands—but the variety of speeches on this side indicates that this is not a party issue as such. It is a problem for which we all want to find a solution. Unless you make some better beginning you are not going to find the solution that you ought to find. It is suggested that it would be a good thing to go on increasing the production of milk even if you had to have a larger amount of manufacture. I should say, speaking from my knowledge of those who are the largest and best customers of the Milk Marketing Board, that the percentage required is nothing like 20 per cent. Surely we ought not to sit down under the assumption that we must encourage the farmer to produce a surplus equal to 20 per cent. of the whole liquid market. It becomes far too big a charge upon the general liquid market at the expense of the consumer. It is said that by putting on tariffs we can do this without it becoming an extra charge on the consumer. How are you going to deal with such a restriction unless you are going to deal with Dominion imports? No one knows better than the hon. Member for Leominster (Sir E. Shepperson) and the hon. Member for Stone (Sir J. Lamb) what an enormous proportion of dairy products comes from the Dominions. Is it going to be the policy of agricultural Members to limit not merely the comparatively small quantities imported from foreign countries but imports from the Dominions?
    Sir J. Lamb: Encourage secondary industries in the Dominions.
    Mr. Alexander: What about your own secondary industries? What about engineering? What about our cotton? What about our heavy industries? The fact is that the true solution is to have as soon as you can a really balanced policy of agriculture on a long-term view. Ministers have for a long time said that they were going to produce such a policy, but they have not done so yet. I have no doubt that the Minister will have the Whips on and that the Division will go against us, but I hope that he will keep in mind the facts that we have put to him. We do not quarrel with much of this Bill, which the Minister says is a temporary one. Nearly all the policy of the Minister

    2345
    is temporary, and perhaps before he produces his next Bill he will have a more rational, sound and economic policy to submit.
    8.16 p.m.
    Mr. David Adams: I do not propose to occupy more than a moment or two, but I come from a Special Area which looks forward with some hope and anticipation to the cheapening of liquid milk. Whilst we are grateful for what the Bill proposes with regard to certain sections of the community, such as aid for expectant mothers and school children, there is a large section of the community who are being continually assailed in one way or another to increase their consumption of liquid milk. We have in this proposition neither more nor less than a decision to diminish the possible means of the great industrial population of this country to obtain this prime foodstuff at a reasonable price. The Government have already decided to put certain tariffs upon all processed milk coming in from overseas and in that way deliberately to increase the cost of certain classes of milk to the industrial population. I have already said in this House
    that the corporation with which I am associated has expended nearly one penny in the pound on rates in giving free milk.
    The Chairman: The hon. Gentleman appears to be making a Second Reading speech on the Bill.
    Mr. Adams: All that I am desiring to do is to express the profound disappointment that I and my constituents have that the policy embodied in this Measure and as defended by the Minister who has just spoken is, in fact, although he will not admit it, to increase the price of milk to the consuming public—
    The Chairman: The hon. Member has confirmed me in my opinion that he is trying to make a Second Reading speech.
    Mr. Adams: I was making a protest, Sir Dennis.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 193; Noes, 129.

    Division No. 239.]

    AYES.

    [8.20 p.m.

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

    Crookshank, Capt. Rt. Hon. H. F. C.

    Harbord, Sir A.

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

    Cross, R. H.

    Heilgers, Captain F. F. A.

    Albery, Sir Irving

    Crossley, A. C.

    Hely-Hutchinson, M. R.

    Aske, Sir R. W.

    Crowder, J. F. E.

    Heneage, Lieut.-Colonel A. P.

    Baldwin-Webb, Col. J.

    Cruddas, Col. B.

    Hepworth, J.

    Balfour, G. (Hampstead)

    Culverwell, C. T.

    Higgs, W. F.

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

    Davies, C. (Montgomery)

    Holdsworth, H.

    Barrie, Sir C. C.

    De Chair, S. S.

    Holmes, J. S.

    Beamish, Rear-Admiral T. P. H.

    Denman, Hon. R. D.

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

    Beauchamp, Sir B. C.

    Despencer-Robertson, Major J. A. F.

    Hume, Sir G- H.

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

    Dorman-Smith, Col. Rt. Hon. Sir R. H.

    Hunter, T.

    Bennett, Sir E. N.

    Drewe, C.

    Hurd, Sir P. A.

    Bird, Sir R. B.

    Dugdale, Captain T. L.

    Hutchinson, G. C.

    Blair, Sir R.

    Duncan, J. A. L.

    Jennings, R,

    Boothby, R. J. G.

    Eastwood, J. F.

    Jones, Sir H. Haydn (Merioneth)

    Boulton, W. W.

    Eckersley, P. T.

    Jones, L. (Swansea W.)

    Bower, Comdr. R. T.

    Edmondson, Major Sir J.

    Kellett, Major E. 0.

    Boyce, H. Leslie

    Ellis, Sir G.

    Kerr, H. W. (Oldham)

    Brass, Sir W.

    Elliston, Capt. G. S

    Lamb, Sir J. Q.

    Briscoe, Capt. R. G.

    Emmott, C. E. G, C.

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

    Broadbridge, Sir G. T.

    Emrys-Evans, P. V.

    Leech, Sir J. W.

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

    Entwistle, Sir C. F.

    Lees-Jones, J.

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

    Erskine-Hill, A. G.

    Leighton, Major B. E. P.

    Bull, B. B.

    Evans, D. 0. (Cardigan)

    Levy, T.

    Butcher, H. W.

    Fildes, Sir H.

    Liddall, W. S.

    Campbell, Sir E. T.

    Fleming, E. L.

    Lindsay, K. M.

    Carver, Major W. H.

    Fremantle, Sir F. E.

    Lipson, D. L.

    Cary, R. A.

    Furness, S. N.

    Little, Sir E. Graham-

    Cazalet, Thelma (Islington, E.)

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

    Llewellin, Colonel J. J.

    Channon, H.

    Goldie, N. B.

    Lloyd, G. W.

    Chapman, A. (Rutherglen)

    Gower, Sir R. V.

    Loftus, P. C.

    Christie, J. A.

    Graham, Captain A. C. (Wirral)

    Mabane, W. (Huddersfield)

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

    Grant-Ferris, Flight-Lieutenant R.

    MacAndrew, Colonel Sir C. G.

    Clydesdale, Marquess of

    Granville, E. L.

    McEwen, Capt. J. H. F.

    Colfox, Major Sir W. P.

    Grattan-Doyle, Sir N.

    McKie, J. H.

    Colville, Rt. Hon. John

    Greene, W. P. C. (Worcester)

    Maitland, Sir Adam

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

    Gridley, Sir A. B.

    Makins, Brigadier-General Sir Ernest

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

    Guest, Maj. Hon. 0. (C'mb'rw'll, N.W.)

    Manningham-Bufler, Sir M.

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

    Gunston, Capt. Sir D. W.

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

    Craven-Ellis, W.

    Hannah, I. C.

    Marsden, Commander A.

    Crooke, Sir J. Smedley

    Hannon, Sir P. J. H.

    Maxwell, Hon. S. A.

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

    Ropner, Colonel L.

    Tasker, Sir R. I.

    Mills, Major J. D. (New Forest)

    Rosbotham, Sir T.

    Thomas, J. P. L.

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

    Ross Taylor, W. (Woodbridge)

    Thomson, Sir J. D. W.

    Moreing, A. C.

    Ruggles-Brise, Colonel Sir E. A.

    Thorneycroft, G. E. P.

    Morgan, R. H. (Worcester, Stourbridge)

    Russell, S. H. M. (Darwen)

    Titchfield, Marquess of

    Morris-Jones, Sir Henry

    Salmon, Sir I.

    Touche, G. C.

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

    Salt, E. W.

    Tufnell, Lieut.-Commander R. L.

    Munro, P.

    Samuel, M. R. A.

    Ward, Irene M. B. (Wallsend)

    Nall, Sir J.

    Sandeman, Sir N. S.

    Wardlaw-Milne, Sir J. S.

    Neven-Spence, Major B. H. H.

    Sanderson, Sir F. B.

    Watt, Lt.-Col. G. S. Harvie

    Nicholson, G. (Farnham)

    Schuster, Sir G. E.

    Webbe, Sir W. Harold

    Nicolson, Hon. H. G.

    Selley, H. R.

    Wedderburn, H. J. S.

    Orr-Ewing, I. L.

    Shaw, Captain W. T. (Forfar)

    Whiteley, Major J. P. (Buckingham)

    Palmer, G. E. H.

    Shepperson, Sir E. W.

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

    Parkins, W. H. D.

    Smith, Bracewell (Dulwich)

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

    Pickthorn, K. W. M.

    Smith, Sir R. W. (Aberdeen)

    Willoughby de Eresby, Lord

    Pilkington, R.

    Smithers, Sir W.

    Winterton, Rt. Hon. Earl

    Procter, Major H. A.

    Snadden, W. McN.

    Wright, Wing-commander J. A. C.

    Radford, E. A.

    Somervell, Rt. Hon. Sir Donald

    York, C.

    Ramsbotham, Rt. Hon. H.

    Somerville, Sir A. A. (Windsor)

    Young, A. S. L. (Partick)

    Ramsden, Sir E.

    Spears, Brigadier-General E. L.

    Reed, A. C. (Exeter)

    Strauss, H. G. (Norwich)

    TELLERS FOR THE AYES —

    Reed, Sir H. S. (Aylesbury)

    Strickland, Captain W. F.

    Mr. James Stuart and Mr.

    Romer, J. R.

    Sueter, Rear-Admiral Sir M. F.

    Buchan Hepburn.

    Rickards, G. W. (Skipton)

    Sutcliffe. H.

    NOES.

    Adams, D. (Consett)

    Harris, Sir P. A.

    Pearson, A.

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

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

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

    Adamson, Jennie L. (Dartford)

    Hayday, A.

    Price, M. P.

    Adamson, W. M.

    Henderson, A. (Kingswinford)

    Pritt, D. N.

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

    Henderson, J. (Ardwick)

    Quibell, D. J. K.

    Ammon, C. G.

    Henderson, T. (Tradeston)

    Rathbone, Eleanor (English Univ's.)

    Banfield, J. W.

    Hills, A. (Pontefract)

    Richards, R. (Wrexham)

    Barnes, A. J.

    Hollins, A.

    Ridley, G.

    Barr, J.

    Jenkins, A. (Pontypool)

    Riley, B.

    Batey, J.

    Jenkins, Sir W. (Neath)

    Ritson, J.

    Benn, Rt. Hon. W, W.

    John, W.

    Robinson, W. A. (St. Helens)

    Benson, G.

    Jones, A. C. (Shipley)

    Sexton, T. M.

    Broad, F. A.

    Kennedy, Rt. Hon. T.

    Shinwell, E.

    Bromfield, W.

    Kirby, B. V.

    Silkin, L.

    Brown, C. (Mansfield)

    Kirkwood, D.

    Silverman, S. S.

    Buchanan, G.

    Lathan, G.

    Simpson, F. B.

    Burke, W. A.

    Lawson, J. J.

    Sloan, A.

    Cape, T.

    Leach, W.

    Smith, Ben (Rotherhithe)

    Cluse, W. S.

    Lee, F.

    Smith, E. (Stoke)

    Cooks, F. S.

    Leonard, W.

    Smith, T. (Normanton)

    Collindridge, F.

    Leslie, J. R.

    Sorensen, R. W.

    Cove, W. G.

    Logan, D. G.

    Stephen, C.

    Daggar, G.

    Lunn, W.

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

    Dalton, H.

    Macdonald, G. (Incs)

    Stokes, R. R.

    Davies, R. J. (Westhoughton)

    McEntee, V. La T.

    Summerskill, Dr. Edith

    Davies, S. O. (Merthyr)

    McGhee, H. G.

    Taylor, R. J. (Morpeth)

    Day, H.

    McGovern, J.

    Thorne, W.

    Dobbie, W.

    MacLaren, A.

    Thurtle, E.

    Dunn, E. (Rother Valley)

    Maclean, N.

    Tinker, J. J.

    Edwards, Sir C. (Bedwellty)

    Mainwaring, W. H.

    Viant, S. P.

    Edwards, N. (Caerphilly)

    Mander, G. le M.

    Watkins, F.C.

    Evans, E. (Univ. of Wales)

    Marshall, F.

    Watson, W. McL.

    Foot, D. M,

    Mathers, G.

    Wedgwood, Rt. Hon. J. C.

    Gardner, B. W.

    Maxton, J.

    Welsh, J. C.

    Gibson, R, (Greenock)

    Messer, F.

    Wastwood, J.

    Green, W. H. (Deptford)

    Milner, Major J.

    Wilkinson, Ellen

    Greenwood, Rt. Hon. A.

    Montague, F.

    Williams, E. J. (Ogmore)

    Grenfell, D. R.

    Morgan, J. (York, W.R., Doncaster)

    Williams, T. (Don Valley)

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

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

    Wilmot, John

    Griffiths, J. (Llanelly)

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

    Woods, G. S. (Finsbury)

    Groves, T. E.

    Noel-Baker. P. J.

    Young, Sir R. (Newton)

    Hall, G. H. (Aberdare)

    Oliver, G. H.

    Hall, J. H. (Whitechapel)

    Paling, W.

    TELLERS FOR THE NOES.—

    Hardie, Agnes

    Parkinson, J. A.

    Mr. Whiteley and Mr. Charleton.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.
    Clauses 5 and 6 ordered to stand part of the Bill.

    CLAUSE 7—(Extension of functions of consumers' committees.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    8.29 p.m.
    Mr. Alexander: I would like to ask a question on this Clause about the functions of the consumers' committee. When the committee is brought into consultation will all the parties concerned in the matter which is before the committee be summoned and brought into conference? It seems reasonable that anyone who is ultimately a party to the matter which is

    2349
    laid before the committee should be brought into consultation. What is the practice, and what is the intention of the Minister?
    Mr. T. Williams: Before the right hon. and gallant Gentleman replies may I call his attention to the following words in the Clause:
    "Any consumers' committee may be brought into consultation under Sub-section (t) of Section thirteen of the Agricultural Marketing Act, 1933."
    How many consumers' committees have been brought into existence?
    8.31 p.m.
    Sir R. Dorman-Smith: I frankly admit that those two questions cannot be answered at the moment. What has happened in the past has been that there has been no legal obligation to consult consumers' committees, but we now think it well that there should be. As to the right of parties concerned to be brought into consultation, I cannot understand what the right hon. Gentleman has in mind. I expect he has something; he usually has.
    Mr. Alexander: If you are bringing into actual consultation of a compulsory character the consumers' committees, anyone who is likely to be affected by a decision arrived at by a consumers' committee should be given notice of the consultation and, if necessary, should have the right to put his case.
    Sir R. Dorman-Smith: I think that is the case at the present time, but I will look into that point. As to the actual numbers of consumers' committees, there is one for Scotland, one for England, and one for Great Britain.
    Mr. J. Morgan: The Clause appears to make a substantial advance in the right of a consumers' committee to get evidence and to find out what is really behind the negotiations. Will the consumers' committees have any more powers than they had before and will they serve any other purpose than they have served before? Up to now they have been practically useless and have had practically no influence upon the position. If, as the Minister has said, they will carry on as before, I do not see why you need to legalise their position. They have been ineffective. Is it a fact that they are to have more powers than before?
    Sir R. Dorman-Smith: There is no statutory obligation to-day for a board to consult a consumers' committee, although in practice boards do consult them. Now we are laying it down that there must be consultation before a decision is taken by a board. A consumers' committee can make representations to the Minister and can hold things up while those representations are being made.
    Mr. Morgan: They will, in fact, be on a better footing than they have been before?
    Sir R. Dorman-Smith: Yes, they will be on a better footing than before.
    Mr. Morgan: And will you take more notice of them?
    Sir R. Dorman-Smith: That is the intention.
    Mr. Hopkin: The Minister may direct one of these committees to do a certain piece of work, such as to ascertain the cost of distribution of milk. Is it possible for the committee to go into consultation with the Milk Marketing Board, and with the right hon. and gallant Gentleman himself, in order to get those costs down?
    Sir R. Dorman-Smith: I do not think that will be possible under the Bill. We should need special powers for them.
    Mr. T. Williams: The right hon. and gallant Gentleman has told us how many consumers' committees have been brought into existence. I remember that the Cutforth Committee investigated the cost of distribution. The committee made recommendations which have all, of course, been ignored. The consumers' committee referred to in Clause 7 is, however, a totally different thing from the Cutforth Committee, that is to say a committee that will be brought into consultation—
    Sir R. Dorman-Smith: It is not a reorganisation committee, as the Cutforth Committee was.
    Mr. J. Morgan: I am still not quite clear about this matter. Sub-section (1) of Clause 7 says:
    "and the functions of consumers' committees shall be extended accordingly."
    Extended in what direction? I feel that we have not had quite the explanation to which we are entitled. Obviously, if we

    2351
    are not giving them any more powers, seeing that it is said that their functions shall be extended accordingly, there must be some functions that are to be extended.
    Sir R. Dorman-Smith: The Sub-section deals with a milk product marketing scheme and a milk product development scheme, and the word "accordingly" refers to these two schemes.
    Clauses 8, 9 and 10 ordered to stand part of the Bill.

    SCHEDULE.—(Payments in Respect of Quality Milk.)
    8.38 p.m.
    The Under-Secretary of State for Scotland (Mr. Wedderburn): I beg to move, in page 15, to leave out line 19.
    This Amendment and the following one—In page 15, line 20, column 1, after "Tested," to insert "or Certified"— relate to the sale of Certified milk. Last year the main Scottish Board informed us that they were going to pay, out of their own funds, an additional premium of ⅛d. a gallon on Certified milk sold as Certified milk, over and above the ordinary T.T. premium. Certified milk producers usually have a surplus which is not sold as Certified milk, but is sold as T.T. milk at the ordinary T.T. price and with the ordinary premium. The line in the Schedule which we propose to leave out was put in in order to give statutory recognition to what the main Scottish Board have been doing, but we find a difficulty in Sub-section (4) (c) of Clause 1 which provides that:
    "Milk shall be deemed to be accredited milk, standard milk, tuberculin tested milk, or certified milk, if, and only if, when the milk was sold or, as the case may be, used, the producer thereof was the holder, or entitled to the benefit, of a licence … authorising him to use the special designation 'accredited,' 'standard' 'tuberculin tested' or 'certified'."
    If the Schedule were left as it is, it would mean that the Board would be legally obliged to pay this ⅛ d. on all milk produced by certified producers, and that was never contemplated. The Amendment would relieve them of that obligation. But it will still be possible for them to continue to pay out of their own funds the additional ⅛d. on Certified milk sold
    2352
    as Certified milk, and the Board have informed us that it is their intention to continue these payments.
    Amendment agreed to.
    Further Amendment made:
    In page 15, line 20, column r, after "Tested," insert "or Certified".— [Mr. Wedderburn.]
    8.41 p.m.
    Mr. Alexander: I beg to move, in page 15, line 25, column 3, to leave out "⅝," and to insert "½."
    We want some explanation from the Minister about certain differences which appear to us to exist in the Schedule. Reading carefully the very important language in the earlier paragraphs, we can deduce fairly clearly that Table I relates to milk sold by wholesalers, and Table II to milk sold by retailers. I understand from the Minister that that is correct. If we take the third sub-paragraph in each of these two tables, we find the following difference. In the case of milk sold wholesale, milk from an attested herd which is not accredited, standard, tuberculin tested or certified milk receives a subsidy of Id. per gallon from the Milk Board, in respect of which the Government Exchequer contribution will be ½d. In the case of milk sold by retail—and in this case, therefore, it must be by the producer-retailer—accredited or standard milk which is not tuberculin tested or certified milk and is not milk from an attested herd, receives the same subsidy from the board, namely, id. per gallon, but the Government pays ⅝d. Why?
    A great deal has happened during the last two or three years in the gradual expansion of favours to the producer-retailer section of the industry, and the extent to which they have been relieved of levies has made a fairly substantial difference to the finance of the scheme and of the pool. Possibly it may be assumed that the intention of the Government is to recoup the Milk Board to some extent for the reduction in the levies which they have charged to the producer-retailers. This section of the industry, which already has the opportunity, in the turnover both on the production and on the sale of the commodity, to make a double profit, and has been relieved of a large part of the levy, as distinguished from producers for wholesale distribution, is now to have this subsidy.
    Sir R. Dorman-Smith: I think the right hon. Gentleman is comparing the third category in Table I with the third category in Table II, but actually the accredited or standard milk in Table II should be taken with the accredited or standard milk in Table I, and this latter is the second category in Table I.
    Mr. Alexander: Perhaps the Minister can give us a little more explanation of the working of the thing. In Table I, which deals with milk sold wholesale, we have the words:
    "Milk from an attested herd which is not Accredited, Standard, Tuberculin Tested or Certified Milk."
    That category gets ½d. from the Exchequer. In Table II we have:
    "Accredited or Standard Milk which is not Tuberculin Tested or Certified Milk and is not milk from an attested herd."
    That gets a higher rate of contribution from the Government. At any rate, that is how it looks on the face of it. In the second paragraph of Table I we have:
    "Accredited or Standard Milk which is not Tuberculin Tested or Certified Milk and is not milk from an attested herd."
    That gets 1¼d. a gallon from the board, and the Minister suggests that we ought to compare that with the third category in Table II. If the argument of the Government is that these two categories are in all respects similar, that would be an answer to the Amendment, but I should like to know what is the explanation of the differential subsidy.
    8.45 p.m.
    Mr. J. Morgan: The Minister has drawn our attention to the fact that the final paragraph should be related to the second paragraph in the first table, where the figure is 1¼d. But in the second column the figure is ¾d., whereas that below it is ⅝d. Why is there this difference?
    8.46 p.m.
    Sir R. Dorman-Smith: Really the wholesaler and the retailer are being treated in exactly the same way by the Exchequer, and what the Exchequer is going to do is to pay half the old premium and the whole of the new premium. The producer-retailers' contributions towards the board arc worked out in a different way from those of the wholesalers. That is where the discrepancy arises. Before this came into operation, the board was paying Id. a gallon in the case of producers selling wholesale, and ¼d. a gallon in the
    2354
    case of producers selling retail. The retailer gets ¼d. plus ⅜d., which is⅝d.; and the wholesaler gets ¼d. plus ½d., which makes ¾d.
    8.48 p.m.
    Mr. T. Williams: Earlier on we argued that there were low-grade milks receiving premiums which we thought they ought not to receive. Line 15 says:
    "Milk from an attested herd which is not Accredited, Standard, Tuberculin Tested or Certified Milk."
    These get a subsidy from the Treasury if sold wholesale. I have never heard any explanation why low-grade milk should get any subsidy at all.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed,
    "That this Schedule be the Schedule to the Bill."
    8.49 p.m.
    Mr. Alexander: My hon. Friend the Member for Don Valley (Mr. T. Williams) has pointed out that, under this, we are to pay a subsidy for milk from attested herds, although the milk does not reach certain specified qualities. In the case of milk sold retail, there is no such wording as is found in the wholesale table. The hon. Member for Don Valley wants to know the reason for that difference. Before the Minister replies, I must say that I very much regret that I was not able to be here to support my hon. Friend on the first Amendment that was moved to-day. We are asking the taxpayers to subsidise milk of a standard which every producer ought to attain without any help at all, because it would be his duty to maintain that standard if licensed to sell milk to the public. It is unreasonable that the taxpayer should be called upon to provide a subsidy for what ought to be the ordinary standard of cleanliness.
    8.51 p.m.
    Dr. Edith Summerskill: I feel that the most undesirable feature of the Bill is the fact that the taxpayer is being asked to subsidise milk which is neither clean nor pure nor safe. The object of the Bill, outlined in the Preamble—
    The Deputy-Chairman: The hon. Member must not discuss a matter which has been discussed already on the first Amendment to-day.
    Mr. T. Williams: Is my hon. Friend not entitled to raise a question which

    2355
    comes under the Schedule, on the Motion "That this be the Schedule to the Bill"? It is true that an earlier Amendment dealt with the words "accredited milk, standard milk." My hon. Friend is now directing the attention of the Committee to milk from an attested herd which is not accredited, standard, tuberculin tested or certified. Is she not entitled to do that?
    The Deputy-Chairman: That is quite correct. My impression was that the hon. Member was making a general indictment against the Bill.
    Dr. Summerskill: I will confine myself to the Schedule. In the Schedule the words "quality milk" occur. I think that conveys the idea to the general public and to the Committee of milk that is safe and clean. Here we are asked to subsidise accredited and standard milk which is not safe, and which is, in fact, a danger to the community. The Minister told us that this was a temporary Measure, but even in a temporary Measure he should concern himself particularly with the kinds of milk which are described in the Schedule. Accredited and standard milk are not safe.
    The Deputy-Chairman: The hon. Member is going outside the Schedule. We are discussing the allocation of money to be contributed by the Treasury.
    Dr. Summerskill: I am suggesting that we should not give one penny to the producers of this kind of milk. If I confine myself to that, and tell the Committee why we should not, surely I am in order. In this country 40 per cent, of the cows have tuberculosis, and these are the cows which are producing accredited and standard milk. I want to remind the Minister that every year 2,000 children die as the result of infection from milk which is called accredited and standard milk, and that three-quarters of the cases of Cervical Glands and three-fifths of the cases of infected bone in children are due to infected milk. Yet the Minister has the temerity to tell us that he is going to subsidise this milk, which is a danger to the community. Because it is called graded and standard milk—I am sure that I am keeping within the Schedule, Colonel Clifton Brown—the farmers and producers are to be subsidised. I suggest to the Minister that nobody in this country should profit by producing milk of this kind, and I ask him to reconsider the Schedule.
    8.56 p.m.
    Mr. Brooke: This Schedule fixes the premiums that are to be offered and paid to the producers of quality milk in order to encourage the production of such milk. The premium on tuberculin-tested or certified milk is to be 2¼d. per gallon, but the premium enjoyed by tuberculin-tested milk in the retail market on sale to the public is 1s. a gallon, and on certified milk is. 8d. per gallon, I do not think that the problem of stimulating the production of quality milks can be solved solely by an adjustment of the premium which the producer is to enjoy, quite apart from the natural demand that ought to be created all the time by a reasonable price asked of the consumer for these milks. The right hon. Gentleman the Member for Hillsborough (Mr. Alexander) suggested, and I think it was accepted by Members in all parts of the Committee, that we all fundamentally in our milk policy want to find the correct solution—
    The Deputy-Chairman: The question of the correct solution of milk policy does not come under this Schedule, which is limited to the way money may be contributed.
    Mr. Brooke: I beg your pardon, Colonel Clifton Brown. I am sure that I was in the wrong, but if I may proceed to the end of my sentence, I was going to say that a great opportunity is being missed by failing to control the production of milk through the fixing of these premiums. If the producer of non-graded milk was made to meet the premium that is to be received—
    The Deputy-Chairman: That would be a very good argument to use on Second Reading, but not on the Schedule, which lays down certain details which are not principles. It would also be a very useful argument on the Third Reading, but the hon. Member is going outside the scope of the Schedule.
    Mr. Brooke: I bow to your Ruling, Colonel Clifton Brown. I had not the opportunity to speak on the Second Reading, but I shall be glad to speak on the Third Reading if you will afford me that opportunity.
    8.49 p.m.
    Mr. Hopkin: May I refer to one point which has been raised in the Debate, on the question of the 40 per cent. T.B.

    2357
    in herds? I mentioned in my speech on Second Reading that there is not a shadow of evidence of any kind that the herds to-day are infected with T.B. to anything like the extent of 40 per cent. I also pointed out that the figure of 40 per cent. arose from the Gowland Hopkins Report in which that figure was fixed on the committee having examined 144 herds out of 140,000.
    The Deputy-Chairman: I cannot see what relation this has to- the Schedule.
    Mr. Hopkin: I thought that I might be able to get round it by replying to the statement which had previously been made and which I respectfully submit, is not correct.
    Dr. Summerskill: As I made the statement, may I be allowed to make an explanation?
    Bill reported, with Amendments; as amended, to be considered To-morrow.

  WHEAT (AMENDMENT) BILL.
  Order for Consideration of Lords Amendments read.
  9.1 p.m.
  Sir R. Dorman-Smith: I beg to move, "That the Lords Amendments be now considered."
  Perhaps it may for the convenience of the House if I give a brief resume of what these Amendments mean. None of them raises any new question of principle at all. For the most part they are either of a drafting character or are certain Amendments of detail of the machinery. A number of them actually have come about as the result of the Wheat Commission having to draft the by-laws which have to be made as soon as the Bill becomes law. There are, however, two Amendments which are of some substance. The first one is represented by the new Sub-section (7) to Clause 7, to which the first Amendment which will come before the House is consequential. The effect of the new Subsection will be to grant a tolerance to those millers who happen to include rather more than the maximum of wheat content in provender mixture destined for livestock. The new Sub-section provides that in such circumstances the
  2358
  miller shall make the quota payment only in respect of the excess of the wheat content and not on the whole of it. I think that that will go a long way to meet what was put forward in all parts of the House, namely, that the small miller should have protection.
  The other Amendment of substance is a new Sub-section (4) to Clause 8, the object of which is to provide machinery to give effect to what, I think, was the agreed intention, namely, that there should be no quota payment liability in respect of certain milled wheaten substances, so that the amount of the liability should be suitably reduced, provided that they were used as food for livestock. But for this Sub-section hardship might arise to the importer. The importer at the time of importation of low-grade flour could not be certain whether that flour would be used for livestock or not. In such circumstances he could not claim any remission of quota payment at the time of importation. The new Sub-section provides that, if the importer makes a quota payment and can subsequently prove to the Wheat Commission that the flour has in fact been used as food for livestock, he can get a rebate. This will also affect, though not to anything like the same amount, the home miller, who would generally know the destination of his flour. Most of the other Amendments that will come before the House are consequential on the addition of these new Sub-sections, and, if it is the view of the House, I propose, after this explanation, to move formally each succeeding Amendment as it is reached, and then answer any questions that may arise on them.
  9.5 p.m.
  Mr. Alexander: I doubt very much whether from an examination of these-very technical Amendments there would be one in a hundred members who could possibly understand them, unless they had made it a very special study and task. In view of the long discussion we had in the last stage of the Bill in this House, sitting very late at night, I have taken special care not to put myself in the position of having to understand every word in these Amendments, but I have been guided by an expert, who took the same view as myself on the previous stage, and I can assure my hon. Friends that there is nothing in these Lords Amendments to which we need take ex-

  2359
  ception, based upon the policy we took up in the last stage of the discussion. So far as I am concerned, I should not mind if the right hon. Gentleman moved the adoption of the Amendments en bloc.
  Lords Amendments accordingly considered.
  Mr. Deputy-Speaker (Colonel Clifton Brown): Will it be for the convenience of the House to take the Amendments en bloc?
  Hon. Members: Agreed. Lords Amendments agreed to.

  AIR MINISTRY (HESTON AND KENLEY AERODROMES EXTENSION) (recommitted) BILL.
  Considered in Committee.
  [Colonel Clifton Brown in the Chair.]

  AIR MINISTRY (HESTON AND KENLEY AERODROMES EXTENSION) (recommitted) BILL.

    CLAUSE 1.—(Power to acquire Heston lands.)
    9.7 p.m.
    Mr. Perkins: I beg to move, in page 3, line 21, to leave out "forty-two," and to insert "forty."
    I am merely moving this Amendment, which stands in my name and the names of several other hon. Members, in order to get an explanation from the Undersecretary why nothing is to be done at Heston Aerodrome for the next three years. Why should we wait until 1943 to see this aerodrome put right? My hon. and gallant Friend may tell us that this sort of thing takes a great deal of time, that they have to cut down a lot of trees, that they have to close a lot of roads, rebuild a lot of roads, pull down old hangars and build new ones, build a new rectory and, finally, level the ground. He will tell us that that cannot possibly be done for at least three years. If this work was required for the defence of London, for the Royal Air Force, we should not have to wait three years for it. Hon. Members in whose constituencies aerodromes have been built know perfectly well that almost in a night these aerodromes are built. In six months the aerodrome is completed. Because this aerodrome is wanted for civil aviation, we are told that there is no hurry, and
    2360
    it may perfectly well be postponed. The real fundamental reason is the outlook of the Air Council towards civil aviation. As the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) said the other day, they are like a cow looking at a passing railway train, and saying: "Wonderful, but it has nothing whatever to do with me." Everyone knows that in the past and now the Air Council are not in the least interested in civil aviation.
    9.9 p.m.
    Mr. Eckersley: In supporting what my hon. Friend has said, I should like to congratulate the Air Ministry on the admirable aerodrome that it has made, and it will be a great deal better when these new plans are completed and this new ground has been taken in. I cannot see why the work should not be done before the end of 1943, and I would appeal to the Under-Secretary to-night to give us an assurance that, although he may not accept this Amendment, if it is pressed, at least he will do his best to get the work going a little earlier. I hope that I am right in thinking that he may be in negotiation with the London Passenger Transport Board for the provision of proper transport facilities to the; aerodrome. If that be so, the delay may be worth while. If that is not the case, then I express the hope that he will take that matter into consideration during the years to come. I hope, however, that it will not be a question of years but of months. I trust that when the work does start the Under-Secretary will consider not only the actual area itself but the taking of powers in every way to ensure free approaches on every side. There are obstructions near to the present Heston Aerodrome, and if the aerodrome is enlarged to its proposed size, those obstructions may become more dangerous, in view of the low approach of modern aircraft. I hope he will hurry the work along as quickly as he can.
    9.11 p.m.
    Mr. Montague: I should like the: Minister to answer two questions, which arise as a result of the evidence given before the Select Committee in respect of Heston. I should like to know, in the first place, whether arrangements have been completed in respect of the land for the rectory, and what has been done with regard to the tenants who are being dis-

    2361
    possessed. So far as I can gather, the Air Ministry and the reverend gentleman concerned have been waiting upon the Select Committee, one with the object of trying to get a bit of public path and the other with the object of trying to fob the reverend gentleman off with a bit of waterlogged ground. In the meantime, two urban councils, meeting on different dates, and one joint committee, meeting once a quarter, have met without knowing what the position was, and having no particulars of the result.
    The Deputy-Chairman: I would remind the hon. Member that we are discussing the Amendment and not the Clause.
    Mr. Montague: I took it that the discussion on the Amendment was going to be general.
    The Deputy-Chairman: I have no objection if we discuss the Clause with the Amendment, but perhaps it would be better if the Amendment were withdrawn.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Montague: I think it will be the more convenient course to have a general discussion, because there is not much more arises in the Bill than the points that are raised in the Amendment, and those I am raising now. It appears to me that both the Air Ministry and the reverend gentlemen were waiting in order to get the best of the bargain. Everybody was in doubt as to what the situation was, and a tremendous amount of red tape was in operation in consequence. I should like to know why the arrangement that was suggested and eventually accepted by the reverend gentleman, to make about 100 or 150 yards of road to enable him to get to the place that he was prepared to accept, when he had found that he could not get his own way about the public path, was not suggested before, so as to prevent this extreme delay.
    I realise the difficulties of the Ministry and the great amount of time and attention that has been paid to dispossessing the rector of the parish, because of the fact that by law the rector must live in his parish. It was amusing to see the hordes of witnesses and counsel engaged on this matter of dispossession, but very
    2362
    little was said, except by myself on the committee and one other Member from this side of the House, about the other dispossessed persons—the workmen who were living in cottages. We had a promise made by the Air Ministry that everything would be done that could be done and that they would be as zealous as possible in trying to get these workpeople settled in decent homes. The difficulty of the problem arises from the past. There are houses which have been for a long time old houses let at an uneconomic rent, and the difficulty is to get new places for the people. The local councils are not ready for them, they do-not know where to put them, and they have plenty of applications in their own central areas. But in any event, it is really a hard thing to expect poorly paid labourers to have their rates doubled, and that is the least they can expect, because; the Air Ministry must get them out in order to extend the aerodrome. I hope the Under-Secretary will clear up these matters, because we feel that they are quite as important as the spiritual duties of the rector.
    9.16 p.m.
    The Under-Secretary of State for Air (Captain Harold Balfour): I am quite ready to respond to the appeal to give information on the subject of the rectory and the tenants. As the Committee is aware, the Select Committee inserted a new Clause which provides, first, that the Secretary of State is to acquire a site of three acres suitable for a parsonage and a garden and offer it free of charge to the rector, and if there is a difference as to whether the site is suitable or not there is provision for arbitration. Secondly, that the rector is to have compensation-on account of the acquisition of the existing rectory on the basis of the Air Ministry bearing the cost of building a new rectory and laying out the gardens as near as possible equivalent to the existing ones. Negotiations are now going on with the Department and with those concerned. We naturally accepted in the spirit as well as in the letter the Clause which has been inserted in the Bill, and we anticipate no difficulty in performing the requirements of the Clause, provided that land is available and that there is a willing seller. It would only be if land were not available, or, alternatively, if the price for such land as was available

    2363
    was put up against us to such a figure that we who are responsible for the expenditure of public money could not contemplate the purchase at that figure, that we should have difficulty in fulfilling the requirements of the Clause. If that should be the case we should have to come to this House and ask for a special Bill to be passed to enable us to have compulsory powers to acquire the necessary land, as such compulsory powers as we have are limited to the acquisition of land for aerodrome purposes.
    I make that reservation as to the possible difficulties in order to issue a warning to anyone who feels that they can put up the cost and hold us to ransom, as it were, that we have at our back those powers. But the negotiations are proceeding satisfactorily, and I anticipate no difficulty in obtaining an alternative site for the rectory
    Mr. Montague: What does the Undersecretary mean by "progressing satisfactorily?" All that he is now saying we knew already. I want to know whether anything further has been done. Has the land been acquired? Have the councils concerned agreed upon the roads? Things ought to have gone much further than what the Under-Secretary has indicated. The negotiations were going on when the Select Committee finished its work, and I think that by now we should know whether the difficulties have been got over. The difficulties were largely the result of the desire of the Air Ministry and the other person concerned to get the best bargain they could without letting anybody know to what they would be willing to agree.
    Captain Balfour: I cannot go beyond saying that negotiations are proceeding, and it would be quite inadvisable while the negotiations are proceeding to give any sort of statement that they are going to be successfully concluded. I do not anticipate difficulty, and, after all, we have had but a comparatively limited space of time since the Bill passed the Select Committee. It takes a little time to negotiate with those who possess land, whether it is the local authority or some private owner, which can be offered as a suitable site. The rector has the right to consider whether it is a suitable site.
    Mr. Montague: That has all been done.
    Captain Balfour: No. The rector has the right to consider whether it is a suitable site or not and I do not think we can expect the rector through his legal advisers to decide as to whether it is a suitable site or not in the time since the Bill came from the Select Committee.
    Mr. Montague: Do I understand this to be the position? The extension of the aerodrome will go on according to the specified programme whatever happens with regard to the rectory? In other words, if you are not able to find an alternative site in the time he will have to take lodgings somewhere else until you do?
    Captain Balfour: That is the position. The paramount need for developing this airport was granted by the Select Committee, who did not stipulate that the rector must be offered alternative accommodation before the scheme can go forward. But we accept the Clause in the spirit in which it was put in, and we shall endeavour to do the fair thing by the rector as well as by the public purse. The hon. Member asked me a question about the tenants. Here, again, since the Second Reading of the Bill and during the time that the Bill has been in Committee, good progress has been made in the examination and solution of this problem. Of the 80 or 90 tenants who were outside the Bill and whom we said we would deal with as if they were inside the Bill, nearly 20 of them have found accommodation elsewhere, and the present number whose problem of housing has to be solved is 61. A further examination has shown that we have no need to evacuate any tenants until September, 1939, and then only 12 families. These we can house in a block of flats which are our property and we shall do so at the existing rents. We shall also facilitate the removal to the new accommodation. The occupants of a cottage required in March, 1940, for the site of the new road can be accommodated in flats on the same basis at the existing rent, and we shall facilitate their removal. All the remaining tenants can stay until September, 1940.
    Generally, we have warned the tenants of our intentions and we have given them as long as possible to make arrangements, and we have left them free to terminate their existing tenancies at an earlier date if it is convenient to them. The matter

    2365
    of the permanent rehousing has been taken up with the three local housing authorities. The hon. Member knows that negotiations with local authorities are not rapidly concluded, but we are in negotiation with them with a view to providing such accommodation as shall be required. A house-to-house survey is going on in order to ascertain precisely the tenants requirements and the amount of accommodation in the area in which they prefer to live. Generally, we anticipate no serious difficulties and the Committee may rest assured that all possible steps will be taken to abide by the statement which was made on the Second Reading of the Bill. That is the position as regards the tenants which I trust the hon. Member for West Islington (Mr. Montague) will not consider unsatisfactory.
    I now turn to the Amendment which the hon. Gentleman the Member for Stroud (Mr. Perkins) withdrew. I am glad he withdrew it, because we should not have been able to accept it. I think he himself should welcome its non-acceptance because it is quite objectless as an Amendment. It suggests that the power of acquiring land compulsorily shall cease in 1940. It is a normal practice in all Bills for compulsory powers of acquisition of land that the powers should extend for a period of three years from the time the Bill is passed. The Select Committee accepted that period of three years. The Amendment would not embarrass us at all because our notices to treat will all be served before 1939 is over.
    If the objective of the Amendment was to speed up the Heston Scheme I am afraid it would not be served by the acceptance of the Amendment, because speeding up is a matter for the administrative action of the Air Ministry. Our programme has been drawn up to complete the airport in the shortest possible time. The reason why we cannot complete until 1942 is that the aerodrome must continue in use owing to our traffic requirements, and the ground takes time to consolidate after the removal of buildings. Grass after sowing takes a certain time to become established and even all the enthusiasm of my hon. Friend the Member for Stroud cannot overcome the processes of nature. Temporary buildings have to be provided to cover the interim period. The permanent airport buildings cannot be
    2366
    planned and built in a style worthy of the main airport of the country in a few months.
    If the hon. Member for Stroud quotes cases of Royal Air Force acquisition of aerodromes I would point out that a great deal of temporary hutting can be provided in those cases, but that would not suffice in this case. Alternative roads have to be built before the existing roads are closed. Our programme for completion in 1942 has been carefully calculated and provides no margin at all for any serious hitch or hold-up. It is sufficient to say that no one is keener than I am to speed up construction of the airport. I have reviewed this programme and cannot see that we can complete the programme in a lesser time than I have stated. We are losing no time at any stage. If the hon. Member for Stroud wishes, I will, at some later date, give him full details of each stage, month by month. I believe that this is an airport which will be one of the finest, if not the finest, in the country, and will be a credit to the country.
    9.29 p.m.
    Rear-Admiral Sir Murray Sueter: I should be obliged if the Air Ministry would remember, in clearing this site, that the rector has in his parsonage grounds six acres and that he uses some of it for a garden and another part as a playing-field. If they can give him six acres, the same amount as he has in his own rectory grounds which are now to be taken over, I should be much obliged. Also, in the present parsonage house he has a very large hall used for all sorts of social entertainments connected with his work. I hope that the Air Ministry will give him sufficient money to have a rectory and hall exactly the same as the present rectory, and will also give him sufficient money to lay out the garden properly as a rectory should be laid out.
    Captain Balfour: The hon. and gallant Member for Hertford (Sir M. Sueter) asks if we shall give more than the three acres the Bill stipulates. I cannot say as to that. We are under an obligation to provide three acres.
    Sir M. Sueter: The Clause says, "approximately three acres." You are not bound down to three acres. "Approximately" may be three, four, five or six acres.
    Captain Balfour: I understand that the rector accepted three acres.
    Sir M. Sueter: That is only because he could not get any more on a particular site.
    Captain Balfour: This is a difficult point. I should have thought that three acres of garden was ample as regards upkeep. Regarding putting back a hall such as that in the present parsonage, so that it can be used for recreational purposes, it is stipulated in the Bill that we bear the cost of building a new rectory and laying out gardens as near as possible similar to the present ones. Therefore any facilities in the present rectory will have to be provided in the new one. If there is any dispute there is the further safeguard for the rector of arbitration.
    Mr. Eckersley: Could my hon. and gallant Friend give us any idea whether there is any possibility of the London Passenger Transport Board giving any rail facilities to the new airport?
    Captain Balfour: We are in negotiation to see whether that can be done. The capital cost of a special line would be enormous and the institution of the line must, to a considerable extent, depend on the revenue likely to accrue. It may be that civil aviation will grow to such a degree that if a line is not instituted at the outset the London Passenger Transport Board, in years to come, will come clamouring for one to be provided.
    Clauses 2 to 11 ordered to stand part of the Bill.
    Schedules agreed to.
    Preamble agreed to.
    Bill reported, without Amendment; read the Third time, and passed.

  BRITISH OVERSEAS AIRWAYS [Money].
  Resolution reported,
  "That for the purposes of any Act of the present Session to make provision, amongst other matters, for the establishment of a British Overseas Airways Corporation, and to make further and better provision for the operation of air transport services, it is expedient—

  A. To charge on the Consolidated Fund any sums required by the Treasury for
  2368
  fulfilling any guarantee of the redemption or repayment of, and the payment of interest on, any stock issued or temporary loan raised by the corporation, being stock or loans the aggregate amount of the principal whereof outstanding at any time (exclusive of amounts borrowed for redeeming stock or paying off a loan) does not exceed ten million pounds.

  B. To authorise the payment into the Exchequer of—

  (a) any sums received by way of repayment of sums issued out of the Consolidated Fund for fulfilling any such guarantee as aforesaid or by way of interest thereon; and

  (b) any sums paid by the corporation to the Secretary of State under the said Act.

  C. To authorise the payment out of moneys provided by Parliament of—

  (a) grants to the corporation of such amounts as may be determined by the Secretary of State under the said Act;

  (b) such grants as the Secretary of State may agree to make in consideration of undertakings with respect to overseas air transport services entered into with him by any company in which the corporation has a financial interest and to which a subsidy is payable by the Government of some country other than the United Kingdom in consideration of corresponding undertakings entered into by that company with that Government; and

  (c) any expenses incurred by the Secretary of State in the provision of facilities for the operation of aircraft of the corporation or of any such company as aforesaid;

  Provided that the aggregate amount of the grants to be made under this Resolution in any financial year, where added to the aggregate amount of any subsidies paid in that year under agreements made before the commencement of the said Act in pursuance of Section one of the Air Navigation Act, 1936, as amended by the Air Navigation (Financial Provisions) Act, 1938, shall not exceed four million pounds, and no such grant shall be made after the thirty-first day of December, nineteen hundred and fifty-three."

  MINING INDUSTRY (AMENDMENT) BILL.
  Not amended (in the Standing Committee,) considered.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  9.35 p.m.
  Mr. Gordon Macdonald: I want personally to welcome the Third Reading of this

  2369
  Bill. Ever since 1920, the Mines Department has suffered from the serious disability of having its expenditure limited to £250,000. I am satisfied that had there been no limitation of that nature during the last 19 years, much more could and would have been done by the Department. In a number of years, the expenditure has been near the maximum, and on one occasion it was within a thousand or so pounds of the maximum. When that is the situation, there has to be a retrenchment somewhere, and often it has been in directions which we think have caused the Mines Department to be less effective than it would otherwise have been. On Tuesday of last week, I put a question to the Secretary for Mines, to which he gave a very acceptable answer. That answer indicated that the Mines Department were alive to the need of doing certain things which we consider to be necessary. I realise that the suggestion I made then would lead to substantial expenditure, but now that the maximum has been removed, it seems to me that there is no limit, save that of the closed fist of the Treasury. I hope and believe that the Secretary for Mines will see to it that the extended powers which he now possesses will be used in certain definite ways which have been pressed upon his predecessors in years gone by.
  One of the appalling features of the mining industry is the very heavy accident rate, and I hope that as a result of these extended powers, the hon. Gentleman will be able to take such measures as will reduce that very heavy rate. I realise that an increase in the number of inspectors will not of necessity bring about such a reduction, but I am satisfied that the reorganisation which the hon. Member outlined on Tuesday of last week will be some contribution towards reducing the accident rate. One of the reasons why I welcome the Bill so much is that this could not have been done without these provisions. There is, moreover, another aspect which has been brought to the notice of the Department by many hon. Members on this side of the House, and particularly by the hon. Member for Leigh (Mr. Tinker). It is the question of overtime. I am satisfied that an increased inspectorate will find out about overtime in a way which the previous inspectorate could not do. We know that the inspectors have been very heavily worked. We have no fault to
  2370
  find, for they have done their job exceptionally well; but we are satisfied that a few more inspectors who could pay unexpected visits to different collieries an hour or so after the end of the shift would find that overtime is being worked to an extent that ought not to be allowed.
  That is another reason why we welcome the Bill. It will enable the Mines Department to increase the inspectorate, and that increase will enable the inspectorate to do work which hitherto they have not been able to do. I hope that the Secretary for Mines will see to it that the question of what we consider to be illegal overtime—although I know there are differences of opinion as to its illegality—will be dealt with as the result of the passing of this Bill. We of the Miners' Federation heartily welcome the Bill. We realise that it is needed, and we hope that it will be used in such a way as, first, substantially to reduce accidents, and, secondly, to deal effectively with what we consider to be the illegal overtime that is now being worked in the mines.
  9.39 p.m.
  Mr. Tinker: I want to welcome the Third Reading of the Bill and to compliment the Secretary for Mines on having brought forward a reform which ought to have been carried out long ago. It is evident from the Financial Memorandum that the Mines Department has been cutting itself to the bone in order to keep within the limits. In the mining industry, where there is such a high accident rate, one would have expected that no expense would have been spared to meet that difficulty, but it is evident from the Financial Memorandum that the Department has been tied down to a limit beyond which it could not go, because it was not allowed to do so by Parliament. It has now been found necessary to do something in that direction. In welcoming the Bill, hon. Members on this side hope that many of the things for which we have asked in the past will be attended to.
  One of those matters is the inspectorate. We hope that there will be an increase in the number of inspectors, so that, not being overworked, they will be able to spend more of their time in the mines. In the past, the inspectors have had to come back and give their report, and in my opinion, they have not been able to give sufficient attention to the actual

  2371
  work in the mines. To understand a mine, the inspector must be on the spot and must be below ground, watching very closely what is taking place. Unless there is a fair number of inspectors to do that work, it is liable not to be done as it ought to be done. The accident rate increases because there is not sufficient supervision in the rush for profits. The men are called upon to do many things which would not be permitted if the inspectors knew of them. In many cases, the Mines Act needs to be strengthened, but even if it were carried out as it ought to be, the accident rate would be reduced. If only for that reason, we welcome the possibility of there being more inspectors as a result of this Bill.
  I am very pleased to be able to compliment the Secretary for Mines on having used his influence, as I believe he has, by saying that if he had to take charge of this Department, he must have sufficient money behind him in order to see that the work of the Department is carried out properly. If he has done that, he deserves our gratitude. I hope that the provisions will be carried out fully, if only for the purpose of reducing the accident rate.
  9.42 p.m.
  Mr. E. J. Williams: I do not want to recapitulate what was said in the Committee by hon. Members on this side, but I should like the Secretary for Mines to explain why a figure is inserted in the Bill, and also why it is such a small figure. Why could not the amount have been increased?
  Mr. G. Macdonald: There is no figure in the Bill.
  9.43 p.m.
  Mr. George Hall: It is very unusual to have a Bill dealing with the mining industry which can be regarded as non-controversial, as this Bill is. As my hon. Friend the Member for Ogmore (Mr. E. J. Williams) said, those of us who were Members of the Committee expressed our views on the Bill in the Committee. I want simply to point out to the Secretary for Mines that now there can be no excuse on the part of his Department for not proceeding with the very important work which all of us think should be done, not only with regard to safety, which is most important,
  2372
  but also with regard to the very important matter of research. The Bill is preliminary to a very much bigger Bill, which will deal with many aspects of the mining industry, and which, we trust, will be introduced by the hon. Gentleman during the next Session of Parliament, and will embody, not merely the main recommendations of the Royal Commission on Safety in Mines, but the whole of the recommendations. I want to say that the whole of the mineworkers of this country and the official organisation welcome this Bill, which will remove what many have regarded in the past as being the excuse for there not being greater activity on the part of the Mines Department.
  9.44 p.m.
  The Secretary for Mines (Mr. Geoffrey Lloyd): I wish to thank hon. Gentlemen for the support they have given me on this Bill. I think the hon. Member for Ogmore (Mr. E. J. Williams) will appreciate that the figure is only an estimate of the expansion of the mines inspectorate. I will pay special attention to that aspect of the duties of the inspectors which relates to overtime.

  IMPORT DUTIES (IMPORT DUTIES ACT, 1932).

    MERCURY BICHLORIDE.
    9.45 p.m.
    The Parliamentary Secretary to the Board of Trade (Mr. Cross): I beg to move,
    "That the Additional Import (Key Industry) Duties (No. 1) Order, 1939, dated the fourth day of July, 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 said fourth day of July, nineteen hundred and thirty-nine, be approved."
    This Order relates to mercury bichloride which has been subject since 1921 to a duty of 33⅓ per cent. Under the Order it becomes liable to duty at such a rate as with the Key Industry duty will amount to 2s. per lb. The new rate is equivalent at the present value of imports—and those values are extremely low—to an ad valorem duty of a little more than double the previous rate. Mercury

    2373
    bichloride is used for pharmaceutical purposes as an antiseptic, in certain types of dry batteries, as a parisiticide for the treatment of wood, and for the manufacture of other mercury compounds. The United Kingdom has sufficient capacity to supply all our home requirements. Since 1937 there has been greatly increased competition from imports at very low average values. These have come particularly from Italy and in the course of the present year they have also come from Russia at even lower average values.
    The Italian exporters, I understand, have been able to get supplies of mercury, and mercury is the principal component and the most costly component in mercury bichloride, at prices lower than the world market prices which have been paid by United Kingdom manufacturers. Indeed this has gone to such a length that the c.i.f. value of the imports in many cases has been less than the cost to the United Kingdom manufacturers of the mercury content alone. As a consequence of this competition the United Kingdom share of the home market and the volume of our export trade have both been greatly reduced. The duty on the recent values of imports is on a reasonable level, despite the fact, which I have already indicated, that it would be something more than twice the 33⅓ per cent. which obtained in the past. The 2s. duty added to the import value of mercury bichloride would bring the total import value up to 4s. 6d. per lb. and that compares with the United Kingdom schedule price of from 4s. l0d. to 5s.
    Mr. Alexander: Is that net?
    Mr. Cross: I would not like to say whether or not it is net. It is the schedule selling price of United Kingdom manufacturers.
    Mr. Alexander: This is an interesting little sum in arithmetic. If the import value is 4s. 6d. a pound and the United Kingdom price is 4s. l0d. to 5s., how is the hon. Gentleman going to justify this additional tax? How is this going to benefit the United Kingdom manufacturer if you leave the import at a lower price?
    Mr. Cross: I think if the right hon. Gentleman adds selling cost to the import value which I have given him, he will see what the position is, and he must also make some allowance for the fact
    2374
    that the British manufacturer may accept a price somewhat below the actual schedule price. I mention these figures to show that this protection is not excessive and I seem to have been very successful because the right hon. Gentle-man apparently feels that this duty might be foolishly inadequate and purposeless. The United Kingdom manufacturers have given the Import Duties Advisory Committee a satisfactory undertaking to maintain their prices at the present level, subject to adjustment in accordance with the variations in the price of mercury. The Committee report that the industry is efficient and there has been no opposition from consumers to the application for an additional duty.
    9.50 p.m.
    Mr. Alexander: I do not propose to ask my hon. Friends to divide against this Order, but I feel that the Parliamentary Secretary to the Board of Trade has just now been proving what we on this side have said so often with regard to the two and a half years' campaign in Spain. This Order is one of the direct results.
    Mr. E. J. Williams: This is the price that we are paying for Franco.
    Mr. Alexander: The Parliamentary Secretary shakes his head, but he need not do so. It is clear at any rate that this mercury bichloride has come, in the past, in large quantities from Italy. The hon. Gentleman said in a rather gentle and naive way that Italy was now able to get large quantities of mercury. Of course we on this side know what that means. They have now very much better access than they otherwise would have to the great resources of mercury which Spain possesses, and therefore we are in the position to-night of having to put on this additional duty to protect our industry here, which no doubt has experienced considerable difficulty in the last three years in obtaining adequate supplies of mercury in order to make bichloride. I suppose the Parliamentary Secretary will be frank with us about that aspect of the matter.
    Of course none of us really wants to create exchange reserves in this country for totalitarian States who might find it very useful to use those reserves in the present state of nerves and of rearmament throughout Europe. This is just a little part of the penalty which the Gov-

    2375
    ernment has to pay for its acts of un-wisdom, for its sins of omission and commission in foreign policy in the last three years. I can understand from reading some of the uses of this substance which are mentioned in the White Paper, such as its use for antiseptic and pharmaceutical purposes, that it would be of considerable value to us in war time. As I say, I do not think my hon. Friends will regard this as a big enough question on which to divide and I shall not ask them to do so, but I do wish that in connection with Orders of this kind the Government would take the House a little more into their confidence.
    9.53 p.m.
    Sir Percy Harris: I agree that in this matter we have to recognise the special circumstances of the case and the necessity for keeping alive essential chemical industries. I have a vivid memory of the fact that this is one of the key industries about which there was such controversy when these duties were originally imposed. We have now had 18 years of protection of this industry and it ought to be in a very strong position by this time. But apparently there are special circumstances in this case. There is one comment I would make on Orders of this kind. There is a paragraph in the Import Duties Advisory Committee's recommendation which says:
    "There are no official figures published of the home output or of total imports but we have obtained in confidence information as to production from each of the firms concerned and we have had access to official statistics of imports which, however, are not available for publication since this might reveal particulars of the trade of individual importers."
    With great respect to the Committee I think that when an order of this kind, extending an exceptional amount of protection and special privileges, is in question, Parliament is entitled to have a statement of the imports and some indication of the amount of production in this country. I do not see that there is any adequate reason for concealing these facts and figures, and I hope this case will not be taken as a precedent. It is not argued that it is not in the public interest that we should not know what the imports are or what quantity is produced in this country. All that is said is that it would be inconvenient to the interests of the traders concerned that the information should be
    2376
    disclosed. I say that when business people ask for these very exceptional privileges we are entitled to know the position as regards imports and home production, at any rate in round figures.
    9.56 p.m.
    Mr. Cross: In reply to the hon. Member for South West Bethnal Green (Sir P. Harris) there is, I think an exceptionally good reason on this occasion for not giving the figures of home production. There are only two concerns engaged in production here and each of them has given its figures confidentially, and either of them would need to do only a very small subtraction sum in order to get information as to the business of the other which is not at present available to it. The right hon. Member for Hillsborough (Mr. Alexander) told us that our sins in foreign affairs were coming home to roost. Whether they be sins or not, nothing is coming to roost, because strangely enough—I think the right hon. Gentleman will think it strange—my mind worked in exactly the same direction as his. As a consequence I made inquiries, both in the Board of Trade and of the Import Duties Advisory Committee, as to whether this might not be a Spanish export which the Italians are anxious to get rid of. I did that all the more because I observed that the first year of heavy imports into this country was 1937, and with my mind working on lines parallel with his I was inclined to attach special significance to that fact, but I am assured that there is every reason for thinking that this is not a Spanish product, because the mercury is mined exclusively in what throughout the greater part of the struggle was a Government area in Spain.
    Mr. Alexander: With the permission of the House may I remind the hon. Gentleman that they were practically all Italian troops who captured those mercury concessions.
    Resolved,
    "That the Additional Import (Key Industry) Duties (No. 1) Order, 1939, dated the fourth day of July, 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 said fourth day of July, nineteen hundred and thirty-nine, be approved."

    GREENWICH HOSPITAL AND TRAVERS' FOUNDATION.
    Resolved,
    "That the statement of the estimated income and expenditure of Greenwich Hospital and of Travers' Foundation for the year 1939, a copy of which was presented to this House on the 8th day of May, 1939, be approved."— [Colonel Llewellin.]

    BRITISH OVERSEAS AIRWAYS BILL.
    Mr. Garro Jones, Commander Marsden, Mr. Mander, and Sir Annesley Somerville nomina-
    2378
    ted Members of the Select Committee on the British Overseas Airways Bill."—[Major Sir James Edmondson.]
    The remaining Orders were read, and postponed.

    ADJOURNMENT.
    Resolved, "That this House do now adjourn."—[Major Sir James Edmondson.]
    Adjourned accordingly at One minute before Ten o'Clock

TRANSPORT.
  KING'S CROSS UNDERGROUND STATION.
  KING'S CROSS UNDERGROUND STATION.
  RAILWAY WAGON WORKS, DUKINFIELD.
  RAILWAY WAGON WORKS, DUKINFIELD.
  PUBLIC SERVICE VEHICLES (FARES).
  PUBLIC SERVICE VEHICLES (FARES).
  TRUNK ROADS (MILEAGE AND EXPENDITURE).
  TRUNK ROADS (MILEAGE AND EXPENDITURE).
  ROAD ACCIDENTS (SELECT COMMITTEE'S REPORT).
  ROAD ACCIDENTS (SELECT COMMITTEE'S REPORT).
  LOCAL AUTHORITIES (RATES EXPENDITURE).
  LOCAL AUTHORITIES (RATES EXPENDITURE).
  HOUSE OF COMMONS MEMBER'S FUND BILL.
  HOUSE OF COMMONS MEMBER'S FUND BILL.
  DANZIG.
  DANZIG.
  GOVERNMENT DEPARTMENTS (STAFFS).
  GOVERNMENT DEPARTMENTS (STAFFS).
  GOVERNMENT CONTRACT (EUXTON, CHORLEY).
  GOVERNMENT CONTRACT (EUXTON, CHORLEY).
  SPAIN (REFUGEES).
  SPAIN (REFUGEES).
  ALIENS (BRITISH WIVES).
  ALIENS (BRITISH WIVES).
MILITARY TRAINING ACT.
  ROYAL AIR FORCE VOLUNTEER RESERVE.
  ROYAL AIR FORCE VOLUNTEER RESERVE.
ROYAL AIR FORCE.
  CONTRACT (DE HAVILLAND WORKS, HATFIELD).
  CONTRACT (DE HAVILLAND WORKS, HATFIELD).
  TRADE DISPUTE (STEEL BARREL COMPANY, UXBRIDGE).
  TRADE DISPUTE (STEEL BARREL COMPANY, UXBRIDGE).
  WORKMEN'S COMPENSATION APPEALS.
  WORKMEN'S COMPENSATION APPEALS.
EDUCATION.
  FREE MILK AND MEALS IN SCHOOLS, WALES.
  FREE MILK AND MEALS IN SCHOOLS, WALES.
  BLACK-LISTED SCHOOLS, LONDON.
  BLACK-LISTED SCHOOLS, LONDON.
ROYAL NAVY.
  TRADE DISPUTE (STEEL BARREL COMPANY, UXBRIDGE).
  TRADE DISPUTE (STEEL BARREL COMPANY, UXBRIDGE).
  WARSHIP CONSTRUCTION (BUILDING PERIOD).
  WARSHIP CONSTRUCTION (BUILDING PERIOD).
BRITISH ARMY.
  SENIOR OFFICERS (RETIREMENT).
  SENIOR OFFICERS (RETIREMENT).
  TRAWSFYNYDD CAMP.
  TRAWSFYNYDD CAMP.
CIVIL DEFENCE.
  EVACUATION.
  EVACUATION.
  AIR-RAID WARDENS (TRAINING).
  AIR-RAID WARDENS (TRAINING).
  FIRE-FIGHTING PLANS (HYDE AND STALYBRIDGE).
  FIRE-FIGHTING PLANS (HYDE AND STALYBRIDGE).
  AGRICULTURAL EXECUTIVE COMMITTEE, DURHAM COUNTY.
  AGRICULTURAL EXECUTIVE COMMITTEE, DURHAM COUNTY.
  POPULATION STATISTICS.
  POPULATION STATISTICS.
UNEMPLOYMENT.
  ENGINEERING INDUSTRY (TRAINEES).
  ENGINEERING INDUSTRY (TRAINEES).
  GOVERNMENT CONTRACTS (CARPENTERS).
  GOVERNMENT CONTRACTS (CARPENTERS).
  BENEFIT AND ALLOWANCES (STATISTICS).
  BENEFIT AND ALLOWANCES (STATISTICS).
  CYPRUS.
  CYPRUS.
  GAMBIA.
  GAMBIA.
  KENYA.
  KENYA.
  TANGANYIKA.
  TANGANYIKA.
  BRITISH GUIANA (REFUGEES).
  BRITISH GUIANA (REFUGEES).
  JAMAICA.
  JAMAICA.
  SIERRA LEONE.
  SIERRA LEONE.
  PALESTINE.
  PALESTINE.
  BOARD OF REFEREES.
  BOARD OF REFEREES.
Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
LORD ROTHERWICK.
Sir Herbert Robin Cayzer, Baronet, having been created Baron Rotherwick of Tylney in the County of Southampton—Was (in the usual manner) introduced.
LORD ENNISDALE.
Sir Henry Edward Lyons, Baronet, O.B.E., having been created Baron Ennisdale of Grateley in the County of Southampton—Was (in the usual manner) introduced.
MINISTRY OF SUPPLY BILL.
Returned from the Commons, with the Amendments agreed to.
LONDON GOVERNMENT BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.
STROUD DISTRICT WATER BOARD, ETC., BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.
MINISTRY OF HEALTH PROVISIONAL ORDER (HEMEL HEMPSTEAD WATER) BILL.
House in Committee (according to Order) on re-commitment of the Bill: the Amendment proposed by the Committee made.
MINISTRY OF HEALTH PROVISIONAL ORDER (HEYWOOD AND MIDDLETON WATER BOARD) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
MINISTRY OF HEALTH PROVISIONAL ORDER (OXFORD) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
MINISTRY OF HEALTH PROVISIONAL ORDER (EASTERN VALLEYS (MONMOUTHSHIRE) JOINT SEWERAGE DISTRICT) BILL.
Read 2a (according to Order), and committed.
MINISTRY OF HEALTH PROVISIONAL ORDER (FALMOUTH) BILL.
Read 2a (according to Order), and committed.
MINISTRY OF HEALTH PROVISIONAL ORDER (BURNHAM AND DISTRICT WATER) BILL.
Read 3a (according to Order), and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (SLOUGH) BILL.
Read 3a (according to Order), and passed.
MINISTRY OF HEALTH PROVISIONAL ORDER (SWAFFHAM WATER) BILL.
Read 3a (according to Order), and passed.
NORTH WEST MIDLANDS JOINT ELECTRICITY AUTHORITY PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.

NUTRITION.
3.30 p.m.
THE LORD BISHOP OF WINCHESTER THE LORD BISHOP OF WINCHESTER rose to call attention to malnutrition and to ask His Majesty's Government if they propose to take further steps to provide milk either at a reduced price or free to (a) expectant and nursing mothers: (b) children below
66
the school age, and (c) children now at school; and to move for Papers. The right reverend Prelate said: My Lords, since I gave notice of this Question, the Government have introduced into another place the Milk Bill, which no doubt in due time will be discussed here. I do not think, however, that this discussion will necessarily in any way overlap the debate which will take place on the Milk Bill. As a rule, when a Milk Bill is discussed the controversy between the producers and the distributors is so great that the consumer is almost looked upon as an interloper if he ventures to express any opinion. Moreover, the question of nutrition is not concerned only with milk, or even only with food. Perfect nutrition requires not only adequate food but also adequate exercise, good air, mental contentment and so on. We are dealing, therefore, with a very wide subject indeed when we are discussing the question of nutrition, and the supply of milk is only part of the very much larger problem.
It may, however, be said that this Motion about nutrition is really unnecessary to-day, for the figures which we have recently heard in connection with the entrances for the Militia have been so satisfactory that they prove that there is really no serious malnutrition in the country. I am sure we all felt that these figures—92 per cent. admitted as fit—were most satisfactory, more satisfactory indeed than we dared expect. But I hope those figures have been very carefully scrutinised, for there is a somewhat startling contrast between those figures and the figures which from time to time we have had about applicants for entrance to the other armed forces. Not so long ago we were told that 60 per cent. of those who were applying for admission to the Army were rejected on physical grounds. We have been told that, I think it is 35 per cent. of those applying for admission to the Air Force have been rejected. Of course these are older figures, and there may have come a very great change during the last two or three years, partly, no doubt, as a result of the campaign for fitness, and it is possible that the standard of physical fitness for entrance in the Militia is a different standard from that which has been in the past adopted for the Army. I should be grateful if the President of the Board of Education, who is replying, would tell

67
us a little bit more about these figures. But whatever qualifications we may have to make in connection with them they are undoubtedly satisfactory. We certainly feel that the young men of the age of twenty in this nation are on the whole fit and strong, and I think that those of us who notice the large numbers who, either walking or cycling, come to the South of England during the week-end, will have been struck with their vigour and general healthiness.
And of course we are anxious that the boys and girls of to-day, either of school age or under school age, should grow up as healthy as apparently those who are now being admitted into the Militia. Very many improvements have been made in public health. I should be very sorry if anything I said appeared to overlook all that has been done in the health and welfare services during this century. The improvements in public health have been quite remarkable, but when all that has been said there still remain certain facts which I think are bound to cause us anxiety. There is a good deal of evidence that there is a considerable amount of malnutrition. I suppose in speaking of malnutrition one naturally starts from that most remarkable report made a few years ago by Sir John Orr. He most carefully and scientifically investigated the food and wages of the people of the country. He pointed out that for perfect health a large number of constituents must go to make up diet. It is not sufficient to have those constituents which bring warmth to the body, but you require others for body building and body protection. When he had taken all those into consideration he came to the conclusion that about one half of the people of the country had a diet which had in it all those constituents, but that twenty-two and a half millions of the people were lacking in some of the constituents necessary for perfect nutrition, and moreover—and this is what I wanted to lay stress upon—there are four and a half millions who lack any of the constituents which are necessary for an adequate diet. He also pointed out that something like 20 to 25 per cent. of the children of the country belong to that class.
Take a different line of investigation. One of the great authorities on wages and food is undoubtedly Mr. Seebohm
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Rowntree. He made careful investigations into the food of the people. I will not trouble the House with the various statistics which led up to his conclusion, but his conclusion was this, that about one-third of the children of Great Britain during five of the most critical years of their lives are inadequately provided for. If you turn to the inquiries which have been made into wages and health in various great cities you will get the same kind of conclusion. A few years ago a survey was made about conditions on Merseyside, and it was found that about 16 per cent. of the population were living below the poverty line. Another survey was made in connection with Southampton, and it was found that about 21 per cent. of the population were living below the poverty line, although I have reason to believe that if such a survey were taken to-day considerable improvements would be shown. Then take quite a small provincial town, in which recently investigations were made into the nutrition of sixty-nine families, which had in them 288 children. Out of these sixty-nine families thirty-six of the families had a diet which cost less than 4s. per head. Now the significance of that would only be recognised when it is remembered that the British Medical Association said that 5s. 2d. is the lowest sum required for a sufficient diet. To turn away from the towns and to the country villages, again and again I have been told in country villages of children who are undernourished. A scientific inquiry has been made in Sussex by Mr. Frazer Brodington and in the last paper which he published he said that in the larger families there was lacking something like 50 per cent. of the constituents, such as milk and so on, which were required for an adequate diet.
These inquiries and these figures all show that there is a considerable amount of malnutrition among the children, especially, of the country. I do not for a moment mean to be understood as saying that there is anything like starvation. There is no evidence of starvation, but malnutrition does mean lower vitality, it means liability to serious illnesses, it means that a certain amount of the joy of life is lost, and there are some results which come quite directly from malnutrition. Under-nourishment means loss in weight and height—loss in body build-

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ing. Sir John Orr in his inquiries found that the boys at Christ's Hospital were two inches taller than boys of the same age in the council schools. In Hampshire there is a school for defective children. The school is very well looked after, and the children there have what I believe is called the optimum diet. Well, children of that school, both in height and in weight, compare most favourably with the normal children in London. They are from one to two inches taller, and in weight anything from six to thirteen pounds more. No doubt there are other circumstances which affect this, but it is largely due to the better diet which they get.
Take, for instance, the effect of malnutrition on infant mortality. Infant mortality is a sure sign of the health and general welfare of the people. You will find that in the well-to-do classes the rate is thirty deaths of infants out of every 1,000; in the working classes it is seventy out of every 1,000, and among the unemployed 100 out of every 1,000. Here again the determining factor undoubtedly is that of nutrition. Another illustration is that which comes from maternal mortality. I think it is recognised that maternal mortality is very closely connected with nutrition. In 1934 in Wales the rate of maternal mortality was very serious. I think it reached rather over eleven per 1,000 in part of South Wales. Then free meals were given at clinics, and the next year that rate had fallen to a little over four out of every 1,000. The one difference apparently was that in the earlier year they had insufficient food and in the next year they had sufficient food. All these facts show that this question of malnutrition is a very serious one, notwithstanding all the improvements which have been made in recent years.
I think the causes of malnutrition are two—partly ignorance, but much more largely low wages. Partly ignorance because people do not know sufficiently about the food which is really health giving. In old days our forefathers ate anything which was put before them and, provided they had enough, they were quite content. But to-day men of science tell us that there must be a right balance in our food. Certain kinds of food may give us temporary warmth, but fail to build up the body. This knowledge needs to be made much more popular. So often
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it is stated in scientific terms, in terms which are impossible for the layman to understand, and frequently quite unpronounceable. A good deal of education is required, but not all the education in the world will get over the main difficulty that a very large number of these families in which there is malnutrition are families in which the wage earner is bringing in week by week insufficient for the complete nutrition of his family.
A very striking illustration of this was found in the Report which we debated about a year ago in your Lordships' House, the Report of the Unemployment Assistance Board, when the Chairman pointed out that some 30,000 of the unemployed were receiving, when unemployed, almost as much as they received when in full work. The Board's payments were simply insufficient to meet the essential needs, and yet they were only just below what these men, and tens of thousands of others, were receiving when they were in full work. I know it is impossible to suggest that at this moment there should be a general raising of the standard of wages, but I do feel that there is a very strong case to consider the policy of family allowances. I hope the noble Earl who will reply may possibly be able to say something about this. The problem has been discussed here before, and I know that there are serious difficulties in the way. We have to convert the Party opposite, I think, to family allowances, and the trade unions certainly have to be converted to it. There are different schemes. I do not venture to express an opinion on any one of these schemes, or to advocate any one special scheme for family allowances. But what I do urge is that the Government should appoint a Committee to inquire into the whole matter as thoroughly as possible, conferring, of course, with those who are at present opposed to this policy.
A much more direct way of dealing with the problem of malnutrition is seeing that those who are unable to provide sufficient milk for their families have this milk, either given free or at a lower price, through subsidies. There are other noble Lords present who can speak with much greater authority than I can about the value of milk. I would only quote a sentence from the Report of the Mixed Committee of the League of Nations on Nutrition. In this it is said:

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"Of special importance is the adequate consumption of milk by infants, children, adolescents and expectant and nursing mothers. Its value is unique, it is indispensable. More than any other food it contains the elements essential for life and growth. It has no satisfactory substitute, and it is in itself the nearest approach we possess to a complete food."
This leads me to the questions that I want to ask of the noble Earl. First I want to ask what further steps the Government propose to take to provide milk, either at a reduced price or free, to expectant and nursing mothers and children below school age. In the Milk Act of last year provision was made for this. A certain sum of money was set aside for this very purpose, but I understand that not one farthing of that money has been spent on this matter.
I believe there were negotiations between the producers and the distributors—I am speaking of the negotiations of last year—but those negotiations were unsuccessful. I understand from a statement in another place that negotiations have been renewed, but it does really seem deplorable that when the Government have set aside a considerable sum of money for this purpose it has not been found possible to use it. If these negotiations fail, I hope His Majesty's Government will make it perfectly plain on whom blame rests for the failure. There fore my question is: What do the Government propose to do to provide milk, either at a reduced price or free, to expectant and nursing mothers and children below school age—this means, I think, something like 3,000,000 mothers and children—and also what further steps do they propose to take to provide milk for the children now at school?
The noble Earl who is replying has shown his sympathy in this matter, and a great deal has already been done, but half the children in the schools are not receiving this milk. The children, I think, have received one-third of a pint a day, which is a good deal less than is recommended by the authorities; also they are only receiving it when they are at school, and the school days take, I think, about two-thirds of the year. On their holidays they are not receiving any milk. I do not know whether the Government can take further steps in this matter. I would remind the House that a very large amount of milk goes week by week
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to the factories, and goes to the factories at a much lower price than it costs to supply the children with the milk. I should have thought that some way might have been found through this difficulty. I quite understand how difficult it must be for any Minister of to-day, however sympathetic, to reply satisfactorily to demands which involve a larger expenditure. We are, however, happily not in the position of another country where the choice has to be between guns and butter. We are asking for guns, butter, and milk, and we believe that the health of the people of the country is as necessary for national defence as the armaments which may have to be used. I beg to move for Papers.
3.52 p.m.
LORD SNELL: My Lords, I shall not detain you for more than one or two minutes, but we should not like this matter to be discussed in your Lordships' House without a word of commendation of the point of view which has been put before your Lordships by the right reverend Prelate, whom I very sincerely thank for bringing this matter before the attention of the House. In the course of his speech the right reverend Prelate expressed a fear lest we should be deluded by the figures of the examinations for the Militia. I am incompetent to speak about that, because I do not know if the standard of examination is just the same. It may be that a lower standard is required for Militia service than for the Regular Army, but, assuming that the standard is the same, we have every right to be thankful for this indication of improved health on the part of our younger population. I cannot help saying in that regard that at long last our faith in the wisdom of Social Services has borne fruit of a very valuable kind. But we must not forget that, in all probability, health and strength are determined in the early years of life, and that if you have starved children you may have a weakened adolescent and adult population growing up. Certainly there is nothing worse than hunger in the school. It is to a very large extent a waste of public money to supply buildings, teachers, and curriculum, and then to have children who are not sufficiently nourished to take full advantage of the provision that is made for them. Most teachers, I think, would say that the experiment of giving

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milk to children has, so far as it has gone, been justified in the increased capacity of the child to absorb the education given.
We see something of what the absence of proper feeding has meant if we look at the factory populations of the last generation. They are, on the whole, of a lower stature than people in other parts of the country. That shows there was something wrong in their early nutrition. I do not wish to speak at length on this matter, but I do commend what the right reverend Prelate has brought to your Lordships' attention, and I hope the Government will be able to offer a satisfactory reply to the questions he has asked. To feed hungry children is not only right in itself, but it is, as we hold, a good national investment. It has its reaction on the prosperity of agriculture. It creates a demand for home-produced products, and is helpful in many ways. Surely, if we can afford anything at all, we can afford to feed necessitous children. That seems to me to be the first of all claims upon whatever we can spend; for remember that a child is not only the child of John Smith, it is also the child of John Bull, who is interested in having it grow up to health and efficiency. If the right reverend Prelate will forgive me, I will not go this afternoon into the difficult question of family allowances. The trade union difficulties are serious ones, and I agree with him that some inquiry should be made to allay same of the fears that they have. I have pleasure in supporting what the right reverend Prelate has said, and again, in conclusion, express the hope that His Majesty's Government will be able to give some satisfactory reply.
3.57 p.m.
LORD HANKEY: My Lords, I would like to associate myself with the thanks to the right reverend Prelate for raising this question. I feel sure that the House will welcome very warmly his last words and endorse them—namely, that there is nothing more important to Imperial defence than national health. I frankly confess it was that which attracted my interest to this question some years ago. As Secretary to the Committee of Imperial Defence, I was profoundly shocked and humiliated by the fact that year after year more than 50 per cent.—sometimes up to nearly 60 per cent.—of the men offering for enlistment in the Army were rejected for physical and medical reasons.
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Under another alias, as Clerk to the Privy Council, I addressed myself to the late Sir Walter Morley Fletcher, then Secretary to the Medical Research Council. He assured me that medical research had proved that the defects which caused these rejections were curable by proper means of nutrition, but he warned me also that it took at least fifteen years to translate research into action in such matters. Since then I have been doing my best to forward the good work, not always with complete success.
I find myself in close accord with what has been said already about the satisfactory result of the enlistment of young men for service in the Militia. It does afford a real ground for satisfaction, and I should be the last person to underrate it. But because that is satisfactory we must not desist from our efforts to get matters still better, and there is still great room for improvement. The Lancet points out that there is no specified minimum of height, weight or chest measurement for the Militia, and that some of the men with minor defects of feet and vision who are placed in Grade 2 (a) of the Militia would be rejected for the Regular Army; and even for the Regular Army the standard was lowered in 1936, and since 1937—again my authority is the Lancet—recruits have not been rejected on dental grounds.
There has been a tendency in some quarters to underrate this question of the importance of good teeth as an element in national health and physique That, I submit, is a very short view. The League of Nations Report on Malnutrition, which the right reverend Prelate has already quoted, explains in some detail how "dental caries lays the foundation for much ill-health." That is by no means all. Defective teeth go with defective bone formation in the body as a whole. According to the League of Nations Report, as the result of an inquiry in London schools in 1931, it was revealed that among children of five years of age there were from 67 to 88 per cent. of cases of abnormalities in the bones, and from 88 to 93 per cent. had badly formed or decayed teeth. Those are very formidable figures, and the report continues:
"There is evidence that the defective bone formation and much of the dental decay among these children would have been avoided by the inclusion in their diet of large quantities of protective foods, such as dairy

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products, and therefore less reliance upon bread and other cereals."
I learn also on a high medical authority, that our bones are much too prone to fracture, and that this can be cured by proper nutrition.
I do not want to exaggerate or to paint too black a picture, because I know how much the national health has improved, but I fear that this bad state of teeth and bones is not the only evidence that our national health is not all that it might be. The number of unfit people that one meets in all classes and of all ages is very disturbing. The very low resistance, especially in winter, to the minor ailments, influenza, colds and coughs, the prevalence of digestive troubles, stiff limbs and joints, and indifferent nervous systems to say nothing of major diseases like tuberculosis and cancer with their terrible incidence; the number of major operations; the increase in the number and size of hospitals, sanatoria and asylums—all these, to the layman, seem to be very unpleasant features. Moreover, if national health were on a really sound footing we should not get this spate of advertisements that defiles our highways and fills the advertisement columns of our Press. Not long ago I found in two of our most popular weeklies that half the advertisement columns contained descriptions of patent remedies. I conclude, therefore, that while public health has vastly improved by comparison with some years ago, and has improved steadily, there is still very much room for further improvement.
Then another factor is the increasing cost of medical services. Here I quote the last report of the Medical Research Council:
"Only by improving the general health and eliminating disease can it be hoped to reduce this present tendency of ever-increasing medical services, and the annual expenditure of between £200,000,000 and £300,000,000 which such services necessitate."
Never in the history of the nation was economy more important than to-day, provided it is true economy, which means increased efficiency, and never was the need for improved national health and physique more vital than at a time like the present, when we are confronted with a long-drawn emergency. So I ask the question: How can economy and efficiency in national health be achieved?
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How are we to endow ourselves with the physical qualities of a great Imperial race? The answer is to be found in full detail in the very illuminating and enlightened Report of the League of Nations Mixed Committee on Nutrition, 1937, the Committee which was presided over by the noble Viscount, Lord Astor, with the most extraordinary success.
Now the Report of that Committee is, of course, much too long to summarise in a speech of a few minutes, but the Medical Research Council has succeeded in its Report for 1937–38 in condensing some of the main results into a very few words, and they seem to me to be of very great importance. Here they are:
"A much greater consumption of milk and other dairy products, of eggs, of vegetables, including potatoes, of fruit, and of fat fish, at the expense of bread, biscuits, sugar and sweets, especially in early life, is an urgent national requirement; it will not only improve the physique of the people but will reduce the amount of dental decay and greatly raise the standard of health. An increase in breast-feeding will still further reduce the high mortality rate of infants from gastro-intestinal troubles and bronco-pneumonia. Whatever advances in medical knowledge may come, until these simple precepts are adopted there will still remain a great deal of preventable disease in this country."
That, in a nutshell, is the new science of nutrition.
I would like if I may to emphasize a few of those sentences. They are "simple precepts"; they are "an urgent national requirement"; they will "improve the physique of the people"; and they will "greatly raise the standard of health" but without them there will still remain a great deal of preventable disease in this country. These words do not come from amateurs. These are the words of the greatest experts in the country and perhaps in the world. It is the basis of a new charter for the people, a charter of life and hope. Well, it all sounds too easy. There must be some catch—but the real catch is in ourselves. To get people to change their habits of feeding is harder than it was to persuade Naaman to try bathing seven times in the Jordan to cure his leprosy:
"If the prophet had bid thee to do some great thing, would'st thou not have done it?"
And so it is with ourselves. Few of us, if left alone, will take the advice of these great world experts, even though it is proved up to the hilt by large-scale experiments. Most of us would rather continue in our deep-rooted but faulty

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methods until old age overtakes us prematurely, until we contract some chronic complaint, or worse, and have to submit to a succession of costly cures—mostly only temporary in effect—or to some crippling major operation.
This can be avoided, so we are told, by proper nutritional methods. It is a fact anyone can prove for himself with common sense, perseverance and just a little guidance. But the tragedy is that the people who want to try these methods do not know how to begin. In our schools next to nothing is taught about this question of nutrition, and what is taught is mostly out of date We do not even know the jargon. How many people know, even approximately, what foods are proteins or carbo-hydrates and what part they play in the health of the body, or fats, or minerals or the different vitamins? Yet for practical purposes most of that could be taught in the elementary schools. It is quite true that there are a few admirable magazines. They are for the most part run by pioneers who for forty or fifty years have been blazing a track far in front of even the distinguished advanced guard of medical research or the slower moving body of the public health services. But their work is carried out in a comparatively restricted sphere. Surely now that the facts are established officially by the highest national and international authorities, the time has come for a great national work of propaganda and education.
Nothing less than a sustained campaign will overcome the apathy, which is not confined to the general public. Here is what the Medical Research Council say on that subject:
"There is great reed for some authoritative body to transmit the necessary information which will stimulate public co-operation. With a more rapid understanding of the facts on the part of the public, delay in application of new knowledge to human needs ought not to be so long as it has been in the past."
This task of public enlightenment ought not to be a very difficult matter. It is not like Air-Raid Precautions, where a new machinery of Government had to be set up. This tremendous Governmental machinery on health questions is ready to hand. There is the Medical Research Council, doing research work all the time; there is the Ministry of Health and the corresponding Scottish Department, maternity and infant welfare organisa-
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tions, a national system of education, school care committees, the national fitness organisation, and the national health insurance organisation, including the panel doctors, hospitals and infirmaries and the medical schools. Why, from the cradle to the grave the bulk of our people are accessible all the time to medical advice and instruction. There is no doubt that the influence of the Government could be powerfully exerted through this system if a real effort were made.
What I am urging, then, is that the whole of this vast machinery should be used for a great and sustained campaign of propaganda and education on the subject of nutrition. The very text books are to hand in the Reports of the League of Nations Mixed Commission and the Medical Research Council. Those responsible for national health have a unique opportunity to carry a stage further the great work that they have already accomplished for the health of the people in the mass by the provision of pure water supplies and sanitation and by the advance of curative and prophylactive medical science. But in this new stage it is up to them to bring home to the individuals who make up the mass of the nation a knowledge by which they can improve their own health and secure an immense increase in happiness and efficiency, both for themselves and the nation as a whole—to say nothing of an immense economy.
We are told on this tremendously high authority, that these simple precepts will improve the physique of the people and raise the standard of health, and that without them there will remain a great deal of preventable disease. If that be true—and having tried out the system for five years myself I give my testimony that it is true—what excuse is there for delay? We may not yet be able to provide what the right reverend Prelate the Bishop of Winchester aims at—an optimum diet for perfect health—but surely we ought not to deny for a day the knowledge as to how expenditure can best be laid out to obtain perfect health. In conclusion, then, I ask the noble Earl who is to reply from the Government Benches to tell your Lordships whether the Government accept the Report of the League of Nations inquiry of 1937 into nutrition and the advice of the Medical Research Council on the subject. I also ask what is being done

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and what is intended with a view to spreading throughout the nation and the Empire the epoch-making discoveries contained in these Reports, for I believe that this is the most important task in the work of national regeneration that lies before us.
4.18 p.m.
VISCOUNT ASTOR: My Lords, all who realise the magnitude of what is commonly called the problem of malnutrition and who are interested in removing it must be grateful to the noble Lord who has just spoken and to the right reverend Prelate for bringing forward this question and dealing so effectively and attractively with it. They have dealt so lucidly with the question that I propose to speak very briefly and not attempt to go into detail. My association with this problem is due to the fact that for two years I was Chairman of the League of Nations Committee on Malnutrition. Two things came out quite clearly before that Committee. One was that in every country there is a big social problem due to malnutrition, and the other was that if all countries tackled the problem of malnutrition and had adequate nutrition policies, it would mean a reorientation and modification of trade policy which would be so great that there must be a great increase in the exchange of goods between one country and another. Therefore an indirect result of tackling this social problem must be a greater atmosphere of peace, which necessarily follows from an improvement in trade.
The Committee over which I presided was very fortunate in being helped in three ways. First of all we had the unanimous recommendation of an international committee of experts defining the nature of the problem, indicating its scope and outlining quite clearly the remedies which would deal with the problem. Secondly, we were fortunate in having a report of an entirely different Committee, a Committee set up by the International Labour Office, which reported while we were sitting. Thirdly, there was the overwhelming and conclusive evidence that in all countries, rich as well as poor, there is this great social problem due to malnutrition, the causes of which everyone agreed to be twofold: ignorance and poverty. Incidentally, that Committee showed the value of an impartial body such as the League in elucidating
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economic and social questions. No other body has similar facilities for dealing with a world problem such as this. But I realised fully, while I was Chairman of that Committee, the limitations of the League so long as all countries insisted on maintaining complete sovereignty. Even on a problem like malnutrition there was a great difficulty in getting anything like agreed recommendations.
I am not going to deal with the international problem, and I am not going to repeat what noble Lords have said before me. I want to deal very briefly with one or two immediate problems nearer home. Whatever the noble Earl who is going to reply may be obliged to say in his official capacity as mouthpiece of the Government, with all the limitations necessarily attached to that capacity, we realise the great work which he has done in educating the public and stimulating nations to tackle this problem. And when we deal with the question of malnutrition among children and the need for giving them adequate supplies of milk, let us also not forget the pre-school child. Two points stand out as obvious to anyone who studies this problem: that the child is the kernel of the problem, and that milk is the most important food. If we tackle this question in childhood, and if we see that children have enough milk, then many of the ill-effects of malnutrition can be avoided.
The great need at the moment here in this country is for cheaper and safer milk. The other day it was my privilege to address a three-day conference organised by the British Medical Association. All of us who follow this question realise that up to date members of the great medical profession have not been able to act with complete vigour in the campaign to increase the consumption of milk, because they realise what I realised many years ago when I was Chairman of the Committee dealing with publicity on milk: the difficulty of urging mothers to give their children more milk when you cannot at the same time guarantee that the milk that will be available is reasonably safe. Every year there are 6,000 fresh cases of bovine tuberculosis and over 2,000 deaths. It is because of that fact that it is really necessary for the Government to do what they can to see that the milk supply is safer. I am not to-day going to discuss the Milk Bill which will come before your Lordships very shortly. It is, however,

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indeed regrettable that three of the main proposals in a Bill which the Government brought forward in December last year, and which would have assisted substantially in making the milk cheaper and safer, have been dropped and are not in the present Bill. As the League Committee stated, milk is not only the most nutritious food but it may at times be a dangerous foodstuff. I do not want to exaggerate that danger, but everybody who has studied the question knows that milk is a medium for the transmission of tuberculosis, diphtheria, typhoid and scarlet fever unless it is properly treated.
I think it was in 1934 that the Milk Marketing Board, very wisely and very generously, provided a considerable sum of money, over £10,000 if my recollection serves me aright, in order to experiment on three separate points: whether children who were given an additional ration of milk showed an improvement in their physique over children who were not given that ration but had a biscuit; whether children who were given a double ration of milk showed better results in physique and health than children who were given a single ration; and what, if any, difference there was between giving children raw milk and giving them pasteurised milk. I was Chairman of the Advisory Committee to the Milk Board that supervised this experiment. The final report of this inquiry will probably be published this autumn; up to date two interim reports have been published. I should like to say that great care was exercised in order to try to arrive at satisfactory conclusions. Care was taken in selecting a committee of medical and other experts to supervise the experiment; the teaching profession's help was obtained, and four medical officers were selected to supervise the whole thing. By the help of the authorities and of the parents something like 8,000 children were under supervision.
So far in the interim reports three things have been brought out. In growth and weight the children who received a ration of milk improved more than those who got no milk; the children who got a double ration of milk improved more than the children who got a single ration of milk; and, so far from there being any difference between giving children raw milk and pasteurised milk, there was substantially no difference. It is very important to have found that last fact,
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owing to the prejudice in some minds against the pasteurisation of milk. My inclination is to oppose pasteurisation of milk, because I am a milk producer and want to sell raw milk, but I have to recognise the fact that there is this problem. I confess that I think the farmers are shortsighted if and when they oppose measures to facilitate the pasteurisation of milk which does not come from tubercle-free cows. A farmer only gets something like sixpence for milk which goes to factories, whereas if it is sold as raw milk he gets double that price. It is therefore to the farmers' interest to get the backing of the medical profession for a "Drink more milk" campaign, but they will only get that backing wholeheartedly if the milk supply is rendered safer. I therefore think they are shortsighted if they oppose measures for the pasteurisation of milk which does not come from a tubercle-free herd.
As regards the public, there is a great amount of ignorance and prejudice, partly due to the fact that people confuse commercial pasteurisation, unsupervised, with the artificial treatment of milk by heat subject to conditions laid down by the Ministry of Health and efficiently carried out. The evidence for the value of pasteurisation is simply overwhelming, and I hope that if and when there is this educational campaign for which the noble Lord who spoke before me pleaded, the findings of those authoritative bodies will be put before the public—the findings on the value of pasteurisation of milk. The Milk Reorganisation Commission, known as the Cutforth Commission, supported it, as also did the Advisory Committee on Nutrition to the Ministry of Health, the Luke Committee, the Committee on Cattle Diseases of the Economic Advisory Council, presided over by Sir Gowland Hopkins, and the Ministry of Health and Department of Health for Scotland. In 1934 the Board of Education, when circularising local authorities, said that
"the Board desire to urge that in all areas where a supply of efficiently pasteurised milk is available, such milk should in all cases be provided."
Then one final testimony. The Ministry of Agriculture are anxious to encourage the number of tubercle-free herds of dairy cows in this country, and it is to the interest of farmers to have tubercle-free herds, because they will get an increased price for their milk. In the

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conditions laid down by the Ministry of Agriculture, conditions which have to be carried out in order to obtain the necessary certificate for the increased price, is a condition that no calf in a herd which it is hoped would be a tubercle-free herd is to be given any milk except milk from a cow guaranteed to be free from tuberculosis, unless that milk has been pasteurised. If the Ministry of Agriculture consider it necessary that a calf should have pasteurised milk if the milk cannot be guaranteed tubercle-free, surely we are entitled to ask equally that provision be made to secure safe milk for the children of this country. I am indeed grateful to the right reverend Prelate for having brought this subject before the House.
4.33 p.m.
VISCOUNT DAWSON OF PENN: My Lords, I will not take up the time of your Lordships by stressing the existence of malnutrition, for surely it is a fact plain before us all, and brought home to us this afternoon by the eloquent speech and convincing facts put before us by the right reverend Prelate. I will take one of his statements: that 22 to 25 per cent. of the children of this country are not receiving the diet appropriate to their age and necessary for their proper growth. I think if we take the country across it will be impossible to gainsay that statement, and if we take it alone it is surely an eloquent fact. One asks oneself, is there any evidence of improvement? Undoubtedly, yes. You have only to watch the children who run about the streets and come out of the elementary schools, and you can see obvious improvements in their health and in their teeth. We have a long way to travel yet, but the improvement has advanced sufficiently for it to be obvious even to the superficial eye.
Then the Militia. We have to remember that the Militia represents all classes of young people from the whole population, and we should therefore expect to find a better average health among them than amongst those who apply for entrance to the ordinary Army in ordinary times, partly because the applicants, those who are being brought into the Army through the Militia, are sufficiently young to have profited from the improved knowledge of feeding during these recent
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years. On the other hand, those who go into the Army in the ordinary way contain amongst themselves a larger proportion of those who are down on their luck and not of those who have been under parental care. I will take it therefore as an established fact, supported by accumulated and growing knowledge, that if we want strong and healthy childhood we must see to it that there is available for the children not only food adequate in quantity but food proper in quality, according to what is well known and has been brought home to us by modern research. Above everything else there must be a sure supply of foods which are both fundamental and protective, and a supply of fresh food such as milk, vegetables, eggs and the like. Such forms of food are of greater importance to us to grow in this county than corn and cereals. I am not urging that corn and cereals are not important as foods, but they are second in importance to a proper provision of freshly grown protective foods, like milk, vegetables and eggs. That is a plea for adequate attention to pasture. After all I take it that it is not difficult to store corn. There is no need for it to be fresh, but dairy produce and green vegetables must be freshly produced.
Here may I say a word in support of the policy of the pasteurisation of milk? Is it unfair to say that Government after Government have been like unto Pharaoh in their obstinacy in this matter? How many more warnings are to be given before the Government of this country are converted to the necessity for the pasteurisation of milk? What about Bournemouth? Was not that evidence enough? What about the outbreaks through the years of diphtheria and scarlet fever, proved over and over again to be due to milk? And what about the new trouble coming amongst us, due rather to overfeeding than to under-feeding, undulant fever? I do not want to stress any more that part of the question.
The right reverend Prelate, when talking of nutrition, said he took it in the large sense of the word as including not only food but fresh air and exercise. I would, however, venture to bring this before your Lordships, that whether we look upon proper nutrition as affecting the individual child, or as part of the safeguarding

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of the interests of the nation, we have to realise that the conditions which make for the greatness of a nation to-day are totally different from those conditions which surrounded our forefathers. We have a different task from that which they had to do. We have to create quality. We have to build up fitness, and if we do not do it we are destined to decline as a nation. That is due to this. In past days you had your big birth-rate, your big death-rate, and therefore a big turnover. The weaklings were killed off. In a rough and tumble way nature brought the stronger to the top, and the stronger survived. But for more than a generation the death-rate has been declining—160 per 1,000 in the latter part of the last century and 53 per 1,000 last year. Put, following the decline of the death-rate, there has been a decline in the birth-rate, with the result that we are no longer reproducing ourselves, and that 100 women during the producing time of their lives only produce 76 girl babies. And the less we reproduce ourselves the more and more are we dependent on the quality of those who are produced.
That brings me to the next point. In the days gone by when there was an adequate supply of children there was no need for the State to bother about it. The children just came. But in these days, when it is within the power of the individual citizen to control his output of children, the children become a voluntary contribution, and therefore it is in the interest of the State, I submit, to share with the individual parents the interest in and responsibility for their progeny. It is true that within regent years the responsibility of the State has been recognised in various forms of social legislation. This very question of milk in schools and milk for nursing mothers and maternity services provides an illustration. Altogether there is quite a collection of legislative enactments which has the object of helping the rearing and nurture of children.
But if we are to achieve fitness, if we are to build up good quality children we must have a persistent policy from the time the child is born to the age of sixteen. What so often happens now is that a young child may be taken care of; it may be given food in school—though as the right reverend Prelate says, it does
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not get the same food during its holidays, so that I imagine it is almost tempted sometimes to wonder whether it would not prefer to be back at school, where it would get better food. Then the children pass out of school and there is no control of them from the school-leaving age onwards. We want, I suggest, a large and comprehensive policy, which recognises that the State has an interest in the nurture of children from the time of their birth to at least eighteen years of age. It is in the interest of the State, it is in the interest of the future of this nation.
The Fisher Act provided for the continuation of education after young people have gone to employment. That is an essential part in such a comprehensive scheme, for thereby there is a control of the health of adolescents, which at present we do not possess. For at present it is quite a usual observation to see a child, which is in good health when it leaves school, deteriorating during the teens. It may be asked, Where is the money to come from for a policy of this kind? I would urge that the building up of the future nation should take precedence of everything else. Whether you regard it from the point of view of the health and happiness of individual children, or as a fundamental necessity for a strong nation in the future, it becomes the best investment, and all measures that would make for fitness should be a prior claim on the Treasury, especially in these days, when the population is declining, for unless we build up for quality we are bound to deteriorate.
4.46 p.m.
THE EARL OF CORK AND ORRERY: My Lords, I wish to give my support, for what it is worth, to those who are trying to better the present position of the children of this country. In spite of all that has been done, I think it is not too much to say that the present state of things is a disgrace to our nation. As has been pointed out, there is a network all over this country of Government authorities, local authorities and voluntary institutions, all trying to deal with the same subject of looking after the mothers and the welfare of children. There is a tremendous amount of overlapping, even in the Government measures. Take this question of milk, this mysterious Milk Marketing Board. Since it began its

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operations it has cost the voluntary hospitals a quarter of a million of money, and I understand that under the new measure that is being introduced, although the children in the schools get milk, if they go to hospital they do not, though I should have thought that was just the time that they required it. If it is possible in war-time to go about with a coupon for meat in your pocket surely a child in a hospital should have a milk coupon.
I am one of those who would very much like some information about this suddenly improved standard of health among the recruits for the Forces. I should very much like to know if it is the same standard as was applied in the past, for you have only got to carry your mind back two years and remember when the attention of the whole nation was focused on thirty-three boys to see whether we could make soldiers of them, and a Minister of the Crown went down and ordered them another helping of butter. I cannot really believe that this wonderful improvement has been made in two years. I must confess that I always thought that was a great waste of time, because any one of the three Services which have dealt with recruits could have told the Government how the health of young men in their teens could be improved by regular meals, regular exercise and regular facilities for sleep. And a great number of institutions could have done the same—the Borstal homes for example. All those institutions keep statistics. I myself from my experience of a training ship for boys could have told the Government a great deal that they wanted to know, and have saved their time.
As to the question of milk, I have not the knowledge of the experts who have spoken, but I have been watching experiments by giving young boys milk, one in a Government training ship, and the other in a training ship of which I am on the Committee. I have spoken to the medical officers, who within three months were saying that the boys were coming along splendidly, their resistance to the minor ailments was very much improved, and altogether their health was on the up-grade. In the summer of 1937 my noble friend the First Lord of the Admiralty introduced into your Lordships' House a Bill dealing with physical
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and recreational training. I put myself down to oppose that Bill, not because I did not approve of the principles—I thought they were excellent—but because the measure did not go half far enough. It was like so many things we do. It simply touched the fringe of a great problem. The physical training of boys was, of course, given great assistance, but the proposals never reached down to those who cannot get away to get their training, and who, probably from under-nourishment, after a long day's work do not feel inclined to take any physical exercise. During two years which I have just spent at Portsmouth I have been interested in the welfare of the wives of young sailors who were under twenty-five when they married, which meant that they got no marriage allowance. While going into these various cases, I was brought into contact with civil cases. In a town like Portsmouth, with a most superior population, largely composed of pensioners from the Services and the large body of intelligent men who work in the dockyard, where there is a most go-ahead municipal council and where the Naval Benevolent Trust is working hard, the conditions under which some of these people were living really appalled me when I came to know them.
I could quote many examples. I will mention one case, that of a girl of eighteen who got 17s. a week from her husband and eked it out by going out and doing a few hours work. When she became pregnant, she had to give up her work. She had to pay 7s. or 8s. a week for her room, and on the rest that girl was trying to prepare herself, in the first place, for the birth of the child and then to keep herself and the child. You might say that she could have gone here or gone there, but that girl could not. She did not dare leave her room. She had no clothes in which to go out, and did not want her neighbours to see how low she had fallen. With all respect to my noble friend, she did not know what all these things he has talked about were. She was existing on dry bread, stale bread, margarine, and weak tea. That was the wife of a young sailor, one of the very people from whom we want to breed, a young man who, if I may use the expression, had the guts in him not to lounge about but had joined one of the Fighting Services. While he

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was in the service of his King and country abroad, that vas the state his wife and child got into.
That has been got over. Three weeks ago they started marriage allowances to young men under twenty. Then I thought everything was all right. But just about that time the Shoreditch Report came out. Can anyone who is proud of his country read that Report without feeling a sense of shame. When we read that 50 per cent. of the people have not enough of the proper foods and that 30 per cent. of the school population show malnutrition, and combine that with the description of the insanitary houses in which they have to live, the dirty conditions, bug-infested rooms, and all the rest of it—how can we breed an Imperial race if this is going on? I am one of those who believe that every child born in these Islands is born a citizen of a rich country and has a birthright. That birthright is to be provided with everything that is necessary to develop it. How much must we have lost in brain, muscle, initiative, and even in genius because the small bodies which might have contained all these desirable qualities have not been given a fair chance to develop? We have now taken a short view of national defence, but if we take a long view I consider the best form of national defence for our Empire is to breed healthy and happy men, and that we are not doing at the present time.
4.55 p.m.
THE PRESIDENT OF THE BOARD OF EDUCATION (EARL DE LA WARR): My Lords, we are all under a deep sense of gratitude to the right reverend Prelate for the debate he has raised to-day. The contributions which have been made to that debate show that your Lordships appreciate the immense importance of the subject. We have had contributions discussing the subject from the social side, the economic side, and last, but not least, the side of Imperial defence. During the last few years such bodies as the British Medical Association and our own Medical Research Council have been giving consideration to the problem. We have had an important Committee sitting, studying the problem from the point of view of our Colonial Empire—a most important side of the problem—and also we have had a Committee set up under the League of Nations which has been so ably presided
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over by the noble Viscount, Lord Astor.
The importance of this debate has been enhanced by the fact that the problem has really been presented, with extreme force, it is true, but also with extreme moderation, and it has been set, if I may say so, in very much its right perspective. In my capacity as head of the Board of Education I have opportunities of surveying the problem from the point of view of our educational services, and we are in a position to obtain a great deal of information, for instance, from our school medical inspections. But the value of these reports is inevitably vitiated to some extent by the fact that there are, as yet, no very objective or exact methods of measuring nutrition and malnutrition. To some extent the figures that we have for malnutrition sometimes tend to look as though the problem is on the increase. I do not think that is so, and what has been said in the debate this afternoon would justify me in saying that it is not so. Any such difference in the figures arises from a better reason—namely, the fact that day by day our standards are tending to improve. Whereas in the old days the child had to be virtually starving before it would be certified as suffering from malnutrition, to-day we demand a higher standard.
Though the figures of the school medical inspections may not be so helpful as at first sight they appear to be, there are certain things we can measure—for instance, the heights and weights of children. Though there are no national figures available on this point, we have a considerable number of figures from certain towns and localities. Thus I have certain local authority figures which show that, as compared with twenty years ago—1919, a post-War figure—children of twelve and thirteen have increased in weight by from 6 to 8 lbs. and in height by from 2 to 3 inches. We would all agree that that is gratifying. I saw it quoted the other day that, based on a sample of 2,000 boys fourteen years of age, the average increase in weight as compared with sixty-three years ago was 18 lbs. That, again, is to some extent encouraging. I agree with noble Lords who said that we should beware of reading too much into the figures with regard to acceptance for the Militia. Undoubtedly all these questions are matters of standards,

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and the standards vary as between this particular standard for acceptance and that required for acceptance into the Regular Army. But if the figures I have ventured to give your Lordships are to some extent encouraging, I would not like to say that they are in any way sufficiently good to enable us to feel we have really begun to solve the problem or any justification for complacency. Rather I would interpret them in this way: they show that while there is still a very great deal to do we can feel that to some extent, in so far as we have tackled the problem, we have been tackling it on fairly sound lines, and that it is possible, if we go further, to get even better results.
The right reverend Prelate referred firstly to the question of mothers and children under five, and he put them together as being part of one problem because they are helped by the same machinery of local welfare authorities, which have the power to-day to supply milk free or at a reduced price to mothers and young children. A Circular was issued by the Ministry of Health in 1937 which drew the attention of all local authorities to the importance of overhauling their arrangements for the supply of milk and the desirability of increasing that supply. One can say, I think, that the response to that Circular has been to some extent satisfactory, though not on nearly so large a scale as one would have liked to see. There has been an increased consumption of liquid milk for this purpose from 2,500,000 gallons to 3,300,000, an increase of something like 32 per cent., and even a larger corresponding increase in the dried milk used for that purpose. In Scotland also there has been a considerable development.
But in spite of those figures I think it is perfectly clear—and the Government freely admit it—that these figures are quite inadequate to the problem, and that the only way to secure an adequate increase in the figures is by a substantial reduction in price. In 1936–37 four experimental schemes for the supply of milk to mothers and children under five were started in the Special Areas. These schemes involved the co-operation of the distributors, the local authorities, the Milk Marketing Board and the Commissioners for the Special Areas. Up to date just over 20,000 persons have benefited
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under the scheme, consuming something over a million gallons of milk. Based on these experiments it has been the Government's policy since 1937, working with the industry, to secure a reduction in the price of milk to local authorities for the purpose of this supply of milk to mothers and children under five. We estimate that if we are able to put this reduction in price into operation it will mean an increase in the consumption of milk for this purpose of from something over 3,000,000 gallons a year to something over 20,000,000 gallons a year.
As the right reverend Prelate has already said, the present Milk Bill before another place makes financial provision for this purpose. At the present moment, as your Lordships have been told, the matter is still the subject of negotiation between the various bodies concerned. The right reverend Prelate is perfectly right, this is quite deplorable when His Majesty's Government are prepared to make available money for this purpose if a scheme is in fact put through; but I think at the same time your Lordships will agree with us in saying that a scheme of this character is really so dependent for its successful working on the co-operation of the distributors and the Milk Marketing Board and other bodies, that it is desirable to make every attempt possible to get some agreement. I can assure noble Lords that the Government are really serious in their intention to put a scheme of this kind into operation. In the meanwhile it has already been applied to Scotland, and we hope for very considerable results from that.
Perhaps I may now pass for a moment to what is happening at a later stage in the schools, particularly the elementary schools. The Government policy is not only based on the experiments of the past to which reference has been made, but also on the experience during the last few years of our milk-in-schools scheme, which gives children in the schools milk at half price. As your Lordships are already aware, a very large demand has been created by this reduction in price, something over 20,000,000 gallons a year being consumed for the purpose. I think we should all desire to express our appreciation to the teachers of the schools for the manner in which they co-operate in this purpose. It frequently has meant a very great deal of extra work for them, and

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the success of the scheme is very largely due to the enthusiasm with which they have thrown themselves into it, solely for the purpose of aiding their children. This reduced price applies not only to the scheme under which the children pay for their milk but also to the milk that is supplied to local authorities to give free to under-nourished children.
Perhaps I might give your Lordships some figures on the operation of our scheme. I will first give some total figures to show what the scheme is achieving, and then go on to show how we are endeavouring to face up to the task of filling up the gaps which still remain. The latest figures show that in England and Wales there are 2,500,000 children paying for their milk in schools, while a further 500,000 are receiving it free. The percentage of children in elementary schools, therefore, who are receiving milk in one way or another is now 55.6; it is slightly lower in Scotland, 51 per cent. The scheme started with such a very large and rapid increase that I think it is only natural that the increase now is rather slower than it was, but it is quite definite and continuous. Thus, during the six months ended March 31 last, the percentage of children receiving milk in the schools has increased by something over 2 per cent., from 53 per cent. to 55 per cent. Though the school population has fallen by just over 30,000 the number of children taking milk has increased by 70,000.
How are we tackling the problem of trying to fill up the gaps, because as the noble Viscount, Lord Dawson, said, while it is very good to be supplying milk to 55 per cent., what about the other 45 per cent.? The first portion of the scheme is being extended to schools and departments which are not yet covered. During the last six months the percentage of departments covered rose from 86 per cent. to 87 per cent. There are several special difficulties in connection with rural schools. It seems a tragedy and a folly that in the rural areas, where the milk is produced, it should be so difficult to get supplies always for the schools. To some extent, however, we are finding ourselves able to tackle the problem. There are rattier exaggerated statements made sometimes about the standards which the Board of Education demand for the supply in certain cases.
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Our rule is quite definitely to leave the final discretion to the local medical officer of health, and I think that is inevitable; but we have made it quite clear that we will allow considerable freedom to supply a bulk supply—that is, a supply not in bottles—in areas and in cases where it would obviously make the scheme impossible if we insisted on a bottled supply. We are working at this problem in the closest connection with the Milk Marketing Board.
Then there is the problem of persuading larger numbers of children in the individual schools to take milk when and where it is available. A great deal of propaganda is being done on this problem. We find quite extraordinary variations. In one area, a poor area, we find 80 per cent. of the children who are not given free milk are buying it, while in a neighbouring area, no poorer, the figure is 39 per cent. We find in certain prosperous areas a very low figure sometimes, while in needy and poor areas there is a high figure of consumption. It is quite clear that it is not purely a question of poverty. My own personal view is that we shall never really be able to tackle the problem of the number of children who will not take milk until we are able to deal with the problem which was particularly emphasized, I think, by the right reverend Prelate—namely, the supply of milk to children under five. I believe a great number of children break the milk-drinking habit, and that it is much harder to get that habit restarted—I do not know whether the noble Viscount, Lord Dawson, will agree with that—than to keep up a continuous liking for milk as a beverage. In the meantime we are continuing to do everything we can by propaganda with the children and with the teachers to get a wider application of the scheme.
The question of the provision of milk during holidays was brought up, again, I think, by the right reverend Prelate. I would like to assure your Lordships that we are doing everything in our power to press local authorities on this point. It is frequently a very difficult matter of organisation, particularly in the rural areas, but last summer holiday arrangements were made in some 90 areas, and we are very hopeful that this summer that figure will show a very considerable increase. The noble Earl, Lord Cork,

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brought up the question of children in hospitals. That is a question I would like to go into, but I can tell the noble Earl that we have been able to make arrangements lately for the parent of a sick child either to call at the school for his bottle of milk or in some cases to arrange for it to be taken to the child's home. I must confess, however, that the point about hospitals is a new one and I will certainly make inquiries into it. The right reverend Prelate referred to the fact that one-third of a pint a day is undoubtedly a small amount. We never, however, pretended that that should be the only source of supply. We are making an effort to persuade children to take the supply of one-third of a pint twice a day. In almost all cases children given free milk receive two-thirds of a pint, and about 10 per cent. of the other children are taking a supply twice a day. We should be very pleased to see that extended.
I am afraid I am taking rather a long time over this reply, but it seems to me so important a subject that I hope your Lordships will excuse me. Now I will turn, if I may, for a moment to the question of the provision of free milk. I have been dealing with milk supplied at a reduced price. The policy of the Board of Education with regard to the provision of free milk for under-nourished children was restated in a Circular issued four years ago. We laid it down that free milk or meals should be provided wherever necessary "for any child who showed any symptoms, whether educational or physical, however slight." I think your Lordships will agree that that was a real lead to teachers and local authorities. I am glad to say that to a considerable extent that lead has been followed. At the moment we are giving our attention in trying to secure greater uniformity. Undoubtedly while a number of authorities are operating the scheme with generosity, there are many who are not yet doing so. What we are doing is to have a survey of the position in every area. Instead of just issuing general Circulars to all authorities, which I do not think is always a very effective way of dealing with the matter, we are sending letters to individual education authorities calling attention to the particular defects in their particular areas.
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These defects include the provision of milk for an insufficient number of children, the provision of an insufficient quantity of milk per child, an unduly severe income scale, and the absence of local nutrition surveys of all the children.
We have sent letters of this character to 130 local education authorities, and we have been able to produce, I think, very appreciable and worth-while results. Nine years ago, that is in 1930, only about 36,000 elementary school children in England and Wales were receiving free milk. Now the figure is nearly 500,000, more than a ten-fold increase, and it is still increasing rapidly. During the last six months there has been an increase of some 47,000, or about 10 per cent., in that short period. Seven years ago only 12,000,000 free milk meals were provided, and last year the figure rose to 97,000,000—an eight-fold increase in seven years. I hope your Lordships will feel from hearing those figures that a good deal is being done already under the Government's policy in the schools.
LORD MOTTISTONE: Before the noble Earl leaves the point, could he perhaps tell us—we have raised the matter here before—what is the total number of school children and what is the proportion of those who receive milk? He told us the number was half a million; how many school children are there altogether?
EARL DE LA WARR: Speaking offhand, I should say that the number was in the neighbourhood of 5,000,000, and therefore approximately 10 per cent. are receiving free milk and between 45 and 50 per cent, cheap milk. Free milk is, of course, only for those who are showing some special need for it. The noble Lord has referred specially to milk, but I hope the House will forgive me if I carry the matter a little further and deal also with the related subject of solid meals. In rural areas it is becoming more and more the practice of schools to provide canteens for children who come from a distance, and local authorities are making at the same time very considerably increased use of their powers to provide free solid meals as well as paid-for meals. Last year over 22,000,000 free meals, other than milk, were provided, which is more than double the number provided ten years ago. In addition, as I say, these canteens are springing up, particularly in the rural areas, and we are

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doing everything in our power to encourage all the local authorities, especially those in the rural areas, to provide canteens. I have been round to some of these schools and partaken of the meals, and I was particularly gratified by their quality. The average price on the whole is about 3d., sometimes with reduction for large families and also reduction for a constant attendance throughout the week. Although in most cases the quality is good, in some cases it is capable of improvement, and last year the Board appointed a dietician who could go round the authorities and help them on the best way of serving meals, on diet, and so on. That is a very important aspect of the problem. The surveys that we have been making cover the whole field of what is being done to deal with the problem of nutrition both by milk and by solid meals, but there is more in the problem than merely the provision of meals, either paid-for or free.
The noble Lord, Lord Hankey, touched on an aspect of the problem which, if I may say so, I think is a very important one. Improvements are being made, and made very rapidly, in the instruction that is given in the schools on domestic subjects—instruction dealing both with the technique of cookery and also with the whole question of food values; and, more important, that instruction is being related to the life and work of the school. In the past quite a considerable amount of this instruction was given, but frequently out of school, by the girls being taken to outside centres, and that meant that it was frequently done on a very unsatisfactory and superficial basis. Now not a single senior school or secondary school would be built without full provision being made for the teaching of domestic science. To-day the girls leave the school with a very real grasp of the fundamentals of good cooking and a simple and intelligent view of food values.
This applies very much more to the new schools—that is, the reorganised schools—than it dots to some of the older ones. We are reorganised throughout the country to the extent of something like 70 per cent. at the present moment, but obviously in some of the old schools which are not reorganised that instruction is rather more difficult. In all schools, however, where provision is made for domestic science—and that is in the vast
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majority of schools—every girl in her last years gets at least one half-day a week instruction in the subject, and in her last term or so that time is probably increased. In addition, more classes are being provided for those who leave school and for young adults, helping to build up a community of people who know what sound feeding means and see that they get it for themselves and their children. I might say here that I think the school meal is not only of value from the point of view of the food that it gives the child, but also in the formation in the child of the habit of demanding the right type of food.
In addition to what the Board of Education are doing, the Ministry of Health has welfare centres at which it carries out instruction on these subjects. It is making use of the machinery of the women's institutes; it is making use of such great exhibitions as we had at Glasgow the other day, where an extraordinarily interesting exhibition was put up on the subject of domestic science. From what I have ventured to say I hope the noble Lord, Lord Hankey, will feel that I have really answered this question of whether or not His Majesty's Government accept the points made in the Report of the League of Nations Committee. I should say most certainly we do accept what they say. We are pressing forward on the lines that I have tried to lay down.
This is a great problem, in searching for a solution of which we have to deal with the question of poverty. I agreed with the right reverend Prelate when he made the statement that he thought that poverty was the basis of this problem. It is, however, also a problem in which ignorance plays a very large part. I hope I have managed to satisfy your Lordships that while perhaps we are only beginning to tackle the problem, we are in fact tackling it on wise lines. I think it is probably the feeling of most of your Lordships that if we are going to tackle it satisfactorily, more machinery than we yet have will be needed in the future. It is also, however, very clear to my mind, in operating the machine as we have it at the moment, that we could make a great deal more use of the existing machine than is being made. If local authorities can only be encouraged to do yet more in the schools than they are doing, a very large contribution could be made. I can assure your Lordships

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that on the specific point raised by the right reverend Prelate, of milk for mothers and children under five, we will press forward with negotiations. I believe that it is the most important next step that can be taken. Finally, I hope the right reverend Prelate who has raised this Motion will feel that he has, by doing so, done valuable service to what I think all of us feel to be a really good cause.
THE LORD BISHOP OF WINCHESTER: My Lords, I should like to thank the noble Earl for the full answer that he has given. He has been most sympathetic, and very encouraging, and I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

EMPLOYMENT AND IMPORTS.
5.32 p.m.
LORD DAVIES LORD DAVIES had the following Notice on the Paper: To urge the necessity of providing employment and establishing industries in this country which would be indispensable in the event of war and to call attention to the import of foreign commodities, especially of Japanese canned foodstuffs; and to move for Papers. The noble Lord said: My Lords, I beg to move the Resolution standing in my name, and in doing so I realise that I shall be accused of departing from free trade principles. I have been a convinced Free Trader for many years, and I still believe that when the menace of war has been removed it will be possible to pull down those trade barriers which now impede the economic recovery of the world. But in the new position which has arisen since the sabotage of the League, and the breakdown of the system of collective security, we cannot contemplate with equanimity the possibility of becoming dependent on foreign countries for supplies of materials and manufactures which are essential for the efficient conduct of war.
However strongly we may believe in the free exchange of commodities I suggest that we are bound to recognise that the whole question of international trade is closely linked up with the problems of national defence. Clearly they are interdependent, and cannot be separated, and therefore in these dangerous and critical times we are compelled, I fancy, to
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abandon those economic policies which in times of tranquillity would probably command our undivided support. We, of course, must concentrate therefore upon those measures which are indispensable, not only for building up our national defences, but also for bringing to a successful issue the policy of resisting aggression upon which this country has now embarked. I suggest that the time has gone by when we can indulge in laissez faire, and when private interests can be allowed to pursue their own way, quite irrespective of the defensive requirements of the country and of our partners in the new Peace Front which the Government are now endeavouring to build up on the ruins of the League.
When we look around the Continent what do we find? In the totalitarian States every economic activity is subordinated to one over-riding consideration—namely, preparation for war; preparation on a scale hitherto undreamt of in the annals of mankind. Everyone knows that during the last few years Germany has been transformed into a huge arsenal, the population has been and still is subjected to great hardships and privations, in order to pile up armaments on armaments, and to construct new defences in readiness for the appointed day. As the right reverend Prelate told us a short time ago the slogan is "Guns instead of butter," and in a population of 90,000,000 there are no unemployed. On the contrary, there is a scarcity of labour, and in a country where we are told that living space is restricted thousands of men are being imported to assist in the preparations for war.
Let us contrast that state of affairs with the conditions in this country. Here, unfortunately, we have still over 1,000,000 unemployed. Why are their services not being utilised in preparation for the day when we may be called upon to stem the tide of aggression? Why is there all this colossal waste of labour which can be employed to make good the deficiencies In our national defence? Why are millions of pounds being doled out by the national Exchequer that could be spent in rehabilitating our defensive arrangements, which years of neglect have unfortunately brought into a parlous condition? Why, may I ask, have refugees been turned away from our shores when so many urgent jobs remain to be done?

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As your Lordships know, there are thousands of these unfortunate people who would have enlisted voluntarily in a Foreign Legion organised and equipped by the Government—men who are already trained, men who possess military experience and whose morale is of the highest. I have met some of them, and they have told me how eager they were to serve under the British flag.
No, the real trouble is that just as in 1914 the Government have not yet realised the magnitude of the task which they have been compelled to undertake. The Foreign Secretary, in his firm and unequivocal declaration a few days ago, assured the country and the world that our commitments would be honoured should that necessity arise. To obviate this necessity, if possible, and to fulfil these obligations should the need arise, I suggest that we have no time to lose. In spite of all that has been done during the lest few months, and I am not trying to minimise in the slightest what actually has been done, there is, so much leeway to be made up that surely it is not a question of how little but of how much we can do to avert the catastrophe. Surely the question we have to ask ourselves is, what is the maximum effort of which this country is capable? Therefore I suggest that, in those circumstances, at this moment, there should not be one unemployed person in this country, and that not a single refugee whose services could be enlisted should be refused admission.
I notice that a few days ago, in another place, the Minister of Labour appeared to be quite complacent about the present rate of unemployment. He told members of the other House that the story of the work done by the Ministry of Labour in the last four years was one of remarkable progress. All I can say is that in spite of this progress there are still 1,300,000 people on the unemployed register. Even in normal times unemployment, as I think most of us will agree, is a scandal, to which unfortunately we seem to accustom ourselves. But the point is that in times of emergency such as the present it is not only a scandal but a crime. I believe it is responsible for a great deal of the malnutrition which we were discussing in the last debate. How can the services of these unemployed persons be utilised? That is a matter for the Government, with all the information at their disposal. All we can
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do as private members of this House is to make a few suggestions. For instance, I should like to ask the noble Lord who will reply to this debate whether the programme of armament manufacture can still be expanded and accelerated. What is the use, after all, of calling up recruits if there are no weapons with which to equip them? Everyone knows that there is unfortunately a shortage of rifles and machine guns.
LORD TEMPLEMORE: No.
LORD DAVIES: Well, there was a very short time ago, and I ventured to draw the attention of the Minister for the Co-ordination of Defence to it. There is also the question of the erection of hutments for those classes which have already been called up, and for the classes which may have to follow. Then there is the A.R.P. work, the provision of effective protection for the civilian population. I understand the Government have turned down several schemes submitted by the local authorities, and the arguments for doing so adduced in the Hailey Report are, I venture to think, most unconvincing. Then what about the provision of emergency hospitals? I do not know whether this is purely conjectural, but I understand that the estimate of the number of casualties during the first few days of hostilities runs into some hundreds of thousands. I am bound, therefore, to ask whether the Government are doing everything which is humanly possible to minimise the number of those casualties, and to provide adequate treatment for the wounded. I honestly do not believe that they are, otherwise there would not be a single unemployed person in this country to-day.
Then there is the question of the storage of food, oil, and other necessities, and I would like to ask the noble Lord opposite whether he can give us an assurance that adequate facilities for storage exist, and that a reserve of at least, shall we say, twelve months' supply of food and other essential materials is being built up. Then there is the question of transportation. I assume that if our railways are put out of action, or if traffic is seriously interfered with, the Government have plans to make good the deficiency by utilising road transport, especially heavy lorries. I suggest that to meet such an emergency involves not only the improvement of our roads, but

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also a big reserve of motor vehicles. It really is not necessary for me to enlarge upon our requirements, because the facts are well known to your Lordships. But the point I want to make is this—and it is an obvious one—that there is ample work to employ every one, if it is only properly organised and planned—work which every patriotic man and woman would cheerfully undertake if given an opportunity.
Before I leave this unemployment question there are two other aspects of it to which I should like to draw your Lordships' attention. The first is that there are certain industries which, I believe, are indispensable for the defence of the country and the conduct of war. These used to be called key industries and your Lordships will remember that when war descended upon us in 1914 it was suddenly discovered that some of those industries, notably the dye industry, had become a monopoly of Germany. We were entirely dependent upon imports from abroad, and in some cases from enemy countries alone. Subsequently it was necessary to discover the processes of manufacture, and to erect factories in this country. This of course involved a considerable amount of time, and placed us at a very serious disadvantage. I do hope that we shall not repeat this error. I assume—perhaps it is a big assumption—that the Government have already taken steps to survey the whole position, and to ensure that in respect of manufactures and processes indispensable in war we are no longer entirely, or even in the main, dependent upon sources of production in other countries. I trust that the noble Lord will give us categorical assurances that this vital matter has not been overlooked. Obviously it is an elementary precaution, but quite recently your Lordships must have felt considerable apprehension when it was stated in the Press that the carbide industry in this country appears to be non-existent, although several abortive attempts have been made to resuscitate it during the last few years. I refer to this particularly because I think it illustrates what I have been trying to say and because it may be typical of others.
What is the history of the manufacture of calcium carbide? Your Lordships are aware that it is of vital importance in the
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manufacture of armaments. May I quote the opinion of no less an authority than Sir Thomas Inskip, when he occupied the position of Minister for the Co-Ordination of Defence. Sir Thomas, speaking twelve months ago on the proposal which was made at that time to erect a carbide factory in the Highlands, said that he approached it from the angle of defence, and he pointed out that calcium carbide is consumed in this country to the extent of about 60,000 tons a year. He also said that its consumption was on the increase and that it was indispensible. He went on:
"About 50 per cent. of this 60,000 tons is used for welding and cutting metal, and is absolutely essential in aircraft construction and shipbuilding, and for fabricating other munitions. About 30 per cent. is used for making an important fertilizer, and another 20 per cent. is used partly for constructing high speed cutting tools. Now, those are all indispensable articles for industry, and especially in war time. What would be our position in war? If this or some similar Bill were not passed, and an industry established, it would be necessary for shiploads of something like 1,000 to 1,200 tons every week to come from Norway to supply this vital necessity."
Then Sir Thomas went on to point out that we were the only important nation in Europe which does not at the present time manufacture calcium carbide for itself. Italy does it, Russia does it, Japan does it and Germany does it. He suggested that it was an advantage that private persons should be prepared to put up a substantial sum of money to establish this industry in our country. Then he went on to speak of ferro-alloys and he said that 37,000 tons of ferro-silicon were required for high-grade steel of particular hardness and tensile strength. It appears at present that we are entirely dependent for its manufacture on Germany. The raw materials are obtainable largely from the Empire, but they are taken to Germany where they are manufactured, and the manufactured article, which is indispensable for industry in peace and war, is then brought to this country. These views were not expressed by a private member in another place, they were expressed by a responsible Minister of the Crown, and that is why I have given a brief summary of what he said more than twelve months a go.
I understand that we have not yet produced an ounce of carbide and that we still entirely depend on supplies from

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abroad. The debate to which I have alluded took place on what is described as the Caledonian Power Bill. That was a Private Bill. It was introduced into another place in three successive years, 1936, 1937, and 1938. I can only assume that the reason why it was rejected on all three occasions was that it was a private measure and not a Government one. I would like to ask the noble Lord why it is that the Minister for the Co-ordination of Defence did not introduce a Government Bill to deal with this urgent matter. Since the last debate, as I have said, nothing has been done, and matters have, unfortunately, been allowed to drift.
In spite of that fact I understand that at least two proposals for the erection of the necessary plant and machinery have been submitted to the Government. One of these was sponsored by the National Industrial Development Council for Wales, whose President is the noble Earl, Lord Plymouth. It was suggested that works should be erected in or near the Borough of Merthyr, which, as your Lordships are aware, is a distressed area. In the twelve years between 1924 and 1936 the Government has had to expend no less a sum than £5,500,000 in the relief of unemployment in the Merthyr area, whilst the local authority has been compelled to spend at the rate of £2,200 per week in relief. I understand that in this area there suitable sites for a calcium carbide factory, and an abundance of coal, lime and coke which are essential requisites for the manufacture of carbide. Another proposal was also made, and that came from Flintshire, to erect a plant on the River Dee where, also, supplies of coal and lime are plentiful. Last year we paid out £625,000 for overseas supplies of carbide, and for that reason your Lordships would like to know why it is that the Government have not taken steps to revive this key industry and why it has been allowed to perish.
I submit that this is a really serious matter. I appeal to the noble Lord opposite to expedite, the provision of new works and to consider, as I am sure he will, the claims of South Wales as one at least of the most suitable areas in which this industry could be located. In a case of this kind, however, where the materials produced are of such vital importance to our national defence, I sug-
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gest that it would be an additional advantage to have two strings to our bow and to establish two factories, one in the North and the other in South Wales. I understand there are plans already in existence, and that all that is needed is the support and authorisation of the Government. I suggest that this should be forthcoming without delay. Noble Lords are no doubt aware that there are other indispensable industries which I could mention and of which I could give particulars to the noble Lord opposite. He would probably agree that they demand the urgent attention of the Government if unnecessary delays are to be avoided.
The next point to which I wish to draw your Lordships' attention is the need for distributing our munition factories all over the country in order to avoid overcrowding in what I would describe as vulnerable areas. If they are all grouped in these vulnerable areas, they would naturally provide the enemy with massed targets. In a very interesting book which I hope your Lordships have read, recently written by Sir Arthur Salter, who was a member of the Supreme Economic Commission during the War, and whose experience in these matters is unquestioned and unrivalled, it is stated:
"It is clear, for example, for both social and strategic reasons, that a large measure of industrial decentralisation is required. The most congested areas are also the most vulnerable, so that the same change would serve both purposes. Obviously such a transformation must be slow and difficult."
Then he points out that the Government have appointed a Royal Commission
"which is working slowly, cumbrously, and elaborately and which was encouraged on the wrong path by a Board of Trade memorandum inspired by the laisser-faire principles of the Victorian era."
He goes on to suggest that the distressed areas should be helped, but he says that up to the present "the financial attractions are rarely sufficient." Sir Arthur Salter's criticisms represent a most formidable indictment, especially coming from his restrained pen.
I have no doubt that the Government are now at last seized with the importance of this matter. All I want to know is what are they actually doing to rectify the errors of the past, and what steps are we taking now to ensure that alternative factories are built outside the danger

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zones and vulnerable areas, which will be able to function as a reserve in the unfortunate event of existing plants being destroyed. I am sure noble Lords will have in their minds many places where such reserve factories could be established. In my own county, for example, there are a number of old factories which have been closed for many years, and which I imagine—I do not know because I have no technical knowledge—could be adapted for the production of munitions and equipment. It is curious that the incidence of employment appears to be highest in those districts which are least vulnerable. I understand, for instance, that in the Highlands and in the Counties of Cardigan and Anglesey more than 25 per cent. of insured workers are unemployed, and I am sorry to say that in Wales generally the figure is in the region of 20 per cent. Surely it does not surpass the wit of man to devise some means of employing these people on work of national defence, especially as they live in those scattered areas which are far less vulnerable to air attack than are the big centres of population.
I now come to the second part of my Motion—namely, the purchase of supplies from abroad and the sale of materials to other countries. I think it is wrong that we should shut our eyes to the fact that an economic war is now actually in progress, however distasteful it may be to all of us. In the debate a few days ago I drew the attention of your Lordships to the enormous quantity of iron and steel scrap which we had recently exported to Germany, and which in the month of December, 1938, alone amounted to 23,000 metric tons. What I want to ask is this: Why should we denude our own country of scrap in order to accelerate German rearmament? Obviously it is a very valuable reserve which could easily be made available in an emergency. Why, after the annexation of Czecho-Slovakia and the seizure of the Skoda works, are we supplying Germany with more metal which may be returned here in the form of bombs and shells? Why does one country prepare for its own destruction by supplying another with the indispensable materials for doing so? That is what puzzles everyone, except the Government. In these days the mechanism of war, I need hardly remind your Lordships, is more compli-
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cated than ever, and the raw materials needed for the manufacture of weapons are more numerous. Consequently those countries which control the bulk of these raw materials could exert, if they were willing to do so, a restraining pressure in the rearmament race.
Then there is the case of Japan. What has been the attitude of the democratic Powers towards the war of aggression which has been raging in the Far East during the last two years? In the year 1938 alone the United States and the Phillipines sold to Japan £35,000,000 worth of war materials, which was equivalent to 57 per cent. of her total war imports during that year. Great Britain and her Colonies and Dominions during the same period sold to Japan £12,500,000 worth, equivalent to 20.6 per cent. The Netherlands came third with a total of £5,000,000 worth. Of all die great Powers, Russia was the only one which sold no war materials of any kind to Japan. Germany and Italy—her Axis allies—supplied her with 8.6 per cent. of her war needs. That is the story of 1938. The question I want to ask is why have the democracies of the United States and of the British Empire and Holland—the next potential victims of Japanese aggression in the Far East—helped the militarists of Tokyo to invade and butcher the people of China? What sense was there in such a policy? And if we and our friends in Washington are so callous that we are not prepared to make the slightest financial sacrifice to save China and its heroic people, then what about the repercussions of this policy upon our trade in China?
What are the first results? Here they are for 1937. This is what happened. In that year, the trade of Great Britain with the occupied territories in China dropped from 8 per cent. to 5½ per cent.; the United States trade dropped from 22¾ per cent. to 18 per cent.; France's from 8½ per cent. to less than 1 per cent.; Italy's from 8 per cent. to just over ½ per cent.; and Germany's from 20 per cent. to under 6¾ per cent. During the same period, the Japanese share of this trade rose from 6½ per cent. to 38½ per cent. And this is only the beginning. I venture to think that if Europe and America allow Chinese independence to be destroyed, their trade with that country will sink gradually to zero. It will become a complete monopoly in the hands

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of Japan. Your Lordships will remember that under the Nine-Power Treaty of 1922, its signatories guaranteed the policy of the "open door" in China. Now, unfortunately, this door is no longer open; it is being banged, bolted and barred by Japan.
And, in order to enable Japan to purchase and to pay for these war materials, we learned a few days ago that it was proposed that we should purchase £1,700,000 worth of Japanese tinned salmon. Now in 1938 we bought 156,000 cwts. of Canadian salmon for which we paid £772,000. In the same year we purchased 395,000 cwts. from Japan for which we paid no less than £1,506,000. In 1929 Japan serif us 123,000 cwts. for which we paid £508,000. Thus your Lordships will see that in nine years the amount paid to Japan for tinned salmon has trebled. It may be true that the Japanese variety is cheaper than the Canadian product, but after all we must remember that the Japanese fishing interests have consistently refused to join the International Fish Conference, and recently they have constructed floating canneries for pirate salinon fishing off the Pacific Coast of North America. The result is, of course, that Japan is able to dump salmon on the British market by unfair competition with the Canadian salmon exporters.
There is one other feature to which I must draw your Lordships' attention in regard to this salmon business. It has to do with the Merchandise Marks Act, 1926. It appears that one of the Japanese trade marks is "Can," which is obviously intended to delude the purchaser into thinking that it comes from Canada, and is therefore a deliberate attempt to hoodwink the British consumer. I understand that in reply to questions in another place an assurance has been given that the Board of Trade is now considering this matter, but may I point out that is the duty of the Government not merely to consider the private interest of the trader but the interest of the consumer and the general public? I am sure the noble Lord opposite will agree with that sentiment. I would therefore ask the Government whether the time has not arrived for tightening up the provisions of the 1926 Act, in order to prevent misrepresentation. We are now told in the Press that the latest proposal, which involved as I
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have said the payment of £1,700,000, has been cancelled. I hope that the noble Lord opposite will be able to tell us that this is really so and that the deal has not merely been suspended. May I also venture to ask him what steps the Government now propose to take in order to encourage the importation of Canadian salmon into this country and to exclude supplies from Japan? Perhaps he can tell us whether it is not possible to assist the Cornish and other fishermen in this country by establishing factories for canning pilchards and other salt water fish. I understand that the attention of the Minister of Agriculture has already been drawn to this urgent matter.
I can assure your Lordships that it is with great reluctance that I have ventured to bring these facts to your notice, but I do so in the hope that something will be done. We cannot help being filled with grave misgivings, because the Government do not yet seem to realise the magnitude of the task which confronts us. The implications of a state of war to-day are infinitely more complex and numerous than they were 25 years ago. Consequently, our preparations to meet an emergency must be on a corresponding scale. We cannot help feeling that the Government are approaching this new situation in a parsimonious and halfhearted spirit. Everybody knows that the Parliamentary machine is clogged and its output should therefore be accelerated. Measures which are vital and urgent should be passed without delay. I believe—and I have heard many people express this view—that Ministers are already overworked, and because they are immersed in the affairs of their own Departments they have little time to think out the policy of the Government as a whole and to co-ordinate the activities of all the Departments.
Therefore, I would venture once more, as I did some weeks or some months ago, to appeal to the Prime Minister to introduce fresh blood into his administration. Above all, I would implore the Government to constitute, as we did in 1917, a Committee of the Cabinet, consisting not of the heads of Departments but of Ministers without portfolios, whose duty it would be to think out these problems and to advise the Cabinet upon the measures which should be taken immediately to build up our national defences, to secure co-operation with the other

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members of the Peace Front, and to ensure that everything possible will be done to meet any emergency which may suddenly descend upon us. I beg to move.
6.15 p.m.
LORD TEMPLEMORE: My Lords, first of all I must thank the noble Lord opposite for his courtesy in sending me the gist of the remarks he proposed to make so that I might prepare my reply to him. I should like, if he will allow me, to refer first to the very end of his speech, and to say that it would be obviously improper for me to comment in any way on the question of what persons my right honourable friend the Prime Minister should recommend to His Majesty for inclusion in his Government. I do not propose to say any more on that subject. Apart from that the noble Lord's speech falls into two parts. In the first place he dealt with the urgency of our preparations against a war. He deals with this matter in relation to the unemployment position and is led to the conclusion that because there are still a large number of unemployed His Majesty's Government are not doing everything possible to expedite preparations for war. The second part of the speech dealt with certain aspects of our overseas trade which have a bearing on the preparedness of other countries for war. The noble Lord covered a very wide field and raised many points of detail, which I will endeavour to answer.
The noble Lord said very truly that there are still over a million unemployed in this country. I think the figure is 1,350,000. In saying that, if he will forgive me, the noble Lord has fallen into a very common error, which Opposition speakers nearly always fall into in discussing the matter of unemployment. It is one which has been answered many times in your Lordships' House and in another place. The noble Lord seems to think that this number of 1,350,000 consists of an unchanging body of people who are always unemployed. As a matter of fact the case is very different. Of the 1,350,000 unemployed on June 12 last 42 per cent. had been unemployed for less than six weeks and only 22 per cent. had been unemployed for twelve months or more. A very large proportion of the figure of 1,350,000 represents, therefore, persons who are merely in the course of changing from one job to another.
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Very large numbers of men and women are out of employment for two or three days only. It is inevitable under any economic system that there must be discontinuities of this sort. Persons who are unemployed in this way are not usually available for employment outside their normal trades. There are also other factors which prevent the employment of all the workless upon defence preparations. Some persons are tied by domestic circumstances to certain districts, some do not possess the necessary skill to fill the jobs that occur as a result of armament and other defence works.
I repeat what was said by my right honourable friend the Minister of Labour the other day—and it has been said many times before—that the figure of 1,350,000 unemployed does not represent a static mass of persons who are available instantly for defence work. The number of unemployed is not an indication of inertia by the Government, but the recent changes in the numbers of employed and unemployed are some indication of the energy with which the Government are pursuing their defence preparations. Since January last, the number of unemployed has fallen by about 650,000, and the number of employed has risen by an even greater figure; and these changes are quite exceptional for this time of year. The number of insured workers in employment is now greater than it ever has been. The number of persons in employment to-day is more than 1,500,000 greater than the number employed at the peak of the 1929 boom. Not all the increase in employment and the reduction in unemployment is due to defence activity, but the rapid changes that have taken place in the last few months are a clear indication of the energy which the Government are putting into the fulfilment of their policy. When I say this, I do not say it in any spirit of complacency whatever. I am perfectly well aware, and the Government are well aware, that this figure of unemployment is much too large, but I only lay stress on these facts to point out that the noble Lord is really quite wrong to suggest, as I think he did, that the Government are rather complacent and not alive to this appalling figure.
LORD DAVIES: I hope the noble Lord will forgive me for interrupting him, but what I said was that the Minister of Labour in another place had been very

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complacent, and I think that if the noble Lord will read his speech, as I dare say he did, he will bear me out.
LORD TEMPLEMORE: There I join issue with the noble Lord altogether. I read the speech of my right honourable friend very carefully in preparation for this debate, and I cannot agree that he was in the least complacent, or that any other member of the Government is so in this matter. However, our opinions there naturally differ. I would say that the Government fully recognise the necessity for being ready for any emergency, and they are making every effort to ensure that the country is fully prepared. The noble Lord said that the time has gone by when we could afford to indulge in laisser faire and when private interests could be allowed to pursue their own way quite irrespective of the defence requirements of the country. I hope that the noble Lord did not imply by this sentence that industry has in any way ignored its duty to the country. I think that the Government and the country owe a very great deal to the willing co-operation of the industrialist in the carrying into effect of the defence programme. Private interests have in general fully appreciated their duties to the State. It is, of course, true that present circumstances warrant a departure from old methods. The Ministry of Supply Bill, at present before Parliament and to become law, I hope, tomorrow, will give very wide powers to the Minister—so wide, indeed, that some of your Lordships, especially one or two noble Lords sitting on the Liberal Benches, did not particularly care about passing them last week. It is undesirable that individual initiative and enterprise should be checked more than is absolutely necessary, but the introduction of the Bill shows that His Majesty's Government are fully prepared to exercise compulsion where compulsion is shown to be desirable.
The noble Lord made certain suggestions for putting the workless on production of defence requirements—for instance, armaments, notably rifles and machine-guns, hutments for housing, and A.R.P. requirements. I should like to assure him that the Government are doing everything possible to hurry on production. The noble Lord spoke of a shortage of rifles and machine-guns. I should like to assure him at once that I
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am informed that there is now no such shortage and that the shortage has been entirely caught up. As regards hutments, excellent progress is being made with the Militia camps. My noble friend the Under-Secretary of State for War, who is sitting behind me, will I think bear me out in that. A.R.P. work also is going ahead. The provision of emergency hospitals and facilities for dealing with the large number of casualities that must be expected to follow any outbreak of hostilities is receiving urgent consideration, and much practical work has already been done.
The noble Lord in part of his speech assumed that His Majesty's Government have plans ready for the utilisation of road transport to make good any breakdown of the railways caused by bombardment. I should like to assure him that this is so. The Ministry of Transport have already announced the existence of a scheme of organisation and control of goods vehicles. At the end of May something like 89 per cent. of all the goods vehicles in the country were registered with traffic area offices in connection with this scheme. So far as the roads themselves are concerned, war-time requirements receive regular attention in connection with schemes for construction and improvement. Priority is being given to works of importance on roads which will be essential for defence purposes. Plans are being completed for the maintenance of roads in war time. Reserves of bridge repair material have been accumulated by the Ministry of Transport in order to facilitate the prompt replacement and repair of road bridges which may be damaged by enemy action. Arrangements have been made whereby a number of highway authorities throughout the country are also accumulating bridge repair material for this purpose.
Another assumption made by the noble Lord is that the Government have taken steps to survey the whole position regarding the supply of commodities, which is so essential in war. Here again I can assure him that they have done so. It cannot, of course, be pretended that this country can be self-sufficient in war-time. We import each year over £400,000,000 worth of foodstuffs and nearly £300,000,000 worth of raw materials. Some of these foodstuffs are no doubt luxuries, and some of the raw materials would not be required in war. But it is

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broadly true that the range of goods and raw materials required for a nation at war is very nearly as large as that actually taken by the country at peace. This country must continue to import, and it is the object of the Royal Navy to see that we are able to do so. It is, however, the duty of the Supply Board, the Board of Trade Supply Organisation, and the Food (Defence Plans) Department to consider, commodity by commodity, the probable needs of the community at war and see whether in any particular case alternative sources of supply will be available, whether stocks are adequate to carry the country through any initial dislocation, and whether any additional reserves should be acquired.
It is undesirable on grounds of public policy to give exact details of existing stocks or of the reserves that have been acquired, and I am quite certain that the noble Lord, with his experience of public life and of Parliament, would not expect me to do so. But it can be said that, in the case of nearly all essential raw materials, the trade stocks and the Government reserves are more than adequate for three months' consumption on the basis of the estimated war requirements, and in the few cases that this is not so the necessary steps are being taken to cover the position.
The noble Lord devoted considerable attention in part of his speech to the question of supplies of calcium carbide. It is quite true that calcium carbide is indispensable in war, but it is not the case that its manufacture in this country is indispensable. Substantial stocks are already held here, and there is reasonable certainty that in time of war supplies would continue to reach us from Norway and Canada, where there is a large capacity for production. It would also be possible to start production here without undue delay in an emergency. The manufacture of carbide in the United Kingdom is very desirable but it is not absolutely essential. My noble friend quoted my right honourable friend the Minister for the Co-ordination of Defence, as he was last year, Sir Thomas Inskip, in certain remarks that he made in another place in the debate on the Caledonia Power Bill, and the noble Lord rather inferred that Sir Thomas Inskip made out that the manufacture of this commodity in this country was absolutely
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essential. The noble Lord, however, did not quote everything. I should like to point out that Sir Thomas Inskip made the position quite clear in that debate.
He said that he would not take the responsibility of saying what he did not believe: that it is absolutely essential to defence that this calcium carbide and these ferro-alloys should be manufactured in this country. He said that some things were essential for defence and some things were desirable: it was a question of degree; and he could only say that the passage of the Bill would be a relief to him in his anxious responsibility and would be a valuable contribution to the solution of our supply problems in time of war. I have to say that His Majesty's Government in this connection would welcome any well-conceived plan for the production of calcium carbide in this country, but as at present advised they do not think that there are sufficient grounds, from an emergency point of view, to give the promoters of the various schemes which have recently been put forward a title to financial assistance. If any scheme were promoted in one of the Special Areas it would of course be open to the promoters to apply for such assistance under the Special Areas Acts as is normally available to private enterprises.
The noble Lord raised a question of food storage, and asked for an assurance that adequate facilities for food storage exist, and that a reserve of at least twelve months' supply has been built up. Here again I am afraid it would not be in the public interest to give information as to the quantities of the Government reserves. I can only say that large reserve supplies have been built up, and that the process is continuing. The noble Lord also mentioned the need for distributing ammunition and other factories all over the country, to avoid overcrowding in vulnerable areas and to give employment in remote areas in which it is badly needed. It has been the policy of the Government, whenever circumstances permitted, to place their own factories in the Special Areas and other areas of heavy unemployment, and due regard is paid to strategic considerations. Factories established and contracts allocated under the defence programme have contributed to the restoration of prosperity in the Special Areas and other areas of heavy unemployment. About thirty factories,

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or large extensions of existing factories, have been built, and about thirty more are either in course of building or have been approved.
Now I turn to the second part of the noble Lord's speech, where he dealt with the purchase of supplies from abroad and the sales of materials to other countries. He was particularly concerned with the sale of scrap iron and steel to Germany, and the purchase of canned salmon from Japan. His remarks were based on the assumption that an economic war is now actually in progress, and I think a few general remarks might perhaps first be made on this assumption. The data which I have been given do not suggest any markedly abnormal increase of exports of raw materials, likely to be required for the manufacture of armaments, to Germany or Japan. All raw materials likely to be required for the manufacture of armaments have normal peace-time uses, and conversely there are few materials which are not required in one way or another for preparing for a modern war. Any proposal to restrict the export to certain countries of raw materials likely to be required for the manufacture of armaments would mean, in effect, a prohibition on the export of raw materials generally to the country concerned. In the opinion of His Majesty's Government such prohibition would undoubtedly provoke, at the very least, retaliatory action in the economic field, and could not but make the prospects of securing peace in the world even more doubtful than they are at present. To attempt to divide the world into two camps which had no normal trading relations with each other would make war almost inevitable, and would be likely to give real weight to the propaganda against encirclement which is now so prevalent in Germany, and which His Majesty's Government are doing their best to counteract.
As regards the references to exports of iron and steel scrap to Germany, the position is that the trade in iron and steel scrap is regulated by an international Convention to which the main European steel producing countries are parties, and to which France and Holland, who are exporters of scrap, are affiliated. Under the Convention British steel makers have first claim on scrap arising in the United Kingdom, and by agreement between the Federation and the Scrap Merchants'
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Federation all scrap is offered to the Federation at an agreed price, and is only exported when not required in this country.
Now I turn to the subject of tinned salmon from Japan, and here the suggestion made was that a deal has recently been negotiated for buying £1,700,000 worth of tinned salmon from Japan in order to enable Japan to secure credit for the purchase of war materials. The noble Lord asked also if it were true that this deal had been cancelled. The suggestion that a special purchase of surplus Japanese goods was contemplated is misleading. According to information received by the Board of Trade from responsible importers nothing abnormal has taken place this year. Japanese salmon is usually imported into this country in the late summer, autumn and early winter. These supplies are sold gradually throughout the year. Buyers take the goods from bond as and when they require them. It is customary at about the present season of the year to clear up outstanding stocks in anticipation of the arrival of the new season's supplies. No doubt considerable sales have been made recently. The goods concerned have, however, for some time been in British hands and there have been no recent heavy shipments from Japan. In other words, there has been no departure at all from the usual trade practice, and I am informed by my advisers at the Board of Trade that no arrangements made have been cancelled.
The noble Lord also asked what steps are to be taken in order to encourage the importation of Canadian salmon into this country, and to exclude supplies from Japan. In order to consider this question it is necessary to have some knowledge of the market for salmon in this country. There are, I am informed, three main varieties of salmon—reds, pinks and chums. The reds are the best quality and largely consumed by the industrial population in the North and Midlands, where there is very little demand for any other variety. Pinks find a certain sale in the South, and chums, the poorest quality, are generally used only for the manufacture of pastes, etc. The annual consumption in the country is on an average rather over 2,250,000 cases of 48 lbs. per case. Some 75 per cent. of this consists of red

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salmon. The average Canadian salmon pack is about 1,250,000 cases. Of this about half a million cases are of a quality not normally required by the United Kingdom consumers, and only 325,000 cases are of the highest quality red salmon. It is understood that the whole of the Canadian red salmon for this season has already been sold, most of this to the United Kingdom, and that any large increase in the production of this variety is unlikely.
As regards the type of salmon mainly consumed in this country Canada is experiencing no difficulty in disposing of her supplies, and it is clear that in any event she could not readily supplant Japan in supplying the United Kingdom market. I should like to add that Canada has the advantage by a duty of 10 per cent. ad valorem on foreign salmon imported into the United Kingdom. The noble Lord also referred to the marking of Japanese salmon. I might mention that in general Japanese salmon is distributed in this country. carrying the label of the United Kingdom distributors. Under the Merchandise Marks Act, 1926, tins so labelled must bear the mark "Foreign," or an indication of the country of origin. The President of the Board of Trade announced recently in another place that the views of the commercial, industrial and agricultural interests affected had been obtained on the suggestion that the option to mark goods "Foreign," instead of a definite indication of the country of origin, should be withdrawn. My right honourable friend said that while it was clear that there is still considerable divergence of opinion among interested parties, the Minister of Agriculture and he had reached the conclusion that there are sufficient grounds in principle for removing the option to use the word "Foreign." He added that the practical difficulties arising are now being studied.
I have, I think, answered to the best of my ability most of the questions asked by the noble Lord. I do not know whether any words of mine will have been sufficient to assure him that the Government are fully alive to the possibilities which the situation opens up and to their responsibilities in connection with it. The idea that anyone who becomes a Minister and finds himself either an Under-Secretary or a member of the Cabinet
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should lose all sense of proportion, and live in a world in which all dangers are ignored, and all is for the best, is really not one that will hold water, and I am sure the noble Lord himself really does not believe it. As regards myself, I do not pretend to be in Cabinet secrets, and I do not hold office in any Government Department, but I hear things, like other people, and I use my powers of observation and deduction. I know enough from this to be perfectly certain that if the test were ever to come, which Heaven forbid, the noble Lord would find that His Majesty's Government had done a great deal more in order to make our homes secure and our victory certain than he is at present inclined to believe.
6.42 p.m.
LORD DAVIES: My Lords, the noble Lord in his reply has endeavoured to reassure us that the Government are doing everything they can to prepare for an emergency, which we hope will never arise. I did not suggest that Ministers, because they are Departmental chiefs, do not take a broad view of all the questions which they are called upon to decide. All I suggested was that Departmental Ministers have a tremendous amount of extra work thrown upon their shoulders, and therefore, as we were compelled to rely upon them, it might be advantageous for everybody concerned if there were a small Committee of the Cabinet, the members of which should be Ministers without portfolios, who could devote all their time to the examination and consideration of these very important questions.
I am not going to go into all the points which the noble Lord dealt with, but I venture to suggest that his reply about the reserves that we have at present in this country is not very reassuring. I drew the noble Lord's attention to a report or document which had been sent to me in regard to the whole question of food supplies, in which it is stated that very serious complaints had been made, especially by the retailers of foodstuffs in this country because the Board of Trade at that time would give no assurance that they would be helped by insurance. The Government would not insure the reserves which the firms were willing to accumulate, and if an emergency did come there was no certainty that they would be able to keep the supplies which

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they had put by in reserve. Those supplies might be taken from them and distributed among other people who had made no provision at all for accumulating reserves. That, of course, has resulted in people shying off, and one cannot blame them.
The traders say: "We have to stand all the risk, while the Government are not prepared to take any risk at all. We do not see why we should purchase reserve supplies, and hold them for an emergency." The result of that is bound to be that we shall fall between two stools. We shall neither have the reserves in the hands of the traders, nor in the hands of the Government. That is a point which I put to the noble Lord, and I should be very grateful if he would look into it again. It is not a question of a few weeks', or even of a few months' supply, it is a case of a supply for a much longer period. I thank the noble Lord for the information which he has given me. I do not think it is as reassuring as one might have hoped. I am still convinced that until every man and woman in this country is engaged in preparing our national defence and in filling up the gaps, we have not really dealt with this matter as it should be dealt with. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

CIVIL DEFENCE BILL.
Order of the Day for the consideration of Commons Amendments to Lords Amendments read.
6.47 p.m.
THE UNDER-SECRETARY OF STATE FOR WAR (Tim EARL OF MUNSTER): My Lords, I beg to move that the Commons Amendments to the Lords Amendments be now considered.
Moved, That the Commons Amendments to the Lords Amendments be now considered.—(The Earl of Munster.)
On Question, Motion agreed to.

LORDS AMENDMENT.
[The references are to Bill No. 118.]
Clause 30, page 33, line 24, at end insert—
("(b) there shall then be added to the sum ascertained under paragraph (a) of this subsection the amount, if any, proposed by the scheme as compensation to persons (including
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the owner) interested in the premises in which the shelter is situated, or the amount (if any) properly paid by, or, as the case may be, reasonably allowed to, the owner in respect of such compensation, whichever is the less.")
The Commons propose to amend the above Amendment as follows:
Leave out from ("scheme") in line 3 to the end of the paragraph and insert:
("to be paid by the owner as compensation to persons having an estate or interest in the premises in which the shelter is to be provided or the amount, if any, properly paid by the owner in respect of such compensation, whichever is the less; and
(ii)The amount, if any, proposed by the scheme to be allowed as compensation to the owner in respect of his interest in the premises in which the shelter is to be provided or the amount reasonably allowed to the owner in respect of such compensation, whichever is the less.")
THE EARL OF MUNSTER: My Lords, this Amendment of the Commons is moved in order to clarify the drafting of the Amendment which I moved in this House on the Committee stage of the Bill. I beg to move that this House doth agree with the Commons in their Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Earl of Munster.)
On Question, Motion agreed to.

LORDS AMENDMENT.
Clause 55, page 54, line 12, leave out ("penalties") and insert ("fines, not in any case exceeding fifty pounds")
The Commons propose to amend the above Amendment as follows:
At end insert ("or imprisonment not exceeding three months")
THE EARL OF MUNSTER: My Lords, this Amendment, I think, is self-explanatory. It merely adds to the provision of a monetary penalty, punishment by imprisonment as well. I beg to move that this House doth agree with the Commons in their Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Earl of Munster.)
On Question, Motion agreed to.

LORDS AMENDMENT.
Clause 83, page 74, line 35, at end insert—
("(8) For the purposes of this Act the number of persons who work in or about a mine shall be deemed to be a number ascertained as follows, that is to say—

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(a) by having regard to all the people employed in or about the mine and ascertaining how many of them are from time to time simultaneously present in or about the mine otherwise than below the surface, and

(b) if the numbers so ascertained fluctuate, by ascertaining the highest number which, throughout any consecutive period of fifteen minutes, is equalled or exceeded.")

The Commons propose to amend the above Amendment as follows:
Leave out from ("highest") in paragraph (b) to the end of the paragraph and insert ("figure below which throughout any consecutive period of fifteen minutes the numbers do not fall.")
THE EARL OF MUNSTER: My Lords, the last Amendment which has been made to the Bill in another place merely makes clearer the intentions of your Lordships when we inserted our Amendment during the Committee stage of the Bill. I beg to move that this House doth agree with the Commons in their Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Earl of Munster.)
On Question, Motion agreed to.
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments has laid upon the Table the Certificate
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from the Examiners that the Standing Orders applicable to the following Bill have not been complied with:
Senior Public Elementary Schools (Liverpool).
The same was ordered to lie on the Table.

CLERGY (NATIONAL EMERGENCY PRECAUTIONS) MEASURE, 1939.
Text of the Measure: Laid before the House (pursuant to Act), and to be printed.
ECCLESIASTICAL COMMITTEE.
Eightieth Report, being the Report by the Ecclesiastical Committee upon the Clergy (National Emergency Precautions) Measure, 1939: Laid before the House (pursuant to Act), and to be printed.

BUSINESS OF THE HOUSE.
THE EARL OF LUCAN: My Lords, before we adjourn, may I remind your Lordships that we shall be meeting at three o'clock to-morrow, instead of a quarter past four?
House adjourned at ten minutes before seven o'clock.