Sitting of 2 May 1939

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

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),—
Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:
Royal Wanstead School Bill [Lords].
Bill to be read a Second time.

PRIVATE BUSINESS.
  MINISTRY OF HEALTH PROVISIONAL ORDER (BURNHAM AND DISTRICT WATER) BLLL,
  "to confirm a Provisional Order of the Minister of Health relating to the Burnham Dorney and Hitcham Waterworks Company Limited," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 118.]
  MINISTRY OF HEALTH PROVISIONAL ORDER (CORSHAM WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the Corsham Waterworks Company, Limited," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 119.]
  MINISTRY OF HEALTH PROVISIONAL ORDER (HAILSHAM WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the Hailsham Water Company," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 120.]

  MINISTRY OF HEALTH PROVISIONAL ORDER (LUTON WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the Luton
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  Water Company," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 121.]

  MINISTRY OF HEALTH PROVISIONAL ORDER (NEWHAVEN AND SEAFORD WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the New-haven and Seaford Water Company," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 122.]
  MINISTRY OF HEALTH PROVISIONAL ORDER (SOUTH KENT WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the South Kent Water Company," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 123.]
  MINISTRY OF HEALTH PROVISIONAL ORDER (SWAFFHAM WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the Swaffham Waterworks Company Limited." presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 124.]
  MINISTRY OF HEALTH PROVISIONAL ORDER (YORK WATER) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the York Waterworks Company," presented by Mr. Elliot; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 125.]
ORAL ANSWERS TO QUESTIONS.
  BRITISH ARMY.

    BUSINESS AND PROFESSIONAL MEN.
    Mr. Kennedyasked the Secretary of State for War whether Government approval has been given to the formation in the provinces of volunteer regiments

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    composed exclusively of business and professional men; and whether that approval was asked for on the ground that it is difficult for employers to serve in the ranks subordinate to their employeés?
    The Secretary of State for War (Mr. Hore Belisha): No, Sir, and no representations of this nature have been received at the War Office.
    Mr. Kennedy: I take it that the Minister is aware that this alleged difficulty is widely discussed in the Press, and may we take it that no such proposal will be supported by any branch of the Service?
    Mr. Hore-Belisha: I was not aware of any such proposal. It would be quite contrary to our practice and we should discourage it.

    CAMPS (HEALTH RESORT WORKERS).
    Mr. Roland Robinsonasked the Secretary of State for War whether he is aware of the difficulties experienced by members of the Territorial Army residing and working in British health resorts who are asked to attend the camps in the months of July and August; whether he is aware that these are the busiest months of the year in these resorts; and whether he will arrange for some of the camps to be held in the spring in order to ease their difficulties and stimulate recruiting in these resorts?
    Mr. Hore-Belisha: The camping season for the Territorial Army in 1939 will extend from early May until late September. Camping dates for units are being arranged as far as possible to suit the majority in the unit, with due regard to trade holidays, the convenience of employers, and the availability of camping sites.
    Captain Arthur Evans: Is it not possible for a Territorial soldier who, through no fault of his own, cannot attend camp within the period named, to be attached to a Regular unit for the same period at a time which will be most convenient to him?
    Mr. Hore-Belisha: I will consider my hon. and gallant Friend's proposal, but I am not sure it will be easy now that the Regular Army has so many other responsibilities.
    Mr. Henderson Stewart: In spite of the regulations which my right hon. Friend has indicated, will he consider the fact that there are tens of thousands of men in the summer resorts who want to join the Territorials but are prohibited from doing so because the camps are concentrated within the short period of the summer months?
    Mr. Hore-Belisha: They are concentrated between May and September, and that covers all the appropriate seasons.

    TERRITORIAL ARMY (TRAINING).
    Mr. Lipsonasked the Secretary of State for War whether he will call up members of the Territorial Army for three months intensive training on the under standing that their present employment shall be available for them at the end of the period of training, and that adequate allowances be paid to their dependants?
    Mr. Hore-Belisha: I would call the hon. Member's attention to Clause 2 of the Reserve and Auxiliary Forces Bill and to the Territorial Army Regulations which provide for admissible allowances.

    DISCHARGE (PRIVATE F. HUBBARD).
    Mr. John Morganasked the Secretary of State for War on what grounds Private Frederick Hubbard, No. 556,870, has been discharged from the Army and the terms of compensation offered to him on the termination of his service?
    Mr. Hore-Belisha: Mr. Frederick Hubbard was discharged from the Army as physically unfit after one year and 293 days service. His disability was constitutional and not attributable to Army service, and he was awarded a gratuity of £6 on discharge in accordance with the terms of the Pay Warrant.
    Mr. Morgan: If it can be shown that this man had a clean bill of health before joining the Army, will that be a sufficient ground for a reconsideration of his case?
    Mr. Hore-Belisha: I can assure the hon. Member that I am only too ready to reconsider any case, but this was a constitutional disability.
    Mr. Morgan: Was it certified by some competent medical authority?
    Mr. Hore-Belisha: Yes, Sir.
    Mr. Sextonasked the Secretary of State for War the total sum paid and due to be paid to date to owners of patents of the Bren gun; and how much of that total has been paid, or is due to be paid, since 15th March, 1939?
    Mr. Hore-Belisha: It would be contrary to the invariable practice to disclose payments to contractors or royalty owners.
    Mr. Sexton: Is the right hon. Gentleman aware that in addition to increasing German military strength by our export of raw materials, we are increasing their financial strength by continuing these payments?
    Mr. Hore-Belisha: That may be, but it is not customary for this country to repudiate a payment when it is legally contracted.
    Mr. Shinwell: Has the ownership of these royalties passed to the control of the German Government?
    Mr. Hore-Belisha: I cannot say that without notice.
    Mr. Shinwell: Do I understand that the right hon. Gentleman has not followed the progress of these royalties?
    Mr. Hore-Belisha: I do not think it is necessary to ask a question of that kind. If the hon. Member wants any information I shall be happy to give it.
    Lieut.-Commander Fletcher: Can the right hon. Gentleman state that no royalties or other payments in respect of this gun are being made to persons of other than British nationality?
    Mr. Hore-Belisha: I cannot say that. All I can say is that any payment which the British Government has contracted to pay must be honoured.
    Mr. A. Edwards: Is it not true that Czecho-Slovakia yesterday repudiated the interest on the loan from this country, and cannot this be off-set against it?

    EGYPT (PALESTINIAN JEWISH VOLUNTEERS).
    Colonel Wedgwoodasked the Secretary of State for War what steps are being taken, in view of the need for British troops in Egypt, to compile registers of Palestinian Jewish volunteers for service in case of war and to provide
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    for their training and equipment; and whether he will consider securing the equipment locally, if necessary?
    Mr. Hore-Belisha: This proposal is under consideration with my right hon. Friend the Secretary of State for the Colonies.

    CAMPAIGN PENSION (MK. R. MCGENNITY).
    Mr. Neil Macleanasked the Secretary of State for War whether he is aware that Mr. R. McGennity, 35, Ruthlin Street, Govan, was granted a campaign pension of 10s. per week, which, with his old age contributory pension, amounted to £1 per week as the income for himself and his wife; that the Glasgow Public Assistance Committee augmented this sum by 12s. per week, making the income 32s. per week; that the Commissioners of Chelsea Hospital, reviewed this pension, and, in view of the augmentation by the public assistance relief, reduced his campaign pension to 2s. per week from 14th January, 1938, then increased it to 8s. per week from 21st January, 1938, and again reduced it to 6s. per week from 2nd March, 1939, and on the grounds of an alleged overissue of pension are deducting 2s. per week from the 6s. until the alleged overissue is recovered; why these deductions have been made; and why public relief is being considered as an income which justifies a reduction of the pension?
    Mr. Hore-Belisha: Special Campaign pensions are compassionate awards made to certain ex-regular soldiers of limited means, and the rate of pension depends on the other income of the recipient. We propose to get into touch with the public assistance officer in order to arrive at the issue from both sources which will be most favourable to the recipient.
    Mr. Maclean: Is not the right hon. Gentleman aware that public assistance is relief and not income, and that it was granted after the granting of the pension awarded; and does he agree that it is fitting that the Chelsea Pension Department of his office should make an economy by placing upon the public rates what they ought to pay in relation to the campaign pension?
    Mr. Hore-Belisha: They are not making an economy. This is a special kind of pension awarded to persons in need. It is quite above any pension to which there

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    is any entitlement by law, and it is adjusted to the income. As I have told the hon. Gentleman, we are trying to arrange with the public assistance officer so that this man gets the maximum that he can get from both sources.
    Mr. Maclean: Before a pension of this kind is granted must not the man have a certain amount of service in the Army?
    Mr. Hore-Belisha: There are a limited number of these special pensions. They are given for need, and if somebody gets a pension who is not entitled to it, it keeps another man from getting it.
    Mr. Maclean:Can the right hon. Gentleman inform me when he is likely to give me further information on this case as I intend to raise on the Adjournment the whole question of campaign pensions being reduced where public relief is given?

    CEREMONIAL AND BATTLE DRESS.
    Major Whiteleyasked the Secretary of State for War whether officers now joining the Regular and Territorial Armies will be required to equip themselves with both ceremonial and battle dress; whether an increased outfit allowance will be made for the purpose; and

    Applicants for enlistment finally approved for the Regular Army and Territorial Army.

    Period.

    Great Britain and Northern Ireland District.

    County of Northumberland.

    County of Durham.

    Regular Army.

    Territorial Army.

    Regular Army.

    Territorial Army.

    Regular Army.

    Territorial Army.

    Year 1937

    26,094

    45,320

    575

    1,221

    413

    1,249

    Year 1938

    38,827

    77,142

    690

    1,608

    821

    2,243

    1st January, 1939 to 31st March, 1939.

    10,588

    27,748

    210

    529

    295

    791

    MARRIAGE ALLOWANCE.
    Mr. Dayasked the Secretary of State for War whether he will consider now introducing legislation for the purpose of enabling all serving soldiers under the age of 26 to qualify for the marriage allowance?
    Mr. Hore-Belisha: I would refer the hon. Member to the statement on this subject which I made on 14th March on the Report stage of Army Estimates.
    Mr. Day: When will the inquiries, which have been carried on for many
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    whether a grant will be made to serving officers to cover the cost of their new battle dress?
    Mr. Hore-Belisha: As battle dress becomes available, officers will be required to provide and maintain one suit of service dress and one suit of battle dress, instead of two suits of service dress, which they have previously needed.
    Major Whiteley: May I ask who is to pay for this battle dress?
    Lieut.-Colonel Heneage: Is there any obligation on a Regular officer to have ceremonial dress?

    ENLISTMENT.
    Mr. W. Joseph Stewartasked the Secretary of State for War the number of persons that have enlisted in the Regular Army and the Territorial units in the whole country, and in each of the counties of Durham and Northumberland during the years 1937, 1938, and 1939, respectively?
    Mr. Hore-Belisha: As the answer contains a number of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    years, be completed in order that justice can be done to the young serving soldier?
    Mr. Hore-Belisha: I do not know whether inquiries have been going on for many years, but I have announced that there will be a discussion on this subject, and I hope an announcement will shortly be made.
    Mr. George Griffiths: Do I understand the Minister to say that the age limit will be reduced?
    Mr. Hore-Belisha: That will become apparent one way or another from the statement that is to be made.
    Lieut.-Commander Fletcher: Is the right hon. Gentleman consulting the heads of the other two Defence Services with a view to a joint approach being made to the Treasury so that an agreed scheme may be worked out?
    Mr. Hore-Belisha: The three Service Departments are working together, and the Treasury is also in the inquiry.

    FOREIGN NATIONALS.
    Mr. Dayasked the Secretary of State for War the number of applications he has received during the previous 12 months from foreign nationals who can speak English, and have had previous military training, and who have offered to place their services at the disposal of His Majesty's forces; and how many of such offers have been accepted?
    Mr. Hore-Belisha: Following the answer which I gave to the hon. Member for East Wolverhampton (Mr. Mander) on 4th April last, there are 703 applications to be dealt with, but I am unable to say, at the moment, how many of the applicants can speak English and have had previous military training. No record of earlier applications has been kept, and no offers have yet been accepted.
    Mr. Day: Are they all of the officer class?
    Mr. Hore-Belisha: No, I do not think so.
    Colonel Wedgwood: Is the right hon. Gentleman aware that such applications are accepted in France?
    Mr. Hore-Belisha: Yes, Sir.

    RECRUITMENT.
    Mr. Arthur Hendersonasked the Secretary of State for War the number of recruits who have joined the Regular and Territorial Army, respectively, since 1st January, 1938?
    Mr. Hore-Belisha: The numbers of recruits finally approved for the Regular Army and Territorial Army from 1st January, 1938, to 31st March, 1939, were 49,415 and 104,890, respectively, as compared with 36,598 and 66,295, respectively, for the corresponding period 1937–38.
    Mr. Henderson: Do not these figures show that the young men of this country are conscious of their duty, and that the voluntary system has not been a failure?
    Mr. Hore-Belisha: They show that there has been the increase which I have described. They do not show that the man-power is distributed in the best possible way, and that intensive training can be given to persons upon a part-time basis.
    Mr. Thorne: Does the right hon. Gentleman not consider that they show the extraordinary way in which the young men have joined up, and if that rate of progress goes on is there any necessity for conscription?
    Mr. Hore-Belisha: I have already answered that question.
    Mr. J. Morgan: Is there not a tendency for recruitment to be accelerated, even on those figures?
    Mr. Hore-Belisha: Yes, Sir.

    APPLICANTS REJECTED.
    Mr. Edwardsasked the Secretary of State for War the percentage of volunteers for the Army who have been rejected in each quarterly period during the last four years and the main causes for rejection?
    Mr. Hore-Belisha: As the answer contains a number of figures, I will, if I may, circulate it in the OFFICIAL. REPORT.
    Mr. Dalton: May we have the approximate figure of the proportion of rejects?
    Mr. Hore-Belisha: I have been asked for figures covering four years. There are a number of figures, and I do not know which one the hon. Gentleman wants.
    Mr. Edwards: Can the right hon. Gentleman give us the answer to the last part of the question, which asks for the main causes of rejection?
    Mr. Hore-Belisha: They are: Diseases of the middle ear (including deafness), loss and/or decay of teeth, defects of the lower extremities—which I understand to be the military equivalent of feet— defective vision, diseases of the heart, insufficient weight and flat feet.
    Mr. Edwards: May we have the rough proportion of those who were unfit, and has not the House been told before that the greater number of rejections is due to under-nourishment or malnutrition?
    Mr. Hore-Belisha: I do not know what the House has been told before. I have

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    given the hon. Gentleman the complete table, and also all the particulars for which he has asked so that he can draw a deduction.

    Percentage of rejections of applicants to enlist in the Regular
    Army.

    Quarterly Period.

    Percentage of rejections.

    1935.

    1936.

    1937.

    1938.

    1st January, to 31st March

    …

    …

    …

    61.4

    60.9

    47.7

    37.1

    1st April to 30th June

    …

    …

    …

    62.1

    62.3

    44.4

    35.2

    1st July to 30th September

    …

    …

    …

    62.0

    61.8

    49.4

    37.3

    1st October to 31st December

    …

    …

    …

    63.4

    55.2

    42.4

    37.4

    The main causes of rejection on medical grounds were as follow:

    Diseases of the middle ear (including deafness),

    Loss and/or decay of teeth,

    Defects of the lower extremities,

    Defective vision,

    Diseases of the heart,

    Insufficient weight, and

    Flat feet.

  COAL INDUSTRY.

    PRODUCER-GAS.
    Mr. Ellis Smithasked the Secretary for Mines whether he is aware that under direct Government encouragement the application of producer-gas propulsion to road vehicles has grown rapidly in other countries; that a passenger-omnibus run on this motive-power has operated for over a year between Inverness and the North; that engineers are satisfied as to the economic prospects of the proposal to use British coal for power purposes in internal combustion engines; and what steps are to be taken to develop the production of producer-gas from coal?
    The Secretary for Mines (Mr. Geoffrey Lloyd): I am aware that producer-gas vehicles are more used in some other countries than is the case here, but I would point out that His Majesty's Government have also given substantial assistance to the development of the use of these alternative fuels for motor transport since no tax is paid in respect of such fuels, while in regard to petrol and diesel-driven vehicles there is a duty of 9d. per gallon on the fuel used. Producer-gas vehicles also pay a lower rate of vehicle tax in the case of the heavier vehicles. With the benefit of this inducement it is for the interests concerned to take steps to secure the development of the use of these fuels and the activities
    Mr. McGovern: Has there been any rejection because of lack of brain development?
    Following is the answer:
    in this country to which the hon. Member refers are doubtless due to it. My Department is keeping in touch with these activities and the possibilities of making a wider use of alternative fuels in an emergency are also under active consideration.
    Mr. E. Smithasked the Secretary for Mines whether he will take steps to expedite the investigations that are to be made by representatives of the Mining Association, the Coal Utilisation Council, and the Coal Research Council into problems connected with the use of producer-gas generated from coal; when the report is expected of the Glasgow Corporation's transport engineers on the demonstration of the Highland Transport omnibus, in view of the fact that it will largely determine the immediate future of producer-gas omnibuses and of the need to economise in the use of imported oil; and whether he will consult the Institute of Mechanical Engineers on the question of coal as fuel for internal combustion engines or take what steps he considers appropriate to deal with the problem?
    Mr. Lloyd: My predecessor recently received a deputation consisting of the President of the Mining Association and other representatives of the Coal Utilisation Research Association, when the programme of the association was discussed, including the question of supplies of suitable fuel for gas producer vehicles. As

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    regards the second part of the question I will ask the Glasgow Corporation to be good enough to supply me with a copy of the report of their transport engineer. I undersand that the Institution of Mechanical Engineers, as a result of the meeting held at Swansea in March, at which my Department was represented, are considering the setting up of a Committee to examine this question further and my Department will keep in touch with the Institution. On the general question I would refer the hon. Member to the reply I have already given him today.

    OIL EXTRACTION.
    Mr. E. Smithasked the Secretary for Mines whether he is aware of the widespread interest in the question of the home production of oil from coal and other indigenous substances, and in the establishment of a plant or plants to work the Fischer process; what steps are being taken to deal with this need; where is it proposed that a plant or plants should be installed; and whether he can make a statement on the Government's policy on this matter?
    Mr. Lloyd: Yes, Sir. It was mainly because of the general interest in the oil from coal problem that the Government invited the Falmouth Committee to make a thorough investigation and report on the whole subject. I would also refer the hon. Member to the reply given to the hon. Member for Neath (Sir W. Jenkins) on 14th March, of which I am sending him a copy.
    Mr. Shinwell: Is not the hon. Gentleman aware that the report contains a recommendation against a wide extension of this process?
    Mr. Lloyd: The committee carried out an exhaustive investigation and there was one main recommendation.
    Mr. Shinwell: What steps are now being taken by the Government to produce more oil from coal in this country, and, therefore, to make ourselves independent to some extent of foreign supplies?
    Mr. Lloyd: The whole matter was described in an earlier report. They recommend that the preference should be stabilised over a definite number of years for the purpose of giving security to this production.
    Mr. Edwards: How many members of the Falmouth Committee were interested in the importation of oil and were, therefore, prejudiced against the production of oil from coal?
    Mr. Edwardsasked the Secretary for Mines whether he is now in a position to report on the various methods of producing oil from coal which have been recently under observation by his Department?
    Mr. Lloyd: I would refer the hon. Member to the answer given earlier this afternoon to the hon. Member for Stoke-on-Trent (Mr. E. Smith).
    Mr. Edwards: Has the Minister any information to give us in regard to the process about which I gave the other Minister some information some time ago, and on which he promised to report?
    Mr. Lloyd: I have not that information.
    Mr. Edwards: Would the hon. Gentleman remember that his predecessor built up a doubtful reputation for investigating matters, but never in any circumstances gave the House any information?

  MENTALLY DEFECTIVE CHILDREN, ROSS AND CROMARTY.
  Mr. Malcolm MacMillanasked the Secretary of State for Scotland the number of mentally defective children in Ross and Cromarty who are, or should be, in certified institutions provided by the county council under the 1913 Act; and how many such institutions they have set up in the past 25 years?
  The Secretary of State for Scotland (Mr. Colville):The number of mentally defective children from Ross and Cromarty who are in certified institutions is 10. The county council have not provided an institution and the 10 children are accommodated in a number of certified institutions with which, I am informed, arrangements are made as required. The county council report that there are no mentally defective children who should be, but are not, in institutions, except possibly one case which is being considered.
  Mr. MacMillan: Which are the certified institutions?
  Mr. Colville: I cannot give the hon. Gentleman the names of all the institutions, but some are in Larbert and some are in Gogarburn.

  DEFENCE (PETROL STOCKS).
  Mr. Roland Robinsonasked the Secretary for Mines whether he will consider the desirability of a Government scheme whereby the existing waste storage space in the tanks under the petrol pumps in every garage throughout the country could be now utilised as a precaution against petrol shortage in war, other by a form of financial credit to the garages or by a guarantee to the oil companies?
  Mr. Lloyd: I would refer my hon. Friend to the reply given on 17th November last to a similar question by my hon. and gallant Friend the Member for Cambridge (Lieut.-Commander Tufnell).
  Mr. Robinson: Would my hon. Friend bear in mind the real danger from air attack of large-scale oil dumps, and does he not consider it wiser to have the nation's oil storage spread out in small units throughout the whole of the country?
  Mr. Lloyd: I appreciate the danger to which my hon. Friend refers, and I assure him that plans have been worked out in detail for the best utilisation of all the available storage in the country, including the type of storage to which he has referred.

  NEW ZEALAND (MINISTER'S SPEECH),
  Captain Peter Macdonaldasked the Secretary of State for Dominion Affairs whether his attention has been called to the official declaration of Mr. Semple, the Minister of Public Works in the New Zealand Government, on 22nd February last, that steps must be taken to ensure the reduction of dividends from national enterprises; and whether, in view of the large amounts of British money invested in New Zealand securities, he will ascertain whether this statement reflects the view of the New Zealand Government as a whole?
  The Secretary of State for Dominion Affairs (Sir Thomas Inskip): I understand that, on the date mentioned by my hon. and gallant Friend, Mr. Semple was
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  speaking in reply to a deputation which had come to see him regarding the condition of a local road in New Zealand. I am informed that he did not make the statement mentioned in the question. The second part of the question does not, therefore, arise.
  Captain Macdonald: Can my right hon. Friend say whether the statement attributed to Mr. Semple, as published in the newspapers of the Dominion, is an authentic report of the speech; and is my right hon. Friend aware of the anxiety that is felt by shareholders in New Zealand securities owing to the attitude of the New Zealand Government at the present time?
  Sir T. Inskip: I am not sure what newspaper report my hon. and gallant Friend has seen, but I have made inquiries direct, and am informed that the facts are as I have stated.
  Mr. Dalton: Is it not a frequent occurrence that statements made by Labour Ministers in New Zealand are misrepresented?
  Sir T. Inskip: Obviously, that is not a question which I am in a position to answer.
  Mr. E. Smith: Would the right hon. Gentleman bear in mind that the present New Zealand Government is more loyal to the British people's interests that most other Governments?

  NEWFOUNDLAND.
  Mr. Lyonsasked the Secretary of State for Dominion Affairs whether he will indicate the various scales of relief now in operation in Newfoundland; the basis for the allocation in each case; and the number of persons on relief at the latest known date?
  Sir T. Inskip: Relief in Newfoundland is granted in kind and is intended to provide those in need with means of supplementing the natural resources, such as fish, poultry, fuel and home-grown produce which are available to the people in most parts of the island. The great majority of Newfoundlanders own their own houses and have no rent to pay. In St. John's, the cost per head of the relief rations issued ranges from 6.40 dollars a month in the case of a family of three to an average cost of

  1675
  4 dollars a month in the case of members of larger familiies. In the country districts the average cost per head is approximately 2 dollars a month, apart from the free distribution of vegtables and fuel in certain districts where this is necessary. In addition, milk or cocoa is supplied daily to 722 schools with an attendance of 27,000 schoolchildren. Special issues of clothing are made to widows, orphans, the aged and the destitute sick. The present scales represent substantial increases since the Commission of Government assumed office, and the Commission have also improved both the range and the nutritional value of the rations given. The number of persons, including women and children, in receipt of relief in March was approximately 80,700, compared with 63,800 in March, 1938, and 80,000 in March, 1937.
  Mr. Lyons: In view of the conditions which existed last winter, may I ask what steps are being taken to increase the wage-earning capacity of the people of Newfoundland?
  Sir T. Inskip: I am afraid that it would not be possible to give a detailed answer to that question at this moment, but I shall be happy to inform my hon. and learned Friend if he cares to see me.
  Mr. Lunn: Why is this important information now given in regard to relief and the number on relief not given in the report issued last week?
  Sir T. Inskip: The report is not my report, but is the report of the Commission.
  Mr. N. Maclean: Why is the information to be given to the hon. and learned Member who asked the question and not to the House of Commons, to whom it is also a matter of great interest?
  Sir T. Inskip: I shall be very glad to give the information to the House on any suitable occasion, or to the hon. Gentleman himself.
  Mr. G. Griffiths: Were these men able to buy their own houses out of the relief that was paid to them?

  TRADE AND COMMERCE.

    SHIPBUILDING.
    Miss Wilkinsonasked the President of the Board of Trade whether, in view of
    1676
    the growing apprehension regarding the shipbuilding capacity of this country in case of war, he will now take steps to ensure that the sterilisation clauses in the contracts for sale of shipyards by National Shipbuilders Security, Limited, which are against public policy, should be nullified, and that the continued activities of National Shipbuilders Security, Limited, in clearing shipyards, being against the public interest, should cease?
    The President of the Board of Trade (Mr. Oliver Stanley): The position with regard to the availability of shipbuilding facilities in time of emergency is being closely watched, but I see no reason for taking the course the hon. Member suggests.
    Miss Wilkinson: Is the Minister aware that these private companies, before they were closed down and paralysed, represented one-third of the shipbuilding capacity of this country; and does he consider that it is in the public interest that this vital service should be closed down?
    Mr. Stanley: Certainly the position must be watched. I am glad to say that, as a result of the Government's proposals, a large number of new orders for ships have been placed, and the prospects are much better for the shipbuilding industry, but I am afraid that that does not mean that the available capacity is filled, and any proposal to reopen these yards would only mean taking away work from other yards which are now open.
    Miss Wilkinson: Surely the right hon. Gentleman realises that this means complete ruin for 40 years—the clearing of the site and the scrapping of the machinery; and does he think that that should take place now, in view of the potential capacity of these shipyards, which may be vital in the event of an emergency?
    Mr. Stanley: Certainly I shall watch very carefully any proposals to close further shipyards.
    Mr. Edwards: Is not the right hon. Gentleman aware that Middlesbrough, which used to be a very important shipbuilding centre, and built the best ships in the world, will be prevented by this Clause from building any more ships for 40 years?

    EXPORT TRADE.
    Mr. Boothbyasked the President of the Board of Trade whether any

    1677
    special measures have been taken or are under consideration with a view to increasing our export trade with those countries the political independence of which we have guaranteed?
    Mr. Stanley: The guarantees recently given by His Majesty's Government to Poland, Rumania, and Greece were given for other than commercial reasons. The economic aspects of our relations with these countries are, however, under consideration with a view to our mutual advantage. As my hon. Friend knows, the Secretary of the Department of Overseas Trade recently visited Poland, where he discussed with the Ministers concerned a number of projects having in view the development of trade between the two countries. A trade mission is in Rumania at the present moment, and it is intended that Sir Frederick Leith-Ross should proceed to Greece, where he will discuss certain economic questions.
    Mr. Boothby: Is it the intention to send a trade mission to Poland, as well as to Rumania and Greece?
    Mr. Stanley: My right hon. Friend the Secretary of the Department of Overseas Trade, with various officials, was in Poland recently, and discussed a number of these matters there.

    NEW ZEALAND (IMPORT RESTRICTIONS).
    Lieut-Colonel Sir Mervyn Manningham-Bullerasked the President of the Board of Trade whether he is aware that New Zealand has prohibited imports of boots and shoes; and, in view of this prohibition, what steps he proposes to take bearing in mind the terms of the Ottawa Agreement?
    Sir John Wardlaw-Milneasked the President of the Board of Trade

    (1) what action he has taken in connection with the restriction of imports into New Zealand, and what effect this measure will have upon the export trade of this country;

    (2)whether he is aware of the serious effect upon the carpet industry in this country which will result from the prohibition of the import of British carpets into New Zealand; and what action is he taking in the matter;

    (3)whether he will make an urgent protest to the New Zealand Government against the proposed prohibition of British
    1678
    imported manufactures, in view of the fact that the balance of trade with this country is about £27,000,000 in favour of New Zealand?

    Mr. Lyonsasked the President of the Board of Trade whether, in the interests of British trade, he will make representations to the Government of New Zealand on behalf of the British boot, shoe and hosiery trades with reference to the recent decision which excludes such products made in this country; and what discussions took place prior to this decision?
    Mr. Stanley: I am aware that the Government of New Zealand have announced that extensive restrictions will be placed on the importation of many classes of goods during the second half of this year, and that the importation from all sources of carpets, most classes of boots and shoes, and hosiery will be prohibited during that period. The New Zealand Minister of Finance has stated that the import reductions made in the first half of the year were partly offset by the admission of goods previously ordered and by the importation of plant and materials for local manufacture, and that, if a substantial reduction was to be made for the whole year, it would accordingly be necessary to make greater reductions for the second half. He expressed the hope, however, that considerable relaxation of the restrictions would be possible next year. I have not yet received sufficient information in regard to these restrictions to enable me to make a reliable estimate of their effect on the United Kingdom export trade to New Zealand, though it is clear that it will be serious. The whole situation is under consideration, and the House will no doubt have been glad to see the announcement that Mr. Nash, the New Zealand Minister of Finance and Customs, proposes to visit this country early in June to discuss, amongst other subjects the effect of the New Zealand import restrictions on trade between the United Kingdom and the Dominion.
    Sir J. Wardlaw-Milne: In the circumstances, is it not possible for the Board of Trade to make representations to New Zealand in order to mitigate the hardship which will be caused to British trade by this complete prohibition? Is it possible to suggest to them that if there have to be

    1679
    some reductions, absolute prohibition should not be introduced, in view of the very serious effects?
    Mr. Stanley: Of course, I hope to have an opportunity for a talk myself with Mr. Nash. I shall certainly represent to him the serious effect of this on British industry, and I have no doubt he will do whatever he can to meet me and mitigate the position.
    Mr. W. Roberts: Is it not a fact that we recently cut the imports of New Zealand food products into this country, and that the New Zealand Government offered last year to increase British manufactured imports into New Zealand provided we would accept more of theirs?
    Mr. Stanley: It is quite true that, as a result of the British Meat Council's decision, an Order was passed restricting the importation of mutton and lamb from Australia and New Zealand. The amount of the cuts is infinitesimal, and bears no relation whatever to the amount of the cuts which have been imposed on British imports into New Zealand.
    Sir M. Manningham-Buller: Is it in accordance with the terms of the Ottawa Agreement?
    Mr. Lyons: In view of the fact that we receive readily all the exports from New Zealand without any taxation at all, could not representations be made to Mr. Nash pointing out the serious situation which must arise?
    Mr. T. Johnston: Is the right hon. Gentleman not aware that, despite this

    Description.

    Year.

    1934.

    1935.

    1936.

    1937.

    1938.*

    1,000

    1,000

    1,000

    1,000

    1,000

    Oils, etc.—

    gallons.

    gallons.

    gallons.

    gallons.

    gallons.

    Mineral crude petroleum

    476,006

    488,516

    511,744

    527,267

    567,953

    Oils, refined—

    Petroleum—

    Kerosene

    221,493

    191,963

    213,149

    218,360

    205,242

    Motor spirit

    1,125,881

    1,231,035

    1,268,143

    1,350,204

    1,457,757

    Spirit, other than motor spirit.

    19,757

    16,132

    18,874

    15,755

    18,097

    Lubricating oil

    103,372

    103,403

    117,943

    120,801

    108,198

    Gas oil

    130,493

    107,877

    109,019

    139,642

    157,926

    Fuel oil

    668,432

    655,353

    677,525

    701,914

    686,864

    Other sorts

    1,070

    460

    438

    809

    1,438

    * Provisional.

    temporary interruption of New Zealand trade, New Zealand, per head of population, is still our best customer; and is he aware that part of New Zealand's difficulties are occasioned by financiers in the City?
    Mr. Stanley: It is quite true that New Zealand has always been an excellent customer for British goods. I do not want to see any interruption of that position, and it is for that reason I am anxious to have these conversations with Mr. Nash. I think it would be unwise to anticipate any statement I may make then.
    Mr. Malcolm MacMillan: Is it in order for supporters of His Majesty's Government to make propaganda attacks upon the financial stability of a friendly Government?

    MINERAL OILS (IMPORTS).
    Mr. Edwardsasked the Financial Secretary to the Treasury the total quantities of mineral oils of all kinds imported into this country during each of the last five years and the duty paid on same during each year?
    The Financial Secretary to the Treasury (Captain Crookshank): As the answer involves a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    Quantities of mineral oils imported into the United Kingdom during the years 1934–38, inclusive:
    The amount of duty paid in respect of mineral oils in any year cannot be related to the quantities imported during that year, because a large proportion of the imports are deposited in bond and do not pay duty until a later date, while almost the whole of the crude oil imported pays duty, not as such, but in the form of petrol and other refined products removed from bonded refineries. The net amounts of duty paid upon imported mineral oils (including oils produced by refining imported oil in this country) retained for home consumption during the last five years were as follow:

    £

    1934

    …

    …

    41,718,000

    1935

    …

    …

    44,405,000

    1936

    …

    …

    47,015,000

    1937

    …

    …

    49,600,000

    1938

    …

    …

    55,488,000

    PIG-IRON (IMPORTS).
    Mr. Dayasked the President of the Board of Trade the quantity of pig-iron imported into this country from Russia and India, respectively, for the six months ended to the last convenient date?
    Mr. Stanley: During the six months ended March, 1939, imports into the United Kingdom of pig-iron consigned from British India amounted to 23,467 tons. No imports from the Soviet Union were recorded during this period.
    Mr. Day: Does that prove that the British private companies cannot produce it in sufficient quantity?

    MERCURY.
    Mr. Kennedyasked the President of the Board of Trade whether he is aware of a shortage of mercury, and whether there is any cause other than the situation in Spain to account for this shortage?
    Mr. Stanley: No representations have been made to me that industry in this country is unable to obtain adequate supplies of mercury. The second part of the question, therefore, does not arise.

  BRITISH SHIPS (FOREIGN PURCHASES).
  Miss Wilkinsonasked the President of the Board of Trade whether he will take steps to prevent the sale of British ships to countries likely to be involved in hostilities against this country; and
  1682
  whether he can now state if companies who have thus sold ships will be eligible to rank for grant under the provisions of the shipping subsidy?
  Sir Nairne Stewart Sandemanasked the President of the Board of Trade what negotiations at present are going on with foreign countries for the sale to them of British ships; and what steps he is taking to stop these, pending the introduction of legislation?
  Mr. Stanley: Legislation will be introduced as soon as possible to require that any vessels which owners wish to scrap or sell abroad shall be offered to the Government in connection with the scheme for a reserve of tonnage. At present the Board of Trade have no power to require this, but, as has been previously stated in the House, in existing circumstances the Board prefer that ships should not be sold abroad; and the shipowners' organisations have circularised shipowners asking them to inform my Department, in good time before the completion of the transaction, of any proposal to dispose of United Kingdom tonnage to foreign ownership. I am considering the possibility of asking Parliament to give my Department the widest discretion in dealing with applications for grants for shipbuilding, and I shall keep a careful record of any sales abroad which may be made and of the circumstances connected with them.
  Sir N. Stewart Sandeman: Is my right hon. Friend aware of any negotiations going on at present?
  Mr. Stanley: In answer to the circular I have been informed of certain proposals.
  Miss Wilkinson: May it be taken as a warning to shipowners that in the interim period, before the legislation can be got through this House, the Minister will view with very grave concern any such steps?
  Mr. Stanley: I have already made it clear that we prefer that these ships should not be sold. We asked shipowners to hold them up pending the establishment of the reserve of tonnage. I am going to ask Parliament to give me a wide discretion in dealing with applications for shipbuilding facilities, and I feel that, if discrimination has to be made, and if, owing to the number of applications, a choice has to be made between various applications, preference

  1683
  should be given to those shipowners who, no doubt at considerable inconvenience and some economic loss, have followed the request of the Board of Trade and held up their ships pending the passing of the legislation.
  Sir N. Stewart Sandeman: Can my right hon. Friend say when we may expect the legislation?
  Mr. Stanley: I am pushing it forward as rapidly as possible, but there are a number of difficult matters to be dealt with.
  Sir Joseph Lamb: Does my right hon. Friend propose that the legislation should be made retrospective?
  Mr. Stanley: I considered that point, but the proposals I shall lay before Parliament will place statutory obligations on the shipowners to offer their ships, and those obligations will be accompanied by penalty provisions involving prosecution for a criminal offence. I do not think there is any precedent for introducing a new criminal offence and making it retrospective. It would be a very bad precedent.
  Mr. Benjamin Smith: Would it not be better if, instead of asking for discretion from this House, the right hon. Gentleman made it clear that no assistance would be granted to any shipowner who disposed of ships abroad after the Board of Trade's request?
  Mr. Stanley: I should prefer to be in a position to consider each individual case in the light of the circumstances in which the disposal was made.
  Lieut.-Commander Fletcher: Were any of the ships that were sold abroad of a type which could be armed and used for offensive purposes in the event of war?
  Mr. Loganasked the President of the Board of Trade how many Merseyside ships were sold to Japan prior to their attack upon China; who negotiated the sale, and whether, to relieve public apprehension, he will take steps to see that such concerns be noted, with a view to seeing that they are debarred from benefiting under the proposed shipping subsidy?
  Mr. Stanley: So far as my information shows, during the period from 1st
  1684
  January, 1937, to the commencement of the Sino-Japanese conflict, one ship registered at a port in the Merseyside area was transferred to the Japanese flag. That vessel—the steamship "Ionic" —was sold by her owners, the Oceanic Steam Navigation Company, Limited, to Japanese owners for breaking up. I cannot accept the suggestion made in the last part of the question.
  Mr. Logan: Can I take it that it is the intention of the right hon. Gentleman, in view of the national emergency, to put an end to this kind of thing altogether?
  Mr. Stanley: I cannot understand what kind of thing. Two years ago, in the normal course of business, one ship was sold to the Japanese for the purpose of scrapping. Of course, under the proposed new legislation such a ship would have to be offered first to the British Government.
  Mr. Logan: The purpose of both these questions, numbers 26 and 27, is to see that we get British trade done in our own country and not given to foreigners, and that our ships are not sold to foreigners.
  Mr. Dobbieasked the President of the Board of Trade whether he has any information in relation to the foreign ships trading between the Argentine, this country and the Continent, their ownership and the length of time in the possession of their present owners; how many of them have been sold by British owners instead of being broken up in British yards; and are such owners who sell these ships eligible for grants under the Tramp Shipping Subsidy Act when building new ships?
  Mr. Stanley: As indicated in the reply given to the hon. Member on 25th April, the information asked for in the first part of the question is not available. As regards the last part of the question, all applications under the schemes announced for the assistance of British shipping will be dealt with in accordance with the conditions which will be laid down in respect of those schemes.
  Commander Marsdenasked the President of the Board of Trade whether he is aware that purchases of ships from Great Britain by German firms are taking place; that an 11,000 ton steamer has

  1685
  been bought by German interests for £34,500, and that negotiations are in progress for the purchase of other ships on the London market; whether he has approved of these sales; who are the owners of the ships concerned; and will he ensure that they shall not benefit under the proposed shipping subsidy?
  Mr. Stanley: Yes, Sir, but I am unable to identify the sale of a British ship of this description. As regards the remainder of the question, I would refer my hon. and gallant Friend to replies already given to previous questions to-day.
  Commander Marsden: While thanking my right hon. Friend for his ample replies, may I ask whether he would consider publishing the names of the owners who have disposed of their ships contrary to the desire of the Board of Trade, and against the public interest?
  Mr. Stanley: I have been asked that question before.
  Mr. Shinwell: Can the right hon. Gentleman indicate what will be the position when British shipowners sell their vessels to countries other than Germany, and find subsequently that these vessels are transferred to Germany?
  Mr. Robert Gibsonasked the President of the Board of Trade how many of the 143 British ships of 422,000 gross tonnage transferred to foreign flags on sale to foreign owners in 1936 have been re-transferred since, and what is the gross tonnage of the ships so re- transferred; and what are the corresponding figures for the 222 ships of 666,500 gross tonnage, and 149 ships of 395,000 gross tonnage so transferred in the years 1937 and 1938, respectively?
  Mr. Stanley: I regret that I am not in a position to supply this information.
  Mr. Gibson: As the amount of shipping transferred from the British Flag during the three years in question is nearly 1,500,000 tons gross, can the right hon. Gentleman say how long it will take under the Government's new arrangements to replace this shipping by new shipping?
  Colonel Burtonasked the President of the Board of Trade the circumstances under which the "Essex Envoy" has been sold to Germany; on what date the
  1686
  transaction was completed; the names of the company making the sale and its directors; and whether the ship was offered to the British Government prior to the transaction being consummated?
  Mr. Stanley: The British register of this ship was closed on 24th April on sale to German buyers. The ship was owned by the Essex Line, Limited, the directors of which are Mr. H. Meldrum and Mr. C. E. Swinson. The company were informed that although the Board of Trade had no power to prevent the sale, the Board preferred, in present circumstances, that ships should not be sold to foreign buyers.
  Mr. Loftus: Would my right hon. Friend consider immediately putting a heavy export duty on the sales of these ships?
  Mr. Stanley: I have already explained, in answer to a previous question, what my intentions are to deal with this situation.
  Mr. N. Maclean: Since the right hon. Gentleman has been good enough to offer to furnish the names of the owners of this ship, will he also endeavour to furnish the names of the ships asked for in previous questions?
  Mr. J. Morgan: Can we have an assurance that the Lord President of the Council is not involved in any such transactions?
  Hon. Members: Order!

  MERCANTILE MARINE.

    FOREIGN-BUILT SHIPS.
    Mr. Loganasked the President of the Board of Trade how many vessels have been built in Germany and on the Continent during the past five years to the order of British shipowners; and will he furnish the names of the directors of these ship-owning concerns?
    Mr. Stanley: According to the returns of the Registrar-General of Shipping and Seamen, 135 new vessels built abroad were added to the United Kingdom register during the years 1934 to 1938, inclusive. All of these were built in Europe, and 49 of them in Germany. As regards the second part of the question, I am not clear that the information desired would be of sufficient importance

    1687
    to justify the labour involved in compiling it.
    Mr. Logan: Is there any truth in the statement that a Member of the Government in another place is one of these delinquents? Is it not possible to bring home to these hon. Gentlemen the enormity of this matter?
    Mr. Stanley: I think that, if the hon. Gentleman makes an insinuation against a member of the Government, he ought to state who it is and all particulars.
    Mr. Logan: If you require names, I can give them.
    Mr. Stanley: With regard to the enormity of the offence, it has been pointed out on many occasions during the last five years that there have been numerous instances where, owing to sterilisation of credits, it was the only way in which owners could get ships built at all.
    Mr. Logan: Is the right hon. Gentleman aware that I have had representations from shipowners in Liverpool complaining about this difficulty, and saying it is unpatriotic? Can it not be remedied?
    Lieut.-Colonel Sir A. Lambert Ward: Is it any more unpatriotic to buy a foreign-built ship than to buy a foreign-built motor car?

    STEAMSHIP "BARON TWEEDMOUTH" (SUBPOENAED SEAMEN).
    Mr. Benjamin Smithasked the President of the Board of Trade whether he is aware that Ali Adowa and Ali Mohamed, two firemen employed on the steamship "Baron Tweedmouth," were summoned as witnesses in an assault case at Gibraltar on 6th February and were taken off the ship on 4th February against the wishes of the master, the ship having to leave without them and without substitutes; that the men were left stranded without employment and have not received any wages as from the date they left the vessel; that they were later repatriated in a Japanese steamer which arrived in London on 16th February; and whether, as the owners of the ship will not pay wages on the ground that the men were taken ashore by the Gibraltar authorities despite the protests of the ship's master, he will have immediate inquiry made into the matter?
    Mr. Stanley: These two seamen were subpoenaed by the Gibraltar police, and the master of the "Baron Tweedmouth" had, therefore, no option but to release them from the service of the ship. I understand, however, that substitutes were engaged. The witnesses were in the care of the Gibraltar authorities, who paid the cost of their maintenance at that port and of their subsequent repatriation to this country. As regards the men's claim for compensation, further inquiries are being made.
    Mr. Smith: Would the right hon. Gentleman undertake to reply if I put a further question down?
    Mr. Stanley: Yes, Sir, I will give the information as soon as I get it.

  EMPIRE RAW MATERIALS.
  Mr. Manderasked the President of the Board of Trade whether, in view of the fact that Germany has been accumulating abnormal stocks of the principal materials required for war purposes, and that these imports have been largely drawn from sources under British control, he will consider the advisability of taking steps to prevent this in future so as to reduce pro tanto the Defence requirements of this country?
  Mr. Stanley: I should deprecate the export to any foreign country of materials of which there was any fear that our own needs would not be met. In recent months there have been some exports of pig-iron and steel scrap under contracts which were entered into some time ago when there was a surplus of those materials in the United Kingdom. I am informed that these contracts have now been completed and that there is no present intention of resuming exports.
  Mr. Mander: Are the Government not going to take any steps to prevent the export from this country to Germany of materials she requires for war purposes?
  Mr. Stanley: It is quite clear that, in the event of war, almost any material might be used for war purposes, and it is equally clear that nearly all materials which can be used for war purposes also have a large pacific purpose as well. My own view is that to attempt to divide the world into two camps which are going to have no normal trade relations with each

  1689
  other, is to make war inevitable; and, further, it seems to give real point to that propaganda against encirclement which, at the present moment, of course, is completely false and unfounded.
  Mr. Mander:Did not the Prime Minister himself tell us that we are not living in normal times, and is it not necessary to take some unusual action because of that fact?
  Mr. Stanley:It is pretty clear from the answers which I have given with regard to ships, that I realise that we are not living in normal times, and that we are taking steps to deal with the situation.
  Mr. A. Hendersonasked the President of the Board of Trade what action His Majesty's Government propose to take to secure that all supplies of iron-ore, pig- iron, and nickel, produced within the confines of the British Commonwealth of Nations are retained for consumption within the Commonwealth, as long as the present international tension continues?
  Mr. Stanley:So far as I am aware, the needs of the Empire for these materials are being adequately met, and it would seem impracticable for the Governments of the Empire to deny supplies to all other countries.
  Mr. Henderson:Can the right hon. Gentleman say whether the Government have taken steps to lay in adequate stocks of these commodities in view of possible future developments?
  Mr. Stanley: In all commodities which may be useful in times of emergency, we are considering not only current requirements, but surplus stocks as well.

  FOREIGN POLICY AND DEFENCE.
  Mr. Manderasked the Prime Minister whether he will consider the advisability of consulting the Leaders of the Opposition and representatives of other sections of opinion in the House, with a view to studying the conditions under which national unity might be obtained in defence matters, as well as in foreign policy?
  The Prime Minister (Mr. Chamberlain): I would refer the hon. Member to the answers which I gave to him on 18th November, 1937, and 16th March, 1938, to which I have nothing to add.
  Mr. Mander:Does not the Prime Minister appreciate that by broadening the basis of his Government he might enormously add to our national effort in these times?

  DISTRIBUTION OF POPULATION (COMMISSION'S REPORT).
  Mr. Lawsonasked the Prime Minister whether he is now able to say when the report of the Royal Commission on Distribution of the Population will be published?
  The Prime Minister:I understand that the Royal Commission are considering their report, but I am not yet able to say when it will be completed.

  PRIVATE INVESTMENT (CONTROL).
  Mr. Boothbyasked the Chancellor of the Exchequer whether, in view of the decision of the Government to introduce military conscription, he will consider the advisability of establishing a greater measure of control over private in vestment?
  The Chancellor of the Exchequer (Sir John Simon): The position will be kept under review in order to assure that the need for capital for national defence is met.
  Mr. Boothby:Does not my right hon. Friend consider that under existing conditions it is desirable to exercise some sort of control over the direction, if not of the volume, of private investment?
  Sir J. Simon: As my hon. Friend knows, there are a number of very large considerations involved here which we can hardly discuss by Question and Answer.

  FOREIGN SECURITIES (EMERGENCY MEASURES).
  Mr. Gurney Braithwaiteasked the Chancellor of the Exchequer whether he proposes to take powers to acquire, on a sterling basis, British holdings of foreign securities held directly or through nominees in the event of the outbreak of hostilities?
  Sir J. Simon:I would refer my hon. Friend to the reply given to the hon. Member for Forest of Dean (Mr. Price) on 25th April.
  Mr. Braithwaite: Does not the Chancellor of the Exchequer think that a statement by the Government along the lines suggested in this question would prove a most effective deterrent to foreign investments?

  BRITISH CAPITAL EXPORTS.
  Sir John Mellorasked the Chancellor of the Exchequer whether, in view of the uncertainty prevailing among members of stock exchanges, he will give an assurance that he does not propose to discourage transactions in foreign securities, where vendor and purchaser are both resident within the United Kingdom, or the purchase abroad of securities of a British Dominion expressed in terms of the currency of that Dominion?
  Sir J. Simon: I would refer my hon. Friend to the answer given to him by my hon. Friend the Financial Secretary to the Treasury on Wednesday last, from which it should be clear that I can give no such assurances.
  Sir J. Mellor: Is my right hon. Friend aware that the rather indefinite character of his pronouncements and those of the Financial Secretary to the Treasury upon this subject have caused considerable doubt in the minds of brokers and dealers in securities as to exactly what he wants them to do or not to do? Will he be prepared to make a fuller statement in order that they may know what is in his mind?
  Sir J. Simon: I can make a very short supplementary answer now. On 20th April I stated quite plainly that the export of capital at the present time was undesirable in the general national interest. As regards foreign issues generally, they are now regulated by the Foreign Transactions Advisory Committee which has proceeded without any statutory authority and most effectively. This control depends on the good will of those concerned to fall in with the wishes which have been expressed on the matter, and I think that I may fairly hope that the private investors will similarly respond to the very definite expression of opinion which has been made with regard to investments in foreign securities.
  Sir J. Lamb: Could my right hon. Friend say what would be the effect on
  1692
  the Stock Exchange if he were to remove all restrictions?
  Mr. R. J. Taylor: Can the right hon. Gentleman say whether those wishes have had any effect in preventing the sale of gold overseas?
  Sir J. Simon: The hon. Gentleman is mistaken in supposing that the movement of gold is to be explained by this matter. It is not to be explained by it at all.
  Mr. Thorne: May we take it for granted that the hon. Member who put down this question would have no objection to lending £100,000,000 to Germany?

  MOTOR VEHICLE LICENCE DUTY.
  Lieut.-Commander Tufnellasked the Chancellor of the Exchequer whether, in view of the fact that the increased horse-power tax will impose a severe burden on some motor-car users, he will consider the desirability of reducing the rate of interest charged on quarterly car licences; and whether he will also consider the desirability of making a monthly licence available at a pro rata charge to those requiring one for a short period to be available from the first of any month?
  Sir J. Simon: I regret that I am unable to entertain either of these proposals, as they could not be confined to the owners of private cars and would result in a substantial increase in the cost of collecting licence duties as well as in a reduction in the yield.

  MEDICINE DUTY.
  Lieut.-Commander Fletcherasked the Chancellor of the Exchequer whether he can give an assurance that the benefits of the abolition of the duty on patent medicines will be passed on to the public by reduction in the prices of the articles concerned; and that the concession will not be solely utilised to increase the profits of the proprietary medicine manufacturers?
  Sir J. Simon: In evidence before the Select Committee, who reported in 1937 on the Medicine Stamp Duties, one important body stated that if the duty were removed the consumer would receive the whole of the benefit and I rely on the good will of other manufacturers and vendors to follow this excellent example.
  Lieut.-Commander Fletcher: Is it not very desirable that the repeal of this archaic tax should not result in certain individuals making larger profits than they do at present out of deceiving and gulling the public?
  Sir J. Simon: I am not prepared to accept the suggestion that all remedies deserve epithets of that sort, but it is certainly desirable that, when a duty is abolished or reduced, as far as possible the benefit should be passed on to the public just as the extra cost is passed on when a tax is increased.
  Lieut.-Commander Fletcher: I would point out that I referred to "certain individuals."

  AFFORESTATION.
  Mr. R. Gibsonasked the right hon. and gallant Member for Rye, as representing the Forestry Commissioners, how many farms are intended to be diverted from use as farms by the Forestry Com mission in Scotland and planted with trees in 1939; where they are situated; how many families will be displaced in consequence; and whether he has any statement to make on the relation between this policy and the need for increasing food stuffs, in view of the international situation?
  Colonel Sir George Courthope: No farm will be completely diverted by the Forestry Commissioners to afforestation in 1939, but small areas will be planted on eight farms situated as follows: Glasvaar, Knockdow, Balure, Arichonan and Gortanronich, Argyll; Castle O'er, Dumfries, Wauchope, Roxburgh and Kings-house, Perth. In two cases the occupiers terminated their tenancies and in one case the present owner would have cleared off the sheep in any event. No families will be displaced; in fact employment will be provided for 30 additional men. The effect on the national food supply of the changes to which reference has just been made will be infinitesimal. In the Acland Report of 1918 it was calculated that the whole afforestation scheme over a period of 80 years would not ultimately reduce the home supply of mutton and venison by more than two-thirds of 1 per cent.
  Mr. Kennedyasked the right hon. and gallant Member for Rye, as repre-
  1694
  senting the Forestry Commissioners, what progress is being made towards the fulfilment of the Government's undertaking to acquire land for afforestation purposes and the creation of additional forest reserves; and whether any information is available as to the acreage of land not usable for general agricultural purposes now available for purposes of afforestation in Scotland?
  Sir G. Courthope: The Forestry Commissioners are unaware of any undertaking such as that to which the hon. Member refers, but the acquisition of land for afforestation has been proceeding actively. The area asquired during the year ended 31st March last was 72,029 acres of which 52,027 are plantable. The Commissioners have no specific information as to the acreage of land suitable and available for afforestation in Scotland, but they are satisfied that there is ample to meet their immediate requirements.

  UNEMPLOYMENT (MEN, 18–21).
  Mr. Thorneasked the Minister of Labour how many men are registered at all the Employment Exchanges between the ages of 18 and 21?
  The Minister of Labour (Mr. Ernest Brown): At 13th March, 1939, there were 63,271 unemployed men, aged 18 and under 21 years, on the registers of Employment Exchanges in Great Britain.

  TELEPHONE CIRCUITS, LONDON— LEICESTER.
  Mr. Lyonsasked the Postmaster- General the number of direct telephone lines now in operation between London and Leicester?
  The Assistant Postmaster-General (Sir Walter Womersley): There are 29 direct trunk telephone circuits between London and Leicester.
  Mr. Lyons: Am I to take it that my hon. Friend will consider any representations I make if the number is insufficient in order to carry on ordinary business promptly?
  Sir W. Womersley: The Departmental engineers have been engaged on Defence work and the hon. and learned Member will agree that that is the first and more

  1695
  important duty. We are getting somewhere in a position when we can give a little more attention to Leicester, and we will do so.

  CARD-ROOM WORKERS (DEPARTMENTAL COMMITTEE).
  Sir Arnold Wilsonasked the Secretary of State for the Home Department whether he will publish the evidence tendered to the Departmental Committee on Compensation for Card - Room Workers?
  The Under-Secretary of State for the Home Department (Mr. Peake): The statistical evidence specially obtained by the committee is dealt with at length in an appendix, and the medical evidence is summarised on pages 10 and 11 of the report. The committee has not suggested that the oral evidence taken should be published, and as at present advised my right hon. Friend does not think such publication should be necessary.
  Sir A. Wilson: Will the Home Secretary be good enough to put a copy in the Library of the House and in the Rylands Library in Manchester, in view of the great scientific importance of the novel questions considered in the report?
  Mr. Peake: I will certainly convey the suggestion to my right hon. Friend.
  Mr. Silverman: Is the hon. Member aware that the bulk of the evidence has already been published by the trade unions concerned, who were good enough to make copies of it available to hon. Members who had sufficient interest in the matter to attend a meeting at the House?
  Mr. Peake: Hon. Members will be glad of that information.

  REFUGEES (VISAS).
  Colonel Wedgwoodasked the Home Secretary whether he will permit the issue of visas to Mr. and Mrs. Rudolf Kraus, whose services have been applied for as a domestic couple by Mr. B. F. Robb, of North End Road, N.W.3, in spite of the post being in London and in spite of their ages, 57 and 52 years, in view of the fact that the applicant wants elderly people and two substantial guarantees of maintenance are available?
  Mr. Peake: No recommendation has been received from the voluntary organisation in respect of this case, but my right hon. Friend is making further inquiries.
  Colonel Wedgwoodasked the Home Secretary whether he will inquire into the case of Felix and Edith Adler, applied for as domestics by the right hon. Gentleman the Member for Newcastle-under-Lyme on 8th January and forwarded to the Home Office for approval by the domestic bureau on 29th March; and, in view of his personal knowledge of these two persons, will he now authorise the visa?
  Mr. Peake: No recommendation has been made to the Home Office by the voluntary organisation in respect of these people, who are not in Germany but in Norway, and on the information before my right hon. Friend, it does not appear that there are grounds for giving priority to these people over others whose claims for help are urgent.
  Colonel Wedgwood: Can the hon. Member say what kind of question of priority comes in? In a case of these two persons I have received a great deal of money from abroad for them in case they should get ill. Why should my application be postponed and other applications be considered?
  Mr. Peake: The answer is that the voluntary organisations have to deal with these cases as they receive them. This case deals with refugees who are in Norway and not in Germany, and the voluntary organisation quite rightly regard the case of German refugees as being the more urgent.
  Colonel Wedgwood: What has an application I make for domestic servants in Norway to do with the German Jewish Refugees Committee?
  Mr. Maxton: Is it something against the right hon. and gallant Member?

  CIVIL SERVICE PENSIONS (EX-SERVICE MAN).
  Major-General Sir Alfred Knoxasked the Home Secretary whether his attention has been drawn to the case of W. T. Miller, late Duke of Cornwall's Light Infantry, who served 22 years, five

  1697
  weeks in the Army, was promoted to colour-sergeant, wounded in 1916 and discharged with an exemplary character; has since served 20 years in the Civil Service, and is due for discharge for age on 23rd June without the prospect of a civil pension; and whether he will specially consider this man's claim after 42 years service to the country?
  Mr. Peake: Mr. Miller was appointed as a temporary clerk in the Office of the Commissioner of Police of the Metropolis in January, 1924, and in an examination held in the following year he failed to qualify for establishment. He will on retirement be awarded the gratuity to which he is entitled under the superannuation regulations applicable to the civil staff of the Commissioner's Office, which are similar to the provisions applying to the Civil Service, but I regret that as he has not held a pensionable office there is no power to grant him a pension. He is already in receipt of a pension in respect of his military service.
  Sir A. Knox: Does the hon. Member realise that this ex-Service man belongs to a class whose services were indispensable in the Civil Service in the post-war years, and is it fair to allow him to leave with only a gratuity after 20 years in the Civil Service?
  Mr. Peake: This man is receiving a military pension of £78 a year, in addition to a gratuity of £80, in accordance with the practice in the Civil Service.
  Sir A. Knox: Is not the military pension for 21 years service in the military branch before joining the Civil Service?

  GREAT BRITAIN AND RUSSIA.
  Mr. Attlee(by Private Notice) asked the Prime Minister whether he will state when the proposals made to His Majesty's Government by the U.S.S.R. were received, and whether His Majesty's Government have accepted them in principle.
  The Prime Minister: As the House is aware, conversations have been proceeding for some weeks past with the Government of the U.S.S.R. and other interested Governments. During the course of these conversations various proposals and counter-proposals have been put for-
  1698
  ward on both sides, and discussions on them are still proceeding. I do not feel that, pending the conclusion of these discussions, it would be right for me to make public any details.
  Mr. Attlee: Is the Prime Minister aware that many people are disturbed at the very slow progress of these negotiations, and it is felt that the Government are not pressing on with them as rapidly as they might?
  The Prime Minister: I cannot help if people get that sort of idea, and I hope the right hon. Gentleman will not do anything to encourage it. I am sure he does not wish to make mischief between the U.S.S.R. and the present Government. We are carrying on discussions of a perfectly friendly character. There must necessarily be a great many details to be considered, and there are other Governments to be considered. Although I quite understand that there may be a certain amount of impatience because it seems that there is a long delay, but I can assure the right hon. Gentleman that there is no want of good will on the part of the Government.
  Mr. A. Henderson: May I ask when the Prime Minister expects to be in a position to make a statement on the matter?
  The Prime Minister: I cannot possibly give any date when the discussions will be completed, but I shall make a statement to the House as soon as there is anything of which to inform the House.
  Mr. Attlee: May I ask when the last exchange of views took place?
  The Prime Minister: I think I have informed the House already that my right hon. Friend the Foreign Secretary saw the Russian Ambassador immediately on his return to this country.
  Colonel Wedgwood: Do the Government really want to conclude this agreement or not?
  The Prime Minister: Of course they do, but they must discuss the best form it should take.
  Mr. Mander: Has the Prime Minister seen the statement in the "Times" that the Government are endeavouring to restrict the nature of the agreement and

  1699
  the proposals put forward by the Soviet Government?
  The Prime Minister: I think the House will do well to await the official statement.
  Mr. De la Bèere: Are not the Supplementary Questions of the hon. Member for East Wolverhampton (Mr. Mander) very unfortunate?
  Mr. Noel-Baker: Will the Prime Minister bear in mind that an early conclusion of an agreement with the Soviet Government would have a much greater restraining power on any possible aggressor than any other Measure?

ROYAL ASSENT (PROCEDURE).
Mr. Alan Herbert: Mr. Speaker, may I ask whether you have been able to make any inquiries into the matter which I mentioned after the Royal Commission last Friday?
Mr. Speaker:In reply to the hon. Member for Oxford University, I can tell him, in the first place, that it is no part of my responsibility to supervise the procedure which is observed in another place on occasions when the Royal Assent is declared in the presence of the Lords Commissioners to Acts which have been agreed upon by both Houses. But, as the hon. Member has asked me a question as to whether the Clerk of the Parliaments departed from the established practice in omitting to bow to the Commons on the last occasion when this House attended the Lords Commissioners, I have caused inquiry to be made, and I am satisfied that the established practice was on that, as on other occasions, faithfully observed.
I am not quite clear as to precisely what opportunity for bowing to the Commons was, in the hon. Member's opinion, missed by the Clerk of the Parliaments. It is true that, when the Royal Assent is to be given to a Bill for granting aids and supplies to the Crown, the Clerk of the Parliaments receives it from my hands at the Bar of the House of Lords, with a bow of personal courtesy to myself, as the representative of the Commons. But on the occasion in question there was no such Bill.
If the hon. Member will recollect the historical significance of these occasions, namely, that the Commons are then
1700
present not as strangers at the Bar of the House of Lords, but as forming in conjunction with the Lords the High Court of Parliament in the presence of the King in the Parliament Chamber, he will realise that for the Clerk of the Parliaments to bow to the Commons without at the same time bowing to the Lords would imply a distinction between the two Houses in respect of their relations to His Majesty, which would be completely without warrant.
It is possible that the hon. Member has interpreted the bows which the Clerk of the Parliaments, and also the Clerk of the Crown, make to the Lords Commissioners as bows to the House of Lords. These are obeisances to the King, represented by the Lords Commissioners, and would be made without alteration if the Sovereign were present in person. The King when present, whether in person or by Commission, is alone entitled to an obeisance. If the Commons receive no bow on such an occasion, no more do the Lords.
It is true that when this House, led by myself, appears in the House of Lords, we bow as we proceed to the Bar. But these obeisances are not made to the Members of that House, but to the Lords Commissioners who represent His Majesty. These bows are courteously acknowledged by the Lords Commissioners. It may be that the hon. Member has unconsciously transferred this courtesy from the Lords Commissioners to the Clerk of the Parliaments.
Mr. Herbert: I thank you, Sir, for the great trouble you have taken and for the very careful statement you have made. I perceive that I was wrong, and I beg to express regret to the House—
Mr. Quibell: For wasting its time.
Mr. Herbert: May I say, in reply to that interjection, that it is not a waste of time to preserve the ancient ceremonies of Parliament in their proper form? I apologise to the House for having acted without checking my information correctly, although that information proceeded from what seemed to me to be one of the most authoritative and experienced sources in the House. I further express a personal apology to the Clerk of the Parliaments for having suggested erroneously that he had departed from the practice and precedent of his predecessors in that manner, and I beg—[Interruption.] I have been asked by the Clerk of

1701
the Parliaments to withdraw what he called a charge, and I am doing so as best I can. I want to add to the withdrawal I have already made, that the Clerk of the Parliaments is entitled to conceive himself as being under a double sense of injustice, because I am informed by the Clerk of the Crown that the Clerk of the Parliaments has departed in one particular from the previous practice of his predecessors, but that that departure, far from reducing the courtesies due to the Commons, has in fact increased them. I will quote what the Clerk of the Crown wrote. [HON. MEMBERS: "Agreed."] I think it is a very interesting point, and it is an explanation of the confusion which has existed, not in my mind only, but in the minds of many much more experienced Members on all sides of the House. The Clerk of the Crown wrote:
"The present Clerk has instituted a slight difference from the practice of his predecessor in that his predecessor, when pronouncing the words, used merely to turn his head and the upper part of his body towards the Commons, whereas the present Clerk of the Parliaments turns round on his feet before he pronounces the words."
That is a graceful innovation of the present Clerk of the Parliaments, for which we should be grateful, and it does explain the confusion which has arisen in the minds of many hon. Members. It is clear that the turning of the body and head might easily have been taken to be a bow. It is not for me to suggest that, as the centuries pass, some further modification of that custom might possibly be made; and all I have to do now is to apologise to the Clerk of the Parliaments for the injustice I have done him.

BILL PRESENTED.
  MINING INDUSTRY (AMENDMENT) BILL,
  "to remove the limitation imposed by Sub-section (2) of Section five of the Mining Industry Act, 1920, upon the total amount of the salaries and remuneration of the staff and of the expenses of the Department of Mines in any year," presented by Mr. Lloyd; supported by Mr. Stanley and Captain Crookshank; to be read a Second time To-morrow, and to be printed. [Bill 117.]

MESSAGE FROM THE LORDS.
That they have agreed to,
North Metropolitan Electric Power Supply Bill, with Amendments.

SELECTION (STANDING COMMITTEES).
  STANDING COMMITTEE A.
  Colonel Gretton reported from the Committee of Selection; That they had added the following Ten Members to Standing Committee A (in respect of the Patents and Designs (Limits of Time) Bill [Lords]): The Attorney-General, Mr. Bellenger, Sir George Broadbridge, Mr. Bromfield, Mr. Trevor Cox, Mr. Cross, Mr. Hollins, Mr. Magnay, Sir Adam Maitland and the Solicitor-General.

  STANDING COMMITTEE B.
  Colonel Gretton further reported from the Committee; That they had discharged the following Members from Standing Committee B: Sir Joseph Leech, Mr. Harold Nicolson, and Mr. Peake; and had appointed in substitution: Colonel Baldwin-Webb, Mr. Denman, and Mr. Keeling.
  Colonel Gretton further reported from the Committee; That they had discharged the following Members from Standing Committee B (added in respect of the Marriage Bill): Viscountess Astor and Sir Nicholas Grattan-Doyle; and had appointed in substitution: Sir John Smedley Crooke and Colonel Mason.
  Colonel Gretton further reported from the Committee; That they had added the following Fifteen Members to Standing Committee B (in respect of the Mining Subsidence Bill): The Lord Advocate, the Attorney-General, Lord Balniel, Viscount Castlereagh, Sir Geoffrey Ellis, Miss Lloyd George, Mr. Arthur Henderson, Mr. Lloyd, Mr. Mitchell, Mr. Palmer, Mr. Ellis Smith, Mr. Henry Strauss, Marquess of Titchfield, Mr. Tomlinson, and Colonel Wedgwood.
  Reports to lie upon the Table.

ORDERS OF THE DAY.
  WAYS AND MEANS.
    REPORT [25TH APRIL].
    Resolutions reported:
    REPORT [25TH APRIL].
      CUSTOMS AND EXCISE.

        TOBACCO (CUSTOMS DUTY).
        1. "That in lieu of the full duties of customs now chargeable on tobacco imported into the United Kingdom there shall, on and after the twenty-sixth day of April, nineteen hundred and thirty-nine, be charged the following duties, that is to say:

        s.

        d.

        Upon tobacco unmanufactured, viz.,

        containing 10 lbs. or mare of moisture in every 100 lbs.

        weight there of—

        unstripped the lb.

        11

        6

        stripped the lb.

        11

        6½

        containing less than 10 lbs. of moisture in every 100 lbs.

        weight there of—

        unstripped the lb.

        12

        6

        stripped the lb.

        12

        6½

        Upon tobacco unmanufactured, viz.,

        Cigars the lb.

        20

        1

        Cigarettes the lb.

        16

        7

        Cavendish or Negrohead the lb.

        15

        9

        Cavendish or Negrohead manufactured in bond the lb.

        14

        0

        Other manufactured tobacco the lb.

        14

        0

        Upon snuff—

        containing more than 13 lbs. of moisture in every 100 lbs.

        weight there of the lb.

        13

        4

        containing not more than 13 lbs. of moisture in every 100 lbs.

        weight thereof the lb.

        15

        9

        and so in proportion for any less quantity.
        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        TOBACCO (EXCISE DUTY).
        2. "That in lieu of the duties of excise now chargeable on tobacco grown in the United Kingdom there shall, on and after the twenty-sixth day of April, nineteen hundred and thirty-nine, be charged the following duties, that is to say:

        Upon tobacco unmanufactured, viz.,

        s.

        d.

        containing 10 lbs. or more of moisture in every 100 lbs.

        weight thereof the lb.

        9

        3½

        containing less than 10 lbs. of moisture in every 100 lbs.

        weight thereof the lb.

        10

        0⅞

        Upon tobacco manufactured, viz.,

        Cavendish or Negrohead manufactured in bond the lb.

        11

        4⅞

        and so in proportion for any less quantity.
        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        TOBACCO (DRAWBACK).
        3. "That as respects tobacco on which the increased duties proposed by the foregoing Resolutions have been paid, drawback shall be allowed at the rates set out in the following Table instead of at the rates set out in Part III of the First Schedule to the Finance (No. 2) Act, 1931.

        TABLE.

        Description of Tobacco.

        Rate per pound.

        In respect of tobacco on which full customs duty has been paid.

        In respect of tobacco on which customs duty at a preferential rate or excise duty has been paid.

        s.

        d.

        s.

        d.

        Cigars

        12

        9

        10

        6

        Cigarettes

        12

        6

        10

        4

        Cut, roll, cake or other manufactured tobacco

        12

        3

        10

        1

        Snuff (not being offal snuff)

        12

        0

        9

        11

        Stalks, shorts, or other refuse of tobacco including offal snuff

        11

        9

        9

        8

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        SUGAR, ETC. (INCREASED CUSTOMS DUTIES).
        4. "That as from five o'clock in the evening on the twenty-fifth day of April, nineteen hundred and thirty-nine, the duties of customs on sugar, molasses, glucose and saccharin shall be charged in accordance with the following provisions—

        (a) for the full rates of customs duty set out in Part I of the Second Schedule to the Finance Act, 1928, there shall be substituted the rates specified in Part I of the following Table;

        (b) for the rates of duty on certificated colonial sugar set out in the First Schedule to the Finance Act, 1934, there shall be substituted the rates set out in Part II of the said Table, and any certificates issued under Section one of that Act, whether before or after the passing of this Resolution, shall have effect accordingly.

        TABLE.

        PART I.

        Full Rates of Duty.

        Article.

        Rate of Duty.

        s.

        d.

        Sugar of a polarisation exceeding 98° the cwt.

        14

        0

        Sugar of a polarisation exceeding 97°but not exceeding 98 °the cwt.

        10

        8·8

        Sugar of a polarisation not exceeding 76° the cwt.

        5

        7·2

        Sugar of a polarisation exceeding 76° and not exceeding 97 °

        Intermediate rates varying between 5S. 7·2d. and 10s. 8·8d. per cwt.

        Molasses (except when delivered to a licensed distiller for use in the manufacture of spirits or yeast, or to a person for use in the manufacture of yeast in premises used solely for that purpose):—

        if containing—

        the cwt.

        s.

        d.

        70 per cent. or more of sweetening matter

        8

        10½

        less than 70 per cent. and more than 50 per cent. of sweetening matter

        6

        4½

        not more than 50 per cent. of sweetening matter …

        3

        1½

        Glucose, solid

        8

        10½

        Glucose, liquid

        6

        4½

        Saccharin (including substances of a like nature or use) the oz.

        4

        6

        PART II.

        Rates of Duty on Certificated Colonial Sugar.

        Article.

        Rate of Duty.

        s.

        d.

        Sugar of a polarisation exceeding 99° the cwt.

        4

        8.7

        Sugar of a polarisation exceeding 98° and not exceeding 99° the cwt.

        3

        10.3

        Sugar of a polarisation not exceeding 76° the cwt.

        1

        10.8

        Sugar of a polarisation exceeding 76° and not exceeding 98°

        Intermediate rates varying between is. 10.8d. and 3s. 10.3d. per cwt.

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        SUGAR, ETC. (INCREASED EXCISE DUTIES).
        5. "That as from five o'clock in the evening on the twenty-fifth day of April, nineteen hundred and thirty-nine, the excise duties on sugar, molasses, glucose and saccharin shall be at the rates specified in the following Table instead of at the rates theretofore chargeable

        TABLE.

        Article.

        Rate of Duty.

        s.

        d.

        Sugar of a polarisation exceeding 99° the cwt.

        6

        11

        Sugar of a polarisation exceeding 98 °and not exceeding 99° the cwt.

        5

        11.1

        Sugar of a polarisation not exceeding 76° the cwt.

        2

        11.3

        Sugar of a polarisation exceeding 76° and not exceeding 98°

        Intermediate rates varying between 2s. 11.3d. and 5s. 11.1d. per cwt.

        Molasses (including all sugar and extracts from sugar which cannot be completely tested by the polariscope)—

        the cwt.

        s.

        d.

        if containing—

        70 per cent. or more of sweetening matter

        4

        4½

        less than 70 per cent. and more than 50 per cent. of sweetening matter

        3

        2

        not more than 50 per cent. of sweetening matter

        1

        7

        Glucose—

        Solid

        4

        4½

        Liquid

        3

        2

        Saccharin (including substances of a like nature or use) the oz.

        2

        3

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        SUGAR (DRAWBACKS AND ALLOWANCES).
        6. "That where a duty of customs or excise has been paid in respect of sugar, molasses, glucose or saccharin at the higher rates for which provision is made by the foregoing Resolutions, drawbacks shall be paid and allowances shall be made as if in Part II of the Second Schedule to the Finance Act. 1928, the following Tables were substituted for Table 1 and Table 2.

        TABLE 1.

        SCALE APPLICABLE IN THE CASE OF SUGAR PRODUCED IN THE UNITED KINGDOM FROM MATERIAL ON WICH DUTY HAS BEEN PAID.

        Nature of Sugar.

        Rate of Duty Paid.

        Rate amount of Drawback.

        Per cwt.

        Per cwt.

        s.

        d.

        s.

        d.

        Sugar of a polarisation exceeding 98° produced from material on which the full duties of customs have been paid.

        14

        0

        14

        0

        less than

        14

        0

        11

        8

        Sugar of a polarisation exceeding 99° produced from material on which customs duty at the general preferential rates has been paid.

        8

        2

        8

        2

        less than

        8

        2

        7

        4.7

        Sugar of a polarisation exceeding 99° produced from material on which customs duty at the

        4

        8.7

        4

        8.7

        less than

        4

        8.7

        3

        11.4

        TABLE 2.

        SCALE APPLICABLE IN THE CASE OF MOLASSES PRODUCED IN THE UNITED KINGDOM FROM MATERIAL ON WHICH DUTY HAS BEEN PAID.

        Nature of Molasses.

        Amount of Drawback.

        Produced from material on which full customs duty has been paid.

        Produced from material on which customs duty at the general preferential rates has been paid.

        Produced from material on which customs duty at the certificated colonial rates has been paid.

        Produced from material on which excise duty has been paid.

        Containing not more than 50 per cent. of sweetening matter and weighing not less than fourteen pounds to the gallon - the cwt.

        2s.

        9½d.

        1s.

        9d.

        11d.

        1s.

        5½d.

        Containing more than 50 per cent. but not more than 60 per cent. of sweetening matter - the cwt.

        4s.

        2½d.

        2s.

        7½d.

        1s.

        5d.

        2s.

        2½d.

        Containing more than 60 per cent. but not more than 70 per cent. of sweetening matter — the cwt.

        5s.

        7½d.

        3s.

        6½d.

        1s.

        10½d.

        2s.

        11½d.

        Containing more than 70 per cent. but not more than 80 per cent. of sweetening matter - the cwt.

        7s.

        8½d.

        4s.

        10½d.

        2s.

        7d.

        4s.

        0½d.

        Containing more than 80 per cent. of sweetening matter — the cwt.

        8s.

        9d.

        5s.

        6½d.

        2s.

        11½d.

        4s.

        7d.

        Nature of Sugar.

        Rate of Duty Paid.

        Rate or amount of Drawback.

        certificated colonial rates has been paid.

        Per cwt.

        Per cwt.

        s.

        d.

        s.

        d.

        Sugar of a polarisation exceeding 99° produced from material on which excise duty has been paid.

        6

        11

        6

        11

        less than

        6

        11

        6

        1.7

        Sugar of a polarisation not exceeding 98° produced from material on which the full duties of customs have been paid and sugar of a polarisation not exceeding 99° produced from material on which customs duty at the general preferential rates or the certificated colonial rates, or excise duty, has been paid.

        Any rate of duty.

        A drawback equal to the duty chargeable on sugar of the like polarisation.

        In the foregoing Tables—

        (a) the expression 'the general preference rates' means the full rates of duty reduced by the amount of the preferential reductions specified in the Second Schedule to the Finance Act, 1928;

        (b) the expression 'the certificated colonial rates' means the special rates of duty applicable to colonial sugar accompanied by a quota certificate.

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        PHOTOGRAPHIC PLATES AND FILM (EXCISE).
        7. "That on and after the first day of May, nineteen hundred and thirty-nine, there shall be charged—

        (a) on all sensitised photographic plates and film manufactured in the United Kingdom, other than X-ray plates and film, an excise duty at the rate of fourpence half penny per square foot; and

        (b) in respect of every licence to be taken out annually by a manufacturer in the United Kingdom of any sensitised photo graphic plates or film an excise duty of twenty shillings.

        For the purposes of this Resolution, references to photographic film include references to cinematograph film and paper negative film, and the area of any perforations in any piece of photographic film shall be treated as part of the area of the film."

        PHOTOGRAPHIC PLATES AND FILM (CUSTOMS).
        8. "That on and after the twenty-sixth day of April, nineteen hundred and thirty-nine—

        (a) the rate of additional duty chargeable under the Import Duties Act, 1932, on un- exposed sensitised photographic plates and film, other than X-ray plates and film, shall be such as will, with the rate of the general advalorem duty, amount to ninepence per square foot;

        (b) the provisions of Sub-section (4) of Section six of the Finance Act, 1938 (which relate to duties on Empire goods) shall apply in relation to unexposed sensitised photographic plates and film, other than X-ray plates and film, subject, in the case of plates and film other than cinematograph film, to the modification that the preferential rate shall be fivepence per square foot instead of two-thirds of the aggregate full rate of the duties applicable to the goods;

        (c) no unexposed sensitised photographic plate or film shall on re-importation be admitted free of duty under Section fourteen of the Import Duties Act, 1932, unless any excise duty which was chargeable has been paid and either no drawback was allowed on exportation or any drawback so allowed has been repaid;

        1716

        (d) the additional duties chargeable under the Import Duties Act, 1932, on exposed cinematograph film of the classes or descriptions specified in the first column of the following Table, shall, whether the film is or is not Empire goods, be at such rates as with the rate of the general advalorem duty will amount to the rates specified in the second column of that Table:

        TABLE.

        Film—

        Per linear foot.

        (i) of a width not exceeding one inch; or

        (ii) containing only a single sound track; or

        (iii) shown to the satisfaction of the Commissioners to be a duplicate of film on which Customs Duty has been paid at the rate of sixpence per linear

        foot and not refunded

        2d.

        Other film

        6d.

        (e) in the case of a film of a greater width than the standard width of one and three-eighths inches, the Customs Duty in the cases mentioned in the last preceding paragraph shall be increased in proportion to the ex tent to which the width is greater than the standard width;

        (f) if, in the case of any exposed cinematograph film, it is shown to the satisfaction of the Commissioners either—

        (i) that the production of the film was organised by persons whose chief or only place of business was in Great Britain or Northern Ireland and the producer of the film and all the principal actors and artists employed for the production thereof, except five, or, if the total number of principal actors and artists is less than twenty, not less than three-quarters of the principal actors and artists, were British subjects and domiciled in Great Britain or Northern Ireland; or

        (ii) that the Board of Trade have certified that the requirements of Sub-section (3) of Section twenty-seven of the Cinematograph Films Act, 1927, or of Sub-section (1) of Section twenty-five of the Cinematograph Films Act, 1938, have been complied with in relation to the film or in relation to any film of which the film forms part;

        the duty chargeable on the film shall be the duty, if any, with which it would have been chargeable if it were still unexposed;

        (g) the exemption of sound track negatives from duties of Customs conferred by the Import Duties (Exemptions) (No. 4) Order, 1938, shall cease to have effect;

        (h) no drawback of duty paid at the rate of 6d. per linear foot on any piece of exposed cinematograph film shall be allowed under the Second Schedule to the Import Duties Act, 1932, if a duplicate thereof, or of any part thereof, has been imported into the United Kingdom, but the Commissioners may waive or modify this provision in any particular case. subject to such conditions as they may consider necessary in order to safeguard the revenue;

        1717

        (i) the provisions of this Resolution, other than those of paragraph (b), may be revoked or varied in the same manner and to the same extent as if they were contained in an Order of the Treasury under the Import Duties Act, 1932.

        For the purposes of this Resolution—

        (i) references to photographic film include references to cinematograph film and paper negative film;

        (ii) the area of any perforations in any piece of photographic film shall be treated as part of the area of the film;

        (iii) all sheets or strips of unexposed sensitised photographic film which are of a length not less than twelve feet shall, whatever their width, be treated as cinematograph film;

        (iv) references to exposed cinematograph film shall include references to all such film whether it is positive or negative, whether it is developed or undeveloped and whether or not it contains or consists of sound track;

        (v) 'the Commissioners' means the Commissioners of Customs and Excise;

        (vi) two lengths of film |shall not be deemed not to be duplicates of each other by reason that one is positive and the other is negative, or, where both lengths represent the same objects and are intended for use in the production of a coloured picture, by reason of any differences ascribable to the nature of the processes involved in producing such a picture.

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        BEER (PRIMING AND COLOURING SOLUTIONS).
        9. "That it is expedient to make provision for authorising a brewer for sale to add priming and colouring solutions to beer at premises other than premises entered by him for the brewing of beer or a bonded warehouse, subject to the premises being licensed for the purpose and to the payment, on the grant of any such licence in respect of any premises for any licence year or part thereof, of a duty of excise in accordance with the following Table:

        TABLE.

        £

        Where the premises have not been licensed as aforesaid for the preceding licence year or any part thereof

        25

        Where the premises have been so licensed and the number of bulk barrels of such solutions received for use at the premises in the preceding licence year did not exceed twenty-five

        25

        Where the premises have been so licensed and the number of bulk barrels of such solutions so received exceeded twenty-five—

        For the first twenty-five barrels

        25

        For every further twenty-five barrels or fraction of twenty-five barrels

        5

        Provided that where the premises have been so licensed for a part only of the preceding licence year, the number of bulk barrels of solutions received for use at the premises in that year shall, for the purpose of the foregoing Table, be taken to be a number which bears the same proportion to the number so received in the period for which the licence was in force as twelve months bears to the length of that period.
        In this Resolution the expression 'bulk barrel' means a quantity of thirty-six gallons, and the expression 'licence year' means the twelve months ending on the thirtieth day of September."

        CUSTOMS DUTY ON FRUIT PRESERVED IN SYRUP.
        10. "That on and after the twenty-sixth day of April, nineteen hundred and thirty-nine, any duties of customs chargeable under the Ottawa Agreements Act, 1932, on goods of the classes or descriptions specified in the first column of the following Table shall be charged at the rates specified in the second column of that Table.

        TABLE.

        Class or description of goods.

        Rats of duty.

        The following fruit salad preserved in syrup, that is to say, mixtures of fruit (but not including mixed fruit pulp) containing not less than four separate descriptions of fruit, in which each of at least four descriptions constitutes at least eight per cent., and no one description represents more than fifty per cent., by weight, of all the fruit in the mixture (excluding syrup)

        5s. 6d. per cwt.

        Loganberries preserved in syrup

        4s. 0d. per cwt.

        Pineapples preserved in syrup

        5s. 0d. per cwt.

        And it is here by declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        CUSTOMS DUTY ON PATENT LEATHER.
        11. "That on and after the twenty-sixth day of April, nineteen hundred and thirty-nine, the customs duty imposed by Section six of the Finance Act, 1934, on patent leather not forming part of another article and goods composed wholly of patent leather shall, in the case of goods on which no additional duty is for the time being chargeable under Section three of the Import Duties Act, 1932, be reduced to seven and a half per cent. of the value of the goods, and accordingly the said Section six shall on and after that date have effect—

        (i) as if in Sub-section (1) thereof for the words 'fifteen per cent.' where they first occur, there were substituted the words 'seven and a half per cent.'; and

        1719

        (ii) as if in the proviso to the said Subsection (1) the words 'if the aggregate amount of the additional duty and the general ad valorem duty exceeds fifteen per cent. of the value of the goods' were omitted.

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        AMENDMENT OF OTTAWA AGREEMENTS ACT, 1932, AS RESPECTS INDIA.
        12. "That, as from the date on which the agreement made on the twentieth day of March, nineteen hundred and thirty-nine, between His Majesty's Government in the United Kingdom and the Government of India comes into force under Article 16 thereof, the Ottawa Agreements Act, 1932, and any other enactment relating to customs which amends or relates to that Act, shall have effect as if that Agreement were substituted for the Agreement set out in Part VI of the First Schedule to that Act."
        REPEAL OF DRAWBACK IN RESPECT OF LINSEED.
        13. "That the drawback of customs duty heretofore allowed in the case of goods manufactured in the United Kingdom and exported or shipped as stores there from, in respect of linseed used in the manufacture thereof, shall not be allowed except in the case of unmixed linseed oil, that is to say, linseed oil not mixed with any substance other than driers."
        REPEAL OF DRAWBACK IN RESPECT OF GROUND-NUTS.
        14. That, in the case of ground-nut oil (whether hydrogenated or not) manufactured in the United Kingdom and exported or shipped as stores there from, no drawback of customs duty shall be allowed in respect of ground-nuts used in the manufacture thereof."

        MECHANICALLY PROPELLED VEHICLES (INCREASED EXCISE DUTIES).
        15. "That as from the first day of January, nineteen hundred and forty. Section thirteen of the Finance Act, 1920, which imposes duties of excise in respect of mechanically propelled vehicles, shall, as amended by any subsequent enactment, have effect as if for paragraphs 1 and 6 of the Second Schedule to the said Act (as so amended) there were substituted the following paragraphs:

        Description of vehicle.

        Rate of duty.

        £

        s.

        d.

        1. Cycles (including motor scooters and cycles with an attachment for propelling them by mechanical power) not exceeding 8 cwt. in weight unladen:

        (a) Bicycles—

        Where the cylinder capacity of the engine thereof—

        (i) does not exceed 150 cubic centimeters

        17

        6

        Description of vehicle.

        Rate of duty.

        £

        s.

        d.

        (ii) exceeds 150 cubic centimetres but does not exceed 250 cubic centimetres

        1

        17

        6

        (iii) exceeds 250 cubic centimetres—

        in a case where the bicycle is one in respect of which a licence was taken out before the first day of January, nineteen hundred and thirty-three, and does not exceed 224 lbs. in weight unladen

        1

        17

        6

        in any other case

        3

        15

        0

        (b) Bicycles, if used for drawing a trailer or sidecar

        1

        5

        0

        (c) Tricycles—

        neither constructed nor adapted for use nor used for the carriage of a driver or a passenger

        2

        0

        0

        other tricycles

        5

        0

        0

        The duty chargeable under sub (b) of this paragraph in respect of a shall be chargeable in addition to the duty chargeable on the bicycle under sub -paragraph (a) of this paragraph.

        Description of vehicle.

        Rate of duty.

        £

        s.

        d.

        6. Any vehicles other than those charged with duty under the foregoing provisions of this Schedule:

        Electrically propelled vehicles

        7

        10

        0

        Other vehicles—

        not exceeding 6 horsepower

        7

        10

        0

        exceeding 6 horse-power—

        for each unit or part of a unit of horse-power

        1

        5

        0."

      INCOME TAX.

        CHARGE OF TAX.
        16. "That—

        (1) income tax for the year 1939–40 shall be charged at the standard rate of five shillings and sixpence in the pound, and, in the case of an individual whose total income exceeds two thousand pounds, at such higher rates in respect of the excess over two thousand pounds as Parliament may hereafter determine;

        (2) all such enactments as had effect with respect to the income tax charged for the year 1938–39 shall have effect with respect to the income tax charged for the year 1939–40.

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

        HIGHER RATES OF INCOME TAX FOR 1938–39
        17. "That income tax for the year 1938–39 in respect of the excess of the total income of an individual over two thousand pounds shall be charged at rates in the pound which respectively exceed the standard rate by the amounts specified in the second column of the Table in Section six of the Finance Act, 1931 (as originally enacted) increased—

        (a) in the case of an amount relating to any part of the first six thousand pounds of the excess, by 15 per cent. of that amount;

        (b) in the case of any of the remaining amounts, by 20 per cent. of that amount.

        And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

        AMENDMENTS AS TO SURTAX ON, AND APPORTIONMENTS OF, INCOME OF CER TAIN COMPANIES.
        18. "That there may be included in any Act of the present Session relating to finance such amendments of Section twenty-one of the Finance Act, 1922 (which relates to Surtax on the undistributed income of certain companies) and of any enactments relating to or amending that Section or referring to apportionments there under, as Parliament may determine, and any such Act may provide that any of the said amendments shall have effect for the purpose of assessments for any year not earlier than the year 1936–37 and authorise any necessary additional assessments for any such year."
        NATIONAL DEFENCE CONTRIBUTION.
        19. "That the enactments relating to the national defence contribution shall have effect and be deemed always to have had effect subject to such amendments as will secure that, in the case of the businesses mentioned in sub-paragraph (a) of paragraph 7 of the Fourth Schedule to the Finance Act, 1937, any income received from investments or other property is taken into account in computing the losses to be carried forward under sub- paragraph (1) of paragraph 2 of that Schedule, notwithstanding that that income has been separately charged to income tax by deduction or otherwise."
        ESTATE DUTY (ALTERATION OF SCALE).
        20. "That, in the case of persons dying after the twenty-fifth day of April, nineteen hundred and thirty-nine, the rates of Estate Duty set out in the Second Schedule to the Finance Act, 1930, shall, so far as they relate to estates the principal value of which exceeds fifty thousand pounds, be increased, in the case of each rate, by one-tenth of the amount thereof."

        ESTATE DUTY (AMENDMENTS AS TO CERTAIN INTERESTS ARISING ON DEATH AND AS TO CERTAIN DEBTS).
        21. "That the enactments relating to Estate Duty shall, in the case of persons dying after
        1722
        the twenty-fifth day of April, nineteen hundred and thirty-nine, be amended with regard to—

        (a) the annuities and other interests that are to be treated as passing on the death of a deceased person by virtue of paragraph (d) of Sub-section (1) of Section two of the Finance Act, 1894, and as being property in which he had an interest;

        (b) the exclusion of certain debts and in-cumbrances from those which may be de ducted from the value of the estate of a deceased person in determining the value of the estate for the purposes of Estate Duty;

        (c) the inclusion in property passing on the death of a deceased person by virtue of paragraph (c) of Sub-section (1) of Section two of the Finance Act, 1894, of property applied to the discharge of certain debts and in-cumbrances, and the payment of Estate Duty accordingly, notwithstanding anything in Section three of that Act."

      MISCELLANEOUS.
        POWER TO BORROW FOR CERTAIN FINAN CIAL PURPOSES.
        "That the whole or any part of the sums required in the current financial year for the purposes mentioned in paragraph (a) or paragraph (b) of Sub-section (4) of Section twenty-three of the Finance Act, 1928, as amended by any subsequent enactment, may be provided out of money borrowed for the purpose under Section one of the War Loan Act, 1919. instead of out of the permanent annual charge for the National Debt."

        UNCLAIMED DIVIDENDS.
        "That the National Debt Commissioners shall, as and when the Treasury request, pay into the Exchequer out of their account of unclaimed dividends, under Part VII of the National Debt Act, 1870, sums not exceeding in the whole one million five hundred thousand pounds, and may for that purpose sell any stock standing to the credit of that account."
        First Resolution read a Second time.
        4 p.m.
        Mr. Charles Brown: I beg to move, in line 8, to leave out "11s. 6d." and to insert "10s. 6d."
        I think there is general agreement that if there must be increased taxation it is better to tax luxuries than to tax necessities. But it is not always easy to decide what is a luxury and what is a necessity. Habit can make a thing that is a pure luxury into a necessity for some folks, and that is the case in regard to tobacco smokers. I know men of middle age and old men who would rather be deprived of almost anything than of their pipe of tobacco. Many an old age pensioner who has to be careful about every half-penny he spends will feel this increase in the Tobacco Duty very severely. It may be argued that sentimental considerations of this kind should not be allowed to

        1723
        stand in the way of meeting a national expenditure of nearly £1,000,000,000, but at any rate we ought to see to it, when we are meeting our expenditure, that no action of ours causes more un-happiness or sense of deprivation than is absolutely necessary.
        I do not pretend to have examined carefully the whole history of the Tobacco Duty, but I am informed that this is the first time there has been a flat rate increase in the Duty as far as manufactured tobacco is concerned. That means, of course, that the increased duty will fall as heavily on the cheaper kinds of tobacco as on the better qualities, and whereas the rich may have many luxuries the poor have but few, and amongst those few tobacco finds a very prominent place. I ask the Chancellor of the Exchequer, why could not the increased duty on manufactured tobacco have been an ad valorem duty instead of a flat rate duty? In its present form the duty will have adverse effects on some sections of the tobacco industry in this country. It would be best to give an illustration of how a flat rate increase will affect a specific branch of the industry. Imported manufactured tobacco goods are being let off at a much easier rate in consequence of this flate rate increase in the duty. Whereas imported cigars paid 18s. per lb. weight the duty on the raw material was 9s. 6d., the difference between the duty on the raw material and the manufactured article being 8s. 6d. This difference made it possible for the British cigar manufacturer, particularly the smaller firms, to carry on their business in a competitive fashion.
        The 2s. increase in duty on the raw material is nearly 20 per cent. increase. The 2S. increase on the imported cigar, the increase from 18s. to 20s., means an addition of only 10 per cent. on that article. Therefore, the imported cigar has been given an advantage by the flat rate increase as against the British-made cigar. It is contended that the British cigar manufacturers, particularly the smaller manufacturers, will be greatly hampered in these intensified competitive conditions. I imagine, of course, that this proposal will not affect very much the larger companies who have interests also in imported cigars, but it will seriously affect the smaller manufacturers. As
        1724
        hon. Members opposite are always telling us that they are in favour of the small trader as against great combines and companies and businesses, I hope they will support us to-day and demonstrate in the Lobby the principles that they so frequently profess. What ought to be done is that the imported cigars should carry a relative duty and not a flat rate duty. This, I understand, has always been the case before, and I ask the Chancellor why he has departed from the usual procedure. The duty on the imported cigars I have mentioned should be 4s., not 2s., to keep the competitive conditions as they exist at the present time.
        Why, by this change of duty, should the Chancellor place any section of British manufacturers, at this time especially, at a further disadvantage in the competitive struggle against imported manufactured goods? How often have I heard hon. Members opposite talk about putting on higher and steeper tariffs to keep manufactured goods out of the country? Probably they will be supporting to-day a proposal for a flat rate increase of duty which will considerably injure a certain section of British cigar manufacturers. I am told that because of this duty some of the smaller factories may very likely have to close. There is a good deal of unemployment now amongst them. I ask the Chancellor whether he will reconsider the matter.
        I conclude by suggesting that my Amendment to reduce the duty by is, would be of real benefit to very large numbers of people in this country, particularly the poorer classes, who do attach a great deal of importance to their smokes. We should not do anything to injure them any more than we can possibly avoid. I know that the Chancellor will talk about the amount of money that he will lose by adoption of the Amendment, but when I heard him open his Budget and explain why he had to raise another £24,000,000 by extra taxation, I really could not understand why he should trouble about extra taxation at all. Expenditure was on such a colossal scale that it did not seem to me that £24,000,000 more mattered very much. I hope he will not argue that he cannot afford to lose the sum of money represented by my Amendment.
        Mr. Ellis Smith: I beg to second the Amendment.
        4.9 p.m.
        Mr. R. C. Morrison: There is one point I wish to make, but I do not want to cover the ground already covered by my hon. Friend the Member for Mansfield (Mr. C. Brown). I wish to ask the Chancellor whether, in imposing a tax of this kind, he makes any inquiries to ascertain that the amount of dislocation that will be caused to the industry concerned is as small as possible. I am not speaking on behalf of anyone. The Chancellor knows very well that a great deal of the cigarette trade is now done through the medium of automatic machines, with slots for sixpences and shillings. I know it is impossible for the Chancellor to inform the people concerned as to the amount of tax that he intends to place upon them, but surely it is not outside the bounds of possibility for the right hon. Gentleman's officers to ascertain whether the people concerned may be able in some definite way to adjust the circumstances to the new tax. We have read in the newspapers that there has been a good deal of confusion, and that the confusion still exists, as to whether automatic machines are to be adjusted to convey packets of nine cigarettes instead of 10, and 18 cigarettes instead of 20, or whether the slots are to be altered so as to require 1s. 1d. to be inserted and a halfpenny change given by being wrapped up in the cigarette packet. It has also been stated that it will be necessary for the automatic machine makers to accumulate vast amounts of farthings to put inside the packets as change. The whole change in duty seems to me to have caused the maximum of confusion. My point is this: When a tax is placed upon beer, say, there is never any doubt in the mind of the public or the people concerned as to what the tax will mean when it is passed on to the consumer, but in this matter there seems to be a considerable amount of confusion caused. It must be remembered that many hundreds of people get their living in attending to these automatic machines. They have been held up for some time and the difficulty has not yet been resolved.
        4.13 p.m.
        Mr. Lewis: At a time like the present, when the Chancellor of the Exchequer has to raise vast additional sums for the purpose of rearmament, it does seem to me important that the idea suggested by the hon. Member for Mansfield (Mr. C.
        1726
        Brown) should not obtain acceptance—the idea that since we are obliged to borrow very large sums, £20,000,000 or so does not matter and that we might as well borrow that too. It seems to me abundantly evident that it is important that the Chancellor should raise as large a proportion as possible of the money required by means of taxation; further, that that taxation should be spread as evenly as possible over the whole population. Obviously the major contribution must come from the payers of direct taxation, but I think it is also desirable that some further share should be asked from the community as a whole by means of indirect taxation. No one likes paying taxes. At the same time I venture to suggest that the ordinary British citizen who happens to be a smoker, when he finds as a result of this proposed duty that a particular tobacco he smokes costs him more, will not in present circumstances grudge that extra payment. I think the money will be cheerfully paid. To any who may wonder why this particular article should be chosen for an increase, I would say that from the point of view of the Chancellor it has the great benefit that it is a duty easily collected, and there is the further fact that the article is so widely used that a small duty brings in a very large sum. I hope that the Chancellor will not be persuaded to alter the proposal.
        4.15 p.m.
        Mr. George Griffiths: I should like to put to the Chancellor of the Exchequer a point of view which directly opposes that of the hon. Member for Colchester (Mr. Lewis). I bring my point of view direct from the people, who asked me only this week-end to appeal to the Chancellor to consider them. They were not very cheerful about paying this extra 1½d. an ounce on tobacco. This week-end I was in South Wales, and at a meeting in Dowlais there was a choir of 25 old age pensioners, some of whom had been out of work for 15 years before they got their old age pensions and they asked me whether something could not be done to prevent them from having to pay 1£d. an ounce more for their tobacco. They are not the type who smoke cigarettes, such as were referred to by the hon. Member for North Tottenham (Mr. R. C. Morrison). They do not put a penny in a machine to get their cigarettes. The old age pensioner is a man who has been

        1727
        used to smoking a pipe and buys his tobacco in ounces or half ounces, and now finds that he will have to pay 1£d. an ounce more. Yesterday afternoon I was speaking in a picture hall to about 200 old age pensioners, men and their wives, and they raised this question. They were complaining that they could hardly live on their old age pensions as things are, and that now the Chancellor would curtail one of their little bits of pleasure. The Chancellor of the Exchequer knows —I do not know whether the Financial Secretary to the Treasury does, because he is new to the job, and was dealing before with a lot of colliers—that 265,000 old age pensioners have to make application to the public assistance authorities to supplement the 10s. a week. Those people have very little to spare for extra taxation and they are not paying these taxes cheerfully. I am appealing to the Chancellor's heart and to his head, and I hope that he will get up and say that he agrees to the Amendment.
        4.18 p.m.
        Mr. Ritson: I have a word to say on behalf of the people who smoke the so-called common tobaccos. I have heard many miners say they would rather miss a meal than miss their pipe. When I was in the pit I used to smoke seven ounces of tobacco a week, and some miners smoked more than that. When they had to do without a smoke in the pit they chewed; it was a twist that would have stiffened the back of even the present Prime Minister; but they liked it, and why should we do anything to deprive them of it? I have spoken of smoking seven ounces a week, but I knew a man who smoked 14 ounces a week. He was not an old age pensioner but an employer of labour. It was twist that he smoked, and he lost his reason. In that he has anticipated the Chancellor. But, joking apart, I know men who are not old age pensioners but are working hard on a minimum wage who will have to pay 10d. or 11d. a week more for their tobacco on account of this increased taxation. I do not know whether the hon. Member for Colchester (Mr. Lewis) will go North and speak there on the lines on which he has spoken to-day. The people there are willing to do a lot for their country. They have done a lot in the past, and they know that their sons will have to go off to war if the occasion
        1728
        should arise, and I suggest that nobody is making a greater sacrifice for the State than those old men who have been such valiant servants of industry. Yet when they get their old age pensions they still have to go to the public assistance committees for extra money. They have no margin left, and yet it is from them that the Chancellor is proposing to take an extra 6d. or 8d. a week.
        I was a very heavy smoker before I came here, and have been a heavy smoker since I have been here, and I can assure the Chancellor that it will mean a great deal to the man who has been used to smoking three or four ounces of tobacco a week if as a result of this extra taxation he has to be content with a little less. There are men who will tell you that they could not go on without having some tobacco about them —even in the pit where they must chew if they cannot smoke. I am not worrying so much about cigarettes, because to begin with they are a nuisance, although I smoke them, but these old people stick to the old twist or black tobacco and the tax which is being put upon it is out of proportion to the amount of taxation which is being imposed on other people who are grumbling, about what they call heavy taxation. I hope the Chancellor of the Exchequer will realise that we are not putting forward this plea as a joke, because tobacco is, in a way, a part of the life of the man who is working in the pit or at the pit head, and although some people may say that this is only a little extra tax upon a luxury that man does not regard his tobacco as a luxury but as part of his "make-up."
        4.23 p.m.
        Mr. Gallacher: I have always been a tobacco smoker, and the tobacco I smoke is the sort that comes in as raw material and is manufactured in this country. The hon. Member for Colchester (Mr. Lewis) said that nobody likes to pay taxes. It depends upon what the taxes are and for what purpose the money is to be used. I know hordes of people in this country who would be very happy to be in a position to pay the taxation which he has to pay, and I know that he would be a much more miserable man even than he appears to be at the present time if he were in the position of people who do not pay such direct taxes as he does. I do not know how much this taxation will mean to the man who smokes cigarettes. I smoke an

        1729
        especially obnoxious kind of tobacco. I have a notion that Shakespeare must have known a smoker like me, because in Hamlet he makes one of his characters say:
        "O, my offence is rank, it smells to heaven."
        I have often heard remarks of that kind when I have been smoking my pipe. On an average I smoke four ounces of tobacco a week—black twist tobacco. It has been costing 9½d. an ounce. Before the War I could get it at 2½d. an ounce and then I was paying at least a penny in tax. Now it is going to cost me 10½d. or 11d. and I shall be getting at the most 1½d. worth of tobacco and paying 9½d. in tax. On tobacco alone I shall be paying 3s. 2d. a week in taxation, and I object to that. There is nobody among all the robbers who have piled up wealth in this country who are paying taxes at a rate which is proportionate to the tax upon tobacco. If a man with a wage of £3 a week who smokes three or four ounces of tobacco a week has to pay 11d. an ounce for that tobacco it is a terrible burden upon him. It will be a still greater burden on the old age pensioner who likes his smoke but is getting only 10s. a week pension.
        I do not object to paying taxes if they are for a desirable purpose. If the Chancellor said to me and to other hon. Members on this side, "I want to put another 1½d. on your tobacco or another 1d. on your tea in order to raise money to increase old age pensions" we should have no hesitation in agreeing to it, but we certainly have a right to object, and we do strongly object, to an increase of the Tobacco Duty and other taxes in order to provide protection for the property of hon. Members on the other side, especially when the needs of so many people are being neglected. I do not understand how any one with the bowels of human compassion can give any support to the Chancellor for this tax. He has a heart that is harder than Pharaoh's, and it will be a miracle if any one is found who is able to soften it. He refuses to give consideration to the claims of these poor people; instead, he puts another impost upon them. Last year the old age pensioner had to pay a little more for his tea out of his 10s. a week, and now he has to pay a little more for his tobacco. The Chancellor will claim to be deeply sympathetic towards all those who may be suffering any privation—he will make that
        1730
        claim, I have heard him make it before—but if he feels like that how can he go forward with this increase of taxation when there is so much wealth around him which could be taxed?
        I have had occasion to say before, and I say again, and I insist upon it, that it is a crime to take from those who have not enough at the present time, those who are in the direst need, while there is an enormous surplus in the hands of those who have an abundance of good things. I ask the Chancellor to withdraw this tax and to raise the money by other means. If he is in any difficulty as to how to raise the money we on this side will be willing and ready to advise him. There will be no difficulty about it. There is not a Member on this side who will not be only too willing to meet the Chancellor in his room and to give him, in the fullest detail and in the simplest possible form, particulars of how he can get the money without imposing this tax upon tobacco users and on the poorest of the poor. I ask him for once to perform a humane action, such as will bring joy to thousands upon thousands of people in this country. I ask him to withdraw this tax and to make a decision that, during the course of these discussions, he will advise us that he has changed his attitude and that he is going to increase taxation in order to produce a sum that will provide an increase for old age pensioners.
        4.30 p.m.
        Mr. Silverman: I do not suppose that I could discharge the function suggested by the last speaker and soften Pharaoh's heart, but I would like to make one comment about this tax. I understand that the theory behind it is that when you are in a time of emergency, it is right that luxuries should pay a little more, so as to make their contribution to the new need, and that in the main, for most people, the smoking of tobacco is a luxury. I could quite understand that, and if the form of tax were a different form, my attitude to the Amendment might be different, but it has always seemed to me that the great injustice of this tax, and still more of this kind of increase of this tax, arises out of the fact that it is a flat rate and not an ad valorem duty. Even if it be granted that luxuries pay a little more, it really is a little difficult to understand why that little more, in the case of a very expensive cigar, should be precisely the same as it is in

        1731
        the case of the humblest cigarette or the cheapest form of pipe tobacco. There would be no great hardship in saying that if a man paid 2s. 6d., or 2s., or 1s. 6d. for a cigar, he ought to pay at this time 1d., or 1½d., or 2d. more. There would, at any rate, be very much less hardship in saying that than in saying, at the other end of the scale, to an old age pensioner who smokes an ounce or two ounces of twist a week, that he shall pay another 6d. for the privilege. It is not fair, it is not equitable, and you cannot, with a tax of that kind, make the claim that the Chancellor of the Exchequer would like to make for this Budget, and that has been made on his behalf, that it spreads the burden evenly and equitably over those who consume the article taxed.
        That claim cannot be made with regard to this tax, and I wish the Chancellor would give us some reason why it should have been found necessary to retain this as a flat rate duty instead of an ad valorem duty, or, if there were insuperable obstacles in the way and it had to be a flat rate duty, why he could not have found some other form in which to raise this money, by taxing luxuries a little more, by making life a little less pleasant, so that we might all know what the policy of His Majesty's Government is costing us. He should, at any rate, have spread the burden evenly and equitably, put the greatest burden upon the broadest backs, and not claimed that he was distributing that burden equitably when he requires a man who smokes very expensive forms of tobacco to make exactly the same contribution as he demands from the humblest consumer of it.
        4.35 p.m.
        Mr. Collindridge:I cannot say that I can speak too personally about the tobacco tax, because I have been a non-smoker all my life, but coming from an industrial district, where I know the major portion of the people are smokers and that they derive some solace from it, after their arduous labours—I have seen miners even after an accident and after washing at the pit-head bath asking for a smoke—I realise the necessity for the continuance of this habit and the desire that there should be no extra infliction upon it. I speak also upon this matter from the point of view of an effort in my own town to render the lives of the aged folk a little
        1732
        happier and brighter, and to augment their meagre old age pensions by voluntary collections. We have in my town what is called the Old Folks Treat Fund, and this organisation gets the old men and the old ladies together every year, gives them a day out and a feed after a ride, and makes them a gift, at the conclusion of this one day of brightness in the year, of a few ounces of tobacco to the old men and a little portion of tea to the old ladies.
        That organisation is acting under very great difficulties in these hard times and is helping against big odds to make the lives of the aged folk brighter, and there have been times when an infliction of this description—in short, the last straw which breaks the camel's back—has been calculated to put a stop to their well-meaning efforts. I can conceive that, at the meeting which this Old Folks Treat Fund Committee will have in reviewing their income for the year and considering the new tobacco tax, they will wonder whether they can continue their well meaning efforts, and I would suggest that if the Government cannot remove a tax from the tobacco needs of the people who can afford the luxurious types of tobacco —and I speak unlearnedly on this question, but I hope I speak sincerely and simply—0surely they are not going to continue this tax to any greater extent on the commoner forms of tobacco.
        What prompted me to join in this discussion were the remarks of the hon. Member for Colchester (Mr. Lewis). His point of view, if I understood it aright, was that in these times of stress we should endeavour to get taxation from all the people in the country. I have heard that argument quite a lot in these Budget discussions, until I have really felt there was a point at which one ought to try to get hon. Members opposite to see how incongruous, how illogical, the argument was. I have heard it said that taxation is not what you take, but what you leave, and when I heard the hon. Member for Colchester likening the taxing the old people on their tobacco with the taxation that is inflicted on people in better-off circumstances, I made a sort of rough calculation. An old age pensioner, smoking a meagre two ounces of tobacco a week, is inflicted with this tax of 3d. It may seem a very small amount, but I would ask hon. Members to compare that

        1733
        with the well-off individual, who has been sympathised with by so many hon. Members on the Government benches as sharing equally this taxation.
        Take an individual who dies and leaves £1,000,000. The suggestion is that wealth is being conscripted by the Death Duties, but they would leave to his next successor, not £600,000 as formerly, but a paltry £560,000. Such an individual, despite the new taxation which the Chancellor is introducing, which has nearly caused tears in the eyes of some people to think about—such an individual, with his £560,000 invested at 4 per cent., would receive £430 a week. Is it fair to suggest that the comparison is equal as between that individual, with his £430 a week, and an old age pensioner with his humble 10s. a week being inflicted to the extent of even 3d.? We feel that hon. Members opposite are really unaware of poverty, of what it means to live on short commons. I have often felt inclined to suggest that the best practical education for well-off folk, when they talk about the impossibility of rectifying the lot of the old age pensioner, would be for them to make an effort for one week alone to live on 10s. a week. They would then know that even a humble few coppers, week by week, of extra taxation could not be borne. I feel sure that hon. Members opposite are not devoid of hearts, but they do not accompany that heart tendency with kindly sympathy, and they should use their brains better to adjust the difficulties with which these unfortunate poor folk have to contend. I hope we shall have a response to-day to our appeal that this tax should not be inflicted on the poorer qualities of tobacco.
        4.42 p.m.
        Mr. Gurney Braithwaite: As an inveterate pipe smoker, I am bound to have a certain sympathy with the Amendment, if only on the principle enunciated by the Chancellor of the Exchequer himself during our previous Debates that we are all in favour of someone else paying taxation in order that we may not have to pay it ourselves. I think it is true to say that the pipe smoker will get the worst of this particular tax. As I see it, it will fall more heavily upon him than upon anybody else, but we must not take a selfish attitude in these matters. We were reminded last night by the Chancellor of the Exchequer
        1734
        that his post bag after a Budget speech is some indication of the feelings of the country as to his proposals. So, to a much lesser degree, is the post bag of the average Member of this House, and I am bound to say that on this occasion, while I have had some correspondence about certain other proposals in the Budget, there has been no complaint of any volume at all from my constituency as to this proposal for an increased Tobacco Duty, although my constituency contains a large number of agricultural workers, whose wage standards are lower than those of many others in the community and who smoke very heavily. I think those of us who were discussing the Budget problems before my right hon. Friend introduced his proposals would agree that, into whatever quarter of society we might have gone to discuss the taxes which might be imposed, we should have found the suggestion made in nine cases out of ten that tobacco might bear an increased tax and was the sort of commodity which ought to be taxed in these times.
        I was very attracted by the suggestion of the hon. Member for Nelson and Colne (Mr. Silverman) in favour of an ad valorem method as compared with the flat rate. That is, in theory, extremely attractive, but I imagine that the Chancellor will tell the House that the machinery of collection under such a system would add very greatly to the problem of collection. I am open to correction by the Chancellor of the Exchequer, but I believe I am right in saying that the percentage of tobacco consumed in cigars is something like 1 per cent. of the total tobacco consumed in this country. Therefore, to create such an upheaval for the purpose of carrying out what has been suggested from the opposite side, seems to me impracticable.
        Mr. Silverman: The hon. Member will recollect that I used that instance only for illustration purposes. There is a very wide range of all sorts of tobacco, cigarettes and cigars between the humble twist at the one end and the most expensive cigar at the other.
        Mr. Braithwaite: The hon. Member will recollect that I indicated when I began my remarks that I thought this increased duty was going to fall more severely upon the pipe smoker than the cigarette smoker or the cigar smoker. The difficulty is more

        1735
        one of machinery of collection than anything else. I suggest that there is no great opposition in the country to the proposed increased duty, certainly less opposition than to the increased Tea Duty last year, and infinitely less than on one famous occasion when a predecessor of the Chancellor of the Exchequer failed to reduce the Beer Duty. I well remember the correspondence we had on that subject, spontaneous correspondence from working men. This Tobacco Duty is ideal in this respect that no one need pay it who does not wish to do so.
        4.48 p.m.
        Mr. Hubert Beaumont: I took part last Saturday in one of the old folks gatherings to which reference has been made. The old men were presented each with an ounce of tobacco, and one dear old fellow, 82 years of age, came to me and said: "Well, Sir, I shall not have to pay the tax on this bit of 'bacca, no matter what it costs me in a week or two." That indicates that there is a considerable amount of opposition to this particular tax. I have in my hand a letter which I received this morning. It says:
        "I see you have delivered your maiden speech and mandate, but you have another one to make about the old age pensions. You said you would make it in the House of Commons when you were returned. There is only one way of getting it, and that is the same as the ladies did to get their votes—fight for it. The last Budget they put 2d. a pound on our tea. Now, they are taxing sugar and tobacco. It is giving 10s, per week with one hand and taking it away by instalments with the other."
        Enclosed with the letter is a cutting showing what has been done in New Zealand, a country which has been spoken of deprecatingly by certain hon. Members to-day. In my view, any taxation that hits the lower class of people—by "lower class" I mean lower in the amount of money they get, but not in regard to their status, their ability or their mentality—is a tax definitely penalising poverty. Whatever inconveniences or hardships have to be suffered, they ought to be suffered by those who are best able to bear them, and not by the poorest of the people.
        I hope that even at this hour it may be possible for the Chancellor of the Exchequer to demonstrate a little inward sympathy for the poor by deciding that
        1736
        in some form or other he will prevent this additional taxation from coming upon them. When one is in receipt of only 10s. a week, an additional three halfpence a week is a very important matter. It means that if the poorer people continue to indulge in what is not a luxury—as a smoker I regard tobacco as a necessity— they will be penalised. If we are going to tax these poor people, who have such a small amount of money, on this little luxury or necessity, it may mean that they will continue to smoke, and therefore they will have to pay an additional amount of money, and will be deprived of some other necessity of life. This is an important matter and, despite what the hon. Member opposite said, there is much opposition to it. He said that in regard to the Beer Duty there was considerable opposition, but he forgets that the opposition to the Beer Duty had behind it a very well-organised trade, whereas opposition to the increased Tobacco Duty, which makes the conditions of the poorer people much harder, cannot be organised but can only be expressed in this House.
        Mr. G. Braithwaite: I hope the hon. Member will not think me offensive if I say that when he has been in the House a little longer he will be able to distinguish between letters which he receives as the result of an organised drive from a powerful interest and those written spontaneously by constituents. In the case of the Beer Duty we got both in very large numbers.
        Mr. Beaumont: I seem to be fated to be interrupted by the hon. Member. He does me the honour of interjecting when I am speaking. He did it when I made my maiden speech.
        Mr. Braithwaite: I am sorry.
        Mr. Beaumont: Apparently, also, it is going to be my fate to follow the hon. Member, in which case I shall always have something to talk about, because almost invariably I disagree with what he says. If it is possible for the Chancellor of the Exchequer so to adjust this Tobacco Duty that it will not fall upon the poorest class of the community, we on this side of the House will be prepared to accept it, but we are definitely out to do everything in our power to prevent any further imposition on these people, and any further hardening of their lives.
        4.55 P.m.
        The Chancellor of the Exchequer (Sir John Simon): The Debate has naturally ranged over fairly wide ground and the Amendment moved by the hon. Member for Mansfield (Mr. C. Brown) was, I imagine, designed to give an opportunity for a general discussion. His actual proposal does not, of course, satisfy the test just laid down by the hon. Member for Batley and Morley (Mr. H. Beaumont), since, if the Amendment were adopted it would mean that the Tobacco Duty would still be increased but it would only be increased to the extent of one-half the amount proposed in the Budget. I recognise that that was a convenient way of raising the question for general discussion.
        Mr. H. Beaumont Mr. H. Beaumont rose—
        Sir J. Simon: I would remind the hon. Member that I am not the hon. Member for Holderness (Mr. G. Braithwaite).
        Mr. Beaumont: I appreciate that, and perhaps it is extremely audacious on my part to interrupt the right hon. Gentleman. I may be wrong, but even if the Amendment were accepted and it meant that the increased duty would be cut down to one-half, might not that half be put upon the people who smoke the more expensive tobaccos and cigars and not upon those who smoke the cheaper sorts?
        Sir J. Simon:The actual proposal made by the hon. Member for Mansfield does not have any of those effects. No doubt, if I were in a position to be in a yielding spirit on this matter we could frame the duty in many ways, but I am very much afraid that it is not possible to contemplate any tax of this sort which could be paid by some people and not paid by other people. I am afraid that the tax cannot be so framed that it is paid by some and not by others, for the very obvious reason that it is a tax primarily on an imported commodity. It is not a case that there is a single duty. There is a vast range of charges, but the governing charge, which affects everything else, is the charge made per pound on un-manufactured tobacco leaf coming into this country.
        The hon. Member for Nelson and Colne (Mr. Silverman) mentioned the possibility —I recognise that he was not arguing the point elaborately—of an ad valorem duty being arranged. I think the difficulty of doing that will be readily appreciated. I
        1738
        should doubt off-hand whether it would be possible to devise an ad valorem duty on imported raw material. It is difficult, for instance, to conceive how you could have an ad valorem duty on imported raw cotton. Some cottons are more valuable than others. Prices and qualities differ, but still cotton is cotton. More particularly is it true that it is not practicable to put a different scale of duties on imported tobacco leaf by inspecting the particular leaf, though one leaf is, no doubt, finer tobacco than another. In a case of this sort if you have to put a duty on tobacco it cannot be an ad valorem duty like the ad valorem duty on imported motor cars and other manufactured goods, where you add a percentage as duty to the amount of the value of the particular manufactured article at the ports.
        We have to face the position that, with all its inconveniences and open as it may be to criticism, this kind of tax is bound to be in the nature of a tax which is not an ad valorem tax on a primary commodity. The tax, apart from the present proposal in the Budget, was 9s. 6d. per lb. on the imported raw tobacco leaf. In order to manufacture it into tobacco for the pipe, cigarettes and cigars, moisture may be added. There are various other operations. There is in the Schedule an article called Cavendish or Negrohead which, for some reason which I cannot understand, has a duty all to itself. I believe that is partly due to the fact that it contains an ingredient of sugar and partly owing to the fact that there used to be a good many Irish Members of this House and they made a row about this matter. I should like the Committee to appreciate that although the Schedule deals with tobacco of various sorts, the governing factor is the import duty on the raw tobacco leaf. The proposal that we make is that the 9s. 6d. duty per pound be increased to us. 6d., an increase of 2s., which ought to work out at 1½d. an ounce.
        As regards cigars, the hon. Member who moved the Amendment had his attention called to what was thought to be a grievance of the home manufacturers of cigars—the British made cigars. But they have very considerable protection as compared with the imported article, and I venture to think that the hon. Gentleman has been wrongly informed if he supposes that the changes now being made put the

        1739
        British manufacturer of cigars in an appreciably worse position than he was in before the Budget. The position was this. The Customs Duty on raw imported tobacco leaf was 9s. 6d. per lb. The duty on imported cigars such as Havana cigars from Cuba is, of course, much higher. It was 18s. 1d. per lb. If we subtract the one figure from the other, we find that there was a preference, an advantage, a help to the British manufacturer of 8s. 7d. per lb., presumably to meet increased charges for labour or other special burdens which he has to bear, as compared with the manufacturer of the competitive article which comes from the other side of the Atlantic. You, therefore, have it that on every pound of raw tobacco leaf which he uses in making up his products, he gets the assistance of a preference of 8s. 7d. Under the new scale imported tobacco leaf will be paying us. 6d. instead of 9s. 6d., but the imported cigars will be paying 20s. 1d. instead of 18s. 1d., so that the British manufacturer continues to get practically the same measure of assistance, namely, 8s. 7d.
        I do not myself see how that does him any injury, because, of course, the things for which he needs this special assistance are those items of wages or other costs of manufacture which do not vary according to the cost of the raw material land provided he is given practically the same degree of shelter as before, I cannot see how he has any matter for complaint. It is true, and this is probably the point at the back of the hon. Member's mind, that in the earlier history of the tobacco taxes there has been a habit—I do not think it can be justified—whenever those taxes have been raised of increasing the actual money amount of the difference, not by arithmetical calculation, but on some rule of three, which does not seem to be a sound principle. It is not the principle applied, for example, in reference to most of the preferences which we know and which, I think, the House as a whole would agree is the right principle to apply, namely, to determine the degree of protection which the home manufacturer ought to enjoy and to secure that in that protection, he should not suffer because the tax upon the raw material, the basic article, goes up or down any more than he would suffer if the price of the raw material apart from the tax went up
        1740
        or down. I have explained this matter at some length, because I am anxious that hon. Members opposite should see that there is really an answer to the point which has been put, but I do not see any grounds for departing from the conditions which have been laid down.
        I was also asked how this taxation was going to be worked out by the tobacco companies. It is undoubtedly an inconvenience, and it may be a considerable inconvenience, to any great established trade to learn with the suddenness which is necessary in the case of a Budget statement, that, just as the clock points to a certain hour, the rate of duty has been changed. That inconvenience is much less probably in the case of a trade that has been accustomed to deal with duties than it is in a case in which some entirely new kind of tax is imposed. But I do not deny the inconvenience. I am certain, however, that a trade which is so well-managed and so well-organised as the tobacco trade, will adjust itself pretty quickly to this new scale of taxation. I believe I am right in saying that even before now there have been cases in which cigarette slot machines have been used from which in addition to the carton of cigarettes the purchaser got a penny or a half-penny as change for the coin originally put in and, therefore, I take it it will be possible to make the necessary adjustments in this case, and that these are being made. I saw some announcements in the newspapers to-day or yesterday upon this matter and I feel sure that the industry will settle that for itself. I am anxious that the public should realise the exact extent to which the duties are being altered, because they will be quick to see that they are not on that account made to bear more of an additional burden than the tax itself warrants. I hope and believe that the tobacco companies have not the slightest intention of attempting to ask the public to bear more than the tax warrants. They have to look after their customers and I am sure that the customers will also look after themselves.
        I come to the last point which has been made by hon. Gentlemen opposite. For my own part I have no desire to spend the time in protesting volubly and audibly and with expressions of sympathy, my appreciation of the fact that a tax of this sort, undoubtedly, is an additional burden, a sensible burden, especially on

        1741
        the poorest people. I hope we ail appreciate the fact that it is, but I do not think the suggestion is in the least likely to carry any conviction that that realisation and that sympathy are to be found only in one quarter of the House.
        Mr. Gallacher: Of course they are.
        Sir J. Simon: The hon. Member shows his own sense of virtue and no doubt it is all the greater because he denies it to anybody else. But I think that we may proceed on the common ground that a common tax dealing with a widely used article like tobacco, is bound to be felt by all who use that article, and is bound, in proportion to the total income, to be felt more severely by the person with a small income, than by the person with a larger income. It is for that very reason that though we impose very severe taxation on the richest section of the community the number of people who are poor being much greater than the number of people who are rich, the taxation of the rich necessarily does not produce as much in the total amount. It is for that very reason also that it is right and necessary, that you should put the most severe taxation on the richest. That is necessary in order to satisfy the sense of justice in the community. I saw a very ill-informed observation the other day in a newspaper to the effect that my Budget plans were manifestly unfair, because the amount which was being got by the extra Surtax was less in total money, than the amount which was being realised by the taxes on articles of general consumption. Of course that statement is a grotesque fallacy. It entirely depends on how many rich people there are. If there were only 10 rich people in this country and if everybody else of the 40,000,000 was very poor, then naturally the taxation of the poorer people would produce much more money than the taxation of the very limited number of rich people. [HON. MEMBERS: "Why?"] I suppose there is only one reason. The point is a very simple one, and I think if hon. Members opposite give it consideration they will see that it is sound.
        Mr. McGovern: But there are many more than 10.
        Sir J. Simon: I therefore concede at once that taxes levied on articles of general consumption which are contributed to by all sorts and kinds
        1742
        of people, undoubtedly do fall upon those with limited incomes with greater severity and require them to make far greater sacrifices than the sacrifices made by very rich people in that respect. That must happen even under a system of taxation which tries to be just by putting other taxes of very great severity upon accumulations of wealth or very large incomes. But I do not agree that, on that account, you can say that there should be no tax whatever which will fall in the smallest degree upon the poorer members of the population. I do not think that that is a sound principle. I believe that the purposes for which the money is wanted are purposes which they recognise as being necessary and right just as much as the rest of us, and I believe that within their powers they are not unwilling to make their contribution. We have, therefore, to adjust these matters, remembering the great inequalities of fortunes which exist in this country and I am sorry to say that I cannot on that account accept the Amendment.
        5.12 p.m.
        Mr. A. Edwards: May I ask a question? I am glad that the appeal which was made to the right hon. Gentleman's heart did not fall on stony ground. He agrees that this taxation is specially hard on the old-age pensioners and others of that class. He agrees that the old-age pensioner is penalised by this tax to the extent of 6d. a week, which is a reasonable estimate. I recognise the difficulties in the way of segregating classes, but I am sure the right hon. Gentleman would not wish to impose a burden of 6d. a week on the old-age pensioners. Would it not, therefore, be possible, if he has real sympathy with these people, and if he cannot vary the classification, for him to indicate that at a later stage he will propose an increase of 1s. a week in old-age pensions, to compensate for this taxation?
        5.13 p.m.
        Mr. McGovern: I always feel reluctant to take part in Budget Debates because there is a feeling of complete unreality about them. On the day when the Budget is introduced the taxes proposed in it are carried into effect. They operate from that evening or the following morning. Then, in the following week, we meet here and hon. Members suggest that

        1743
        certain taxes should not be imposed. But in the meantime they have been imposed. I am told that these Debates provide a guide for the Chancellor of the Exchequer or possible successors, as to the taxes that are popular and those that are unpopular. I have never discovered popular taxes in this House or in this country, because what is popular on this side is unpopular on the other, and vice versa. The Amendment suggests that the Tobacco Duty should be modified, largely because of the hardship which it will entail to certain persons in the community. As a non-smoker, and to a large extent a teetotaller—except possibly at Christmas time—I have often wondered why it is assumed that the man who smokes or drinks, should have an unlimited amount of taxation imposed upon him. I do not know why it is assumed that beer, whisky, wine and tobacco should always be selected for imposition.
        I take a detached view, because these taxes do not touch me. We know that all taxes are bound to hit some people unfairly. An extra 6d. per week payable by the man who smokes four ounces of tobacco a week does not mean much to the man with £8 or £10 a week, or more, but it is a serious amount to a man on the means test, a man drawing unemployment benefit, an old age pensioner, or a man with a low wage and a large family. I heard the Chancellor deal with slot machines and speak about getting a packet of cigarettes and one halfpenny back. A good many people sometimes put 6d. or 1s. in a machine and get neither cigarettes nor money back. That is a fairly common thing, and I have seen men in the evening trying to break the machines in order to get their cigarettes. I could have appreciated it if the Chancellor had imposed a special tax upon the tobacco trust, which threw up £11,000,000 or £12,000,000 in dividends last year. To impose this tax on tobacco is to impose it not on a luxury, but on what is a necessity in view of the drab, colourless lives of large sections of the people. It ill becomes the Chancellor to attempt to deprive them of even the smallest amount of colour in their lives, even if it is only sitting by their fire smoking the pipe of peace and dreaming dreams of what life might have been if there had not been a
        1744
        National Government and a capitalist system.
        During the War a suggestion was made by a Liberal colleague of the Chancellor of the Exchequer that the cinema tax should be abolished and he said at that time that it was far better to keep the population watching Charlie Chaplin on the screen than that they should stand at the street corner listening to anti-war and Socialist speeches. The same may be true in regard to many of these taxes. The more you deprive the poorest sections of the opportunity of living, even in the smallest way, you create in their minds and hearts an antagonism against society, especially when their cupboards are bare and their pockets are denied the wealth given to other sections. The Chancellor has a large field over which he can operate and he can raid the hen-roosts of the rich, to use a phrase of one of his predecessors. He has people, like the Duke of Sutherland, who try to evade their ordinary taxation, and people like the Marquis of Bute who recently sold £20,000,000 of land in Cardiff. Three halfpence means little to these people, but it means a lot to the people at the bottom of the social ladder on which capitalist society rests. The Chancellor used the excuse rather than the argument that if there were 40 rich men in this country taxation was bound to be more on the many than on the smaller number. There are, however, a great many more than 40 rich people in the country. There are 97,000 people who take over £400,000,000 per year. There are a large number who escape a measure of taxation because the Chancellor operates for that class, and not for the class at the bottom. He attempts to convince the people at the bottom that he is taking successfully from those at the top. Those at the top, however, do not produce the wealth. It is the people at the bottom who do that. Everything the human eye can see in ordinary life is created by the energies of the people who produce, and the rich people live on the wealth that the workers produce.
        If there are a few thousand extremely rich men we are entitled to take from them first before we go down to the poorest of the poor and impose additional taxes on them. It is not convincing to say to the old age pensioner that he has to bear an extra 6d. per week because the

        1745
        bond-holding interest of the rich class is in danger throughout the world. It is not right that the young man who is chased around on the means test and his family who have to live on one income should have to bear these additional burdens while the rich class walk off with the wealth created by the class at the bottom. I look upon all these impositions on the working class as not only obnoxious, but unjust and as a pure evidence of rich-class rule. A civilised and just system of government would not permit them. It would abolish all indirect taxation and substitute direct taxation on those who can bear the burden. Those at the bottom would thus be freed of unequal burdens. As ordinary common men and women more and more realise this class rule by the alleged National Government and the financiers who are behind it spurring it on they will want to abolish it and these unjust taxes; and when the people take their courage in their own hands and use their brains they will substitute the rich-class rule government for working-class rule government.
        5.22 p.m.
        Mr. A. V. Alexander: I do not suppose, in view of the excellent case that has been stated by my hon. Friends in regard to this duty, that I need address a speech to the Chancellor, but I do not want him to think that, because no long speech has been made from the Front Bench, we are not entirely associated with the case that has been put so well by my hon. Friends. It will be necessary to debate the principle which they have advanced on tobacco at some length on the next Resolution with
        regard to sugar. I am dissatisfied with the reply of the Chancellor, and I propose to ask my hon. Friends to show their view of it in two ways. The first is to take careful note when they speak in the country of the Chancellor's references to the ratio of sacrifice which is involved in his Budget which I thought were most vivid.
        Sir J. Simon: I said nothing about the ratio of sacrifice involved in my Budget. I said, what is a commonplace to every thoughtful man, that to tax a very widely used commodity, taken by itself, is of course a burden more difficult for the poor than for the rich people to bear. I went on to say—and I hope that if hon. Members repeat the first they will also repeat this—that this is the reason why any good system of taxation must call as well for a high and special contribution from the richer classes.
        Mr. Alexander: Of course, we will, if we quote the first part, also quote the second part, but we shall be entitled to analyse how much is left in the hands of the rich people in the way of purchasing power. That will be a fair presentation of the argument. The other thing I propose to ask my hon. Friends to do is to divide twice on this matter. We ought to vote very strongly for the Amendment, and then we ought to vote against the Resolution.
        Question put, "That '11s. 6d.' stand part of the Resolution."
        The House divided: Ayes, 231; Noes, 131.

        Division No. 86.]

        AYES.

        [5.26 p.m.

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

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

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

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

        Burton, Col. H. W.

        Cross, R. H.

        Agnew, Lieut.-Comdr. P. G.

        Butcher, H. W.

        Crowder, J. F. E.

        Albery, Sir Irving

        Caine, G. R. Hall-

        Cruddas, Col. B.

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

        Cary, R. A.

        Culverwell, C. T.

        Anstruther-Gray, W. J.

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

        Davidson, Viscountess

        Apsley, Lord

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

        De la Bère, R.

        Assheton, R.

        Cazalet, Capt. V. A. (Chippenham)

        Denman, Hon. R. D.

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

        Channon, H.

        Despencer-Robertson, Major J. A. F.

        Baldwin-Webb, Col. J.

        Chapman, A. (Rutherglen)

        Doland, G. F.

        Barrie, Sir C. C.

        Chapman, Sir S. (Edinburgh, S.)

        Donner, P. W.

        Baxter, A. Beverley

        Christie, J. A.

        Duckworth, Arthur (Shrewsbury)

        Beauchamp, Sir B. C.

        Churchill, Rt. Hon. Winston S.

        Dugdale, Captain T. L.

        Beechman, N. A.

        Colfox, Major W. P.

        Duncan, J. A. L.

        Bennett, Sir E. N.

        Colville, Rt. Hon. John

        Eastwood, J. F.

        Blair, Sir R.

        Conant, Captain R. J. E.

        Eckersley, P. T.

        Bossom, A. C.

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

        Eden, Rt. Hon. A.

        Boulton, W. W.

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

        Edmondson, Major Sir J.

        Bower, Comdr. R. T.

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

        Elliston, Capt. G. S

        Braithwaite, J. Gurney (Holderness)

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

        Emmott, C. E. G. C.

        Brass, Sir W.

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

        Emrys-Evans, P. V.

        Brocklebank, Sir Edmund

        Cox, H. B. Trevor

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

        Brooks, H. (Lewisham, W.)

        Cranborne, Viscount

        Everard, Sir William Lindsay

        Brown, Rt. Hon. E. (Leith)

        Craven-Ellis, W.

        Findlay, Sir E.

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

        Croft, Brig.-Gen. Sir H. Page

        Flaming, E. L.

        Fox, Sir G. W. C.

        Magnay, T.

        Sandeman, Sir N. S.

        Fremantle, Sir F. E

        Maitland, Sir Adam

        Sanderson, Sir F. B.

        Furness, S. N.

        Makins, Brigadier-General Sir Ernest

        Scott, Lord William

        Fyfe, D. P. M.

        Manningham-Buller, Sir M.

        Selley, H. R.

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

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

        Shaw, Captain W. T. (Forfar)

        Grant-Ferris, Flight-Lieutenant R.

        Markham, S. F.

        Shute, Colonel Sir J. J.

        Grattan-Doyle, Sir N.

        Marsden, Commander A.

        Simon, Rt. Hon. Sir J. A.

        Gretton, Col. Rt. Hon. J.

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

        Smiles, Lieut.-Colonel Sir W. D.

        Gridley, Sir A. B.

        Mayhew, Lt.-Col. J.

        Smith, Bracewell (Dulwich)

        Grimston, R. V.

        Medlicott, F.

        Smith, Sir R. W. (Aberdeen)

        Guest, Hon. I. (Brecon and Radnor)

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

        Smithers, Sir W.

        Guinness, T. L. E. B.

        Mills, Sir F. (Leyton, E.)

        Snadden, W. McN.

        Gunston, Capt. Sir D. W.

        Mills, Major J. D. (New Forest)

        Somervell, Rt. Hon. Sir Donald

        Hambro, A. V.

        Mitchell, Sir W. Lane (Streatham)

        Somerville, A. A. (Windsor)

        Hannah, I. C.

        Moreing, A. C.

        Southby, Commander Sir A. R. J.

        Hannon, Sir P. J. H.

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

        Spears, Brigadier-General E, L.

        Harbord, A.

        Morris-Jones, Sir Henry

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

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

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

        Stewart, J. Henderson (Fife, E.)

        Haslam, H. C. (Horncastle)

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

        Stourton, Major Hon. J. J.

        Heilgers, Captain F. F. A.

        Neven-Spence, Major B. H. H.

        Strauss, H. G. (Norwich)

        Hely-Hutchinson, M. R.

        Nicolson, Hon. H. G.

        Stuart, Hon. J. (Moray and Nairn)

        Heneage, Lieut.-Colonel A. P.

        O'Connor, Sir Terence J.

        Sueter, Rear-Admiral Sir M. F.

        Hepburn, P. G. T. Buchan-

        O'Neill, Rt. Hon. Sir Hugh

        Sutcliffe, H.

        Hepworth, J.

        Orr-Ewing, I. L.

        Tasker, Sir R. I.

        Herbert, A. P. (Oxford U.)

        Peat, C. U.

        Tate, Mavis C.

        Holdsworth, H.

        Peters, Dr. S, J.

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

        Hopkinson, A.

        Petherick, M.

        Thomas, J. P. L

        Horsbrugh, Florence

        Pickthorn, K. W. M.

        Thorneycroft, G. E. P.

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

        Pilkington, R.

        Thornton-Kemsley, C. N.

        Hulbert, Squadron-Leader N. J.

        Ponsonby, Col. C. E.

        Touche, G. C.

        Hunloke, H. P.

        Pownall, Lt.-Col. Sir Assheton

        Turton, R. H.

        Hunter, T.

        Procter, Major H. A.

        Wakefield, W. W.

        Hutchinson, G. C.

        Radford, E. A.

        Wallace, Capt. Rt. Hon. Euan

        Jones, L. (Swansea W.)

        Raikes, H. V. A. M.

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

        Kerr, Colonel C. I. (Montrose)

        Ramsay, Captain A. H. M.

        Ward, Irene M. B. (Wallsend)

        Kerr, J. Graham (Scottish Univs.)

        Rathbone, J. R. (Bodmin)

        Wardlaw-Milne, Sir J. S.

        Kimball, L.

        Reed, A. C. (Exeter)

        Waterhouse, Captain C.

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

        Reed, Sir H. S. (Aylesbury)

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

        Lamb, Sir J. Q.

        Reid, J. S, C. (Hillhead)

        Wayland, Sir W. A.

        Leighton, Major B. E. P.

        Reid, W. Allan (Derby)

        Wells, Sir Sydney

        Levy, T.

        Remer, J. R.

        Whiteley, Major J. P. (Buckingham)

        Lewis, O.

        Robinson, J. R. (Blackpool)

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

        Liddall, W. S.

        Ropner, Colonel L.

        Williams, C. (Torquay)

        Lindsay, K. M.

        Ross, Major Sir R. D. (Londonderry)

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

        Lipson, D. L.

        Ross Taylor, W. (Woodbridge)

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

        Little, Sir E. Graham-

        Rowlands, G.

        Womersley, Sir W. J.

        Loftus, P. C.

        Royds, Admiral Sir P. M. R.

        Wood, Hon. C. I. C.

        Mabane, W. (Huddersfield)

        Ruggles-Brise, Colonel Sir E. A.

        Wright, Wing-Commander J. A. C.

        M'Connell, Sir J.

        Russell, Sir Alexander

        York, C.

        Macdonald, Capt. P. (Isle Of Wight)

        Russell, R. J. (Eddisbury)

        Young, A. S. L. (Partick)

        McEwen, Capt. J. H. F.

        Russell, S. H. M. (Darwen)

        McKie, J. H.

        Salt, E. W

        TELLERS FOR THE AYES.—

        Macnamara, Lieut.-Colonel J. R. J.

        Samuel, M. R. A.

        Lieut.-Colonel Herbert and Mr. Munro.

        NOES.

        Adams, D. (Consett)

        Dalton, H.

        Henderson, A. (Kingswinford)

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

        Davidson, J. J. (Maryhill)

        Hicks, E. G.

        Adamson, Jennie L. (Dartford)

        Davies, R. J. (Westhoughton)

        Hills, A. (Pontefract)

        Adamson, W. M.

        Davies, S. O. (Merthyr)

        Jagger, J.

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

        Day, H.

        Jenkins, A. (Pontypool)

        Ammon, C. G.

        Dobbie, W.

        Jenkins, Sir W. (Neath)

        Attlee, Rt. Hon. C. R.

        Dunn, E. (Rother Valley)

        Johnston, Rt. Hon. T.

        Banfield, J. W.

        Ede, J. C.

        Jones, A. C. (Shipley)

        Barnes, A. J.

        Edwards, A (Middlesbrough E.)

        Kennedy, Rt. Hon. T,

        Barr, J.

        Edwards, Sir C. (Bedwellty)

        Kirkwood, D.

        Bartlett, C. V. O.

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

        Lansbury, Rt. Hon. G.

        Batey, J.

        Foot, D. M.

        Lathan, G.

        Beaumont, H. (Batley)

        Frankel, D.

        Leach, W.

        Benn, Rt. Hon. W. W.

        Gallacher, W.

        Leonard, W.

        Bevan, A.

        Gardner, B. W.

        Logan, D. G.

        Bromfield, W.

        George, Major G. Lloyd (Pembroke)

        Lunn, W.

        Brown, C. (Mansfield)

        George, Megan Lloyd (Anglesey)

        Macdonald, G. (Ince)

        Buchanan, G.

        Gibson, R. (Greenock)

        McEntee, V. La T.

        Burke, W. A.

        Green, W. H. (Deptford)

        McGhee, H. G.

        Cape, T.

        Greenwood, Rt. Hon. A.

        McGovern, J.

        Charleton, H. C.

        Griffiths, G. A. (Hemsworth)

        MacLaren, A.

        Chater, D.

        Groves, T. E.

        MacLean, N.

        Cluse, W. S.

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

        MacMillan, M. (Western Isles)

        Cocks, F. S.

        Hall, G. H. (Aberdare)

        Mainwaring, W. H.

        Collindridge, F.

        Hall, J. H. (Whiteshapel)

        Mander, G. le M.

        Cove, W. G.

        Hardie, Agnes

        Marshall, F.

        Cripps, Hon. Sir Stafford

        Harris, Sir P. A.

        Maxton, J.

        Daggar, G.

        Hayday, A.

        Messer, F.

        1748

        1749

        Milner, Major J.

        Seely, Sir H. M.

        Tinker, J. J

        Montague, F.

        Sexton, T. M.

        Viant, S. P.

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

        Shinwell, E.

        Walker, J.

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

        Silkin, L.

        Watkins, F. C.

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

        Silverman, S. S.

        Watson, W. McL.

        Muff, G.

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

        Westwood, J.

        Naylor, T. E.

        Sloan, A.

        Whiteley, W. (Blayden)

        Oliver, G. H.

        Smith, Ban (Rotherhithe)

        Williams, E. J. (Ogmore)

        Paling, W.

        Smith, E. (Stoke)

        Williams, T. (Don Valley)

        Parkinson, J. A.

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

        Wilson, C. H. (Attercliffe)

        Pearson, A.

        Smith, T. (Normanton)

        Windsor, W. (Hull, C)

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

        Stephan, C.

        Woods, G. S. (Finsbury)

        Price, M. P.

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

        Young, Sir R. (Newton)

        Pritt, D. N,

        Stokes, R. R.

        Quibell, D. J. K.

        Summerskill, Dr. Edith

        TELLERS FOR THE NOES.—

        Riley, B.

        Taylor, R. J. (Morpeth)

        Mr. Mathers and Mr. Anderson.

        Ritson, J.

        Thorne, W.

        Question put, "That this House doth agree with the Committee in the said Resolution".
        The House divided: Ayes, 237; Noes, 131.

        Division No. 87.]

        AYES.

        [5.36 p.m.

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

        Donner, P. W.

        Liddall, W. S.

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

        Dower, Lieut.-Col. A. V. G.

        Lindsay, K. M.

        Agnew, Lieut.-Comdr. P. G

        Duckworth, Arthur (Shrewsbury)

        Lipson, D. L.

        Albery, Sir Irving

        Duncan, J. A. L.

        Little, Sir E. Graham-

        Anstruther-Gray, W. J.

        Eastwood, J. F.

        Loftus, P. C.

        Assheton, R.

        Eckersley, P. T.

        Mabane, W. (Huddersfield)

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

        Eden, Rt. Hon. A.

        Macdonald, Capt. P. (Isle of Wight)

        Baldwin-Webb, Col. J.

        Edmondson, Major Sir J.

        McEwen, Capt. J. H. F.

        Barrie, Sir C. C.

        Elliston, Capt. G S.

        McKie, J. H.

        Baxter, A. Beverley

        Emmott, C. E. G. C.

        Macnamara, Lt.-Col. J. R. J.

        Beauchamp, Sir B. C.

        Emrys-Evans, P. V.

        Magnay, T.

        Beechman, N. A.

        Evans, Capt. A. (Cardiff S.)

        Maitland, Sir Adam

        Bennett, Sir E. N.

        Everard, Sir William Lindsay

        Makins, Brigadier-General Sir Ernest

        Blair, Sir R.

        Findlay, Sir E.

        Manningham-Buller, Sir M.

        Bossom, A. C.

        Fleming, E. L.

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

        Boulton, W. W.

        Fox, Sir G. W. G.

        Markham, S. F.

        Bower, Comdr. R. T.

        Fremantle, Sir F. E.

        Marsden, Commander A.

        Bracken, B.

        Furness, S. N.

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

        Braithwaite, J. Gurney (Holderness)

        Fyfe, D. P. M.

        Mayhew, Lt.-Col. J.

        Brass, Sir W.

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

        Medlicott, F.

        Brooklebank, Sir Edmund

        Grant-Ferris, Flight-Lieutenant R.

        Mellor, Sir R. J. (Mitcham)

        Brooke, H. (Lewisham, W.)

        Grattan-Doyle, Sir N.

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

        Brown, Rt. Hon. E. (Leith)

        Gretton, Col. Rt. Hon. J.

        Mills, Sir F. (Leyton, E.)

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

        Gridley, Sir A. B.

        Mills, Major J. D. (New Forest)

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

        Grimston, R. V.

        Mitchell, Sir W. Lane (Streatham)

        Burton, Col. H. W.

        Guest, Hon. I. (Brecon and Radnor)

        Moreing, A. C.

        Butcher, H. W.

        Guinness, T. L. E. B.

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

        Caine, G. R. Hall-

        Gunston, Capt. Sir D. W.

        Morris-Jones, Sir Henry

        Cary, R. A.

        Hambro, A. V.

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

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

        Hannah, I. C.

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

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

        Hannon, Sir P. J. H.

        Munro, P.

        Cazalet, Capt. V. A. (Chippenham)

        Harbord, A.

        Neven-Spence, Major B. H. H.

        Channon, H.

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

        Nicolson, Hon. H. G.

        Chapman, A. (Rutherglen)

        Haslam, Henry (Horncastle)

        O'Connor, Sir Terence J.

        Chapman, Sir S. (Edinburgh, S.)

        Heilgers, Captain F. F, A.

        O'Neill, Rt. Hon. Sir Hugh

        Christie, J. A.

        Hely-Hutchinson, M. R.

        Orr-Ewing, I. L.

        Churchill, Rt. Hon. Winston S.

        Heneage, Lieut.-Colonel A. P.

        Peat, C. U.

        Cobb, Captain E. C. (Preston)

        Hepburn, P. G. T. Buchan-

        Petharick, M.

        Colfox, Major W. P.

        Hepworth, J.

        Pickthorn, K. W. M.

        Colville, Rt. Hon. John

        Herbert, A. P. (Oxford U.)

        Pilkington, R.

        Conant, Captain R. J. E.

        Hoare, Rt. Hon. Sir S.

        Ponsonby, Col. C. E.

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

        Holdsworth, H.

        Pownall, Lt.-Col. Sir Assheton

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

        Hopkinson, A.

        Procter, Major H. A.

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

        Horsbrugh, Florence

        Radford, E. A.

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

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

        Raikes, H, V. A. M.

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

        Hulbert, Squadron-Leader N. J.

        Ramsay, Captain A. H. M.

        Cox, H. B. Trevor

        Hunloke, H. P.

        Rathbone, J. R. (Bodmin)

        Cranborne, Viscount

        Hunter, T.

        Reed, A. C. (Exeter)

        Craven-Ellis, W.

        Hutchinson, G. C.

        Reed, Sir H. S. (Aylesbury)

        Croft, Brig.-Gen. Sir H. Page

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

        Reid, J. S. C. (Hillhead)

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

        Jonas, L. (Swansea W.)

        Reid, W. Allan (Derby)

        Cross, R. H.

        Keeling, E. H.

        Romer, J, R.

        Crowder, J. F. E.

        Kerr, Colonel C. I. (Montrose)

        Robinson, J. R. (Blackpool)

        Cruddas, Col. B.

        Kerr, J. Graham (Scottish Univs.)

        Ropner, Colonel L.

        Culverwell, C. T.

        Kimball, L.

        Ross, Major Sir R. D. (Londonderry)

        Davidson, Viscountess

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

        Ross Taylor, W. (Woodbridge)

        De la Bère, R.

        Lamb, Sir J. Q.

        Rowlands, G.

        Denman, Hon. R. D.

        Leighton, Major B. E. P.

        Royds, Admiral Sir P. M. R.

        Despencer-Robertson, Major J. A. F.

        Levy, T.

        Ruggles-Brise, Colonel Sir E. A.

        Doland, G. F.

        Lewis, O.

        Russell, Sir Alexander

        Russell, R. J. (Eddisbury)

        Spears, Brigadier-General E. L.

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

        Russell, S. H. M. (Darwen)

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

        Ward, Irene M. B. (Wallsend)

        Salt, E. W.

        Stewart, J. Henderson (Fife, E.)

        Wardlaw-Milne, Sir J. S.

        Samuel, M. R. A.

        Stewart, William J. (Ballast, S.)

        Waterhouse, Captain C.

        Sandeman, Sir N. S.

        Stourton, Major Hon. J. J.

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

        Sanderson, Sir F. B.

        Strauss, H. G. (Norwich)

        Wayland, Sir W. A.

        Scott, Lord William

        Stuart, Hon. J. (Moray and Nairn)

        Wells, Sir Sydney

        Selley, H. R.

        Sueter, Rear-Admiral Sir M. F.

        Whiteley, Major J. P. (Buckingham)

        Shaw, Captain W. T. (Forfar)

        Sutcliffe, H.

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

        Shute, Colonel Sir J. J.

        Tasker, Sir R. I.

        Williams, C. (Torquay)

        Simon, Rt. Hon. Sir J. A.

        Tate, Mavis C.

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

        Smiles, Lieut.-Colonel Sir W. D.

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

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

        Smith, Bracewell (Dulwich)

        Thomas, J. P. L.

        Womersley, Sir W. J.

        Smith, Sir R. W. (Aberdeen)

        Thorneycroft, G. E. P.

        Wood, Hon. C. I. C.

        Smithers, Sir W.

        Thornton-Kemsley, C. N.

        Wright, Wing-Commander J. A. C.

        Snadden, W. McN.

        Touche, G. C.

        York, C.

        Somerset, T.

        Tryon, Major Rt. Hon. G. C.

        young, A. S. L. (Partick)

        Somervell, Rt. Hon. Sir Donald

        Turton, R, H.

        Somerville, A. A. (Windsor)

        Wakefield, W. W.

        TELLERS FOR THE AYES.—

        Southby, Commander Sir A. R. J.

        Wallace, Capt. Rt. Hon. Euan

        Lieut.-Colonel Herbert and Captain Dugdale.

        NOES.

        Adams, D. (Consett)

        Gibson, R. (Greenock)

        Muff, G.

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

        Green, W. H. (Deptford)

        Naylor, T. E.

        Adamson, Jennie L. (Dartford)

        Greenwood, Rt. Hon. A.

        Oliver, G. H.

        Adamson, W. M.

        Griffiths, G. A. (Hemsworth)

        Paling, W.

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

        Groves, T. E.

        Parkinson, J. A.

        Ammon, C. G.

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

        Pearson, A.

        Anderson, F. (Whitehaven)

        Hall, G. H. (Aberdare)

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

        Attlee, Rt. Hon. C. R.

        Hall, J. H. (Whitechapel)

        Price, M. P.

        Banfield, J. W.

        Hardie, Agnes

        Pritt, D. N.

        Barnes, A. J.

        Harris, Sir P. A.

        Quibell, D. J. K.

        Barr, J.

        Hayday, A.

        Riley, B.

        Bartlett, C. V. O.

        Henderson, A. (Kingswinford)

        Ritson, J.

        Batey, J.

        Hicks, E. G.

        Seely, Sir H. M.

        Beaumont, H. (Batley)

        Hills, A. (Pontefract)

        Sexton, T. M.

        Benn, Rt. Hon. W. W.

        Jagger, J.

        Shinwell, E.

        Bevan, A.

        Jenkins, A. (Pontypool)

        Silkin, L.

        Bromfield, W.

        Jenkins, Sir W. (Neath)

        Silverman, S. S.

        Brown, C. (Mansfield)

        Johnston, Rt. Hon. T.

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

        Buchanan, G.

        Jones, A. C. (Shipley)

        Sloan, A.

        Burke, W. A.

        Kennedy, Rt. Hon. T.

        Smith, Ben (Rotherhithe)

        Cape, T.

        Kirkwood, D.

        Smith, E. (Stoke)

        Chater, D.

        Lansbury, Rt. Hon. G.

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

        Cluse, W. S.

        Lathan, G.

        Smith, T. (Normanton)

        Cooks, F. S.

        Leach, W.

        Stephen, C.

        Collindridge, F.

        Leonard, W.

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

        Cove, W. G.

        Logan, D.G.

        Stokes, R. R.

        Daggar, G.

        Lunn, W.

        Summerskill, Dr. Edith

        Dalton, H.

        Macdonald, G. (Ines)

        Taylor, R. J. (Morpeth)

        Davidson, J, J. (Maryhill)

        McEntee, V. La T.

        Thorne, W.

        Davies, R. J. (Westhoughton)

        McGhee, H. G.

        Tinker, J. J.

        Davies, S. O. (Merthyr)

        McGovern, J.

        Viant, S. P.

        Day, H.

        MacLaren, A.

        Walker, J.

        Dobbie, W.

        Maclean, N.

        Watkins, F. C.

        Dunn, E. (Rother Valley)

        MacMillan, M. (Western Isles)

        Watson, W. McL

        Dunn, E. (Rother Valley)

        Mainwaring, W. H.

        Westwood, J.

        Ede, J. C.

        Mander, G. le M.

        Williams, E. J. (Ogmore)

        Edwards, Sir C. (Bedwellty)

        Marshall, F.

        Williams, T. (Don Valley)

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

        Mathers, G.

        Wilson, C. H. (Attercliffe)

        Foot, D. M.

        Maxton, J.

        Windsor, W. (Hull, C.)

        Frankel, D.

        Messer, F.

        Woods, G. S. (Finsbury)

        Gallacher, W.

        Milner, Major J.

        Young, Sir R. (Newton)

        Gardner, B. W.

        Montague, F.

        Garro Jones, G. M.

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

        TELLERS FOR THE NOES.—

        George, Major G. Lloyd (Pembroke)

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

        Mr. Whiteley and Mr. Charleton.

        George, Megan Lloyd (Anglesey)

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

        Fourth Resolution read a Second time.

        5.45 P.m.
        Mr. Alexander: I beg to move, in line 12, to leave out "14s. 0d.," and to insert "9s. 4d."
        We have been discussing, both in the general Budget Debate and on the last Amendment, the relation between the
        1752
        taxation which presses most heavily on the working classes and other forms of taxation. It has been said during these discussions that, in a time of emergency, a good deal of argument was possible in favour of special taxation on articles which might be regarded as being in the nature of luxuries, but it cannot be said that the commodity with which this Amendment deals is in any way to be regarded merely as a luxury. We want

        1753
        to make it plain to the Chancellor of the Exchequer that we consider sugar to be a vital necessity for the people of this country. It is a vital food, it is a very important energising food, and it is of especial importance in the diet of young children. Therefore, we want to make it clear that we are attacking the Chancellor's policy with respect to this commodity from the point of view that it is wrong that he should seek to extract this additional revenue from so important a food of the people.
        It will be observed that we are not merely asking that the duty should be lower than the figure proposed by the Chancellor, but that it should be lower than the pre-Budget rate. I would ask the House to consider the present market position and the probable price position of this commodity. I have heard already this week complaints from certain quarters that a warning has been given that the retail price of sugar is likely to be, not ¼d. per lb. higher than was the case on the morning of the Chancellor's statement, but ½d. per lb. higher, and questions are being asked, by many consumers who are unaware of the real market position, about the notice given of that expected further rise in price. Taking as the basis of my comments the effect on granulated sugar of the quality known as "Tate's packed," I find that the price on 1st March was 21s. 1½d. per cwt. to the trade. This morning it is 25s. 4½d., there having been an increase of 4s. 3d. per cwt. in the wholesale market price of a very large proportion of the granulated sugar sold in this country, while the in crease in duty which the Chancellor pro poses in his Budget as 2s. 4d. There has been a steady and continuous rise, usually by movements of about 1½d. per lb., for the last five or six weeks—
        Mr. Holdsworth: What is the reason?
        Mr. Alexander: I will deal with that presently. It is very important that the price of this vital food should remain at a reasonable level to the consumer, and, in view of these marked movements, it is reasonable to ask, not merely that the duty should not be increased, but that it should be reduced by another ¼d. per lb. The reasons for the steady advance in the wholesale market price are, first, that there was a partial failure of the sugar-beet crop in this country last
        1754
        season; secondly, that there was an even heavier failure of similar types of sugar production on the Continent; and, thirdly, that in the last few weeks there has been quite heavy Continental buying of this commodity, and there has been no corresponding relief, although there has been some relief, through the sugar quota of the International Sugar Commission.
        I do not believe, from my examination of the position, that there is any real world shortage of sugar stocks at the present time, but there has been a fall in the stocks in this country, which, in company with the Continental buying, has been sufficient to account for the fairly steep rise in the wholesale market price. It is very unfair that, at the time when the Chancellor comes along and asks for a further imposition on this commodity, the consumer should be faced also with an unnecessary rise in price because of a control in which British authorities at least have had some say. We now control our home beet-sugar production, largely through the operation of an Act of Parliament, by an impartial Sugar Commission of our own, who must, of course, have their representations to make to the financial body which controls the quotas and stocks in the world. In these circumstances it is important that we should take such steps as we can to prevent the price of this very important food from becoming unduly high.
        I shall leave it to some of my hon. Friends on these benches to argue as to the actual burden that is placed upon the housewife, and will confine myself to the importance of this primary food commodity as a raw material in many manufactures of other foods in this country. I remember that, when I first came to London, in 1920, to do political and Parliamentary work in connection with trade, one of my first duties was to organise the presentation of the case on sugar taxation and the consumption of sugar generally to the then Chancellor of the Exchequer, now Viscount Home; and I remember then being able to produce figures which showed that the very steep taxation upon sugar during the War had not only had an effect on the consumption of sugar as such per head in its direct use by the population, but also a very serious effect on the various trades that were using sugar as a raw material.

        1755
        Sugar is used especially in the manufacture of jam, and of cakes, biscuits and confectionery, and also, though perhaps this might be regarded as more of a luxury, though nevertheless it is very often used as food, in the manufacture of chocolate.
        Sir J. Simon: And of beer.
        Mr. Alexander: If the Chancellor has any special information that he can give the House about the effect of the Sugar Duty upon beer, we shall be very glad to hear it. I myself know nothing from the manufacturing point of view of the value of sugar as a raw material in that trade, but in the trades I have mentioned it is a very important factor, and we have to think of the general effect upon the consumer. I dare say other Members of different parties will recognise that there has been some difficulty with the jam trade in the past season, because there was a pretty poor fruit crop, and, unless there is a marked improvement in the general fruit position available to jam manufacturers within the next few months, there will be a still further adverse effect on the price of this very important part of our food. Moreover, one may include in jam the general process of canning, a section of British industry which many of us are desirous of seeing extended. It seems to me that there will certainly be some reaction in that direction if the Sugar Duty is increased now, and, unless we make our proper protest, it may go on increasing, with the result of dealing a very severe blow at the industry as a whole.
        A suggestion, with which I had some sympathy, was made by an hon. Member below the Gangway in dealing just now with the Tobacco Duty, as to the possibility of getting some of the revenue that the Chancellor is after out of the heavy profits of the combines that deal with that commodity; but while, perhaps, the Chancellor might find some part of the money he wants in that direction, it is the fact that, as I said last night, in the sugar trade generally and in the distribution of the commodity there is really no margin from which the Chancellor could get this revenue. Sugar has been used in the retail trades as a means of attracting people into grocers' shops, until the competition has become so ruinous that, as regards the commodity itself, there is
        1756
        no net profit on the retailing of sugar, and, therefore, it is quite impossible to think that the tax can be recovered by any other means than passing it on directly to the consumer. The usual margin in the process between the wholesaler and the retailer is at most 8 or 9 per cent., and if the Chancellor will take the opportunity, between now and the Finance Bill, of looking up what is the average wage cost per lb. of distributive sales, he will find that generally the wage costs of the distribution of sugar are not met by the close margin which usually prevails in the retailing of sugar as such. It is clear, therefore, that this duty will have to be passed on as a whole to the consumer of the sugar, whether in the form of a primary commodity or in the form of a manufactured article of which the sugar is a constituent.
        I feel that the Chancellor ought to call a halt in regard to the way in which taxation on foodstuffs is increasing in this country. It is not so very long ago since it was said—at the time of the Budget of Lord Snowden for 1929–30—that taxation on food as such had almost disappeared. Now we have returned to a situation in which not only have we such forms of taxation as the levy to provide money for the wheat subsidy and the restriction of bacon supplies in order to provide the subsidy on pigs but in other forms, until we are paying much more than £40,000,000 a year in taxation on food. The time has come to tell the Chancellor that he has to call a halt to this increasing tendency to tax the food of the people of this country. The best way would be to force a Division this afternoon, and in the course of the discussion to say that not merely should there be no increase in the duty, but actually a reduction, in order to bring this important food commodity within the reach of the main body of consumers. I am not persuaded that it is impossible for the Chancellor to get this extra £4,000,000 to £4,500,000, which he hopes to get from the Sugar Duty, by way of Super-tax from those who are better able to bear it.
        6.2 p.m.
        Mr. Chater: I beg to second the Amendment.
        If the Amendment had been so framed as to propose the abolition of the Sugar Duty altogether, I would second it with

        1757
        much more enthusiasm. I am opposed altogether to taxes on vitally necessary foodstuffs. Sugar, as my right hon. Friend has said, is a necessary foodstuff, and unless people consume sufficient of it malnutrition inevitably results. I believe that food taxes are altogether wrong in principle. When it is argued, as it has been by the Chancellor, that the increase may be excused on this occasion because of the national interest, and that even the very poorest of the population should be called upon to bear some share of the national burden, I suggest that the poorest sections of the community already pay in indirect taxation more than their fair share. When we consider what people with incomes of £2 to £3 a week—and there are many hundreds in my constituency who do not get even £2 a week—have to pay for rent and other necessary expenses, it is easily realised that the amount which they pay to the Exchequer is far out of proportion to their means. This taxation on poverty has been steadily increasing under two National Governments, and, as my right hon. Friend said, it is time a halt was called. Yet I feel no hope that that halt will be called by this Government. On the contrary, it seems to me that the spirit which is abroad on the benches opposite is rather in the direction of trying to put, and desiring to put, a greater proportion of the burdens of the country on the shoulders of the poorer sections of the community.
        In the great co-operative movement, which I and my right hon. Friend have the honour to represent in this House, we are painfully aware of the poverty-stricken conditions which govern the lives of a large proportion of our members from the time of their birth to that of their death. Therefore, we are bound to oppose all taxation of food. In this case, we are called upon not only in the name of our members, but on behalf of the general community, to make a protest against this increase. I am quite aware that the Amendment would deprive the Chancellor not only of the increase of ¼d. a lb., but also of another ¼d. If I remember rightly, he estimated that the increased amount he was going to get in taxation as a result of this additional duty was something in the region of £4,000,000. Therefore, this Amendment would involve a loss of £8,000,000. I am not going to suggest alternative methods
        1758
        of raising that money, because I do the Chancellor the honour of believing that his personal ingenuity would at least be equal to the task of finding other sources. I hope the Amendment will be accepted, although I have very little hope.
        6.9 p.m.
        Mr. Lunn:I should like to support the Amendment, which has been so ably proposed by my right hon. Friend. I do not think that anybody should apologise for objecting to taxation on our food supplies. No one has protested against it more effectively than the present Chancellor of the Exchequer did in the past. He presented a marvellous case not only in opposition to the taxation of food, but in support of the principle that taxation should be a matter of ability to pay. I believe that it was a maxim of the right hon. Gentleman many years ago that if taxes were to be imposed they should be borne by those best able to bear them. Of course, it is not difficult for Ministers to change their minds. But I think it is unreasonable and unfair to put a tax on sugar, and I do not think that anyone can justify this increase. It will add to the hardships of the poor considerably-. The effect will be felt in millions of homes where old age pensioners, widows and people with miserably low wages are living. The duty is increased by ¼d. a lb., but in many parts of the country we have no farthings; shopkeepers have hardly ever seen them, and they are charging an extra ½d. a lb. Many people cannot purchase two pounds of sugar at a time, in order to get it for 5½d., and so they have to pay 3d. for a single pound. The Chancellor ought to deal with that matter. I look upon sugar as an absolute necessity for everybody. It is used in many articles of food, as well as in a cup of tea. I think the Chancellor could have found other means of getting the money he requires, and if he believes in the test of ability to pay I suggest that he should look for this money in other directions which are known to himself perhaps better than to anybody else in this House.
        6.13 p.m.
        Mr. Tinker:I think everybody on this side of the House ought to raise his voice in protest against this tax. We listened very attentively to the Chancellor of the Exchequer when he expounded his Budget statement. He said that he was.

        1759
        £24,000,000 short, and that that had to be found somewhere. As he proceeded to describe how he was going to raise the money, he met, to a large extent, with our approval in regard to many of the taxes that he imposed. I welcomed the proposal about Surtax and the provision regarding Death Duties. After that, I was wondering whether he would leave us anything to criticise. Then he reached his proposals in regard to indirect taxation. First, there was the Tobacco Duty. I am not so very much upset about that. But when he came to sugar, all the good feeling I had had for him was swept away in a surge of anger. It may be that some people can manage without sugar, but very few can. Tea, which is the stable drink in ordinary households, is usually taken with sugar. I was at a tea party on Saturday when, I believe, sugar was demanded by every person present.
        When the Chancellor of the Exchequer touches sugar he is making a direct attack on every household, though not in the same proportion. Rich people do not use sugar in the same proportion as poor people, and the extra farthing a pound on sugar will hit the poorer people harder than it does other classes of people. The Chancellor of the Exchequer could very well have turned his attention in other directions to raise this £4,000,000 or £5,000,000, for instance by further increasing the Surtax or Estate Duties. When I think of the poorer people, my mind always goes back to the old age pensioners. Many who draw the old age pension have no other resources, and they cannot afford any luxuries. They cannot get either tobacco or beer, but they do look forward to the solace of a cup of tea, and now another burden is to be placed upon them because of the increased taxation of sugar used for sweetening their tea, the Tea Duty having been increased last year.
        There are no signs of approval from the Treasury Bench in response to the demand for an increase in the old age pension. This extra burden by way of taxation has to be borne without any corresponding advantage. The Chancellor of the Exchequer has done an entirely wrong thing, as the money required could have been found in other directions, and I do not think that the Sugar Duty will meet with any approval
        1760
        in the country. There may not be a big shout against it because many of the poor people are inarticulate and do not know how to combine and make a protest effectively, but there is a deep-seated feeling that the tax ought not to have been put on at a time like the present. These people are being called upon under the Military Training Bill to provide the manpower and at least they can expect to be relieved of indirect taxation such as that which is now being put upon them. I do not think that it is too late even now to ask the Chancellor of the Exchequer to turn in some other direction for the money. If the proceeds of a tax amount to a large sum of money, say, of £20,000,000 or £30,000,000, it is almost impossible to get the Government to review the position, but if sufficient agitation is created against them where the amount at stake is perhaps £3,000,000 or £4,000,000, the outcome is successful. If the Chancellor of the Exchequer can give way on any taxation at all, it should be on the Sugar Duty. I hope that we shall make our protest as strong as possible, with the object of getting the Chancellor of the Exchequer to review the tax and see if he cannot get the money from other directions.
        6.21 p.m.
        Mr. R. J. Taylor: My mind goes back, in discussing this question, to an occasion some years ago when the Chancellor of the Exchequer was a Member of the Liberal party, and when the right hon. Gentleman the Member for Epping (Mr. Churchill) was Chancellor of the Exchequer. In those days Chancellors of the Exchequer also had their financial difficulties. I remember, as a visitor in this House, Sitting under the Gallery when the present Chancellor of the Exchequer occupied a seat just below the Gangway. I enjoyed that visit tremendously because the right hon. Gentleman the present Chancellor of the Exchequer made a great speech attacking the then Chancellor of the Exchequer because he had raided the Insurance Fund. I do not remember the year at the moment, but I am sure that the right hon. Gentleman will recall the occasion. As I listened to the speech of the present Chancellor of the Exchequer on that occasion I was thoroughly convinced that the then Chancellor of the Exchequer had committed an unpardonable sin, and that it was little short of a criminal act to rob the

        1761
        Insurance Fund of the surpluses of the ordinary insured contributor, and even the soldiers and the sailors were robbed on that occasion. There was no limit to the vocabulary of the right hon. Gentleman as he poured scorn and condemnation upon the then Chancellor of the Exchequer for what he had done; but how much more should we be justified, if we could command the vocabulary of the Chancellor of the Exchequer, in pouring scorn on the taxation of food at the present time. The right hon. Gentleman, in view of the financial circumstances in which the Government find themselves, ought to have avoided any taxes on food at the present juncture. I fear that, with the tremendous loan that is to be brought forward this year, and the withdrawing of men from industry, we are aiming at a steep rise in the cost of living.
        The Chancellor of the Exchequer has mentioned in Budget speeches the number of holes which need plugging up, but it is a remarkable thing that the right hon. Gentleman is going on at such a leisurely gait. If he knows that there are holes through which tax evaders are squeezing and escaping, why does he not stop up those holes, when he would probably get the £4,000,000 that he is after from the increase in the Sugar Duty. It has been said by some hon. Members opposite that we must not adopt a selfish attitude in regard to these taxes. When the Prime Minister was Chancellor of the Exchequer and put his first impost on tea he said that it was put on so that the poor people of this country might feel that they were playing their part in contributing towards the rearmament expenditure. We are getting the same sort of thing here.
        The people for whom I am concerned are the old age pensioners and those who are on public assistance, who will be much worse off if there is a rise in the cost of living during next year. There is no evidence of the Minister of Labour making any recommendation that men on Unemployment Assistance Board scales are to have any increase. I refer to the means test men. The burden that we are inflicting upon the old age pensioners is a most onerous one. The people who are going to feel this taxation most hardly are those who have already played their part. They are the old age pensioners, and the elderly men on Unemployment Assistance Board scales, for
        1762
        whom the nation cannot find jobs. At election times hon. Members opposite make most fulsome promises to old age pensioners. We have got to the position that these old people can no longer have the full benefit of their 10s. a week. They have to pay their share of these indirect taxes, and many of the old men, to whom smoking is not a luxury but a necessity, are being called upon to pay more for their tobacco. The Chancellor of the Exchequer is adding to a burden which is already too heavy for the old age pensioners, and I hope that he will find a way to relieve them of this burden.
        6.30 p.m.
        Mr. Leonard: My hon. Friend who has just sat down has referred to one of the speeches made some years ago by the present Chancellor of the Exchequer. What I am concerned with on the present occasion is that I am told that the Chancellor of the Exchequer has made a great effort to equalise the burden of taxation as it applies to all sections of the people of this country. On that point I would like more details, proving that the incidence is equalised over all sections of the community. One of the main points to which I want to draw the right hon. Gentleman's attention was mentioned by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander)—namely, that in 1930 the impost on tea was 1s. 10d. per cwt. and that it is now to be 14s. per cwt. I should like to know whether that percentage of increase bears any relation to other increases imposed by other provisions in the Budget, and if it does not, I say that the Budget does not conform to the Chancellor of the Exchequer's expressed effort to equalise the burdens over the whole community.
        Sufficient has been said on the Sugar Duty to show that it is of tremendous importance to the common people. I want to refer to the practice of the very poorest. It is not always possible for them to buy sugar by the lb. I represent a division in Glasgow which has six lodging houses. I trust that the word "lodging house" will not be thought to convey the idea that the people who live in them are any worse than we are; they are just as good. But they have not the facilities. There are 400 people in each of these lodging houses, and some of them have a splendid status and character. But they buy their sugar not in lbs. but in very small quantities, in sub-

        1763
        divisions of a lb., and I feel that the incidence of the tax on them is going to be greater than it is on the general body of the public. Reference has been made to the production of jams, and it brought to my mind the fact that in working-class districts one of the most popular and cheapest fruits with which to produce jam is rhubarb. It is very cheap, and the poor people buy it in great quantities. But it has this feature about it, that it needs just a little more sugar than does ordinary jam and, therefore, this is putting an additional burden on people who have to rely chiefly on this form of jam.
        The only other point to which I wish to draw the attention of the right hon. Gentleman is that a little while ago this Empire of ours was much agitated about a place called Jamaica, which grows sugar cane, but the organisation which was referred to by the right hon. Member for Hillsborough is restricting the production of sugar cane in that country. This is a part of the Empire where you are creating unemployment by a restriction on production from which you expect to get a revenue. So great was the trouble in Jamaica that an official, in order to prevent bloodshed, had to promise an immediate disposal of £500,000 to prevent further trouble. This taxation should be taken into consideration because its incidence is much higher on sugar users than is the incidence of other taxation on any other taxpayer who will be expected to bear a burden as a result of the Budget proposals.
        6.36 p.m.
        Mr. A. Jenkins: I should like to add my appeal to the Chancellor of the Exchequer to give further consideration to this tax. The hon. Member for Morpeth (Mr. R. J. Taylor) has drawn attention to the attitude of the right hon. Gentleman some years ago to the taxation of foodstuffs. The right hon. Gentleman has changed greatly in recent years. There cannot be any justification at all for imposing this tax on the poor. The Chancellor of the Exchequer must face the fact that some of the people who will have to bear this tax will be the poorest in the land. Will he say that old age pensioners with 10s. a week are able to pay more for their sugar? It is true that it is only a small amount, but the hon. Member for St. Rollox (Mr. Leonard) has just told us that the taxation of sugar since
        1764
        1930 has risen from 1s. 10d. per cwt. to 14s. per cwt. That is roughly eight times as much. Can the Chancellor of the Exchequer deny the fact that the imposition of this tax on the poorest of our people is not a complete violation of all the canons of taxation which he himself has advanced many times? He has pointed out that taxation should be borne by those who are able to bear it.
        These are poor people, old age pensioners, those on unemployment benefit, and large numbers whose wages are very low. If you take the miners, their average income is £100 per year for every family, and they cannot afford to pay any more in taxation than they are paying at the present time. In fact, many members of these families axe suffering from malnutrition, and still the Chancellor of the Exchequer imposes this further taxation. If he has to get a certain sum of money, £4,000,000, it would be far wiser to seek some other source of revenue. I do not think it is beyond his ability to find sources which are much more able to provide it than are these poor people. I hope he will give further consideration to this matter, but I would ask him whether or not he is prepared to advocate that the poorest people in our land should be called upon to pay increased taxation on their sugar?
        6.39 p.m.
        Mr. Lewis: In times past, when proposals have been brought forward in this House to lay burdens on great trading corporations, hon. Members have pointed out that the shares in these corporations were often held by poor widows and other persons of small means. That argument has sometimes been stressed so far as to give the impression to a casual listener that the capital of our railways and other great corporations is held by people of small means. I have often heard hon. Members protest against an abuse of that argument. Something of the same thing is happening now when we are discussing the question of indirect taxation. Listening to some hon. Members opposite one would think that the great bulk of the tobacco, tea and sugar consumed in this country is consumed either by old age pensioners or by persons who are so unfortunate that by reason of lack of skill or physical infirmity they are unable to obtain employment. The truth of the matter is that both these arguments are

        1765
        appeals for the purpose of creating prejudice when we are discussing proposals which affect a very much larger class of people.
        We are not asked to consider some special impost directed only at these very poor people of whom so much has been heard this afternoon. We are asked to agree to an impost which is to apply to a commodity of universal use. It is no doubt very regrettable that one effect of that is undoubtedly to increase the expenses of the poorest section of the community, but the argument in my judgment is hopelessly overdone as a reason why the imposition should not be imposed at all. It is the very circumstance that this commodity is one of universal use that makes it so suitable as a means of raising revenue and affording an opportunity to all sections of the country to make some contribution towards its finances, for the express purpose of bearing the burden of our expenditure on armaments, which is designed to protect the homes, the liberties and the lives of all sections of the community, without respect to class or grade.
        Mr. Jenkins: Are we then, when taxation is being imposed, to disregard the damaging effect of the tax upon old age pensioners, upon 2,000,000 unemployed and probably some 5,000,000 or 6,000,000 people in this country, when you know that in certain cases it is bound to have a damaging physical effect on the people?
        Mr. Lewis:The point I was making was that there is no reason why a tax of a very wide application should not be proposed because on a certain minority it will bear hardly. If that principle was followed it would strike at the root of nearly every form of taxation. It is impossible for the Chancellor of the Exchequer to raise revenue if he has to pay attention to that plea. In the present circumstances the proposals of the Chancellor of the Exchequer are eminently reasonable and I do not believe that in the country as a whole there is any great resentment against them.
        6.44 p.m.
        Miss Wilkinson: I do not know whether the hon. Member for Colchester (Mr. Lewis) ever reads his speeches in the Official Report, but if he does he will realise that what he has just been saying
        1766
        is nonsense. He has said that it would strike at the basis of all taxation if we object to a tax because it bears more hardly on the poorest sections of the community. Surely, the very idea of the super-tax is that it is a tax which does not bear hardly on the poorest sections in the community; you are taxing a man according to his ability to pay. Our objection to this tax is that it bears most hardly on those who have no ability to pay, and who ought indeed to be receiving a greater amount from the community if their standard of nutrition is not to fall below civilised levels. When the hon. Member says that he has yet to hear that anybody is making any complaints about this tax, I can only say that I do not suppose that, in the circles in which he moves, he hears any complaints about the duty on sugar. It is not his wife or his friends who would be likely to complain if even one shilling a lb. was the tax on sugar. But the hon. Member should come up to the areas for which some hon. Members on this side speak. I come from one of the most distressed areas in the country. In that area, there has been recently an inquiry into the condition of malnutrition in the schools. That inquiry has shown that we have in that area a condition of malnutrition which is one of the worst in the country.
        Sugar is a valuable food for children. I am not speaking at the moment of the old age pensioners, of whom hon. Members opposite may say that, after they have given a life of useful service, the quicker they get into the grave and are no longer a burden on our taxes, the better; I am speaking of our future citizens, our future defence, children who, if they are starved now, will have to be rejected, when they are wanted later as conscripts, on the ground of bad health, and so on. Sugar is one of the major forms of food for the poor—in a way, it is unfortunate that it is so much a major food—and the particular meanness of this tax is that it is placed on a very cheap form of food which, in its poorest and roughest kind, is wanted not merely by the old age pensioners and the people who are unemployed, but by a very large number of people who are employed by those on the other side of the House at wages that are very little higher, if at all higher, than the amount the men would get if they were on the means test. It is

        1767
        these people who hon. Members opposite say ought to pay this tax.
        In a few minutes, I suppose we shall hear the beautiful voice of the Chancellor of the Exchequer uttering those sentences which I can almost repeat before he says them, about how necessary it is that all sections of the community should feel the burden and have the gladness and joy of making some sacrifice for the common cause. And that, said with a few sobs in one's voice, will go down at a Primrose League meeting. It would be no use the Chancellor coming and talking to my women in that way. Their sacrifice for the common cause, a sacrifice which saves your rates and taxes, is bad teeth and badly-nourished bodies. That is their sacrifice to the common cause for the purpose of saving taxation, while you are selling ships to Germany and getting high rates for the things needed for munitions. And then hon. Members opposite talk about sacrifices for the common cause. I say it is a scandal that there should be any taxation placed on the food of the working classes, and no beautiful sentiments, expressed in the beautiful voice which the Chancellor can produce, can justify such a scandal.
        6.49 p.m.
        Mr. Gallacher:The hon. Member for Colchester (Mr. Lewis) is the authentic voice of the other side of the House. I ask the Chancellor whether he wishes me to accord him any virtues. Does he wish me to bless him as one whose heart is beating with a love of humanity? Does he want me to credit him with unselfishness? No, in speaking as he did, he expressed the greed, selfishness and evil that is represented by the whole side of the House for which the Chancellor of the Exchequer will speak. If there were a tax on sugary language, instead of the nice mellow tones of the courthouse, we should get from the Chancellor the harsh voice of the counting house, as we got it from the hon. Member for Colchester. A tax on sugar is a tax on the poorest of the poor, and the poorer they are the more they will have to pay on this tax, because the poorer they are, the more they have to economise by baking and making jam. In my own home, I remember that when I was a boy, and my mother had been doing a day's work, she came home at night and did all sorts of
        1768
        baking in order to try to provide the family with the necessary and essential food Sugar was a necessary item.
        When one goes into the poorer homes and sees how much they have to use sugar to help with baking, jam-making and so on, one is amazed to hear the Chancellor claim that hon. Members on his side of the House have as much sympathy for the poor as we on this side have. None of the hon. Members opposite believes the Chancellor of the Exchequer. The Chancellor is the man who made most wonderful orations on the free breakfast table, and if it had not been for his orations on the free breakfast table, he would not be sitting on that Front Bench now. Always, when we are discussing the question of taxes on the poor, the right hon. Gentleman gets up and says, "But we are putting heavy taxes on the wealthy—Income Tax and Surtax." Hon. Members on this side are not children. They know how to count. They can read the newspapers and the financial journals. I challenge the Chancellor of the Exchequer to deny that the wealth of the wealthy people is increasing. Will anybody deny that, in spite of the Income Tax and the Surtax, the wealth of the wealthy people is increasing? Income Tax and Surtax are a fraud and a deception, for all the time the wealthy people are being left with more than they had before. "But," says the hon. Member for Colchester—the Chancellor is sympathetic, and the hon. Member for Colchester is not, but they both say the same thing—"every body wants to make a contribution." I ask, who builds the ships, who makes the guns, who runs the factories, digs the coal, and carries on transport? Is that not making a contribution? It is almost incredible that hon. Members opposite—loafers who have never contributed one thing to the production of the wealth of the country, who have never contributed to the making of a ship or a gun or the carrying on of transport—
        Mr. Speaker: The hon. Member is getting a long way off sugar.
        Mr. Gallacher: Thank you, Mr. Speaker. I will introduce a sweeter note. With all the effort that it is possible for me to muster, I do not know whether I could put myself in the position of the Chancellor or some of his friends when,

        1769
        in the courthouse, they make appeals that soften the heart of the judge and get a decision in favour of their clients. Who are the clients of hon. Members on this side of the House? We have the most hard-working and the poorest people in this country. We have the unemployed and the old age pensioners, who after 50 years of service in industry have to live on 10s. a week and who are now to be taxed on sugar as well as on other things. I make an appeal to the Chancellor, on behalf of these old people, on behalf of the mothers who have to care for large families and who have to use so much sugar to maintain their families. I do not know whether the Chancellor of the Exchequer is going to reply to the Debate. If the Chancellor does not give the kind word, then the Financial Secretary to the Treasury will be overflowing with sympathy, but sympathy will not make scones or jam.
        Dr. Edith Summerskill: Not without sugar.
        Mr. Gallacher: I want to make a special appeal to the Chancellor of the Exchequer. One of my hon. Friends said that it would be a good thing if the right hon. Gentleman the Chancellor of the Exchequer would try to live for a week on 10s. I think it would be better if, instead of going away to some of the country houses at the week-ends, he would spend a week-end with an old age pensioner—I will get him fixed up—or with a widow who has a large family. [Interruption] I am looking at the matter from the point of view of a woman who has a hard and bitter struggle to make ends meet. I wish hon. Members were not so quick in the uptake. I would like to put the right hon. Gentleman in touch with someone who has a hard and bitter struggle to make ends meet, and in the course of that struggle has to use a large amount of sugar. I am certain that if the Chancellor were brought into touch with the old age pensioner, with the widow who has to toil week in and week out in order to bring up a family, if he were brought into touch with the average member of the working class, and realised what sugar means to them and what an extra burden the extra tax will be, he would be prepared to reconsider this tax. If the right hon. Gentleman asserts, as he has done many times, that he is sympathetic by nature—it is
        1770
        very difficult for us to believe that—and if he has a large human feeling for those who are toiling, sorrowing and suffering, then let him show it now. Let him give it some practical expression. Let him not only say that he has sympathy, but show that he has it by withdrawing this tax.
        6.59 p.m.
        The Financial Secretary to the Treasury (Captain Crookshank):If I rise to make a few observations on this Amendment, it is not because I want to save my right hon. Friend the Chancellor of the Exchequer from the embarrassment of dealing with the invitation which the hon. Member for West Fife (Mr. Gallacher) has presented him. I think the House ought perhaps to be reminded, particularly after the speech of the hon. Member for West Fife, that although the Debate has been more or less a general Debate on the rates of Sugar Duty and their effect, it is really a discussion of an Amendment to reduce the duty, and not to abolish it. Hon. Members opposite have not put down any such rash Amendment in the present circumstances of our financial situation; they have not suggested that the duties should be taken off altogether. They have merely suggested that the pre-Budget rates should be reduced by exactly the same amount by which the Budget increases them. Perhaps while I am on the subject I might deal with the point raised by the hon. Member for Rothwell (Mr. Lunn). If objection is taken to the difficulty caused by increasing the duties by a farthing, it stands to reason that exactly the same difficulty would arise if the tax was decreased by the same amount.
        Mr. Lunn: Does the right hon. and gallant Gentleman regard that as an answer to my question?
        Captain Crookshank: Certainly, because the hon. Gentleman is presumably supporting the official Amendment of his party and, if it was carried, it would have the same effect as may or may not be the effect of the increased duty as outlined in the Budget statement. But, of course, the short answer to the criticism that we have heard is to be found in one remark of the hon. Member for North-East Bethnal Green (Mr. Chater), who said that, if the Amendment were carried, it would cost some £8,000,000. That is just what the House is faced with in this proposition.

        1771
        It means that instead of getting the estimated £4,000,000 of extra revenue this year which my right hon. Friend has thought it necessary to ask from this class—which is the totality of taxpayers—you would get £4,000,000 less than on the pre-Budget basis.
        But I do not want to leave it at that. The hon. Member for St. Rollox (Mr. Leonard), for example, quoted something which the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) had said about the rate of duty before the War. It is as well to remind ourselves that that was a quarter of a century ago, and a good many things can happen in 25 years. We must also bear in mind that what the State collected in 1913–14 from the total direct and indirect taxes was £163,000,000, and what my right hon. Friend has had to budget for this year from these two sources is £916,000,000. We are now dealing not only with vastly increased demands on the taxpayer, but must consider rates of wages and hundreds of other factors if we are talking about the difference between to-day and 25 years ago.
        It was the right hon. Gentleman, with his experience and knowledge of the matter, who launched the larger attack. Other of his hon. Friends have more or less concentrated on the "hardship" aspect of the situation. The hon. Lady who came in at one door, made a speech, and went out at the other door, concentrated on the aspect of "hardship" on the young. The great bulk of the "hardship" speeches have dealt with the "hardships" which, it is anticipated, will fall upon the old, and particularly the old age pensioners. My hon. Friend the Member for Colchester (Mr. Lewis) pinned the question that they raised firmly down when he reminded them that what was under discussion was a tax that was going to be paid by everyone, whether old age pensioners or people in work or youth or anyone else. That is the whole essence of this type of indirect taxation— it falls upon everyone.
        As the question of indirect taxation has been raised I would remind the House that, taking into account the proposals of the Budget as it was opened, the ratio between indirect and direct taxes this year is in fact more favourable to the indirect taxpayer, about whom we have been talking all the afternoon, than it was in the
        1772
        bad years of the depression. It would be difficult for anyone making a survey of the general situation to say that the country is in a worse position to-day than it was in the years 1932–33 and 1933–34, but I repeat that the proportion this year is more favourable than it was then for the indirect taxpayer. [An Hon. Member: "Can you give us the ratios?"] Yes, if the hon. Member likes. The percentage of indirect taxation proposed by this year's Budget is 37.5 to 62.5 direct. In 1932–33 it was 39 indirect as compared with 61 direct, and in 1933–34 it was still more unfavourable for the indirect taxpayer—39.7 to 60.3.
        Mr. Mainwaring: Does the right hon. and gallant Gentleman consider that all other factors are equal?
        Captain Crookshank: I am dealing with one thing at a time. I was dealing with the factor of the direct and indirect taxpayers proportion. The right hon. Gentleman used a most extraordinary argument, repeating what he said last night, to the effect that he had been making some inquiries, and that this tax was bound to be passed on, because most people, while they do not sell sugar at a complete loss, do not make more than a small gross profit, since they use sugar as a catch-penny to attract the customer into the shop. He reminded me of the hon. Member for Silvertown (Mr. Jones), whose absence we all regret, who was always referring in his speeches to a "little bit of sugar for the bird." It seems an extraordinary argument to adduce for the Chancellor of the Exchequer not to increase the duty if for other reasons he thinks it necessary. After all, they need not use sugar for this extraordinary catch-penny system that the right hon. Gentleman has indicated, and whether they do or do not has no relevance to my right hon. Friend's proposal. He decided that sugar should bear this year a further burden, and he reminded us, as I remind the House again, that in the last three years increases of direct taxation have been such as to produce some £75,000,000 per annum, and that increases in indirect taxation during the same period only amount to some £12,000,000 per annum.
        I commend the right hon. Gentleman's opening remarks to those who were not here when he opened the Debate, because

        1773
        he told us something about what he considered was likely to be the market trend of sugar prices in the future. He was perhaps performing a useful function in pointing out that, if there is a further rise in price, it will not be due to this tax but to outside causes. He has certainly put it on record that, if there should be any considerable increase, it will not be the fault of this farthing extra tax.
        Mr. Alexander: The right hon. and gallant Gentleman cannot get away with it like that. I took the actual figures. I said that the increase in the wholesale price since 1st March last year has been 4s. 3d., of which 2s. 4d. was duty. It is no use for him to try to hide the fact that more than half of the increase is due to the increase of the impost.
        Captain Crookshank: The right hon. Gentleman also gave it as his opinion that there was going to be a further rise owing to the rise in the international price of sugar.
        Mr. Alexander: And that it was reasonable not to increase the tax at such a time.
        Captain Crookshank: That may be the right hon. Gentleman's opinion, but it still remains to be put on record that there are many other important factors which may tend to produce a rise in the price of sugar quite irrespective of this. This, it is admitted, represents a farthing a pound at present, and that would bring the price up to 2¾d., which is a farthing more than what has been the retail price generally since February, 1937. As the result of this the price will go up—assuming that it goes up by the full farthing—to 2¾d., and then it reaches the price at which it was in July, 1929. I think it is just relevant to bear in mind that in July, 1929, the Ministry of Labour cost-of-living index number was 161. At present, with that extra farthing added to the 2½d. which has been the average price since February, 1937. the cost-of-living index figure is 153. Let us bear those figures in mind when considering what this extra burden may involve. I really have nothing more to say except to reinforce the fact that this proposal would lead to a loss to the Budget this year of about £8,000,000. I am sure that, on further reflection, even hon. Members opposite will understand that it is not a proposal which my right
        1774
        hon. Friend could in present circumstances possibly accept, and therefore we must ask hon. Members on this side to support us in rejecting it.
        7.14 p.m.
        Mr. Ede: I suppose we have all had the experience of going to a theatre expecting to hear one of the great performers on the stage and have found a slip inside the programme to tell us that, owing to some personal misfortune, we shall have to put up with an understudy. I am sure that the right hon. and gallant Gentleman who has just done his best with the Amendment will not feel that I am passing any unduly heavy criticism on him if I say we feel very much the same now, because we had been hoping to hear a repetition of the right hon. Gentleman's speech on sugar, which many of us recall having heard for many years. The right hon. and gallant Gentleman completely failed to deal with the dilemma put to him by my hon. Friend the Member for St. Rollox (Mr. Leonard), a dilemma which the Chancellor of the Exchequer was always very fond of putting on this point. Is sugar a foodstuff or is it a raw material? My hon. Friend the Member for St. Rollox, in the example of jam, gave an instance which the right hon. and gallant Member did not attempt to answer. I do not think that the right hon. Gentleman would have been lured into the mathematics of the problem in the way the right hon. and gallant Member was. He asked us to bear in mind that even if the tax were now 14s. the Budget was £916,000,000, though it is my recollection that the amount we are raising out of taxation is £942,000,000; but a mere difference of £26,000,000—
        Captain Crookshank:We may as well get this right. If the hon. Member will look at the last page but one of the Financial Statement, he will see that the total budgeted for from taxes is £916,720,000. The other receipts come from other sources.
        Mr. Ede:We will take the taxation alone. In 1913–14 the receipts from taxation were £153,000,000, and to-day they are £916,000,000. That is to say taxation to-day is five and a half times as high as in 1913–14, but this tax, as pointed out by my hon. Friend the Member for Pontypool (Mr. Jenkins), is eight times as big, and therefore it does not seem to

        1775
        me that the right hon. and gallant Member has got us very far by that comparison. It does not justify the figure that is now proposed, and would hardly justify a tax at the level it would be at if this Amendment were accepted.
        A point was made by the hon. Member for Colchester (Mr. Lewis) which is continually being put forward from the other side of the House. He said that this was a tax to protect the homes, the liberties and the lives of all members of the community, and that therefore everybody ought to pay. I put again the point which I put in Committee yesterday. Does any one imagine that in any of the countries with which we may unfortunately go to war, there can be any envy of the homes and the lives of the people in the poorest streets of my constituency, where 30 per cent. of the people are still unemployed, or in the adjoining borough of Jarrow, or in the constituencies of my hon. Friends from South Wales? I venture to say that as the principal sufferers in war would clearly be those whose lot is far more pleasant than that of the people of whom I have just been speaking, it is fair that we should protest against this additional burden being placed on those people if
        it can be supported by no better argument than those which have been adduced by the right hon. and gallant Member. Many of those people live on so narrow a margin that the last penny is budgeted for and even the most trifling alteration in the price of foodstuffs leads to some alteration of the weekly budget, to such an alteration in the whole planning of the lives of those people as entails great hardship. I sincerely hope that my right hon. Friend the Member for Hillsborough (Mr. Alexander) will not be content with the rejection of his plea by the right hon. and gallant Member but will take this Amendment to a Division. I notice that the right hon. and gallant Member obviously felt that his arguments had been singularly lacking in conviction, because in his last sentence he made no appeal to the House as a whole. All he said was that he would rely on his party whips to get Members into the Lobby to support him, and we on this side of the House view with the greatest regret the attitude of the Government to the Amendment.
        Question put, "That' 14s. 0d.' stand part of the Resolution."
        The House divided: Ayes, 218; Noes, 140.

        Division No. 88.]

        AYES.

        [7.21 p.m.

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

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

        Fremantle, Sir F. E.

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

        Channon, H.

        Furness, S, N.

        Agnew, Lieut.-Comdr, P. G.

        Chapman, A. (Rutherglen)

        Fyfe, D. P. M.

        Albery, Sir Irving

        Christie, J. A.

        Gower, Sir R. V.

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

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

        Grattan-Doyle, Sir N.

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

        Colfox, Major W. P.

        Gretten, Col. Rt. Hon. J.

        Anstruther-Gray, W. J.

        Colville, Rt. Hon. John

        Gridley, Sir A. B.

        Apsley, Lord

        Conant, Captain R. J. E.

        Grimston, R. V.

        Assheton, R.

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

        Gritten, W. G. Howard

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

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

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

        Baillie, Sir A. W. M.

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

        Gunston, Capt. Sir D. W.

        Balfour, G. (Hampstead)

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

        Hambro, A. V.

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

        Craven-Ellis, W.

        Hammersley, S. S.

        Beauchamp, Sir B. C.

        Crooke, Sir J. Smedley

        Hannon, Sir P. J. H.

        Beechman, N. A.

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

        Harbord, A.

        Bennett, Sir E. N.

        Cross, R. H.

        Haslam, Henry (Horncastle)

        Bernays, R. H.

        Crossley, A. C.

        Heilgers, Captain F. F. A.

        Blair, Sir R.

        Crowder, J. F. E.

        Hely-Hutchinson, M. R.

        Boulton, W. W.

        Cruddas, Col. B.

        Heneage, Lieut.-Colonel A. P.

        Bower, Comdr. R, T.

        Davidson, Viscountess

        Hepburn, P. G. T. Buchan-

        Bracken, B.

        De la Baèe, R.

        Hepworth, J.

        Braithwaite, J. Gurney (Holderness)

        Denman, Hon. R. D.

        Herbert, Lt.-Col. J. A. (Monmouth)

        Brass, Sir W.

        Despencer-Robertson, Major J. A. F.

        Hogg, Hon. Q. McG.

        Briscoe, Capt. R. G.

        Doland, G. F.

        Hopkinson, A.

        Brocklebank, Sir Edmund

        Donner, P. W.

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

        Brown, Rt. Hon. E. (Leith)

        Duckworth, Arthur (Shrewsbury)

        Hulbert, Squadron-Leader N. J.

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

        Dugdale, Captain T. L.

        Hunloke, H. P

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

        Eastwood, J. F,

        Hunter, T.

        Burghley, Lord

        Edmondson, Major Sir J.

        James, Wing-Commander A. W. H.

        Burton, Col. H. W.

        Emmott, C. E. G. C.

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

        Butcher, H. W.

        Emrys-Evans, P. V.

        Jones, L. (Swansea W.)

        Carver, Major W. H.

        Entwistle, Sir C. F.

        Keeling, E. H.

        Cary, R. A.

        Everard, Sir William Lindsay

        Kerr, Colonel C. I. (Montrose)

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

        Findlay, Sir E.

        Kerr, J. Graham (Scottish Univs.)

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

        Fleming, E. L.

        Keyes, Admiral of the Fleet Sir R.

        Cazalet, Thelma (Islington, E.)

        Fox, Sir G. W. G.

        Kimball, L.

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

        O'Connor, Sir Terence J.

        Storey, S.

        Lamb, Sir J. Q.

        O'Neill, Rt. Hon. Sir Hugh

        Stourton, Major Hon. J. J.

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

        Orr-Ewing, I. L.

        Strauss, H. G. (Norwich)

        Leighton, Major B. E. P.

        Peat, C. U.

        Strickland, Captain W. F.

        Levy, T.

        Peters, Dr. S.

        Stuart, Hon. J. (Moray and Nairn)

        Lewis, O.

        Petherick, M.

        Sueter, Rear-Admiral Sir M F.

        Liddall, W. S.

        Pickthorn, K. W. M.

        Sutcliffe, H.

        Lindsay, K. M.

        Ponsonby, Col. C. E.

        Tasker, Sir R. I.

        Lipton, D. L.

        Radford, E. A.

        Tate, Mavis C.

        Little, Sir E. Graham-

        Raikes, H. V. A. M.

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

        Loftus, P. C.

        Ramsbotham, H.

        Thorneycroft, G. E. P.

        Lyons, A. M.

        Rathbone, J. R. (Bodmin)

        Thornton-Kemsley, C. N.

        Mabane, W. (Huddersfield)

        Reed, A. C. (Exeter)

        Titchfield, Marquess of

        M'Connell, Sir J.

        Reed, Sir H. S. (Aylesbury)

        Touche, G. C.

        Macdonald, Capt. P. (Isle of Wight)

        Raid, J. S. C. (Hillhead)

        Train, Sir J.

        McEwen, Capt. J. H, F.

        Reid, W. Allan (Derby)

        Tryon, Major Rt. Hon. G. C.

        Maclay, Hon. J. P.

        Remer, J. R.

        Wakefield, W. W.

        Macmillan, H. (Stockton-on-Tees)

        Robinson, J. R. (Blackpool)

        Wallace, Capt. Rt. Hon. Euan

        Macquisten, F. A.

        Ropner, Colonel L.

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

        Magnay, T.

        Ross, Major Sir R. D. (Londonderry)

        Ward, Irene M. B. (Wallsend)

        Maitland, Sir Adam

        Ross Taylor, W. (Woodbridge)

        Wardlaw-Milne, Sir J. S.

        Makins, Brigadier-General Sir Ernest

        Rowlands, G.

        Warrender, Sir V.

        Manningham-Buller, Sir M,

        Royds, Admiral Sir P. M. R.

        Waterhouse, Captain C.

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

        Ruggles-Brise, Colonel Sir E. A.

        Wayland, Sir W. A.

        Markham, S. F.

        Salmon, Sir I.

        Wedderburn, H. J. S.

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

        Salt, E. W.

        Wells, Sir Sydney

        Mayhew, Lt.-Col. J.

        Sandeman, Sir N. S.

        Whiteley, Major J. P. (Buckingham)

        Mellor, Sir R. J. (Mitcham)

        Simon, Rt. Hon. Sir J. A.

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

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

        Smiles, Lieut.-Colonel Sir W. D.

        Williams, C. (Torquay)

        Mills, Major J. D. (New Forest)

        Smith, Bracewell (Dulwich)

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

        Mitcheson, Sir G. G.

        Smith, Sir R. W. (Aberdeen)

        Womersley, Sir W. J.

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

        Smithers, Sir W.

        Wood, Hon. C. I. C.

        Morris-Jones, Sir Henry

        Snadden, W. McN

        Wright, Wing-Commander J. A. C.

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

        Somervell, Rt. Hon. Sir Donald

        Young, A. S. L. (Partick)

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

        Somerville, A. A. (Windsor)

        Neven-Spence, Major B. H. H.

        Spears, Brigadier-General E.L.

        TELLERS FOR THE AYES.—

        Nicholson, G. (Farnham)

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

        Mr. Munro and Lieut.-Colonel Harvie Watt.

        Nicolson, Hon. H. G.

        Stewart, J. Henderson (Fife, E,)

        NOES.

        Adams, D. (Consett)

        Green, W. H. (Deptford)

        Montague, F.

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

        Greenwood, Rt. Hon. A.

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

        Adamson, Jennie L. (Dartford)

        Grenfell, D. R.

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

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

        Griffiths, G. A. (Hemsworth)

        Muff, G.

        Ammon, C. G.

        Groves, T. E.

        Nathan, Colonel H. L.

        Attlee, Rt. Hon. C. R.

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

        Naylor, T. E.

        Banfield, J. W.

        Hall, G. H. (Aberdare)

        Noel-Baker, P. J.

        Barnes, A. J.

        Hall, J. H. (Whitechapel)

        Oliver, G. H.

        Barr, J.

        Hardie, Agnes

        Paling, W.

        Bartlett, G. V. O.

        Harris, Sir P. A.

        Parker, J.

        Beaumont, H. (Batley)

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

        Parkinson, J. A.

        Benn, Rt. Hon. W. W.

        Hayday, A.

        Pearson, A.

        Bevan, A.

        Henderson, A. (Kingswinford)

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

        Bromfield, W.

        Henderson, J. (Ardwick)

        Price, M. P.

        Brown, C. (Mansfield)

        Hills, A. (Pontefract)

        Pritt, D. N.

        Buchanan, G.

        Jagger, J

        Quibell, D. J. K.

        Burke, W. A.

        Jenkins, A. (Pontypool)

        Richards, R. (Wrexham)

        Cape, T.

        Jenkins, Sir W. (Neath)

        Riley, B.

        Charleton, H. C.

        Johnston, Rt. Hon. T.

        Ritson, J.

        Chater, D

        Jones, A. C. (Shipley)

        Roberts, W. (Cumberland, N.)

        Cluse, W. S.

        Kennedy, Rt. Hon. T.

        Rothschild, J. A. de

        Cocks, F. S.

        Kirkwood, D.

        Seely, Sir H. M.

        Collindridge, F.

        Lansbury, Rt. Hon. G.

        Sexton, T. M.

        Cove, W. G.

        Lathan, G.

        Shinwell, E.

        Daggar, G.

        Lawson, J. J.

        Silkin, L.

        Dalton, H.

        Leach, W.

        Silverman, S. S.

        Davies, R. J. (Westhoughton)

        Leonard, W.

        Simpson, F. B.

        Davies, S. Q. (Merthyr)

        Leslie, J. R.

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

        Day, H.

        Logan, D. G.

        Sloan, A.

        Dobbie, W.

        Lunn, W.

        Smith, Ben (Rotherhithe)

        Dunn, E. (Rother Valley)

        Macdonald, G. (Ince)

        Smith, E. (Stoke)

        Ede, J. C.

        McEntee, V. La T.

        Smith, T. (Normanton)

        Edwards, A. (Middlesbrough E.)

        McGhee, H. G.

        Stephen, C.

        Edwards, Sir C. (Bedwellty)

        McGovern, J.

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

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

        MacLaren, A.

        Stokes, R. R.

        Fool, D. M.

        Maclean, N.

        Summerskill, Dr. Edith

        Frankel, D.

        Mainwaring, W. H.

        Taylor, R. J. (Morpeth)

        Gallacher, W.

        Mander, G. le M.

        Thorne, W.

        Gardner, B. W.

        Marshall, F.

        Tinker, J. J.

        Garro Jones, G. M.

        Mathers, G.

        Viant, S. P.

        George, Major G. Lloyd (Pembroke)

        Maxton, J.

        Walkden, A. G.

        George, Megan Lloyd (Anglesey)

        Messer, F.

        Walker, J.

        Gibson, R. (Greenock)

        Milner, Major J.

        Watkins, F. C.

        1778

        1779

        Watson, W. McL.

        Williams, E. J. (Ogmore)

        Young, Sir R. (Newton)

        Welsh, J. C.

        Williams, T. (Don Valley)

        Westwood, J.

        Wilson, C. H. (Attercliffe)

        TELLERS FOR THE NOES.—

        Whiteley, W. (Blaydon)

        Windsor, W. (Hull, C.)

        Mr. Adamson and Mr. Anderson.

        Wilkinson, Ellen

        Woods, G. S. (Finsbury)

        Question put, "That this House doth agree with the Committee in the said Resolution."
        The House divided: Ayes, 214; Noes, 140.

        Division No. 89.]

        AYES.

        [7.31 p.m.

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

        Fyfe, D. P. M.

        Peters, Dr. S. J.

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

        Gower, Sir R. V.

        Petherick, M.

        Agnew, Lieut.-Comdr. P. G.

        Grattan-Doyle, Sir N.

        Pickthorn, K. W. M.

        Albery, Sir Irving

        Gridley, Sir A. B.

        Ponsonby, Col. C. E.

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

        Grimston, R. V.

        Radford, E. A.

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

        Gritten, W. G. Howard

        Raikes, H. V. A. M.

        Anstruther-Gray, W. J.

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

        Ramsbotham, H.

        Apsley, Lord

        Gunston, Capt. Sir D. W.

        Rathbone, J. R. (Bodmin)

        Assheton, R.

        Hambro, A. V.

        Read, A. C. (Exeter)

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

        Hammersley, S. S.

        Reed, Sir H. S. (Aylesbury)

        Baillie, Sir A. W. M.

        Hannon, Sir P. J. H.

        Reid, J. S. D. (Hillhead)

        Balfour, G. (Hampstead)

        Harbord, A.

        Reid, W. Allan (Derby)

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

        Haslam, Henry (Horncastle)

        Remer, J. R.

        Beauchamp, Sir B. C.

        Heilgers, Captain F. F. A.

        Robinson, J. R. (Blackpool)

        Beechman, N. A.

        Hely-Hutchinson, M. R.

        Ropner, Colonel L.

        Bennett, Sir E. N.

        Heneage, Lieut.-Colonel A. P.

        Ross, Major Sir R, D. (Londonderry)

        Bernays, R. H.

        Hepburn, P. G. T. Buchan-

        Ross Taylor, W. (Woodbridge)

        Blair, Sir R.

        Hepworth, J.

        Rowlands, G.

        Boulton, W. W.

        Hogg, Hon. Q. McG.

        Royds, Admiral Sir P. M. R.

        Bower, Comdr. R. T.

        Hopkinson, A.

        Ruggles-Brise, Colonel Sir E. A.

        Bracken, B.

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

        Salmon, Sir I.

        Braithwaite, J. Gurney (Holderness)

        Hulbert, Squadron-Leader N. J.

        Salt, E. W.

        Brass, Sir W.

        Hunloke, H. P.

        Sandeman, Sir N. S.

        Briscoe, Capt. R. G.

        Hunter, T.

        Simon, Rt. Hon. Sir J. A

        Brocklebank, Sir Edmund

        James, Wing-Commander A. W. H.

        Smiles, Lieut.-Colonel Sir W. D.

        Brown, Rt. Hon. E. (Leith)

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

        Smith, Bracewell (Dulwich)

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

        Jones, L. (Swansea W.)

        Smith, Sir R. W. (Aberdeen)

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

        Keeling, E. H.

        Smithers, Sir W.

        Burghley, Lord

        Kerr, Colonel C. I. (Montrose)

        Snadden, W. McN.

        Burton, Col. H. W.

        Kerr, J. Graham (Scottish Univs.)

        Somervell, Rt. Hon. Sir Donald

        Butcher, H. W.

        Keyes, Admiral of the Fleet Sir R.

        Somerville, A. A. (Windsor)

        Carver, Major W. H.

        Kimball, L.

        Spears, Brigadier-General E. L.

        Cary, R. A.

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

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

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

        Lamb, Sir J. Q.

        Stewart, J. Henderson (Fife, E.)

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

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

        Storey, S.

        Cazalet, Thelma (Islington, E.)

        Leighton, Major B. E. P.

        Stourton, Major Hon. J. J.

        Channon, H.

        Levy, T.

        Strains, H. G. (Norwich)

        Chapman, A. (Rutherglen)

        Lewis, O.

        Strickland, Captain W. F.

        Christie, J. A.

        Liddall, W. S.

        Stuart, Hon. J. (Moray and Nairn)

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

        Lipson, D. L.

        Sueter, Rear-Admiral Sir M. F.

        Colfox, Major W. P.

        Little, Sir E. Graham-

        Sutcliffe, H.

        Colville, Rt. Hon. John

        Loftus, P. C.

        Tasker, Sir R. I.

        Conant, Captain R. J. E.

        Lyons, A. M.

        Tate, Mavis C.

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

        Mabane, W. (Huddersfield)

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

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

        M'Connell, Sir J.

        Thorneycroft, G. E. P.

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

        Macdonald, Capt. P. (Isle of Wight)

        Thornton-Kemsley, C. N.

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

        McEwen, Capt. J. H. F.

        Titchfield, Marquess of

        Craven-Ellis, W.

        Maclay, Hon. J. P.

        Touche, G. C.

        Crooks, Sir J. Smedley

        Macmillan, H. (Stockton-on-Teas)

        Train, Sir J.

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

        Macquisten, F. A.

        Tryon, Major Rt. Hon. G. C.

        Cross, R. H.

        Magnay, T.

        Wakefield, W. W.

        Crossley, A. C.

        Maitland, Sir Adam

        Wallace, Capt. Rt. Hon. Euan

        Crowder, J. F. E.

        Makins, Brigadier-General Sir Ernest

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

        Cruddas, Col. B.

        Manningham-Buller, Sir M.

        Ward, Irene M. B. (Wallsend)

        Davidson, Viscountess

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

        Wardlaw-Milne, Sir J. S.

        De la Bère, R.

        Markham, S. F.

        Warrender, Sir V.

        Denman, Hon. R. D

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

        Waterhouse, Captain C.

        Despencer-Robertson, Major J. A. F.

        Mayhew, Lt.-Col. J.

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

        Doland, G. F

        Meller, Sir R. J. (Mitcham)

        Wayland, Sir W. A.

        Donner, P. W.

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

        Wedderburn, H. J. S.

        Duckworth, Arthur (Shrewsbury)

        Mills, Major J. D. (New Forest)

        Whiteley, Major J. P. (Buckingham)

        Dugdale, Captain T. L.

        Mitcheson, Sir G. G.

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

        Eastwood, J. F.

        Morris-Jones, Sir Henry

        Williams, C. (Torquay)

        Edmondson, Major Sir J.

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

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

        Emmott, C. E. G. C.

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

        Womersley, Sir W. J.

        Emrys-Evans, P. V.

        Nail, Sir J.

        Wood, Hon. C. I. C.

        Entwistle, Sir C. F.

        Neven-Spence, Major B. H. H.

        Wright, Wing-Commander J. A. C.

        Everard, Sir William Lindsay

        Nicholson, G. (Farnham)

        Young, A. S. L. (Partick)

        Findlay, Sir E.

        Nicolson, Hon. H. G.

        Fleming, E. L.

        O'Connor, Sir Terence J.

        TELLERS FOR THE AYES.—

        Fox, Sir G. W. G.

        O'Neill, Rt. Hon. Sir Hugh

        Mr. Munro and Lieut.-Colonel Herbert.

        Fremantle, Sir F. E.

        Orr-Ewing, I. L.

        Furness, S. N.

        Peat, C. U.

        NOES.

        Adams, D. (Cornett)

        Griffiths, G. A. (Hemsworth)

        Parker, J.

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

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

        Parkinson, J. A.

        Adamson, Jennie L. (Dartford)

        Hall, G. H. (Aberdare)

        Pearson, A.

        Adamson, W. M.

        Hall, J. H. (Whitechapel)

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

        Ammon, C. G.

        Hardie, Agnes

        Price, M. P.

        Anderson, F. (Whitehaven)

        Harris, Sir P. A.

        Pritt, D. N.

        Attlee, Rt. Hon. C. R.

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

        Quibell, D. J. K.

        Banfield, J. W.

        Hayday, A.

        Richards, R. (Wrexham)

        Barnes, A. J.

        Henderson, A. (Kingswinford)

        Ritson, J.

        Barr, J.

        Henderson, J. (Ardwick)

        Roberts, W. (Cumberland, N.)

        Bartlett, C. V. O.

        Hills, A. (Pontefrast)

        Rothschild, J. A. de

        Batey, J.

        Jagger, J.

        Seely, Sir H. M.

        Beaumont, H. (Batley)

        Jenkins, A, (Pontypool)

        Sexton, T. M.

        Benn, Rt. Hon. W. W.

        Jenkins, Sir W. (Neath)

        Shinwell, E.

        Bevan, A.

        Johnston, Rt. Hon. T.

        Silkin, L.

        Bromfield, W.

        Jones, A. C. (Shipley)

        Silverman, S. S.

        Brawn, C. (Mansfield)

        Kennedy, Rt. Hon. T.

        Simpson, F. B.

        Buchanan, G.

        Kirkwood, D.

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

        Burke, W. A.

        Lansbury, Rt. Hon. G.

        Sloan, A.

        Cape, T.

        Lathan, G.

        Smith, Ben (Rotherhithe)

        Charleton, H. C.

        Lawson, J. J.

        Smith, E. (Stoke)

        Chater, D.

        Leach, W.

        Smith, T. (Normanton)

        Cluse, W. S.

        Leonard, W.

        Stephen, C.

        Cocks, F. S.

        Leslie, J. R.

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

        Collindridge, F.

        Logan, D. G.

        Stokes, R. R.

        Cove, W. G.

        Lunn, W.

        Summerskill, Dr. Edith

        Daggar, G.

        Macdonald, G. (Ince)

        Taylor, R. J. (Morpeth)

        Dalton, H.

        McEntee, V. La T.

        Thorne, W.

        Davies, R. J. (Westhoughton)

        McGhee, H. G.

        Tinker, J. J.

        Davies, S. O. (Merthyr)

        McGovern, J.

        Viant, S. P.

        Day, H.

        MacLaren, A.

        Walkden, A. G.

        Dobbie, W.

        Maclean, N.

        Walker, J.

        Dunn, E. (Rother Valley)

        Mainwaring, W. H.

        Watkins, F. C.

        Ede, J. C.

        Mander, G. la M.

        Watson, W. McL.

        Edwards, A. (Middlesbrough E.)

        Marshall, F.

        Welsh, J. C.

        Edwards, Sir C. (Bedwellty)

        Maxton, J.

        Westwood, J.

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

        Messer, F.

        Whiteley, W. (Blaydon)

        Fool, D. M.

        Milner, Major J.

        Wilkinson, Ellen

        Frankel, D.

        Montague, F.

        Williams, E. J. (Ogmore)

        Gallacher, W.

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

        Williams, T. (Don Valley)

        Gardner, B. W.

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

        Wilson, C. H. (Attercliffe)

        Garro Jones, G. M.

        Mull, G.

        Windsor, W. (Hull, C.)

        George, Megan Lloyd (Anglesey)

        Nathan, Colonel H. L.

        Woods, G. S. (Finsbury)

        Gibson, R. (Greenock)

        Naylor, T. E,

        Young, Sir R. (Newton)

        Green, W. H. (Deptford)

        Noel-Baker, P. J.

        Greenwood, Rt. Hon. A.

        Oliver, G. H.

        TELLERS FOR THE NOES.—

        Grenfell, D. R.

        Paling, W.

        Mr. Mathers and Mr. Groves.

        Fifteenth Resolution read a Second time.

        7.39 p.m.
        Mr. T. Williams: I beg to move, in line 5, to leave out "fourpence halfpenny" and to insert "one penny."
        I do so to enable the Chancellor of the Exchequer to clarify what it a difficult problem to many people in the film industry. Particularly do I want to ask the right hon. Gentleman to clarify the situation with regard to the rebate on wastage referred to by him in his Budget speech. The right hon. Gentleman has accomplished many feats in his time, but he accomplished almost a miracle a week ago to-day, for whereas the right hon. Gentleman the President of the Board of Trade and all his predecessors for about 10 years have been trying to produce unity within the film industry, and have failed, the Chancellor accomplished that feat in about two minutes in his speech and apparently the industry is now united
        1782
        in opposition to these proposals of the right hon. Gentleman. At first sight, it may be that there is a good deal of misunderstanding with regard to these proposals and that their effect will not be nearly so disastrous as some of those within the industry seem to imagine, but there is genuine apprehension in certain quarters, and I hope the right hon. Gentleman will be able to relieve the tension and to satisfy those who may be adversely affected that the position is not nearly so bad as they imagine at the moment.
        The first question that I want to put to the right hon. Gentleman is with regard to wastage, and I want him to give a categorical reply concerning film that is wastage in the production, for I under stand that it is not at all unusual, in the production of a 5,000 feet film, for 4,000 feet to be wasted before the final product is turned out. If we take a 5,000 feet film and some four-fifths of the mute and sound track are wasted, that will involve the producers a considerable loss unless

        1783
        for the whole of that waste, rebate is available. We understand from the appropriate Department that their calculation of the Minister's proposals is that for 1,000 feet of 35 millimetre film, the Excise Duty will be about £2 3s., while in the production of the finished article one requires a triplicate film—mute, sound, and married—which would increase the £2 3s. to £6 9s. for the final article. If 4,000 of the 5,000 feet of film used was waste, that would involve the producer in a loss, for Excise Duty alone, of no less than £25 16s., whereas on a 1,000 feet film, as the President of the Board of Trade knows, that can be anywhere from 2½ per cent. to 5 per cent. of the total cost of that particular film. If the right hon. Gentleman will tell the House that on all the waste involved in the production of either small, short, documentary films, or news reel or feature films, a rebate will be allowed for, I am sure he will relieve the anxiety within the industry.
        Then I want to submit to the Chancellor that while the circumstances of the moment may be abnormal and revenue must be obtained from some source, it seems to be absurd that the documentary film, or the short film, or the educational film, belauded so much by the President of the Board of Trade when the Film Bill was passing through this House, the very thing we were all anxious to encourage, should now suffer this disability which falls upon it through the Excise Duty. As I explained just now, the documentary film is usually round about 1,000 feet long, and the Excise Duty on the first 1,000 feet—that is, the negative— would be £6 9s., but as each copy would cost £2 3s., and approximately 20 copies would be required of these documentary films for exhibition North, South, East and West, the total cost for increased copies beyond the negative, for Excise Duty alone, would be approximately £43. I understand that a documentary film might cost £1 a foot or it might be 10s. a foot, according to the subject and according to the good fortune of the producer. An Excise of £43 on a 1,000 foot film may be 5 per cent. or even more of the total cost of what we all regard as an educational feature. I do not think that this is the time when we ought to be imposing further burdens on that phase of the film industry, which is struggling
        1784
        very hard to hold its own and which, I believe, has been justifying itself in the past year or two.
        The feature film is a different proposition. Here the Excise Duty on a 7,000 foot film would be £45 3s., and if 20 prints of the feature film were produced it would involve the British producer in an excess cost for Excise Duty alone of somewhere about £346. Spread over a film that cost £7,500, or £15,000, or £22,000, £346 may not appear a very large sum; it may not mean the difference between the continuation of the production of the British film, or not, but, as the President of the Board of Trade in particular must know, the British film industry is struggling for its very life at this moment, and it seems extremely difficult to justify imposing further burdens, especially at a moment when we have 80 per cent. of the cine-technicians unemployed.
        I do not want to go into the figures of film production, we passed through that phase in 1938, but it is certainly relevant to the subject to tell the Chancellor of the Exchequer that he should have made meticulous inquiry before he indulged in this form of taxation, so that he might know exactly what would be the effect upon the production of British films. We learn that two years ago the output of British films was 270, but in the last year for which figures are available, the number was approximately 90. The independent companies are struggling to hold their own in very difficult circumstances. I do not want to exaggerate the danger to the industry, but I do want to say that while the President of the Board of Trade was trying to encourage the production of British films this increased duty seems to me to be a form of discouragement, of which we do not quite see what the ultimate effect will be. The President of the Board of Trade recently negotiated an agreement with America. It is well known that of the films shown in this country, 90 per cent. approximately are American, and in order to fulfil the British quota they have to put £2,000,000 of their money into the production of films in this country. Again, I would say that on a £50,000, £60,000 or £80,000 film. £346 more for Excise Duty will not make the difference between profit and loss, or make the difference between production or going out of production, but it will not improve

        1785
        the relationship with the importing country.
        A most important feature—and I want the right hon. Gentleman to give us the benefit of his general knowledge on this point—is connected with the news reels. I am credibly informed by those responsible for producing news reels that if the Excise Duty remains as is suggested by the Chancellor of the Exchequer, there will be no more news reels in this country. The news reel has become not only a part of every programme but a very welcome part of it. As a political partisan, in view of the propaganda that the cinemas have been giving to the present Government, I should say: "Away with the news reels," and I think the right hon. Gentleman would be doing us a good turn in that way, but, as the President of the Board of Trade said, the news reel has answered well in the past, and some news reels are the best part in our cinema shows. We all know that not only has the news reel been a good agent for propaganda for the Navy, the Army, Royalty, the opening of hospitals, the laying of foundation stones, etc., but it has formed a pure British propaganda, and I am bound to confess that if the fears told to me are real, then the Chancellor of the Exchequer ought to reconsider the Excise Duty, particularly as it affects the production of news reels.
        What are the figures as we see them? If a news reel is 1,000 feet, on the first copy £6 9s. will be paid in Excise Duty, but instead of printing some 20 copies of the news reel, as they might do of the documentary or the feature film, they will print many more. There are only five companies producing news reels for exhibition in this country, and there are 5,500 cinemas. A news reel must be used, and it must not be stale. You cannot show a month or two months hence a news reel taken this week. If they attempted to do that, it would no longer be news. Instead of 20 copies of this 1,000 feet news reel, approximately 1,000 copies would be required, and as each copy would cost in Excise Duty alone £2 3s., that would involve the producers in an Excise cost for duty alone of something over £2,000. I am informed that this Excise Duty will actually not only dispose of any profit that otherwise might have been made, but it is so heavy a burden that the new news reel producers cannot hope to carry on.
        1786
        I am not sure whether the right hon. Gentleman studied this question before he produced this proposal last week. If he did study the question before he made the proposal, then I imagine he must have made up his mind to do one of two things. If the question was studied as meticulously as it should have been, and the cost involved to the producing companies was clearly understood, the right hon. Gentleman must have had in his mind the feeling that some exception should be made as far as news reel producers are concerned. If that was not in the mind of the Chancellor of the Exchequer, then, quite clearly, he must have had a second thing in his mind, which meant one of two other things, either that the exhibitor exhibiting news reels would have to pay far larger sums than he pays to-day, or alternatively no more news reels would be produced.
        I hope that I have been clear enough for the right hon. Gentleman to get some idea of the points I want to submit to him. First, I hope he will clear up the position, for there is anxiety within the industry, and state categorically that when he said a rebate would be available for wastage, he meant that the rebate would be available for all wastage involved in the production of the finished article ready for the screen. Secondly, I would ask whether he feels it to be his duty to insist upon imposing a burden upon those who produce documentary or educational films, since a very small margin may mean the difference between profit and loss. If there is one film that we desire more than all else in this country it is the kind of film which shows our industries, our social life, our general social development, our incomparable countryside and the things that mean so much to the British people. Finally, I would ask whether as regards the news reels he feels that he can afford to do anything that may contribute towards putting that kind of film out of production. On the reply given by the right hon. Gentleman we shall decide whether or not we ought to vote for a reduction from4½d. to 1d. per foot, which at least would not impose the burden upon this hard-pressed industry that the proposal of the right hon. Gentleman does.
        7.58 p.m.
        Mr. Leonard: The examination directed to this matter by my hon. Friend the

        1787
        Member for the Don Valley (Mr. T. Williams) is sufficient for my purpose; but I would plead with the Chancellor of the Exchequer that he should very seriously reconsider his intentions. He will recollect that this House, or many Members of it, spent a considerable time examining the position of the cinema industry in Great Britain not long ago. The industry was deemed to be of such importance that a Statutory Committee was set up for the purpose of examining matters for the guidance of the Board of Trade. That special Committee consists of 21 members, 11 of whom are independent, and represent various sections in this House. Speaking as one of the 11 independent Members, I would impress upon the right hon. Gentleman the fact that the whole of the Committee are seized with the great difficulty of the British production units, and they feel that nothing should be done to weaken their position. Therefore, the Chancellor of the Exchequer ought to pay some attention to that point. The right hon. Gentleman will bear in mind that the quota film to rank for the British quota is fixed on a financial basis. A financial formula is the form for determining the quota. It would not be good for the industry that of the financial requirements a considerable portion of the money was required for taxation. Because of that rather simple but important point, I trust the right hon. Gentleman will reconsider the matter.
        8.0 p.m.
        Colonel Baldwin-Webb: I followed closely the remarks of the hon. Member for Don Valley (Mr. T. Williams), whose interest in and knowledge of the film industry are so well-known, and I strongly support the view which he has expressed. I hope the Chancellor of the Exchequer will see his way to meet the request which has been made in regard to educational films and news pictures. We do not wish to do anything which would restrict that side of production in this country. Furthermore, I understand that the proposals, as they stand, would seriously affect the continued production at home of coloured pictures, both educational pictures and others. I hope that the Chancellor of the Exchequer will collaborate with the President of the Board of Trade in giving consideration to this very important question and will recognise the importance of doing all we can
        1788
        to encourage the production at home of films of educational value, not only for exhibition at home but also for exhibition overseas, in exactly the same way as we should encourage the production in this country of bigger and better news reels.
        8.2 p.m.
        Sir J. Simons:The hon. Member for Don Valley (Mr. T. Williams), not for the first time, has dealt with this necessarily rather complicated subject in a manner which I am sure has gained general acceptance in the House and I am much obliged to him for having stated his points so clearly and precisely. He manifestly and rightly, was well prepared to put those points before the House accompanied by figures and calculations in which he will not expect me to follow him here and now. I will examine with my advisers what he has said, but I think it would be useful, at this stage, to make a short statement, even though it should be of a rather more general character than the hon. Member's speech. I am confident that I can go a long way towards satisfying my hon. and gallant Friend the Member for The Wrekin (Colonel Baldwin-Webb) on some, at any rate of the anxieties which he has expressed. I may mention that the hon. Lady the Member for Jarrow (Miss Wilkinson) has also put in a manuscript Amendment to which I shall refer later.
        First, let me say that it is necessary for us to get a view of the scheme of these duties, all taken together, and I propose to say something about that, while not forgetting that there are special questions of wastage, of educational films, and of news reels, which I must mention separately. Though this proposal is one for which I am responsible, it has only been put forward after a great deal of consideration, during which my right hon. Friend the President of the Board of Trade has been brought into consultation. I think it will be found that, in principle, the proposal is a good one, though I am willing to admit that, as is often the case with new taxes which are complicated and rather technical, it may be necessary to consider proposals for adjustments on certain points some of which will have occurred to hon. Members already. What one has to bear in mind is that the scheme involves an Excise Duty on the manufacture in this country of blank film and a Customs Duty on imported blank film and imported picture film. There is no

        1789
        Excise Duty on a British picture as such, although the blank film used for making the picture is subject to an Excise Duty.
        This brings me to some remarks about the question of wastage. I do not think that I was obscure upon that point in my Budget speech. I meant exactly what I said then, and I think it was accurately phrased. Perhaps it took the cinema industry by surprise, and I agree that it goes much further than one usually goes when making any sort of rebate or allowance for wastage. But I repeat that I meant exactly what I said, namely, that under suitable conditions we propose to give back the whole of the Excise Duty in respect of film in this country which is wasted. I do not speak with the knowledge of some hon. Members opposite, but I am aware that in the making of a picture in this country there is a large amount of film which, for one reason or other, is not ultimately used. It may be spoiled or there may be some other reason for not using it. I do not profess to use technical language, but I am stating the matter as clearly as I can. What I mean is that there may be thousands of feet of blank film which has paid Excise Duty. I propose that so far as it is shown to be wasted in production, we should pay back not a part but the whole of the Excise Duty on the amount of that wastage.
        I hope I have made that plain and I am glad to have had this opportunity of doing so. I know something of the difficulties of the industry from the limited opportunities which I have had of seeing its working in Wardour Street or in the studios, and I know that there is constantly an immense amount of waste which is not represented fruitfully in earning power. I think it would be intolerable to charge Excise duty on that part of the film which is shown to be wastage.
        Sir Adrian Baillie: Part of the industry at least is still in doubt about this matter of wastage and the precise extent of the proposal. A film which runs to 10,000 feet on the screen may represent the expenditure of 80,000 or 100,000 feet of film. I am sorry if I am raising a point which has been mentioned already, but the question uppermost in the minds of producers is, whether all that is not shown on the screen is wastage, or what exactly is to be wastage. If it is just to be a matter of short ends of blank film, it will be very difficult to check.
        Sir J. Simon: I do not know that the point which the hon. Member now puts is different from that which was put earlier by the hon. Member for Don Valley. I will see whether I can produce, if desired, a technical definition which is, I imagine, what the trade would like, but I think that on this matter they would be well advised to do what other sections of the trade are doing, and put themselves in communication with the Customs and Excise Department. We are having special expert advice on the subject, and I am sure that any difficulty of the sort which has been indicated can be solved. It will be understood that, speaking here, I cannot use technical language because of the possibility of causing misunderstanding.
        If I may resume, I would point out that, subject to this rebate or return of duty for wastage, the Excise duty proposed is 4½d. per square foot. I understand the hon. Gentleman opposite would like to delete 4½d. and substitute 1d. The reason we chose the square foot as the unit of measurement for domestic made films, is because, in practice, it is much more convenient. I think the common width of cinema film is 1⅜ inches and if you multiply that by nine, you get almost exactly 12. Therefore, 4½d. on the square foot is very much the same thing as ½d, per linear foot. That is the Excise duty which we propose, subject to the rebate I have already explained. That is the new duty and I cannot agree that I am, necessarily, inflicting an injury on the British cinema trade or discouraging British films by that part of the proposal. What is necessary, of course, is that the Customs duty should be in a suitable proportion. At present there is a Customs duty on imported blank film. It is rather complicated and based on a combination of two formulae, but it is enough on this occasion to say that it is equivalent to something between 3d. and 5d. per square foot, dependent on value and various other factors. What I propose is that we should make the Customs duty on imported blank film 9d., which, contrasted with the Excise duty of 4½d., roughly maintains the difference between the home made blank film and the imported blank film which exists at present.
        I am as much alive as anybody can be to the great importance of not putting any clogging burden upon the British film industry which everybody

        1791
        wants to encourage for every reason. The principal reason is that British films, as far as I have seen them, are uncommonly good and are improving rapidly—not only the picturesque and romantic films of which some admirable productions have been made recently, but also educational films, news films and others. I contend that to rearrange the duty on blank film so that there still remains the full degree of difference between the Customs duty and the new Excise duty, cannot, in itself, be a discouragement to British films as far as what I may call the raw material is concerned.
        I would observe that the cinema industry is a very great industry now. It has had its difficulties and we have discussed them often in this House, but if the figures given to me are right, the box-office takings of the industry in this country now amount to between £45,000,000 and £50,000,000 per annum. I do not think, therefore, that an Excise Duty which, from first to last, is calculated to produce £600,000 is going to bring about a complete revolution. The industry may take a little time to shake down as between producers, distributors and proprietors of cinema theatres but every new duty is like that. Of course it is not the duty of the Chancellor of the Exchequer and the Treasury merely to tell everybody to take a scheme of this kind just as it is proposed. What they may have to do is to consider adjustments, if there are places where the new scheme does not fit. That applies to this proposal, but the principle is one which, I think, the House of Commons will regard as sound.
        That is as regards the duty on blank films. Now we come to the case of the picture film. When I first examined this very interesting subject it struck me as most remarkable that I should be able to calculate on gaining something like £600,000 from the Excise Duty on cinema film which is purely internal, and yet expect to get a smaller amount from the Customs Duty, the two together making with the remainder of my proposals a total of something like £1,000,000. The explanation is not only that British films are—as I hope with all my heart they are —going ahead, after great difficulties but that the Hollywood film introduced from abroad, arrives here, in many instances,
        1792
        as a single specimen and is then reproduced here. The reproduction even of an American film is largely a matter of English reproduction and English blank film. Therefore, the Excise Duty mounts up while the Customs Duty does not provide as much as one would expect. Of course there is a great deal of justice in saying that if the film is one of which many reproductions are made, if it is going to be used in a great many cinema houses, if it is calculated to have a wide circulation, the amount which it contributes to the revenue should rise, as it would rise because, of course, an increased amount of blank film is being used.
        I am entirely of the view that we have to see how this new plan will really work in reference to films which have a special value from the point of view of their influence and educational usefulness, but which in some cases may not have anything like so wide and prominent a circulation as the popular romantic film. I want to examine carefully what the hon. Gentleman has said with my advisers, who include those with great knowledge of this industry. The Customs and Excise Department will consider with the representatives of the industry whether modification is needed. My own view is that some modification may be needed, but the form which it should take has to be considered. If it were possible to show that a particular film had not been reproduced it might have a claim for preferential treatment over one which was multiplied and circulated all over the Kingdom.
        It was with these things in mind that I framed the new Customs Duty. Originally the idea of the Customs Duty on imported picture film was to put a high charge of 5d. per linear foot on the negative of the film, but that on the positive copies that came in the Customs charge should be 1d. per foot run. As I explained in the Budget speech, and I believe I am confirmed by the trade, methods are in common use which avoid the higher duty for the first entrant by not having any negative imported at all. One would have thought it was difficult to print from the positive, but science is a wonderful thing, and it is possible to import from abroad a single positive picture and to reproduce it and circulate it throughout the country. If that is the case, no negative copy ever enters at all, and the real object of the duty, which was to put a stiffer tax on the first entrant,

        1793
        was being defeated. I think the House will agree with me that it is right to revise that because the principle was a true principle, but it was not being applied. I have, therefore, arranged in the new Customs Duty that the first copy of the picture film—whether it is a positive or negative does not matter—shall pay the full rate and that subsequent copies shall pay the lower rate. In view of the fact that we have now an Excise Duty, it seemed to me right to increase the Customs Duty and make the duty on foreign-made picture films 6d. for the first copy instead of 5d.
        Mr. T. Williams: What the right hon. Gentleman has just related with regard to negatives and positives is correct. It did create an anomaly, but in the process of side-stepping the original purpose by sending a positive film here and having a negative made from the positive, it has tended to create a good deal of work for technicians in our own laboratories. I do not ask the right hon. Gentleman completely to dispose of his original intention, but when he re-examines it perhaps he will look at the employment created.
        Sir J. Simon: My attention has been called to that, and I appreciate that it is an important point. If what one gets from abroad is not a negative from which one can print at once, but is a positive strip, no doubt there are additional processes which have to be applied and which, therefore, find inside this country employment for specially trained people. It thus helps to give employment and I agree that that factor cannot be overlooked.
        I have tried to give to the House a picture of the scheme of the new duties. I think the scheme is good and I hope the House will come to that conclusion. I cannot believe that an Excise Duty which is expected to produce £600,000 will prove a really serious clog to a great industry which is now taking at its box offices £45,000,000 to £50,000,000 in the year. I am anxious to meet the objections raised by the hon. Member. I have made inquiries of the Customs and Excise to-day and they tell me that they are already in communication with the various branches of the industry. They have instructions and themselves wish to consider the causes of difficulty, some of which were mentioned here to-day. The case of the news reel is very present to my mind.
        1794
        The point about it is not so much that it is reproduced, but that it lasts such a very short time. News soon ceases to be news. Anybody who has seen that most interesting feature in a cinema entertainment knows how extraordinarily quickly any particular picture included in the news reel disappears, for when you send your friends to look at it the message often comes back that it has been taken off.
        Mr. T. Williams.As in the case of the right hon. Gentleman.
        Sir J. Simon: I was taken off after five minutes. That was only fair. I hope I have shown the House the basis and principle of this new tax which I strongly commend. At the same time, I repeat the assurance that I appreciate that modification may be necessary, and I hope to consider that question with the help of the trade. This is not the subject for a prolonged Debate or declaration. It is a technical subject in which I hope, with general co-operation, we shall be able to work out a good scheme.
        8.23 p.m.
        Mr. Pethick-Lawrence: I do not profess to have any expert knowledge on this subject, but I would like to express what, I think, is the view of my hon. Friends before we part with this Amendment. It was not easy to follow the precise effect of what has been said in the House from hearing it, but, as far as we can understand, the right hon. Gentleman is prepared to do the straight thing in this matter. Therefore, we do not propose to carry the Amendment to a Division. We shall watch carefully when the Finance Bill is introduced to see whether what the right hon. Gentleman says is, in our opinion, fully implemented in the terms of that Bill. We hold ourselves free to take any action when that time comes that we may think necessary. In view of what the right hon. Gentleman said and his obvious desire to deal fairly in this matter, we do not propose to divide the House on the Amendment.
        Mr. T. Williams: I beg to ask leave to withdraw the Amendment.
        Amendment, by leave, withdrawn.
        8.25 p.m.
        Miss Wilkinson: I beg to move, in line 6, at the end, to insert:
        "Provided that the present rate of import duty shall still apply in the case of the import of a first copy where the importer signs an affidavit undertaking not to allow the whole or any part to be copied and to operate with only one copy."
        This Amendment raises rather a different point from that with which the Chancellor has dealt. He was speaking, as he rightly said, of a great industry which has found a means, when a positive film is introduced, of printing from it a very large number of copies, and that is a point with which the right hon. Gentleman is going to deal. The Amendment deals with a very different industry, one which is very highly individualised and specialised but which 'is essential if the work now admittedly being done to improve British films is to be extended. It is important that our younger technicians and our interested film-going public should have the opportunity of seeing the very best work that is being done elsewhere, in foreign films, and other kinds of specialised films. Generally speaking, those films have practically no general appeal. They appeal to a specialised public which is partly technician and partly consists of those who take a great interest in films.
        At the present time there are the London Film Society and a number of other film societies in this country, and there are specialised art cinemas. I might mention the Curzon Cinema. There are others of that kind who specialise in these films. They constantly use only one copy. There is no question whatever of a positive being introduced and a very large number of positives being printed from it, or of avoiding the duty, which is a very difficult matter for them. I am speaking as a member of the council of the Film Society. When we introduce a film novel, it pays a duty of £40, and when you are giving only one show that £40 is almost prohibitive. We are continually dealing with the Customs officers, trying to get films scheduled as educational, but not all of them are so scheduled that ought to be. I give the figure of £40 merely as an illustration.
        A film which now pays the £40, will have to pay £240 if this Customs Clause goes through. That would mean that the London Film Society, or theatres like
        1796
        the Curzon Theatre, would have to pay precisely the same for only one week's showing of their film as would be paid by people who might bring in a Greta Garbo film to be shown in thousands of cinemas all over the country. The effect of the change would mean the closing down of all the film societies. There is no point in the film societies showing films that are easily accessible to ordinary cinema audiences in this country. They show films which are not ordinarily going to the cinemas; that is in their articles of association. The second thing is that, even though the highly specialised theatre might not have to close, it would be restricted only to those films which they could be sure were non-commercial films. They might, for instance, regard the new Zola film as having a certain sensational interest and likely to have a long run, and they might pay the £240 on that but some other plays like "Le Roi S'amuse," of interest only on technical grounds, might have only a short run.
        The Chancellor has shown himself in every way fair to representations of this kind, and I hope we can get him to consider allowing to this almost miniature section of the industry such a rebate as I have suggested in the Amendment. It might not be the best way of dealing with the matter. The best thing to do would be to cut out altogether the duties on this highly specialised work. That would re-pay us a thousand fold, as a nation desiring to put forward our national point of view on the films as the Americans have done. This is really highly educational work, although we are not suggesting that it is highly educational to the general public. The general public will not go and see these films. If they would, these questions would not arise. The work is highly educational to people who want the opportunity of seeing these things and to students in the film academies and in universities. It is for that kind of public that this kind of film exists. If the Chancellor cannot cut out the duty altogether, I suggest that he should allow us the rebate in the way suggested in my Amendment.
        Mr. Jagger: I beg to second the Amendment.
        8.34 p.m.
        Sir J. Simon: I would like to assure the hon. Lady that I am not suggesting that you can improve the standard of British

        1797
        art by putting a tax on foreign art. I sympathise entirely with the spirit of much that she has said. We have already quite understood the interests of this particular section of the cinema movement, represented, I believe, by the showing in this country, for example, of certain French films which some people would call high-brow, but at the same time are of great interest and importance. In devising these taxes the best way to secure fair treatment in such a case as she has put forward is a matter for consideration, but I can assure the hon. Lady that I have not the least intention of allowing the full burden of this duty to fall upon cases such as she has mentioned. I have no doubt that we shall find a way to see that we do not hamper unduly a very interesting section of the cinema movement which is not primarily commercial, and which is of very great importance both in the development of new ideas and to cinemas showing this type of film.
        Miss Wilkinson: I thank the Chancellor warmly for his sympathetic reply, and beg to ask leave to withdraw the Amendment.
        Amendment, by leave, withdrawn.
        Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
        8.36 p.m.
        Mr. Alexander: Before the House leaves the question of films, I want to bring to the Chancellor's notice another matter in which great difficulty has been experienced by processing laboratories in connection with the class of films described as sub-standard. Quite apart from the section of the film trade to which the Chancellor has been giving sympathetic consideration, these sub-standard films are subject to a very great deal of trade credit and to large discounts, and, in consequence of the working of these discounts as between, first of all, the processing laboratories and the wholesalers, and then between the wholesaler and the retailer, until finally they are passed on to the amateur user of the film, there is a great deal of difficulty as to how the duty shall be arranged. At the rate proposed by the Chancellor, it works out at 2s. per 100 linear feet. I do not wish to go into the matter in detail at this stage, but simply to say that, because of the opera-
        1798
        tion of these discounts in the case of this class of film, considerable difficulty has been experienced, and it is suggested that, instead of passing on a duty of 2s. per 100 feet, it will be necessary to double that rate, and thereby very largely discourage trade in that section of the industry. May I ask the Chancellor if he will undertake to receive more details and technical trade representations between now and the Finance Bill?
        Sir J. Simon: Certainly.
        Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
        8.38 p.m.
        Captain Crookshank: This Resolution relates to a perfectly legitimate practice which already takes place in brewing, namely, the practice of priming and colouring. "Colouring" is self-explanatory and "priming" is the addition of some sugar solution in the course of the production of the beer. Up to the present time these additions of "priming and colouring solutions" have always been made at the brewery itself, but I understand that owing to recent developments in connection with bottling and so forth, this is now more often done at depots nearer the place of consumption rather than at the brewery itself. In view of the fact that priming and colouring should be done at the last moment in order that the best beer may be produced, a desire has been expressed by the brewers that facilities should be given for the priming and colouring to be done elsewhere than at the brewery. This Resolution is designed to permit the introduction of a Clause into the Finance Bill for that purpose, in order to meet what is in effect a growing development of trade practice. So far as I know there is no objection to this proposal. The reason for the Resolution is simply that, if the trade wish to have this facility, it is only reasonable that they should pay for it in the form of licence duty. The licence duty is intended to cover the general cost of supervising the priming and colouring when it is done at depots instead of at the brewery. I hope that this is a clear explanation of the Resolution.
        Mr. Pethick-Lawrence: I take it that the Chancellor of the Exchequer does not expect to get any revenue from this duty, but merely to pay the expenses of carrying out a method which is more convenient to the trade?
        Captain Crookshank: That is so; from the Exchequer point of view there is no money in it, but we do not think it right that the State should lose by this new practice and the object broadly is to cover the extra cost.
        Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
        8.42 p.m.
        The President of the Board of Trade (Mr. Oliver Stanley): This Resolution clears up a very small point that was left over from the Anglo-American Trade Agreement. As hon. Members know, most of the reductions of duties resulting from that Agreement were brought into effect by Order, but, owing to a technicality which I will explain, this particular one involved a point which had to wait over until the Budget. Prior to the Anglo-American Agreement, the rate of duty on this class of goods was 15 per cent. ad valorem, but during the negotiations the Dominions agreed to the substitution of the specific duties set out in the Resolution. As far as the United States were concerned, with their scale of prices for this class of goods, the specific duties represented a very considerable decrease on the ad valorem duty of 15 per cent., and, if that had been the only country involved, it would have been possible to bring them in in the ordinary way by a Treasury Order. But there is a certain class of imports, very small in quantity, coming from Japan, where the price is so low that specific rates are about equal to, or in some cases slightly over, the 15 per cent. ad valorem, and, as the Treasury Order procedure can only be used for a reduction of duty, it was not possible to bring them fully into effect by that means; under the Treasury Order procedure we had to put on a specific duty or a duty of 15 per cent. ad valorem, whichever was the less. We are now removing the alternative ad valorem duty altogether. The only effect of the
        1800
        Resolution is that, while carrying out our undertaking to the United States under the Agreement, it gives some protection to Dominion producers against a small section of very low-priced commodities coming from Japan.
        8.44 p.m.
        Mr. Alexander:The effect of this Resolution will be to take away from the consumer any advantage which might accrue to him where the ad valorem duty would show a lesser yield than the new specific duty. I suppose that what the right hon. Gentleman has in mind are cheap tinned articles—
        Mr. Stanley: Fruit salad and pineapple.
        Mr. Alexander:—from Japan. With regard to other classes of canned goods in syrup, I take his remarks to mean that the Americans would gain by this provision in the case of sliced pineapple, though I should hardly have thought that that would have been the case as regards pineapple chunks. I do not propose to regard the matter as important enough to divide about, but it is clear that whatever advantage the consumer might have got where the ad valorem duty was lower than the specific duty is now to go, and the consumer is to pay.
        Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
        8.45 p.m.
        The Parliamentary Secretary to the Board of Trade (Mr. Cross):This Resolution gives effect to an undertaking in the Trade Agreement recently concluded with the United States of America that (he duty on patent leather not shaped shall be reduced from 15 per cent. ad valorem to 7½ per cent. ad valorem. The rate of 15 per cent. ad valorem was guaranteed to the Canadian Government under the Trade Agreement of 1937. Linked with this reduction in the United Kingdom duty is a reduction of the United States duty to the same level, because Canada agreed to the reduction in the United Kingdom duty only on the understanding that the United States duty should be similarly

        1801
        reduced. So we have here a good example of a trade agreement producing an all-round reduction of a tariff.
        The Resolution covers goods composed wholly of patent leather on which no additional duty is payable under the Import Duties Act. It is, in fact, practically certain that any patent leather, either shaped or made up, would be charged the full duty. For instance, shaped patent leather for shoes would be charged with a duty of 20 per cent. ad valorem. There is therefore no reason to think that any of the home industries will be deprived of protection. The production in the United Kingdom in 1935 was approximately 8,500,000 square feet. The United States product is similar to the Canadian, which is already coming in free, and there is no reason to anticipate any adverse effect on the home industry. The other reductions arising out of the agreement with the United States were made by Treasury Order, and took effect from 1st January last. But the powers to reduce duties by Treasury Order apply only to duties imposed under the Import Duties Act, the Ottawa Agreement Act and with some limitations to the Silk Duties. The duty on patent leather is imposed under the Finance Act, 1934. For that reason, it is necessary to seek the authority of the House of Commons to make this reduction.
        8.48 p.m.
        Mr. Stanley: I beg to move, "That this House doth agree with the Committee in the said Resolution."
        The object of this Resolution is to substitute the new agreement signed with India last March for the agreement which is now scheduled to the original Ottawa Act. The Indian Agreement has been published in the Press; it has had a considerable amount of publicity given to it, and I do not think the House would expect me to-night to do more than run over the most salient points. Hon. Members will recollect the circumstances in which this new treaty was inaugurated. The initiative for the negotiations came from the Government of India, who in May, 1936, gave notice to terminate the existing Ottawa Agreement owing to an
        1802
        adverse resolution which had been passed in the Indian Legislative Assembly after the pledge they had given that if the decision of the Assembly was adverse they would denounce the agreement. Subsequently it was arranged between the two Governments that pending the negotiation of a new agreement, the Ottawa Agreement should, subject to denunciation at three months notice, remain in force. Ever since I came to the Board of Trade, two years ago, these negotiations with India have been proceeding, and it is no secret that they have been among the most difficult negotiations which the Board of Trade has ever had to conduct.
        Although the denunciation of the treaty originated in India, on the grounds that they were dissatisfied with the operation of the original treaty and desired something better from their point of view, a considerable number of complaints have also come from industries in this country, which wished for a modification of the old treaty. At an early stage in the negotiations it became quite apparent that the Government of India were not prepared to conclude any new agreement which did not permit of the discontinuance of a substantial number of the tariff preferences which were secured to the United Kingdom by the original treaty at Ottawa. From the outset, therefore, His Majesty's Government were faced with the decision as to whether they were prepared to accept that in return for other concessions which might be made in a different direction and with which I shall deal later, or, if they were not prepared to accept it, whether they were prepared for the old treaty to lapse. The result of that would have been that we should have lost not only the preferences which under the new treaty we have had to give up, but the preferences—of a very considerable amount—which under the new treaty we retain. The Government came to the conclusion that, on economic grounds alone—apart from the political significance, which is obvious to everyone, of a trade war with India—it would be better to conclude a new treaty, even if it meant the sacrifice of some of our preferences. If it was compensated for— as we had reason to believe it might be —by concessions to that very hard-hit industry, cotton, that would be preferable to a failure to reach agreement at all, which would have left a position of

        1803
        very strained economic relations. The time which has been taken in the negotiation of the details of this Agreement is some criterion of the difficulties, even when that general principle is accepted, of getting agreement upon the actual details.
        The general effect of the Agreement is as follows: It involves the loss to the United Kingdom of about half the preferences which we enjoyed under the Ottawa Treaty. On taking the year 1937–38 as the standard year, it means a loss of preferences valued at about £7,500,000 and a retention of preferences valued at about £6,750,000. Those are preferences secured by the Ottawa Agreement. This does not touch the very large class of preferences, covering almost a quarter of our exports to India, which are secured under the differential duty system in India, which is not affected by this Agreement. In discussing the preferences which were to be surrendered and those which were to be retained, we have made efforts to retain, as far as possible, the preferences which were of most use to us —although, in certain circumstances, the Government of India were not prepared to allow the retention of existing preferences. It is interesting to note that if we take the classes of goods on which these preferences have been retained we shall find that they are goods of which the sale in India has been increased by nearly 40 per cent. since the Ottawa Agreement was reached—from £4.8 millions to £6.7 millions—whereas in the classes of goods where the preferences have been surrendered, there has been in that period comparatively little change—a slight increase from £6.9 millions to £7.5 millions. That, I think, is evidence that we have retained the preferences in those classes of goods where the preference has given the most impetus to the securing of more trade and the broadening of our market. We have obtained one new preference—for motor cycles and motor scooters—which is a complement to the preferences on motor vehicles which were given under the original Ottawa Agreement and which we still retain under this Agreement.
        On the other side of the picture, the very important concession which we obtain in return for the surrender of these preferences is the concession which has
        1804
        been made in respect of cotton piece goods. The provisions with regard to cotton are, I am afraid, very complicated, but I think I can explain the salient points fairly simply. In the first place, the basic charge upon United Kingdom cotton piece goods has been reduced from 20 per cent. to 15 per cent., and on prints it has been reduced from 25 per cent. to 17½ per cent., but that advantage, substantial as it is in itself, is not the completion of the picture. In subsequent years the duties to be levied upon United Kingdom cotton piece goods will depend upon two factors, first, the volume of the import of such goods into India, and, secondly, the quantities of Indian raw cotton which are imported into this country. In regard to the first consideration—the amount of the imports of our cotton goods into India—the rough scheme is, that we have a top and a bottom level. If the imports go above a certain figure, then the duty against our goods is increased until we get back to the middle figure. If they go below the bottom figure, then the duties are decreased, and the decrease remains until the level has risen to the middle figure. The top figure is that of 500,000,000 yards. In 1937–38 our exports to India were something like 267,000,000 yards. If we were to go above the top figure of 500,000,000 yards, we should be subject to an increase in the basic rate, and the increase of the duty would remain until we had got back to the middle figure of 425,000,000 yards. If our exports fall below 350,000,000 yards —and last year they were very considerably below that figure—there is an additional reduction of 2½ per cent., in addition to the basic reduction of which I have already told the House. That new reduced rate of duty will stand until the imports from this country have risen to a figure of 425,000,000 yards, that is to say, 160,000,000 yards more than in fact we exported in 1937–38. It is almost certain that, after the first 12 months of the currency of this Agreement, we shall in fact get an additional reduction of duty for Lancashire cotton goods, and I think there is every hope that under this new system we shall be able to bring the export of our cotton goods from Lancashire towards the middle figure of 425,000,000 yards, which will mean a very substantial increase above what we are now

        1805
        doing and a considerable amount of employment for Lancashire.
        The other factor which governs the sliding scale is the import of Indian raw cotton into this country. I do not know that I need trouble the House with the rather complicated details, but what happens is, that a standard is laid down that we shall try and import every year, and if we fall below that standard, provision is made for a sliding scale, which, according to the amount by which we fall below the standard of a particular year, will affect the figures which I have just been giving to the House on which we are entitled to a decrease of duty. If we rise above a particular figure, a very important concession will be given to us, that the duties on prints, which now under the basic rates are higher than the duties on ordinary piece goods, will be reduced to the level of the duties on piece goods.
        These concessions are, I believe, regarded in Lancashire as very substantial and hold out promise of a considerable restoration of trade with India, although it is idle to expect that there is any possibility of the restoration of our cotton trade with India to the high level at which it used to be before the War, or even to the high level that we have known in post-war days.
        I have endeavoured to give to the House a rough outline of the effect of this agreement, which His Majesty's Government think gives to the trade between the two countries a better chance of development than would have been given by a failure to agree and to substitute a new agreement for the old one which had been denounced. It is true that the new agreement does not give to many of the industries in this country the relief and the advantages which they hoped and expected to get, and which His Majesty's Government tried their best to get for them. It has, I think, in some cases resulted in disadvantage to our trade through loss of preferences which we resisted to the utmost, but I am convinced that on balance this agreement, which we present in this Command Paper, and which is now to be scheduled, from the purely economic point of view, represents for this country a very much better position than would have been obtained by a breakdown of the negotiations and an economic war between the two countries. If that is true upon the economic basis, I
        1806
        need hardly emphasise to the House the political aspect, which certainly makes it advisable that, in these days, we should strain every nerve to agree on matters of this kind, knowing full well what pleasure failure to reach agreement would give in certain quarters of the globe.
        9.4 p.m.
        Mr. Alexander: The statement which the President of the Board of Trade has just made under this quiet, little Budget Resolution is one of considerable importance. It is true, as he says, that the Board of Trade gave publicity to the new Trade Agreement with India in the Press, but, as far as I can remember, since the date of this agreement of 20th March there has been no opportunity of debating the details of it in the House, and, therefore, we have to take it now as an established fact. In this little backdoor amendment of the law introduced in a minor Resolution under the terms of the Budget Statement of 1939 there is to slip through the formal approval of this very important Trade Agreement upon which the President of the Board of Trade has been speaking. I am speaking only for myself when I say that I have been taken by surprise, though I dare say that there are other Members of my party who have followed more closely the progress of this trade treaty with India than I have been able to do in this very busy year. Nevertheless, the way in which the President of the Board of Trade has explained the matter puts the arrangements with India in a much more favourable light than they were under the Ottawa Agreement.
        I remember the great indignation which was expressed in many Indian quarters that apparently the only real concession made in the sphere of British preferences to India as a great self-governing Power in the British Empire was on linseed. Now I see in the schedule to this agreement that very considerable preferences to Indian traders are given in the British market. Certainly this list of preferences seems to be much longer and more important than anything in the Indian section of the original Ottawa Agreement. I remember that one of the great difficulties with which I had to deal immediately after that agreement was the effect on the linseed oil industry in this country. I had to put a case before the Import Duties Advisory Committee.
        Mr. Stanley: That is the next Resolution.
        Mr. Alexander: I hope we shall get a little more information on that as well. In the meantime, in the midst of all the juggling with tariffs and preferences which now goes on it is true to say that the arrangements made under this Agreement—the top level and the bottom level in regard to these countervailing preferences from one side to the other—are likely to do a considerable amount of good, but I should liked to have heard a word from the President as to how far these preferences will make it possible for Lancashire goods to meet the competition of piece goods and print goods from Japan in the Indian market.
        Mr. Stanley: These are not preference but reductions in the actual rate of duty.
        Mr. Alexander:I use the term "preferences," but they are countervailing reductions in the duty in return for preferences. I should like to know how far this reduction of a minimum of 7½per cent. will have a real effect in enabling Lancashire goods to compete with the piece and print goods of Japanese production. I should have been happy to have had a little more explanation about that, but I think it would be more convenient if we had another look at this Agreement and reserved any more detailed remarks about it when we come to deal with the Vote of the right hon. Gentleman's Department.
        9.10 p.m.
        Mr. Lansbury: I did not come into the House to take part in this very exciting Budget Debate, but if I am in order I want to congratulate the President of the Board of Trade, and especially the Indian Government and people, on this treaty. This is an example of what this country is endeavouring to do with India, not perhaps as quickly as I should like it to be done. This is trying to give the Indian Government the right to manage their own affairs, and the fact that the right hon. Gentleman has been able to negotiate so very difficult a question and bring it to a successful issue with the consent of all parties in India is, I think, something upon which this House of Commons and this country may be congratulated. This is an example of how the British people are endeavouring to bring about a real commonwealth by giving what is
        1808
        called the subject race the right to real self-determination in what are fundamental questions, that is economic questions, concerning their relationship with the outside world. I feel that I must say that without entering into a discussion as to the exact benefits which we are going to get out of it. I think the treaty will be beneficial both to the masses in India and to our own people.
        Mr. Stanley: In reply to what the right hon. Gentleman opposite has said, it is the view of the Board of Trade and the cotton industry that this reduction in the duty will give them a real chance of increasing their sales in India. I cannot make any definite forecast, but, given reasonable trading conditions, I am satisfied that this hope will be fulfilled. Unfortunately, the signature of the Agreement coincided exactly with the entry of the Germans into Czecho-Slovakia, which changed the situation, but I am convinced that, given normal trading conditions, it will provide an opportunity of increasing the quantities of English cotton goods sold in India.
        9.12 p.m.
        The Parliamentary Secretary to the Board of Trade (Mr. Cross): I beg to move, "That this House doth agree with the Committee in the said Resolution."
        This Resolution gives effect to a provision in the Trade Agreement between this country and India, under which the United Kingdom undertakes to make modifications in the allowances of the drawback on duty paid foreign linseed. This duty which is one of 10 per cent. ad valorem, was imposed as a result of the Ottawa Agreement with India, and drawback schemes were introduced to meet the needs of United Kingdom exporters. The Agreement also requires the maintenance of a duty of 15 per cent. on foreign linseed oil. This duty has been increased from time to time on the recommendation of the Import Duties Advisory Committee in order to protect the home seed-crushing industry against the import of linseed oil from foreign countries; and it now stands at £5 per ton. There is a provision for a drawback on the export of goods made from

        1809
        duty-paid linseed oil similar to the drawback which relates to foreign linseed.
        Linseed is used for the production, in the first place, of linseed oil, and it will be seen from the Resolution that that product is not affected by the new drawback provisions. It is also used to produce linseed oil, which in turn is used as an ingredient of paint, enamel, varnish, printers' ink, putty and "mixed oils." Both linseed oil and the last mentioned range of products come under the same drawback scheme. There are no separate statistics to show what amount of drawback may be paid in respect of each of them, but the quantity of linseed oil which is exported is enough to account for all the linseed in respect of which drawback is payable. Therefore, it would seem that this drawback scheme is used only to a limited extent—it may be to an almost negligible extent—in connection with the export of paints, varnishes, and so on.
        Mr. Alexander: What about linoleum?
        Mr. Cross:I shall come to that in a moment or two. From the inception of these drawback schemes, India regarded them with a good deal of disfavour on the ground that the schemes diminished the value of the preference which had been granted under the Ottawa Agreements, and that they might tend to divert this country's purchases from India to the Argentine. Consequently, the Indian delegation pressed for the abolition of all drawback schemes on both linseed and linseed oil. This matter was the subject of very long and difficult negotiations. Viewing it from the Indian point of view, we were unable to see that India could gain substantially from the abolition of the schemes. The import of linseed from India in 1931 amounted to 71,000 tons, and it had risen in 1938 to 229,000 tons, and a possible gain to India of some part of the 13,000 tons of linseed which is used in the manufacture of exported linoleum—an item to which the Indians look particular objection and to which I will refer later—seemed to be too small to justify their attaching any very great importance to it. At the same time, we on our side were very reluctant in principle to abolish any drawback scheme. Nevertheless, the Indian delegation made it clear that they attached the very greatest importance to the question and indeed treated it as a major issue, and
        1810
        they went further and said that they would not conclude a treaty which did not satisfy them on this particular point. After much discussion and consultation with the trade interests with a view to finding a basis of compromise, we came to the conclusion that the best possible compromise from the British point of view was the one which is contained in this Resolution.
        I have dealt with the effects with regard to paints, enamels and other items in that category, which appear to be either very limited, or it may be negligible; but there is a further group of industries, to which the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) referred just now, which are affected and which come under a separate drawback scheme. They are the industries concerned with linoleum, floorcloth, cork carpets, felt base, cellulose plastic flooring, fishing nets, oil baize and leather cloth. These use, as I have already indicated, the product of 13,000 tons of linseed a year, a figure which compares with the import from India alone of 229,000 tons in 1938. These industries are left with an alternative method of getting the drawback, and that is that they should use foreign linseed oil. Therefore, it was a question as to how far would the British seed crushers be affected by the transfer to foreign oil of a part, or, to take the blackest possible case, the whole of the 13,000 tons.
        If we take the extreme and improbable case that the whole of this business would be transferred to foreign oil, the question is, how far would that affect imports of foreign oil? How far would those foreign imports be increased, and consequently, what would be the detrimental effect on British seed crushers? I find that the import of foreign oil into this market amounted to some 19,000 tons in 1938, which is far more than is required to cover all the drawback which is allowed for foreign linseed oil, together with any addition we have to make in respect of the 13,000 tons of linseed. The figure for 1938 was 8,000 tons of imported foreign linseed oil for which the drawback was allowed. We must then add to that some further amount in respect of the 13,000 tons of linseed, which I understand is the equivalent of a further 4,000 tons of linseed oil, and this gives us a total of 12,000 tons of foreign linseed oil to meet requirements. There is,

        1811
        therefore, a total of 12,000 tons of foreign linseed oil which—on the basis of past requirements plus an addition in respect of the 13,000 tons of linseed—would be necessary as against an existing import of 19,000 tons every year. Consequently, it does not necessarily follow that imports of foreign linseed oil would be increased or that the seed crushers in this country would suffer. It remains only for me to add on this subject that the proposal put forward would take effect as from 15th August next, four months from the time of the signing of the Agreement, so that the manufacturers would be allowed a period of four months in which to adjust themselves to the altered provisions.
        9.22 p.m.
        Mr. Alexander: The more I listened to the Parliamentary Secretary, the more I was surprised. I have already said that I have not been able to give much consideration to the Indian trade treaty, but when the hon. Gentleman said that all the interests had been consulted, I wondered who those interests were. About three and a half years ago, I made a pretty big attack on the Government with regard to linseed, and I would point out to the President of the Board of Trade, in passing, that during the whole of the discussions that have taken place, his Department have not deigned to communicate with us, although we are vitally interested in the question of linseed oil and the drawback. We did not hear a word from his Department. We have now been told that all the trade interests have been consulted. That is the first word I have heard on the subject. I am reminded very forcibly of what we had to say about the original negotiations that went on with regard to linseed, and the back-scratching arid wire-pulling that took place before the Import Duties Advisory Committee, when seed crushers were asking for a gradual raising of the duty on foreign linseed oil.
        There was a special concession to these very important industries, which employ a large number of people, such as the linoleum, paint, varnish, and white-lead industries. These industries use large quantities of linseed oil, and they were given a special right to a drawback in respect of whatever products they used which had been subject to duty, in order that they might be able to maintain their position in the export market. We were
        1812
        blandly told, in a very mixed and technical speech, by the Parliamentary Secretary, who no doubt put, the matter as clearly as he could, that these drawbacks are now to be dealt with in a different way. As far as I could gather from his argument, although I am not very clear about it, he said that all the drawbacks are to go, except that the users of the oil in the paint, varnish and linoleum trades will be able to use foreign linseed oil, and that that will come, in any case, in a sufficient quantity, so that they will be able to meet their requirements and get the drawback.
        I think that was the argument. I shall certainly have to consider it a little more carefully in the morning when I see it in print in the OFFICIAL REPORT before I shall thoroughly understand it in regard to the total supply. At any rate, if it is the fact that between 1931 and 1938 the export of linseed from India to this country has increased from something less than 100,000 tons to over 229,000 tons, I hope it indicates that there is, as the result of closer arrangements between us and that country, a real development of acreage of linseed cultivation, because my recollection of the matter as it happened some four or five years ago seems to indicate to me that unless there were an expansion of something like 3,000,000 hectares of production in India we should always more or less be dependent on imports from such countries as the Argentine for the main quantity of that commodity which we could use for crushing and for other purposes. It might be interesting, before we leave this Resolution, if we could have some information about that. But I protest very strongly indeed that interests with which I am connected and for whom I appeared before the Import Duties Advisory Committee on the whole question of duties and drawbacks after the Ottawa Agreements have never, as far as I know, had a word of notice or consultation from the Board of Trade or from the Advisory Committee during the whole time that the negotiations on this Treaty were going on. I do not think that that is quite the treatment that one is entitled to expect or to receive.
        Mr. Stanley: Could the right hon. Gentleman tell us in what capacity— crushers or users?
        Mr. Alexander: Users.
        Mr. Stanley: For what purpose?
        Mr. Alexander: Paint, varnish and linoleum—in every respect.
        Mr. Stanley: Manufacture?
        Mr. Alexander: Yes, certainly. It was in our capacity as manufacturers that I went before the Committee. This is the first we have heard of the negotiations.
        Mr. Stanley: Does the right hon. Gentleman's body co-operate with various trade associations? Would they be members of a trade association representing paint and varnish manufacturers?
        Mr. Alexander: Very rarely.
        Mr. Stanley: Probably that is the reason
        Mr. Alexander: I cannot understand how it could arise in that way, because Government Departments ought to know by now with whom they should communicate. It is a long-standing arrangement. We are as much entitled to be consulted as any other section of the trade. Before the Finance Bill comes I shall take particular care to look at the explanation that has been given to the effect of the drawbacks, and, if necessary, take whatever steps I can to see that our position is safeguarded.
        9.30 p.m.
        Mr. Ede: I think some back-bencher ought to join in the protest that my right hon. Friend has made. I am sure no one objects to India being put in a better bargaining position that she was in years gone by. We can only rejoice that she is getting into this more favourable position, as is evidenced by the negotiations that have taken place on these two Resolutions. I gather from the Parliamentary Secretary that there were occasions when they kept a stiff upper lip in a manner which would have done credit to negotiators with many centuries of tradition behind them. I am sure that none of us regrets that India should be put in that position. But one is alarmed at the way in which in these days very important matters come before the House almost by accident.
        Mr. Stanley: The hon. Member must not say that. There is nothing unprecedented in it. I remember, two years ago exactly the same procedure on the Canada Agreement, with ample opportunity for discussion at this stage and on the Finance Bill.
        Mr. Ede: I do not want to say anything which may appear a reflection upon the right hon. Gentleman. I have had too many negotiations with him not to know that he would not do anything to mislead the House or deprive it of any of its rights, but one finds now that these matters appear unexpectedly on the Order Paper, and they go through pro forma. One gathers that, if we pass this stage, we have virtually approved in principle the whole of this Agreement, in so far as it relates to the matters now brought before us. I think the right hon. Gentleman must expect that we shall have to reserve our right to criticise this and similar proposals when the Finance Bill appears. If this goes unchallenged to-night, it must not be thought that we have abandoned our right to express any criticism which may appear necessary when more detailed examination of the matter has taken place.
        There is one matter on which I should like some enlightenment. My earliest recollection of linseed is that it was the main ingredient of a poultice which was supposed to cure all ills. The exterior application of a linseed poultice and the interior application of Epsom salts was supposed to be a complete cure-all for juvenile ailments. I did not hear the properties of linseed for poultices mentioned amongst the uses to which it is now put. Are we to understand that modern medical science has dispensed with it?
        Mr. Dingle Foot: I was a little alarmed by the hon. Member's prophecy. I am also interested in the last Resolution and in this, but I understood that there will be an opportunity to discuss the Indian Trade Agreement on the Finance Bill. It was the intention to embody it in the Bill. May I take it that I am right in that understanding?
        9.35 p.m.
        Mr. Cross: I beg to move, "That this House doth agree with the Committee in the said Resolution."
        This is a small matter. The Resolution gives effect to a further provision of the Agreement with India. This country has undertaken to discontinue the drawback

        1815
        on duty-paid foreign ground nuts. Foreign ground nuts axe chargeable with a duty of 10 per cent. ad valorem, and the maintenance of this duty was guaranteed under the old Agreement and is guaranteed under the new Agreement. The discontinuance of the drawback is not a matter of great importance to industry in this country. The imports from foreign sources amount to something under a third of 1 per cent. of our total imports. In 1937, the last year for which I have complete figures, the total imports into this country were 270,000 tons, of which only 700 tons were derived from foreign sources. It will be seen, therefore, that the quantity affected is quite small, but the Indian Delegation did attach importance to this matter. The acceptance of this proposal facilitated the conclusion of an agreement which affects other matters of very great importance, and it is for these reasons that we agreed to discontinue the scheme.
        9.36 p.m.
        Mr. Alexander:In view of the very sketchy way in which we are able to consider this matter in relation to the Indian trade treaty I hope the House will understand that because we do not divide against the Resolution we are not necessarily committed to complete support of this proposal when we come to the Finance Bill. It is important to make that plain. Like my right hon. Friend the Member for Bow and Bromley (Mr. Lansbury) we are all anxious to see a development of understanding on trade and economic questions between this country and India, and to negotiate with a free self-governing community which we hope to see growing up to its full stature in that country. But that does not mean that we agree that every action by our Executive Government is necessarily of advantage to the citizens of this country, and we still have citizen rights to maintain and to defend. Arrangements of this kind need to be examined in great detail. Since the Import Duties Act and the Ottawa Agreements Act there has grown up a terrible structure of new duties, new preferences and new drawbacks through the mazes of which traders have to try to find their way, until now nearly all big interests have to keep special staffs doing nothing else but deal with these fiscal questions, instead of getting on with the work of production,
        1816
        distribution and imports. It is difficult to keep track of every one of these developments, and so if we do not divide upon this Resolution—because it has not been possible to get all the information we want—it must not be taken that we shall necessarily give a free passage to the subject-matter of the Resolution when the Bill comes on, and we may have to offer very serious criticism.
        9.38 p.m.
        Mr. Parker: I beg to move, in line 11, to leave out "17s. 6d.," and to insert "15s. 0d."
        We on this side are not at all happy about the whole of the increased duties on mechanically-propelled vehicles, particularly, first of all, because we think the increased duties upon motor cycles and the cheaper motor cars are impositions upon the poorer sections of the people who use mechanically-propelled vehicles. There are now a good many people not belonging to the wealthier classes who use motor cycles and motor cars. Among the 12,000 workers in the Ford works at Dagenham there are 1,500 to 2,000 who possess motor cars of their own, and a very large number own motor cycles, and this increased duty will be a serious imposition upon such people, who use their cars and motor cycles for going to and from work. Also, we believe that this increased duty, so far as it affects poorer people using mechanically-propelled vehicles, will defeat its own ends, because it will lead to a reduction in the receipts from the petrol tax We believe that any increase in the licence duties will mean, first, that fewer people will take out licences for motor cycles and the smaller type of motor cars, and, secondly, that those who do possess them will lay them up in winter or for a large part of the year, and as they will not be using them they will not use petrol, and therefore the receipts from the petrol tax will automatically decrease.
        Another thing which we believe is likely to result from the general increase in the licence duties is that people will buy fewer motor cars and motor cycles. Commercial travellers and the like, who use small motor cars for business purposes, instead

        1817
        of buying a new car every year and selling the old one for a fairly high sum, will make a car last, perhaps, three years, and therefore the tax as a whole will not merely hit users but will hit the motor car trade. That trade has been in rather a bad way recently. If I may again quote Dagenham, in my own constituency, during the past winter unemployment in the motor trade has been much higher than it has ever been. The figures for last January were twice as high as the year before. There has been some small improvement recently, but this extra duty will, I think, hit the trade once more at a time when it is sorely tried.
        If trades like the motor trade which are found in many of the newly developed industrial districts are hit in this fashion, we shall have new distressed areas created in places like Dagenham. That will be a very bad thing for the country, particularly in new areas where the motor industry flourishes, because there the people generally are buying their own houses, and if they are to be thrown out of work we shall find them having to give up those houses, on which they have already paid a great deal of money. Let me again quote the example of Dagenham. The Ford Company built at Dagenham a motor car factory which adjoins one of the London County Council's housing estates. That is an estate which was built primarily for Londoners and people coming from other parts of the country to work at Dagenham were not allowed to live on that estate and had to buy houses in areas adjacent to it. Any increased imposition upon the motor industry will seriously hit those who work in that industry, and may lead to the development of new depressed areas in some of these newly-developing districts. Therefore, because we regard the increased duties as a whole as an imposition on the poorer users of motor vehicles and because they will hit the motor trade as a whole, I am moving this Amendment. I hope that the Government will consider it sympathetically, because the motor cyclist is the person who is least able to meet an increase in the duties.
        9.43 p.m.
        Mr. David Adams: I beg to second the Amendment.
        The proposed increase in the duties impose an additional burden upon the poorer sections of the community and is
        1818
        in line with the increases in the taxes upon tobacco and sugar. As long as we have a very large proportion of our population not in receipt of incomes sufficiently large to enable them to play their proper part as citizens maintaining their families, no Chancellor of the Exchequer has any right to impose taxation upon that class, and there is no doubt that this motor tax will affect considerably the lower reaches of those who use mechanically-propelled vehicles. The Budget propose to increase the tax upon a motor cycle from 12s. to 17s. 6d., an increase of 5s. 6d., or 45 per cent. over previous taxation. The right hon. Gentleman might have been more considerate in this motor taxation. He might have adopted some system of graduation, which would have relieved the poorer classes, many of whom are compelled through business reasons to use the motor cycle. This particular tax may be described as a vindictive one. Certainly, it is very harsh. In the main it is a tax upon the smaller and poorer section who use motor cycles. It will tend to reduce the use of the motor cycle, and I think the Chancellor of the Exchequer would agree that it is to that extent a tax upon sport and health. Why is the tax to be increased to so large an extent? The Government have considerable sympathy with the demand of the railways for a freer hand in the matter of charges, and the tendency of this tax will be to drive more citizens to use the railways as against the roads.
        When one looks at the culpability of the tax and one considers that the National Defence Contribution has remained unchanged, although it is bringing to the Exchequer only a trifling sum, £25,000,000, out of the many millions of profits made, it is the more surprising that this additional tax should have been placed upon the motor industry. One would not have complained if only the richer section of the community had been called upon to pay the additional taxation, but to ask the other classes to find still more money while at the same time the Chancellor of the Exchequer is not making any increased demands on the richer sections so far as National Defence Contribution is concerned, is an act of injustice which the Chancellor of the Exchequer would have difficulty in defending.
        The motor industry is to be called upon to pay in taxation some £100,000,000 per

        1819
        annum. It was never intended in common sense and reason to place so heavy a burden upon the industry. I am satisfied, from conversations with those who are concerned as manufacturers and salesmen of the lesser type of motor cars and motor cycles, that this increased duty will have a damaging effect upon sales and upon our export trade in these vehicles. It will diminish employment and will have a detrimental effect upon the workers, the manufacturers and the distributors. The general position in this country, so far as motoring and cycling are concerned, is considerably worse than the position in the United States of America. The United States Government has seen the wisdom of not impairing the opportunities of the industrial workers to engage in this healthy and necessary modern pastime. The result of that is that petrol taxation there is low, and the horse-power taxis virtually unknown, but there is a registration tax upon cars. In conversation, a Senator stated that you could never persuade the United States Government to place heavy burdens upon that which was looked upon as a fundamental necessity of the population of the States—motoring.
        The increasing duties which we are putting on the motor industry are steadily reducing the possibilities of our lower paid workers from indulging in motoring. In the United States there is not a family, except members of the lower paid coloured classes, which has not a motor car. The collier, the iron worker and other grades of labour go from their homes to their work in motor cars or on motor cycles, more largely in motor cars, which are within reach of the average wage of the industrial worker. For these reasons I think that the Chancellor of the Exchequer, who has adopted a benevolent attitude towards the film industry and has given an assurance that he will consider that matter at a later stage in a favourable light, ought to be good enough to consent to reconsider the taxation upon the lower grades of cars and motor cycles. If he does that, we should be very happy to withdraw the Amendment.
        9.53 p.m.
        Mr. Gurney Braithwaite: I do not desire to stand between the House and the Financial Secretary, but I should like to make a few observations on this Amendment. The hon. Member for Romford
        1820
        (Mr. Parker), who moved it, and the hon. Member who followed him have spoilt their case by overstating it. Anyone on reading the Order Paper might be led to think that they propose a reduction of tax on the mechanically-propelled vehicles used by the poorer sections of the community generally, whereas the Amendment deals only with motor cycles. The hon. Member for Consett (Mr. David Adams) spoke at some length about the lower-powered motor cars. On inquiry I find that in 1938 the number of motor cycle licences taken out was 462,000. The figure has been falling steadily year after year. Yet the hon. Members suggest that here is an Amendment which is designed to prevent a hardship being placed upon large sections of workers who go to their work by motor vehicle. I was a little surprised that the hon. Member for Consett did not paint a picture of the old age pensioners being deprived of the opportunity of motor cycling. That is the sort of impression that was left by the speech to which we have just listened.
        Mr. David Adams: I might have done so if I had been sitting on the other side of the House.
        Mr. Braithwaite: To suggest that this is an attack on the health of the people is a little far-fetched. The argument has been put forward—and incidentally it was a rather remarkable tribute to the system under which we live—that we have reached a time when the working classes can go in their own cars and mechanically-propelled vehicles to their work. That is unusual, and far more go on the old-fashioned push bicycle. The way in which the argument was put was exaggerated, and I do not think any useful purpose would be served by carrying the Amendment. I shall, therefore, vote against it if it goes to a Division.
        Mr. David Adams: When I was referring to the working classes going to their work in cars I was referring to the United States as against this country.
        9.57 p.m.
        Mr. Silverman: I think the hon. Member for Holderness (Mr. G. Braithwaite) has omitted to notice that although only motor cycles are concerned with this Amendment, it must be quite clear to the House that this is the first step in an argument, and that what is being suggested here is that the general pro-

        1821
        posal made in the Budget for raising the tax on motor cars is mistaken.
        Mr. Braithwaite: There is no other Amendment on the Paper dealing with motor cars.
        Mr. Speaker: I suggested that the whole motor vehicle tax should be treated in one debate.
        Mr. Silverman:The hon. Member spoke earlier when we were discussing the Tobacco Duty, when I too spoke and made the point, which the hon. Member was good enough to call an attractive point, that the tax might have been better if instead of being a flat rate, it had been an ad valorem duty, so that the increase in the cost could be graded and the poorer people would pay a proportion of it more in accordance with their means and the richer people who use the more expensive article pay a little more. The hon. Member was unable to support me in that argument, and his reason for not doing so was the practical difficulties in the way. The Chancellor, when he replied, told us some more of the practical difficulties, and although I do not pretend to have been convinced—I think that with good will those difficulties could be surmounted —still the difficulties were no doubt there.
        Mr. McGovern: The Whips were there.
        Mr. Silverman:In this case I think the Whips are there, because the other practical difficulties that applied in the case of tobacco do not apply here. It would be the simplest thing in the world—there is no difficulty of collection, no adding to the expense, no abstruse valuation required—to say that in the case of a 20, 25 or 30 horse-power vehicle the tax should be increased proportionately more than in the case of a small 7, 10 or 12 horse-power car, or still more in the case of a light-weight motorcycle. If the last speaker found the other argument attractive, there is no reason why he should not find this argument attractive, because, in fact, it is the same argument, with this added advantage, that the difficulty he saw in the other case does not apply here. If, therefore, I find that the hon. Member is not accepting the argument, however attractive, and is not adopting the proposal, however simple, I am afraid we are driven to the conclusion that his sympathy is purely a verbal thing and that he does not mind in the least being
        1822
        sympathetic to a poor person so long as richer persons are not called upon to pay: for the sympathy.
        He said something about the state of civilisation that we have reached when so many people are able to use mechanically-propelled vehicles. I am amazed that so few people get that privilege. Nowadays, when we have achieved so much, when our mechanical inventiveness has gone so far that almost at the wave of a hand we could destroy the whole of our civilisation within 24 hours, when we are able to produce these things so rapidly, and so many of them, and produce them so powerfully, when we are able to build our roads and our bridges, and so organise our lives in cities that we are able to rely upon these mechanical things in order to enable us to live further out, with all the wealth of our mechanical civilisation, what is it that on the one hand stands in the way of the overwhelming majority of the working class having these things and, on the other, makes our very mechanical inventiveness almost the means of mass suicide? I have no hesitation in saying that it is this economic system which produces poverty at the one end and war as its inevitable consequence at the other, but that is not what we are now debating. We are debating the point that if you have reached the stage when your fear of war has made it necessary to restrict still further the advantages that are to be derived from our civilisation, at any rate let the burden be graded, let it be borne equitably, let the broader shoulders carry the greater part of it. That could easily have been done in this case, and I cannot see any reason why the Amendment, and other Amendments consonant with it, should not be accepted, except the desire which one reads into the Chancellor's, speech to see that the poorer section of the population should bear the greater part of these burdens.
        10.4 p.m.
        Captain Heilgers: I should like to appeal to the right hon. Gentleman who is going to reply for further consideration of this question. I am not entirely happy about the position so far as motor cycles in the rural areas are concerned. The hon. Member for Holderness (Mr. Braithwaite) said that the number of motor cycles licensed had fallen steadily. That is true, but I do not believe it is true as far as the rural areas are concerned. The

        1823
        motor cycle does enable skilled men like the thatcher to seek work far a field, which he could not do before, and it enables the sugar-beet man and the fruit and vegetable worker to go further afield as well. The motor cycle is not used in the rural areas for pleasure. I agree that in the old days it was a very common thing to see a girl on the back of the bicycle, but to-day the girl demands a car and not a motor cycle. I submit that this is a proposal to tax not a luxury but a necessity. It involves taxing a means of providing work, and, therefore, the proposal is, to some extent, wrapped up with the question of employment. The motor cycle affords the worker in the country increased opportunities for seeking employment further afield, and on that account any increase in tax upon it should be avoided.
        10.6 p.m.
        Colonel Nathan: When fresh money has to be found by taxation, there is a good deal to be said for adapting well-recognised and well-tried methods of taxation to the new requirements. I do not grudge the right hon. Gentleman the £6,250,000 which he expects to get from this tax this year, or the £11,500,000 which it is expected to realise in a full year as additional taxation from the users of motor cars. What I do object to is the arrangement of the tax and the manner in which the burden is to be borne by those who come within the purview of this proposal. The question of the motor cycle has been dealt with by my hon. Friend the Member for Romford (Mr. Parker) and the hon. and gallant Member for Bury St. Edmunds (Captain Heilgers), and I do not propose to say any more about that. I desire, however, to say something about the ordinary motor car.
        Looking at the matter objectively and forming the best opinion I can, I do not believe that this additional tax, in so far as it falls upon those who are comfortably placed, will make the least difference to their manner of life, to their luxuries or their enjoyments. I do not believe that anyone of those who are comfortably placed, is likely to have to give up his car because of this increase in the horsepower tax. But there is a large and increasing number of motor car owners who do not buy new cars. There are many people whose ambition it is to become
        1824
        proud possessors of second-hand cars which they can use at week-ends to take their wives and children from the towns to the country to enjoy the green fields and the fresh air. Very often those people make great sacrifices in order to acquire second-hand cars. Very often the car is paid for painfully, out of weekly earnings, and I do not think it an exaggeration to say that in a number of cases the amount of additional taxation payable annually under this revision will be as much as the capital sum which has been paid for the car itself. That will certainly be so as regards higher-powered cars. Frequently cars are bought by artisans and workpeople for £15 or £10, or even £7 10s., and I have known them to go as low as £5. Doubtless these are cars which many of us would not be very anxious to own, but there are people to whom the possession of such a car is the achievement of an ambition. This additional taxation will fall very hardly upon such owners.
        I am not suggesting that the amount derivable from the tax should be reduced, but I suggest that within the purview of the tax there might be adjustments of its incidence. There is, for instance, a distinction to be drawn between the new car and the second-hand car and that is a rather important matter. The right hon. Gentleman may with some justification say that in suggesting that a difference should be made as between the new car and the second-hand car, I am moving away from the canon of taxation which I mentioned at the start, namely, that one should try to adapt well-tried and well-recognised methods to new conditions but I do not think I am really moving away from that position. I venture to ask the right hon. Gentleman, in the first instance, to consider whether it is possible to draw a distinction between the new car and the second-hand car so as to adjust this tax in a favourable direction towards the second-hand car—the kind of car in which one sees the small tradesman, the artisan, the ordinary working man on the road at the week-end and which has possibly been bought for a smaller amount than the actual horsepower tax under this provision.
        Further, I would ask the right hon. Gentleman to consider whether it is possible so to adapt his tax as to make it fall more heavily per horse-power upon the second and third cars of those owners

        1825
        who own more than one. I do not think it is to be assumed that those people who own more than one car can necessarily bear the burdens of a steeply graded tax without feeling it, but I consider that they will feel it a great deal less than the small man who owns the second-hand car will weel the burden of having to pay exactly the same rate of tax as the wealthier owner who can buy his Rolls Royce, or Daimler or Austin, or whatever make it may be. I know that Chancellors of the Exchequer do not care to consider modifications of their proposals which are suggested from the Opposition side of the House. It is human nature that that should be so, but having made clear that I am not asking the right hon. Gentleman to reduce the total amount demanded from motor-car owners, I ask him to give favourable and sympathetic consideration to a modification along the lines which I have indicated.
        10.14 p.m.
        Sir Stanley Reed:I should like to express my appreciation of the way in which the Mover and Seconder of the Amendment dealt with this question and to support the suggestion that the Chancellor should either give further consideration to this subject or silence some of the doubts entertained by some of those who are only too anxious to support him. When we go back into the history of this tax we see it is the greatest fraud on a section of the community that has ever been perpetrated. It was a tax introduced for the sole purpose of improving the roads. It was immediately raided, and finally it passed into the general revenue. It is now being used to single out one section of the community for a heavy additional contribution to the Budget. While I take that view, I shall vote against the Amendment because at a time like this we cannot stand in the way of the Chancellor obtaining the taxation which is needed to meet the emergency.
        There are two points which I venture to impress on the Chancellor. The first is that the tax as graded must fall with special severity on the users of small cars, who form an important section of the community. The man with a motor cycle or small car cannot switch over to a yet smaller horse-power, so that he must pay the full rate of duty. The man with the higher-power car can switch over to the smaller car which mechanically will suit
        1826
        his needs as well as the higher-power car. I would welcome some statement from the Treasury Bench that this is a point they are prepared to consider.
        Another point on which I should be glad to have my doubts removed is whether this tax as graded will give the Chancellor the revenue he expects from it. He wisely spoke of the psychological effects of a rise in Income Tax. There will be a psychological effect in the Motor Car Duty, inasmuch as it was generally expected that it would be restored to its old amount of 20s. Instead, it has been increased to 5s. above that amount, and the psychological as well as the practical effect will be that a large number of people are now considering changing their cars for smaller horse-power cars so as to escape the full incidence of the tax, while many of those who have a second car are thinking of doing without it so that the whole increase will not fall upon them.
        If those practices are followed they must operate in two ways. The Chancellor will not get the revenue from the Registration Duty that he expects, and the revenue from the Petrol Duty will be reduced, because it is the higher-power cars which are the most greedy users of petrol. I welcome the effect of the proposals on social life, because they may drive off the roads the high horse-power cars, the 40 horse-power "suffer little children," and the road hogs which cause so many accidents. I would like to be satisfied on two points—whether there ought not to be a reconsideration of the incidence of the tax so that it will not throw its full weight on the users of small cars, and whether the Chancellor will consult his experts and silence our doubts as to whether a tax so steeply ranged will have the result he expects from it and which we hope he will get.
        10.19 p.m.
        Mr. Montague: The hon. and gallant Member for Bury St. Edmunds (Captain Heilgers) put up the argument that the motor car tax was bad because it was a tax on a necessity of life.
        Captain Heilgers: I was referring to motor cycles.
        Mr. Montague: I will accept that. The hon. Member early this evening voted for the taxes upon tobacco and sugar. I do not know whether he regards sugar

        1827
        as a necessity of life, or whether he considers that motor cycles are more of a necessity than sugar.
        Captain Heilgers: If the hon. Gentleman challenges me, I would reply that what I said was that motor cycles were a necessity of employment and not necessarily a necessity of life.
        Mr. Montague:The hon. and gallant Gentleman is speaking about a necessity of life. I will leave that point. The question of what is necessary ought to be considered from a different angle from that which he is taking. The point which interests me particularly, as a member and an official of an organisation which is very much concerned about this tax, was stressed recently in this Debate, when an hon. Member raised the question whether working men used motor cars to go to work. They do so to a large extent in America but not to the same extent in this country. There is, however, a type of working men, many thousands in number, who not only go to work in motor cars but do their work in a motor car. I refer to the commercial traveller. Large numbers of commercial travellers own cars and use them for the purpose of their business, and because they have to carry samples with them they cannot do as many people are doing to-day, and are willing to do because of this tax—swap their cars, sell them and get smaller cars.
        That is an important consideration in the issue raised by the hon. Member who spoke last, as to whether the tax will really secure for the revenue what is expected and desired. Commercial travellers cannot do this, because it would not suit their business. They cannot put their cars up for the winter, as many people are determined to do in the winter of this year because of the tax. The car is part and parcel of the business and the life of the commercial traveller. The commercial traveller who uses a car is not supplied with it by his employer. Very often he works entirely upon commission, especially if he owns a car for some reason or other. In the trade papers you will frequently find advertisements for the services on commission of travellers possessing cars. The increase of tax imposes upon commercial traveller owners of cars of 10, 12 or even higher horse-power a
        1828
        direct tax upon income. They cannot get out of it. If their cars are only of 12 horse-power the proposed increase puts another £6 a year upon them, equivalent to about half a crown a week. To the average commercial traveller that is a big tax upon income and is very unfair. We contend that a tax of this kind ought to be effectively graded.
        I would like to make a serious suggestion to the Chancellor of the Exchequer in respect of the commercial traveller and his car. It is true that the commercial traveller gets a remission of tax because his car is part of his expenses, but that makes no difference to the fact that the extra charge puts so much tax upon his income irrespective of the normal advantages that are gained. I suggest that it would be fair and very practical if the Chancellor could arrange that the remission of tax in respect of the use of a car for purposes of business should be looked into, with a view to making for the commercial traveller a corresponding extra advantage which would counteract the effect of this additional tax. I do not think it would make very much difference to the Chancellor's revenue, and it would be very much fairer to the commercial traveller. I think the right hon. Gentleman will realise that a tax of this description on a motor vehicle which must be used for purposes of business, and which in the majority of cases cannot be a small car, is a very great hardship that could be rectified, and I suggest that it might be rectified.
        10.26 p.m.
        Mrs. Tate: I should like to mention one business that will be very seriously affected by this tax, and to stress the argument of the hon. Member for West Islington (Mr. Montague). One body of people on whom this tax will fall, because they need a car for the carrying on of their profession, are the district nurses and midwives. As hon. Members will be aware, since the passing of the Midwives Act it has been necessary in country districts to increase the funds raised towards the payment of a district nurse, and the tax will fall upon this body of women with very great severity. It is almost impossible already to raise the necessary funds, and it really will not be possible to raise the extra £6, £8, or £10 a year. These women are already working exceedingly hard, and a car is an absolute necessity to them. I hope that, between now

        1829
        and the Finance Bill, the Chancellor will consider whether there is not some way in which he can differentiate between a car which is a luxury and one which is a necessity for the purpose of carrying on a business. I have very little sympathy with the argument of the hon. and gallant Member for Central Wandsworth (Colonel Nathan) about the man who buys a car for pleasure at week-ends. We have come to a stage in our national history when we may have to do without luxuries in order to defend ourselves adequately, but district nurses and commercial travellers are in a different category, for to them a car is not a luxury, but an absolute necessity. I hope that, if the Chancellor can do so, he will differentiate to some extent in this particular instance.
        10.29 p.m.
        Mr. McGovern: I must express surprise at one or two expressions that were used by the hon. Lady. She states, in relation to the working-class family, that to take a small car out at the week-end—
        Mrs. Tate: I never said anything about the working-class family. There are many people whom the hon. Member would class as idle rich wh take cars out at week-ends. I was merely saying that, where a car is a luxury, we have to have this tax, much as we deplore it, but that in the case of the district nurse or the commercial traveller the car is not a luxury.
        Mr. McGovern: If the hon. Lady would have a little more patience, she would probably see that I was going to deal with that point. The hon. Lady was replying to what was said by the hon. Member for West Islington (Mr. Montague). He spoke of the families that take out second-hand cars for enjoyment in the country at week-ends, and the hon. Lady condescendingly says we must be prepared to sacrifice our luxuries. The luxury she is going to sacrifice is the working man's week-end enjoyment in a second-hand car. I sympathise with her plea for the nurses and others who are going to be affected by this tax. On the day it was imposed I said to a colleague of mine that I believed that one of the most unpopular taxes would be this. It is going to hit a large number of small people in this country who have previously been supporters of the Government, and who are now making approaches to almost everyone in public life
        1830
        in order to get some remission of this tax. The hon. Member for West Islington made a very good case. There are a large number of commercial travellers, small tradesmen and other people who have very low incomes who are going to be affected by this unjust tax. I would never dream of pleading for the people with high-powered cars and decent incomes, who are always quite well able to make their wishes known to the Chancellor and the Cabinet and get more consideration than the small man usually gets.
        The hon. Member on the back benches talked in a contemptuous manner about a statement made by an hon. Member on this side that a large number of workers use motor cycles for their work. He must have very little contact with the working classes if he does not know that a considerable number of workers use motor cycles in connection with their business. In the housing estate in which I reside there are probably at least 20 or 30 young men, some of them bricklayers, plasterers and tradesmen, who go out into the country in connection with their work, and use motor cycles for the purpose. The hon. Member was making an attack on this country when he suggested that the workers of the country probably could not afford motor cycles. It has been mentioned that in America there are probably more than here. I remember going through an industrial works in Germany, where I was specially asked to take note that there were 1,000 workers and that there were 320 cycles chained in places provided for them at the works, 76 motor cycles and 39 small cars, all belonging to the workers in that factory. In every factory I visited there I discovered hundreds of cycles, motor cycles and cars, owned by the workers. This was in Nazi Germany, the land of poverty and terror. Therefore, the suggestion which the hon. Member made that the workers in this country were not able to provide themselves with motor cycles for their work, if it were true, would be a reflection on the standard of life of the common people of this country.
        I hope there is to be some attention paid in this House to the small man. We have often heard that the small man has been the backbone of this nation; that the small man in business, the small man who is the owner of a house or the owner

        1831
        of a car and who has some little savings has to get consideration. When I was in Germany I also visited the great motor works that are being erected in order to produce 100,000 cars per year. They were hoping to put on the market for the little man 100,000 cars a year at a cost of £50 each, or something in that region. These great works in Germany are catering for the small man. At a time when that country of terror and brutality is able to cater to such an extent for the small man, we have in this House the repression of the small man and disdainful references to the small man that he is to get off the road and make way for the high-powered cars. This has been the kind of talk in this House to-night— after all, if it clears the little man off the road and makes way for the man with the high-powered car, so much the better. [AN HON. MEMBER: "Who said it?"] It was said during the Debate. I do not remember exactly by whom it was said, but it was said by an hon. Member in this House. I am prepared to await the publication of the OFFICIAL REPORT to-morrow, when I will examine it, and, if I am wrong, I will come down and apologise to this House. I am convinced of it. The statement was definitely made that, if it clears the little fellow off the road, then so much the better. It ill becomes those who, in the past, have exploited the little man to the utmost to come to this House and glory in the fact that something is going to be done to clear him off the road. We are going to sacrifice the small man. As the hon. Lady said, she is prepared to make sacrifices because of the emergency, and the small man will be her sacrifice.
        This is an unpopular and an unjust tax. Am I irritating the right hon. Gentleman? He appears to be showing signs of great irritation. He has often given greater cause for irritation to Members of this House than I am giving at the present moment, and I say to him that this tax will probably have a greater effect than he expects. The additional tax is going to hit very hard the small man because it means all the difference between keeping a car and surrendering a car. At least seven or eight people that I know personally have stated that they are prepared to surrender their cars because the burden will become unbearable. I shall oppose the tax, not
        1832
        because of the men with the high-powered cars and the large incomes, but because of the small men with ordinary incomes upon whom the tax will bear heavily and unjustly. I intend to cast my vote against the tax because I believe that these men ought to be supported in this House, and in the country and that justice should be done to them.
        10.40 p.m.
        Sir J. Simon:The hon. Member for Shettleston (Mr. McGovern) has said that an observation has been made by an hon. Member during the Debate that this tax is welcomed because it will sweep the little man off the road, and that he proposes to search the OFFICIAL REPORT to-morrow, and if it is not so will express his regret for his mistake. What I thought the hon. Member for Aylesbury (Sir S. Reed) said was that for his part he was prepared to welcome the tax if it had the result of sweeping off the road those whom he described as road hogs, who were exposing children to danger, and he thought that it might have that result. It is not for me to say who is right or wrong.
        Mr. McGovern: I am wrong in your estimation.
        Sir J. Simon: I know that the hon. Member will not mind my pointing out that that is what I thought the hon. Member for Aylesbury (Sir S. Reed) said, and I think I am within the general recollection of the House.
        I think it is convenient that I should state the view we take on this matter. Hon. Members will realise that the considerations which have been discussed in the course of the Debate are considerations which have been carefully weighed. I will state as clearly as I can the reason why I reached the conclusion that this tax should be imposed. In the first place, it is a direct tax; there is no doubt about that. I suppose that an indirect tax may correctly be described as a tax which can be passed on to somebody else. There is no doubt that this is a direct tax and is paid by the person who has to pay the horse-power tax. It is not necessarily a good tax or a bad tax on that account, but that is the nature of the tax. I do not agree that a horse-power tax is a tax without graduation, because the very conception that you should multiply the horse-power of the different cars by a

        1833
        figure is itself a method of graduation. There is no doubt whatever that the tax is a graduated tax which rises in proportion to the horse-power of the car. Whether it should rise more steeply or not is another question, but it is essentially a graduated tax on the individuals who have to pay it.
        There are two different points of view from which the tax must be examined, apart from the fiscal point of view of what it produces. I was glad to hear hon. Members say that they realised they have to view this proposition on the basis that if it is going to be varied it must still produce the money required, that is £11,500,000 in a full year. I have examined a number of suggested modifications with that in mind, and I should like to assure the House that I intend to examine carefully the suggestions which have been made to-night. At the same time it is only right for me to say that I have examined some of them and that I see great difficulties in adopting some of the modifications suggested. For example, an hon. Member opposite asked whether it would not be possible to draw a distinction between the tax on a new car and the tax on a second-hand car of the same horse-power. I am sure the hon. Member will see the difficulty of that. It would appear to lead to an arrangement by which two people buy two new cars and the next day sell them to one another. It would obviously be extremely difficult to adopt such a suggestion.
        I would point out the economic consequences which might be expected to follow. It seems to me that if we do increase the horse-power tax the economic effect is likely to be, at any rate, in the case of the high-powered cars, that the second-hand prices for them would tend to fall. I am sorry for the second-hand car dealers, I am sorry for anyone who wants to sell a car second hand, but at the same time, that may be noted, because, as the hon. Member said, it is true that a good many of the people of whom he was more particularly thinking are people who buy second-hand cars. Indeed, I have known cases, and I think the hon. Member will confirm me when I say that there are cases, where people having a very humble income acquire, very much second hand, a rather high-powered car. My hon. Friend the Member for Frome (Mrs. Tate) would like to see a distinc-
        1834
        tion drawn between a car used as a luxury and a car used as a necessity, and the matter was put rather more precisely by the hon. Member for West Islington (Mr. Montague), who called attention to the important case of commercial travellers. Of course, what he said was quite true. Quite a number of commercial travellers in the country are required to provide themselves, out of their own pockets, with cars, and the hon. Member said that sometimes indeed they are advertised for as persons who must have a car, and by means of the car are enabled to carry on their business.
        There is, however, this point. Although I do not profess to be specially instructed on the matter, I feel sure that in a case where such a car in the possession of a commercial traveller is used entirely for his business, the expenses of that car are an expense deductable for purposes of Income Tax. [AN HON. MEMBER: "Sometimes"] Perhaps the hon. Member will correct me when I have finished, if he thinks I am wrong. If the car is used for the purposes of the commercial traveller's business, I think that would be so, and that being so—and it is on this that the hon. Member wanted to be assured—if the amount which the commercial traveller has to pay as horsepower duty goes up, so does the amount which he is entitled to deduct for purposes of Income Tax. I will go further. Supposing that, as is commonly the case, the commercial traveller uses his car for business purposes and also sometimes for private purposes, I think I am right in saying—I will have this checked and at a later stage assure the House about it one way or the other—that a proportion of the expenses, including the increased tax, of running the car is allowed to rank as a business expense when calculating the Income Tax of the commercial traveller. I think that is an important point in the particular cases which the hon. Member had in mind. I should suppose that the same principle would apply—again, I do not profess to be specially instructed—in the case of a doctor who is running a car either wholly or partly for the purposes of doing his business as a medical man.
        Mr. Montague: I am sure the right hon. Gentleman would not wish to mislead the House on this matter. The right hon. Gentleman says that when a commercial traveller or anyone else is running a car for business purposes, those expenses

        1835
        may be taken into account for purposes of Income Tax, but we must remember that it is only for purposes of Income Tax. Such a man does not get the full amount of the additonal taxation taken off, but only that proportion represented by Income Tax—namely, 5s. 6d. in the £.
        Sir J. Simon: I think that is quite plain. It is an expense just as any other expense deductible for Income Tax purposes; but I agree with the hon. Member that the result is that it relieves such a man to the tune of the rate of Income Tax in each £,
        Mr. Pritt: If that is so—and I think it must obviously be so—then, of course, the right hon. Gentlemen will not get all the revenue he wants from this tax, because the people will pay the tax with one hand and receive back 5s. 6d. in the £ in another. I do not know whether the amount is a serious one, or whether any calculation of it has been made.
        Sir J. Simon: Of course that has to be taken into account, and there are a great many things which have to be taken into account. Before I gave the Committee of Ways and Means an estimate of what this would produce I had the most careful inquiries made of the Ministry of Transport and elsewhere and I have given the House the figures as they were given to me.
        Now I must deal with the matter in rather more general terms. I quite see the force of some of the objections and difficulties that are raised, though as a matter of fact difficulties can be raised to any and every tax. I thought it was better to arrange for an increase in this direct tax rather than, for example, to increase the Income Tax or reduce the rates of allowance for Income Tax. I do not present it as anything other than an additional burden falling upon the very large numbers who have to carry it, but the question is whether or not it is regarded, when analysed and examined, as on the whole a better proposition than any other form of direct taxation which could be substituted for it. It is the best that I could do after a great deal of consideration. The hon. Member who first spoke thought it was going to have an injurious effect on motor production, and that is an important point also. I looked at the figures very carefuly, because we
        1836
        do not want unnecessarily to interfere with the carrying on of an important trade. I am quite convinced, having examined the figures over a series of years, that, whatever may be the impression elsewhere, the number of shillings in the horse-power tax is not the thing that really decides the extent to which British motor cars are sold or exported.
        No doubt this is adding to the burden of the motorist, but it is not the governing consideration to a person who is buying a car. The price of the car, especially in the case of high-powered cars, is necessarily a far greater consideration. Another is petrol, and anyone who is acquiring a car, whether high-powered or low-powered, can make a calculation and find out whether or not the horse-power tax or the price of the petrol is the more important item. The extent to which there is an active sale of cars is reflected by the general prosperity of the country at the time. If you take the figures over the last 10 years they do not show any sudden change, in relation to horse-power, and I do not expect to see any very sudden change now. The reason is very simple, that the expense of running the car and other necessary expenses much exceed the multiplication of the horsepower. The same thing is particularly true as regards high-powered cars. I have looked at the figures there. Sales are not really dependent on the rate of the horse-power tax. They necessarily mainly depend on other considerations.
        I think that that will appeal to the common sense of all hon. Members, as to anybody who has considered the accounts of his own motor car, without its being further developed. At the same time it is, of course, an additional burden. I can assure hon. Members that I do not take pleasure in putting burdens upon anybody, but I submit that it is preferable that we should raise this £11,500,000 in this way—with the result, unquestionably, that the higher-powered car has to pay more than the lower-powered car— than that we should make any other change in direct taxation, which of course is always available, and which I think would be very much more resented, certainly by business people, and I think, certainly, by the great mass of the citizens.
        I do not think the question has been raised, but I have had a number of letters

        1837
        asking whether it would not have been better to have put on a sales tax. Assuming that I must produce £11,500,000 in a full year, if we take the number of new cars that are sold in a year and divide it into the £11,500,000 we shall get the average figure of what the sales tax must be. Of course nobody would dream of having a flat sales tax; it would have to be graded steeply. I think I am right in saying that a division sum will show that the average flat-rate tax would be somewhere between £40 and £50 a car, and when it had been graduated so as really to pile it up, as would have to be done on the higher-powered expensive cars, the addition to the price of those cars would be a very serious matter indeed in the eye of the motor manufacturer. I want the House to appreciate that these matters have been considered anxiously and carefully by myself and my advisers, and in the light of what I have said I think hon. Members may be prepared to take the view that, assuming that additional revenue is to be got by this means, there is a great deal to be said for increasing the horse-power tax in the way I have proposed, and it really is a graduated tax for the reasons I have pointed out.
        I must say a word now on the proposed tax on motor cycles. I agree entirely—and the scheme of the taxation shows that I have agreed—that we should not make as steep an increase of taxation in the case of these light motor cycles as I have thought it necessary to make in the case of motor cars, and for the reason, which has been pointed out from both sides of the House, that undoubtedly a much greater proportion of these motor cycles are used by poor people. Therefore, in the case of the light motor cycle the scheme is to raise the annual amount from 12s. to 17s. 6d., which is a substantially smaller percentage rise than the rise from 15s. to 25s. per horse-power in the case of motor cars. I am not saying
        that it is not a material burden, no doubt it is. It means an increase of 5s. 6d. a year, or 1¼d. a week, and undoubtedly there are people who will find that extra 5s. 6d. hard to come by. I do not deny it. But I have done my best to modify the tax so far as the light motor cycle user is concerned, because I entirely agree with what has been said, on both sides of the House, that it is far more difficult for the ordinary motor cycle user to find the money than it may be for the average motor car user.
        The other case in which an exception has been made, besides the light motor cycle, is that of the light motor tricycle. It does not arise very often, but there are such cases, though it is not very common to see motor tricycles on the road. That particular form of vehicle did not enjoy the advantage of a reduction which took place some years ago, and that being so I have only put up the tax in this case by 25 per cent.
        I may not have covered all the points, but I have tried to make to the House a perfectly straightforward statement of some of the considerations that have been working in my mind, and I hope the House will see that some of those considerations have very great force. I do not think they would find it easy to devise an alternative which would get £11,500,000 from motor users. Broadly speaking, I claim that this is, on the whole, a just way of finding the necessary £11,500,000, and it is one in which we shall get the man with the big, expensive car paying, as he ought to pay, more than the man with the small, low-powered car. I hope, therefore, that the good sense and reasonableness of this proposal will commend it to the House.
        Question put, "That '17s. 6d.' stand part of the Resolution."
        The House divided: Ayes, 188; Noes, 118.

        Division No. 90.]

        AYES.

        [11.3 p.m.

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

        Beechman, N. A.

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

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

        Bernays, R. H.

        Bull, B. B.

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

        Bird, Sir R. B.

        Burghley, Lord

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

        Boulton, W. W.

        Butcher, H. W.

        Apsley, Lord

        Bower, Comdr. R. T.

        Carver, Major W. H.

        Aske, Sir R. W.

        Boyce, H. Leslie

        Cary, R. A.

        Assheton, R.

        Bracken, B.

        Channon, H.

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

        Braithwaite, J. Gurney (Holderness)

        Chapman, A. (Rutherglen)

        Baillie, Sir A. W. M.

        Briscoe, Capt. R. G

        Christie, J. A.

        Baldwin-Webb, Col. J.

        Broadbridge, Sir G. T.

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

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

        Brooke, H. (Lewisham, W.)

        Colfox, Major W. P.

        Baxter, A. Beverley

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

        Colman, N. C. D.

        Conant, Captain R. J. E.

        Hunter, T.

        Reed, Sir H. S. (Aylesbury)

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

        Hutchinson, G. C.

        Reid, W. Allan (Derby)

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

        James, Wing-Commander A. W. H.

        Remer, J. R.

        Cox, H. B. Trevor

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

        Ropner, Colonel L.

        Croft, Brig.-Gen. Sir H. Page

        Keeling, E. H.

        Ross, Major Sir R. D. (Londonderry)

        Crooks, Sir J. Smedley

        Kerr, J. Graham (Scottish Univs.)

        Ross Taylor, W. (Woodbridge)

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

        Keyes, Admiral of the Fleet Sir R.

        Rowlands, G.

        Cross, R. H.

        Kimball, L.

        Royds, Admiral Sir P. M. R.

        Crowder, J. F. E.

        Lamb, Sir J, Q.

        Rugglas-Brise, Colonel Sir E. A.

        Cruddas, Col. B.

        Leighton, Major B. E. P.

        Russell, Sir Alexander

        Culverwell, C. T.

        Lennox-Boyd, A. T. L.

        Russell, S. H. M. (Darwen)

        Davidson, Viscountess

        Levy, T.

        Salmon, Sir I.

        Denman, Hon. R. D.

        Liddall, W. S.

        Salt, E. W.

        Doland, G. F.

        Lipson, D. L.

        Sandeman, Sir N. S.

        Duckworth, Arthur (Shrewsbury)

        Llewellin, Colonel J. J.

        Sandys, E. D.

        Dugdale, Captain T. L.

        Loftus, P. C.

        Scott, Lord William

        Duncan, J. A. L.

        Lyons, A. M.

        Shaw, Captain W. T. (Fortar)

        Dunglass, Lord

        Mabane, W. (Huddersfield)

        Simon, Rt. Hon. Sir J. A.

        Eastwood, J. F.

        M'Connell, Sir J.

        Smith, Sir R. W. (Aberdeen)

        Edmondson, Major Sir J.

        MacDonald, Sir Murdoch (Inverness)

        Smithers, Sir W.

        Elliot, Rt. Hon. W. E.

        Macdonald, Capt. P. (Isle of Wight)

        Snadden, W. McN.

        Elliston, Capt. G. S.

        McEwen, Capt. J. H. F.

        Somervell, Rt. Hon. Sir Donald

        Emery, J. F.

        McKie, J. H.

        Somerville, A. A. (Windsor)

        Emrys-Evans, P. V.

        Maclay, Hon. J. P.

        Spears, Brigadier-Central E. L.

        Everard, Sir William Lindsay

        Magnay, T.

        Spens, W. P.

        Fildes, Sir H.

        Makins, Brigadier-General Sir Ernest

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

        Fleming, E. L.

        Manningham-Buller, Sir M.

        Stourton, Major Hon. J. J.

        Fremantle, Sir F. E.

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

        Strauss, H. G. (Norwich)

        Furness, S. N.

        Markham, S. F.

        Stuart, Hon. J. (Moray and Nairn)

        Fyfe, D. P. M.

        Maxwell, Hon. S. A.

        Tasker, Sir R. I.

        Gower, Sir R. V.

        Mayhew, Lt.-Col. J.

        Tate, Mavis C.

        Grant-Ferris, Flight-Lieutenant R.

        Medlicott, F.

        Thorneycroft, G. E. P.

        Gridley, Sir A. B.

        Mills, Major J. D. (New Forest)

        Thornton-Kemsley, C. N.

        Grimston, R. V.

        Mitcheson, Sir G. G.

        Titchfield, Marquess of

        Gritten, W. G. Howard

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

        Wakefield, W. W.

        Gunston, Capt. Sir D. W.

        Munro, P.

        Walker-Smith, Sir J.

        Hambro, A. V.

        Nail, Sir J.

        Wallace, Capt. Rt. Hon. Euan

        Hammersley, S. S.

        Neven-Spence, Major B. H. H.

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

        Hannah, I. C.

        Nicholson, G. (Farnham)

        Ward, Irene M. B. (Wallsend)

        Hannon, Sir P. J. H.

        Nicolson, Hon. H. G.

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

        Harbord, A.

        O'Neill, Rt. Hon. Sir Hugh

        Wells, Sir Sydney

        Haslam, Henry (Horncastle)

        Orr-Ewing, I. L.

        Whiteley, Major J. P. (Buckingham)

        Heilgers, Captain F. F. A.

        Patrick, C. M.

        Windsor-Clive, Lieut.-Colonel G.

        Hely-Hutchinson, M. R.

        Peters, Dr. S. J.

        Womersley, Sir W. J.

        Heneage, Lieut.-Colonel A. P.

        Petherick, M.

        Wood, Hon. C. I. C.

        Hepburn, P. G. T. Buchan-

        Power, Sir J. C.

        Wright, Wing-commander J. A. C.

        Hepworth, J.

        Procter, Major H. A.

        York, C.

        Herbert, Lt.-Col. J. A.(Monmouth)

        Radford, E. A.

        Young, A. S. L. (Partick)

        Holdsworth, H.

        Raikes, H. V. A. M.

        Hopkinson, A.

        Ramsbotham, H.

        TELLERS FOR THE AYES.—

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

        Rathbone, J. R. (Bodmin)

        Captain Waterhouse and Lieut.-Colonel Kerr.

        Hunloke, H. P.

        Reed, A. C. (Exeter)

        NOES.

        Adams, D. (Consett)

        Edwards, Sir C. (Bedwellty)

        Leonard, W.

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

        Foot, D. M.

        Leslie, J. R.

        Adamson, Jennie L. (Dartford)

        Frankel, D.

        Logan, D. G.

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

        Gallacher, W.

        Lunn, W.

        Ammon, C. G.

        Gardner, B. W.

        Macdonald, G. (Ince)

        Anderson, F. (Whitehaven)

        Garro Jones, G. M.

        McEntee, V. La T.

        Attlee, Rt. Hon C. R.

        Gibson, R. (Greenock)

        McGovern, J.

        Banfield, J. W.

        Graham, D. M. (Hamilton)

        Maclean, N.

        Barnes, A. J.

        Green, W. H. (Deptford)

        Marshall, F.

        Barr, J.

        Greenwood, Rt. Hon. A.

        Maxton, J.

        Bartlett, C. V. O.

        Grenfell, D. R.

        Messer, F.

        Batey, J.

        Griffiths, G. A. (Hemsworth)

        Milner, Major J.

        Beaumont, H. (Batley)

        Groves, T. E.

        Montague, F.

        Benn, Rt. Hon. W. W.

        Hall, G. H. (Aberdare)

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

        Buchanan, G.

        Hall, J. H. (Whitechapel)

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

        Burke, W. A.

        Hardie, Agnes

        Muff, G.

        Cape, T.

        Harris, Sir P. A.

        Nathan, Colonel H. L.

        Charleton, H. C.

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

        Noel-Baker, P. J.

        Cluse, W. S.

        Hayday, A.

        Oliver, G. H.

        Cocks, F. S.

        Henderson, J. (Ardwick)

        Paling, W.

        Collindridge, F.

        Hills, A. (Pontefract)

        Parker, J.

        Daggar, G.

        Jenkins, A. (Pontypool)

        Parkinson, J. A.

        Dalton, H.

        Jenkins, Sir W. (Neath)

        Pearson, A.

        Davidson, J. J. (Maryhill)

        Johnston, Rt. Hon. T.

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

        Davies, S. O. (Merthyr)

        Jonas, A. C. (Shipley)

        Price, M. P.

        Day, H.

        Kennedy, Rt. Hon. T.

        Pritt, D. N.

        Debbie, W.

        Kirkwood, D.

        Quibell, D. J. K.

        Dunn, E. (Rother Valley)

        Lathan, G.

        Richards, R. (Wrexham)

        Ede, J. C.

        Lawson, J. J.

        Riley, B.

        Edwards, A. (Middlesbrough E.)

        Leach, W.

        Ritson, J.

        1840

        1841

        Roberts, W. (Cumberland, N.)

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

        Welsh, J. C.

        Sexton, T. M.

        Strickland, Captain W. F.

        Westwood, J.

        Shinwell, E.

        Summerskill, Dr. Edith

        Whiteley, W. (Blaydon)

        Silverman, S. S.

        Taylor, R. J. (Morpeth)

        Williams, E. J. (Ogmore)

        Simpson, F. B.

        Thurtle, E.

        Williams, (Don Valley)

        Sloan, A.

        Tinker, J. J.

        Windsor, W. (Hull, C.)

        Smith, Ben (Rotherhithe)

        Viant, S. P.

        Woods, G. S. (Finsbury)

        Smith, E. (Stoke)

        Walkden, A. G.

        Young, Sir R. (Newton)

        Smith, T.(Normanton)

        Watkins, F. C.

        Stephen, C.

        Watson, W. McL.

        TELLERS FOR THE NOES.—

        Mr. Mathers and Mr. Anderson.

        Question put, "That this House doth agree with the Committee in the said Resolution".
        The House divided: Ayes, 184; Noes, 116.

        Division No. 91.]

        AYES.

        [11.12 p.m.

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

        Grant-Ferris, Flight-Lieutenant R.

        Orr-Ewing, I. L.

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

        Gridley, Sir A. B.

        Patrick, C. M.

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

        Grimston, R. V.

        Petherick, M.

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

        Gritten, W. G. Howard

        Power, Sir J. C.

        Apsley, Lord

        Gunston, Capt. Sir D. W.

        Procter, Major H. A.

        Aske, Sir R. W.

        Hambro, A. V.

        Radford, E. A.

        Assheton, R.

        Hammersley, S. S.

        Raikes, H. V. A. M.

        Baillie, Sir A. W. M.

        Hannah, I. C

        Ramsbotham, H.

        Baldwin-Webb, Col. J.

        Hannon, Sir P. J. H.

        Rathbone, J. R. (Bodmin)

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

        Harbord, A.

        Reed, A. C. (Exeter)

        Baxter, A. Beverley

        Haslam, Henry (Horncastle)

        Reed, Sir H. S. (Aylesbury)

        Beechman, N. A.

        Heilgers, Captain F. F. A.

        Reid, W. Allan (Derby)

        Bird, Sir R. B.

        Hely-Hutchinson, M. R.

        Remer, J. R.

        Boulton, W. W.

        Heneage, Lieut.-Colonel A. P.

        Ropner, Colonel L.

        Bower, Comdr. R. T.

        Hepburn, P. G. T. Buchan-

        Ross, Major Sir R. D. (Londonderry)

        Boyce, H. Leslie

        Hepworth, J.

        Ross Taylor, W. (Woodbridge)

        Bracken, B.

        Herbert, Lt.-Col. J. A. (Monmouth)

        Rowlands, G.

        Braithwaite, J. Gurney (Holderness)

        Holdsworth, H.

        Royds, Admiral Sir P. M. R.

        Briscoe, Capt. R. G.

        Hopkinson, A.

        Ruggles-Brise, Colonel Sir E. A.

        Broadbridge, Sir G. T.

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

        Russell, Sir Alexander

        Brooke, H. (Lewisham, W.)

        Hunloke, H. P.

        Russell, S. H. M. (Darwen)

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

        Hunter, T.

        Salmon, Sir I.

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

        Hutchinson, G. C,

        Salt, E. W.

        Bull, B. B.

        James, Wing-Commander A. W. H.

        Sandeman, Sir N. S.

        Burghley, Lord

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

        Sandys, E. D.

        Butcher, H. W.

        Jones, L. (Swansea W.)

        Scott, Lord William

        Carver, Major W. H.

        Keeling, E. H.

        Shaw, Captain W. T. (Forfar)

        Cary, R. A.

        Kerr, J. Graham (Scottish Univs.)

        Simon, Rt. Hon. Sir J. A.

        Channon, H.

        Keyes, Admiral of the Fleet Sir R.

        Smith, Sir R. W. (Aberdeen)

        Chapman, A.(Rutherglen)

        Kimball, L.

        Smithers, Sir W.

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

        Lamb, Sir J. Q.

        Snadden, W. McN.

        Colfox, Major W. P.

        Leighton, Major B. E. P.

        Somervell, Rt. Hon. Sir Donald

        Colman, N. C. D.

        Lennox-Boyd, A. T. L.

        Somerville, A. A. (Windsor)

        Conant, Captain R. J. E.

        Levy, T.

        Spears, Brigadier-General E. L.

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

        Liddall, W. S.

        Spens, W. P.

        Cox, H. B. Trevor

        Lipson, D. L.

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

        Croft, Brig.-Gen. Sir H. Page

        Llewellin, Colonel J. J.

        Stourton, Major Hon. J. J

        Crooke, Sir J. Smedley

        Loftus, P. C.

        Strauss, H. G. (Norwich)

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

        Lyons, A. M.

        Stuart, Hon. J. (Moray and Nairn)

        Cross, R. H.

        Mabane, W. (Huddersfield)

        Tasker, Sir R. I.

        Crowder, J. F. E.

        M'Connell, Sir J.

        Tate, Mavis C.

        Cruddas, Col. B.

        MacDonald, Sir Murdoch (Inverness)

        Thomas, J. P. L.

        Culverwell, C. T.

        Macdonald, Capt. T. (Isle of Wight)

        Thorneycroft, G. E. P.

        Davidson, Viscountess

        McEwen, Capt. J. H. F.

        Thornton-Kemsley, C. N.

        Denman, Hon. R. D.

        McKie, J. H.

        Titchfield, Marquess of

        Doland, G. F.

        Maclay, Hon. J. P.

        Wakefield, W. W.

        Dugdale, Captain T, L.

        Magnay, T.

        Walker-Smith, Sir J.

        Duncan, J. A. L.

        Manningham-Buller, Sir M.

        Wallace, Capt. Rt. Hon. Euan

        Dunglass, Lord

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

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

        Eastwood, J. F.

        Markham, S. F.

        Ward, Irene M. B. (Wallsend)

        Edmondson, Major Sir J.

        Maxwell, Hon. S. A.

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

        Elliot, Rt. Hon. W. E.

        Mayhew, Lt.-Col. J.

        Wells, Sir Sydney

        Elliston, Capt. G. S.

        Medlicott, F.

        Whiteley, Major J. P. (Buckingham)

        Emery J. F.

        Mills, Major J. D. (New Forest)

        Windsor-Clive, Lieut.-Colonel G.

        Emrys-Evans, P. V,

        Mitcheson, Sir G. G.

        Womersley, Sir W. J.

        Everard, Sir William Lindsay

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

        Wood, Hon. C. I. C.

        Fildes, Sir H.

        Munro, P.

        Wright, Wing-commander J. A. C.

        Fleming, E. L.

        Nail, Sir J.

        York, C.

        Fremantle, Sir F. E.

        Neven-Spence, Major B. H. H.

        Young, A. S. L. (Partick)

        Furness, S. N.

        Nicholson, G. (Farnham)

        Fyfe, D. P. M.

        Nicolson, Hon. H. G.

        TELLERS FOR THE AYES.—

        Gower, Sir R. V.

        O'Neill, Rt. Hon. Sir Hugh

        Captain Waterhouse and Lieut.-Colonel Kerr.

        NOES.

        Adams, D. (Consett)

        Grenfell, D. R.

        Parker, J.

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

        Griffiths, G. A. (Hemsworth)

        Parkinson, J. A.

        Adamson, Jennie L.(Dartford)

        Groves, T. E.

        Pearson, A.

        Adamson, W. M.

        Hall, G. H. (Aberdare)

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

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

        Hall, J. H. (Whitechapel)

        Price, M. P.

        Ammon, C. G.

        Hardie, Agnes

        Pritt, D. N.

        Attlee, Rt. Hon. C. R.

        Harris, Sir P. A.

        Quibell, D. J. K.

        Banfield, J. W.

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

        Richards, R. (Wrexham)

        Barnes, A. J.

        Hayday, A.

        Riley, B.

        Barr, J.

        Henderson, J. (Ardwick)

        Ritson, J.

        Bartlett, C. V. O.

        Hills, A. (Pontefract)

        Roberts, W. (Cumberland, N.)

        Batey, J.

        Jenkins, A. (Pontypool)

        Sexton, T. M.

        Beaumont, H. (Batley)

        Jenkins, Sir W. (Neath)

        Shinwell, E.

        Benn, Rt. Hon. W. W.

        Johnston, Rt. Hon. T.

        Silverman, S. S.

        Buchanan, G.

        Jones, A. C. (Shipley)

        Simpson, F. B.

        Burke, W. A.

        Kennedy, Rt. Hon. T.

        Sloan, A.

        Cape, T.

        Kirkwood, D.

        Smith, Ben (Rotherhithe)

        Charleton, H. C.

        Lathan, G.

        Smith, E. (Stoke)

        Cluse, W. S.

        Lawson, J. J.

        Smith, T. (Normanton)

        Cocks, F. S.

        Leach, W.

        Stephen, C.

        Collindridge, F.

        Leonard, W.

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

        Daggar, G.

        Leslie, J. R.

        Summerskill, Dr. Edith

        Dalton, H.

        Lunn, W.

        Taylor, R. J. (Morpeth)

        Davidson, J. J. (Maryhill)

        Macdonald, G. (Ince)

        Thurtle, E.

        Davies, S. O. (Merthyr)

        McEntee, V. La T.

        Tinker, J. J.

        Day, H.

        McGovern, J.

        Viant, S. P.

        Dobbie, W.

        Maclean, N.

        Walkden, A. G.

        Dunn, E. (Rother Valley)

        MacMillan, M. (Western Isles)

        Watkins, F. C.

        Ede, J. C.

        Marshall, F.

        Watson, W. McL.

        Edwards, A. (Middlesbrough E.)

        Mathers, G.

        Welsh, J. C.

        Edwards, Sir C. (Bedwellty)

        Maxton, J.

        Westwood, J.

        Fool, D. M.

        Messer, F.

        Williams, E. J. (Ogmore)

        Frankel, D.

        Milner, Major J.

        Williams, T. (Don Valley)

        Gallacher, W.

        Montague, F.

        Windsor, W. (Hull, C.)

        Gardner, B. W.

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

        Woods, G. S. (Finsbury)

        Garro Jones, G. M.

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

        Young, Sir R. (Newton)

        Gibson, R. (Greenock)

        Nathan, Colonel H. L.

        Graham, G. M. (Hamilton)

        Noel-Baker, P. J.

        TELLERS FOR THE NOES.—

        Green, W. H. (Deptford)

        Oliver, G. H.

        Mr. Whiteley and Mr. Anderson.

        Greenwood, Rt. Hon. A.

        Paling, W.

        Ordered, "That the Consideration of the remaining Resolutions be now adjourned." —[Captain Margesson]
        Sixteenth and subsequent Resolutions to be considered To-morrow.
        The remaining Orders were read, and postponed

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

MERCANTILE MARINE.
  CREWS' ACCOMMODATION.
  CREWS' ACCOMMODATION.
  STEAMSHIP "TUSCANIA" (TRANSFER TO FOREIGN FLAG).
  STEAMSHIP "TUSCANIA" (TRANSFER TO FOREIGN FLAG).
  GRANTS FOR SHIPBUILDING.
  GRANTS FOR SHIPBUILDING.
  MONEY RATES.
  MONEY RATES.
  CHINA AND JAPAN.
  CHINA AND JAPAN.
  TITHE ACT SUMMONSES.
  TITHE ACT SUMMONSES.
  AERIAL WARFARE (NON-MILITARY ZONES).
  AERIAL WARFARE (NON-MILITARY ZONES).
  RAILWAY ELECTRIFICATION (MANCHESTER DISTRICT).
  RAILWAY ELECTRIFICATION (MANCHESTER DISTRICT).
  POLICE FORCES AMALGAMATION.
  POLICE FORCES AMALGAMATION.
  UNEMPLOYMENT (CONFECTIONERY WORKERS, NORWICH).
  UNEMPLOYMENT (CONFECTIONERY WORKERS, NORWICH).
  DRUNKENNESS (METHYLATED SPIRITS).
  DRUNKENNESS (METHYLATED SPIRITS).
  HOUSE OF COMMONS (AMPLIFIERS).
  HOUSE OF COMMONS (AMPLIFIERS).
  ABORTION COMMITTEE (REPORT).
  ABORTION COMMITTEE (REPORT).

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
The Lord Selsdon—Sat first in Parliament after the death of his father.

CONWAY GAS BILL. [H.L.]
Returned from the Commons, agreed to.
NORTH METROPOLITAN ELECTRIC POWER SUPPLY BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.

WILD BIRDS (DUCK AND GEESE) PROTECTION BILL. [H.L.]
4.16 p.m.
Order of the Day for the consideration of Commons Amendments read.
VISCOUNT MERSEY: My Lords, in moving that the Commons Amendments be now considered, it will be convenient, perhaps, if I remind your Lordships of the object and the history of this Bill. It came before the House last year as a Bill agreed between the different societies connected with the protection of wild birds and it was backed by the Home Secretary's Advisory Committee. It went through your Lordships' House very quickly and we hoped that it would have an equally easy passage in another place, but other interests which arose there delayed it. There were some who wished to extend and others to diminish the close season. However, an agreement has now been arrived at, owing largely to the ability of Sir Thomas Moore backed by the powerful support of Sir Samuel Hoare.
The Amendments which I shall ask your Lordships to agree to are, in the opinion of the Home Secretary's Advisory Committee, a strengthening of the Bill. They will have effect in two ways. One is to extend the close season by setting it back from February 15 to February 1, and I may say that February 1
826
was in the original Bill as it was drafted before it came to your Lordships' House. The other is to allow a rather longer period for the shooting of wild duck and geese along the seashore, and in that case power is given to the Secretary of State, on application, to allow that period to be extended up to February 21. That really is the sense of the Commons Amendments. I beg to move that they be now considered.
Moved, That the Commons Amendments be now considered.—(Viscount Mersey.)
THE EARL OF MANSFIELD: My Lords, while I am in complete agreement with the noble Viscount's statement that this measure has returned to your Lordships' House in a stronger and therefore better form than that in which it left, I feel very regretful that we had not the opportunity of discussing it in detail here, because, as those of your Lordships who were present at the time will remember, those of us who had Amendments on the Paper were dissuaded by the plea—which unfortunately was not justified by events—that we should get the Bill through in time for it to become effective in February this year. It is now half promised by the Home Secretary that a further Bill to consolidate, and I hope to clarify, the present very unsatisfactory condition of the law regarding wild bird protection will be introduced before very long. When that is done I hope opportunity will be taken to remedy certain anomalies in the present Bill with which I will not trouble your Lordships now. I would like to make a further suggestion that if such legislation is introduced there will be two Bills, one to deal with the shooting season of such wild birds as may receive legal protection, and the other to deal with the general and very thorny question of wild bird protection. I entirely agree with the noble Viscount that this Bill is now a better measure.
THE PRESIDENT OF THE BOARD OF EDUCATION (EARL DE LA WARR): My Lords, I do not think it necessary to add anything on behalf of the Government, except to confirm what the noble Viscount, Lord Mersey, has said, that the Home Office are strongly in favour of the Bill and regard the Commons Amendments as a definite improvement.
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords, as

827
I am Chairman of the Advisory Committee I will only add a word to what the noble Viscount has said about the Commons Amendments. I hope your Lordships will accept the Amendments, because I think that on the whole they improve the Bill, and it is very desirable that it should be passed into law as early as possible.
On Question, Motion agreed to.

COMMONS AMENDMENT.
[The references are to Bill No. 6.]
Clause 1, page 1, line 16, leave out ("fifteenth") and insert ("first").
VISCOUNT MERSEY: My Lords, this Amendment will extend the close season by taking it back from February 15 to February 1. I beg to move that it be agreed to.
Moved, That this House doth agree with the Commons in the said Amendment—.(Viscount Mersey.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
Page 2, line 1, leave out subsection (3) and insert:
("(3) After the commencement of this Act—

(a) no order shall be made under the power conferred by Section eight of the principal Act making any provision whereby the time during which the killing and taking of wild duck or wild geese or any kind thereof is prohibited is to begin with, any date later than the first day of February or end with any date earlier than the eleventh day of August, and

(b) no order shall be made under the power conferred by Section nine of the principal Act exempting any county or any part or parts thereof from the operation of that Act as respects wild duck or wild geese or any kind thereof,

and any order made under the said sections before the commencement of this Act shall cease to have effect if and in so far as it makes any such provision or exemption as aforesaid:
Provided that nothing in this subsection shall prohibit the making after the commencement of this Act of any such order as is mentioned in the next following subsection.
(4) The power of the Secretary of State under Section eight of the principal Act shall include power to make an order, in pursuance of an application made under the said section after the commencement of this Act, providing that the time during which the killing and taking of wild duck and wild geese is prohibited shall begin with such date not later than the twenty-first day of February as may be specified in the order in such
828
parts of the county or county borough to which the application relates, being parts contiguous to the low water mark of ordinary tides, as may be so specified.")
VISCOUNT MERSEY: My Lords, the first two paragraphs of the new subsection (3) are really a redrafting of the original subsection and are considered clearer. The new subsection (4) gives the Secretary of State power to allow the shooting of wild duck and geese along the seashore in marshy and sandy places up to February 21 on application by the local authority. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Viscount Mersey.)
THE EARL OF MANSFIELD: My Lords, I hope that when the bird protection measures are consolidated, something will be done to remedy the slightly ridiculous position brought about by this Bill; for, whereas in the past it was possible to shoot wild fowl for a month after the close of the normal shooting season, it will now be illegal to shoot them inland on February 1, although partridges and pheasants can be shot on that day. This is an anomaly which I think should be put right at a later date.
On Question, Motion agreed to.

COMMONS AMENDMENT.
Clause 3, page 2, line 36, leave out ("fifteenth") and insert ("first").
VISCOUNT MERSEY: My Lords, this Amendment is to bring the dates into line as regards the importation of wild duck and geese from the Continent. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Viscount Mersey.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
Clause 5, page 3, line 31, at end insert:
("(2) This Act shall come into operation on the first day of August nineteen hundred and thirty-nine.")
VISCOUNT MERSEY: My Lords, this is consequential on the Bill having been delayed in another place. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Viscount Mersey.)
On Question, Motion agreed to.

REORGANISATION OF OFFICES (SCOTLAND) BILL.
House in Committee (according to Order): Bill reported without amendment.

INDIA AND BURMA (MISCELLANEOUS AMENDMENTS) BILL. [H.L.]
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Marquess of Zetland.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF ONSLOW in the Chair.]
Clause 1 agreed to.
Clause 2:
Amendments as to certain items in Legislative Lists.
(2) After paragraph 48 of the Provincial Legislative List, there shall be inserted the following paragraphs:
"48A. Taxes on vehicles suitable for use on roads, whether mechanically propelled or not.
THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND)THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND) moved, in subsection (2), at the end of paragraph 48A, to insert "including tram-cars." The noble Marquess said: The purpose of this small Amendment which stands in my name is to include tram-cars as a subject of taxation by the Provincial Governments in the appropriate Schedule of the original Act. By an oversight this item was omitted when the Bill was drafted. As a result of representations, to which I have been able to give further consideration, from the Government of Bengal, I have now put down this Amendment. It appears that tram-cars are already a subject of taxation in one at least of the Provinces of India, and it is therefore desirable that no doubts as to the power of Provincial Governments to levy these taxes should be allowed to remain. I beg to move.
Amendment moved—
Page 2, line 38, at end insert ("including tram-cars").—(The Marquess of Zetland.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Remaining clauses agreed to.
Schedule agreed to.

THE GOVERNMENT: BASIS AND POLICY.
4.28 p.m.
LORD DAVIES LORD DAVIES moved to resolve, That, with a view to restoring confidence abroad and ensuring unity at home, it is the opinion of this House that steps should at once be taken to broaden the basis of His Majesty's Government in order that all sections of opinion may be given adequate representation during the present emergency.
The noble Lord said: My Lords, I have put down this Motion entirely on my own responsibility and am speaking only for myself. I hope, however, that your Lordships will believe that I move it in no partisan spirit and with no desire to introduce any Party politics into the discussion. Firstly, I am sure your Lordships will agree that in these difficult times, whatever may be our views in regard to a problem, we are all of one mind that the liberty of our country and its institutions, which have been handed down to us by our forefathers, should be preserved at all costs. Secondly, I think we should also agree that our liberty can only be preserved on the basis of justice, which is the one true and lasting foundation of peace. Thirdly, I believe your Lordships will support the principle that whatever policy is decided upon should be carried out with the utmost vigour and promptitude and should have the whole weight of a united country solidly behind it, if possible to avert the calamity of war, or, if that is impossible and war is forced upon us and our friends, that we may win it in the shortest possible space of time.
I imagine there are few of your Lordships who will not subscribe to these general principles. They are, after all, the common stock of all Parties and of all sections of the community. If we differ, it is with regard to the most effective methods of carrying them out. That is why I suggest that, irrespective of Party and of personal allegiances, we should dispassionately consider the facts, with the object of arriving at an unbiased conclusion as to whether we are proceeding on the right lines, and whether everything possible is being done to prevent the catastrophe. I believe there are few members of this House who are not troubled with an uneasy feeling at the back of their minds that our policy still leaves much to be desired, that it is not

831
clear-cut and unequivocal. Moreover, we cannot help being perturbed about the state of our national defences and our preparations to meet an emergency, which like a thief in the night may come upon us at any moment. I agree that recriminations at this stage are of no purpose. It is no use bemoaning wasted opportunities or deploring years which the locusts have eaten. On the other hand, if we want to be constructive, I suggest that we are bound to criticise. Unless we are clear as to what mistakes have been made, and who are responsible for them, I fail to see how we are going to remedy them. It is in this spirit, and with this object, that I propose to offer some criticism this afternoon.
I rather gather that the Government resent criticism. I hope I may be wrong. I listened carefully last week to the speech of the Foreign Secretary. It was a thoroughly self-satisfied and complacent speech. There is an old maxim that the King can do no wrong, and the impression left upon my mind, after listening to that speech, was that the Government could do no wrong. Of course, that may be the view of Ministers, but I think it is not the view which is shared by many people in the country, nor is it shared by our friends in other countries. We have been told, for instance, that to criticise is to foul our own nest. Well, I deny that honest and constructive criticism fouls any nest. Your Lordships will recollect that on some of the most critical occasions in the last War Parliament did not hesitate to criticise the Government in office, often with excellent results. Even in those great moments, when we stood with our backs to the wall, very few people—some, no doubt, but few—suggested that Parliamentary criticism and discussion should be discontinued. On the contrary, I think it helped us on the road to victory, and placed power and responsibility on the shoulders of those who were best fitted to bear them.
Why, therefore, I ask, should criticism be stifled to-day? Surely it is the lifeblood of any democratic community. Yet only a few months ago a Member of Parliament was taken to task by the Minister for War, and even threatened with proceedings, because he had drawn attention to the shortage of guns—surely a most meritorious and courageous act. Then a
832
short time ago, your Lordships will remember, there was a revolt amongst the Under-Secretaries, which apparently was quashed without any casualties. This incident, I think, was an indication at any rate that complete harmony did not exist even amongst the Government's own supporters. Our dissatisfaction with and censure of the Government may be summarised under two headings, which are interdependent and cannot be separated. The first is the inconsistency and vacillation of our foreign policy during the last ten or twelve years, which has resulted, especially during the last three years, in a series of unprecedented diplomatic defeats, and diminished our prestige and authority in every part of the world. The second is the state of our military and naval unpreparedness to meet any attack, which has characterised all our Administrations during this period.
It is obvious, I think, that without adequate military, naval and air power to defend our country and the British Commonwealth, and also to play a part commensurate with our resources in any system of collective security, our foreign policy was bound to suffer. I suggest that the converse is equally true, that if we deserted the collective system, or failed to develop and organise it on the basis of mutual protection against aggression, we should be compelled once more to build up colossal national armaments and military alliances, which in the past have always, sooner or later, ended in war. That is the position which we have now, unfortunately, reached. In the old days the motto of the Foreign Office was continuity of policy, and after the War, your Lordships will remember, successive Foreign Ministers and Prime Ministers assured us that the League was to be the keystone in future of our foreign policy. That was the formula until the so-called policy of appeasement was announced by the Prime Minister, in his midsummer madness speech of June 11, 1936. A weak-kneed and vacillating policy, devoid of any moral principle, has at last brought us to the brink of war. We have helped to destroy the only institution which, under the leadership of this country and through the co-operation of its members, might have established the rule of law, and by substituting peaceful for violent methods of settling international disputes, backed by a superiority of policing power, could

833
have placed insuperable obstacles in the path of the aggressors.
If your Lordships will bear with me for a few moments I will produce some of the skeletons front the diplomatic cupboard. Exhibit Number One is labelled "Manchukuo." Your Lordships will remember how the United States Secretary of State, Mr. Stimson, was cold-shouldered by the present Chancellor of the Exchequer when he suggested some form of co-operation between this country and America in resisting Japanese aggression in Manchuria. On another occasion, despite the unanimous Report of the Lytton Commission, we refused to exert any financial or economic pressure upon Japan; in fact, we repudiated our obligations under the Covenant. On the contrary, we threw China overboard and allowed the Japanese militarists to secure a foothold in Northern China. This has been followed by the invasion of China which, if it is successful, will not only pulverise what remains of British prestige and authority in the Far East, and close that vast country to British trade and enterprise, but will also menace our position in the Pacific and endanger the safety of Australia and New Zealand. That is the price that we may have to pay for our cowardice, shortcomings and shortsightedness when the first act of aggression took place in 1931.
THE EARL OF GLASGOW: The noble Lord will pardon me for interrupting him, but may I ask what this has to do with the broadening of the basis of the Government?
LORD DAVIES: I am trying to demonstrate to the House the shortcomings of the present Administration, in the hope that that will induce them to broaden the basis of the Government. To resume my argument, if we are saved from the perils that I have indicated it will be due not to any exertions on our part, but to the courage and heroism of the Chinese people in their grim determination, despite their unpreparedness and lack of armaments, to thrust back the invaders of their country.
Exhibit Number Two is Abyssinia. Your Lordships will remember that Mussolini was so impressed with the diplomacy of Sir John Simon over Manchuria that for nine months he openly proclaimed his intention of conquering
834
Abyssinia. During this period we did nothing to prevent him from massing troops and munitions in vast quantities in Africa. Sir John Simon met Mussolini at Stresa, but so far as we know there was not a word of remonstrance and not a single protest. I am sure your Lordships will agree that, to say the least of it, it was unfortunate that during his term of office the seed of disintegration should have been sown at Geneva and the system of collective security undermined.
Now I come to his successor, the present Home Secretary and another member of the Inner Cabinet. Your Lordships will remember that at Geneva he proclaimed to the world our fidelity to the Covenant and loyalty to the League. This is what he said on that occasion. It is just as well that we should remind ourselves of the declarations which have been made from time to time by the members of the present Government. This is what he said:
"It is to the principles of the League and not to any Party manifestation that the British nation has demonstrated its adherence. Any other view is at once an underestimate of our good faith and an imputation on our sincerity. In conformity with its precise and explicit obligations, the League stands, and my country stands with it, for the collective maintenance of the Covenant in its entirety and particularly for steady and collective resistance to all acts of unprovoked aggression."
Well, I think your Lordships will agree that this speech was of vital importance. In the first place, it is not too much to say that it won the last Election for the Government. It was their trump card. And, secondly, it led the Emperor and people of Abyssinia to anticipate that the League, under the leadership of Great Britain, would protect them against the onslaught of Mussolini. With that assurance they decided to fight. We know the sequel. They were badly let down and the League suffered a terrible blow.
The third exhibit is the Anglo-German Naval Agreement concluded at the moment when we had joined France and Italy at Stresa in denouncing Hitler's unilateral repudiation of Part 5 of the Treaty of Versailles. This Agreement, which really meant nothing to us, only served to wreck the collective system by alienating France and sending her off in search of compensation to Moscow and to Rome. To-day it is a corpse not a

835
skeleton since it was only on Friday that Hitler proceeded to knock it on the head. Exhibit No. Four is Austria. The death of Austria and the brutal imprisonment of Dr. Schuschnigg evoked protests—nothing more. The policy of appeasement was now in full swing. Exhibit No. Five is the resignation of Mr. Anthony Eden because he refused to abandon his principles and to take his orders from Rome and Berlin. Exhibit No. Six is the Anglo-Italian Agreement for which the noble Viscount the Foreign Secretary must take his share of the responsibility. I could never have believed that he would have become a party to a treaty which dishonoured this country by endeavouring to derive profit and advantage for ourselves out of the misery and sufferings of the brave Ethiopean people. That is the naked truth which will haunt us all to our dying day.
Exhibit No. Seven is Spain, where, under the cloak of non-intervention, we have tamely acquiesced in the veiled conquest of that country by the Axis Powers. And now I come to the last skeleton in this gruesome cupboard—the conquest and subjugation of a young and democratic Republic in Eastern Europe which we and our allies had sponsored at the conclusion of the War, and which we had led to believe almost up to the last moment that we should support in its struggle for existence. Munich will go down to history as a betrayal of our friends and the most glaring example of our repudiation of the Covenant which we signed in the blood of our comrades and fellow countrymen who made the supreme sacrifice in the World War. In his speech on Friday Hitler gloated over our discomfiture and recounted the booty which he had acquired at the expense of our safety and prestige.
Those are the diplomatic skeletons which grin at us from behind the curtain. Has any Government in so short a time ever collected such a grisly array? These are the stark facts. Whatever pretexts or reasons we may adduce in support of our policy or our actions, the results are apparent for all to see. We are nearer war to-day than we have ever been since the Armistice was signed. Nations, Governments and leaders must in the long run be judged by results. Good intentions are all very well; but if the results are such as to endanger the
836
safety of our country and to shatter the confidence of others in our good faith, then, I suggest, it is time to reconstruct our policy, to unite our people and our friends under a Government which will command their allegiance and respect. I protest against the new methods of carrying on our diplomacy which have characterised the present Administration. Will the noble Viscount, the Foreign Secretary, tell us—he is not here to-day, but perhaps he will tell us on some other occasion—whether he concurs in these arrangements which helped to bring about the resignation of his predecessor? Will be tell us why it was that in the negotiations at Munich, for example, the Foreign Office was not represented? Why was it that the Prime Minister carried out his task without the assistance of Foreign Office experts? Why were Sir Robert Vansittart and Sir Alexander Cadogan left at home when momentous decisions affecting the safety, security, and vital interests of the British Commonwealth were being taken 700 miles away? Surely the time has arrived when amateur diplomacy of this description should come to an end.
Of course, the Prime Minister and the Cabinet have the last word in these matters, but if the Foreign Secretary is not allowed to run his own Department without interference from outside, then he ought seriously to consider whether he should not resign. The fact is that our foreign policy has been characterised by equivocation and vacillation—blowing hot to-day and cold to-morrow. The latest example, of course, is the sudden recall of our Ambassador from Berlin, followed by his speedy return. Yesterday he banged the door and walked out, to-day he sits on the doorstep awaiting the pleasure of Herr von Ribbentrop. Is it really necessary, even in the sacred cause of peace, to undergo all these humiliations and suffer all these indignities, or do they arise from stupidity and divided counsels? Your Lordships will recollect that after Munich our peace envoys returned waving a scrap of paper bearing the signatures of the Prime Minister and Herr Hitler which, we were assured, would ensure a lasting peace between ourselves and Germany. This innocent gesture was almost an insult to our intelligence. It was a lamentable exhibition of wishful thinking without parallel in the history of our diplomacy. The truth is

837
that the Government have no long-range policy. Ever since they repudiated the Covenant, they have abandoned the moral plane to which, for many years, they at least paid lip-service, and have descended to the level of the Dictators—rank opportunism and sheer expediency. Consequently, as it seems to me, they have lost the esteem of their friends and become the butt of their enemies.
I have dwelt on the bankruptcy of our foreign policy. Let me now turn to our home front. Here again the Government have shown a remarkable inability to appreciate the trend of events and to rehabilitate our defences. Broadly speaking, there are three distinct periods. There was the demobilisation and general disarmament which occurred immediately after the War, when, in the natural reaction, we stripped ourselves of these encumbrances. Then there was the period of unilateral disarmament—a noble example which we gave to all other countries, but I fancy, though I have no very substantial grounds for saying it, that financial stringency had also something to do with it. This phase came to an end with the Abyssinian crisis, when we were brought up with an unpleasant jerk. Lastly, there is the period of the last three years when the rearmament programme is supposed to have been in operation. I do not know how long it takes a country to rearm itself, but it is clear that there have been interminable delays, and a complete inability to deal with the problem of national defence as a whole and to co-ordinate it with similar preparations on the part of our friends designed to resist any acts of aggression.
Where is the Ministry of National Defence which should have been created, surely, not only to co-ordinate the activities of the Fighting Services, but also the measures for the safety of the civilian population? I submit that offensive and defensive preparations are both part of the same problem. Where is the Ministry of Munitions, to speed up rearmament and mobilise the resources of the country before, not after an emergency arises? The measure proposed by the Government a few days ago is, as I suggest, a caricature of the Ministry created by Mr. Lloyd George in the last War. Why all this hesitancy and procrastination? Is it merely the reverse side of the policy of appeasement? Every Department—War Office, Admiralty, Air
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Ministry, Board of Education, Lord Privy Seal, Board of Trade, the Ministries of Health and Transport, Home Office, even the local authorities—is involved in this problem of defence. Every man and woman is being invited to help. But where is the co-ordinating authority to ensure that all these Departments are not working at cross purposes? Why is each person not told how, and in what job, he or she can best serve the country in an emergency? Are we once more, in far more strained and agonising circumstances, to go through the period of muddle and improvisation which we encountered in the first two years of the World War? No doubt it is a very difficult and herculean task, but it must be faced now. We cannot afford to run away from it.
I submit, therefore, that in the grave and perilous conditions in which we find ourselves, it is our duty to insist upon two essential things. The first is a constructive and consistent foreign policy, based not upon what is usually described as national interest, but upon the rule of law; in other words, upon justice. The second is a reconstituted Government which will include not only the Leaders of the Labour and Liberal Parties, but also what I may describe as our elder statesmen, who passed through the fiery furnace of the last conflagration, and whose experience in tackling the problems and emergencies of war is unique and unrivalled. Such a Government is absolutely necessary in order to unite our nation at home and to restore confidence abroad. These are the two constructive propositions which I venture to submit to your Lordships this afternoon.
What do we mean by the rule of law? Well, I suggest at least two things—a peaceful procedure for the settlement of all disputes, negotiation and conciliation, or, if they fail, arbitration by an impartial and disinterested third party, supported by a pre-organised system of financial, economic and military sanctions. There is no other way. These are the only foundations, I suggest, of any durable and lasting peace. But the immediate problem is the mobilisation of all those nations who are prepared jointly to resist aggression. This involves not merely the signing of treaties and the issue of blank cheques, which may or may not be dishonoured, but the preparation of specific plans in advance in which all the

839
co-operating States are prepared to play their part if an emergency should arise. Do we again propose to repeat the disastrous policy of improvisation, of hap-hazard arrangements, which was pursued during the first three years of the last War? It would be madness and foolishness to do so. Obviously, the first step is to appoint a commission of experts, financial, economic and military, to mobilise the resources and to co-ordinate the activities of all the non-aggressive nations in a comprehensive plan of mutual defence.
But I submit that such a plan by itself is not enough. If the nations who join the defensive combination are to be imbued with the highest morale—and, after all, it is morale that accounts in the end—an appeal must also be made to their idealistic feelings. They must realise that beyond a peradventure they are fighting in a just cause. For many years past, not merely after reading Herr Hitler's contradictory speech, in which he extolled the virtues of British Imperialism in one breath and asked for the return of the German Colonies in the next, some of us, I am sure, have had an uneasy feeling at the back of our minds that the existing distribution of non-self-governing Colonial territories is scarcely compatible with the idea of justice. Why should some countries control vast territories in Africa and elsewhere, whilst others who arrived late on the scene, or were vanquished in war, have none at all? I do not think that other countries are going to help us in the hour of adversity merely to enable us to retain all our territories and possessions. After all, these were acquired by conquest and this constitutes our sole title. Therefore, I ask, what is the Government going to do about it?
I do not suggest for a moment that any of these territories should be handed over to Germany. That would be only to perpetuate an unjust and inequitable system. But merely to say "No" and adopt a negative attitude is not a solution. After all, there are other countries besides Germany who have put forward their claims. Poland, for example, who is now one of our allies. How do we propose to satisfy them all? On what principle is any new distribution to be made? Is the situation to be allowed to develop into a casus belli? I believe that there is a much more
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satisfactory and equitable solution, and that is to put these territories under the control of an International Commission and an international civil service recruited from all the co-operating States. Let us suppose that such a plan was applied in the first instance to Equatorial Africa, and that all the States who possess non-self-governing territories in that area handed them over to an International Commission. Such a body would be charged with the duty of administering these regions, primarily in the interests of the native populations. It would recruit its own police force and ensure equality of treatment, of economic opportunity, and of access to raw materials to the nationals of all the countries who joined together for the purpose.
I submit that here is a constructive and co-operative plan which would eventually pave the way for a United States of Europe. I know, of course, that there are objections. Herr Hitler would no doubt reject it. He prefers Imperialism and threats of war, but it does not follow that the German people would also reject it. If they secured equality of status with everyone else, their grievance would have been removed. Secondly, we shall be told that it is impracticable and will not work. What right have we to assume that this will be the case? An International Commission administered the Saar territory with conspicuous success for fifteen years. The Chinese Customs Service was another example of international administration, as also is the work of the humanitarian sections of the League and the International Labour Office at Geneva. Thirdly, it will be said that the other countries will refuse to join in the plan. But the point we have to consider is whether we are prepared to make the offer. There is no evidence, as far as I know, to prove that the other countries would turn it down. May I also allude to the attitude of our friends in America? They have always been very critical of our Imperialism, and I think they are right. If we want to win their approval and esteem we must make some offer on these lines. What it means is that we abandon the policy of Imperialism, so dear to Hitler and Mussolini, and substitute for it a commonwealth of nations based upon co-operation, equality and justice.

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I must apologise for the length of my remarks, but I am almost drawing to a close. There is one other proposal which, I am afraid, as the noble Earl opposite said a few moments ago, is not very germane to the Motion, but it is made with the object of trying to suggest some sort of constructive policy in lieu of the non-constructive policy which the Government have hitherto been pursuing. The second proposal I would suggest is that there can be no real peace in Europe so long as the armament race continues. Sooner or later it is bound to end in war, unless some miracle happens, or the United States throws all her weight into the balance against the aggressor now—before, not after, the crisis occurs. Herr Hitler in his speech the other day declared that he wants peace—peace, of course, at his own price, by which he means that he will not make war if he can get what he wants without it. But let us not forget that he is also in this dilemma; if he slows down the tempo of his armament factories and his warlike preparations, he immediately throws out of employment millions of his people. The same thing, of course, is true in perhaps lesser degree of other countries. Governments here and in France, as well as the Dictators, will be faced with the same problem of how to avert an economic catastrophe should a substantial measure of disarmament ever be agreed to.
I suggest that something should be done to finance the transition period from a war to a peace footing. I am not competent to suggest the details of any scheme, but would it not be possible to create an international fund to which many countries, if not all, would subscribe, and which would enable the wealthier communities to assist not only themselves but also the dictator States? in dealing with this difficult matter? Your Lordships, will agree, I am sure, that scarcely any price in cash is too high to pay to avoid a war which would probably destroy life and property on an unprecedented scale and plunge every country in Europe into complete bankruptcy. I confess that I am not very sanguine, but if agreement about disarmament could be reached, and that agreement was backed by undoubted and unimpeachable guarantees, then I suggest participation in such a fund would be a sound investment. Hitler and Mussolini would probably reject it with scorn, but at any rate its significance
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would not be lost upon the German and Italian peoples.
I have only one more matter to mention. I have said that not only must we revise our policy, but we must also restore confidence at home and abroad. I suggest that this can be done by constituting a truly National Government. We have reached a stage, I think, somewhat similar to the crisis in 1915, when, as you will recollect, Mr. Asquith formed his first Coalition. Surely the time has come when we cannot afford to be deprived of the services of our elder statesmen who bore the burden and the heat of the day twenty years ago, and whose experience of war administration and problems of mobilisation is unrivalled. Unfortunately, most of them have passed away, but a few still remain. Their advice and counsel at this juncture would be invaluable.
May I mention a few? First there is Mr. Lloyd George. In spite of his age he is as virile and alert as ever. Like every politician he has made mistakes, but we must all agree that his indomitable pluck, his drive and his vision—to say nothing of his inspiring speeches—helped perhaps more than anything else to pull the country and the allies through the last War. And there is Mr. Winston Churchill, whose brilliant achievements and patriotic fervour I need not enlarge upon. For years he has never ceased to warn us. Why are these two men, of undoubted ability, energy and experience, cold-shouldered and excluded from the inner counsels of the nation in this time of peril and anxiety? There is also my noble friend Viscount Cecil, who played a conspicuous part in the organisation of the blockade and afterwards at the Peace Conference. Of course there are many others whom it would be invidious for me to mention, but surely at this time of crisis their experience gained in a somewhat similar emergency can be utilised with advantage to the State. Then there is Mr. Eden. Why is he left out in the cold, when so many backsliders have been reinstated in the present Government? Now that the Government have reverted to the policy which he so ably advocated why is he left out of the team?
Lastly, there is the question of national unity. If we are to march forward as a united nation into the dangerous times ahead of us, is it not of vital importance

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that the Government of our country should represent all sections of opinion in the community? I can only express the hope that the Leaders of both the Labour and Liberal Parties will be invited to join the Administration, and that they will respond to their country's call in the hour of need. My Lords, I end where I began. I appeal to the rank and file of the Conservative Party. We on these Benches, of course, are powerless. But if in the light of all that has happened noble Lords feel that there is need for change, that leadership must be strengthened and the morale of the country fortified, I implore them to use their influence and to make it felt in the inner councils of their Party. United we stand, divided we fall. Our country cannot be saved through the exertions of any one man or any single Party. It can only weather the storm through the exertions and the sacrifices of all.
Moved to resolve, That, with a view to restoring confidence abroad and ensuring unity at home, it is the opinion of this House that steps should at once be taken to broaden the basis of His Majesty's Government in order that all sections of opinion may be given adequate representation during the present emergency.—(Lord Davies.)
5.19 p.m.
LORD HARMSWORTH: My Lords, I rise with great diffidence to address you for the first time, but I am reinforced by the knowledge that you will extend to me the indulgence you extend to all maiden speakers in your Lordships' House. I cannot hope to traverse the whole area of my noble friend's speech. I have not come down to this House this afternoon with any intention or with any preparation for so extensive a survey. Indeed, I was slightly doubtful at times, if my noble friend will permit me to say so, what relation considerable portions of his speech bore to the Motion which he has presented to us.
I was disappointed to hear him repeat in this House the old stage clichés and platitudes about the defaults of His Majesty's Government. He was pleased to bring out from that cupboard certain very familiar diplomatic skeletons: Manchuria, Austria, Spain and others. If my noble friend will in private explain to me how the Government of this country
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could have effectively intervened in the Sino-Japanese War, I shall be exceedingly grateful to him. He referred to Austria. What sort of action could His Majesty's Government have taken with any prospect of success or, I will say, with any propriety, in the Anschluss between Germany and Austria? Then, again, it is to the greatest credit of His Majesty's Government that they succeeded, in spite of criticism from quarters whence I think they need not have expected it, in maintaining throughout that struggle in Spain the policy of non-intervention. If I were in a mood to prophesy, I would say that their policy in that matter, very difficult in its pursuit, will redound in history very greatly to the credit of His Majesty's Government and of the people of this country.
My noble friend repeated here an opinion that has been expressed ad nauseam in both Houses of Parliament, on the platform and in the Press: that His Majesty's Government, and this country, in fact, are mainly responsible for the enfeeblement of the League of Nations. My noble friend knows that the League of Nations was crippled from the outset by the defection of the United States of America. He knows that since then two of the most powerful States in the world have seceded from the League, and one of them, at a time when it was a Member of the League, was in active opposition to every principle of the Covenant. No, my Lords, in my experience—and I have had the honour of representing this country at the Council of the League of Nations—no country in the world tried harder to do its best for, or more generously supported, the League of Nations than this country. The noble Lord spoke of the loss of prestige of this great country. I have heard that charge made against successive Governments in this country throughout the whole of my life. Indeed, it has been made, as we all know, in every year of English government. In point of fact, unless, since I was a member of a British Government and was enabled to survey the world from the Foreign Office, things have changed materially and disastrously, I would say that the prestige of this country is now and has been throughout my life at least equal to that of any of the great nations of the world.
But perhaps I may be permitted to come to the Motion on the Order Paper.

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In time of peace our democratic system requires that there should be an Opposition, that there should be a play of political forces in Parliament, in the Press and on the platform. A few years ago we used to look to the Opposition to provide the alternative Government. I have always thought that in time of peace the stronger the Opposition the better, provided always that the Government of the day had an adequate and not too large a majority. I think it is a good thing that we have at present a partially National Government. In war-time I would agree with my noble friend that it is essential that we should have a fully National Government. I venture to submit, however, that a war Government must not only be a National Government but must also be a united Government. It should, indeed, as my noble friend has suggested, comprise the leaders of all considerable sections of opinion, but they should and must be ready to accept the policy of the Government and to sink minor differences and prejudices for the time being.
I would ask your Lordships, do those conditions exist at this moment? I have very grave doubts, not on account of the ability of the statesmen who would be called to join a united Government, but because of the sentiments they have expressed and continue to express, and which have been expressed in your Lordships' House this afternoon by my noble friend. No Prime Minister of my time has been more relentlessly assailed or more continually misjudged and misrepresented than the present Prime Minister. His policy of conciliation was, and is, derided in quarters where one would least expect derision, and by statesmen who would become his colleagues if Lord Davies's proposal were accepted. I am old-fashioned enough to stand by Munich, and I trust that the Prime Minister and his colleagues will lose no opportunity of returning to that attitude. I do not regard his heroic effort at Munich as a gailure. At least he profoundly impressed the German nation, if he did not convert their Leader.
There is a minor consideration which I hope your Lordships will not regard as a purely frivolous one, and which affects your Lordships' House. Under the proposals of my noble friend, are we to be deprived altogether in this House of our
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major and minor Oppositions? I foresee in that case a sensible loss in the interest and usefulness of your Lordships' debates. My imagination is not lively enough to picture a situation in which the Leader of the major Opposition and Lords Addison and Strabolgi would be wedged in and muzzled on the sometimes congested Front Bench below me. And then, thinking of my noble friend—if I may still so describe him—Viscount Cecil of Chelwood, I am wholly unable to imagine him being wedged in or muzzled in this House—or outside.
Undoubtedly, in the case of the supreme emergency of war, some such proposals as those that have been presented by my noble friend would be realised. I trust, if that should happen, that we shall have a Government devoted to all preparations for war and—this I regard as equally important—not bitterly estranged from any consideration of appeasement or conciliation. For, war or no war, appeasement and conciliation must be the ultimate policy in Europe. It is infinitely better, I would venture to say, that that policy should be tried out to the uttermost before war rather than after var. I believe myself—it is a bold statement, I dare say, to make—that the raw materials for a better, a more human understanding are to be found, if they are looked for, in the wide expanse of Herr Hitler's speech the other day. But I must not enlarge upon that opinion this afternoon. I should trespass too far on your Lordships' indulgence, and find myself probably outside what seem to me to be the very generous limits of law which are observed in your Lordships' House.
5.32 p.m.
THE MARQUESS OF ZETLAND: My Lords, by far the pleasantest of my tasks this afternoon is to express my own pleasure, and I am sure the pleasure of all your Lordships, wherever you sit, at the speech to which we have just listened from the noble Lord who has addressed your Lordships for the first time. He spoke with a knowledge which study and experience of the past have given him, of the great problems of foreign policy which have been brought before your Lordships' notice this afternoon, and we may well look forward, with feelings both of pleasure and of interest, to the future occasions on which we hope that the noble Lord will contribute to our discussions.

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I cannot help thinking that it would have been for the greater convenience of your Lordships if the noble Lord who introduced this Motion had composed his speech first and then drafted his Motion to fit the speech, for the Motion would certainly have read in very different terms if he had followed that procedure. A Motion to fit his speech is not really a Motion for broadening the basis of the Government. It is a Motion for the removal of His Majesty's present Ministers, and the substitution of others in their place. The noble Lord spoke of vacillating and weak-kneed foreign policy, which had been pursued by the Government, as he said, for the last ten or twelve years. I am happy to think that His Majesty's present advisers, or at any rate the majority of them, can hardly be held responsible for what happened at the beginning of that period. Then he took exception to the fact that one day last week my noble friend the Foreign Secretary put up a defence against certain criticisms which had been levelled against the foreign policy of the present Government. He described my noble friend as displaying an attitude of complacency and self-satisfaction. If I may say so in passing, I know of no one who ever gives me less idea of complacency and self-satisfaction than my noble friend the Foreign Secretary. I really think it was rather an exaggeration of critcism on the part of the noble Lord to attribute these characteristics to my noble friend.
LORD DAVIES: May I interrupt the noble Marquess for a moment? I applied it not to the Foreign Secretary but to his speech. I would not presume to suggest that the Foreign Secretary was either self-satisfied or complacent.
THE MARQUESS OF ZETLAND: That is a refinement of distinction which I admit that I myself am wholly unable to follow. I hope the noble Lord will forgive me if I do not follow him over the very wide territory over which he himself travelled—from Spain to China, from China to America, and from America back again. Indeed the noble Lord did not come to the actual substance of his Motion until five o'clock, and at two minutes past five he drifted away from it again, and said: What about the Colonies? He asked me a direct question. He asked: What are the Government going to do about the
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Colonies? I can hardly believe that he would expect an answer to a categorical question of that kind, submitted without notice of any sort, and I really feel disposed to suggest to him that he should accept the answer given by a very distinguished member of his own Party, who is no longer with us, many years ago, in answer to many questions put to him—namely, that he had better "wait and see."
Towards the close of his speech the noble Lord perhaps felt he should talk once more for a few moments on his Motion, and he put to me certain suggestions with regard to a reconstitution of the Government. He asked why various persons were not included in the Government. For example, he asked why Mr. Eden was not a member of His Majesty's Government. I should have thought that the answer to that question was obvious. Mr. Eden had been a member of the Government and had resigned from it, and that seems to me to be the answer to the noble Lord's question with regard to Mr. Eden.
Now, to deal in rather more general terms with the Motion of the noble Lord, I hope that he will feel that his purpose in putting this Motion on the Order Paper will have been achieved by the publicity which has thereby been given to his views, and I hope that he will not expect from me any pontifical pronouncement upon a matter which I should have thought was universally, or at any rate very widely, accepted to lie within the prerogative of the Prime Minister. Surely the usual constitutional practice in this country is for the Prime Minister to select his colleagues, and to recommend their names for the approval of His Majesty. I do not for a moment pretend to be in the confidence of the Prime Minister with regard to the subject matter of the noble Lord's Motion. Nevertheless it may not be inappropriate perhaps that I should contribute one or two considerations to the discussion of this matter which the noble Lord has initiated. The first observation which I would make would be this, that my right honourable friend the Prime Minister has shown that he is more than willing to make use of talent which is to be found within the ranks of Parties other than the one to which he himself belongs, as witness his recent appointment of the

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noble Marquess my noble friend Lord Lothian to represent His Majesty's Government in the United States of America. And may I take this opportunity of congratulating the noble Marquess, on his appointment, on his willingness to accept what is an office of the very highest importance in the circumstances of to-day? May I at the same time take this opportunity of congratulating the Government and the country upon the fact that he has accepted this office, and that he will represent the interests of this country in the United States of America?
Then again, in the matter of appointments to the Government itself, I submit that the Prime Minister has shown that he is not hidebound by Party considerations, as witness the recent appointment of my noble friend Lord Chatfield to a post of the highest responsibility and importance in the Government. What Lord Chatfield's politics may be I have no idea. He was certainly never appointed on any political or Party grounds. He was appointed because he was recognised by the Prime Minister, and I think by general consent, to be the man best qualified at the moment to fill the particular post to which he was appointed. If I pass for a moment from the question of individuals to the question of the representation of Parties in the Government I should be a little bit inclined to doubt whether at the present moment an invitation to the Leaders of Parties at present outside the Government would necessarily be conducive to unity at home. I am, I admit, basing my present thoughts upon the experience of the past. It will be within the recollection of your Lordships that in the early days of the National Government representatives, and indeed members, of the Party which are at present sitting on the Liberal Benches were included in the Government; but, as a result of certain fissiparous tendencies which were apparently inherent in the Liberal Party at that time, and by a process of what I believe the biologists call spontaneous generation, the Liberal Party broke in two, and there was one portion of it left within the Government and another portion left, and still to be found, outside. That does not seem to me to suggest the idea of unity. And if we come to the Labour Party, if I may say so a similar fissiparous tendency displayed
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itself before even the National Government came into existene.
LORD STRABOLGI: No.
THE MARQUESS OF ZETLAND: Well, unless my recollection of history is sadly at sea it was largely a break in the Labour Party which resulted in the formation of the National Government. A distinguished Leader of the Labour Party, who was then Prime Minister, in fact formed the National Government—the late Mr. Ramsay MacDonald. And if the Labour Party which is habitually seated on the Benches—well, perhaps I should not say habitually seated, because not many of them are habitually seated there; but if the Labour Party who are represented in this House may be regarded as a microcosm of the Labour Party outside I should rather fear, after having watched various movements in its ranks during the past few years, that the process of fragmentation might go even further in the case of the Labour Party than it has done in the case of the other great historical Parties.
Moreover, I am bound to say that I doubt whether if at this moment an invitation were given to the Leaders of the Labour Party who are at present outside the Government to join its ranks it would restore, or at any rate establish, that confidence abroad which the noble Lord is so anxious to see. And I say that because, for reasons which are honourable to the noble Lord (Lord Snell), reasons which are sincerely held by him, he does at the present moment differ fundamentally from the Government on an important principle of policy—namely, the question whether in preparation for war a measure of compulsory training for our people is wise and desirable. It will not have escaped the notice of your Lordships that a prominent member of the Labour Party in France, M. Blum, has taken a view which is diametrically opposed to the view which is taken by my noble friend the Leader of the Opposition on that question. M. Blum seems to regret profoundly this apparent lack of unity in the country upon this important question. I can hardly believe, therefore, in view of that, that to invite my noble friend at the moment to join the Government would be likely to re-establish the confidence of men like M. Blum and the members of the French Government in the policy of His Majesty's Government.

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I am not, of course, going to be so indiscreet as to ask the noble Lord whether in the event of an invitation being extended to him he would be likely to accept it. I do not know whether the noble Lord who is responsible for this Motion has made inquiries on that point.
LORD DAVIES: No.
THE MARQUESS OF ZETLAND: He has not, and therefore it would not be fair for me to put what would be a purely hypothetical question to the noble Lord. Nor am I going to be so indiscreet as to ask the noble Lord, Lord Strabolgi, whether he is in complete agreement with the noble Lord, Lord Snell, on all questions of policy, including the question of compulsory training. I do not know, but it seems to me quite conceivable that their views may not be identical on a question of that kind. That being so, I hope that the noble Lord who moved this Motion will, as I said, feel that his purpose has been achieved by the publicity which has been given to the matter. So far as I am concerned, of course, I am in no position to give him a direct answer to the question which he put to your Lordships. It is said of the pronouncements of the Pythian priestess whose headquarters were at Delphi that they were so framed that the real meaning of them was difficult to decide. If my remarks this afternoon have to some extent shared that characteristic of the ancient priestess, I feel your Lordships will realise that in the circumstances of the case it was inevitable that that should be so.
5.52 p.m.
LORD STRABOLGI: My Lords, it was not convenient to interrupt the noble Marquess with a correction at the time. I waited to let him develop that part of his remarks, and I rise only to deal very briefly with one part of his most entertaining speech: that is his misrepresentation of the history of the formation of the National Government and the part played in it by the Labour Party. For historical purposes I just want to correct his account. He was fulfilling the very honourable duty of a Governor of an Indian Province at the time, and he therefore had an alibi. I was a member of another place, and with my noble friend I was behind the scenes and fully aware
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of everything that happened. The noble Marquess will, I am sure, allow me to tell him that his account of it is quite wrong. The Labour Party on that occasion did not split. It remained intact, and no section of it joined or helped to form the National Government. I do not want to say anything against the memory of the late Mr. MacDonald who formed that Government, but he formed it as an individual with two or three of his colleagues, and in the subsequent proceedings not one constituent part of the Labour Party, not one trade union, not one co-operative body, or any other part of the machinery that makes up the great Labour movement which polled eight or nine million votes, declared for the National Government. The position of the Liberal Party was quite different. Quite honourably they decided to support the Government, and, equally honourably, the Labour Party decided to have nothing to do with the National Government. We have been abundantly justified!
THE MARQUESS OF ZETLAND: My Lords, may I be permitted to say, in reply, that the answer to that is that the vote of the labouring people of this country at the subsequent General Election was overwhelmingly in support of Mr. MacDonald's Government, which contained, as the noble Lord admits, distinguished members of the Labour movement, Philip Snowden and others.
LORD STRABOLGI: There was a very small difference in the Labour poll.
THE MARQUESS OF ZETLAND: The noble Lord was good enough to correct an historical mistake on my part. May I also correct an historical mistake he made, though it is absolutely of no importance? He is quite wrong in supposing that when the National Government was formed I was Governor of an Indian Province. I was in this country.
LORD STRABOLGI: My Lords, if I may be allowed, I am very sorry I got my dates wrong. The great services of the noble Marquess in India were so present in my mind that I fell into error. But he also has fallen into error. Even under all the circumstances of the 1931 Election, the figures show that our Labour vote fell very little—a matter of perhaps ten per cent. The figures are on record. What happened was that the noble Marquess and his friends attracted

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the large body of non-voters and those misguided working men who still vote Conservative.
5.57 p.m.
LORD DAVIES: My Lords, before I ask leave to withdraw my Motion, I wish to say two things. In the first place I wish to congratulate the noble Lord, Lord Harmsworth, on his maiden speech. I am sure we all listened to it with the greatest pleasure and interest, though perhaps some of us did not agree with everything he said. I remember when he represented us on the Council at Geneva. That was long before the matters of which I have complained this afternoon actually took place. But I hope he did not think that I attributed all the blame to the Government of this country. Far from it. One realises that the rot began when America first of all dissociated herself from the League and refused to send her representative to Geneva. Nevertheless, as I endeavoured to point out to your Lordships, we have also a great responsibility for all that has, unfortunately, happened during the last ten or twelve years.
The second thing I wish to do is to thank the noble Marquess for his very interesting and courteous reply. I ought really to apologise to your Lordships for having introduced extraneous matters into the Motion, and I thank your Lordships for your indulgence. I shall certainly endeavour to remember the advice which the noble Marquess gave me a few moments ago that, before drafting a Motion, I should prepare my speech. That is excellent advice which I shall try to live up to. I quite understand that the noble Marquess is not in a position to reply to some of the questions which I put to the Government, but I would like to thank them for their appointment of my noble friend Lord Lothian to the Embassy at Washington. That appointment has given the greatest satisfaction to all Parties in the country, and I hope it will be regarded, perhaps, as a precedent and as a happy augury of similar appointments in the near future. I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.

PEERS AND THE OFFICIAL SECRETS ACTS.
5.59 p.m.
LORD SNELLhad the following Notice on the Paper:—To ask His Majesty's
854
Government whether, in view of the findings of the Select Committee appointed by the House of Commons in December last "to inquire into the applicability of the Official Secrets Acts" to members of that House, they are prepared to make any statement as to the applicability of those Acts in equal degree, and in comparable circumstances, to members of the House of Peers; and to move for Papers. The noble Lord said: My Lords, I beg to ask His Majesty's Government the Question that stands in my name on the Order Paper, and to move for papers.
THE LORD CHANCELLOR (LORD MAUGHAM): My Lords, I have been in communication with the Leader of the House and the Chairman of Committees, and if the House approves I think the best course to adopt with reference to the subject of the Motion before the House is that I should put upon the Paper a Motion that a Select Committee he appointed to consider the matter. If, therefore, the House approves of this course, I will take steps to place such a Motion upon the Order Paper at an early date.
LORD SNELL: My Lords, if the noble and learned Lord on the Woolsack thinks that a Select Committee is required I do not apprehend that we should disagree to that course being adopted, but the matter seeems to my mind to be perfectly simple. I think that we ought to be able to claim the same privileges of immunity in this House that are accorded to members in another place. If that is so, I should hope that there is another way of arriving at a decision rather than by an inquiry by a Select Committee which might be prolonged.
THE LORD CHANCELLOR: My Lords, in reply to the noble Lord, I may say that I do not think it is necessary to have a very long inquiry, and it seems to me a little difficult to say that the matter should rest simply upon the decision of the few noble Lords who may happen to be present on a particular day. There may be some questions of considerable importance to consider in connection with the privileges of Peers of Parliament, and I submit that the course I have suggested—and it is the view of the Leader of the House—is the best one to take in the circumstances.
VISCOUNT SAMUEL: My Lords, I am sure your Lordships will agree to the course suggested by the noble and learned Lord on the Woolsack. My noble friend Lord Snell has already said he would in the circumstances be prepared not to disagree, and I trust that the suggestion will be unanimously adopted, and that the matter may be adequately considered in a formal fashion before this House comes to a decision which would have lasting consequences.
LORD SNELL: My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

BUSINESS OF THE HOUSE.
THE MARQUESS OF ZETLAND: My Lords, perhaps I might remind your Lordships that it is proposed to meet at three o'clock to-morrow.
House adjourned at three minutes past six o'clock.

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

London Midland and Scottish Railway,

Saint Nicholas Millbrook (Southampton) Church (Sale),

London and North Eastern Railway (Superannuation Fund).

Sunderland Corporation.

The same was ordered to lie on the Table.

STROUD DISTRICT WATER BOARD, &c. BILL. [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The Orders made on the 15th of March and the 4th of April last discharged, and Bill committed.