Sitting of 23 July 1940

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
  MID-WESSEX WATER BILL [Lords],
  Read the third time, and passed, with Amendments.
ORAL ANSWERS TO QUESTIONS.

  BRITISH PROPERTY, GERMANY AND ITALY.
  Captain Alan Grahamasked the President of the Board of Trade whether he has yet made any arrangements for the registration of British landed and industrial or other property situated in German and Italy territory and thus liable to sequestration by these powers on the outbreak of hostilities?
  The President of the Board of Trade (Sir Andrew Duncan): Arrangements are being made for the registration of property in Germany and Italy belonging to persons of British nationality resident in the United Kingdom.
  Mr. Robert Gibson: Can the Minister say what is the purpose of the registration?
  Sir A. Duncan: To record the claims.

  CONTRACTORS' PROFITS.
  Mr. Denvilleasked the President of the Board of Trade whether he is aware that immediately after the outbreak of war certain scenic contractors and carters formed a ring with the result that prices have risen 500 per cent. in some cases, and not less than 250 per cent. in any; and what action he is taking to prevent this profiteering?
  Sir A. Duncan: If my hon. Friend will furnish me with full particulars of the charges he has in mind, I shall be glad to consider what action can be taken.
  Mr. Denvilleasked the President of the Board of Trade whether he is aware that certain firms working on private and Government contracts, after charging for time and material, are adding 15 per cent. establishment charges, and 20 per cent. profit, respectively; and what steps he is taking to prevent this profiteering?
  Sir A. Duncan: As regards private contracts, perhaps my hon. Friend will kindly give me details as to the nature of the contracts of which complaint is made. So far as the Question relates, to Government contracts, it should be addressed to the contracting Department.

  GOVERNMENT DEPARTMENTS.

    MINISTRY OF ECONOMIC WARFARE.
    Mr. Liddallasked the Minister of Economic Warfare what further reduction in the total number of staff has been effected as the result of the reorganisation of the work of his Ministry?
    The Minister of Economic Warfare (Mr. Dalton): Between 15th May and 16th July the staff has been reduced from 1,550 to 1,022.
    Mr. Liddall: Is the Minister satisfied with that reduction?
    Mr. Dalton: I do not think that a reduction of 34 per cent. in two months is too bad.
    Sir Patrick Hannon: Has there been any diminution in the efficiency of the Minister's Department which deals with such important questions?
    Mr. Dalton: I hope that the reduction of staff will always be subject to the maintenance of economic warfare to the most effective degree possible.
    Mr. Liddallasked the Minister of Economic Warfare whether it was on his instructions that the heads of the various Departments in his Ministry were recently asked by an officer of his Department to state to which political party they belong?
    Mr. Dalton: Such an inquiry, officially addressed to public servants, would be most improper. No such inquiry has, of course, been made in my Ministry on my instructions. Since, however, the hon. Member has seen fit to place this Question on the Order Paper, and has thereby made himself responsible for allegations regarding my officers, I have had an

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    investigation made and find, as I anticipated would be the case, that no head of a department in my Ministry has been asked any such question. The hon. Member's allegations are, therefore, completely baseless.
    Mr. Liddall: I do not want this schoolmaster attitude. It does not cut any ice with me. But while I accept the right hon. Gentleman's statement—and I am very glad that he has been able to give that assurance—he must not be too sensitive in matters affecting his Department when criticisms are made, as he used to criticise previous Ministers.

    STAFFING.
    Mr. Liddallasked the Prime Minister whether he will consider the appointment of a committee similar to the Geddes Committee, with full authority to investigate the staffing of all existing Ministries; the findings of the Committee to be published at an early date?
    The Prime Minister (Mr. Churchill): My hon. Friend will be aware that a Select Committee on National Expenditure was appointed by the House on 12th December last, to examine expenditure on services connected with the war and to report on economies. The investigations of this Committee covered staffing matters in all the principal Departments, and reports have been, and will, I have no doubt, continue to be, made.
    Mr. Liddall: Is the Prime Minister aware that the decisions are arrived at on documentary evidence, whereas a committee on the lines of the Geddes Committee, as favoured by many prominent personages outside this House, would be able to visit the various Ministries and see for itself?

    ADMINISTRATIVE METHODS.
    Mr. Nunnasked the Financial Secretary to the Treasury what steps have been and are being taken to introduce commercial methods of administration into the Departments of State which are now engaged, as a result of the war, in large-scale commercial activities?
    The Financial Secretary to the Treasury (Captain Crookshank): Departments keep under constant review the improvement of their administrative methods. There
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    is in addition a special Treasury Investigating Section, the staff of which has been substantially increased since the beginning of the war by recruitment from outside the Civil Service: its main activities are directed to giving Departments expert help in matters of organisation.

  BRITISH ARMY.

    PAPER ECONOMY.
    Lieut.-Colonel Sir Thomas Mooreasked the Secretary of State for War whether he will issue instructions that the use of paper will be confined to a minimum in transmitting orders to, or demanding reports from, units of the Local Defence Volunteers?
    The Secretary of State for War (Mr. Eden): Instructions have recently been issued for all possible economy in the use of paper and in the volume of returns called for in respect of all Army units and establishments. These instructions will apply to Local Defence Volunteers.
    Sir T. Moore: Will my right hon. Friend bear in mind that Local Defence units have neither typewriters, typists, pens, ink, nor paper except those supplied by themselves, and that therefore this suggestion particularly applies to those units?
    Mr. Eden: The hon. and gallant Member cannot be more anxious than I am to reduce the amount of paper that the Army is called upon to use.
    Mr. Stokes: Is the Minister aware that an ordinary Regular battery has to make no fewer than 25 returns per day?

    ISSUE OF ARMS.
    Sir T. Mooreasked the Secretary of State for War whether he will consider issuing a suitable number of Mills bombs to every police barracks in the country for re-issue in emergency to duly accredited members of the local community?
    Mr. Eden: Armed resistance to invasion is a matter for the Armed Forces of the Crown, including the Local Defence Volunteers. I am not prepared to make any public statement as to the measures in contemplation or under consideration
    Sir T. Moore: While I see my right hon. Friend's point of view, will he re-

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    call that the Prime Minister stated last week that everyone in this country was now in the front line; therefore, is it not essential that those in the front line should be suitably armed?

    LOCAL DEFENCE VOLUNTEERS (THE HOME GUARD).
    Sir T. Mooreasked the Secretary of State for War whether, in view of the possibility of interference with normal communications in this country, he will consider authorising the issue of telephones, portable radios and motor-bicycles or cars to all group headquarters of the Local Defence Volunteers?
    Mr. Eden: Telephones have recently been authorised for group headquarters of the Local Defence Volunteers. I am not prepared to make a public statement as to any arrangements which may be necessary in regard to the use of motorcars, motor-cycles or portable radios.
    Sir T. Moore: If my right hon. Friend is not prepared to make a public statement, will he send me a private statement?
    Mr. Eden: I will gladly give my hon. and gallant Friend any information that he desires.
    Mr. Thorne: Why should the hon. and gallant Member know any more than anyone else?
    Sir P. Hannonasked the Secretary of State for War whether he will take into sympathetic consideration the applications for the issue of a medal to ex-Servicemen now serving as Local Defence Volunteers who served in the last war and joined the Colours in 1914, but who, for reasons over which they had no control, were not drafted overseas?
    Mr. Eden: As my hon. Friend is, no doubt, aware, the decision not to grant a medal for home service in the last war was reached only after the fullest consideration and it is clearly impracticable for me to re-open the matter now. To give a medal for home service in the last war only to those who serve in the Local Defence Volunteers in this war would, as I think my hon. Friend will agree, be inequitable and illogical.
    Sir P. Hannon: Can my right hon. Friend not give some sort of distinction
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    to these ex-Servicemen of the last war who are now doing such admirable service with the L.D.V.? They would naturally feel at a disadvantage compared with the new persons coming into that organisation?
    Colonel Arthur Evans: Would my right hon. Friend also bear in mind that ex-Servicemen of the last war are also serving with the regular army in this war?
    Mr. Eden: The ex-Servicemen gained that distinction for their services in the last war, and we are happy to have their services again.
    Sir P. Hannon: Does my right hon. Friend realise that these men were prevented from going overseas because of the organisation of the. Army? Why should they be deprived of some decoration?
    Mr. R. C. Morrison: Will it not be time to hand out medals on a large scale when we have won the war?
    Mr. Cocksasked the Secretary of State for War whether the title of "Local Defence Volunteers" is to be changed to "The Home Guard"?
    Mr. Eden: It is proposed to submit for His Majesty's approval an Order in Council giving the Local Defence Volunteers the title "The Home Guard." Armlets will be adapted as convenient to the initials "H.G."
    Mr. Shinwellasked the Secretary of State for War whether he will make a full statement on the organisation of the Local Defence Volunteers; their numbers and the provision of equipment; the method of selection of officers; whether sections are being formed by works and colliery managers and in such cases who is responsible for the selection of men; why applicants in certain areas must submit their names to the British Legion; whether men are allowed to join solely for the purpose of guarding works or collieries or are available for general defence purposes; and whether he is in a position to say what the general state of efficiency of this organisation is?
    Mr. Eden: I am glad to have the opportunity of making this, statement. The Home Guard is a voluntary unpaid part-time force having its origin in the desire of patriotic citizens engaged in ordinary

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    civil occupations to make some active and voluntary contribution to defence, especially to the defence of their own localities. The object of the force is to augment the local defences of Great Britain by providing static defence of localities and protection of vulnerable points and by giving timely notice of enemy movement to superior military formations. The force has been assigned a definite role in the defence plans of the country and its value lies not in the individual action of its members, but in proper co-ordination with the other parts of the military machine.
    The organisation of the Home Guard is under the control of the War Office. The Commander-in-Chief, Home Forces, exercises operational control and is responsible under the direction of the War Office for the training of the force. Under the War Office and General Headquarters, the chain of command and organisation is through the Army commands and military areas. At the headquarters of each area commander there is an officer holding the appointment of Home Guard area commander whose duty it is to supervise the Home Guard in the area. Area commanders have the benefit of the assistance of an honorary organiser. The military areas are divided into zones and into groups as necessary and thence into battalions, companies, platoons and sections.
    The local administration of the force is conducted by Territorial Army Associations. Appointments in the Home Guard are made by those holding the higher appointments. Battalion commanders and upwards are appointed by area commanders. Sections are being formed in works and collieries: the men register at their works and the registration forms are then deposited in bulk at the nearest police station before the men are enrolled by the company commander. There is no necessity in any area for applicants to submit their names to the British Legion. Men are allowed and encouraged to join units for the purpose of defending industrial undertakings when these are of sufficient importance to justify the diversion of men and arms from the defence of the locality as a whole. Many such units are being formed, but they normally form part of the local Home Guard organisation. Their use in schemes for the defence of their factories is under the general supervision of the military authorities and their members are in all respects members of the Home Guard.
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    Hitherto there has been no fixed establishment of the force, and the response to the appeal for recruits has been so magnificent that its strength already exceeds 1,300,000. It has therefore been decided temporarily to suspend in the near future recruiting except in those districts where strengths have not yet met immediate requirements. This decision will enable provision of equipment for all accepted volunteers to be pressed forward: it is already sufficient to ensure that the Home Guard shall play the part allotted to them efficiently, but it is not complete. The breathing space thus afforded will also enable commanders to assess their requirements more accurately and to remedy any defects in the organisation which may come to light. The suspension of recruiting is a temporary measure, and applicants may continue to register at their local police stations, but after recruiting is suspended they will be put on a waiting list and will not be enrolled or form part of the local defence forces until vacancies occur or recruiting is reopened.
    As to the general efficiency of the force, disparities are inevitable in a force of over a million and a quarter men which has been raised and officered in a period of little more than two months. But rapid progress has been made with organisation, training and the allocation of duty to units. The Home Guard area commanders are responsible for this and should be consulted when doubts or difficulties arise. I am satisfied that in equipment, in efficiency and above all in fighting spirit the Home Guard are a valuable addition to the Armed Forces of the Crown and a formidable reinforcement to national security.
    Mr. Shinwell: The right hon. Gentleman will be aware that his answer will give general satisfaction both in this House and in the country, but will he direct the attention of area commanders to what he has specifically said about the appointment of local commanders and also to what he said about the British Legion, because there are many complaints coming in to which I shall direct his attention by letter?
    Mr. Wedgwood: Did I understand the right hon. Gentleman correctly in his description of the duties and scope of the force? Did he omit from the duties of

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    the Home Guard the duty of guarding and fighting for the home?
    Mr. Eden: No, Sir. I think that was very much implicit in all that I said. As regards what the hon. Member for Sea-ham (Mr. Shinwell) said, there are, of course, bound to be teething troubles, but I am very glad of the opportunity which this Question has provided of showing how very valuable this force is to the nation at the present time.
    Sir Francis Fremantle: What arrangements are being made for medical care for these men when on duty?
    Mr. Eden: Certain arrangements have been made. Perhaps the hon. Member will put down a Question.
    Colonel A. Evans: As it is clear that a battalion commander of the Home Guard will be responsible for a command of 1,600 men, would it be possible to provide him with a full-time adjutant drawn from the Regular Forces?
    Mr. Eden: That problem is also under consideration, but this is a volunteer force, and we ought to be very careful to guard that spirit.
    Mr. Glenvil Hall: Will the right hon. Gentleman consider issuing gum boots to the Home Guard?
    Mr. Kenneth Lindsayasked the Secretary of State for War whether he is now in a position to say what action he proposes to take with regard to the case of Mr. James Bostock, group commander of the Stafford Local Defence Volunteers?
    Mr. Eden: As the result of my hon. Friend's previous Question, I am in communication with the Home Guard authorities concerned, and I will write to my hon. Friend as soon as my inquiries are complete.
    Mr. Lindsay: Will my right hon. Friend bear in mind that I brought this matter to the attention of the War Office some days ago; that it is the case of a man who had six years in the Territorials, who responded to his broadcast appeal the following day, has been in charge of 800 men, and was summarily dismissed? Will he give the matter his immediate attention, because it is causing great dissatisfaction?
    Mr. Eden: It is because my hon. Friend brought this matter to my attention that I made inquiries, but I must allow the local authorities time to make their report.

    NORTHERN IRELAND (DEFENCE).
    Dr. Littleasked the Secretary of State for War whether he will give instructions to the military authorities for the utilisation of the unemployed men in Northern Ireland, so far as that is practicable, for the perfecting of its defences against all enemy attacks?
    Mr. Eden: When extra men are needed either by contractors or for direct employment by the military authorities on defence works, they are obtained through the Employment Exchanges, and this has the effect of providing work for men who might otherwise remain unemployed.
    Dr. Little: Is my right hon. Friend aware that there is a great deal of work which these unemployed men could do if they were given the opportunity?

    DEPENDANTS' ALLOWANCES.
    Mr. Manderasked the Secretary of State for War whether he will make arrangements for soldiers' dependants' allowances to be paid through the Post Office on Fridays instead of Mondays, in view of the difficulty created by the present arrangements?
    Mr. Eden: A considerable number of different types of payment is made through Post Offices, and these have necessarily to be spread throughout the week. I understand that the General Post Office would have difficulty in making a change from Monday to Friday in the case of Army family and dependants' allowances.
    Mr. Mander: Is the Minister aware that many housewives have found great inconvenience with the present arrangements, because certain traders will not give credit over the week-ends? This makes it very difficult for them, and will the right hon. Gentleman give this matter further consideration?
    Mr. Eden: From the Army point of view, I should be quite willing to agree with the change, but the question of whether it can be arranged is a matter for the Post Office authorities.
    Mr. Mander: I will put down a Question to the Postmaster-General.
    Captain Sir William Brassasked the Secretary of State for War whether he is aware that the payments of dependant's allowance to a wife is completely stopped if a soldier overstays his leave by four days; and whether, in view of the grave hardship resulting from such action by the regimental paymaster, he will consider giving instructions that complete stoppage should not be made in such cases, but that either a reduction in allowance be made over a period or that the allowance be paid in full and a deduction made from the soldier's future pay?
    Mr. Eden: When a soldier has absented himself without leave, the position is not the same as when he has forfeited pay but remains with the Colours, and, in the case of such absence, I do not think it is reasonable to expect that any payments which are being made in respect of his services should continue to be admissible. The rule in such cases is, however, that payment to the wife is not stopped until absence has extended beyond seven days. It is then discontinued until the soldier rejoins. The over-issue in respect of the days of absence, during which payment was made to the wife, is recovered by reasonable instalments from any future payments to the wife in respect of family allowance, and from the soldier's pay in respect of the allotment made to her from that source.
    Mr. A. Edwards: Has the Minister received a case which I brought to the notice of his Department yesterday of a woman who wrote to say that when her husband returned from France he overstayed his leave for four days and that she has not had a penny?
    Mr. Eden: I am afraid I cannot keep all these matters in my head.
    Mr. Lipsonasked the Secretary of State for War whether he is aware that wives of men in the Gloucestershire Regiment who have been posted as missing have had their allowances reduced by amounts varying from 8s. to 3s. 6d. per week under a regulation that the voluntary allotment in excess of normal qualifying allotment ceases four weeks
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    from the Monday following notification that a soldier is posted as missing; and, in view of the fact that the financial commitments of the wives remain the same, will he withdraw the regulation which is causing serious financial hardship to the women concerned?
    Mr. Eden: Family allowance and the qualifying allotment from a soldier's pay continue to be paid to his wife for a period of 17 weeks after he is reported "missing." In addition, during the first four weeks of this period, his pay and allowances continue to be credited to the soldier, and his wife consequently continues to receive any voluntary allotment which he has made to her. When the 17 weeks have expired, the wife receives an allowance equal to the pension payable if the soldier were dead.
    Mr. Lipson: My right hon. Friend has not explained how those women who have had their allowances reduced are to continue to live for the four weeks until their pensions are fixed. Does he not think that voluntary allotments ought to continue until the man's position is determined?
    Mr. Eden: This is a very difficult question. In the case of the missing soldier found to be alive, the voluntary allotment is resumed and all the back amounts are paid. If my hon. Friend has a case in mind, I shall be glad to look into it.
    Mr. Lipson: I have more than one.

    FOREIGN VOLUNTEERS.
    Sir Frank Sandersonasked the Secretary of State for War whether, in view of the Prime Minister's appeal to all well wishers from all parts of the world who are not subjects of His Majesty to give us their utmost aid, he will, so soon as there is equipment to spare, proceed with the formation of a liberty legion, composed of true men, regardless of origin, who would volunteer to fight for the cause of Britain, and for this purpose take the preliminary steps now?
    Mr. Wedgwoodasked the Secretary of State for War whether he has yet taken the preliminary steps to form a Foreign Legion, which anti-Nazi aliens now interned might be permitted to join?
    Mr. Eden: I am happy to be able to inform the House that good progress is being made in organising a number of

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    formations of citizens of foreign countries who are fighting with us in the common cause. French, Polish, Czech, Dutch, Norwegian and Belgian units are all in process of reorganisation and re-equipment and we greatly value the aid they will give us. As regards internees, steps are now being taken in conjunction with the Home Office to decide which of the men now interned can be discharged from internment for enlistment into special companies of the Auxiliary Military Pioneer Corps.
    Sir F. Sanderson: Is my right hon. Friend aware of the historical significance of the statement which he has just made and the tremendous satisfaction it will give to countless thousands of men?
    Mr. Wedgwood: Does the last sentence of the reply mean that those friendly aliens who are now interned will be allowed to enlist in the British Army, or a Foreign Legion, or some other body?
    Mr. Eden: My right hon. Friend has strictly interpreted it.
    Mr. Sorensen: Does it mean that Austrian and German internees now in Canada will be able to join?
    Mr. Eden: That, I do not know.
    Lieut.-Colonel Acland-Troyte: Will my right hon. Friend bear in mind that you cannot trust any Boche at any time?
    Mr. G. Strauss: Does the reply mean that there will be a cessation of the shipment from this country to Canada of those internees who are able to serve?
    Mr. Eden: Not necessarily. This deals only with a specific class of internees as a result of steps which we are taking with the Home Office.
    Mr. Logan: Does it mean that men whose parents are resident in this country, who enlisted in the British Army and have been interned, will be liberated?
    Mr. Eden: I should like to see that question on the Paper?
    Viscountess Astor: Is it not true that some aliens who went to Canada through a mistake must be brought back?
    Mr. Eden: That is not a matter for me.

    LEAVE.
    Mr. Manderasked the Secretary of State for War whether he will give in-
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    structions that whenever a soldier goes on leave he should be given an adequate ration allowance before leaving his unit?
    Mr. Eden: Instructions have been issued that soldiers going on leave are to be paid ration allowance at the appropriate rate in advance.
    Mr. Mander: Is it obligatory in all cases?
    Mr. Eden: Yes, Sir, certainly.
    Mr. George Griffiths: Will it date back for those who have not had it?
    Mr. Eden: I cannot give back rations to soldiers.
    The following Question stood upon the Order Paper in the name of Mr. THURTLE:
    32. To ask the Secretary of State for War whether it is his policy that, where military exigencies permit, leave should be granted to officers and men who are desirous of obtaining such leave for the purpose of getting married; and, if so, will he make that policy known to commanding officers?
    Mr. Thurtle: I do not ask this Question, but I hope, nevertheless, that no obstacle will be put in the way of any legitimate marriage.

    AUXILIARY MILITARY PIONEER CORPS.
    Mr. Hammersleyasked the Secretary of State for War whether he is aware that considerable numbers of members of the Auxiliary Military Pioneer Corps are in camp with nothing to do, while in other parts of the country civilians are being paid high wages to do pioneer work under the direction of Royal Engineers; and will he give instructions that all such unemployed units should now be engaged on essential defensive works?
    Mr. Eden: My hon. Friend is probably referring to members of the Auxiliary Military Pioneer Corps who, on return from the British Expeditionary Force, became separated from their units, and were put into various camps until reorganisation could be effected. The companies have now been re-formed and have all been allotted to duties in this country The majority are already at work.
    Mr. Hammersley: Does that mean that my right hon. Friend recognises the impropriety of a substantial number of the

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    members of this Corps being idle when important defence works are urgently required?
    Mr. Eden: I do realise that, but there was an inevitable period of disorganisation after the return from Dunkirk. That period is now over, and these companies are now at work.

    INDUSTRIAL MIDLANDS (DEFENCE).
    Mr. Hammersleyasked the Secretary of State for War whether he is satisfied that adequate measures have been taken for the defence of the industrial Midlands against the possibility of any troops landing in substantial numbers from troop-carrying aeroplanes?
    Mr. Eden: It would not be desirable to make any public statement about details of our defence schemes. My hon. Friend will, I hope, accept my assurance that we have taken all protective measures that are practicable.
    Mr. Cocks: Is the right hon. Gentleman aware that in certain areas, which I will not specify, there are still many fields not protected?
    Mr. Eden: This is a difficult cross-examination, for if my hon. Friend cannot specify them, I cannot recognise them.

    COMMISSIONS.
    Mr. Sorensenasked the Secretary of State for War whether he is aware that British subjects until recently resident as civilians in France have been able to secure commissions in the British Army within a short time of reaching this country whilst ex-officers in this country have been waiting the grant of a commission for some months; and whether applicants for commissions who join the ranks because commissions have not yet been granted will thereby be precluded from receiving commissions for which they have applied?
    Mr. Eden: I am not aware that any undue preference has been given to candidates for commissions who have lived in France. Applicants for commissions who join the ranks are considered for commissions under the same conditions as their fellow soldiers.

    INTERNEES (GOVERNMENT PROPOSALS).
    Mr. Rhys Daviesasked the Secretary of State for War whether, in order to allay apprehensions, he will arrange for representatives of some independent responsible organisations to visit at regular intervals all refugee internment camps in this country, and report to his Department on any problems which may arise?
    Mr. Graham Whiteasked the Secretary of State for War whether he has now received a report of the conditions in the refugee and prisoner of war camps?
    Mr. James Hallasked the Home Secretary whether he is aware of the hardships caused by the numerous arrests recently made of male aliens between 60 and 70 years of age, most of whom have lived in this country for many years; and does he intend to have an early review of the reasons determining these internments so that these elderly people may be permitted to return to their ordinary duties?
    Mr. Rhys Daviesasked the Home Secretary whether it is intended to release those refugees now in British internment camps whose loyalty and patriotism to this country are beyond doubt?
    Sir Percy Harrisasked the Home Secretary whether he is now in a position to make any statement with regard to the policy of the Government in relation to aliens?
    The Under-Secretary of State for the Home Department (Mr. Peake): My right hon. Friend the Home Secretary has been asked to reply to Questions Nos. 11 and 15, and he proposes to answer together these two Questions and Nos. 72, 73 and 78. With your permission, Mr. Speaker, and by the leave of the House, he proposes to make a full statement on this subject at the end of Questions; and perhaps my hon. Friends will await that statement.
    At the end of Questions—
    The Secretary of State for the Home Department (Sir John Anderson): As the House is aware, the policy adopted at the outbreak of war was to examine by means of local tribunals and regional advisory committees all cases of Germans and Austrians and to intern only those about whom doubt was felt after such exam-

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    ination. This policy resulted in the internment of a very small proportion of the large numbers of Germans and Austrians in this country. After the invasion of Holland, Belgium and France, and with the knowledge of what had happened in those countries, it was necessary to reconsider the position in the light of the military situation here, and for the reasons explained by my hon. Friend the Parliamentary Under-Secretary in the Debate on 10th July, it was decided that a policy of general internment must be adopted. That decision was to me a matter of great regret but I take responsibility for it as necessary and indeed inevitable. In giving effect to such a policy provision must always be made for suitable exemptions, and while there can be no question at the present time of reverting to a position in which the internment of men of enemy nationality shall be the exception rather than the rule, it is clear that further examination will be likely to disclose in a number of cases circumstances justifying the release of individuals interned in pursuance of the general policy.
    The recent instructions for the internment of Germans and Austrians who had been placed in the C category provided for the exemption of those falling within certain specified descriptions. Retrospective effect will be given to those instructions, and steps taken accordingly for the release of such of the persons interned earlier under general directions as would have been exempted had the recent instructions been in force at the time. There have been cases of mistake in interpreting instructions which necessarily had to be carried out under a great sense of urgency. In particular persons have been interned who should have been exempted on grounds of ill-health or infirmity. These mistakes must be rectified with the least possible delay. Consideration must also be given to the question of enlarging the categories of exemption to include particularly those who can render services of special value or make a significant contribution to the war effort. I propose as soon as possible to publish a full statement of the categories of persons eligible for exemption and of the procedure to be followed in making applications for release.
    To assist me in dealing with this problem of the control of aliens of enemy
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    nationality, I have, with the authority of the War Cabinet, decided to appoint a small advisory committee. I am glad to say that Sir Herbert Emerson and Major-General Sir Neill Malcolm, whose work in connection with refugees is well-known, have consented to serve on this committee, and I hope to appoint as chairman someone who has had experience of high judicial office. The terms of reference of this committee will be:

    (i) to keep under review the application of the principles laid down in regard to the internment of enemy aliens and to make to the Home Secretary such suggestions and recommendations thereon as they think fit;

    (ii) to advise the Home Secretary on such proposals for modifying the internment policy as he may refer to them from time to time; and,

    (iii) to examine, awl make recommendations upon, such individual cases or groups of cases as may be referred to them from time to time by the Home Secretary.

    I have also to inform the House that the Government have decided to transfer to the Home Office the responsibility for the welfare of those aliens who are interned. At the time when it was necessary to make rapid arrangements at short notice for the custody of large numbers of persons, it was essential to make use of the military organisation for this purpose. No other organisation could have coped with this task, and a tribute is due to the commandants and staffs of the camps for the efforts made by them to alleviate the position of the large numbers of prisoners for whom they had to make provision. But as my hon. Friend the Under-Secretary of State for War said in the House on 10th July, it should not be the business of the Army to look after civilian internees, and while the War Office must continue to be responsible for providing the necessary camps and the service personnel to guard them, the Home Office is now to be responsible for managing the camps. The selection of aliens to be transferred overseas will also be a responsibility of the Home Office. The necessary executive crganisation for the discharge of these responsibilities is being set up with all speed.
    So far, I have dealt mainly with the problem of aliens of German and Austrian nationality. The same arrangements will,

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    however, extend so far as applicable to Italians, among whom there are of course few or no refugees. To complete the picture, I have to announce the appointment of an Advisory Council which will be attached to the Refugee Department of the Foreign Office and will be concerned with questions affecting aliens of many nationalities in this country, including the nationals of countries which have been overrun by Germany. This council will contain representatives of a wide range of interests, and one of its functions will be to advise and assist the Home Office in the arrangements to be made for the welfare of those detained in internment camps, and to make recommendations upon the problem of finding occupations for them. A full statement of the functions of this council will be circulated in the OFFICIAL REPORT. With the assist ance of this council and of the advisory committee to which I referred earlier, rapid progress will, I am sure, be made both in arranging for the release from internment of many Germans and Austrians who can properly be set at liberty, and in promoting the welfare of those whom it is necessary for reasons for which they are not responsible to keep in internment. Recognising that large numbers of them are anxious to help this country, it is the desire of the Government that everything possible shall be done to alleviate their position, and in particular to ensure that internment shall not involve conditions of enforced idleness.
    Mr. Wedgwood: Is the right hon. Gentleman aware that the statement which he has just made misses the whole point? Instead of having categories to be left out of unjust imprisonment, there should be categories to be retained in imprisonment. May I ask him whether he has read the leading article which appears to-day in the "Evening Standard" by Michael Foot, which embodies the opinions of nine out of ten Englishmen?
    Sir J. Anderson: I am certainly well aware of the point of view which has just been put by the right hon. Gentleman. As regards the last part of the Question, I have had occasion to read many leading articles of late, and I have noticed remarkable inconsistencies in articles published in the same journal over the last few weeks.
    Mr. White: May I ask the right hon. Gentleman whether, in view of the importance of his statement and the wide interest which will be taken in it, he will facilitate an opportunity being given to the House for the discussion of some aspects of it? The right hon. Gentleman in his statement referred to Germans and Italians. May I ask, as a matter of detail, whether in the term "Italians" he would now include Albanians, and also whether Czechs, Poles, Rumanians, and other nationalities who are not hostile to us but at present are in concentration camps will have the privilege of having their cases considered by means of the machinery just announced?
    Sir J. Anderson: Yes, Sir. As far as persons of nationalities other than German and Italian are in internment camps, the arrangements which I described in the early part of my statement will be applicable. As regards the question of aliens generally, and in particular alien refugees, all matters affecting their interest and welfare will be within the scope of the larger body, the council, to which I referred in the latter part of my statement.
    Mr. Rhys Davies: May I ask whether the very generous statement which the right hon. Gentleman has made will be brought to the notice of internees who desire release or to the notice of their relatives; and, secondly, whether the welfare Advisory Council which the right hon. Gentleman is setting up will see that regular visits are paid to the camps so that representations can be made to him on any problem which may arise?
    Sir J. Anderson: It is certainly contemplated that visits should be paid to the camps by or on behalf of the Advisory Council to which I have referred. As regards the question of bringing the substance of what I have said to the notice of those who may be affected, all necessary steps will be taken to that end. As I said in the course of my statement, the conditions under which exemptions may be claimed and details of the machinery which is to be provided for dealing with applications, will be published at an early date.
    Mr. James Hall: Will this committee be prepared to give priority to men of over 60 years of age? Some of these have already been interned and have had to be released because of ill health. Many of

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    them have lived in this country for 50 years and have sons fighting in the British Army and it seems ironical that they should be interned.
    Sir J. Anderson: That, I think, is rather a question of detail. I think the hon. Gentleman will find that it is specifically covered by the statement which I have made.
    Sir William Davison: Will the right hon. Gentleman have inquiries made as to the conditions obtaining at Huyton Camp, near Liverpool?
    Sir J. Anderson: Yes, Sir. I have already had inquiry made.
    Major Cazalet: May I thank my right hon. Friend for an answer which, in my opinion, goes a very long way to meet the grievances expressed by hon. Members on this subject? May I ask him to bear in mind that speed is the essence of dealing with this problem, and that to-day, the internment of C category aliens is continuing? Will he do his best to see that the examination of these cases takes place as quickly as possible and that the committee gets to work at once, because a large number of individuals have now been suffering for a long time?
    Mr. Pethick-Lawrence: In view of the fact that these investigations are bound to take a considerable time, will the right hon. Gentleman do his best to afford facilities to those internees who have businesses—sometimes with employés who are British subjects—and who have had no means, up to the present time, of providing their employés with wages or keeping the businesses going? Will the right hon. Gentleman take such steps as are possible to enable people in that position to keep in touch with persons who are managing their affairs, in the interests both of themselves and of their employés?
    Sir J. Anderson: I will certainly see what can be done in that regard.
    Mr. Pickthorn: Can the right hon. Gentleman tell us that the speed of decision which he has promised will apply particularly to those categories of C aliens who have been sent to Canada and who, it is now recognised, were sent there in error and who are releasable persons?
    Sir J. Anderson: It might be convenient if a question were put on the
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    Paper on that subject. If so, I shall be glad to give a reply. The point has not been overlooked.
    Mr. Burke: Will the wives of refugees be given some information immediately about the welfare or whereabouts of their husbands who have been taken away? For several weeks, some of these people have been in doubt as to where their husbands are or what has happened to them.
    Sir J. Anderson: I am very anxious indeed to facilitate speedy communication between internees and their families.
    Miss Rathbone: Will the right hon. Gentleman consider adding to those whose release he is willing to consider, certain categories which are not at present included? A large number of refugees who have given undoubted proof of their sympathy with this country do not come within the rather narrow range of categories to be considered for exemption.
    Sir J. Anderson: I did provide for that in my statement. May I repeat what I said, that consideration must also be given to the question of enlarging the categories of exemption.
    Several Hon. Members
    Mr. Speaker: I do not think we can discuss this matter any further.
    Mr. Wedgwood: On a point of Order. It is most important that we should know whether we are to have an opportunity of debating this question before we part with this, our only opportunity of dealing with it by Question and Answer in this House. If there is to be no opportunity for debate, I am sure Mr. Speaker, you will give us some further opportunity of obtaining answers to our Questions.
    Mr. Speaker: Hon. Members cannot go on asking questions about it all day.
    Rear-Admiral Beamish: On a point of Order. May I ask whether I can ask a Supplementary Question?
    Mr. Speaker: I thought the hon. and gallant Member would help me to bring this to a close.
    Mr. Silverman: On a point of Order. I recognise the necessity of not continuing this too long, but there is one important and extremely urgent aspect of this matter which has not been mentioned so far.
    Mr. Speaker: I do not think this is the time for putting any further questions on the subject.
    Following are the functions of the Advisory Council referred to in the statement:

    "(a) To suggest measures for maintaining the morale of aliens in this country so as to bind them more closely to our common cause.

    (b) To review and if necessary to suggest measures for the co-ordination, to the end described in (a) above, of the work of the various refugee committees and other Voluntary organisations concerned with aliens in this country.

    (c) To maintain contact with the various Government Departments having responsibilities in connection with refugees and other classes of aliens and with foreign Governments or National Committees established in this country.

    (d) To advise and assist the Home Office in the arrangements made for the welfare of enemy aliens in internment camps.

    (e) To study, and make recommendations upon, the problem of finding occupations for enemy aliens in internment camps."

    Mr. Sorensenasked the Under-Secretary of State for Dominion Affairs whether he is taking steps to impress on the Dominion Governments that B and C categories of internees sent, or being sent, to their Dominions are neither criminals nor hostile to this country, but victims of, or refugees from, Nazi oppression; that they should be kept distinct and separate from prisoners of war and hostile aliens; and that reasonable facilities should be allowed for communication between them and friends or relatives in this country?
    The Under-Secretary of State for Dominion Affairs (Mr. Shakespeare): Steps are being taken to send to the Dominion Governments concerned detailed particulars relating to any internees sent from this country. The Dominions are parties to the Convention on the Treatment of Prisoners of War, 1929, and intend to apply that Convention generally to civilian internees.
    Mr. Sorensen: Does the hon. Member not recognise that these internees are not prisoners of war, and that what most disturbs them is the assumption in some quarters here, which is liable to be translated across the Atlantic, that they are criminals? Will he not make an announcement on this point?
    Mr. Shakespeare: The Dominion Governments appreciate these points, as the United Kingdom Government do. In fact, the B and C categories are separated from the others.
    Mr. Sorensen: Will the hon. Gentleman not say so to the Dominion Governments?
    Mr. Shakespeare: It is done.

    "ARANDORA STAR."
    Mr. Wedgwoodasked the Secretary of State for War whether he is aware that Karl Obritisch, youngest Member of Parliament of the Weimar Republic and a Czech anti-Nazi refugee, was on board the "Arandora Star"; whether he was saved; and why he was deported?
    Mr. Eden: No internee with the name given in the Question is traced as having been on board the "Arandora Star." The list contains a Karel Olbrisch, a category A German, who is reported "missing."
    Mr. Wedgwood: Is not that the same man?
    Mr. Eden: No, Sir; the name is spelt differently—Karel Olbrisch—and I understand he was born as Essen.
    Mr. Mathers: Has the right hon. Gentleman a full list of those who were on board the "Arandora Star," and of those who were saved and those who were lost?
    Mr. Eden: A list is being compiled and will be made available in the Library of the House as soon as possible.
    Mr. R. Gibson: As I was promised a week ago that this would be available, can the right hon. Gentleman say when it will be made available?
    Mr. Eden: Probably to-morrow.
    Mr. White: Is any attempt being made to follow up the numerous cases of substitution which it is understood took place?
    Mr. Eden: That question is being dealt with later.
    Mr. G. Straussasked the Secretary of State for War whether he can now make any further statement as to

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    whether the Germans and Italians on the "Arandora Star" were all Nazi sympathisers?
    Mr. Eden: In view of the allegations that have reached me, instructions have been issued that immediate inquiries should be made into all the circumstances of this case. A further statement will be made to the House as soon as the inquiries are completed.
    Mr. Strauss: Will that be within a few days?
    Mr. Eden: I cannot promise that, because a great many matters are being looked into, but there will be no undue delay.
    Mr. Silverman: Will that statement include any information as to who was responsible for the drafting of particular individuals to the "Arandora Star"?
    Mr. Eden: Yes, Sir, that will certainly be one of the matters to be inquired into.

    NAVY, ARMY AND AIR FORCE INSTITUTES.
    Mr. Shinwellasked the Secretary of State for War whether he will request the representatives of the War Office on the board of management of the Navy, Army and Air Force Institutes to make inquiries into the conditions of the staffs at canteens, the wages paid, the hours worked and the sleeping quarters; whether he will also ask for a statement of reserves at the disposal of this organisation, the amount of surplus refunded to units and the reason why service men cannot be supplied with tobacco and cigarettes at Navy, Army and Air Force Institute canteens on a rationed basis and at cost price; and whether, in view of the importance of this organisation to the forces, he will take steps to exercise a larger measure of control?
    Mr. Eden: I am not aware of any reason for calling for the inquiry suggested in the first part of the Question, but, if my hon. Friend has any specific case in mind to which he thinks attention should be drawn, perhaps he will let me have particulars. The reserves and the surplus refunded to units are shown in the annual
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    accounts, copies of which are placed in the Library. I will send my hon. Friend a copy of the latest report. As regards tobacco and cigarettes, I am informed that, after allowance is made for duty, expenses and rebate, there is no margin for any appreciable reduction. Further, there are obvious objections to selecting one particular commodity for special treatment. As regards the last part of the Question, I am satisfied that the control exercisable by the Service Ministries by means of the machinery indicated in the Articles of Association of the Navy, Army and Air Force Institutes is adequate to secure the conduct of the organisation in accordance with the best interests of the Services.
    Mr. Shinwell: Does the right hon. Gentleman appreciate that this important organisation, which is ancillary to Services in an important degree, is not in any way controlled by this House and that its accounts are not subject to examination? Will not the right hon. Gentleman give the matter his personal consideration? is he aware that I have several letters dealing with the first part of the Question which I shall be happy to send him?
    Mr. Eden: I shall be glad to see those letters.
    Mr. Shinwell: Is the right hon. Gentleman aware that, although the accounts are available to hon. Members in the Library, they are not presented to the Public Accounts Committee and, therefore, there is no meticulous examination?
    Sir P. Harris: Is my right hon. Friend aware that the Select Committee on Expenditure are inquiring into the organisation and finance of the Institutes, and will he help them in their inquiries?
    Mr. Eden: My right hon. Friend may be assured of that.
    Mr. W. H. Green: Is the right hon. Gentleman aware that this organisation is reported as having made a profit of £100,000 last year, and does not that mean that prices are unduly high for serving soldiers?
    Mr. Eden: My hon. Friend will appreciate that this organisation remits its profits in certain forms to those who provide them.

  CIVIL DEFENCE.

    EVACUATION (SCOTLAND).
    Mr. J. J. Davidsonasked the Secretary of State for Scotland whether, in view of recent events, he intends to alter the definition of North-East of Scotland areas as neutral areas for evacuation purposes?
    The Secretary of State far Scotland (Mr. Ernest Brown): Certain changes in the Government evacuation scheme have recently been made, but it is not in the public interest to give particulars.
    Mr. R. Gibson: Does the right hon. Gentleman realise that this is not so much a question of evacuation as of the provision of adequate air-raid defences, especially in the matter of anti-aircraft guns?
    Mr. Brown: That is not the Question on the Paper. But I would point out that there is a number of other factors to he taken into consideration.
    Mr. Davidson: Can the right hon. Gentleman assure the House that in view of the circumstances in this area, which has suffered considerably, it will be definitely declared as a neutral area and not an area for the reception of children?
    Mr. Brown: I can give the assurance that the situation is being watched from day to day.

    RESTRICTIVE REGULATIONS.
    Mr. Lindsayasked the Prime Minister whether he is aware that the policy of the formation of silent columns, of the regulation relating to the spreading of gloom and despondency, and the arbitrary arrest and release of British citizens is diminishing the bracing effects of his own speeches and broadcasts and belittling the loyalty and intelligence of the British people; and whether he will take suitable action in the matter?
    The Prime Minister: The movement of forming silent columns was well-meant in its endeavour to discourage loose and ill-digested talk of a depressing character about the war. However, when this idea was put down in black and white it did not look by any means so attractive and seemed to suggest that reasonable and intelligent discussion about the war between loyal and well-disposed people ought not to take place. On the contrary, His
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    Majesty's Government are glad that the general aspects of the war should be understood and discussed, provided that there is no breach, however inadvertent, of official secrecy, no precise references to the strength and disposition of our Forces, and no talk about future operations. This movement to create a silent column has, therefore, passed into what is called in the United States innocuous desuetude.
    Upon the second part of my hon. Friend's Question, I would observe that we have been and are still passing through a most critical phase in the war, and that our Forces are now ranged and vigilant to strike at invasion. The House has accepted numerous regulations which, but for the gravity of the hour, would be extremely repugnant to all our ideas, and some of which might tend to encourage ill-natured tale-bearing and mutual suspicion in our midst. In the circumstances I have asked the Home Secretary to have every sentence imposed by the courts for loose or defeatist talk carefully and immediately reviewed, and that it should be reduced or remitted wherever it is clear that there was no evil wish, or systematic purpose to weaken the National Defence in the persons concerned. His Majesty's Government have no desire to make crimes out of silly vapourings which are best dealt with on the spur of the moment by verbal responses from the more robust members of the company. They desire only to curb, as it is their duty to do, propaganda of a persistent, organised and defeatist character. As these sentences come to be revised and their revision is made public, as it will be, the courts all over the country will have a good guide furnished them as to what are the intentions of Parliament and the requirements of the State in respect of these war-time regulations.
    Mr. Rhys Davies: Is it possible for the Government to consider either withdrawing or amending this regulation?
    The Prime Minister: No, Sir, I do not think so.
    Mr. G. Strauss: Was not this silent column campaign initiated by the committee to which I referred in my previous Question?
    The Prime Minister: I am not aware of it, but even if it were the case, I do not

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    think that I would be called upon to revise anything I have said.
    Mr. De la Bére: Did not the Prime Minister give a most satisfactory answer?

    REGIONAL ORGANISATION.
    Mr. Ellis Smithasked the Home Secretary whether he will review the regional organisation in the light of experience gained, reconsider the appointments made by the regional commissioners, and place the organisation on a more democratic basis, bringing in representatives of men who have the confidence of the people; and, as the present areas are too large and the machinery functions slowly, will he have regard to the economic geographical areas if more decentralisation is decided upon?
    The Parliamentary Secretary to the Ministry of Home Security (Mr. Mabane): While the Civil Defence regional organisation is under constant review, I am not clear what changes the hon. Member has in mind. No regional commissioners have yet made any appointments, and the method of appointment of officers of the regional staffs conforms with Civil Service practice. The size and boundaries of the various regions were settled after an exhaustive review of the needs of the various Departments and authorities concerned, and they have proved satisfactory in practice. The results to be achieved from any regrouping of the regions at the present time would not, I am satisfied, justify the expense and the dislocation of public business that would be involved.

  COAL INDUSTRY.

    LOCAL STOCKS.
    Mr. Thorneasked the Secretary for Mines whether the local authorities will be permitted to purchase extra tons of coal during the next four months, and sell to local people during the winter months?
    The Secretary for Mines (Mr. David Grenfell): I am anxious to take full advantage of the readiness of local authorities to help in building up reserves of coal in their areas, and I think that they can do so most effectively and expeditiously by co-operating with my Department in laying down stocks
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    on Government account. I am sending my hon. Friend a copy of the circular letter which I addressed to all urban authorities in Great Britain on this matter on 12th July.
    Captain Stricklandasked the Secretary for Mines what steps he proposes to take to secure for the greatly increased population of Coventry an immediate and adequate supply of household coal to enable citizens to meet present needs and to lay in a winter stock where possible; and whether, in the interest of economic transport, he will put a stop to replacing Warwickshire coal, sent away from the district, by coal imported from other distant coalfields?
    Mr. Grenfell: Very considerable stocks of house coal have already been built up in Coventry, and further stocks are being accumulated at a satisfactory rate. As regards the last part of the Question, I am doubtful whether the retention in Warwickshire of a greater proportion of local coal would effect any saving in transport, having regard to the longer rail haul from other producing areas to places which that district now serves.
    Captain Strickland: Is the hon. Gentleman aware that one large trading concern in Coventry has been able to supply only about 1 cwt. per customer during the last six weeks?
    Mr. Grenfell: I am not quite sure that I identify that company, but the facts are that, in Coventry, distributors have sold at the rate of four times the ration which was laid down for the whole of the last winter, in addition to which the stocks have been multiplied nearly four times in the last two months.
    Captain Strickland: Is the Minister aware of the facts of the case; that there are people who have had orders for coal for over five weeks and that one trading concern, at any rate, has not a spot of coal in the whole of its sidings?
    Mr. Grenfell: If the hon. and gallant Member will send me particulars of that trading company, I will see that it gets its share of coal.
    Mr. Dolandasked the Secretary for Mines what measures he has adopted or proposes to adopt to create dumps of coal for the use of small consumers in South-West London during next winter; whether

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    he is aware that in many of these districts coal merchants and factors have insufficient space on their own property to store stocks of coal in order to supply these small consumers; and whether he will take steps to assist in this respect?
    Mr. Grenfell: House coal is already being stocked on Government account at six sites in South-West London, and other sites are awaiting supplies.
    Mr. Doland: Would the hon. Gentleman give the names of some of the places where they are stored?
    Mr. Grenfell: I can assure the hon. Member that he knows of these places. They are situate in his own neighbourhood. I cannot oblige him with all the names or the quantities of coal stored.

    LAND (DUMPING OF COAL).
    Sir William Jenkinsasked the Secretary for Mines what applications he has received from colliery owners to assist in securing land for dumping coal in order to keep their collieries going; and whether he will take steps to secure from the landowner without undue delay the necessary sanction in order to keep the pits going and, if necessary, compel unwilling landowners?
    Mr. Grenfell: I have had one such application. There has been difficulty and delay in obtaining from the colliery company sufficient information to identify the land proposed to be secured. The land has, however, now been identified, and negotiations are proceeding satisfactorily. So far, the need to use compulsory powers has not arisen.

    EXPORT TRADE.
    Mr. James Griffithsasked the Secretary for Mines what steps are being taken to promote the expansion of our coal export trade in the South American countries; and whether it is proposed to provide special assistance to the export trade in this and other areas?
    Mr. Grenfell: The Government are fully alive to the importance of maintaining and expanding coal exports to the greatest possible extent; and they are in consultation with the coal industry as to the methods by which this could be achieved.

    FUEL AND LIGHTING ORDER, 1939 (BREACH).
    Mr. W. H. Greenasked the Secretary for Mines whether he is aware that, by reason of a delay in his Department, a breach of the Fuel and Lighting Order, 1939, by Messrs. Cutts and Son, of Peck-ham, was not effectively dealt with, although such breach was brought to the notice of the Mines Department by the local fuel overseer; and will he take such steps as will provide for the proper enforcement of the Order in similar circumstances?
    Mr. Grenfell: I can assure the hon. Member that there was no avoidable delay in this case. After careful consideration, it was decided that the case would best be met by the issue of a warning letter to the firm concerned, informing them that proceedings would be instituted for any future infringement of the requirements of the Order.
    Mr. Green: Is the Minister aware that the reply to the local authorities suggests that prosecution is not undertaken, owing to the delay, and does he not realise also that the local authorities take great care to see that the law is properly enforced?
    Mr. Grenfell: If any words uttered in this House could convey a further warning to those who are responsible for the violation of order, I would again warn them not to offend in a matter which is intended to serve the interest of the coal-consuming public.

    ECONOMIC AND SOCIAL DIPLOMACY.
    Mr. De la Béreasked the Prime Minister whether, with a view to retaining and increasing the many friends and adherents of this country on the Continent, he will give an assurance that the Government will develop, side by side with the old methods of diplomacy, a real economic and social diplomacy?
    The Prime Minister: The advance throughout the generations toward a real economic and social diplomacy must be faithfully pursued as opportunity occurs.
    Mr. De Ia Bére: Is the Prime Minister aware that the important point of the Question is that the diplomats of the future should have training as commercial attachés as well as on the old lines,

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    because one is just as important as the other?
    The Prime Minister: My reply to that point will be comprised within the somewhat wide scope of my original answer.
    Viscountess Astor: Will the right hon. Gentleman take care that we keep the friends that we have already, particularly France, and see that they get better propaganda?

    MEMBERS OF PARLIAMENT (SALARY).
    Mr. Denvilleasked the Prime Minister whether he will consider introducing a scheme under which Members of Parliament only receive full pay if they attend regularly to Parliamentary business and are only absent for reasons of sickness, on Government business, or on service with the Fighting Forces?
    The Prime Minister: The salaries of Members of Parliament are paid in pursuance of a Resolution of the House, and cannot be withheld by Executive decision. It is open to any Member who is unable, for any reason, to discharge his Parliamentary duties to refrain from drawing his salary. It is not considered necessary at present to ask the House to take any special action. Practically all the Members of this House are, unless they are engaged in other duties in relation to the prosecution of the war, carrying out their Parliamentary duties to the full.

    SUSPICIOUS POLITICAL ACTIVITIES (COMMITTEE).
    Mr. G. Straussasked the Prime Minister whether the committee appointed by his predecessor, under the chairmanship of Lord Swinton, to report to him suspicious political activities, is still in existence; who its members are; and whether it is now making any reports?
    The Prime Minister: It would not be in the public interest to give any information on the subject covered by the hon. Member's Question.
    Mr. Strauss: As this committee was set up without any public announcement, and its purpose seems to be rather peculiar, would it not be possible to allay public suspicion by some announcement in regard to its activities?
    The Prime Minister: A great many committees and a good many enterprises, some of them of a peculiar character, are set up without any public announcement. I cannot see any advantage in this case in dealing with the matter across the Floor of the House.
    Mr. Silverman: What were the special qualifications that led the right hon. Gentleman to appoint this particular chairman?

    AIR RAIDS (REPRISALS).
    Mr. Lewisasked the Prime Minister whether he will undertake that, in the event of hostile air raids on London, prompt reprisals will be made not only on Berlin but also on Rome?
    The Prime Minister: There is not much to be gained by putting Questions of this kind on the Paper. If the answer were in the negative, it would remove a deterrent upon the enemy. If it were in the affirmative, it might spur him to increase his preparations and add to the difficulties of our airmen. If it were noncommittal, it would not add to the enlightenment of my hon. Friend. Although the enemy frequently volunteers statements of his intentions through various channels, these are nearly always found to be untruthful and given for the purpose of misleading. I should be very sorry if my hon. Friend, by making inquiries about future military operations, were to tempt me into courses of that character.

  NATIONAL FINANCE.

    INCOME.
    Mr. Craven-Ellisasked the Chancellor of the Exchequer to state the national income for the financial year ending March, 1938, and his estimate for the year ending March, 1941?
    Captain Crookshank: No official estimates of the national income are available.

    INTEREST-FREE LOANS.
    Mr. Manderasked the Chancellor of the Exchequer the total amount of loans to the Government, free of interest, made up to date by trade unions and employers' organisations?
    Captain Crookshank: I do not think it desirable that I should depart, even in the

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    case of interest-free loans, from the usual practice of not publishing any detail of the amounts received. My right hon. Friend would wish me to repeat the thanks he recently expressed to these organisations and others for their response to his appeal.
    Mr. Mander: As it has been announced that the Trades Union Congress has advanced £10,000 free of interest, can the right hon. and gallant Gentleman say whether any employers' organisations have made similar advances?
    Captain Crookshank: I have just said that my right hon. Friend does not think it desirable to depart from the usual practice.
    Mr. Glenvil Hall: Has the right hon. and gallant Gentleman's Department had cause to express the thanks of the Treasury to the joint stock banks for any of these interest-free loans?
    Captain Crookshank: If I answered that question, I should be doing what I said was not my right hon. Friend's desire.

    STATE PENSIONS.
    Mr. Davidsonasked the Chancellor of the Exchequer whether, in order to equalise the financial burden of the war, His Majesty's Government intend to introduce legislation for the purpose of modifying civil, judicial and hereditary pensions in accordance with the national need?
    Captain Crookshank: Such pensions have been granted pursuant to Acts of Parliament, and my right hon. Friend does not propose to introduce legislation such as is suggested.
    Mr. Davidson: Is the right hon. and gallant Gentleman aware that many conditions of the workers also were introduced as a result of Acts of Parliament, and that they have been modified to meet the national need; and will he not therefore reconsider the question of at least modifying yearly pensions of £3,000 to £5,000 for the duration of the war?

    GOVERNMENT CONTROL.
    Mr. Butcherasked the Chancellor of the Exchequer what steps he has taken since the introduction of the Emergency Powers (Defence) Bill, on 22nd May, 1940, to take greater control of the finance of the country and the banks?
    Captain Crookshank: My right hon. Friend does not clearly follow what my hon. Friend has in mind in alluding to greater control of the finance of the country. The Emergency Powers (Defence) Order applies, of course, to financial institutions as it does to other undertakings by way of trade or business. No occasion for a formal invocation of those powers has arisen; the assistance required of the banks in various directions has been at all times readily given.

    CIVIL SERVICE PENSIONS.
    Sir Smedley Crookeasked the Financial Secretary to the Treasury whether, in view of the acute financial circumstances prevailing among the many Post Office pensioners owing to the increased cost of living who are now unable to work because of age and infirmity, some of whom have to apply for public assistance, he will consider the advisability of taking necessary steps by legislation or otherwise, to increase the pensions of the Government's aged servants, and thus prevent them suffering poverty?
    Captain Crookshank: It would not be possible to increase the pensions of retired civil servants without legislation, and as I stated in my reply to the hon. Member for North Camberwell (Mr. Ammon) on 18th July, I cannot undertake to introduce legislation for this purpose.

    POSTAGE (ARMED FORCES).
    Mr. Ralph Ethertonasked the Financial Secretary to the Treasury whether he will modify the previous decision in regard to free postage for troops, so as to allow the issue of a limited number of stamped field cards and also, if possible, one or more stamped envelopes each week to those below the rank of noncommissioned officer serving with the Armed Forces in this country?
    Captain Crookshank: Although I have every sympathy with members of His Majesty's Forces and all other classes of the community who, because of their national service, are separated from their families, I am sorry that my right hon. Friend cannot agree to concessions of this nature which would involve a considerable sacrifice of existing revenue.
    Mr. Shinwell: Does the right hon. and gallant Gentleman realise that all wages have been increased throughout the in-

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    dustrial sphere while the wages of soldiers have not been increased and that they are compelled to pay more for postage stamps, cigarettes, tobacco and other things? Will he not consider that?
    Mr. Etherton: Has my right hon. and gallant Friend made any estimate of what would be the cost of this concession?
    Captain Crookshank: The hon. Gentleman had better put that question down. As regards the first question, of course all those matters have been taken into account.
    Mr. Lipson: Is the right hon. and gallant Gentleman aware that whatever the cost of the concession, the public would be very glad indeed to bear it?
    Captain Vyvyan Adams: Could not the concession be given in areas where the censorship operates?

    OLD AGE PENSIONS.
    Mr. Sorensenasked the Financial Secretary to the Treasury whether he will take steps to give effect to the resolution forwarded to him by the Leyton Local Pension Committee and other pension committees requesting him to recognise residence in a British possession by a British-born subject as equivalent to residence in Britain for the purpose of statutory condition in respect of old age pensions?
    Captain Crookshank: I do not consider that the conditions imposed by the Old Age Pensions Act, 1936, in regard to residence are unreasonable, particularly having regard to Sub-section (2) of Section 2 of the Act. I am afraid I cannot undertake to introduce amending legislation as suggested.
    Mr. Sorensen: Would the right hon. and gallant Gentleman say whether he has received a large number of resolutions and memoranda along the lines which I have suggested?
    Captain Crookshank: Not that I am aware.

    AGRICULTURAL CREDIT FACILITIES (BANKS).
    Mr. De la Béreasked the Chancellor of the Exchequer whether he is now in a position to state the approximate number of agricultural bor-
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    rowers from the clearing banks at 30th June, 1940?
    Captain Crookshank: No, Sir. The figure desired by my hon.. Friend is not available. I hope, however, to obtain a figure of the number of borrowers for some date in August, when the amount of the bank advances to agriculturalists will be next ascertained. I will arrange to inform my hon. Friend when the figures are available.

    NATIONAL WAR EFFORT (BANKS).
    Mr. Davidsonasked the Chancellor of the Exchequer whether he is now in a position to publish a full statement of the financial contribution to the national war effort of the Bank of England and the joint stock banks?
    Captain Crookshank: The Bank of England and the joint stock banks, like other corporations, contribute to the war effort through taxation and by their loans to the Government. I would also add that at my right hon. Friend's request the banks are taking steps to secure that in all proper cases adequate credit is extended to firms engaged on work of national importance, and I am satisfied that they are doing so on reasonable terms.
    Mr. Davidson: Have any of these bank contributions been made for a less percentage of interest than before, and have the Bank of England or the joint stock banks contributed in any degree to the interest-free loans?
    Captain Crookshank: The hon. Gentleman has asked me the same question as that to which I have answered about not disclosing details of interest-free loans.
    Mr. Davidson: But in view of the fact that some of the details have been disclosed, is the right hon. and gallant Gentleman not replying to this part of the question because the reply would not be very satisfactory from die banks' point of view?
    Captain Crookshank: I really must not be accepted as having said anything of the kind. The hon. Gentleman will see the answer which I gave to Question

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    No. 56, and he will see that my right hon. Friend has said that he could not depart from the usual practice of disclosing information. If individuals disclose how much they themselves give, that is another matter, but this is a question of my right hon. Friend disclosing what he has received.
    Mr. Stokes: Arising out of the original reply, in view of the fact that the loans made by the banks are on the nation's credit, will the right hon. and gallant Gentleman consider making representations to the banks that they should make those loans interest-free?

    HOME-PRODUCED FUELS (INTER- NAL COMBUSTION ENGINES).
    Sir Stanley Reedasked the Secretary for Mines whether the committee appointed to investigate the use of alternatives to petroleum for use in mechanically-propelled vehicles has reported; and, if so, what action has been taken?
    Mr. Grenfell: I would refer the hon. Member to the reply I gave to the hon. and gallant Member for Coventry (Captain Strickland) on 18th June, to which I have nothing to add.
    Captain Strickland: Has no progress whatever been made since June?
    Mr. Grenfell: There will be a report published in the course of the next few weeks, and I think that that will give the information required?

    CHILDREN'S OVERSEAS RECEPTION SCHEME.
    Mr. Lewisasked the Under-Secretary of State for Dominion Affairs, for which Members of this House the Children's Overseas Reception Board have requested that exit permits should be granted, and for what reasons?
    Mr. Shakespeare: I would refer my hon. Friend to the reply given by my right hon. Friend the Secretary of State for the Home Department on 11th July. That is the only case where an exit permit has been issued to a Member of this House on the advice of the Board, and it was granted in connection with an offer to provide for the reception of 500 British children in the United States of America.
    Mr. T. Smith: When this exit permit was granted to this hon. and gallant Member, was any stipulation made that he should take his mother with him to look after him?
    Mr. Shakespeare: I will look into that point.
    Mr. Smith: She has gone with him, I understand, anyhow.
    Major Braithwaiteasked the Under-Secretary of State for Dominion Affairs how many appointments in the United States of America in connection with the Children's Overseas Reception Board have been made; and how many Members of Parliament have been employed in such work?
    Mr. Shakespeare: Two such appointments have been made in the U.S.A. The first was that of the hon. Member for Blackpool (Mr. R. Robinson), who will shortly be returning to this country, having rendered valuable assistance in working in close association with the U.S.A. authorities.. The second appointment is that of an officer of His Majesty's Consular Service, who will be attached to the staff of His Majesty's Ambassador at Washington.
    Mr. R. Gibsonasked the Under-Secretary of State for Dominion Affairs how many applications in respect of children in Scotland have been received up to the latest available date; how are these distributed as between local authority schools and other schools, respectively; and how many in each group have been accepted?
    Mr. Shakespeare: Up to 5th July, when the Board's lists were closed, applications were received in Scotland in respect of approximately 27,000 children, 474 of whom were in attendance at non-State-aided schools. Letters intimating the Board's provisional acceptance have so far been sent out in respect of 1,448 children, including 24 of the non-State-aided group.
    Mr. Gibson: Has any decision been reached with regard to the rest, or are they still under consideration?
    Mr. Shakespeare: They are still under consideration.

    DETENTION OF A MEMBER.
    Captain W. T. Shawasked the Home Secretary whether he is now in a position to make a report to the House on the case of the hon. and gallant Member for Midlothian and Peebles (Captain Ramsay)?
    Mr. Stokes: On a point of Order. In view of the fact that this Question concerns an hon. and gallant Member of this House, is he not entitled to be here, to hear the Home Secretary's statement and to make a reply?
    Mr. Speaker: There is no Question before the House. There is merely a Question for the Home Secretary, to which he is to make a reply.
    Sir J. Anderson: Yes, Sir. I have received the report of the Advisory Committee. The committee recommend that the detention of the hon. and gallant Member should continue. I have given very careful consideration to their report and recommendation, and have decided to give directions for the hon. and gallant Member's continued detention.
    Captain Shaw: Will my right hon. Friend reconsider that decision, in view of what the Prime Minister said in answer to a previous Question?
    Sir J. Anderson: I can only repeat that my decision was taken after the most careful consideration.
    Mr. Denman: Could not that report be laid before the House?
    Sir J. Anderson: No, Sir.
    Mr. Maxton: Does that answer necessarily mean that the detention of the hon. and gallant Gentleman must continue to be in Brixton Gaol, or might other methods of detention be considered?
    Sir J. Anderson: That will certainly be considered.
    Captain Graham: Was the hon. and gallant Member given facilities for having legal advice?
    Sir J. Anderson: The hon. and gallant Member has been treated in exactly the same way as others who are in the same position.
    Mr. Kirkwood: Is the Home Secretary in a position to lay before the House this
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    report, which is evidently of such a character that action has been taken such as I have never heard of before? The House knows that I do not approve of any of the actions of this man, but I think it is most unjust that he should be shut up in gaol under these conditions.
    Mr. A, Bevan: Are we to understand that the reply of the Home Secretary means that the liberty of any Member of this House is now at the disposal of the Home Secretary, acting on the advice of a private tribunal, whose findings are not put before the House?
    Mr. Edmund Harvey: Could this report be laid before the Committee of Privileges, which could consider it in confidence on behalf of the House?
    Sir J. Anderson: I am of opinion that it would not be in the public interest to lay the report. As regards the Committee of Privileges, that is not a matter for me.
    Mr. Bevan: Can I have an answer to my question? On a point of Order. This is a very grave matter, affecting the safety of every Member of this House. There is no attempt on the part of any of us to defend anything that the hon. and gallant Member has done, but surely what the Home Secretary has now informed the House amounts to this, that the freedom and safety of all of us are now at his personal disposal, on the recommendation of a committee sitting in private, whose recommendations we do not know about, and on evidence that we have not heard?
    Sir J. Anderson: I think the House will realise that, as Home Secretary, I have a public duty to discharge, and that I discharge it to the best of my ability, in accordance with the best advice available to me, and in accordance with the terms of the Regulation which was made, and which the House had an opportunity of debating.
    Major Milner: Without in any way reflecting upon the Home Secretary or his action, may I ask you, Mr. Speaker, how this matter can be brought within the cognisance and control of the House?
    Mr. Speaker: This is not a question of Privilege, and it goes back a considerable time. When it was first raised any Member of the House could have raised the question of Privilege, and that was not

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    done. When I read a letter from the hon. and gallant Member concerned, again the question of Privilege could have been raised. Now that is past and gone, and hon. Members cannot raise it any more. The House loses the opportunity.
    Mr. G. Strauss: May I submit to you, Mr. Speaker, that on a previous occasion when this matter was raised I raised this very point of Privilege, and asked whether the report, when it became available, would be submitted to the Committee of Privileges, so that that committee, on behalf of the House, might consider the matter? I did raise it at that time.
    Mr. Speaker: This report is not before the House. If a Motion is put down, the House can consider it.
    Major Milner: May not that action be taken now if the House so desires?
    Mr. Speaker: No, it must be done by giving notice of a Motion.
    Mr. Thurtle: May I ask the right hon. Gentleman whether he is aware that the House desires him to take as his paramount consideration the national safety?
    Captain Shaw: Is it the fact that the hon. and gallant Member was not allowed to be represented before the Advisory Committee?
    Sir J. Anderson: In reply to the hon. and gallant Gentleman, I have previously explained the position with regard to legal representation, and the hon. and gallant Member whose case is involved here appeared personally before the Committee, but was not legally represented. It would have been within the power of the Advisory Committee to have granted him legal representation.
    Captain Shaw: Is it the case that the hon. and gallant Gentleman was not granted ordinary legal facilities, and that the right hon. Gentleman said, in replying to a Supplementary Question, that he believed he would be?
    Mr. Mathers: Will consideration be given to the fact that the hon. and gallant Member's constituency is disfranchised at the present time, and is any action contemplated in that regard?
    Mr. Speaker: That is another question.

    CZECHOSLOVAKIA (PROVISIONAL GOVERNMENT).
    Mr. Mander(by Private Notice) asked the Prime Minister whether he can now make a statement with regard to the granting of official recognition to a Czechoslovak Government on the same lines as that granted to the Polish Government, bearing particularly in mind the recognition already granted to the National Czechoslovak Committee and the Czechoslovak army, the existence of a Czechoslovak legation in London, and the importance of placing all Allies in the same political position?
    The Prime Minister: Communications have recently passed between my Noble Friend on the one side and Dr. Benes on behalf of the Czechoslovak National Committee on the other, concerning the recognition of the Czechoslovak National Committee as a Provisional Czechoslovak Government. As the result of these communications, Dr. Benes informed my Noble Friend of the composition of the Provisional Czechoslovak Government, in which several new members joined the previous members of the Czechoslovak National Committee, and requested the recognition by His Majesty's Government of the newly constituted Provisional Czechoslovak Government. This recognition was granted on 21st July in a letter from my Noble Friend to Dr. Benes in the following terms:
    "In the light of exchanges of view which have taken place between us, I have the honour to inform you that, in response to the request of the Czechoslovak National Committee, His Majesty's Government in the United Kingdom are happy to recognise and enter into relations with the Provisional Czechoslovak Government established by the Czechoslovak National Committee to function in this country. His Majesty's Government will be glad to discuss with the representatives of the provisional Government certain questions arising ou of this recognition which require settlement."
    Mr. Mander: In connection with that most satisfactory statement, may I ask the Prime Minister when it is proposed to make any statement regarding the personnel of the new Government, and whether that Government will be in exactly the same position as the Polish Government in regard to recognition?
    The Prime Minister: I am not sure that it falls to me to make a statement as to the personnel of the Government of an independent sovereign State formed in

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    our own country, but as far as the position of the Czechoslovak Government in relation to the Polish and other Governments established in this country is concerned, there may be certain differences of form, but, in principle, there is no difference.
    Mr. Gallacher: Can the Prime Minister tell the House whether this Provisional Government of Czechoslovakia represents pre-Munich Czechoslovakia or post-Munich Czechoslovakia, and why two Czechoslovak deputies have been arrested and detained, just when the question of recognising the Government has been under consideration?
    The Prime Minister: I would have been glad to have had some information from the hon. Member in connection with the Baltic States.

    NEW MEMBERS SWORN.
    Sir Frederick Hugh Sykes for the Borough of Nottingham (Central Division).
    Hyacinth Bernard Wenceslaus Morgan, esquire, for the Borough of Rochdale.

BUSINESS OF THE HOUSE.
Ordered,
"That the Proceedings on Government Business be exempted at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).— [The Prime Minister.]

MESSAGE FROM THE LORDS.
That they have agreed to—
Merchant Shipping (Salvage) Bill,
Unemployment Insurance Bill, without Amendment.

RAILWAYS (GOVERNMENT CONTROL).
Copy presented,—of estimates of the pooled revenue receipts and expenses and resultant net revenue of the Controlled Undertaking for (a) the four months ended 31st December, 1939, and (b) the half-year ended 30th June, 1940 [by Command]; to lie upon the Table.

REVISED FINANCIAL STATEMENT (1940–41).
Copy ordered, "of Revised Estimates of Revenue and Expenditure for the year 1940–41."—[Captain Crookshank.]
Copy presented accordingly: to lie upon the Table, and to be printed. [No. 150.]

ORDERS OF THE DAY.

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

  FINANCIAL STATEMENT.
  4.19 p.m.
  The Chancellor of the Exchequer (Sir Kingsley Wood): The Budget of April last has only just been passed into law, but the Committee is generally aware of the reasons why it is now necessary to review again our financial position and to take certain immediate action. In the April Budget a total of £2,000,000,000 was given, with all reserve, as a provisional round figure for our war expenditure during the current year. It was then stated that under present conditions any estimate made for so long ahead is bound to partake largely of the nature of a guess. It depended—and any future estimate must depend—upon the amount of manpower available for production, the supply of raw materials and many similar factors. After adding to the round figure of £2,000,000,000 the cost of the Debt service and ordinary Supply services, the total figure of £2,667,000,000 was reached.
  The revenue available towards that expenditure on the pre-Budget basis of taxation was estimated at £1,133,000,000, but the yield, in the current year, of the additional taxation imposed by the April Budget brought the figure up to £1,234,000,000. The deficit on this basis to be covered by savings or other means was, therefore, £1,433,000,000. It is plain that our war expenditure during the current year will be considerably greater than was assumed in April. While we all welcome it as a real and tangible evidence of a greatly accelerated war effort, it certainly presents further and difficult problems in relation to our national finances.

  WAR EXPENDITURE.
  The figure of £2,000,000,000, assumed in April for war expenditure, represented an average of about £40,000,000 a week during the year. The rate of expenditure during recent weeks has been over £50,000,000 a week, and the latest figures,
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  which I have just received, show that for the four weeks ended 20th July the rate was £57,000,000 a week. At that rate our war expenditure for the whole of this year will approach £2,800,000,000, and it may well be that during the rest of the year the weekly rate will increase still further. Any figure which I now take for our war expenditure must, as I have already stated, be given with all reserve, but if one assumes that the increase over the £2,000,000,000 will be of the order of £800,000,000, the total for all expenditure comes not to £2,667,000,000, but to £3,467,000,000. Accordingly, the Committee will note that the excess of expenditure, thus estimated, over revenue will be in the region of £2,200,000,000.
  While the gap thus disclosed between revenue and expenditure is formidable, it is not so alarming as at first sight might appear. To meet that part of our expenditure which is made overseas, we are able to a considerable extent to draw on outside resources, and this happens in three principal ways. First, we can dispose overseas of gold which is the property of the Government and in which other nations are ready to invest. Secondly, we can dispose overseas of securities which the Government have had to purchase from persons in this country, and although the process is indirect, this also relieves the general situation. Thirdly, the Dominions and India are not spending the whole of the proceeds of our large expenditure upon their products, but are allowing part of them to accumulate in the form of balances and other short-term investments in this country.
  I need hardly say that we do not wish to deplete our overseas resources in these ways more than is necessary for the victorious conduct of the war, but the exigencies of war are compelling us, for reasons not connected with domestic finance, to make considerable use of these reserve elements of our financial strength. While this is regrettable from other points of view and will create many problems for us in future, it does undoubtedly render the immediate economic problem less intractable than it might at first appear.
  There is also another factor, too, which is working in the same direction. Owing to the need to conserve the use of skilled labour, of machinery and of building

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  materials for purposes directly connected with the war, it will not be physically possible for most businesses, especially those normally catering for civilian consumption in the home market, in the near future to spend as much money on the maintenance and renewal of plant as wisdom would ordinarily dictate or as prudent finance will have made provision for, and here is another source of subscription to Government loans which does not involve any fresh saving on the part of the subscriber but rather a substitution of one kind of asset for another.
  The Committee will realise that I have mentioned these elements of relief, not in order to minimise the task which remains, but in order to dispel any fear which a superficial glance at the figures might create that the task that lies before us is outside our powers to fulfil. In these various ways there is some alleviation to be found, but however optimistic a view might be taken in that respect, there must remain, it is obvious, a large gap to fill which will require very strenuous and continuous efforts in the form of increased taxation and additional savings.
  Behind this formidable financial problem there lies an economic problem of fundamental importance. One consequence of the huge expenditure which the Government are incurring is that the total money income of the community is, on balance, higher than it was. By far the greater part of the sums that we expend on the manufacture or purchase of guns or aircraft or munitions is paid out as wages or salaries to those who help to produce them or the component commodities, right down the productive process, which are used in their manufacture. Against this the incomes of very many persons are seriously reduced by war conditions, but on balance there has unquestionably been an increase in the incomes of the British people reckoned in terms of money, and reckoned gross, before the tax collector has done his work. We must also remember that the more we succeed in expanding our war production, and the greater the consequent volume of Government expenditure, the larger is this total of money incomes likely to become.
  That is one side of the picture. The other side is that there will be no increase in the supply of commodities on which these larger incomes can be spent. The
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  case, in fact, is very much the contrary. The speeding-up of the war effort means that we are devoting to war purposes a steadily increasing proportion of our productive resources—that is, our plant, our labour power and raw materials—and it follows that a steadily diminishing proportion is left to satisfy the multifarious needs of civilian life. Indeed, in order to free the maximum amount of capacity as quickly as possible for the expansion of the war effort, it has been necessary for the Government to adopt direct restrictions on the amount of material that may be used to supply the home market, and the Board of Trade has already made Orders restricting considerably the normal supply to retailers by manufacturers and wholesalers of a wide range of goods. By another Order the Board has prohibited the supply, except under licence, of certain types of machinery for the home trade, and it is the Government's intention to extend these methods of regulation. By this action we shall not only release labour and material for urgent war service requirements, but we shall enable manufacturers to maintain and, where possible, extend the export trade, which must be regarded as a vital part of our war effort. For it is by our export trade that we must obtain the means of payment to the greatest possible extent for imports of munitions, raw materials, food and other essential goods, and, in its claims upon our resources, the export trade must come second only to overriding military necessities. It follows that in any regulation of productive capacity designed to give the maximum impetus to our war effort we must aim first at reducing the calls on that capacity which would normally be made by civilian consumption in the home market.
  Here is the crux of the economic problem—a larger and increasing total of money incomes and a smaller and a diminishing supply of consumable goods —and I do not hesitate to say that this is a fundamentally dangerous situation. Behind it there is always the danger that prices might rise, no matter what action was taken to check them, and that a rapid inflationary movement might develop in which people came to distrust money and tried to turn it into goods as soon as they got it, and in which prices and wages chased one another upwards. I do not want further to enlarge upon

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  these matters, because I am confident that we shall be able to avoid them, but let there be no mistake—to allow a real and quickly developing inflationary movement might well be fatal to the successful prosecution of the war, and certainly a source of hardship and suffering, more particularly to the poorer sections of the community. To meet this danger the essential need is to see to it that demand does not outstrip production, and this means that, in so far as the incomes of the public are in excess of the available supply of goods and services at present prices, this excess must not be used for current purchases. Much the best way of securing this object is to divert this excess of incomes to the State, by taxation so far as tins is practicable and, so far as taxation is not practicable, by the public saving a substantial portion of their incomes and lending the savings to the State.

  ADDITIONAL TAXATION.
  It is clear that in the situation in which we now find ourselves considerably increased taxation is essential from both the financial and the economic standpoint. From the ordinary financial standpoint it would be highly imprudent to watch the Budget deficit grow at the rate at which it is now growing without attempting to secure additional revenue, and from the economic standpoint it is no longer a question of the avoidance of extravagance in personal expenditure. If we are to keep consumption within the bounds of our available production, we must secure widespread and drastic retrenchment in forms of personal expenditure which axe not in the least extravagant but which are not absolutely essential.
  The time has long gone, if there ever was a time, when the finance of a world war could be found merely by the well-to-do, and to-day varying contributions are being made by all sections of the community, subject to such safeguards as are necessary for the poorest members, and the increased taxation which is necessary must fall on all sections of the community if, as we must, we are to continue to make our greatest effort. Nor, in fact, can the needs of the economic situation be met without savings and retrenchment by all.
  I am not unmindful of the contribution which vigilance and care can make in relation to our war expenditure, for which
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  the Treasury has special responsibilities. It is vital, I agree, that there should be no holding-up or delays in our war effort, and for my part I have done my best to see that these shall always be avoided, and I shall continue to do so. But the fact that the House has appointed a Select Committee on War Expenditure, and that much time and labour have been expended and that valuable advice has been given to the Government in this important connection, is a tangible recognition that here lies an important field in which economies should continually be sought to be effected and money, wherever possible, saved. I would suggest, though I have noticed some impatience in certain quarters, that even in the stress of war we must do all we can in this way to augment our financial resources, as well as to give confidence to our people that the sacrifices they are making are not being wasted or frittered away.
  It is evident that further taxation on the largest scale possible, and covering as wide a field as possible, is imperative, but it is equally plain that we cannot expect, nor would it be possible or expedient or just, to raise by way of taxation, at one time and in one Budget so quickly following another, all the sums which will have to come still further from this source. We must regard this Budget, as it is, as an interim Budget both as regards direct and indirect taxation.

  INCOME TAX.
  There are severe limits, at any rate, on certain means of obtaining new revenue. Income Tax, which is not an optional tax but an inescapable one, five years ago was at the standard rate of 4s. 6d. A year ago it was 5s. 6d. To-day it is 7s. 6d. There have also been two recent successive increases in the Surtax. These taxes, which in 1935–36, with Income Tax at 4s. 6d., yielded roughly about £290,000,000, are to-day estimated to yield about £525,000,000, and it is evident that, even with the most drastic taxation, the limit of what is possible by way of direct taxation on the higher incomes is approaching. It is not always understood that if one took the whole of all incomes in excess of £2,000 a year they would only produce in extra taxation some £70,000,000 per annum.

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  But I must in the present situation ask for a further contribution from the direct taxpayer, and I believe he will willingly respond.
  I now propose to increase the standard rate for the whole of the current year to 8s. 6d. With this increase in the standard rate I propose to alter the reduced rate of tax which is charged upon the first £165 of taxable income—that is, upon the first £165 of the actual income, less the personal allowances to which the taxpayer may be entitled. The rate chargeable on this zone of income is at present half the standard rate, and, with the increase of the standard rate to 8s. 6d. in the £, the reduced rate would rise automatically to 4s. 3d. in the £. I propose that the reduced rate should be increased to 5s. in the £. Proportionately it must be realised that this increase in the reduced rate will mean a greater contribution from the taxpayers at the lower end of the scale.
  The usual tables will be found in the White Paper, but I might perhaps give one or two illustrations of the effect of these changes. A married man with two children and with an earned income of £400 a year who at present pays £11 17s. 6d. will now pay £15 16s. 8d. If his income is £600 a year, he will pay £68 17s. 6d. instead of £55 6s. 3d.; if his income is £1,000 a year, he will pay £210 10s. 10d. instead of £180 6s. 3d. The increase of the standard rate to 8s. 6d. in the £ and of the reduced rate to 5s. in the £ will produce in a full year £84,000,000 and in this year £60,000,000.

  SURTAX.
  I have now to say a word about the Surtax. The graduation of the Surtax was increased in the first war Budget so as to produce £8,000,000 in a full year. I propose now a further increase in the scale of charge under which the rate on the first slice of income in excess of £2,000 will be increased from 1s. 3d. to 2s. in the £, and the peak rate of 9s. 6d. in the £ will come into force in respect of income in excess of £20,000 per annum instead of in excess of £30,000 per annum as at present. Details of the scale proposed will be found in the White Paper, and this increase is estimated to produce £11,000,000 in a full year and £8,000,000 in the current year.
  As the Committee is aware, the standard rate of Income Tax and the Surtax are the two constituent elements of one tax, namely, the Income Tax, and the effect of the changes is that Income Tax will be graduated to a peak rate of 18s. in the £, so that on the slice of incomes in excess of £20,000 a year the State will take nine-tenths of every £. To take one or two illustrations, a married man with two children and with investment income of £3,000 per annum, will pay in Income Tax and Surtax £1,238 instead of £1,062.
  Mr. MacLaren: His wife will seek a divorce.
  Sir K. Wood: If his income is £5,000 a year, he will pay £2,463 instead of £2,112; and if his income is £10,000, he will pay £6,113 instead of £5,324. The result of these increases in Income Tax and Surtax will be to raise the yield from them—
  Mr. MacLaren: And the death rate.
  Sir K. Wood Sir K. Wood — in a full year to £639,000,000 as compared with the figure of £290,000,000 which they produced only five years ago—more than double.

  ESTATE DUTY.
  Then, there is the Estate Duty. In the case of Estate Duty, an increase of 10 per cent. in the scale was imposed by the first war Budget on all Estates exceeding £10,000 in value. I propose to add a further 10 per cent. over the same range of estates which raises the graduation of the Estate Duty to a peak rate of 65 per cent, of the value. This is estimated to produce about £6,000,000 in a full year and £1,000,000 in the current year. The Committee should observe that the full year contribution of the direct taxpayer under these proposals amounts to £101,000,000, made up of £84,000,000 for Income Tax, £11,000,000 for Surtax, and £6,000,000 for Estate Duty.
  There is another series of figures which I would like to bring before Members of the Committee in order that they may appreciate the position. The increases of direct taxation effected by the April Budget of this year were estimated to produce in a full year £62,000,000. Since then the rate of Excess Profits Tax has been raised to 100 per cent., and I expect the increase in that tax to yield a further £40,000,000 in a full year, so

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  that the full year gain from the increase in direct taxation imposed this year amounts in all to £203,000,000. I recognise that this will involve further sacrifices, many readjustments, and in some cases hardship, but I believe that all affected will regard it, as it is, as a necessary contribution to our war effort.
  There are two matters in connection with the increase of the Income Tax in regard to which I shall propose an amendment of the existing law. One relates to the incidence of the tax and the other to its collection.

  LIFE INSURANCE POLICIES (INCOME TAX).
  The first point relates to the incidence of the new standard rate of 8s. 6d. in the £ on that part of the interest income of life insurance companies which is put aside for the benefit of policy holders. That income comes under charge generally at the full standard rate of Income Tax, and in the interests of the policy holders I feel it necessary to readjust the Income Tax chargeable so as to give some relief. Therefore, I propose to retain the standard rate at 7s. 6d. in the £ on the interest income of the Life Insurance Fund which is earmarked and set aside for the policy holder, and to obtain a recoup-ment for this concession by pegging the relief given to the policy holder in respect of his life insurance premiums at the rates obtaining last year, so that everyone this year will get relief on his premium on the same basis as he did last year—that is, generally speaking, at the rate of 3s. 6d. in the £. The gain to the Exchequer in restricting the relief on the life insurance premiums to what it was last year will make good the loss of tax which results from restricting the charge on the Life Fund to the standard rate of 7s. 6d. in the £. This is a somewhat complicated matter which will be more suitably discussed in detail when we come to the relevant Clause in the Finance Bill, but the proposal is one which will, I feel sure, commend itself to the Committee, for it is of the greatest importance that the incidence of the Income Tax should as far as possible be adjusted to secure the greatest advantage to the savings of the community as reflected in the Life Insurance Fund.

  METHOD OF COLLECTION (INCOME TAX).
  The other matter in connection with the increase in the Income Tax to which I must refer is the collection of the tax
  646
  charged on salaries and wages. For the salary or wage earner whose income is derived wholly or mainly from his employment, the tax is payable in two equal instalments on 1st January and 1st July, and the task of finding enough money to pay his Income Tax when it becomes due in January and in July has in recent years become increasingly difficult. In 1931, when the rates of tax were increased, a voluntary scheme of deduction of tax from salaries was devised so that employés could spread their tax liability evenly throughout the year. The Committee may be aware that all officers paid out of public funds, including the Fighting Services and the Civil Service, have their tax collected in this way. All railway officials are in the same position. The voluntary scheme was directed to extending to local authorities, and over industry generally, this method of paying tax by way of instalments deducted from pay throughout the year; and in fact, it has been adopted by a number of local authorities and large industrial concerns and has been working smoothly and to the great advantage of the employés who participate.
  The time has now come, I suggest, to extend the principle of deduction at source to the whole range of salary and wage earners from the manual wage earner paid weekly to the company director. Unless tax is deducted at source, a married man with £600 a year would have to pay in Income Tax in January next £56, which is more than the whole of his salary for that month, and he would have the same problem again next July. If he is to be able to pay and the Exchequer is to get in due time what it wants, the burden must be spread. Spreading the burden throughout the year is, therefore, I believe absolutely necessary, and the only saris-factory and workable method is deduction at source month by month or week by week. With the added burden of taxation which I have been compelled to propose, this problem of spreading the burden throughout the year becomes too serious and too extended to be left to voluntary arrangements, and I accordingly propose to make deduction of tax from salaries and wages compulsory.
  I realise that this proposal will impose extra responsibility and extra work on employers, but, at the present time, it is of vital importance that the machinery

  647
  for collecting revenues should work smoothly. Therefore, I appeal to all employers, and I believe I can rely upon their giving me their fullest co-operation in this important task of collecting the national revenues. I would like the Committee to know that in all cases the work of determining the amount of tax due will continue to be done by the Income Tax authorities, and the employer's duties will be confined to deducting by equal instalments the tax notified to him by the Collector of Taxes and to paying to the collector once a month the amount so deducted. The employer will have nothing to do with the computation of the liability of the employé nor will the tax officials disclose to him any information given on the employé's returns; he will simply deduct the figure of tax notified to him. The employé will therefore be completely safeguarded and need have no apprehension that particulars relating either to himself or to his family will be made known to his employer. In these circumstances I feel sure, myself, that the proposal for deduction of tax at source will be recognised and appreciated as a desirable method of relieving an employé from the burden of arranging to provide a heavy payment of taxation at a given date.
  Sir Henry Morris-Jones rose—[Interruption.]
  The Chairman: The hon. Member knows that he cannot insist on intervening if the right hon. Gentleman refuses to give way.
  Sir K. Wood: In addition, there are one or two minor matters of detail relating to Income Tax and Excess Profits Tax for which Resolutions are required. I need not explain these at this stage; they can best be dealt with when the Finance Bill is under discussion.

  BEER.
  In addition to the proposals for increased direct taxation, it is necessary to have further taxation on certain personal expenditure, which is what indirect taxation means. The duty on beer will be increased as from to-morrow by an amount which will mean on the average an additional 1d. per pint, and the additional yield will be about £13,000,000 in a full year and £7,500,000 during the rest of this financial year.

  TOBACCO.
  Then there is tobacco. The Tobacco Duty will also be increased as from tomorrow by a further 2s. per pound, representing an increase of 1½d. per ounce. I am glad to tell the Committee that the consumption is standing up well to the recent increases in taxation.
  Mr. George Griffiths: It will go down now.
  Sir K. Wood: The addition to the revenue is estimated at £9,000,000 for a full year, and £6,000,000 for the remainder of the present year. The stabilised preference of 2s. 0½d. per pound on Empire tobacco will be maintained.

  WINES.
  Wines also must contribute. As from to-morrow the duty on light wines will be increased by 2s. per gallon, and on heavy wines by 4s., making the duty on light wines 8s. per gallon, and 16s. per gallon on heavy wines. The preference for wines from the Dominions and Colonies will be retained, and the new Empire duty will be at the rate of 6s. for light wines and 12s. for heavy wines. British wines—that is, wines made in this country—will have their duty increased from 3s. 6d. to 5s. 6d. per gallon. Despite a decline in imports which must be anticipated and some change in personal habits, I expect to receive additional revenue of about £2,000,000 in a full year and £1,500,000 during the present year.

  ENTERTAINMENTS.
  The duty on entertainments will also be increased, and the present rates will be adjusted so as to aim at producing an estimated addition to the revenue of about £4,000,000 in a full year and about £2,000,000 during the present year. In this estimate I recognise, of course, that the yield from Entertainments Duty is inevitably affected by war developments and that some areas will yield little. I should like to say to the Committee and to the country that the increase in Entertainments Duty is not designed to discourage persons from having and enjoying the entertainments available to them. It is rather a contribution which I believe they will willingly make towards those defences which make it possible for them to enjoy, with their families and friends, reasonable relaxation and pleasure.
  These proposals as a whole in the sphere of direct and indirect taxation

  649
  give me £86,000,000 in the current year and £129,000,000 in a full year, but the Committee will appreciate that even with these substantial contributions it is obvious that I must obtain some new sources of revenue.
  Two sources of taxation have been suggested upon which I shall say a few words. The first is the taxation of land values. I doubt, apart from the merits, whether even the most ardent supporters of that tax would say it would be practicable to bring it into operation to-day. The ascertainment of the value of land, which is a necessary preliminary, is a long and difficult process, and a task of that kind obviously cannot be undertaken under present conditions. I can see no hope of such a tax bringing in revenue to meet our urgent and pressing needs.
  Then there is the tax upon capital. I am not now referring to any action in relation to individual accretions of wealth arising as a result of the war—statements have already been made as regards intentions concerning them. What I have in my mind are those proposals which are now sometimes advanced not in the form of a large capital levy, but in the nature of an annual percentage tax chargeable upon capital values, but payable in cash. This again, apart from discussing more controversial aspects which I do not desire and have no need to do to-day, would mean prolonged investigation and assessment, and in this case there is the additional complication that the process would need to be repeated every 12 months. Moreover, I would suggest to all Members of the Committee that under our existing system of taxation, Death Duties with their very heavy incidence already tax capital in a different way, and, if taxation of capital is to be regarded as a laudable object, they do it, I suggest, in a more satisfactory manner.
  For the rest, I would say again that what I need is cash, and cash out of current income. Already in the case of the highest incomes—which are mainly though not exclusively income from capital—the State takes in Income Tax and Surtax the main part of the current cash income. If it be said that even more should be taken, the best way, I suggest, to take it is by the method of income taxation, which can be effectively imposed without all the time and labour involved in the ascertainment of capital values. Greatly
  650
  as the Chancellor of the Exchequer needs new sources of taxation in these times, I fear that I cannot see in either of these proposals a contribution to the problems which have to be met to-day.

  PURCHASE TAX.
  It is in these circumstances that I have again examined the Purchase Tax proposals. I have already stressed to the Committee the urgent and imperative need both to limit civilian consumption and also to obtain a new source of revenue and I myself have reached the clear conclusion that a further tax on personal expenditure must form a necessary part of my present financial proposals. At the same time I have recognised the force of certain criticisms which were advanced against the tax in its original form, and I have certain fundamental changes to suggest, as I shall explain to the Committee, with a view to meeting objections, and I hope composing differences without impairing its main objects.
  Before describing the new plan, which will involve the withdrawal of the Bill now before Parliament, I think it would he of advantage to examine very briefly the field of expenditure over which it is now suggested that the tax should operate. I think the following calculation which I shall give to the Committee is of some interest generally, apart from the question of the tax itself. While there are no official estimates of the national income and while unofficial estimates made in recent years must be regarded with considerable reserve in the light of the impact of the war, a number of calculations have been made which show that our peacetime national income is of the nature of £5,000,000,000. A sub-division of that figure has been made, and while I would not wish the Committee to imagine that I am giving official blessing to a calculation on which so many eminent economists would differ, the general conclusion which emerges is worthy of special attention in relation to this particular proposal I am discussing this afternoon. In the calculation to which I have referred it is estimated that out of a national income of the order of £5,000,000,000, £1,500,000,000 is spent on rents, rates, interest, Income Tax and savings; that £1,350,000,000 is spent on food; that £880,000,000 is spent on services such as water, gas, electricity, transport, education, domestic wages, etc., and that

  651
  570,000,000 is spent on coal, petrol, tobacco and drink. These items total £4,300,000,000 or, according to this particular calculation, 86 per cent. of the national income. The point I wish to make to members of the Committee is that none of this overwhelming proportion of expenditure will be liable to the tax.
  The balance of personal expenditure is obviously only a very moderate proportion of the total. It is estimated that if the figures are adjusted to wholesale values and to other changes in prices which have occurred in recent months, the taxable field amounts to some £640,000,000. Even this figure, however, includes expenditure on children's clothing and children's boots and shoes which I recently added to the exemptions from the scope of the tax. Therefore, with the exclusion of this item, the taxable field may be taken at about £600,000,000 at wholesale prices. All food and drink will be exempted in all circumstances, and there will be no tax on services, fuel, gas, electricity or water and on some goods already subject to high duties; nor on children's clothing, boots and shoes. While I appreciate that there are certain criticisms of the cost of living index, the result is that more than 80 per cent. of that index is not affected by the tax.
  Other important exemptions are those for machinery and equipment required by farmers and horticulturists engaged in the production of food. Another exemption is given in the case of certain medicines and medical appliances. We spend many millions annually on medicines of differing quality and differing necessity, but there are certain drugs and medicines which have to be taken for long periods, and sometimes, as in the case of diabetic patients, for life. The prime cost in such cases is heavy and, therefore, we provide that in those cases there shall be complete exemption from the tax.
  A principal objection which has been taken to the tax was that in the original scheme all other goods should be subject to a flat rate of tax to apply alike to luxuries and articles which certainly cannot be so described. My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence), in an interesting and authoritative article which he wrote a few days ago, discussing the dangers of
  652
  general inflation and certain proposals for avoiding it, stated that the original Purchase Tax scheme did not conform to them
  "because it involves taxation at a flat rate on a miscellaneous number of articles, including some luxuries and some necessaries."
  It is in this important connection that I propose to make a radical change in the scheme.
  I propose to abolish the flat rate of charge and to introduce two rates sharply differentiated. Under the new plan there will be a high rate of tax on the purchase of goods which are either luxuries or goods which in the hard circumstances of war we can either do without or of which we can at least postpone the replacement. That rate of tax will be one-third or 33⅓ per cent. on the wholesale value, representing about 24 per cent. on retail prices. The type of goods covered by this higher rate of tax will include luxuries like furs, articles made with real silk, lace, china and porcelain articles, cut glassware, fancy goods, jewellery, toilet preparations including cosmetics, and articles not normally requiring immediate replacement like haberdashery, miscellaneous textile piece goods and furniture.
  In addition there will be a schedule of goods at a much lower rate of duty. This rate will be one-sixth, or 16⅔ per cent. on the wholesale value, representing about 12 per cent. on the retail prices. This is half the basic rate. There will be included in the lower rate schedule articles like clothing, boots and shoes, other than children's clothing, boots and shoes which are completely exempted, and other than certain types of such articles of a luxury category which will be liable to the higher rate of duty. Domestic hollow-ware like pots, pans and kettles will be taxed at only half rate, as also will cups, saucers and plates if made of earthenware; if made of china or porcelain they will be charged at the full rate. Domestic brooms and brushes will be charged at the reduced rate of duty. In addition I propose to include at the lower rate medicines and drugs other than those completely exempt: and finally, newspapers, periodicals and books. This places at the low rate those personal and household goods which require fairly frequent replacement.
  It is interesting to observe, studying the effect of this tax, that expenditure

  653
  on these goods, that is, those in the lower-rate schedule, represents rather more than 12 per cent. of the household expenditure in the cost-of-living index. Thus, in addition to exempting altogether from the tax 80 per cent. of the average household expenditure in that index, I propose to place a further 12 per cent. at the half rate of duty. I think, therefore, that I can fairly claim that care has been taken and consideration given to the consequences of the tax upon the cost of living of our people, and particularly of the lower-paid wage earners. I am sure the Committee will realise that this is so and that, while with a tax of this kind it is not possible to differentiate according to the personal circumstances of the buyer, other alleviations outside the scope of this tax have been granted in recent months by the Government which will be of special help to the poorest sections of the community.
  The introduction of the two rates will require another substantial change from the present Bill. I propose to schedule goods which are liable to tax showing the types of goods liable to the full duty and those liable to the half duty respectively. The class of goods on which the duties are falling will thus be defined and this will be of considerable advantage to traders. I also propose to make certain simplifications in the machinery of registration.
  I might perhaps say that I have also examined again with care the method by which the tax is to be imposed. There are alternative forms which this type of tax takes in various countries, and only after careful consideration was it decided that here it should take the form of a merchant sales tax which should be applied normally when goods pass from the wholesaler to the retailer. I have satisfied myself that this is the most practicable and convenient method, and an appreciable majority of the Trade Associations who have discussed this matter with the Board of Customs and Excise share this opinion.
  I know that some advocate a retail sales tax, but I believe that in war-time it would be an impracticable proposition involving, in the innumerable daily transactions of retail trade, a great mass of accounts and stamps of varying ranges of value and paper and printing of a most extensive character. It is interesting to
  654
  observe that there are in this country some 300,000 retailers, exclusive of street traders, who keep no accounts but who carry on on the "till basis," who do not give bills and often do not know the value of the stocks they hold. It is difficult to see how to surmount the difficulties which would arise in connection with a retail sales tax, and there might be much confusion and evasion and often, no doubt, a growing sense of unfair competition. We do not believe that the machinery will be unduly difficult, nor will it be costly to administer. It is not expected that any appreciable number of additional officials or staff will be required. Customs work, owing to the course of the war, has been reduced, and this will enable the initial work of registration to be carried on without additional numbers of civil servants. The necessary adjustment of staff and organisation for verifying the quarterly returns by registered persons can also be made without undue difficulty and little or no expansion.
  The Committee will wish to know what procedure is contemplated in connection with the recasting of these proposals. The Resolutions to be put from the Chair to-day will include a new Resolution to impose the tax as from a date to be fixed by Treasury Order, at rates of one-third and one-sixth respectively, on articles to be specified in the necessary legislation. The existing Purchase Tax Bill will then be withdrawn and the provisions of the new scheme will be included in the ordinary way in the forthcoming Finance Bill. The tax cannot operate until the preliminary process of registration has been completed, but I see no reason why that should occupy more than a month or two. The alterations in the scheme which I have outlined will involve a reduction in the amount that the Exchequer would have obtained under the original proposals. They will, however, secure, I am advised, the substantial sum in a full year of approximately £110,000,000. The yield in the current year will depend upon the date on which the tax can be brought into operation, but I hope to obtain revenue of about the order of £40,000,000.
  The two main purposes for which such a tax is designed are even more imperative now than they were at the end of April, when a scheme was first outlined in the Budget statement. We must reduce considerably civilian consumption

  655
  which is not absolutely necessary in order to set free resources and energy for the urgent needs of the war and to avoid inflation—and we need imperatively more money at the disposal of the Exchequer as soon as possible. It is said by some that such objectives are an attempt to do two contradictory things, but I am satisfied that the scheme now proposed will produce a necessary reduction of civilian consumption and, at the same time, bring considerable sums to the State. This tax has also the merit of being of a comprehensive character. It is a tax which will obtain a contribution from the people of the country as a whole, and it is one in respect of which all may well pay something unless they are able or willing to abstain from certain purchases. I recognise that a considerable contribution will have to be made by the wage earners of the country, but I believe myself that they will be just as willing as others to play a further part in financing the war.

  CONCLUSION.
  The present Budget will thus provide in a full year a further sum of £239,000,000, and, as I have already stated, I think this sum is all I can reasonably ask for by way of taxation at the present time. It must not be forgotten that the April Budget imposed new charges of the order of £128,000,000, making in all an additional sum of £367,000,000 imposed in the last three months excluding the £40,000,000 to which I have already referred in connection with the 100 per cent. Excess Profits Tax.
  At an earlier stage in my speech I reminded the Committee of certain special contributions on which we can rely, more particularly by the use of external resources available for purchases overseas, and by the growth here of overseas balances and short-term investments. For the rest, we must look primarily to the large and evergrowing volume of the savings of the people. Already during this war £300,000,000 has been raised by 3 Per Cent. War Loan, £250,000,000 from the sale, since November last, of Savings Certificates and Defence Bonds, and £110,000,000 by the new 2½ Per Cent. National War Bonds. In the week ending Tuesday last £28,000,000 was raised by these means. It is the success of these saving efforts that leads me to be-
  656
  lieve that this contribution makes the filling of the gap by no means an unmanageable task. I think we can, indeed, take heart for the future from the tact that in a period when so many individual budgets have not only been dislocated by war conditions, but drastically reduced by high taxation, there has been such a satisfactory response to the appeals to the private investor. But clearly these efforts must now be redoubled. I look with confidence for even greater success by the small savings campaign. It can only be achieved if the habit of regular saving, especially through the medium of savings groups, is intensified still further, and address that appeal particularly to the many who are benefiting from our war expenditure by way of increased incomes. The continuous sale of National War Bonds has had an encouraging start, but it will only achieve its object if every one of the large investors plays his part to the full—individuals, financial institutions, companies, firms and trustees. I ask them also to subscribe and to continue to make regular contributions to the utmost of their ability.
  It cannot be said too often that the problem of financing this war is in the main the problem of directing spending power from all sections of the population into the hands of the State. The Government will continue to assist in this way by the rationing of finished products, the control of materials and the regulation of industry and of labour to limit private consumption. But all such action cannot cover the whole field. Over large sections of the population there will still remain many opportunities for people to forgo not merely luxuries, but what in ordinary times might be regarded as necessary expenditure, and generally to restrict their expenditure to the absolute minimum so that their loans to their country may be their maximum.
  I say this, in conclusion: The financial problems that face us are undoubtedly many and difficult, but we can have full confidence that they are by no means insurmountable. We have already done much, and we shall continue to do all that lies in our power successfully to overcome them. We have many resources, and of our determination and capacity to use them to the utmost there can be no doubt. Heavy contributions by our people have already been made. Substantial additions will now again be gladly given,

  657
  and others that will be necessary will not be found wanting. As in the field of war, so in the vital area of national finance, we are determined to continue in our course unceasingly and at any sacrifices until victory has been achieved.
  5.36 p.m.
  The Chairman: I want the Committee to be good enough, if they will, to give a general assent to a course of procedure which I am proposing with such assent to adopt. The Committee will recollect that it was brought to my notice some two years ago by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) that the Committee were placed in a difficulty through the Budget Resolutions not being before the Committee until the close of the first day's Debate, and as a result, and with the general assent of the Committee, I have since then adopted a change in procedure by putting from the Chair all the Resolutions (except the last one, which was kept open for the purposes of the general Debate) immediately after the first two speeches following the Chancellor's statement. This course was not entirely approved by some hon. Members who thought it contrary to their ideals of equality of treatment of all Members of the House. The circumstances of the present time—including the fact of the Government being composed of Members of various parties—seem to provide an ideal opportunity for meeting that particular criticism. I therefore suggest to the Committee that they should formally pass all the Resolutions but one now, that is, immediately on the conclusion of the Chancellor's statement. I therefore ask for the general assent of the Committee to this course, of the Chair putting all the Resolutions now, immediately after the Chancellor's statement, with the exception, of course, of the last one, which will be kept open in the usual way for the purposes of keeping open the Debate on the Budget proposals as a whole. I hope that course will meet with the approval of the Committee.
  Sir William Davison: Without any speeches at all?
  The Chairman: Directly the Committee have passed all the Resolutions except the last one, I shall put to the Committee the last one, and the Debate on the whole of the Budget Resolutions and the Chancellor's statement will then be open on that last Resolution. The only change is in the time at which these Resolutions are pot to the Committee.
  Sir W. Davison: It is very important.
  Mr. Tinker: I take it, Sir Dennis, that you are having no speeches now, but reading the Resolutions straight off?
  The Chairman: The intention is, no speeches until after these Resolutions have been formally disposed of; and I think it will be to the further advantage of hon. Members, who are no more fond of hearing the sound of my voice than I am myself, that they will have 20 minutes or so in which to get a cup of tea.
  Sir W. Davison: On that point. I take it that the Committee will, under existing circumstances, approve of what you have just suggested, but I wish to lodge a caveat that it should not be taken as a precedent when war conditions do not obtain.
  The Chairman: I think the Committee have already given me the assent for which I asked, and the matter cannot be debated now.

CUSTOMS AND EXCISE.

  BEER (EXCISE).
  Resolved,
  "That, on and after the twenty-fourth day of July, nineteen hundred and forty, the duty of excise charged in respect of beer under Section one of the Finance (No. 2) Act, 1939, shall be charged at the following increased rates:—

  £

  s.

  d.

  For every 36 gallons of worts of a specific gravity of 1,027 degrees or less

  4

  1

  0

  For every 36 gallons of worts of a specific gravity exceeding 1,027 degrees—

  For the first 1,027 degrees

  4

  1

  0

  For every additional degree in excess of 1,027 degrees

  0

  3

  0

  and so in proportion for any less number of gallons;
  and, in the case of beer in respect of which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty at the foregoing increased rates has been paid, the excise drawback allowed under that Section shall be allowed at the following increased rates:—

  £

  s.

  d.

  For every 36 gallons the worts whereof were, before fermentation, of a specific gravity of 1,027 degrees or less

  4

  1

  2

  For every 36 gallons the worts whereof were, before fermentation, of a specific gravity exceeding 1,027 degrees—

  For the first 1,027 degrees

  4

  1

  2

  For every additional degree in excess of 1,027 degrees

  0

  3

  0

  and so in proportion for any less number of gallons;
  Provided that, as respects beer the worts whereof were, before fermentation, of a specific gravity of less than 1,027 degrees, the amount of drawback allowable shall not exceed by more than twopence for every 36 gallons the amount of duty which is shown as aforesaid to have been paid.
  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 (CUSTOMS).
  Resolved,
  "That, on and after the twenty-fourth day of July, nineteen hundred and forty, the duty of Customs charged in respect of beer under Section one of the Finance (No. 2) Act, 1939, shall be charged at the following increased rates:

  For every 36 gallons the worts

  £

  s.

  d.

  whereof were, before fermentation, of a specific gravity of 1,027 degrees or less—

  In the case of beer being an Empire product

  4

  1

  5

  In the case of beer not being an Empire product

  5

  1

  5

  For every 36 gallons the worts whereof were, before fermentation, of a specific gravity exceeding 1,027 degrees—

  In the case of beer being an Empire product—

  For the first 1,027 degrees

  4

  1

  5

  For every additional degree in excess of 1,027 degrees

  3

  0

  In the case of beer not being an Empire product—

  For the first 1,027 degrees

  5

  1

  5

  For every additional degree in excess of 1,027 degrees

  3

  0

  and so in proportion for any less number of gallons;
  and in the case of beer in respect of which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty at the foregoing increased rates has been paid, the Customs drawback allowed under that Section shall be allowed at the following increased rates:

  For every 36 gallons the worts

  £

  s.

  d.

  whereof were, before fermentation, of a specific gravity of 1,027 degrees or less—

  In the case of beer being an Empire product

  4

  1

  2

  In the case of beer not being an Empire product

  5

  1

  2

  For every 36 gallons the worts

  whereof were, before fermentation, of a specific gravity exceeding 1,027 degrees—

  In the case of beer being an Empire product—

  For the first 1,027 degrees

  4

  1

  2

  For every additional degree in excess of 1,027 degrees

  0

  3

  0

  660

  £

  s.

  d.

  In the case of beer not being an Empire product—

  For the first 1,027 degrees

  5

  1

  2

  For every additional degree in excess of 1,027 degrees

  0

  3

  0

  and so in proportion for any less number of gallons:
  Provided that, as respects beer the worts whereof were, before fermentation, of a specific gravity of less than 1,027 degrees, the amount of drawback allowable shall not exceed the amount of duty which is shown as aforesaid to have been paid, less threepence for every 36 gallons.
  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."

  WINES (CUSTOMS).
  Resolved,
  "That, on and after the twenty-fourth day of July, nineteen hundred and forty, the duties of Customs charged on wines under paragraph (a) and paragraph (c) of Subsection (1) of Section three of the Finance (No. 2) Act, 1939, shall respectively be charged at the increased rates set out in Part I and Part II of the following Table, and the duty charged under paragraph (b) of that Subsection on wine not exceeding twenty-seven degrees proof spirit and being an Empire product shall be increased accordingly.

  TABLE.

  PART I.

  WINES NOT BEING EMPIRE PRODUCTS.

  Description of Wine.

  Rate of duty per gallon.

  s.

  d.

  Not exceeding 25 degrees proof spirit

  8

  0

  Exceeding 25 degrees proof spirit and not exceeding 42 degrees proof spirit

  16

  0

  For every degree or fraction of a degree above 42 degres proof spirit, an additional duty

  1

  4

  Sparkling, an additional duty

  12

  6

  Still, in bottle, an additional duty

  2

  0

  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."

  SWEETS (EXCISE).
  Resolved,
  "That on and after the twenty-fourth day of July, nineteen hundred and forty, the rate of the duty of excise on sweets shall be increased from nine shillings and sixpence to eleven shillings and sixpence per gallon in the case of sparkling sweets, aud from three shillings and sixpence to five shillings and sixpence per gallon in the case of other sweets.
  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 (CUSTOMS).
  Resolved,
  "That, on and after the twenty-fourth day of July, nineteen hundred and forty, in lieu of the full duties of customs theretofore, chargeable on tobacco imported into the United Kingdom, there shall be charged on tobacco so imported of the descriptions set out in the first column of the following Table duties of customs at the rates respectively specified in the second cloumn of that Table:

  TABLE.

  Description of Tobacco.

  Rate of duty per pound.

  Tobacco unmanufactured—

  containing to lbs. or more of moisture in every 100 lbs. weight thereof—

  £

  s.

  d.

  unstripped

  0

  19

  6

  stripped

  0

  19

  6½

  containing less than 10 lbs. of moisture in every 100 lbs. weight thereof—

  unstripped

  1

  0

  6

  stripped

  1

  0

  6½

  Tobacco manufactured, viz.—

  Cigars

  1

  8

  1

  Cigarettes

  1

  4

  7

  Cavendish or Negrohead

  1

  3

  9

  Cavendish or Negrohead manufactured in bond

  1

  2

  0

  Other manufactured tobacco

  1

  2

  0

  Snuff—

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

  1

  1

  4

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

  1

  3

  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).
  Resolved,
  "That, on and after the twenty-fourth day of July, nineteen hundred and forty, in lieu of the duties of excise theretofore chargeable on tobacco grown in the United Kingdom, there shall be charged on tobacco so grown of the descriptions set out in the first column
  662
  of the following table duties of excise at the rates respectively specified in the second column of that table:

  TABLE.

  Description of Tobacco.

  Rate of duty per pound.

  Tobacco unmanufactured—

  s.

  d.

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

  17

  3½

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

  18

  0⅞

  Tobacco manufactured, namely—

  Cavendish or Negrohead manufactured in bond

  19

  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).
  Resolved,
  "That, as respects tobacco on which there have been paid duties of customs or excise at the increased rates for which provision is made by any Resolution passed by the Committee of Ways and Means together with this Resolution, 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 Third Schedule to the Finance Act, 1940.

  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

  1

  0

  9

  18

  7

  Cigarettes

  1

  0

  6

  18

  4

  Cut, roll, cake or other manufactured tobacco

  1

  0

  3

  18

  1½

  Snuff (not being offal snuff)

  1

  0

  0

  17

  11

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

  0

  19

  9

  17

  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."

  ENTERTAINMENTS (EXCISE).
  Resolved,
  "That, as respects payments for admission to entertainments held on or after the sixth day of October, nineteen hundred and forty, entertainments duty shall be charged—

  (a) in the case of stage plays and other entertainments to which Subsection (3) of Section one of the Finance Act, 1935, applies, at the rates set out in Part I of the following Table;

  (b) in the case of other entertainments, at the rates set out in Part II of that Table:

  TABLE.

  PART I.

  Reduced Rates.

  Amount of Payment.

  Rate of Duty.

  Where the amount of the payment, excluding the amount of duty—

  d.

  exceeds 3d. and does not exceed 11½d.

  ½

  exceeds 11½d. and does not exceed 1s. 2d.

  1

  exceeds 1s. 2d. and does not exceed 1s. 7d.

  2

  exceeds 1s. 7d. and does not exceed 1s. 9½d.

  2½

  exceeds 1s. 9½d. and does not exceed 2s. 0d.

  3

  exceeds 2s. 0d. and does not exceed 2s. 2d.

  4

  exceeds 2s. 2d.

  4d. for the first 2s. 2d. and 1d. for every 5d. or part of 5d. over 2s. 2d.

INCOME TAX.

  STANDARD RATE OF INCOME TAX FOR 1940–41.
  Resolved,
  "That—

  (a) the standard rate of Income Tax for the year 1940–41 shall be increased from seven shillings and sixpence to eight shillings and six pence in the pound;

  (b) in connection with the said increase, special provision shall be made in relation to income chargeable under Schedule C, under Rule 6 or Rule 7 of the Miscellaneous Rules applicable to Schedule D, or under Rule 21 of the General Rules, and amendments shall be made in Section two hundred and eleven of the Income Tax Act, 1918 (as amended by subsequent enactments);

  (c) such other amendments shall be made in the Income Tax Acts as are consequential on the said increase."

  HIGHER RATES OF INCOME TAX FOR 1939–40.
  Resolved,
  "That Income Tax for the year 1939–40 in respect of the excess of the total income of an individual over two thousand pounds shall, instead of being charged at the rates mentioned in Section twelve of the Finance Act, 1940, be charged at rates exceeding the standard rate by the amounts specified in the second column of the following Table; and that such amendments shall be made in the Income Tax Acts as are consequential on the foregoing provisions of this Resolution:—

  TABLE.

  For every pound—

  s.

  d.

  of the first five hundred pounds of the excess

  2

  0

  of the next five hundred pounds of the excess

  2

  3

  of the next one thousand pounds of the excess

  3

  3

  of the next one thousand pounds of the excess

  4

  3

  of the next one thousand pounds of the excess

  5

  0

  of the next two thousand pounds of the excess

  5

  9

  of the next two thousand pounds of the excess

  7

  0

  of the next five thousand pounds of the excess

  8

  3

  of the next five thousand pounds of the excess

  9

  0

  of the remainder of the excess

  9

  6"

  ALTERATION OF CERTAIN RELIEFS.
  Resolved,
  "That—

  (a) the following enactments relating to reliefs from Income Tax shall be amended as Parliament may provide by any Act of the present Session relating to Income Tax, namely—

  (i) Sub-section (2) of Section forty of the Finance Act, 1927 as amended by subsequent enactments (which relates to the reduction of the tax remaining chargeable after the allowance of other reliefs);

  665

  (ii) Sub-section (2) of Section fifteen of the Finance Act, 1925, as so amended (which relates to persons over sixty-five years of age);

  (iii) Sub-section (2) of Section nineteen of the Finance Act, 1935, as so amended (which provides for a reduction of tax in the case of incomes less than one hundred and forty pounds);

  (b) such amendments shall be made in the Income Tax Acts as are consequential on any amendments which may be made in the enactments aforesaid."

  ASSESSMENT AND COLLECTION OF INCOME TAX UNDER SCHEDULE E.
  Resolved,
  "That—

  (a) the Commissioners of Inland Revenue shall be empowered to make regulations for the assessment and collection of Income Tax chargeable under Schedule E and in particular for requiring employers and other persons to deduct tax so chargeable from payments made by them and for making them accountable for any tax which they are so required to deduct, and any such regulations shall have effect notwithstanding anything in the Income Tax Acts;

  (b) penalties shall be imposed for failure to comply with the said regulations;

  (c) the time within which proceedings may be brought for the summary recovery as a civil debt of any tax charged under Schedule E shall be extended."

  LIFE INSURANCE.
  Resolved,
  "That—

  (a) as respects the year 1940–41, and any subsequent year for which the standard rate of income tax exceeds seven shillings in the pound, the relief allowed under Section thirty-two of the Income Tax Act, 1918 (as amended by subsequent enactments) in respect of premiums paid for life insurance or other contracts referred to in paragraph (a) of Sub-section (1) of that Section or Section twenty of the Finance Act, 1932, shall be calculated as if the standard rate of income tax were seven shillings in the pound;

  (b) as respects the year 1940–41, and any subsequent year, no relief shall be allowed under the said Section thirty-two (as so amended) in respect of the amount, if any, by which the premiums or other sums in respect of which relief is claimed exceed the claimant's taxable income;

  (c) as respects the year 1940–41, and any subsequent year for which the standard rate of Income Tax exceeds seven shillings and sixpence in the pound, such relief shall be given to assurance companies carrying on life assurance business, in respect of Income Tax on policy-holders' part of the income from investments held in connection with that business, as may be provided by any Act of the present Session relating to Income Tax;

  666

  (d) such amendments shall be made in the Income Tax Acts as are consequential on the foregoing provisions of this Resolution."

  PAYMENTS IN RESPECT OF WAR RISKS INDEMNIFICATION.
  Resolved,
  "That—

  (a) in computing the amount of the profits or gains of any person for any purpose of the Income Tax Acts for the year 1940–41 or any subsequent year, no sum shall be deducted in respect of any payment made by him under any such contract or arrangement relating to indemnification in respect of war damage as may be described in any Act of the present Session relating to income tax;

  (b) no such payment shall be included in computing the expenses of management in respect of which relief may be claimed for any such year under section thirty-three of the Income Tax Act, 1918, as amended by subsequent enactments, or the cost of maintenance, repairs, insurance and management in respect of which relief may be so claimed under Rule 8 of No. V of Schedule A as so amended."

MISCELLANEOUS.

  PURCHASE TAX.
  Resolved,
  "That—

  (a) provision shall be made for charging a tax in respect of purchases (whenever made) from wholesale sellers of such goods as may be specified in any Act of the present Session, and in respect of such other transactions (whenever made) relating to such goods as may be so specified;

  (b) the tax shall be charged (subject as mentioned in paragraph (c) of this Resolution) at one or other of the following rates, as may be provided by the said Act in relation to different classes of goods, that is to say, a basic rate equal to one third of the wholesale value of the goods, or a reduced rate equal to one sixth of the wholesale value of the goods;

  (c) the Treasury shall have power to make orders—

  (i) for bringing the tax into operation,

  (ii) for varying from time to time the basic rate or the reduced rate of the tax,

  (iii) for rendering the tax chargeable, at either rate, in the case of goods other than goods on which it is chargeable under paragraph (a) of this Resolution, or for rendering the tax chargeable in the case of any goods at the basic rate in lieu of at the reduced rate or vice versa, and

  (iv) for such other purposes as may be specified in the said Act,

  so however that an order for bringing the tax into operation, for increasing the rate of the tax, for rendering the tax chargeable, or for rendering the tax chargeable at the basic rate in lieu of at the reduced rate, shall be subject to approval by this House as may be provided by the said Act;

  667
  (d) the Government of Ireland Act, 1920, shall have effect as if the tax were one of the taxes mentioned in Sub-section (1) of Section twenty-two of that Act (which relates to reserved taxes)."

  RATES OF ESTATE DUTY.
  Resolved,
  "That—
  (a) in the case of persons dying after the twenty-third day of July, nineteen hundred and forty, there shall be substituted for the rates of estate duty set out in the Second Schedule to the Finance Act, 1930 (as increased by subsequent enactments) rates in accordance with the following Table:

  TABLE.

  Principal Value of Estate.

  Rate per cent, of Duty.

  £

  £

  Exceeding

  100 and not exceeding

  500

  1

  Exceeding

  500 and not exceeding

  1,000

  2

  Exceeding

  1,000 and not exceeding

  5,000

  3

  Exceeding

  5,000 and not exceeding

  10,000

  4

  Exceeding

  10,000 and not exceeding

  12,500

  6

  Exceeding

  12,500 and not exceeding

  15,000

  7.2

  Exceeding

  15,000 and not exceeding

  18,000

  8.4

  Exceeding

  18,000 and not exceeding

  21,000

  9.6

  Exceeding

  21,000 and not exceeding

  25,000

  10.8

  Exceeding

  25,000 and not exceeding

  30,000

  12

  Exceeding

  30,000 and not exceeding

  35,000

  13.2

  Exceeding

  35,000 and not exceeding

  40,000

  14.4

  Exceeding

  40,000 and not exceeding

  45,000

  15.6

  Exceeding

  45,000 and not exceeding

  50,000

  16.8

  Exceeding

  50,000 and not exceeding

  55,000

  19.5

  Exceeding

  55,000 and not exceeding

  65,000

  20.8

  Exceeding

  65,000 and not exceeding

  75,000

  22.1

  Exceeding

  75,000 and not exceeding

  85,000

  23.4

  Exceeding

  85,000 and not exceeding

  100,000

  24.7

  Exceeding

  100,000 and not exceeding

  120,000

  26

  Exceeding

  120,000 and not exceeding

  150,000

  28.6

  Exceeding

  150,000 and not exceeding

  200,000

  31.2

  Exceeding

  200,000 and not exceeding

  250,000

  33.8

  Exceeding

  250,000 and not exceeding

  300,000

  36.4

  Exceeding

  300,000 and not exceeding

  400,000

  39

  Exceeding

  400,000 and not exceeding

  500,000

  41.6

  Exceeding

  500,000 and not exceeding

  600,000

  44.2

  Exceeding

  600,000 and not exceeding

  800,000

  46.8

  Exceeding

  800,000 and not exceeding

  1,000,000

  49.4

  Exceeding

  1,000,000 and not exceeding

  1,250,000

  52

  Exceeding

  1,250,000 and not exceeding

  1,500,000

  54.6

  Exceeding

  1,500,000 and not exceeding

  2,000,000

  58.5

  Exceeding

  2,000,000

  65

  (b) any Act of the present Session relating to estate duty may make provision as respects cases where an interest in expectancy has been sold or mortgaged and the rates of estate duty in force in the case of a person dying when the interest falls into possession are higher than the rates in force in the case of a person dying at the time of the sale or mortgage."

  EXCESS PROFITS TAX.
  Resolved,
  "That the law relating to excess profits tax be amended (as respects all chargeable accounting periods) so as—
  668

  (a) to disallow deductions in certain cases in respect of interest, annuities and annual payments, and in respect of payments under certain contracts or arrangements relating to indemnification in respect of war damage;

  (b) to make special provision as to the standard profits of certain trades and businesses."

  NATIONAL DEFENCE CONTRIBUTION.
  Motion made, and Question proposed,
  "That the law relating to the national defence contribution be amended as respects all accounting periods beginning on or after the first day of April, nineteen hundred and thirty-nine, and so much of any accounting period beginning before that date as falls on or after that date) so as to disallow deductions in certain cases in respect of interest, annuities and annual payments, and in respect of payments under certain contracts or arrangements relating to indemnification in respect of war damage."
  6.7 p.m.
  Mr. Lees-Smith: The Chancellor of the Exchequer has presented to us a Budget which I think contains the largest expenditure and the highest peak of taxation in the history of the country, and I am bound to say that he did so with a persuasiveness and a disarming manner which I have noticed has got him through a good many difficulties in the House before, and which on this occasion kept the Committee in fairly good humour throughout the painless dentistry in which he showed himself a practitioner. He said that the estimated expenditure was nearly £3,500,000,000, and I made a little calculation which showed that that is about £900,000,000 more than the estimated expenditure of the Budget of April last. I am glad of that increased estimate of expenditure, and I take it as an example of the increased vigour of the administration and of the increase of our production of the war machine under the new administration. I say that for this reason, that the main advantage which Germany has in this war is her machines, and the general impression which I have gleaned from those who have come back from the front is that if you take a German out of his machine, it is doubtful whether he is as good a man as his father was in 1914. The Nazi system produces a poor human quality, and when our production of machines of which our expenditure is the test is so developed that we meet with the Nazi powers man for man on equal terms, then the war will begin to be won.

  669
  I was interested in the statement of the Chancellor of the Exchequer about the Purchase Tax. The Bill has been withdrawn; it is proposed to tax in an entirely new form, and I noted with pleasure that we accepted the very drastic suggestions made by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) that the tax should be in two steps, distinguishing between necessities and luxuries. My right hon. Friend and I will consider the new tax and the other proposals during our leisure in the course of the next 24 hours, and I hope that tomorrow afternoon the right hon. Member for East Edinburgh will let the Chancellor know what our views are. There is one principle which we have laid down for every Budget, even in war time, although we do not want to apply it to pedantic extremities, and that principle is that no scheme of finance must undermine the reasonable standard of life for everyone throughout the whole population. If I may say so, that principle, I think, is reinforced by the present position and the course of the war, because this is now clearly going to become a war of endurance and of nerve strength. One of our greatest advantages is that we began without that continual lowering of the standard of life to which the German population had been subject years before hostilities broke out. Therefore, we would say that any scheme of taxation which impairs the sheer power of physical resistance would be a scheme of taxation which would undermine our strength in enduring this war to the end.
  In the early part of his speech the Chancellor of the Exchequer went into an interesting exposition and examination of the danger of inflation, and I would like to take some of his figures and tell him exactly in what area, as far as I can see, the danger of inflation will take place. He told us that his expenditure is £3,467,000,000; he did not actually give us his final figure, but I calculate that it is about £1,471,000,000. Therefore, I calculate that the deficit is somewhere about £2,000,000,000. He spoke about borrowing and referred to the various resources which he had at his disposal, such as mobilising foreign securities, which is a kind of forced loan; but from the calculations which I have seen I have not heard our power of borrowing put at a great deal more than, say, £1,000,000,000,
  670
  and I have not heard of our power of mobilising foreign securities put at much more than, say, £400,000,000, that is, if the war is to last for two or three years. So that you get there a figure of £1,400,000,000 towards a total deficit of about £2,000,000,000. This is why I have made this analysis: I gather that the remainder must be borrowed, and is already, I suppose, deemed borrowed from the banks. Of course, it is in this sum which has been borrowed from the banks that the area of possible inflation is to be found, because, as the right hon. Gentleman explained in a very interesting way, that does represent exactly that money which is extra Government expenditure without any reduction of private expenditure to offset it on the other side which would lead naturally to a rise of prices and progressive inflation. I mention that, because I would like the Committee during the Budget discussion to examine some of the rather technical proposals which have been made by financial economists upon this subject. I find that a large school of them consider that the danger of inflation by borrowing from banks is much less if you borrow from commercial banks than if you borrow from the Bank of England. That is a very important point, which could very usefully be discussed during the Budget Debates. I have examined the point made by the right hon. Member for East Edinburgh in that article to which reference has been made. The point is that, although there may be a rise in prices, the dangers of it may be largely met because in this very artificial economy of war there can be a selective rise in prices, by distinguishing between necessities, semi-luxuries and luxuries. I hope that that point will be usefully discussed in the later Debates.
  I come to the increase in direct taxation. I accept that, but it would have been better if this increase had come last April, because changes of taxation in the middle of a financial year create the maximum of inconvenience and dislocation. I believe that the Chancellor, if necessary, can carry the limits of taxation in this country almost to the limits of human endurance. A great difference has taken place in the war since the Budget of April last. Since then, we have been driven in upon ourselves alone, and now we know that never has any country had

  671
  such a responsibility as will rest upon us, with our 45,000,000 people, during the next few months. We have the responsibility for the civilisation of the entire world in the future. The country knows of that responsibility, and I believe it is willing to rise to that responsibility, and, therefore, to accept self-sacrifice such as it did not contemplate even a few months ago.
  6.18 p.m.
  Sir Percy Harris: I would like to congratulate my right hon. Friend on having handled a tremendous task with skill, and, above all, with clearness and grit—two very important qualities. I was glad to hear, too, of his incorrigible optimism, which is something very helpful and necessary in these days. When he was making his terrific call, unprecedented in the history of this or any other country, I could not help thinking of some of his great predecessors who have stood at that Box. I thought of Peel, Gladstone, Asquith and McKenna, whose Budget Speech during the last war I remember hearing. I thought of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) and of the memorable statement in 1931 of Lord Snowden. Their figures were big, but they certainly would have been amazed if they had thought of the figures which the right hon. Gentleman has now given us. Some people were surprised at his selection for the office that he holds. He had had no previous experience of finance. Most of his work in the House of Commons had been associated with the spending Departments, particularly the Ministry of Health and, later, the Air Ministry. His appointment is an experiment. He has to win his spurs. He is now on trial, under testing circumstances.
  He has appointed a committee, and I think that in that he has been well advised. I do not know whether that means that the Chancellorship is going into commission. We should like to know —though, of course, the right hon. Gentleman is not likely to tell us—how much the members of his committee had to do with the framing of his scheme. How much is due to the hand of Mr. Keynes, and how much to the hand of Lord Catto? Certainly there is none of the originality of Mr. Keynes in the Budget
  672
  which is now presented to us. It is unimaginative. The right hon. Gentleman seems to think that he has exhausted the possible methods of taxation. It seems that even the ingenious minds of those whom he has called into council have been unable to devise any new methods of bringing in the tremendous Revenue that he has to find. The Income Tax is a very useful instrument, and it is to be increased, although by not quite so much as was anticipated in some papers. We should like to know a little more about the right hon. Gentleman's scheme for collecting the tax, through the employers. I am afraid that that is going to put a great deal of work on the employers. We shall scrutinise this particular device very carefully in Committee.
  I come to the Purchase Tax. We must have the revenue, and this is the best that the right hon. Gentleman can do. Although most of us claim the right to examine the Bill when it comes before the House, we accept the principle. The principle of graduation is right. It is difficult to say exactly what is a luxury and what a necessity, even if you exempt food, but the principle is sound, and if the right hon. Gentleman has worked out a scheme which is practicable we shall do our best to help him. I regret that he has not thrown overboard the tax on what is not a luxury but a necessity in war-time, the tax on books. That is a thoroughly unsound tax, particularly at present. It is common knowledge that the book industry is going through a hard struggle to survive under the strain of war conditions, and, with the public facing the long nights of the winter, with the blackout in force, it is unfortunate that this very bad tax on knowledge has been retained. I hope that when the time comes members of his committee will do their best to persuade the right hon. Gentleman to regard books as a necessity at a time like this, and will get him to throw over a tax which cannot bring in much revenue.
  As for tobacco, it is one of those useful instruments to which every Chancellor of the Exchequer turns as a convenient way of raising revenue, but this tax is a hardship on the soldiers. That is not a mere appeal to sentiment. When the soldiers went overseas they got their tobacco and cigarettes at a more or less nominal price. If the right hon. Gentleman insists on

  673
  this tax he should persuade the Service Departments to consider seriously giving each soldier a free grant of cigarettes or tobacco. I am not going to deal with the tax on beer, but I should like to make a reference to entertainments. The entertainment industry is going through a lean time, particularly in London, and particularly the theatrical side, as opposed to the cinema. The late Prime Minister, when he was Chancellor of the Exchequer, made some concession to the living theatre.
  Mr. A. P. Herbert: And the late Chancellor of the Exchequer did so.
  Sir P. Harris: Yes. I suggest that if the right hon. Gentleman puts this extra tax on entertainments, he should make some further concession. In London theatre after theatre has closed down, and hundreds of actors and actresses have been thrown out of work. Some concession would be much appreciated, and it would decrease the possible unpopularity of this further taxation. However, we are conscious that we have to find the money somehow. It is very easy to criticise, but one is always faced with the challenge, "Find a better way." I believe that the nation is prepared to submit to any burden in order to secure victory. The alternative obviously means bondage and bankruptcy. We can see what has happened to our ally France, which has handed its liberties over to the Nazi invader.
  I should be neglecting my duty if I did not make some reference to the blessed word "economy." The right hon. Gentleman did pay lip service to it, but it is a word very much out of fashion, and almost under suspicion. The suspicion arose during the first nine months of the war that it was used in order to hold up necessary war supplies. The figures for the last few months, and especially for the last month, prove that nothing of that kind is being done by the present Chancellor of the Exchequer. It was suggested that the late Chancellor of the Exchequer was too much the top dog. The right hon. Gentleman must be careful not to become the bottom dog. The nation's resources are not unlimited, I am glad that he stressed that point. We must think, as he said, not so much in terms of pounds, shillings and pence,
  674
  but in terms of man-power and material. If any Department is wasteful or extravagant it is hindering the war effort. I happen to be a member of the Select Committee on Expenditure, and I took a great interest in the starting of that committee. I was very glad that the right hon. Gentleman went out of his way to pay tribute to the work of the committee. I should like to pay some tribute particularly to the chairman, whom I am glad to see in his place, and to the 30 members of the committee who have done yeoman service in examining all the details of the various Departments. But let us be frank with ourselves. I think the chairman of that committee will agree with me that only too often our criticism and examination come after the event rather than before. We cannot do anything at the beginning. We have to look to the ordinary machinery of government.
  The right hon. Gentleman the Chancellor of the Exchequer, as the guardian of the public purse, must take the main responsibility for seeing that our resources are used to the best advantage. I know that everybody regards the Treasury control as amply fulfilling that responsibility. There is no one who does not recognise the ability and capacity of those splendid men who work in the Treasury, but, although they discharge their functions efficiently and effectively in peace time, something else will have to be devised if we are really to control these great Service Departments that are expanding almost every week. We are becoming more and more a vast trading organisation monopolising the greater part of the industry of the country. It is something like the financial director that you have in these big combines and businesses, working, not outside the Department like the Treasury and the Select Committee, but right inside, and seeing to the proper balancing of the industrial output and the vast expanding expenditure.
  The economic weapon is likely to be as deadly as guns, ships or aeroplanes. Germany now commands more or less the whole resources of Europe. She is ruthlessly harnessing her industry and agriculture to her war effort. On the other hand, we have the unlimited resources of the New World. Germany gets her supplies by robbing her victims; we, on the other hand, have to pay for what we

  675
  require in sterling. I was very glad that the right hon. Gentleman went out of his way to refer to the vital importance of maintaining our exports, and that some concession is being made by the Ministry of Supply and the trading Departments to stimulate and provide the exports that are now handicapped obviously by the closing of the Continental markets. We have to look to them largely to help us to get those vast resources upon which the next few months depend so much. But they only partly, or in a very small way, contribute to paying for our necessary imports and supplies. We have largely to rest upon our credit and the soundness of our financial position. Upon that depends whether we can prove to the world that our financial system can stand the strain of this terrific war expenditure. We are not by any means, as the right hon. Gentleman showed, paying our way. He has asked us to find a very large sum, but their still remain vast balances that must be found by borrowed money and by various ingenious devices.
  The right hon. Gentleman said that this was an interim Budget. I think that that is the right description. It is not going to be the end of the amount of money we shall have to raise. We shall have to find still larger sums from the taxpayer in the future. I suggest to him that between now and next spring, or even earlier, when he comes again to this House, he will put on his thinking cap and use the ingenuity of his advisory committee to see whether the nation, which is willing to find the money, can be told new ways, methods and systems of finding taxation in order that we can say that the country is financially sound.
  6.34 p.m.
  Sir John Wardlaw-Milne: It is not given to all of us, indeed it is given to very few of us, to have to stand at the Front Bench and introduce a Budget, but I am sure that I am speaking for all Members of the Committee when I say that, although we may not be able to speak from personal experience, we can realise the very severe strain of having to speak for about an hour and a half with an explanation of detailed sets of figures and hold, as the right hon. Gentleman did to-day, the complete interest of the Committee. I congratulate him very much upon the
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  achievement of that heavy physical task. Although most of us have not, as I say, had anything to do with introducing budgets, it is probably the case that almost every Member of Parliament at some time or another has had to make speeches in his constituency or elsewhere dealing with budgets, and at any rate most of us, I think, have long ago found the necessity of making one thing clear to an uninitiated audience, namely, that the Budget is neither a balance sheet nor a profit and loss account, but that it is nothing more or less than a statement of estimated income and expenditure. It is, therefore, from that point of view that I want to say a few words in reference to the statement which has been put before us to-day for a balanced Budget is a thing unknown in these days either in this country or elsewhere.
  The Chancellor of the Exchequer, as was right and proper, devoted the greater part of his speech to pointing out that it was necessary to put forward new taxation proposals amounting in all to £239,000,000 in the present provisional Budget, which, added to some 300 odd million pounds additional taxation which was imposed on the country by the Budget of last April, total up to between £500,000,000 and £600,000,000 additional taxation this year so far. I am afraid that I am not very interested, speaking broadly, in how that money is to be raised. The thing that interests me is the gap between the total and the total figure of our expenditure. The immensity of the gap is bound to make one look at the problem of the Budget as put before us as really rather a minor affair. It is true that it is not a small matter in the form of taxation on individual income and the contraction of individual spending power—that may cause very great hardship indeed—but the real problem before the Chancellor of the Exchequer and the country is not whether the Income Tax will be 8s. 6d. or 7s. 6d. or whether the Purchase Tax should be put in its new form or in the old form under the proposed Bill, but how is the country to meet this enormous expenditure which, as he describes it, is something over £50,000,000 a week. That problem, I agree with the Chancellor of the Exchequer, is probably insoluble at the present time in the sense that it is not possible to put forward a clear statement of how it will be met to-day, but

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  that does not mean that we shall not be able to face the expenditure. The resources of the country, I have no doubt whatever, will meet that expenditure in the end. What we are first concerned with however in this Committee is the effect of the immediate expenditure upon the country and the daily lives of everybody in it.
  If the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) is correct in his figures—and I have no doubt that he is—there is a gap of some £600,000,000 which will have to be met by borrowing from the banks. My estimate of the figure would be somewhat larger than that, but the exact amount is not material. The point is how are we to avoid inflation so long as there is that margin which cannot be met either by borrowing or by taxation? There is a definite limit to taxation. I am always amused—and I will give the benefit of this to hon. Members opposite—when I hear Chancellors of the Exchequer saying that the Income Tax has arrived at a figure which makes it impossible for it to go any higher. You can say that of any taxation. Actually you can impose any tax up to 19s. 11½d. or 20s. in the £ if you choose. That is not the point. The point is that if you put taxation beyond a certain proportion of income or earnings there is no initiative or enterprise, and this apart from the destruction of happiness and comfort. These taxes have no bearing on the real war problem of expenditure. Doubling the Income Tax would make little difference to bridging the gap between revenue and expenditure if the latter should continue at the present rate for a long period. This Budget imposes excessive taxation. It is excessive if you are to treat the country as a going concern. It has been said that it is much too expensive to die; it is much too expensive now to live. Clearly the whole system of taxation has got beyond us. We wish presumably to look at it from the point of view of a going concern, and we want to try and balance our income and expenditure.
  In doing this, we also wish to avoid inflation, because of all the circumstances which would follow from uncontrolled inflation. I am not, however, one of those who believe that all inflation is necessarily evil or necessarily uncontrolled. I think it is possible to some extent to control it, but the situation in which we
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  are placed to-day is that we are trying to finance the war without inflation, whereas in the last war we definitely inflated. Inflation, if it can be controlled, has this advantage, that when people are bearing heavy burdens in the shape of personal losses, sorrows, reduction in income and so on they have for a time at least the feeling that they appear to be richer and are able to handle more money. In this war we have definitely gone out to avoid that position. We have cut down incomes and now we are going to cut down consumption, but there is one difficulty in dealing with it on the present lines which we have to face. The income of the rentier, the net income from invested funds, and that of the bulk of the salary and wage-earning class is going to be much reduced, but there is one part of the community—a small part —whose incomes are not being reduced, but are being very much increased. There are certain classes of labour in this country who are being much overpaid by overtime, Sunday work and the like, and they are a danger to themselves and to the vast majority of their fellows who are not in that position. This is one of the matters which the Government will have to watch, and upon which action is required. If nothing is done, it is possible we shall have serious unrest. I do not want to go into any details about it here, because this is not a suitable opportunity, but I suggest to the Government that they will have to take the greatest care to see that there is not great inequality in the reward of labour in different classes of the community. By that I do not mean different social classes, but different sets of people in the same classes working under very similar conditions and probably all doing excellent national work. That is one of the conditions that the Government will have to watch, and a continuation of the present system may bring about inflation whether we like it or not because the people who may be getting excessive wages will make purchases and the money thus spent may in itself bring about inflation.
  I want to say a word regarding the statement of the Chancellor of the Exchequer that he was going to fill part of the gap to which I have referred by the sale of securities and by use of the unexpended balances of the Indian and Dominion Governments. That is surely very much a makeshift. It will not help

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  very far, because sooner or later these balances will have to be repaid in sterling and, therefore, to me that is very much a matter of a few months only. I hope very much that the right hon. Gentleman is not looking to that source to help him to fill any material part of this very large gap between our totals of income and expenditure.
  There is another detailed point to which I want to refer for a moment, and that is the question of the collection of Income Tax from workers at the source. That sounds a very effective proposal. It has been discussed on previous occasions, as my right hon. Friend knows, in past years and at first sight there seems to be everything to be said for it. But let us look a little further to see how it is going to work. I do not want to weary the Committee to-day with details but I want to mention one point, namely, What is to happen in regard to refunds which will play a very important part in connection with taxation at the source? Take the case of a man who has deducted from his wages a fixed amount each week or month and who is, in fact, entitled to allowances for family or other reasons and has, therefore, a claim upon the Exchequer. It is true that his employer, who collects the weekly or monthly amount, will have nothing to do with the position upon which that man's final tax assessment is made up, but it is equally true that there will be a great deal of work for somebody in order to secure the money the workman has overpaid.
  Mr. Loftus: This is an important point. I understood the Chancellor to say that the assessment would be made out by the Income Tax authorities with all allowances deducted and that the net figure would be handed to the authorities.
  Sir J. Wardlaw-Milne: Perhaps I did not make myself clear; I am aware of that but, unfortunately, that does not cover the whole case. Conditions under which an assessment is made out vary from year to year and during the Income Tax period. In all classes there are smaller or larger savings of invested funds. These amounts are outside earnings and will have to be taken into consideration in assessing Income Tax. They may vary year after year, and the matter is not, therefore, so simple as at first sight
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  appears. I think that this question of refunds is one which will give the Treasury a good deal of difficulty.
  Sir Frank Sanderson: Is my hon. Friend aware that the total number of repayments to-day is approximately the same as the total number of receipts, so that it really would not make a great deal of difference? It is merely a question of filling in a form in a different way.
  Sir J. Wardlaw-Milne: Perhaps it is again my fault that I do not make myself clear on this point, otherwise I am sure my hon. Friend would have followed me. I will try to make the point again. As I see it, it is nothing to do with what the system has been up till now; in future you are to get money paid weekly, and that money when totalled up, in a good many cases, will vary from the final amount due by the taxpayer. I think that is an important point and it is one which, clearly, will have to be discussed when we come to the Finance Bill.
  Sir F. Sanderson: I think it would be universally accepted.
  Sir J. Wardlaw-Milne: I am not against the principle. I am trying to ensure that the system of refunds will not overburden the scheme.
  There is one other thing I want to say to my right hon. Friend which I think is worthy of consideration. I think one of the mistakes we have made so far is to make our Excess Profits Tax 100 per cent. I have always believed that it was important to let people make as much money as they could, however much you had to take away from them afterwards. If you prevent them from making money at all, you will destroy the goose that lays the golden egg and put an end to initiative and enterprise. But there is another reason why I think the actual figure of 100 per cent. is unsound. I do not want to give the impression that I think a tax which takes away practically all excess profits due to the war is bad, for that is not my view. My point is that we defeat our own ends by taking away initiative and because, in the working of a 100 per cent, tax, it is well known to-day that in some businesses which are subject to this tax, a considerable increase in expenditure will be met with. I will not put it in any greater detail than this. There may be a considerable increase in

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  management expenditure, and, if so, it is an increase that the Government, with all their resources, will not be able to track down or question. It will be impossible to say that the increase in most cases is not genuine, and I think we would not have been subject to that if we had been wise enough to say that the tax should be 90 per cent, or 95 per cent. but not 100 per cent.
  Mr. Glenvil Hall: Does not the argument of the hon. Member cast a very severe reflection on the community at large, especially as the men going into the Forces have to give 100 per cent.?
  Sir J. Wardlaw-Milne: I am not casting a reflection on anybody. I am dealing with the matter of human nature. It may be almost impossible to say that an increase is not genuine. There have been so many changes caused by the war, men going to the front, new appointments and so on, that one cannot take past conditions as a guide. That is why I think we would have been wise if we had made our Excess Profits Tax slightly lower.
  Sir Robert Tasker: How can you stop dishonesty?
  Sir J. Wardlaw-Milne: It is not necessarily dishonesty at all. There may be a tendency to be less careful about increased charges when you have no interest in the result, and you are not nearly so keen on economy when your pocket is not affected. If you make it worth while for people to be economical, they will be economical, but if you take away the personal interest, the same care will not be taken. However, these are merely criticisms which I wanted to make on my right hon. Friend's statement and points to which I wanted to draw his attention.
  The main point, if I may revert to it, is that we have to face this very large difference, whether it is £600,000,000 or more, between the amount we can raise and the amount of our expenditure. I think that question is what must give the Chancellor the greatest concern. I have no doubt we shall face it and that we shall find the money, but I doubt whether we shall be able to find it without having to embark on some form of inflation. The amount of money borrowed from the banks is already considerable; the increase in our note issue is also considerable, and these things, I fancy, must be giving the
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  Chancellor a good deal more concern than the mere matter of whether the Income Tax rate next year is to be 8s. 6d. or 7s. 6d. It is not for any private Member to put forward a new system of finance which would lift us out of our difficulties—certainly it cannot be done at a moment's notice—but I think the whole of our system of raising money will have to be looked at after the war, and probably before the end of the war, with new eyes and from a new angle. I do not think we can continue on the basis upon which we have worked for so many years past; the days of "soaking the rich" have gone long ago, and, on the other hand, if you put your indirect taxation beyond a certain figure, you will make life so bitter for a large number of people that you will destroy the greatest reserve in the country's strength—the contentment and determination of the people as a whole. One thing is certain; equality of sacrifice is the essential basis of our national effort. These are not easy problems, and our sympathy must be with the Chancellor in a task which has never been faced by any of his predecessors in the history of this country. I can only say, in conclusion, that while I congratulate him on the achievement of a difficult task to-day, I do not envy him in what is ahead, because, as he has truly said, this is but an interim Budget. It is not only the question of this Budget but what is to follow that must be his concern from the time he leaves this Debate to-day. Like every other Member of the Committee, I wish him well in that task, and I know that in the serious burdens he will have to lay upon the country he will have whole-hearted support behind him both within and without this House.
  6.58 p.m.
  Sir Percy Hurd: The spokesman from the Front Opposition Bench has been urging the Chancellor to push taxation still further to the very limit of human endurance. I gathered from the interesting speech to which we have just listened that we had nearly reached that point now. The Chancellor himself said that we must expect further burdens, but he gave us this comforting thought. He thought these burdens would be borne with equanimity if the community had the assurance that there was no waste

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  and no frittering away of the huge revenues which have been collected.
  I want to bring to the notice of the Committee one direction in which our national spirit has been considerably damped by one of our present methods. The late Chancellor chastised us with whips, and the present Chancellor is chastising us with scorpions, but I believe the chastisement will be borne with resignation because of our feeling that we are contributing in our small way towards the great fight for Christian civilisation. Even those most hardly hit have a sense of exhilaration because of the belief that they are taking part in this great struggle, but it is on the condition that there shall be no frittering away of our revenues. There must be greater resolution to stop waste and re-establish and strengthen the self-managing capacity of the English people. We are frittering that away by the excessive interference of Whitehall. I speak with the memory of a meeting of a town council, of which I am a member, and which was held last night. We had before us the monthly report of the various spending committees. What is the method by which we are frittering away a large part of our revenue? I will take two or three examples by way of illustration.
  There is, first of all, the question of air-raid expenditure. There was a question of providing cleansing facilities at an air-raid post. This is a town council representing 100,000 ratepayers. They are responsible, they are full of a sense of their duty and anxious and determined to fulfil it, and they hold a very high record for efficiency and economy. But this high authority, elected by the ratepayers, has to go to the Middlesex County Council for sanction for this very small sum, and the Middlesex County Council has to go to the Ministry of Health to get its consent. The Committee can imagine the correspondence, the interviews and the delays that are occasioned. There was another case, a question of providing water closets for a certain ambulance station. The town clerk reported that he had obtained the sanction of the Middlesex County Council for the expenditure and, if the Home Office approved it—in this case an expenditure of £30—it would be sanctioned.
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  Right through the report you get this same over-elaboration of internal machinery. The Chancellor will tell me that there must be control where public expenditure is involved. Let us have control, but do not let us imagine that the old methods of control are suited to our conditions of to-day. They are not, either on the ground of quickness, efficiency or economy. What is to prevent the Ministry of Health saying "There are certain municipal authorities having a certain rateable value or a certain population, and there are certain duties which we must lay upon them. They are clearly defined. We know what they are, and we know the limits"? Why should not a formula be established by which the Ministry of Health will say, "There is your sphere of action. This is a formula which, on a basis of population or rateable value, will give you a certain block sum. It will be your duty to delegate a large part of those functions to various town councils." Their sphere of action is also limited. They know what they have to do and, instead of every meticulous item having to pass through this bottleneck of the Middlesex County Council and then up to the Ministry of Health, the county council would say, "You have these duties to do. We are going to allocate a certain block sum for them. You will not have to come to us for 20." There are 13 such cases in this one month's report. The volume of correspondence and the amount of delay occasioned by this is colossal. This is only one authority. The same principle is applied throughout the country to every municipal body.
  Cannot my right hon. Friend devise some means by which this waste of time, creation of irritation and damping down of initiative and effort are put a stop to? Instead of treating big municipal authorities like school children, why cannot they be treated as responsible authorities anxious to do what they can to help forward the war effort? I do not believe it is beyond the capacity of the finance officials of the Ministry to devise such a formula, applicable in the one case to the Ministry of Health in its relations with county councils and in the other to the county councils in their relation with smaller bodies, enabling the municipalities to bring about a higher effort in forwarding the national purpose. We know

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  how our Departments are overworked. Why should the additional work be thrown on their shoulders? Municipal staffs are greatly overworked. Mr. Priestley on Sunday gave a broadcast and started it by relating his experience of an interview with a high civil servant, and he showed what an entirely different point of view was that of the ordinary citizen from that of the highly placed official. They ended up, not by blows, but with very nasty language one towards the other. It is no good getting angry. It is no good abusing civil servants. They are performing a high duty in a very fine spirit. It is only necessary for someone regarding the problem from the point of view of my right hon. Friend to view it in the light of new conditions and requirements, relieve these civil servants and municipal officers of all this worry and give them a system more adapted to the needs of to-day.
  7.6 p.m.
  Mr. Tinker: I am sorry that the Chancellor of the Exchequer did not in a sense make a table of his Budget. I could not follow exactly what we are going to borrow. We are spending about 1,60,000,000 a week. That would mean about £3,120,000,000 in 12 months. We shall get a certain amount by ordinary taxation, and I understand that some £2,000,000,000 will be required from our savings. The Chancellor did not tell us what is expected from that. He hinted that it might mean what is called inflation. Will someone later on examine what inflation means, and tell us? We hear about the dangers of inflation, but we never get any further as to what it actually means. I hope that some financial pundit who knows all about these things will, while the Budget is passing, tell us exactly what it will mean in this country, isolated and living practically within itself. It is understood that at the moment we have the money in the country to meet any call within reason. We keep taxing this and taxing the other. I think in a crisis like this we ought to get right down to the bottom and start up from the base.
  I have a suggestion that I should like to put before the Committee. We ought to examine what is the unit of cost of a family—food, clothing and comforts—multiply that by the number of the household, and then give to each family that
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  amount each week, or at least, if the head of the family gets that in wages, that is his allocation. When everybody has been put on the basis of being sable to live, all income above that level should be taken away by taxation for the purpose of meeting the exigencies of the war. If all that amount were not required, it could be returned in proportion to what had been paid; if all were required, and de standard that had been fixed was too high, the standard would have to be lowered. We have to remember that we are now fighting for our very existence, and whatever may be the hardships that we have to face as a country, those hardships must be faced by every individual. I do not think any individual—certainly no individual in the lower ranks—would complain of that method as long as he knew that those above were not getting wealth easily at a time like the present. I should like to give the Committee an example in connection with the talk about economy and the criterion of spending power. Last week, I read in a London newspaper of a man who had been to a certain restaurant, and who said, "They were still able to put on a lunch at 8s. 6d. per head, and the place was packed." I ask the Committee to think what must be the effect, when we are talking about economy and the criterion of spending power, if it is spread throughout the country that a certain restaurant is able to put on a lunch at 8s. 6d. per head, whereas a working-class family never gets anywhere near that at any time. At a time of grave crisis, it is wrong that that sort of thing should happen in any part of the country.
  When we have to meet this tremendous expenditure, let us at least try to curtail expenditure where it ought to be curtailed —among the better-off classes. We have heard it said many times that we cannot soak the rich any more, but I always find that there is a class of society which lives very well indeed after all the soaking. The soaking does not seem to trouble them very much, and cannot ever have gone very deep. These people live very well indeed, and although that may be all right when things are normal, it is not right in time of war. We are sending soldiers to the front, and they are living on a certain stated amount; they are fighting for us, and defending the country. Is it wrong to ask that everyone should be in the same position as they are? We

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  who escape the dangers of being at the front ought not to have a better standard of life than the soldiers have. I put this plainly to the very rich people—they know as well as I know that it is touch and go as to what will happen in this country. I believe fervently that we shall win, but let us look at the matter from the other side. If we happened to lose, what would happen to us? Those who conquered us would take everything away; there would be little difference with any class of society, for we should be right at the bottom, without any freedom and living on a very hard standard of life. To prevent this happening, we have to make every sacrifice we can.
  I appeal to the Chancellor not to be squeamish at this time of crisis, but to try to work a scheme on the lines of that which I have advocated. There is no need for him to ask for anything; he can get the money simply by taking it. The Chancellor and hon. Members opposite say to the working classes, "We want your savings, and we will pay interest upon them." That is very attractive to a working man. He may invest £30 or £40, which will bring him a little return. But I want the Chancellor to remember what he is doing with this huge borrowing. Sums of £30 or £40 are as nothing compared with what those with money invest, and when the time comes to straighten out these things, those small investments will be paid many times over to the richer classes who have invested big amounts. The question of borrowing money at a time like the present ought to be put out of the way altogether. Whatever is wanted by the State should be taken. Soldiers are sent to serve at the front. The Minister of Labour can transport labour from one part of the country to the other. He is doing this. Wherever there is a shortage, labour is sent. The rights of freedom of which we boasted in times gone by have gone by the board. I agree with this. We must utilise all our resources. If that be so, and if there is money in the country, as there is—I have figures showing that the total of private fortunes in this country is £25,000,000,000, four-fifths of which are owned by 5 per cent. of the population—and if my contention is right, the money ought to be taken, just as human labour is taken to carry on the work. I want the Chancellor to be more pugnacious. I ask
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  him to make no apology, but to demand the money. Those who want to win the war will say to him, "Good luck; we would like you to get all you can to carry us to victory."
  7.16 p.m.
  Mr. Lipson: I think there will be general agreement with at least one sentiment expressed by the hon. Member for Leigh (Mr. Tinker), when he said that, however grim may be the taxation we are called upon to pay to-day and whatever taxation the Chancellor may impose in future, it will certainly be less than we should have to pay if Hitler were to have his sweet way in these islands. On that account alone I think the people of this country are quite willing to bear whatever sacrifices they may be called upon to make to enable us to win the war; but of course, this does not necessarily mean that they will approve of every individual proposal for taxation, for naturally, they must reserve the right to criticise.
  I am very glad that the question of economy has been raised in the Debate this evening, but I think that what has been said shows how easy it is to talk economy in theory and how difficult it is when one tries to give an example of where economy should be practised. I sympathise with what was said by my hon. Friend the Member for Devizes (Sir P. Hurd) when he spoke about his local authority and how it had to go through certain processes before it could spend certain moneys as it wished to do; but I am afraid that if the proposal which my hon. Friend made were adopted, it would result, not in less expenditure, but in very greatly increased expenditure. I think one cannot leave it to the Ministry of Health to decide by means of a formula how much will be spent by any local authority. Surely, in the interests of economy, it is the local authority itself, which knows all the facts, that must determine the amount of its expenditure. But as far as general expenditure is concerned, there is no need for a local authority to consult either the Ministry of Health or any other higher authority. It is only when it seeks to borrow money or to go outside its ordinary routine expenditure that it has to obtain that authority.
  Sir P. Hurd: I am afraid my hon. Friend is out of date, for if he will look at the report of any toxin council, he

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  will find every item of air-raid precautions expenditure, for instance, has to be sanctioned by the scheme-making and grant-making authority, as well as by the Ministry of Health.
  Mr. Lipson: I think that matter comes under one of the special new services in respect of which I made an exception in what I said. On the whole, it is wise to leave to the larger authority in an area to decide the amount of expenditure on a service of this kind. I also have had some experience of local government, and my experience goes to show that, however small a local authority may be, it wishes to spend as much as possible on A.R.P. If every authority is allowed to do that, the total expenditure throughout the country will be greatly increased. Therefore, there must be some more responsible body to examine recommendations of particular local authorities and to decide whether or not the expenditure is justified. Although such a procedure might involve a certain amount of correspondence and delay, I am quite satisfied that, in the end, it makes for greater economy.
  Sir P. Hurd: Does the hon. Gentleman really suggest that the town clerk of a great borough like Hornsey is unable to judge proposed expenditure as well as a gentleman in Whitehall, especially on a formula which is strictly limited?
  Mr. Lipson: There may be particular instances where a local authority might suffer by the present arrangement, but the system has been devised in the interest of the nation as a whole. Generally speaking, I think it is a good thing that there should be some kind of formula for new expenditure of this kind. For example, with regard to expenditure on air-raid shelters, it is, I think, important that some authority, with knowledge of all the facts, should lay down the basis on which expenditure should be made. Whatever else the change proposed by my hon. Friend would produce, it would not result in less expenditure.
  The hon. Member for Leigh asked whether some financial pundit would give him an explanation of what inflation is, and what its effects are likely to be. I am by no means a financial pundit, but I will try to tell him what I understand by inflation. It may be that I am somewhat of a child in these matters, and
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  therefore shall have to put it simply and clearly, I shall speak the language which the hon. Member will understand. As I view the financial position at the present time, it is that, owing to the war, the country is spending a great deal more money than usual, and in consequence a great many people are earning more money. People who were unemployed are now at work, and people who were working for a certain number of hours are now working longer hours, and in many cases there has been an increase in the rate of wages. The result of this is that there is more money in circulation. At the same time, in the national interest it is necessary for the State to limit the sale of certain articles. One of the reasons for this is that certain articles of consumption have to be bought overseas, which means risking men's lives. Again, there is the necessity of saving shipping space and foreign currency. The net result is that while purchasing power has increased, there are fewer articles on the market. There is more money about, and there is an increased demand for those fewer articles. If people start competing for those articles, the inevitable result will be that prices will go up, and that will produce inflation—that is to say, the pound will not buy as much under these conditions as it did before.
  How does that affect the people? It does so in this way. For instance, a great many of my constituents live on fixed incomes, and have not had their incomes increased as the result of the war—in many cases they have actually suffered a decrease because their dividends are not forthcoming as before. The Chancellor of the Exchequer has also made bigger demands on them. Inflation will, therefore, fall very hardly upon them, and very hardly upon all people with limited means, and it will deprive the working classes of a great deal of the advantage of their higher wages. It is not the amount of money one receives that matters, but what that money will buy. In the interest of all classes it is necessary to prevent inflation. Incidentally, inflation would add to the difficulties of the Chancellor of the Exchequer, because not only would the ordinary prices of articles go up, but also the prices of everything we have to buy with which to wage the war. If inflation took place, we should be in a much more serious position, and therefore one test of this Budget, and all

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  subsequent Budgets, must be the extent to which it prevents inflation.
  The right hon. Gentleman the Chancellor of the Exchequer pointed out that he is concerned with the present position owing to the extent of the gap, estimated at something like £600,000,000. That is a problem which one day will, I think, have to be faced. To my mind, there are only two ways in which to deal with it. One is by the adoption of Mr. Keynes' plan of deferred pay—I would welcome that plan, not only for its immediate advantages, but also because after the war the people who received this money would have something with which to face the difficulties of the post-war period. The second method is by a tax on wages. So long as we leave this purchasing power free, we shall not be able to prevent consumption, and the example given by the hon. Member for Leigh, in which he drew attention to people who paid 8s. 6d. for a lunch, is an example drawn from only one class of society. The same thing will happen in all other classes where there will be equally unwise forms of expenditure. Therefore, I believe the only real way is for the Government to adopt one of these two alternatives, but apparently public opinion is not yet ripe for that, and I presume we shall have to wait.
  This Budget has been described as a conventional Budget, and while the country will receive it with a feeling of satisfaction, I also think it will be received to a certain extent with a feeling of relief. I regret that no concession is made to soldiers in respect of postal charges because I can assure my right hon. Friend that there is a very strong feeling throughout the country on this matter. I also regret that no concession is made to soldiers with regard to the Tobacco Duty. I do not know what it would cost to supply a ration of tobacco to serving soldiers without payment of the last two duty increases, but I am sure it is something which should be done. If the Chancellor does not make some concession on these lines, he will find that later on there will be an overwhelming demand for increases in soldiers' pay. The Chancellor must ask himself which course will prove the less expensive. I must also express my regret that my right hon. Friend did not put an increased tax on whisky. The Beer Tax will, I
  692
  think, be received with much greater favour if the people know that at the same time spirits are being taxed. As my right hon. Friend is not proposing to do this at the presnet time, I hope he will bear it in mind for his next Budget.
  I am pleased that the original Purchase Tax Bill has been dropped, for I thought it was a thoroughly bad Bill. Until we have the Schedule and know to what this revised tax will apply, it is difficult to express an opinion. I am, however, surprised at the amount that the Chancellor is expecting to get. It would seem from the figure of £110,000,000 that he can hardly be expecting a very great reduction in consumption. I was sorry that, as he expected to get such a large amount, he did not agree to exempt books and newspapers. I would like to ask him whether he is imposing this tax on books and newspapers because he wants to restrict consumption. Does he want people to read less? The amount involved cannot be very great, but the principle involved is a vital one. This is an old battle that has been fought out before, for it really is a tax on knowledge at a time when there should be no such tax.
  Sir Stanley Reed: Does my hon. Friend ask the Committee to believe that one-tenth of the matter published as books to-day is any contribution whatever to knowledge?
  Mr. Lipson: That is not the point, because it is proposed to tax the good with the bad. The good is so vital to the nation, particularly in these days when we have to face propaganda from the Continent against free thought and the freedom of the human spirit that we should be reluctant to take such a step as is proposed by this tax. This proposal is also particularly hard on newspapers at a time when their burden has become very great and when we shall have to rely more and more upon books and newspapers to maintain the spirit of our people in this struggle. I hope that the Chancellor will not think I have been unappreciative of the efforts that he has made. I can assure him, in common with all other Members of the Committee, I will give him any support I can to enable him to use our financial resources to bring us safely and victoriously through the war.
  7.34 p.m.
  Mr. Gallacher: The interim Budget introduced this afternoon, and especially the speech that accompanied it, brings out clearly the terrible impasse to which the capitalist system has brought the people of this country and the utter impossibility of extricating them from it, while the capitalist class and capitalist property relations continue to determine the fate of this country. The Minister made a remark to the effect that this war, unlike other wars, cannot be paid for by the taxation of the rich. Have the rich ever paid for any war? In every war that has ever taken place the rich have piled up enormous fortunes. I remember hearing how after the last war the benches opposite were packed with big fat men who had piled up fortunes out of the people. In every war the masses of the people have had to bear the burden, and they will have to bear it in this war. This Budget definitely places the burden upon them. An hon. Member who spoke from the well-packed Liberal benches made a sinister remark when he said that the Minister was on trial. It was sinister because I gather from a book that has recently been published that the Minister is one of the guilty men.
  The Chancellor presents the question in this way. We have to concentrate great masses of our forces and energy on war production. We have then to direct a great mass of our forces and energy to the export trade which is necessary to assist in the winning of the war. Then, as the "orphan of the storm," comes consumption goods. But what is the war effort for? Is it to save the property-owners and the financiers, or are we to believe, as we are continually being told, that this is a people's war, and that it is to save the people? If, however, during the process of saving the people and expending all their energies on war and export production you cut their consumption goods, you will starve them. Cannot the Minister understand that in a war such as is contemplated and in a test of endurance such as lies before the people of this country the stamina, health and morale of the people will be the determining factor. It was the home front that defeated Germany in the last war, yet here, without the slightest consideration of the character of the situation which
  694
  will develop, the Minister glibly talks about cutting down the consumption goods of the masses of the people.
  Before there is the slightest thought of cutting down the consumption goods of the masses of the people, every luxury hotel and wealthy house in the country should be closed down. Why should we have wealthy luxury hotels and big country houses with their week-end parties, and the rest of it? Consider the consumption goods that are squandered in these places. The Minister cannot tell us that the luxury hotel or the big country house entertaining guests at the week-end is essential for the national effort. Country houses should be used for evacuated children, for health centres for the workers who will be affected by the long hours they are working, and for soldiers who are in need of rest after being wounded or sick. All these luxury houses should be taken over and the luxury hotels closed and used for other purposes.
  Mr. Stokes: Does my hon. Friend suppose that if we closed all the hotels and luxury houses in the country, it would increase the amount of money in circulation for the purchase of consumable goods?
  Mr. Gallacher: I am not suggesting it would increase the amount of money in circulation. I am suggesting that it would result in more consumption goods for the masses of the people. Until the luxury houses and the luxury hotels are closed it is a crime to talk about interfering with the consumption goods of the masses of the people, whose health and well-being should be our consideration.
  Mr. Leslie Boyce: In so far as these consumption goods, as the hon. Member calls them, are rationed, we shall not get any more or less consumption whether we close down those places or not.
  Mr. Gallacher: If they were closed down you would increase the goods available for other people.
  Mr. Boyce: But there would be the same number of people to feed, whether they were living in those houses or not.
  Mr. Gallacher: A lot of other consumption goods are not rationed. They are alternatives and substitutes, which are being used continually in luxury hotels

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  and houses. Read the advertisements in the papers. They show how in these hotels and luxury restaurants they have wonderful substitutes which add to the rations and thus provide very special lunches and dinners. All those should be at the disposal of the masses of the people, in order to ensure the absolute minimum of interference with what is necessary for the maintenance of health.
  Mr. Stokes: May I interrupt again? I do not join issue with the hon. Member at all as to the better distribution of wealth, but would he not do better to direct his atention to the distribution of it as controlled by the banks?
  Mr. Gallacher: I am coming to the banks and the land. In view of all the talk there has been about everybody having to make sacrifices, I ask the Chancellor to tell us what sacrifices the banks are making. Is it not the case that the banks are piling up enormous fortunes, and not only the banks, but other concerns which are represented on the other side of the House? We have had much talk about heavy taxation, about the Income Tax at 7s. 6d. in the £ and then Super-tax, but despite all this heavy taxation, the wealthy in this country are not becoming poorer, but more wealthy. More millionaires are being created all the time. That is what is going on. What are the banks doing? In agriculture, one of the most important assets of the country, the banks will not lend money to farmers at under 5 per cent. The banks are contributing nothing, but are bleeding the veins of the people of this country. Whenever the Chancellor talks about property, land or capital they are always regarded as sacred. How easy it is for the Chancellor to find reasons why nothing should be done about the land. How easy it is for him to offer reasons, which are thoroughly acceptable to those on the other side, why nothing should be done to interfere with capital.
  Mr. Glenvil Hall: Are we to take it now that the taxation of land values is part of the Communist programme?
  Mr. Gallacher: The interjections of the hon. Member are generally of a character which are not intended to be helpful. They are intended to be very smart, but I do not like smart men who are not
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  smart. When it is a question of the land or capital, the Minister can make all sorts of excuses for not doing anything; but let us remember that when, in France, it came to a question of saving property interests or sacrificing France that the ruling class there sacrificed France. Many times in this House I have called attention to the fact that there were people in this House and in high places in this land who would sacrifice the country rather than sacrifice their property. If the people of this country are to be saved, then the whole system must be changed, but there are people on the other side who would rather lose the war than lose their property.
  Mr. Craven-Ellis: Name them.
  Mr. Gallacher: I could name a whole lot.
  Mr. Craven-Ellis: We must have the names. If the hon. Member makes accusations about Members on this side of the Committee, he should give their names.
  Mr. Gallacher: Read their records. Take the men who supported Franco, Hitler and Mussolini in Spain.
  Mr. Craven-Ellis: Give the names.
  Mr. Gallacher: Take the men who, when it was pointed out in this House that they were betraying their own country, when they were betraying the Spanish people, the Members who supported and justified the sinking of British shins and the killing of British sailors. Take their records. The hon. Member knows them as well as I do. Their records are there. One of them is going to get up now.
  Mr. Henry Strauss: Would the hon. Member tell the Commitee whether the Communist party is now in favour of fighting this war?
  Mr. Gallacher: Again the intervention is quite irrelevant.
  The Deputy-Chairman (Colonel Clifton Brown): I do not think the hon. Member for West Fife (Mr. Gallacher) need answer that question, because it is quite outside the Debate.
  Mr. Gallacher: I drew attention to the fact that the ruling class in France, when it came to a question of the interests of property or the sacrifice of France, sacri

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  ficed France. If the people of this country are to be saved from the terrible fate which threatens them and which has been brought upon them by the capitalist system, then the land has got to be taken over, and all rents and all money associated with the land. Why should it not be so? "Ah," they say, "that is a big question." There are so many of the aristocracy in this country who have an interest in the land that you cannot interfere with them. There would be hardships. [An HON. MEMBER: "And many of the working classes."] There should be conscription of wealth. All the wealth of the wealthy should be taken over. All the private fortunes should be taken over. It is all right for Members on the other side who have big fortunes. They can carry on. But when the war is over what shall we get? There will be a mass of poverty-stricken workers, though some of them, we are told, will be not so badly off because of their savings. Masses of unemployed and big wealthy families in the country after the war. Is that what we are to get?
  I say that the wealth of the wealthy should be conscripted, and that the land and all land values, rents and other money associated with the land taken over in order to ensure the welfare and the defence of the people. If we did that, if we took over the land and all associated with it, conscripted wealth and put a heavy tax on capital there would be hardship, and the Minister says that before we could do that, there would have to be an examination of the question. We have had several discussions on the question of dealing with aliens. The Minister for Home Security says that it is necessary first to gather up all the aliens and put them in detention and then hard cases can be considered, because that is in the public interest. But we cannot take over the land or take over capital without a thorough examination, which would take such a long time that the proposal would be of no value. Take over the land and capital, and the wealth of the wealthy, and then make any examination that is necessary. If there is hardship, we can introduce the people concerned to the public assistance committees. You can never solve the problems that confront the people of this country while you maintain the present arrangement of private ownership in land and in the productive forces of the
  698
  country. Think about some of the suggestions that have been made in regard to tobacco, postage and many other things for the soldiers. I am a victim of the heavy taxation upon tobacco, but it is a shame that the soldiers should be so treated. Soldiers cannot afford heavy costs. It is obvious that steps should be taken to remedy their grievance.
  The question to which I was about to call special attention is that of the Purchase Tax, a tax which is directed towards cutting down the consumption of goods by the masses of the people. This consumption tax does not affect in the slightest degree people with wealth. They may spend more money, but there is nothing that they cannot buy, whereas the masses of the poor people will be so seriously affected by the Purchase Tax that they will not be able to buy the things that are necessary. Remember the problem that confronts young couples who want to marry. They cannot, at the present moment, get married in many cases for lack of housing. That is a serious problem, but now you will add to it, and to the other difficulty associated with it—high rents—by a heavy tax on furniture. This will mean a serious handicap for most young working-class people in this country. The Purchase Tax is, by its whole character, part of the process by which the ruling class of this country are putting the burdens of the war on to the mass of the people.
  That is why the Communist party demand a people's Budget and a people's government composed of those who have no other concern but the welfare of the people. We do not want a bunch of people who have big financial and industrial interests, which they put first, as happened in France and will happen here. We want to see a government in which every member is concerned only with the welfare of the people. Only by getting such a government and a people's Budget will the health, welfare and real defence of the people of the country be guaranteed. I was in my constituency all last week looking into the questions of A.R.P. and Civil Defence. Raiding planes come that way, and when bombs drop half a mile away, houses are shaken. There is a necessity for adequate protection, but how can we get it while land and wealth are private property? There is any amount of wealth in the

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  country which we cannot get distributed. You can go to my constituency and find that not half enough has been done to ensure protection. The representative of the county council and the representative of the Ministry of Home Security recognise that much can be done, but it requires finance. That is why I say that, whatever may be necessary for war production and export trade production, the one thing which is absolutely essential is that the consumption of goods by the people should be maintained, and that every sort of wealth in this country, whether from land or capital, must be taken over and used for the health, welfare and defence of the people.
  7.54 p.m.
  Sir Stanley Reed: I listened with some alarm to the remarks of my hon. Friend the Member for Cheltenham (Mr. Lipson) protesting against a Purchase Tax on books as though it were a tax on knowledge. I ask how is it possible that a man of the great experience and freshness of my hon. Friend can seek to delude this Committee into that belief. I can only conclude that he buys a book only when he knows it is a good one and that he has never been a victim of the stream of semi-garbage that pours out from the publishing houses and which, I hope, will be reduced as a result of the tax. The good books will be so much more in demand that they will be very well able to pay the tax. It will not be bad if, as a result, the new generation are thrown back a little upon our classics and if they learn what English literature really is.
  The point I particularly want to raise is that of the change announced by the right hon. Gentleman, in the collection of Income Tax on all salaries at the source. That is one of the greatest reforms introduced within my memory in regard to Income Tax. The right hon. Gentleman said that the rate of tax would be fixed by the Income Tax officers, that the pay and salaries would be charged at that rate and that there would be no disclosure of the other means of the individuals concerned; but surely if a higher rate than the standard is fixed, that is the rate at which the deduction is made from the salary, and it follows that information must be given that the individual has sources of income outside his salary. I
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  lived for many years in a country where this deduction of tax at the source was invariable and had been in practice for half a century. The tax was always deducted at the standard rate, and any difference between that rate and the taxation upon other sources of income, was charged at the end of the year and was levied separately. The system worked with extraordinary smoothness. I congratulate the Chancellor of the Exchequer on taking this great step. It will alleviate in a very marked degree the burden of tax falling upon the salaried worker.
  Another point I want to raise is in reference to the remarks which fell from the hon. Member for Leigh (Mr. Tinker). He is always an attractive speaker because he is perfectly sincere. Like all of us, he is groping after the truth in these difficult financial matters, and although we may approach it from different angles we all have the same object in view, which is, How can we best make our financial contribution to the winning of the war, if we are not able to participate in a purely military capacity? He raised the question of the aggregation of capital in certain individual hands. As I go about the country I find that few people realise the tremendous financial revolution that will be caused in the financial structure of the country by the war and our method of paying for it. What is much of the capital that we talk about as accumulating itself in certain hands? What is the capital value of a great house to-day? It is what some people will pay for it, and often that is nil. What is the capital value of the very large number of moderate sized houses? It is what some people will pay, and that again is often almost nil. One talks about a capital security. What is a capital security? It is a piece of paper which is a promise to pay, and it is no more than that. If a person promises to pay and cannot or will not pay it disappears. A very large amount of what we call capital at the present time may have very little value indeed in the great reconstruction period which comes after the war.
  Mr. Stokes: Would the hon. Gentleman allow me to interrupt him? When he says that these houses and estates have no value, does he mean to say that if I offered the owners nil for them they would transfer them to me?
  Sir S. Reed: Substantially. There are to-clay many large houses which you could get for nothing if you undertook to pay the rates and ground rents on them, and the owners would be only too glad to be relieved of the burden.
  Mr. Glenvil Hall: May I ask the hon. Member whose fault it is that rates are paid on these houses?
  Sir S. Reed: The people who own them cannot do it.
  Mr. Hall: It is your own party.
  Sir S. Reed: I am not talking about party; I am talking of facts. We are trying to consider how we can best make our financial contribution to this war. If I had scrip nominally worth £1,000 you might say that I have £1,000 in capital, but what would happen if the issuer could not or would not pay the interest on it? It would cease to have value as capital. The Chancellor has given us a wise and patriotic lead in confining himself to the true sources of raising these revenues, and that is by taxation of income and raising this taxation as high as he thinks we can bear it. Those of us who have to pay, will pay cheerfully and gladly to the maximum of our resources. If the right hon. Gentleman goes beyond that stage he will be trying to raise money from something which at the present time does not exist and which may have little or no value whatsoever, judged by the one test of value—which is what somebody else will pay for it. I conclude by saying that I think the Chancellor has led us along the right path and that we will stand behind him in the immense task which he has to face.
  8.4 p.m.
  Mr. John Morgan: I want to put it on record that my impression of this afternoon's Budget statement and its reaction in the Committee is that the Chancellor is reaching the limit of his ability merely to juggle with the money income of the country, and that he will have to face the fundamental approach to the problem which was indicated in an interesting contribution from a quarter of the Committee which is sometimes treated rather jocularly and certainly looked upon with a certain amount of concern. He will have to get behind him substantial interests like land to get through this job effectively. If he were to announce tomorrow morning that he was taking over
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  the rent income of this country, he would simply be disturbing a limited number of people enjoying unearned income from estate property, and he would be able to deal with them on a satisfactory basis of hardship in a much simpler form than he can deal with the multitude of other interests which he has now to conciliate.
  I hope that this will be the last Budget dealing with a war financial situation by 3d. here and 6d. there, by various fresh innovations of taxation, and that some more substantial and fundamental approach to the problem will be made, or it will overwhelm the system and the very thing the Government are seeking to avert, namely, inflation, be tackled in the way indicated by the Communist Member of this Committee. In the interests of those persons as well as interests which are seated on the property rights and the capital rights of this country, it is time that they took notice of the fact that they are heaping up for themselves a mere network, a labyrinth, a jungle of innovations which will bring the whole show tumbling down.
  Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put and agreed to.—[Mr. J. P. L. Thomas.]
  Committee also report Progress; to sit again To-morrow.

  EMERGENCY POWERS (DEFENCE) (No. 2) BILL.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  CLAUSE 1.—(Power to provide for trial of offences by special courts in certain areas.)
  8.8 p.m.
  The Secretary of State for the Home Department (Sir John Anderson): I beg to move, in page 1, line 19, at the beginning to insert, "It is hereby declared that."
  This Amendment, together with five other Amendments which, with permission, I should like to take together, is designed to give effect to a promise that I made during the Second Reading of this Bill that words would be inserted to make clear what I said was the intention of the Government, that there should be set up,

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  if necessary, courts of a special character but not courts of a military character. There is in the principal Act no express prohibition of the establishment of courts of any special character other than courts-martial, but, as I explained on the Second Reading, it seemed to the Government, notwithstanding that what they have in mind is to provide in certain circumstances of emergency for special courts of a civil character, that it was right to bring the matter before the House of Commons before taking the steps framed in the Regulations. If words are to be inserted in the Bill in accordance with my promise, limiting the powers given by the Bill for the establishment of courts other than courts-martial, it is quite clear that the Bill must be recast in a declaratory form, because, as I have said, a provision by this Bill for the setting up of special courts of a civilian character does not on the surface involve any infringement whatsoever of the provisions of the principal Act. Therefore, we have to make the main provision in terms declaratory. All the provisions in the various Amendments that I have indicated are consequential upon that. I think that, with that explanation, I may leave the matter to the Committee.
  8.11 p.m.
  Mr. A. Bevan: I am sorry to have to intervene, but what exactly is the purport of this? Is it to make this Bill declaratory, instead of an amendment of the existing law? If it is declaratory, there is obviously a limit upon the Amendments which can be moved. If, on the other hand, it is not declaratory, but merely an amendment of the existing law, the scope of the Amendments that can be moved is much greater. I apologise to the right hon. Gentleman, but it is rather important. One cannot understand why the right hon. Gentleman introduced the Bill in its original form. On that occasion I pointed out that if the existing law was as the right hon. Gentleman declared it to be, there was no need to bring in the Bill at all. He now finds it necessary to bring in an Amendment which makes it clear, as far as we can see, that the existing law gives him all the powers that he is asking under the Bill. Therefore, he wants to make the Bill declaratory of the existing law, rather than an amendment to it.
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  I just want the one assurance, that the nature of the Amendment does not in any way limit the Amendments that we can move.
  Mr. Pickthorn: Are we now to discuss all the Amendments in the name of my right hon. Friend?
  The Chairman: No, that is not the intention; only some of them. The right hon. Gentleman, however, gave a sufficient explanation of all these particular other Amendments, so that, at any rate as far as he is concerned, he probably does not propose to do more than to move these further Amendments formally.
  Sir J. Anderson: May I refer to this again? The first Amendment that I am referring to is the first on the Paper, in page 1, line 19, at the beginning, to insert "It is hereby declared that." The others are:
  In page 2, line 2, to leave out from "engaged," to "include," in line 3; in line 10, after "such," to insert "special"; in line 10, after "courts," to insert "not being courts martial"; in line 16, after "courts," to insert "not being courts martial"; in line 23, leave out from the first "and," to "are," in line 25.
  They all hang together, and they are necessary in order to give effect to a promise which I gave on the Second Reading. In answer to the hon. Member for Ebbw Vale (Mr. Bevan), all I can say is that it is no design of the Government that, by the adoption of this form, which is forced upon us by the exigencies of draftsmanship, the scope of possible Amendments shall be in any way curtailed. I do not know whether the Chair can give any guidance on that.
  Mr. Lees-Smith: Can you give any guidance, Sir Dennis, as to whether your decision on subsequent Amendments will be affected by this?
  The Chairman: I do not see any reason whatever why that should be so.
  Mr. Bevan: Am I to understand that the other Amendments on the Order Paper will be called?
  The Chairman: These which I had intended to call.
  Mr. Glenvil Hall: Is that one reason why we are taking the Preamble last?
  The Chairman: No. We are taking the Preamble last because that is the proper procedure on any Bill which has a Preamble.
  Mr. Hall: I understood that, but this was the point that I wanted to make. There are certain Amendments to the Preamble, in the name of the Home Secretary. It will surely be that Preamble which will limit any Amendments which we might move. Up to then we shall be all right.
  The Chairman: On the contrary, the Preamble is taken last because the form of the Preamble will depend on the form of the Bill.
  8.17 p.m.
  Sir Herbert Williams: I am not clear what we are doing. I gather than the Home Secretary has moved the Amendment, to insert, in line 19, "It is hereby declared that." This is a declaration that we are passing an unnecessary Bill. You do not declare that this is the law unless you have doubts. I take it that the right hon. Gentleman has doubts as to whether he can do all this business under previous Acts which we have passed. Personally, I thought that on 24th August we passed all the emergency legislation which was necessary; but we go on legislating, and ultimately we produce this document, under which, if I understand it correctly, all sorts of people can be bumped off without trial. I put it in crude terms, because I think in crude terms with regard to this Bill. The Home Secretary really ought to tell us why his first Amendment is to declare that all that is in this Bill can already be done. [Interruption.] I think so, because it is really almost an impertinence to ask Parliament to pass a Bill to declare that we can set up all sorts of persons in certain circumstances to shoot other people because the powers are already possessed. I do not recollect any other Bill of this character. It is true that we have only one Hitler in the world, but that is no reason why we should pass this particular Amendment.
  8.19 p.m.
  Mr. Bevan: Can we have a statement, because this is really important? The hon. Member for South Croydon (Sir H. Williams) is quite correct. On a previous
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  occasion I was treated with some contumely by the right hon. Gentleman because I suggested that the first words of the Bill were plain nonsense if what he said was correct. When he moved the Second Reading he said that it was not necessary for him to bring the Bill to the House, as he had all the powers necessary to do what he wanted done under the Bill, but that as he proposed to do something which was an important departure from existing practice, he thought it necessary to give the House an opportunity of discussing the matter. I think that that lies within his recollection and the recollection of the Committee. That made plain nonsense of the Title of the Bill, which plainly said that he had not the power which he said he had. Having realised his mistake on that occasion, he now brings in a form of words which makes the Bill declaratory of the existing law.
  I am sorry if I am being unduly suspicious. If I am, it is the right hon. Gentleman's own behaviour which is responsible. He now makes this declaration, and, as you have already said, Sir Dennis, we shall come to the Amendment of the Title of the Bill, which is, to "remove doubts as to the extent of." To remove doubts as to the extent of what? Of the existing powers of the right hon. Gentleman before this Bill is passed. That is the purpose of the Amendment of the Title, so that we are engaged, as far as I can gather, in an attempt to place upon the Statute Book an interpretation of the powers which the right hon. Gentleman says he has at this moment. That is surely a most clumsy and maladroit way of bringing it before the House of Commons. It is an attempt to sneak the consent of the House of Commons to proposals, which, had they been introduced by regulations, might have brought a storm down upon the right hon. Gentleman's head. We are very doubtful about this. You have informed us, Sir Dennis, and we are very grateful for it, that the Amendment now moved by the right hon. Gentleman will not in any way limit the Amendments which we want to move in the subsequent stages of the Bill, and that all the Amendments that we now want to move could have been moved if the right hon. Gentleman had not moved his Amendment. We are very grateful for this provision, but we would like to put on record

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  our view that the right hon. Gentleman has befuddled and bewildered the House of Commons by a procedure which is entirely unnecessary instead of acting in a straightforward fashion.
  Captain W. T. Shaw: Would you indicate, Sir Dennis, what Amendments you are really going to call, in view of the Amendment being proposed now?
  The Chairman: No, I cannot do so altogether, because it must depend upon the course of the Debate. Any hon. Member interested in any particular Amendment should raise any question about his Amendment when we reach it.
  8.25 p.m.
  Commander Sir Archibald Southby: I am in some personal difficulty. I do not want to anticipate a Ruling by you, Sir Dennis, but if we pass this Amendment and this Bill is made declaratory, will it influence your decision with regard to the Amendments you would call? In my particular case, if making the Bill declaratory is to rule out any Amendments that I have on the Order Paper, I should naturally vote against making the Bill declaratory, but if it is not going to make any difference whether you call my Amendments or not, my action may be quite different. In my Amendments I seek to establish the principle that this House should keep control of the courts. You have not indicated, Sir Dennis, whether you are going to call these Amendments or not, but it is vitally important to me.
  The Chairman: The hon. and gallant Baronet has not yet given me the chance.
  Sir A. Southby: That is why I rose to ask you, with great respect, whether, in view of the difficulty in which I find myself, through the Bill being declaratory, it would be in order for you to indicate whether you intend to call Amendments or not.
  The Chairman: I hope that it will satisfy the hon. and gallant Gentleman if I tell him that, if the Amendment is passed, it will make no difference whatever to what course I may adopt with regard to the Amendments.
  Mr. Ernest Evans: I think that the Amendment is
  708
  rather unnecessary. Why is it that the right hon. Gentleman felt it necessary to introduce this Amendment? Either he has or he has not the powers. If he has the powers, this Bill is not necessary, and if he has not the powers, why did not he ask for them in the ordinary way by saying, "I want a Bill which will give me these powers"? Why introduce this particular and unusual form of saying, "I declare these things are necessary"?
  8.27 p.m.
  Mr. Shinwell: May I put a point which might very properly be dealt with by the Attorney-General? It will be a question of draftsmanship, and there may be a legal point involved. If this Bill is rendered declaratory as the result of the acceptance of the first Amendment of the right hon. Gentleman, does it not follow that all the Amendments on the Paper will be rendered null and void because the right hon. Gentleman will then have power, having regard to the declaratory nature of the Bill, if amended, to proceed by regulation on all the points that are raised in the Amendments on the Paper? That is what appears to me to be the position. If the right hon. and learned Gentleman can clear up the point, we shall be satisfied, but there seems to be a little dubiety on the point.
  Mr. Glenvil Hall: Would the right hon. Gentleman the Home Secretary also tell us when he realised that the position had altered? When this Bill was introduced obviously he had not these powers, and now, several days later, it appears quite plainly that he not only has them but he wants us to declare that he has them. When did enlightenment come to the right hon. Gentleman?
  8.28 p.m.
  The Attorney-General (Sir Donald Somervell): That point is a simple one to answer. The Bill as originally introduced removed altogether the bar in the original Act on the trial of civilians by courts-martial or any special court which might be regarded as analog to a court-martial. When my right hon. Friend had explained that his intention was to set up what might reasonably be described as civil courts, he was asked by the right hon. Gentleman opposite, and the hon. Gentleman who was then the Member for

  709
  West Middlesbrough (Mr. K. Griffith) whether, if that was his present intention, he would be content to limit the power which the Bill, as introduced, conferred on him to the extent necessary for the carrying out of his present intention as he stated it to the House. My right hon. Friend said he was. That brought about this state of affairs; that these courts clearly were not courts-martial. It might have been suggested, whether it could have been held as a matter of law or not, that the prohibition in the original Act on setting up courts-martial to try civilians indicated a general intention not to set up such courts, which, though not courts-martial under the Army Act, were at any rate special courts to be set up, having regard to the military sitiuation. It was in that state of affairs that my right hon. Friend said that, although his intention was limited in the ways he had stated, he would not in any event have thought it right not to come to this House with a Bill in order that the matter might be discussed and Amendments proposing limitations considered and accepted or rejected.
  The result of that undertaking given by my right hon. Friend made it quite plain that the Bill, as amended, did not add new power, at any rate, to the letter of the original Act. It introduced something that necessitated putting the Bill into declaratory form, because it would have been unintelligible from the point of view of draftsmanship not to have this Bill in declaratory form when it was doing something that was conferred by the original Bill but which it was thought right should be made the subject matter of an amending Bill, with all the possibility of Parliamentary discussion and Amendment which a new Bill involves. Therefore, in the Bill amended by my right hon. Friend in accordance with his undertaking, it is certainly necessary that it should be declaratory in form. The question of Amendments is a matter for the Chair, but I thought the Committee had had an assurance from the Chair that the passage of this Amendment would in no way limit the Amendments which it was proposed to call for discussion.
  8.32 p.m.
  Mr. Bevan: We should be very much reassured if the Chair could find it possible to indicate the Amendments which it is proposed to call. In ordinary
  710
  circumstances we get assurances through the ordinary channels, but they have now either been closed or temporarily suspended, and we have not those former facilities. If this Bill is declaratory, then it is declaratory of the existing law, and if an amendment of this Bill is construed to be an amendment of the existing law, then it would be presumed to be out of order.
  8.33 p.m.
  The Chairman: I understand the hon. Gentleman has put a question to me, and I presume he wants it to be answered by me, and not to give the answer himself. I will answer the question so far as I can, but I thought I had already given sufficient answer by saying that if this Amendment were made, it would not alter my decision in any way with regard to any Amendments on the Order Paper or any of those handed in in manuscript. I do not want to go further, because the hon. Member will realise that in a case of this kind the Chair may have to depend upon what happens to certain Amendments as to whether others should be called. I can only give him the definite assurance that if this Amendment is carried, it will make no difference whatever to the selection or otherwise of other Amendments on the Order Paper. If I may put it a little more plainly, I do not consider that the insertion of these words would rule out of order any Amendment which would otherwise have been in order.
  Amendment agreed to.
  8.35 p.m.
  Sir J. Anderson: I beg to move, in page 2, line 2, to leave out from "engaged," to. "include," in line 3.
  Mr. Naylor: As the Amendment is now drafted, I think there must be some mistake. The word "engaged" should be "shall."
  The Chairman: The hon. Member is mistaken. Where it says "leave out from 'engaged'," it means all the words after that word.
  Mr. Naylor: The word "shall" is necessary for the sense of the Clause.
  The Chairman: I do not read it so. I think it is perfect sense in the form in which it is on the Order Paper. The effect of the Amendment, if carried, would make the passage read in this form:

  711
  "… and the efficient prosecution of any war in which His Majesty may be engaged, include power to make provision," and so forth.
  Sir J. Anderson: This Amendment is consequential.
  Amendment agreed to.
  8.36 p.m.
  Sir J. Anderson: I beg to move, in page 2, line 4, after "where," to insert:
  "by reason of recent or immediately apprehended enemy action."
  I gave two assurances during the Second Reading, one that I would propose Amendments on the lines of the Amendment we have just passed, together with certain other consequential Amendments, and the other that I would consider carefully whether words could be inserted to make more plain the precise nature of the contingency we have in view as to the possibility necessitating the establishment of special courts. The Amendment, together with the further Amendment in page 2, line 5, to leave out from "require" to "persons" in line 6, and to insert:
  "that criminal justice should be administered more speedily than would be practicable by the ordinary courts,"
  goes as far as we have found it possible to go, after full consideration, towards meeting the second point. The object of these two Amendments is to make it quite clear that we do not wish to have absolutely unfettered discretion to introduce the special courts at any time and in any circumstances. We are quite willing that the power to set up these special courts should be limited in the manner implied by the words which it is proposed to insert by way of Amendment. That is to say, it is only
  "by reason of recent or immediately apprehended enemy action"
  that we seek power to introduce these courts and then only where the military situation is such as to require that criminal justice should be adjusted more speedily than would be practicable by ordinary courts. I trust that the right hon. Gentleman and hon. Gentleman who asked for the assurance to which I have referred, during the Second Reading, may feel that we have at any rate gone some way, and in our view as far as was practicable—it is a matter of drafting—towards giving the assurance that was desired.
  8.40 p.m.
  Mr. Spens: This is the first occasion on which I have intervened on this Bill, and I think I am the only lawyer who has not spoken on it. I am extremely sorry to have to criticise the Amendment in any way, but these are severely limiting words:
  "by reason of recent or immediately apprehended enemy action."
  Part of my division is now a defence area, and it is quite true that it was turned into a defence area because it might be said that at the present moment there is "immediately apprehended enemy action." Anyone who has to deal with this Bill has to anticipate everything happening except what is most likely to happen, and although in one sense the South-East of England may be a part of the country to which the enemy may come very soon, at the same time, judging him always as likely to do what is least expected, it may be that we shall remain a defence area for a very long time and may not suffer anything more than we are suffering at present from enemy action. What is happening in the area at present arises as much from action taken by ourselves and our own Government and Government Departments as from enemy action. We have a large portion of the population immobilised there. They have little or no means of transport, the principal businesses all along the coast have been mined, there is very considerable suffering, and one wonders whether, with conditions continuing like that for a long time, it will be possible to continue the present system of administration of justice. I am inclined to think that there will have to he special arrangements made which are not available at the present moment under our present law, although they may be available under present regulations. I would ask my right hon. Friend to consider whether it might not be possible slightly to enlarge the words:
  "by reason of recent or immediately apprehended enemy action."
  so as to include action taken in this country on account of recent or immediate apprehended enemy action. [Interruption.] Hon. Gentlemen are frightened of something of that sort being done.
  Mr. Shinwell: It is you who are frightened.
  Mr. Spens: I am not frightened in any way, but I am concerned to see that in every large area it will be possible to carry on the ordinary administration of justice. It is difficult for hon. Members to realise the change that has come over these areas, a change very vital to the population. I do not want anything more than that my right hon. Friend and the Attorney-General should satisfy themselves before the Bill becomes law that they have not limited themselves too much, in the event of these areas remaining in their present condition, and perhaps getting into more difficult conditions for people to travel about and justices to hold their courts, in order to deal with a situation which may get more difficult as time goes on if we are not made the object of an immediate attack. At present, with this Amendment, the Bill may, in fact, turn out to be too limited to deal with the difficult situation around the coast in three, four or six months' time.
  Mr. Sorensen: Would the hon. and learned Gentleman mind being a little more precise as to the conditions that he envisages in which these powers should be operative?
  Mr. Spens: I do not think it very desirable to go too much into details and to specify conditions that may arise. I want to be quite certain that we may not want to have some elasticity in dealing with local courts possibly in the months to come.
  8.47 p.m.
  Mr. Silverman: I apprehend that the purpose of the Amendment is to introduce some limitation upon the right of the Executive to set up these special courts by regulation, and I understand that the limitation which is contemplated by the Amendment is contained in these words. I want to know who is to be the judge of the necessity. I want to know whether there is to be any control of any kind upon the power of the Executive to declare that the conditions contemplated by the amended Bill are such as to require the institution of these special courts. Are the ordinary courts of the land to have power at some stage, or in some conditions, to examine whether the right hon. Gentleman has acted correctly or incorrectly in declaring that in any particular area at any particular time the situation is such as to enable him
  714
  under the Bill to set up the special courts which are contemplated? Unless there is some time at which the authority of the Executive can be controlled or checked by some impartial judicial authority, it seems to me that all this paraphernalia of definition is absolutely meaningless. If the right hon. Gentleman is himself to be the judge of whether the conditions are such as to necessitate the establishment of these special courts, it does not seem to matter a great deal what are the words under which he is authorised to act. I should like some assurance that any regulation that he may make setting up these special courts shall at some time be subject to review in the courts—that it shall not rest entirely on his declaration that the conditions contemplated by the Bill are satisfied, but that there should be some judicial determination as to whether these special courts have been properly set up or not.
  8.50 p.m.
  Mr. Pickthorn: I rise to put as shortly as I can a point which is so small that perhaps it ought not to be put, but it worries me a little. I do not feel clear that these words really add anything, but I understand that they were drafted to meet the desires and fears of some hon. Gentlemen, and I should not wish to stand in the way of their being inserted. I want to inquire whether enemy action may not be of three kinds. I quite understand there is never such a thing as the present, but only the past and the future. Presumably enemy action can be recent, or it can now be continuing, or it can be immediately apprehended in the future. I am not quite clear whether in logic, and perhaps even in law, something ought not to be done with these words, or some further explanation given on that point.
  8.51 p.m.
  Sir A. Southby: I disagree with my hon. and learned Friend the Member for Ashford (Mr. Spens). Heaven forbid that we should give any further powers under this Bill. When my right hon. Friend the Home Secretary said that these words would be a limitation, it struck me that the limitation would be more apparent than real, because there is no part of the country where one man, if the matter is to be decided by one man, might not say that he immediately apprehended enemy action; and there would be no means, as far as I can see, for the House ever

  715
  to say whether they agreed with him in his apprehension or whether they did not. We are legislating for the future. I do not think anybody in the Committee would have any idea that my right hon. Friend would ever do anything that did not carry out the law honestly, justly, and fairly. We have to think about the future, and to realise what has happened in other countries.
  It seems to me that the words of the Amendment give enormous power. One man—presumably the Home Secretary—is to decide whether he apprehends enemy action as likely to be immediate, and then he is also to decide whether he thinks criminal justice could not be administered under the conditions then existing. He is to decide that, and nobody is to be able to say to him, "Are you quite sure you are right about that?" By one stroke of the pen one man can turn every area of the country into a district in which the existing judicial system is swept away on the grounds that possibly enemy action may take place. To-night, enemy action might be immediately apprehended in the City of London, and it would be possible for the Home Secretary to take this action there. It seems to me that if these words are to be accepted—and I have no desire to stand in the way of their being accepted—there must be at the same time an undertaking that the House shall have an opportunity of saying whether they think the Home Secretary has acted rightly or not. That is the essence of the objection that I have to the Bill and the powers which it contains. If there is to be an opportunity for the House to maintain some control over the decision as to whether it is necessary to put these powers into force, and subsequently to have some control over the way in which the courts function, the words can be inserted in the Bill, and it will not matter very much.
  8.54 p.m.
  Mr. Bevan: In the Second Reading Debate on this Bill, there was obviously a desire that the executive should be entrusted with powers to modify the normal processes of justice in certain emergencies. What the House was suspicious about was the nature of the modification and the manner in which it was proposed
  716
  to be carried out by the Home Secretary. As far as I could gather, no hon. Member suggested that it would be possible to carry out the normal processes of justice if there were an invasion in certain areas, and some hon. Members even suggested that if an invasion occurred in any part of the country, the w hole of the country might be affected by it. What the House was highly suspicious about was the sort of situation in which the modification would be brought about. The language of the Bill was far too wide, because it might be said by some Home Secretary that the existing situation justifies a modification of the existing processes of justice. I consider that the words in the Amendment are limiting words, and that they are less wide than the words originally in the Bill. In the original Bill there was a reference to the "military situation." Therefore, in the first place, the Amendment ought to he accepted because it limits the power of the executive to decide whether such a situation has arisen.
  Who is to decide whether such a situation has arisen? I do not want to quarrel with my hon. Friend the Member for Nelson and Colne (Mr. Silverman), but I am bound to say that I do not consider that anybody except the executive can decide such a matter. The executive is limiting its decision by the wording of this Amendment. It will be no good the Government coming to the House and saying, "We consider that the military situation justifies us in issuing an order under this Bill," because under the Amendment enemy action has to be immediately apprehended. The wording of the Amendment means that there must be local action about to be committed by the enemy, or apprehended to be committed by the enemy. I think the Amendment very considerably limits the power of the executive. Then, the action must be taken by the executive. It cannot be taken by the courts. It cannot be taken by the House, because the House might not be sitting, and the House would not have the information necessary. When the Bill was presented, I was filly conscious of the necessity for a modification of the existing procedure in an emergency. What I wanted was a chance to decide what the modification was to be. I suggest that the executive should have the power to determine, under these limiting

  717
  words, when the emergency has arisen, and of course, the House will always be, and must be, the judge of whether the Home Secretary has exercised the power properly. The House will be able to ask, "Why did you issue the order in district A, B or C? What was your justification for doing so?"
  Mr. Silverman: We shall be told that in the public interest we cannot be told.
  Mr. Bevan: Neither my hon. Friend nor I wish to obstruct the right hon. Gentleman in getting necessary powers. I suggest to my hon. Friend that surely it will lie within the functions of the House at the time to force the Home Secretary to justify the action he has taken. What we want to do is to limit the scope of his action, and I suggest that has been limited by the Amendment. I believe the Amendment will be a good one, and I shall support it.
  8.58 p.m.
  Colonel Gretton: I agree that this Amendment is a limiting one. What I am not quite sure about is whether there is any reason for inserting the word "recent" in the Amendment. Does it mean that the enemy action must have taken place recently, and must be expected to happen again, before the setting up of these special courts can be justified? Is that the proper interpretation?
  8.59 p.m.
  Sir Richard Acland: I have on the Paper an Amendment dealing with the same point as that dealt with in the Home Secretary's Amendment. You have not selected my Amendment, Sir Dennis, on the grounds that it covers the same point as that covered by the Home Secretary's Amendment, and I believe that if I wanted to argue my reason for preferring my Amendment, I might be allowed to do so; but I do not propose to do that because I should be in the difficulty that, if I were to persuade the Committee that my Amendment was preferable, the Committee would have gone beyond the point at which it could make the Amendment. With your permission, Sir Dennis, I can make the points which I intended to make on my Amendment if you will allow me to move an Amendment to the Home Secretary's Amendment of which I have given you notice, namely, to leave out of the Home Secretary's Amendment the words "or immediately apprehended."
  718
  In support of that Amendment I would ask the Home Secretary to consider one or two points. I would ask him to consider how the whole of this Bill appears to many Members in all parts of the Committee, and, in particular, to Members on this side of the House. We are all, I am sure, anxious to do everything we can to safeguard the country from all possible forms of danger. One obvious danger is that the Government may not have enough powers to deal with a certain situation which may arise, but another form of danger, which this Committee must guard against, is that the Government may have too much power, and powers which in these days an Executive ought not to have. I submit that this is one of the cases where the Government is asking for just a little bit too much power. The right hon. Gentleman may reply by asking whether it is possible to give the Government too much power and whether we do not completely trust them. I would ask the right hon. Gentleman to remember that this is the third occasion on which this kind of thing has happened. First we had the I.R.A. Emergency Bill. Many hon. Members thought it went too far, giving the Government too many powers, and, as a result of debate, alterations were made which to a certain extent satisfied us. Then there were the emergency powers at the beginning of the war, and again it was generally agreed that the Government were being given far greater powers than they ought to have, and by agreement those powers were limited. Here, for the third time, the Government seek to secure powers which many Members in this Committee are of the opinion are more than any Government should have.
  The Chairman: The hon. Member seems to be making a Second Reading speech on the Bill. When I called him I understood that he wished to move an Amendment, but he has not stated what that Amendment is, or explained it in any degree, or indeed confined any of his remarks to that which is now before the Committee.
  Sir R. Acland: I beg to move, as an Amendment to the proposed Amendment, to leave out the words "or immediately apprehended."
  I was trying to explain why these, words gave to the Government wider powers than they should have. If hon.

  719
  Members will look at the statements which have been made on this Bill, describing the situation it was designed to meet, it will be clear that the Amendment to leave out these words would give to the Government all the powers they need. I would draw attention to what the Attorney-General said on that occasion:
  "What, then, is the problem with which the Bill and the regulations made under it seek to deal? As I have said, it does not arise in the immediate battle-area. When the guns are going oil, when fighting is actually going on, there is no opportunity to apprehend people and deal with them by due process of law. It is the problem which may arise—and may not—not necessarily over the whole country but in certain areas, in the aftermath of an invasion or attempted invasion, when the enemy have been driven back but when there are small parties of men about"— [OFFICIAL REPORT, 16th July, 1940; col. 138, Vol. 363.]
  If that be the Government's case, what objection can there be to having this Amendment worded as it would be if these words were left out? If the Home Secretary is going to refuse my Amendment, as I gather he is, I would ask him to give one concrete example of the type of situation in which he might desire to use these powers and would not be able to do so if the words "or immediately apprehended" were left out. If he can give an example, I shall be prepared to withdraw my Amendment to the Amendment. If he cannot, I hope he will withdraw his opposition to my proposal, because I submit that if these words are left in they give to the Government powers which the House of Commons ought not to give to any Government, namely, to say "We apprehend that something will happen somewhere or possibly everywhere"—because there is nothing in the Bill to prevent them doing it everywhere at once—"which makes it necessary to wipe out our present system of justice."
  Question proposed, "That those words stand part of the proposed Amendment."
  The Chairman: The Committee will perhaps realise that as I have put the Amendment to the Amendment, that is the only thing we can discuss at the moment.
  Mr. Silverman: Does the Amendment to the Amendment require seconding?
  The Chairman: No.
  9.8 p.m.
  Sir J. Anderson: The hen. Baronet was safe in one particular, and that was when he expressed the expectation that I should not be disposed to accept the Amendment to the Amendment. I do not see why the limiting words which I have already proposed to be inserted should be further limited in the manner proposed by the hon. Baronet. It is true that the state of affairs which we have mainly in mind is a state of affairs which might arise following an invasion or attempted invasion or enemy attack. I think, however, that the Executive ought to be armed with powers to deal with a case where, in a battle that might be ebbing and flowing, it is thought desirable that an area contiguous to one in which an attack had been suffered should, as it were, clear the decks for action. For that reason I think we ought to be content with the limiting words, that are proposed in my Amendment.
  Amendment to the proposed Amendment negatived.
  Question proposed, "That the proposed words be there inserted."
  9.10 p.m.
  Mr. Lees-Smith: Two appeals have been made to the Home Secretary, but I hope that he will not accept either of them. The hon. and learned Member for Ashford (Mr. Spens) wishes the limiting words which have been inserted to be taken out, so that in his constituency there should be, even without these safeguards, power to do away with the ordinary courts of law even now. That, of course, would be entirely contrary to the undertaking which the Home Secretary gave to the House on Second Reading. The hon. Baronet the Member for Barnstaple (Sir R. Acland) thought that the words "recent enemy action" were not necessary, but, if there has been fighting, I imagine that even though the enemy may have withdrawn from a particular area conditions there may be so disturbed that these courts, if they have been established, should be allowed to continue until the situation has been cleared up. After the undertaking which he gave on Second Reading the Home Secretary had a discussion with certain representative Members. We racked our brains to find a form of words which would suit the undertaking he gave. We came to the

  721
  general conclusion that we wanted to put into words the idea that the conditions were such that the ordinary courts could not, somehow, be effective; and I am bound to say that we did not hit upon any better form of words to express what is wanted. I feel that the Home Secretary has made a very fair attempt to meet the undertaking which was given.
  9.13 p.m.
  Sir J. Anderson: I will deal with one or two of the points which have been raised in the discussion upon this Amendment. As regards what fell from my hon. and learned Friend the Member for Ashford (Mr. Spens), has he observed that, apart altogether from this Bill, Regulations have recently been made under the principal Act which are designed to impart a greater measure of flexibility to the machinery of the ordinary courts? In the view of the Government, it is by way of such Regulations that any difficult situation that may arise, otherwise than in the manner contemplated by this Bill, can best be dealt with. If the amendments in procedure which have been made by those Regulations are not found to go far enough, there will be nothing to prevent further amendments of a similar character being made, and I think we may be satisfied that all contingencies that are likely to arise, short of the profound disturbances caused by enemy action of the kind that is in contemplation in connection with this Bill, can be met in the way I have indicated. My right hon. and gallant Friend the Member for Burton (Colonel Gretton) referred to the use of the word "recent." As the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) has indicated, there is virtue in that word. What we have in mind is that the establishment of these special courts should follow as soon as possible after the disturbances caused by enemy action, and therefore we wish to retain the word "recent" to mark that point.
  Major Milner: There is more virtue in the word "apprehended."
  Sir J. Anderson: That is the other contingency that we have in mind. We do not contemplate that the special courts should be introduced for the first time long after enemy action has been taken in any area.
  Sir H. Williams: I do not know whether "enemy action" means invasion or the dropping of bombs. I do not want to mention anything that it would be improper to mention, but I was in certain places where bombs had been dropped. That was recent enemy action. As a result of that, could all this machinery have been put into operation?
  Sir J. Anderson: We shall be in trouble if we raise points which were dealt with upon the Second Reading. I thought I had made it clear on Second Reading that we meant, not only invasion but exceptionally heavy aerial bombardment resulting in turmoil and confusion.
  Mr. Silverman: It does not say that.
  Sir J. Anderson: It says "recent enemy action."
  Mr. Silverman: It does not refer in any way to the degree of such action.
  Sir J. Anderson: I was dealing only with the point that heavy aerial bombardment was covered. The only other point is that which was made by my hon. Friend the Member for Cambridge University (Mr. Pickthorn). The words that we propose to introduce are, undoubtedly, of a limiting character, as the hon. Member for Ebbw Vale (Mr. A. Bevan) clearly pointed out.
  Mr. Glenvil Hall: Can the right hon. Gentleman deal with the point which was raised by the hon. and gallant Member for Epsom (Commander Sir A. Southby)? The point was that, in a sense, whatever form of words you used, you could not really limit, as is proposed by the right hon. Gentleman, the powers of the Home Secretary under a Regulation. As soon as war begins, enemy action may be apprehended. When enemy action is going on, a state of emergency exists. The right hon. Gentleman may not always be at the Home Office, and we should be much safer if we could have the Regulations brought to this House, before they were ratified and put into operation by the Home Secretary.
  Mr. Silverman: Suppose the Committee accepted the right hon. Gentleman's Amendment: what limitation would there be on the right of the Executive to declare, in any area, that the circumstances contemplated by the Bill had arisen?
  Sir J. Anderson: The point which was raised by the hon. Member for Colne Valley (Mr. Glenvil Hall) was really answered by the hon. Member for Nelson and Colne (Mr. Silverman). I did not deal with that case, as I thought it was best disposed of by the hon. Member for Ebbw Vale, but the position is surely this: These powers, if they are granted, must of necessity be entrusted to the Executive. [HON. MEMBERS: "Why?"] Because they are essentially powers of an executive nature. An hon. Member asked, who would actually exercise them? From my point of view I do not know that it is very material whether they are exercised by the Secretary of State or by the Minister of Home Security, but it will be one or the other. As regards control, the only possible way is that provided by an ever-vigilant House of Commons.
  Mr. Silverman: After the event.
  Sir J. Anderson: After the event, certainly.
  Mr. Silverman: Many people will be dead by then.
  Sir J. Anderson: Every Minister who has to exercise executive powers of this character, as everyone knows, has in his mind the possible reaction of the House of Commons. If you sought to introduce any other form of control—a form of judicial control, for example—the whole purpose of this Bill would be defeated. I suggest that the Committee must make up its mind whether or not these powers are to be granted. If they are to be granted, they must be granted to the Executive.
  9.22 p.m.
  Sir A. Southby: I hope that the hon. Member for Colne Valley (Mr. Glenvil Hall) did not misunderstand the point that I made. I entirely agree with the hon. Member for Ebbw Vale (Mr. A. Bevan). At a time like this, the powers must be granted to the Executive and the Executive cannot be hampered in the use of their powers by having to come to Parliament. I want an assurance that there shall be some effective way by which the House can afterwards express its view as to whether the Executive have exercised those powers rightly or wrongly.
  Mr. Glenvil Hall: That actually was the point I was making.
  9.23 p.m.
  Sir H. Williams: The Secretary of State told us that a vigilant House of Commons will make sure that everything is all right. The right hon. Gentleman the Home Secretary or the Minister of Home Security—he is not certain which—will take action. The courts are set up. With great expedition they shoct a certain number of people. They any shoot them, or cause them to be shot. [HON. MEMBERS: "No."] That is what we are talking about. We are talking about whether people are to be kilted who have not had a fair trial. That is what the Bill means. [HON. MEMBERS: "No."] I say "yes."
  The Chairman: We are not talking about the Bill. We are talking about the Amendment.
  Sir H. Williams: That makes it even worse. The right hon. Gentleman is going to make an Order, the, text of which I have not seen. He says that a vigilant House of Commons will take control of it. It will be laid on the Table. I am not certain whether it will mean an affirmative Resolution. [An HON. MEMBER: "No"]. I understand that it will not. It cannot be amended. We are talking about an Order—
  Sir J. Anderson: Forgive me, but what we were talking about was the kind of Order which may be made after the Bill becomes law establishing particular courts in a war zone.
  The Chairman: Perhaps I may add that I was about to call the hon. Member's attention to the fact that we are not discussing the making of the Regulations now. This Amendment does not deal with the matter. Perhaps if the hon. Member will look at the Amendment again, he will realise that.
  Sir H. Williams: I was wondering whether this power to take action is to come into operation when the military situation is such as to require the institution of special courts, or where by reason of recent or immediately apprehended enemy action, the military situation is such as to require the institution of special courts. What these words mean I do not know. I do not think they mean anything. I think they are pure unadulterated eyewash, because either the right hon. Gentleman thinks that the military

  725
  situation is such that he ought to do this or that, or he does it by reason of recent or immediately apprehended enemy action. We are trying to examine that interesting point which we used to examine in the days before the hon. and right hon. Gentlemen alongside me and behind me decided that "genuinely seeking work" was not a proper phrase, because you had to examine the state of mind of the person concerned. What we are doing now is examining the state of mind of the right hon. Gentleman. You have to examine his state of mind as to where the military situation is such as to require the institution of special courts, or the state of his mind as to
  "here by reason of recent or immediately apprehended enemy action,"
  special courts must be instituted for the trial of offenders, There is no difference in the state of the right hon. Gentleman's mind, except as indicated by this change. He hoped by these words, which mean nothing, to persuade a difficult House of Commons to take a more kindly attitude to this Bill than it took last week, when I was not here. I think he will be disappointed. I think that this eyewash will not in the slightest degree satisfy the Committee. We are at this moment engaged in fighting two enemies: an enemy without and an enemy within. I do not want to see the right hon. Gentleman including himself in the enemy within by taking stupid powers to enable other people to be killed.
  9.27 p.m.
  Mr. Pethick-Lawrence: I think that the point is somewhat simpler than some hon. Members seem to realise. The Bill, as originally drafted, gave the Home Secretary the power of decision. The Bill, as it will be drafted after the Amendments are carried, still gives him that power of decision. What, then, is the difference? I will try to explain what, in my view, the difference is. The Bill, as it originally stood, gave insufficient indication of the circumstances in which the Home Secretary would be entitled to use these powers. The Bill, if amended in the way that the Home Secretary proposes, will give a fairly precise indication, as the hon. and learned Member for Ashford (Mr. Spens) realises. It is true, as my hon. Friend
  726
  the Member for Nelson and Come (Mr. Silverman) says, that even if we insert these words, they do not give a legal remedy against an abuse of power by the Home Secretary, but that is not to say that they do not give a political remedy. The fact that the Home Secretary, by reason of this Amendment, explicitly declares some limitation on the circumstances in which he is likely to use those powers, puts this House in a very different position from what it would have been in if we merely left that understanding implicit. The fact that the Home Secretary, in accordance with the wishes of the House of Commons on Second Reading, and after meeting some of us the other day to discuss the matter, has seen fit to go as far as to give a definite indication of the kind of circumstances in which he is likely to use those powers, and is, therefore, giving the House, in future, time to round upon him if he uses the powers otherwise, goes a long way to meeting the wishes expressed by hon. Members and I shall vote for the Amendment.
  9.29 p.m.
  Mr. Ernest Evans: I think, with great respect, that some Members of the Committee have been rather unfair to the Home Secretary. On Second Reading a great deal of anxiety was expressed lest these powers might be used in a very wild way, without any sort of definition as to the circumstances in which the Home Secretary would conceive that he should use them. It was in response to the appeal which was made on Second Reading that the right hon. Gentleman tried to meet that criticism. When I heard that criticism I thought that the right hon. Gentleman would have great difficulty in finding words to meet it. The hon. Member for South Croydon (Sir H. Williams), who has just spoken so eloquently, has not, so far as I can see, put any Amendment on the Paper which would meet that criticism in better terms, and I do not know that any other Member has discovered better terms to meet the criticism. The point is that either we give the Government this power or we do not. If we are to give it, the Amendment which the right hon. Gentleman has put down strengthens the power of this House in criticising, attacking, defeating, turning out of office and condemning.
  9.31 p.m.
  Mr. Silverman: My objection to this Amendment is that it subjects the action of the right hon. Gentleman to a political sanction always when in reality it ought to be subject to a legal sanction. It seems to me to attempt to meet the criticism by a form of words, without altering the actual situation in any degree at all. If you are to apply special courts, special laws and special penalties in a particular area, the circumstances in which you apply that power ought to be under the control of some judicial authority and not merely subject to the decision on political grounds of a particular House of Commons.
  9.32 p.m.
  Mr. Groves: Coming as I do from an area near the coast I have been a little disturbed about this matter, but, on the other hand, I feel that the Amendment strengthens the hands of the Home Secretary. As I have listened to this Debate I have wondered whether "enemy action" means "non-British." I wonder what extra powers the Home Secretary needs to deal with the area from which I come.
  The Chairman: The hon. Member cannot raise that question on this Amendment.
  Amendment agreed to.
  Further Amendment made: In page 2, line 5, leave out from "require," to "persons," in line 6, and insert:
  "that criminal justice should be administered more speedily than would be practicable by the ordinary courts."—[Sir J. Anderson.]
  The Chairman: The next two Amendments on the Order Paper are obviously one in substance.
  9.34 p.m.
  Mr. Bevan: I beg to move, in page 2, line 9, to leave out "the."
  The purpose of this Amendment and the following Amendment—in page 2, line 9, at the end, insert:
  "made on or before the thirty-first day of July, nineteen hundred and forty"—
  is to limit the power of the Home Secretary to the first set of Regulations under the Bill. He may quarrel with me about the date, and think that it is too early. I shall not worry about that. If he wants to put the date a little later, I do not think that my hon. Friends and I will
  728
  disagree. He might not have enough time before the end of the month to make his Regulations. When the Home Secretary moved the Second Reading of the Bill he was careful to explain what he proposed to do under the Regulations which he intended to issue in pursuance of the Bill. As hon. Members will recall, we were very suspicious because what he said he proposed to do under the Regulations was not, in fact, contained in the Bill. We said it would be far better if the Bill itself contained whit he proposed to do. But that cannot be done without an entirely new Bill, so we are faced with the fact that we are entrusting the Home Secretary with certain powers, and we are limiting, as far as we can, the kind of Regulations he will issue under the Bill. Nevertheless, the limitations we can impose upon him are not very considerable and, therefore, he may issue Regulations which are very wide in character. This business is fresh before the Committee, and we shall watch the next Regulations vigilantly, but unless this Amendment is carried, the right hon. Gentleman can afterwards issue a series of Regulations which may amend the first set of Regulations and the only limitation upon them will be the nature of the Bill we are now considering.
  Everybody agrees that these limitations are not sufficiently narrow. Let the right hon. Gentleman embody all he wants to say in his first set of Regulations, and having done so, let his power to issue more Regulations die. If he wants more power he should have to come to the House. We do not want a series of Regulations which need not come before the House at all. They may need a Prayer, but by that time we may not be in a position to pray, despite the Foreign Secretary's broadcast last night. It seems perfectly reasonable that we should ask the Home Secretary to embody all he wants to obtain, in his first set of Regulations. I know this is unusual, and that it is customary to give the Executive power to issue Regulations in definitely in accordance with the terms of a Bill, but this is a very unusual piece of legislation and we suggest that the House of Commons should reassume its powers over the Home Secretary in respect of this Bill, if it can possibly do so. There is another thing which would be a safeguard. If the Home Secretary knew that his power to issue Regulations

  729
  died on a certain date, he would try to put everything into the Regulations, and when he did so we who are on the alert would examine them much more closely than if he had his Regulations by instalments.
  That is the technical aspect of the Amendment which, the Committee will agree, is of considerable importance. There are, however, one or two general observations I would like to make on this matter, and I do not make them with any desire to be offensive to the Home Secretary. We have given him great powers during the last 10 months, but I am bound to say that neither the House of Commons nor the country has been satisfied with the way in which his powers have been used. The right hon. Gentleman is a very able man indeed. He has had great experience abroad and at home, but he is not what I should call a good House of Commons man. He was not in the House long enough before he received his promotion to the Front Bench. It would have been infinitely better for us and the country had he served a longer apprenticeship as a back bencher.
  The Chairman: I do not see how this comes within the Amendment. The hon. Member is now discussing an individual Member of the House. The Amendment deals with a person who may, for the time being, be the holder of a particular office.
  Mr. Bevan: We have been asked over and over again from that Bench to entrust powers to the Home Secretary and to other Ministers.
  The Chairman: If that is so, I am afraid it does not alter my Ruling.
  Mr. Bevan: Next time, I hope that you, Sir Dennis, will pull up the Minister as well as Members on the opposite side. We have been asked over and over again to entrust powers to Ministers because their record and their reputation entitle them to receive the confidence of the House. It is not enough that we should be set aside in this House because of a technicality in the procedure of the House. The right hon. Gentleman has no right, on account of recent events, to ask us to give him power to issue Regulations in perpetuity. He is asking for them so long as this situation exists. There is no limit at all in the Bill. Once his courts are established, they last. Once he has
  730
  the power to make Regulations, there is no limit to the number of Regulations that he can make. The only limit is to their scope, and hon. Members have spoken of the difficulty of putting limitations as to their scope in the Bill. The right hon. Gentleman should have all the powers he wants under the first Regulations that he issues. I am sorry that you, Sir Dennis, have interfered with what I wanted to say about the right hon. Gentleman because I did not want to make my remarks personal at all. We are dealing with a very unusual structure of legislation. Unlimited powers are being given to the Executive, and it is very necessary that we should have confidence that those powers will be properly exercised. Almost every major piece of legislation that the right hon. Gentleman has suggested has had to be altered.
  The Chairman: The hon. Member is offending against the Ruling that I have given. If I may say so, it is quite clear that it would be absolutely intolerable, and would make debate and legislation impossible, if the personality of the Minister concerned and his conduct in other matters were to be the subject of debate whenever a power is proposed to be given to the holder of a particular office. The hon. Member must confine himself to dealing with the matter as it affects the Minister for the time being.
  Mr. Bevan: Then I shall have to alter my language to make it the Government and not the Home Secretary. It is time, in these days of emergency, that we should get rid of these silly fictions of procedure and deal with the realities of the situation.
  The Chairman: The hon. Member is now breaking a rule and making remarks which are offensive to the Chair and, worse than that, offensive and insulting to the House of Commons.
  Mr. Bevan: Everyone knows that the rules and procedure of the House of Commons are extraordinarily fluid. During the last 10 months we have very considerably modified the whole procedure as a consequence of the war. Therefore, it is absurd to suggest—
  The Chairman: We are not now discussing the Rules or procedure of the House. I must ask the hon. Gentleman to confine himself to the Amendment.
  Mr. Bevan: I apologise, Sir Dennis, but I am in this respect suggesting that we are being asked to entrust to the Home Secretary and the Government as a whole powers to issue Regulations gravely affecting the safety and welfare of the citizens of Great Britain. I submit that it is perfectly proper for me to argue that the record of the Government and the Home Secretary is such that we ought not to entrust those powers beyond a certain date. If that is not in Order, I do not know what is in Order. I was suggesting that experience during the last nine months has taught us that, after the House has parted with powers to the executive, those powers have been gravely abused by the executive. I suggest, further, that the right hon. Gentleman, speaking on behalf of the Government, has over and over again obtained from the House powers which experience has shown have been abused, and only by agitation in the Press and in the House have those powers been modified and retraction made. I could give one piece of evidence after another to show that the right hon. Gentleman and the Government have, in the exercise of these powers, caused grave injury, injustice and suffering to thousands of people in Great Britain, and therefore, it is time that the House reasserted its control over the executive. I had hoped—and I say this with great sorrow—that the inclusion of certain persons in the Government would have restrained the excesses of the Executive, but that has not happened, and the postbags of hon. Members in all parts of the Committee have been filled during the last few weeks with evidence that we are now slowly degenerating into a police state, and that the liberties of the subject cannot be entrusted to persons who appear to be unable to stand up to their own civil servants.
  It is time that hon. Members spoke in a forthright fashion. It would be far better if the House could be refreshed by contact with the constituents, but that cannot be. The 615 Members of Parliament are entrusted with very grave responsibilities, and we cannot hand them over to anybody else. We are expected by the country to be guardians and custodians of the liberty and safety of the people. It would be a very sad thing indeed if, after we had given to the right hon. Gentleman power to make these Regulations, during the next six, nine or
  732
  12 months, we found that a series of Regulations was gradually stealing away the liberties of the subject. Let me say this further. Whenever these powers are required from us, we are always asked to give them because the right hon. Gentleman or some other Minister tells us that he intends to do certain things and that he does not intend to do anything else; and we part with the powers because we have that assurance from the Front Bench. We then find that what the right hon. Gentleman has said is entirely out of accord with the actual circumstances. This afternoon, the Prime Minister rebuked indirectly the right hon. Gentleman—
  Sir J. Anderson indicated dissent.
  Mr. Bevan: And he rebuked the courts. Why? Because the right hon. Gentleman had frivolously issued orders under powers given him by the House of Commons.
  Sir J. Anderson indicatcd dissent.
  Mr. Bevan: The right hon. Gentleman shakes his head. I know he did not do so himself; he may have done so on the advice of his advisers and the demands of other Departments. This is a very serious matter.
  Sir J. Anderson: I would like the hon. Gentleman to specify a little more precisely to what he has just been referring.
  Mr. Bevan: If I indicated more precisely what it is I wanted to say, I should be immediately called to order, and so I can in this case only use metaphors and illustrations to point an argument.
  The Chairman: Then I am afraid I must tell the hon. Member that though I was very unwilling to interrupt him again I had just felt that I could not allow this discussion to go any further. I was about to point out, at the moment the Home Secretary got up, that I was afraid the hon. Member had already again transgressed my Ruling.
  Mr. Bevan: I am very anxious indeed not to quarrel with the Chair, but the Chair will admit that the Amendment I am moving—
  Sir Irving Albery: Is it not permissible, when an hon. Member has made certain allegations against another,

  733
  and as in this case the right hon. Gentleman has questioned them, that the hon. Member should state the reasons for making them?
  The Chairman: In my opinion, it is not only permissible but it is usual; but the hon. Member apparently does not propose to comply with the Home Secretary's request, and that caused me to rise.
  Mr. Bevan: So far from being unwilling to do so, I am most eager and anxious, if I can do so within your Ruling. At Question Time the Prime Minister made a statement with respect to an Order issued by the Home Secretary which referred to alarm and despondency.
  Sir J. Anderson: I would make the matter quite clear. That Order had nothing to do with the Home Secretary or the Home Office.
  Mr. Bevan: Then who made the Regulation?
  Sir J. Anderson: The hon. Member must accept my statement. It had nothing to do with the Home Secretary and nothing to do with the Home Office.
  Mr. Bevan: Who made the Regulation? [An HON. MEMBER: "It is for you to find out."] I am trying to find out in the House of Commons.
  The Chairman: The hon. Member has given his explanation, but it is not a matter which may now be debated further. I must ask him to come back to the Amendment he is proposing.
  Mr. Bevan: I have not finished the evidence on which I base my accusations against the right hon. Gentleman. He denied it, and it will be now for the House of Commons to find out who was responsible for the Regulation. I am sure that Members in all parts of the Committee will have been astonished by what the right hon. Gentleman has said. In the second place, I would refer hon. Members in all parts of the Committee to their postbags and to the way in which the police, who are responsible to the right hon. Gentleman—
  The Chairman: I must really ask the hon. Member to speak to his Amendment.
  Mr. Bevan: But I do implore that you should be a little more lenient, Sir Dennis. You said I did not propose to give evidence of my charges against the Home Secretary, and then when I propose to do so I am called to Order and asked to return to my Amendment. Which Ruling am I expected to obey?
  The Chairman: I think I may put it shortly. I will ask the hon. Member to obey my last Ruling, which is that he must address himself to the present Amendment.
  Mr. Bevan: I will accept your Ruling, but at the moment I was following your former Ruling. I shall only say one or two words in justification of my Amendment. I beg and implore hon. Members in all parts of the Committee to force the right hon. Gentleman to accept the Amendment, because it does put a period of time upon his powers, when it is so difficult for us in the terms of the Bill itself to put any other limitation upon him. The Regulations should be brought before the House when the legislation upon which they are based is fresh in the minds of hon. Members and they can examine the Regulations in their entirety and compare them at that time with the assurances the right hon. Gentleman gave when he introduced them to the House of Commons.
  9.55 p.m.
  Mr. Silverman: I regret that the discussion of this Amendment has led to controversy about other matters which, however important and relevant, tend to distract the minds of Members from the importance of the Amendment. I would ask the Committee to realise what the Government are asking us to do. They are asking no less than a blank cheque of unlimited power over the life and liberty of every citizen and to be allowed executive action without limitation or review of any kind. That would be the situation if the Amendment were not accepted. In justification of that demand, the Government have said that they propose only to exercise these unlimited powers in certain ways at certain times and on certain conditions, but those ways, times and conditions are to be determined by Regulations to be promulgated under the principal Act. There is no Member of the Committee, and, as far as I know, hardly any member of the public who

  735
  would not be prepared to give the Government every essential power to meet the exigencies of the urgent situations which might take place. Nothing in the Amendment that has been moved, and certainly nothing in this Amendment, is designed to limit that power.
  We say that if the Government have made up their minds what are the powers they require, and if they are ready, as we apprehend they are, to communicate through the usual channels the Regulations which they propose, there is no reason why the limitations upon those powers, which are to be defined by the Regulations, should not be in the Bill. The reason advanced by the Attorney-General in the Second Reading Debate against putting into the Bill the exact and circumscribed powers which the Government demand was that it would involve a long Bill in the nature of the judicature Act, which would be too long to pass and too detailed and cumbrous to deal with the immediate situation which is contemplated. We are endeavouring in the Amendment to meet that objection. We say that if there are reasons—which we do not admit—which prevent the Government putting in the Bill the exact limits of the powers which they seek and if it is necessary to limit those powers by the Regulations, we will concede the point, but let us know at some defined early date what the limits of the powers are to be. I cannot conceive why this Amendment should not be accepted. Unless I completely misunderstood the right hon. Gentleman's speech on Second Reading, he knows now what are the powers he wants. He is prepared now, and, indeed, I understand has already done it, to consult with representative Members in all parts of the House, about the delimitation which he requires under this Bill. He is in no difficulty, therefore, about telling us what he wants, and I find it hard to understand why the powers should not have been delimited in the Bill; but if there be some reason why they are not so delimited, if there be some inexorable reason why they should be dealt with by Regulations we say that there ought to be a limit—
  Mr. Stokes: Hear, hear. [Laughter.]
  Mr. Silverman: There may be something humorous about this or about my way of putting it, and if there is, I apologise
  736
  to the Committee, but I do not think there has been any occasion since 3rd September last year when we have been faced with a more important constitutional issue. It is something entirely new for the House of Commons to be asked to entrust the Executive with completely unlimited, undefined, uncircumscribed powers over the life and limb of every citizen, relieved of every one of the checks which our long constitutional history and experience have placed upon those powers. All we ask in this Amendment is that if they know now what are the powers they require, but are unable to put them in the Bill, they shall be compelled to define them in Regulations by some specified date, and shall not afterwards have the right to alter or extend those powers. It does not seem that that is too much to ask. If we do entrust to the Executive any entirely unlimited power by which citizens may be haled before courts not yet set up, upon charges not yet defined and be subject to penalties not yet specified, there will come a time when we shall bitterly regret having allowed ourselves to be stampeded in a moment of urgency—certainly not a moment of panic, I hope—into parting with every one of those constitutional safeguards against purely arbitrary Executive action.
  10.5 p.m.
  Mr. Stokes: I wish to say a word in support of my hon. Friends above the Gangway. If my interruption seemed to be humorous, it was not meant to be. I feel very strongly on this point, more especially in view of what we heard at Question Time, in regard to this rather odd, secret Gestapo, which has been formed under Lord Swinton with a couple of toughs named Crocker and Ball.
  The Chairman: Order. The hon. Member has now been long enough in the House to know the procedure in Committee on a Bill, and to know that if he wishes to speak, he must confine his remarks to the Amendment.
  Mr. Stokes: I was endeavouring to do so by illustrating my point as to the dangers which we am running. Apparently these powers will be available to this organisation of which this Committee knows very little, and in so far as the Amendment will tend to limit and to define the powers exercised by those people, I most heartily support it.
  10.6 p.m.
  Mr. Kenneth Lindsay: I am not sure whether this is the right way of further limiting and defining what is to be possible by the Executive. I did not put my question to the Prime Minister without serious deliberation. Like many other hon. Members, I have a score of letters in my pocket from citizens in this country describing conditions, which have been described outside by Mr. Nevinson and others, and which make one ashamed.
  The Chairman: I have just asked another hon. Member, and I must now ask the hon. Member, to confine himself to the Amendment which is before the Committee.
  Mr. Lindsay: I am trying to confine myself to the Amendment. I have no wish to impede the right hon. Gentleman in the exercise of his legitimate powers, but we seem to need some point of check. I speak not particularly for those who come under this Clause, but I am alarmed that it is possible at this moment that a person who belongs even to some Anglo-German camaraderie to which I belong myself, can be put away and detained. Similar examples have come to the notice of the right hon. Gentleman every day, under powers for which the right hon. Gentleman has already said he is not himself responsible.
  The Chairman: The hon. Member is now discussing powers with which this Amendment does not deal.
  Mr. Bevan: Is it not possible for hon. Members in this Committee to give instances to show that the power to issue regulations by the Executive should be limited because of the manner in which the same Executive has already abused that power?
  The Chairman: Yes, but within such limits as the Chair may set.
  Mr. Bevan: I submit, then, further to my point of Order, that before hon. Members have started to put such illustrations the Chairman has intervened. If this continues, a Motion will be put on the Order Paper. It is ridiculous.
  The Chairman: The hon. Member is entitled to put a Motion on the Order Paper—
  Mr. Bevan: I shall do so.
  The Chairman: —but he is not entitled to show disrespect to the Chair.
  Mr. Bevan: The Chair must not be disrespectful to the Committee.
  The Chairman: I must ask the hon. Member to withdraw that remark.
  Mr. Bevan: I beg to withdraw the remark.
  10.9 p.m.
  Mr. Edmund Harvey: Many hon. Members feel it is desirable that there should be some further safeguard of the rights of the House of Commons. If the Amendment which is taken in conjunction suggests too early a date, and if it is impossible for the Regulations to be put forward by 31st July, it could be possible for the Government to suggest an amended date, and to substitute August for July, leaving several weeks more in which to elaborate these Regulations. But it is surely desirable that the House of Commons should have final control, and we know from experience that if the Government issue a whole series of Regulations by Orders in Council, it is practically impossible for the House of Commons to exercise a vigilant oversight over the details of the Regulations. Only in exceptional cases, under the form of the Prayer, is it possible to raise questions and call the attention of the House of Commons to matters of great importance, and I therefore very much hope that although the Government may not be able to accept the particular form of the limitations suggested in this Amendment, they will see their way to accept some further measure of limitation which will assert, as I believe very many Members on both sides of the Committee wish to see, the fundamental rights of the House of Commons safeguarding the liberty of the subject.
  10.12 p.m.
  The Attorney-General: I cannot but submit that the hon. Member for Nelson and Colne (Mr. Silverman) was employing somewhat exaggerated language when he referred to this Bill as one which gave the Executive unlimited power over rights and liberties. What this Bill declares is that under the original Emergency Powers Act courts other than courts-martial can be set up to try, according to the law of the

  739
  land, offences against the law of the land. I do not want to be unnecessarily controversial, but I think it is putting it a little high to describe that as a Bill which gives the Executive unlimited power over rights and liberties.
  Mr. Silverman: It is necessary that we should understand each other. Am I right or wrong in thinking that under either the original Bill or this Bill, which is declaratory of what the original Bill intended, the Executive have the right to create entirely new offences, to impose for those new offences entirely new penalties, to try those new offences and impose those new penalties before entirely new courts?
  The Attorney-General: I am talking about this Bill, and I thought the hon. Gentleman was. Under the original Act, as hon. Members know, there is power to create offences and to impose penalties if they can be justified for the efficient prosecution of the war, the maintenance of public order and so on. This Bill declares that courts can be set up—not only civil courts but special courts—to try offences in circumstances with which the Committee are familiar. Of course, those new courts will involve a new procedural code, simple but, we hope—in accordance with the general principles of justice as understood in this country—expeditious. A good deal has been said or indicated on grounds on which I shall not trespass in regard to powers of the Executive as exercised since the outbreak of the war. One of the purposes of the House in war-time, and one of the services which it performs, is to bring up matters in which it thinks the Executive have made an excessive or wrong use of their powers. But of all means of limiting the power of the Executive in a particular matter, this Amendment seems to me the worst. I suggest that this is exactly the area where a provision of this kind would be the last thing we want. These Regulations would set up the courts on the main lines indicated by my right hon. Friend, which my right hon. Friend had arranged to discuss.
  Mr. Bevan: What does the Attorney-General mean by that? We hear about discussions, and we do not know with whom.
  The Attorney-General: I am very sorry about that, but it is not my fault. In
  740
  the Second Reading Debate certain Members pressed my right hon. Friend to enter into discussions of the kind that he has entered into before. Obviously he could not meet 600 Members of the House, and I am sure that he would consider any representations from any part of the House, provided that it did not increase the number beyond the normal possibilities of such a discussion. However, that is not directly relevant to the point I am making. The Regulations laid down the broad points. They also had to deal with procedure. Anybody who has had anything to do with procedure knows its complexities, and knows the need for elasticity in revising it in the light of experience. Procedure in the courts can be revised by Rules, which, of course, do not require an Act of Parliament. Starting, as we were here, with a clean slate, and having to do our best to think out appropriate and fair procedure, it is inevitable that amendments of that procedure will be necessary, as they always are in dealing with legal matters of this kind. As I pointed out, the existing procedure of the courts is laid down generally, but there is a flexible power of making amendments of this kind.
  The effect of this Amendment would be that the whole procedure would be petrified in the form which our foresight, such as it is, was able to provide in the first Regulations dealing with the matter. But suppose that in August, September, or October one of the learned judges says that it is quite obvious that something will have to be provided which was omitted in the original draft. If this Amendment is carried, we cannot do that without coming back and getting a Bill. It is quite certain that before these courts are actually functioning they will have to consider the Regulations and get the whole scheme working, foreseeing, as far as possible, eventualities that will arise. The smallest amendment could not be made, the best suggestion, possibly of a kind wholly parallel with the views of hon. Gentlemen opposite, could not be adopted, without our coming back and getting another Bill. In the case of Regulations which are going to deal with procedure particularly where a new court is being started, it is cbvious that improvement and amendment, in the light of experience, are bound to be required.

  741
  Is not this surely the worst possible device for limiting the power of the Executive, even if in other directions they may desire this Amendment? For these reasons, I am afraid I cannot advise the Committee to accept the Amendment. It would, I think, be quite impracticable. There is a greater danger. In debate it is one of the rules of the younger debater that if a Minister gives any indication of what he is going to do, you attack him. If he is honest and takes the House into his confidence and gives assurances, they say, "What are your assurances worth? You may not he here in the future." Do the Committee desire a particular assurance or not? [An HON.MEMBER: "We want it in the Bill."] It obviously cannot he put in the Bill. Do the Committee desire and welcome assurances from Ministers? My right hon. Friend, having said he was quite prepared to discuss with persons particularly interested the original lay-out of the Regulations, naturally any undertaking which he had given would not have been given without having discussed it with those who were interested. The Amendments which will be necessary will he Amendments in procedure which I know will he inevitable and will be required to he made, possibly, at short notice.
  10.22 p m.
  Mr. Shinwell: It is true that the right hon. Gentleman the Home Secretary gave certain assurances to hon. Members in the Second Reading Debate, and he has fully complied with the spirit of those assurances. That much ought to be said. He met what may be described as a representative body of Members in that they represent all quarters of the House. [An HON.MEMBER: "No."] It may be that some of my hon. Friends behind me are more representative than those who were met. That is a debatable point, but the right hon. Gentleman agreed to meet several hon. Members, and he did. It must be noted that my hon. Friend the Member for Ebbw Vale (Mr. Bevan), in a speech of characteristic eloquence, supported the Amendment placed on the Paper by the right hon. Gentleman as a result of the discussions in which this so-called body of Members participated. [Interruption.] Goodness knows, there have been irrelevancies in discussion. Of course, this is a bad Bill. We have recognised that from the start. But we
  742
  are up against a very serious situation, and we have to make the very best of a bad Bill in a serious situation. I do not say that my hon. Friends behind are not trying to make the position better, but let us face the realities of the situation. We do not in any way add to the force of the argument by retailing all the evil characteristics of the right hon. Gentleman opposite, facts with which we are all familiar. I am concerned about the Amendment that is before us.
  I am as much concerned about safeguarding the liberty of the subject as any Member of this Committee. We got an assurance that the right hon. Gentleman would meet us, and he did. He also gave us an assurance that when he came to the Regulations he would submit them to a representative body of Members. I want to ask whether he stands by that assurance?
  Sir J. Anderson Sir J. Anderson indicated assent.
  Mr. Shinwell: He does. We have that assurance, and I accept it. I cannot always pretend that assurances by right hon. Gentlemen should be something which should be completely ignored. At any rate we can hold them to such assurances in the course of debate; we have done so and will continue to do so in future. I attach considerable importance to the assurance given by the right hon. Gentleman, that before the Regulations are on the Paper, a representative body of Members will have an opportunity of expressing their views upon them.
  Mr. Glenvil Hall: Does that mean all the Regulations or only the first set?
  Mr. Shinwell: I was coming to that. Let us take the thing in its proper sequence. First of all there are the Regulations which arise under this Bill, and the right hon. Gentleman has given an assurance that he would submit them to a representative body of Members. This House has the right to reject them in spite of the discussions with a representative body of Members. It is true we have no power to amend Regulations, but I take it that a representative body of Members, having expressed their views on them, will be able to convince the right hon. Gentleman that some are unsatisfactory and should be amended. We hope, therefore, that when the Regulations do finally come before us they will be more satisfactory than they might have

  743
  been when they were discussed with a representative body of Members of the House.
  Then I come to the second set of Regulations. The Amendment envisages a situation in which circumstances undergo a drastic change. The right hon. Gentleman can construct a set of Regulations which are suitable to a particular situation, but in these rapidly changing days they may be out of date almost before they are on the Paper. Then the right hon. Gentleman prepares a new set of Regulations, and I take it they would be submitted, also, to a representative body of Members. The second set of Regulations must be placed on the Table of the House and can be voted against, or accepted, by the House. So we have a double safeguard.
  I come now to what I regard as the reality of the situation. I have said that this is a bad Bill in a serious situation. Something has been said about not trusting the right hon. Gentleman. Well, I will put my cards on the table. If I had to choose between the military authorities—and please acquit me of any discourtesy to those in charge, because I had to work with them at the War Office —and the right hon. Gentleman, in a critical situation, I would prefer the Home Secretary. It may not be the same Home Secretary. You never can tell. I prefer to leave myself and, what is more important, to leave my friends who may be affected by the provisions of the Bill, in the hands of the civic authority rather than in the hands of the military in such a situation. Ordinarily in peace time the military are to be relied upon in matters such as this, but in such a situation as we envisage I would rather the Home Secretary.
  Mr. Bevan: On several occasions we were pulled up because we were irrelevant. Are we now discussing whether power should be entrusted to the War Office, the Navy, or the Air Force or to the right hon. Gentleman? We are discussing no such matter at all. We are discussing whether the power to issue Regulations should die on a certain date or not and not to whom they should be entrusted.
  The Deputy-Chairman (Colonel Clifton Brown): I was not in the Chair when the
  744
  Debate started. I thought the hon. Member for Seaham (Mr. Shinwell) was answering points raised by the hon. Member for Ebbw Vale (Mr. Bevan).
  Mr. Shinwell: You are quite correct, Colonel Clifton Brown. Then are some people who do not like a Roland for their Oliver. Many of my hon. Friends, keen as we are about safeguarding the liberties of our people, and anxious as we are to protect ourselves against Regulations of a severe character, feel that the Amendments which have already been accepted as a result of our submissions, and other safeguards, such as the assurance which the right hon. Gentleman has now reaffirm ed—[HON. MEMBERS: "No, he has not."] I asked that he would submit all subsequent Regulations to a representative body of Members.
  Sir J. Anderson: I was asked by the hon. Gentleman whether I adhered to the assurance which I had given to the House on the Second Reading. I said "Certainly." I have been asked whether the assurance applies to all subsequent Regulations. No Minister would give assurances running indefinitely, but I will tell the Committee frankly how I, as an ordinary person, interpret the sort of obligation one undertakes when one gives the sort of assurance I have given in regard to this matter. If I undertake to discuss a body of Regulations with Members of this House and if, as a result of those discussions, certain understandings are arrived at, I should not regard it as honourable conduct subsequently to make Regulations involving a departure from those understandings without similar consultation.
  Mr. Shinwell: Leaving out any considerations of political partisanship, I accept that. It may be that we shall find ourselves on the wrong side of the street in consequence, but I accept that assurance. [Interruption.] My hon. Friends can take one course, and we can take another. This House is split up into all kinds of sections now. Anyone can take a line of his own. I have expressed my view of the situation as a result of consultations with my hon. Friends beside me, at our party meeting and in our party administrative committee, and as a result of our participation in discussions with the right hon. Gentleman, and by that view I am prepared to stand.
  10.36 p.m.
  Mr. Bevan: Although the consultations to which my hon. Friend the Member for Sea ham (Mr. Shinwell) referred have taken place, and although the hon. Member has spoken with considerable eloquence and a remarkable degree of irrelevancy, he did not in the course of those consultations obtain the assurance which has now been obtained as a consequence of the Amendment on the Paper. The fact is—and I want to put this on record, because I would like to have this binding not only on the right hon. Gentleman the Home Secretary, but on any successor who may follow him in that office—that not only will he consult about the Regulations he is now going to bring in, but he will consult about any subsequent Regulations which may be brought in under the Bill, and those subsequent Regulations will be presented to the House after consultation in exactly the same way as the first set of Regulations. [Hon. MEMBERS: "No."] Let us know what is the assurance which the right hon. Gentleman has given. Has the right hon. Gentleman given an assurance that subsequent Regulations will be brought in after consultation with hon. Members in all parts of the House, and will he subject to the same procedure as the original set of Regulations? Is that the assurance?
  Sir J. Anderson: I have nothing more to say.
  Mr. Bevan: If that is not the assurance, then it does not meet the arguments that have been made. It may be all right for hon. Members opposite, who are now, as far as I can see, running away from the position which they took on this matter in the Second Reading Debate, but I want an assurance that the first set of Regulations will not be subjected to erosion by a subsequent series of Regulations which will be brought in when the House is not as vigilant as it will be about the first set of Regulations. It will be remembered that when we discussed this matter on the Second Reading, the thing upon which hon. Members in all parts of the House seized was the fact that the content of the Bill consisted in the Regulations and not in the Bill itself. It is that content which we are now discussing. If we cannot have an assurance of the kind I have suggested, and which I think is quite reasonable—because it is merely
  746
  that the same procedure will be followed with the subsequent Regulations as with the first Regulations—we shall have to divide.
  Sir J. Anderson: If assurances such as I have given in this matter are not to be accepted in the spirit in which they are given, I think it will be very difficult for Ministers to give assurances at all. I thought I had made my meaning and intention sufficiently clear to the hon. Member on the Front Bench opposite and to the Committee as a whole.
  Mr. Silverman: We do not agree with him.
  Sir J. Anderson: I thought it was sufficiently clear. I would like to remind the Committee that a similar question arose some time ago. There were discussions on Regulation 18B, and certain connected Regulations. As a result of those discussions, certain Amendments were made. The war then entered upon a new phase, and I found it necessary to contemplate further Amendments of those Regulations. I took the initiative and promoted with the co-operation of hon. Members further discussions for the reason that I did not wish Regulations which had been settled after discussion to be modified in matters in which an understanding had been arrived at. I do hope that after what I have just said there will be no room for-misunderstanding as to what I have in mind. I cannot and will not give a formal undertaking that every single Amendment which may hereafter be made in respect of Regulations under this Bill will be subject to discussion. It would be absurd to give an assurance so absolutely rigid in form as that. I have given an assurance which will be found on record, and which I venture to think all reasonable people will regard as sufficient.
  10.41 p.m.
  Mr. Silverman: Can we understand exactly what assurance the right hon. Gentleman is giving? If the Amendments in the Regulations are purely formal points of procedure such as those referred to in the speech of the Attorney-General, then I suppose most of us would be content to leave it to the Executive. But the Regulations contemplated under this Bill may be either purely formal in procedure or they may be something far more im-

  747
  portant. They may be, as we have repeatedly stated during the Debate, creating entirely new offences.
  Sir J. Anderson: The assurances I am giving relate to Regulations under this Bill. They cannot relate to anything else.
  Mr. Silverman: Undoubtedly. What we are asking is whether the Minister assures us that any Amendment of the Regulations under this Bill which are matters of substance and not purely matters of form will not be made without discussion already promised with regard to the first Regulation. We are prepared to allow a certain latitude on formal points but not on matters of substance or fundamental points.
  10.43 p.m.
  Mr. Bevan: As Mover of this Amendment may I say that it may conceivably have happened in the course of the Debate that there have been temperamental differences? I cannot see why the right hon. Gentleman should not have accepted the language which I suggested, which was not in any way intemperate. He would merely be applying to subsequent Regulations the procedure he applies to the other Regulation. I did not put this forward to be obstructionist and difficult. I thought it was, in the circumstances, quite reasonable. But the right hon. Gentleman has with Scottish obstinacy refused to accept that form of words for another form of words which amount to almost the same thing, but with more circumlocution as befits a follower of Dun Scotus. I think it would be unwise to divide the Committee on so narrow a point, so I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Amendments made:
  In page 2, line 10, after "such," insert "special."
  In line 10, after "courts," insert "not being courts martial."
  In line 16, after "courts," insert "not being courts martial."—[Sir J. Anderson.]
  Colonel Arthur Evans: May I ask whether the Chair has decided not to call the manuscript Amendment to Clause 1, page 2, line 10, at the end, to
  748
  insert certain words? It deals with a specific point which has not been covered.
  The Deputy-Chairman: That Amendment is not being called.
  10.45 p.m.
  Major Milner: I beg to move, in page 2, line 17, after "Regulations," to insert:
  "such Regulations to provide for legal representation before all such courts by barristers or solicitors."
  On Second Reading the Home Secretary gave an assurance that the courts would be of a civilian character, that the ordinary rules of evidence would apply, and that defendants should have legal representation if they were able to obtain it. It is essential to enable those who are brought before these courts to obtain legal representation. The powers of the courts are extraordinary, the procedure is new, particularly in that there will be no preliminary inquiry before courts of summary jurisdiction, courts may be sitting where there is a good deal of feeling, the penalties which it is within the power of the courts to inflict include the extreme penalty of death, and no appeal is provided for. I press the matter more particularly because recently there has been a number of instances where legal representation has not been granted. There has been the case of aliens, the procedure before the hardship committees and the procedure before the Price of Goods Committees. Curiously enough, the only persons who have latterly been permitted to have legal representation are conscientious objectors. It is essential in this important matter that it should appear in the Bill that legal representation would be permissible.
  10.47 p.m.
  Sir J. Anderson: I can assure the hon. and gallant Gentleman that it is intended to make provision in the Regulations whereby persons accused and brought before these courts will have the right of legal representation. I do not think it would be appropriate, having regard to the general structure of the Bill, to make a specific provision on a matter of this kind, but there will be provision in the Regulations.
  10.48 p.m.
  Captain W. T. Shaw: I hope that the hon. and gallant Gentleman will

  749
  press the Amendment. We have recently had cases of people who have been detained for six weeks without any charge being brought against them. In difficult circumstances and with strained nerves, they have come before the Advisory Committee without any opportunity of having anyone to represent them and put their cases. It is essential that in this Bill, under which capital punishment may be inflicted, people who appear before them should have the right to be represented legally. I do not think it is a matter that should be left in the hands of the Home Secretary.
  10.50 p.m.
  Mr. Glenvil Hall: The Home Secretary has given us no reason why these words should not be inserted in the Bill. I should like to bear out what the hon. and gallant Member for South-East Leeds (Major Milner) has said, that there is a great deal of feeling on this matter not only among the legal profession, but among ordinary laymen. It is felt to be essential that in these courts people should have legal help, especially as the charges may be serious and may carry the death penalty. Although the Home Secretary has up to now refused to accept Amendments I hope he will realise that this is a reasonable one and agree to its insertion in the Bill.
  10.51 p.m.
  Major Milner: I understand that the right hon. Gentleman proposes to include my proposal in the Regulations. It has been suggested that the Regulations may be altered subsequently, but I assume that the right hon. Gentleman will, both in the first instance and afterwards, honourably carry out his undertaking in the spirit as well as in the letter. That being so, I beg to ask leave to withdraw the Amendment.
  10.52 p.m.
  Mr. Silverman: Before this Amendment is withdrawn—
  The Deputy-Chairman (Colonel Clifton-Brown): If leave is to be given to withdraw the Amendment there can be no discussion upon it.
  Mr. Silverman: Leave to withdraw has not been given yet. I have no desire to be ungracious, and would have no objection to accepting the assurance of the right hon. Gentleman both as to putting
  750
  the Amendment in the Regulations and keeping the obvious obligation there would be upon him not to alter it afterwards; but I do not regard either this Government or the right hon. Gentleman as being immortal. Times change and Governments change with them, and Members may change even without the Government changing. We have had experience of that in the last few months and I hope we shall have more of it before we are through with this business. If the right hon. Gentleman accepts the principle that there should be a right to have legal representation, then it is difficult to see why it should not be inserted in the Bill, so that no subsequent Government or Minister could alter it without the specific leave of this House.
  10.53 p.m.
  Sir A. Southby: I would ask my right hon. Friend whether he cannot reconsider his decision. There is no doubt that the setting up of these courts has given rise to a considerable amount of misapprehension, not only in the House but outside. If these courts are to be regarded with confidence by the public I think it is essential that the public conscience should be strengthened by the knowledge that persons who come before them they will be assured of legal representation. My right hon. Friend has said that he will put the provision in the Regulations, and of course we know that that undertaking will be honourably carried out, as all his undertakings have always been honourably observed, but the Regulations are subject to subsequent amendment, and it will be very difficult for an amended Regulation to be turned down by this House. If it is put into the Bill then any amendment taking away the right to legal representation will have to come specifically before the House. In the interests of giving people confidence in these courts I would ask the right hon. Gentleman to reconsider his decision.
  10.54 p.m.
  Mr. Stephen: I support the appeal to the Minister to accept this Amendment, or, if he cannot accept this precise Amendment, to give us an assurance that words to the same effect will later be inserted in the Bill. He has said that he will make provision for this proposal in the Regulations, but no one knows what may happen in the future. Though he asked us not to insist

  751
  upon the Amendment going into the Bill he gave us no reason why it should not be in the Bill. All he said was, "I hope he will not insist upon putting it into the Bill." There may be reasons, as I gather from the Home Secretary, but I notice that the Attorney-General is ready to explain the point.
  10.55 p.m.
  The Attorney-General: This is a manuscript Amendment, and I think that, for several reasons, it would be a mistake to accept it. The Regulations which are to deal with this matter must of course deal also with the representation of the prosecution. In these courts it is contemplated that a solicitor should have the right to appear, in addition to a barrister, unlike the High Court. It is clearly intended that the prosecution should be represented not only by counsel or solicitor but, possibly, by a superior police officer. You have to work under emergency conditions. It may be desirable to see that it is done. So far as the defence is concerned, you may contemplate instances in which a soldier might be represented by an officer or personal friend. It is also proposed to give to the court a general overriding power, if solicitors are not available, to allow representation by some other persons. My right hon. Friend has given his assurance that, so far as these words are concerned, it is better to keep them.
  Mr. Stephen: I am not satisfied with the reasons. The right hon. Gentleman will understand that while his assurance is accepted by all of us, with regard to the Regulations, Governments are not immortal, and we are entitled to ask for statutory provision. I should be satisfied if the Home Secretary would agree to consider words which would give a statutory provision to include all the Regulations for the future.
  10.58 p.m.
  Mr. Harvey: I hope the Home Secretary will consider the suggestions that have been made. His argument was addressed to the words of the Amendment and to their place in the Bill, but not to the underlying principle. The Home Secretary has made it clear that he accepts the principle; surely it ought to be possible to find words which can be inserted in another place. It is not beyond the power of the right hon. Gentleman,
  752
  given a little time, to devise words to carry that meaning.
  10.59 p.m.
  Mr. E. Evans: I was in favour of withdrawing the Amend rent until I heard the right hon. Gentleman speak. I am bound to say that his speech has made me very uncomfortable. The right hon. Gentleman has introduced an entirely new element. He gave us the first inkling of any Regulations that are likely to be made under this Bill, and that inkling was that there were technical difficulties about the procedure; he said that they might have to decide who should be the representative for the prosecution—a barrister or a policeman.
  The Attorney-General: I said, who should appear for the prosecution.
  Mr. Evans: It is appearance that we are talking about. If it is so important to state in the Regulations who should be allowed to appear for the prosecution, whether he should be a solicitor or a police officer, it is also very important to decide who should appear for the defence. When courts are set up with these extreme powers, I beg of the Government to make absolutely sure that every accused person shall have the right to be represented by a qualified legal person. I know of many courts in which a person can appear by a friend, and the friend often acts in a very capable way, but when you have courts of this sort with the power of imposing death sentences or sentences of a very grave character, and when the courts themselves are not subjected to the ordinary procedure of courts, I ask the Government to accept the position that it is essential that all persons who appear before those courts should be entitled to appear by persons who understand the ordinary rules of procedure.
  The Attorney-General: I am afraid I did not make myself clear. I did not mean to suggest for a moment that every person accused and brought before a court would not have the right to appear by a barrister. Take, for example the assizes. An accused man is not allowed to appear by a solicitor there. What I was dealing with was to see how wide the right should be to be perfectly fair.
  Major Milner: I do not think that is satisfactory. Do I understand that the

  753
  right hon. and learned Gentleman has in mind considerations whether a barrister or solicitor may have a right of audience? In a court of this sort, called at short notice possibly, it is essential that either or both should have a right of audience.
  Sir I. Albery: On a point of Order. Is the hon. and gallant Gentleman entitled to talk on this now?
  11.3 p.m.
  Mr. Bevan: Surely the objection made by the Attorney-General could be met by a form of words agreeable to the Government and put in the Bill, unless it be that the right hon. Gentleman has made up his mind that in no circumstances should an Amendment moved in Committee be accepted by him. That appears to be the attitude taken by him. There will be a Report stage—
  The Joint Parliamentary Secretary to the Treasury (Captain Margesson): Tonight.
  Mr. Bevan: This is entirely unreasonable, surely. We have a large number of Amendments on the Order Paper, and this is a very important matter indeed. We were told by the right hon. Gentleman on the Second Reading that the method of procedure was to extend and not limit the time in which the Committee could consider this Bill. I think he is a victim of his own maladroitness. Surely, on the Report stage language can be put in the Bill to give the assurance that is asked for here. Can we have an assurance of that kind?
  11.4 p.m.
  Mr. Silverman: We are asking for something very small. We are only asking that the Bill should secure for an accused person the right of legal representation. The right hon. Gentleman may decide by Regulation what form that right should assume, but what we think important is that the Bill itself shall reserve for an accused person the right of some legal representation at his trial. Cannot we have that assurance?
  11.5 p.m.
  Sir J. Anderson: I do not want to appear in the least obstinate. I have no objection to accepting Amendments which would improve the Bill. In regard to this question of legal representation, I thought I had made it perfectly plain that there
  754
  was no intention of making Regulations which would deprive accused persons of their right to have, at their option, representation by a barrister or a solicitor or, possibly, certain other persons. But if you provide for legal representation of the accused person, you have to provide for legal representation of the prosecution, and it seems to me that this is the sort of matter which could be more satisfactorily dealt with, after discussion, by provisions which would be of a more deterrent character, in the regulations themselves. I really think the Committee might he content to leave the matter there.
  11.6 p.m.
  Mr. Bevan: May I respectfully suggest that we are concerned at present with the defence and protection of the accused person? We are perfectly satisfied that the Executive will be able to protect itself. We are not anxious to be obstructive, but surely the right hon. Gentleman is now—I was going to use the un-Parliamentary expression "pig-headed"—giving us a master piece of obstinacy. There is no reason why the language of the Amendment should not be put into the Bill on the Report stage. If he does not like the language of the Amendment he can alter it, but it is humiliating to the Committee to suggest that reasonable Amendments cannot be put into the Bill because the Minister insists on their being put—into the Regulations. If the right hon. Gentleman persists in the mood of which he is now the victim he will find himself up against the wishes of the Committee. He ought to be a little more resilient and to accept reasonable Amendments when they are agreeable to other Members of the Committee.
  11.8 p.m.
  Sir Richard Acland: I merely want to ask the Minister a question about his intentions in regard to participating in this discussion, apart from the point which has been engaging the attention of hon. Members for the last five or 10 minutes. The right hon. Gentleman says that the accused will have a right of being represented by a barrister or solicitor. Does that mean that he will have a right to be represented by a barrister if he can get one: if he can pay for one or find one in the time and the circumstances, or does it mean that under the Regulations that right of being represented by somebody experienced in

  755
  the law will be guaranteed to him, so that no man will, at least, be tried for his life without being legally represented? It is a poor consolation when a man is brought under this quick procedure, arrested and brought into a dock in some emergency court, for him to read in the OFFICIAL REPORT that the Home Secretary said that he had the right to a barrister, when the authorities of the court say, "Where is your barrister? You have the right to one if you can find one."
  11.10 p.m.
  Sir J. Anderson: May I deal with the point that has been raised although it is rather different from the one raised on the manuscript Amendment? The speech to which we have just listened is a very good illustration of the case that I think there is for reserving this matter to be dealt with in the Regulations. We propose to provide in the Regulations for the application, with suitable modifications, of the poor persons' rules, or what ever the technical phrase may be. I still think that to reserve the whole of this matter of legal representation, including the question of representation of poor persons, to be dealt with in Regulations will in practice be found to be the most satisfactory method. The hon. and gallant Member who moved the manuscript Amendment expressed a desire to withdraw it, and I hope he will do so.
  11.12 p.m.
  Major Milner: Obviously I am in some little difficulty because a number of hon. Members clearly desire the matter to go to a Division. I wonder whether it would be possible to effect a compromise on some such lines as these. If the right hon. Gentleman would agree to consider the matter and, possibly, to insert this proposal in the Bill in another place, it would give him time and opportunity to look into the points which have been raised. If he did that, I think it would facilitate matters and I should be happy to ask leave to withdraw the Amendment. It would not put the right hon. Gentleman under an absolute obligation to insert this in the Bill but would give him an opportunity of considering the matter and perhaps of meeting the obvious wishes of a large number of Members of the Committee.
  11.13 p.m.
  Sir A. Southby: What the Attorney-General said, satisfied the objection which I had in mind. I understood the right hon. and learned Gentleman to have an objection to putting these words into the Bill here, because under the Regulations he would have to provide for circumstances in which it might not be possible to get legal representation. Would the Home Secretary look into the matter, taking some time about it, and, if he thought he could do it reasonably in the Bill, have it inserted in another place without giving any particular undertaking to the Committee? If he could find suitable words, which he and the Attorney-General wanted to do, the Committee would prefer to see them in the Bill rather than in the Regulations.
  11.14 p.m.
  Mr. Stephen: I think the Home Secretary and the Attorney-General are possibly misunderstanding what some of us want. We are not asking the right hon. Gentleman to put into the Bill the specific matter which he is proposing to include in the Regulations, with all the various alternatives, but surely it is not outwith the mind of the Attorney-General to get a different form of words which will give a statutory right to legal representation. We are asking that a general right to legal representation should be included in the Bill, and then afterwards, when the Regulations are made, the particular matters that are in the mind of the Home Secretary and his advisers can be put into the Regulations to satisfy the general right that is in the Bill itself. I hope I have made that distinction plain. So much time seems to have been wasted because the Attorney-General and the Home Secretary seem to think that the whole of what the right hon. Gentleman is proposing should be put into the Bill. All we want is the insertion of the principle in the Act. Surely it is not beyond the competency of the Attorney-General to draft such words. If he has any difficulty about it, I think I could do it for him myself.
  11.16 p.m.
  The Attorney-General: I am always glad of any help I can get, but I must say that I think the proper place for this is in the Regulations. I think if you come to deal with it you will find a difficulty in that the words would be so wide

  757
  as to mean nothing or will be specified, like the Amendment, and suggest that other forms of representation must be excluded. However, I will undertake, and my right hon. Friend has authorised me to say that he will undertake, to see whether the difficulties can be overcome and some words inserted in another place. That is not a pledge that we will insert words but perhaps the hon. Gentleman and the Committee will be content to leave the matter like that.
  Major Milner: Would the right hon. and learned Gentleman consult with me? I beg to ask leave to withdraw the Amendment.
  Mr. Bevan: On a point of Procedure: Is it reasonable to ask how far we are going to-night?
  The Deputy-Chairman: We must first dispose of the Amendment.
  Major Milner: I asked leave to withdraw it.
  The Deputy-Chairman: The hon. and gallant Gentleman cannot withdraw the Amendment, because there were speeches afterwards, and the Amendment must be negatived.
  Amendment negatived.
  11.17 p.m.
  Mr. Bevan: On a point of Order. The Committee proceedings started much later than Members expected because the Debate on the Budget was far longer than was expected. Now, in view of the late hour, and having regard to recent experiences—there has been no obstruction—is it not possible for us to take the rest on the subsequent day?
  Colonel A. Evans: May I support the plea of the hon. Member? There are certain important manuscript Amendments which we shall wish to move.
  The Deputy-Chairman: I am not quite sure what we have before the Committee. I think the hon. Member ought to have moved to report Progress.
  Mr. Bevan: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
  11.19 p.m.
  Colonel Evans: I hope the right hon. Gentleman will not ask the House to proceed further to-night. It is obvious that the Committee stage as such will not be
  758
  completed for a considerable time yet, and I hope the Government will give us an opportunity of considering whether to press the manuscript Amendments we wish to move on the Report stage.
  11.20 p.m.
  Mr. Spens: I feel very diffident in expressing a view which I know the Committee will not really like, but this is really a most urgent Bill. Those who represent certain parts of the country are anxious that it should not take day after day in the House. It affects our ordinary procedure in the courts and our ordinary administration of justice. Everyone is expressing the desire that the ordinary courts should function as long as possible, but it would be wrong to leave the Committee with the view that there are not reasons why the Bill may be required at a very early date in certain parts of the country. The only alternative is that certain parts of the country will, or may, find themselves under courts-martial both for civilians and for the military. In these circumstances I hope the Committee will see their way to get the Bill through as early as possible.
  Colonel Evans: Is it possible, as the law stands at present, to apply martial law to the civil population?
  Mr. Glenvil Hall: There are at least a dozen Amendments on the Paper and some are extremely important and will take some time. We all wish the Bill to go through as quickly as possible, subject to safeguards which we think essential. I hope the Government will see their way to give us what we want and give an opportunity at an early date to proceed with the rest of the Amendments.
  Sir A. Southby: I think we might finish the Committee stage to-night. The Bill is urgently required, but I also think the liberties of the people require a little time for discussion. We are not so afraid of Hitler that we cannot take time to discuss things quietly. I suggest that we finish the Committee stage to-night and leave the other stages for another day.
  11.23 p.m.
  Captain Margesson: The Government asked that the Bill should be passed through all its stages as a matter of urgency last week and it was on Thurs

  759
  day, when some difficulty arose over the Second Reading, that the Government decided that they would not push forward any further on that day. Consultations took place with little groups, and we were assured that we should be saving time in the long run and that we should proceed much faster when we next took the Bill up. The House was informed that we proposed, after a discussion on the Budget Resolutions to-day, to take all stages of this Bill, and no objection was raised in any quarter. I made some inquiries to-day and was informed that two and a half or three hours would see it through all its stages. We entered upon its discussion at 8 o'clock, and it is now 11.25. The Government do not wish to force the Committee. There is no good in doing that. The Bill is urgent and should be got on to the Statute Book as quickly as possible. Progress is difficult when you have a section of the Committee determined to hold up a Measure.
  The only thing to do is to try to find some ways and means of getting this Bill on to the Statute Book as early as possible. The suggestion I make to the Committee is that we should now report Progress and ask leave to sit again, and that to-morrow, instead of entering upon the discussion of the outstanding Budget Resolutions in Committee, we should proceed with the remaining stages of this Bill; and if to-night we could make some agreement that by, say, 7·30 to-morrow we should be able to conclude the Committee stage, the Report stage and the Third Reading of the Bill, so as to get it completed, I think the Government would be generously meeting the wishes
  760
  of hon. Members in all quarters of the Committee. I should like to feel that the Government are carrying all sections of opinion in the Committee with them, and that it will not be said to-morrow that we are trying to hustle and bustle the Committee.
  Mr. Bevan: I am very grateful to the Patronage Secretary. May I suggest that in order to facilitate further proceedings, it may be possible for the Minister to get into communication with those who have Amendments on the Paper so as to try to get some agreement by consultation before the Amendments are reached
  Captain Margesson: We will see what can be done, and I feel sure that my right hon. Friend will do his best to meet that wish.
  Question, "That the Chairman do report Progress and ask. leave to sit again," put, and agreed to.
  Committee report Progress; to sit again To-morrow.

  PURCHASE TAX BILL.
  Order for Committee read, and discharged; Bill withdrawn.
  The remaining Orders were read, and postponed.

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

TRADE AND COMMERCE.
  COTTON INDUSTRY.
  COTTON INDUSTRY.
  RETAIL CONSUMPTION.
  RETAIL CONSUMPTION.
  TOBACCO AND ALCOHOLIC DRINKS.
  TOBACCO AND ALCOHOLIC DRINKS.
  COMPANIES ACT.
  COMPANIES ACT.
GOVERNMENT DEPARTMENTS.
  WAR OFFICE.
  WAR OFFICE.
  OFFICE OF WORKS (TENDERS).
  OFFICE OF WORKS (TENDERS).
  FIRE PROTECTION.
  FIRE PROTECTION.
BRITISH ARMY.
  LOCAL DEFENCE VOLUNTEERS (THE HOME GUARD).
  LOCAL DEFENCE VOLUNTEERS (THE HOME GUARD).
  OFFICERS (UNIFORMS).
  OFFICERS (UNIFORMS).
  CATERING.
  CATERING.
  INFANTRY TRAINING CENTRES.
  INFANTRY TRAINING CENTRES.
  PAY AND ALLOWANCES.
  PAY AND ALLOWANCES.
  REGULATIONS (AMENDMENT).
  REGULATIONS (AMENDMENT).
  DEFENCE MEASURES (AMBULANCES)
  DEFENCE MEASURES (AMBULANCES)
  BANDS.
  BANDS.
  VISORS.
  VISORS.
  BILLETING.
  BILLETING.
  DEFENCE WORKS (PROPERTY).
  DEFENCE WORKS (PROPERTY).
  WAR MATERIAL (INSPECTION).
  WAR MATERIAL (INSPECTION).
  CIVIL DEFENCE.
    MOTOR TRAFFIC.
    MOTOR TRAFFIC.
    FASCISTS.
    FASCISTS.
    EMERGENCY MEDICAL SERVICE.
    EMERGENCY MEDICAL SERVICE.
    ROYAL AIR FORCE (LAND ACQUISITION).
    ROYAL AIR FORCE (LAND ACQUISITION).
    CHANNEL ISLANDS.
    CHANNEL ISLANDS.
    INTERNEES.
    INTERNEES.
FOOD SUPPLIES.
  TEA RATIONING.
  TEA RATIONING.
  SPECIAL DIETS.
  SPECIAL DIETS.
NATIONAL FINANCE.
  TAXATION (ARMED FORCES).
  TAXATION (ARMED FORCES).
  UNCLAIMED BALANCES.
  UNCLAIMED BALANCES.
  EXCESS PROFITS TAX.
  EXCESS PROFITS TAX.
MILITARY SERVICE.
  THEATRICAL PROFESSION.
  THEATRICAL PROFESSION.
  RECRUITS (CHOICE OF SERVICE).
  RECRUITS (CHOICE OF SERVICE).
  REGISTRATION ARRANGEMENTS.
  REGISTRATION ARRANGEMENTS.
  MEDICAL BOARDS.
  MEDICAL BOARDS.
  MERCANTILE MARINE (MOTOR LIFEBOATS).
  MERCANTILE MARINE (MOTOR LIFEBOATS).
  DEBTORS (IMPRISONMENT).
  DEBTORS (IMPRISONMENT).
  RAILWAY CARRIAGES (WINDOW BARS).
  RAILWAY CARRIAGES (WINDOW BARS).
  DOCKERS (REGISTERED STATUS).
  DOCKERS (REGISTERED STATUS).
AGRICULTURE.
  HYDROPONICS (EXPERIMENTS).
  HYDROPONICS (EXPERIMENTS).
  FARM WORKERS (BADGE).
  FARM WORKERS (BADGE).
  GRANTS AND SUBSIDIES.
  GRANTS AND SUBSIDIES.
  FOXES (DESTRUCTION).
  FOXES (DESTRUCTION).
  DEFENCE AREAS (TELEPHONE NUMBERS).
  DEFENCE AREAS (TELEPHONE NUMBERS).
  SCOTTISH CENTRAL MEDICAL WAR COMMITTEE.
  SCOTTISH CENTRAL MEDICAL WAR COMMITTEE.
  LIEUT.-COLONEL ROCHE (RETIRED PAY).
  LIEUT.-COLONEL ROCHE (RETIRED PAY).
MINISTRY OF SUPPLY.
  WOOL CLIP (PRICE).
  WOOL CLIP (PRICE).
  NORTHERN IRELAND (WAR WORK).
  NORTHERN IRELAND (WAR WORK).
  WASTE MATERIAL (SALVAGE).
  WASTE MATERIAL (SALVAGE).
  AIRCRAFT PRODUCTION.
  AIRCRAFT PRODUCTION.
Preamble
The House met at four of the clock, The LORD CHANCELLOR on the Woolsack.
NEWCASTLE-UPON-TYNE AND GATESHEAD GAS BILL.
Returned from the Commons, with the Amendments agreed to.
MERCHANT SHIPPING (SALVAGE) BILL.
Read 3a (according to Order), and passed.
UNEMPLOYMENT INSURANCE BILL.
Read 3a (according to Order), and passed.

OVERSEAS EVACUATION OF CHILDREN.
4.7 p.m.
LORD MARLEY LORD MARLEY had given Notice that he would ask His Majesty's Government what steps are being taken to secure that children from State-aided schools shall be given equal opportunities with children of the well-to-do to accept the extremely generous offers for the reception and maintenance of British children which have been made by the Dominions and by the United States of America; and move for Papers.
The noble Lord said: My Lords, the Motion that I have put on the Paper is not intended in any way to be an attack on the Government. It is simply a request for information, and it is a request for information in view of the criticism in other parts of the world of the alleged policy of this country, criticism to which it is very desirable that we should have an authoritative reply, in order that we may show that we are in fact carrying out the democratic principles which we have professed. Perhaps I may remind your Lordships that the recent Inter-Departmental Committee which dealt with the subject of the recep-
1068
tion of children overseas had as its term of reference:
"To consider offers from overseas to house and care for children…from the European war zone residing in Great Britain.…"
In the Report of this Inter-Departmental Committee there was included a sentence which I will venture to read:
"In order, however, to ensure that shipping space in the future should be made available to the right categories of children so that a proper cross-section of the child population be sent overseas, we recommend that in future parents who are able to make their own arrangements for the evacuation of their children overseas, should be required to obtain the permission of the executive body.…"
the Children's Overseas Reception Board. While the scheme was welcomed in another place, this particular recommendation was turned down by the Government in, I think, a rather unfortunate way. The Parliamentary Secretary to the Board of Education, Mr. Ede, said in reply to a question during the debate that this particular recommendation was not accepted by the Government, being regarded as "administratively impracticable."
That was the decision of the Government as regards the registration of what we may call roughly the children of the well-to-do. But the Government accepted that portion of the Report—and I want just to underline this—which recommended that they should pay the cost of sea transport for children from grant-aided schools and, above all, the Government accepted the principle of a cross-section of children going overseas, that is, children drawn from every class of the community in this country. The Under-Secretary for the Dominions gave these percentages of the children who, he suggests, should go over under the scheme:—England and Wales, 75 per cent. from State grant-aided schools and 25 per cent. from other schools: Scotland, 98 per cent. from State grant-aided schools and only 2 per cent. from other schools. That is probably due to the greater volume of poverty in Scotland, because so many wealthier people leave Scotland to live in England. But whatever the reason, those were the figures.
Therefore it will be clear that the percentages from the non-State-grant-aided schools were higher than these figures by reason of the fact that a considerable and incalculable number of children were going, outside the proposals in the scheme,

1069
solely because their parents could afford to pay their passages. In accepting those figures the Under-Secretary of State said he put them forward in order to give what he described as a balanced migration representing a cross-section of British children and, as though to make matters still more clear, he went on to say:
"If I find that the children who are outside my scheme,"
that is, the children of the well-to-do—
"impinge on the space required for the State grant-aided school children, I shall not fail to intervene."
That is the position of the Government. They want a balanced migration, and they have stated categorically that they intend to see to it that we get this balanced migration. And that was stated by the Government not only because it is democratically desirable, but because also the same attitude was taken both by the Dominions and the United States of America. The Lord Privy Seal, on July 16, speaking of the United States, said in another place that "the United States desire this," and I need not remind your Lordships perhaps that in the New York Times on the day following that, there was a full-page advertisement dealing with the subject, asking for the dispatch of American ships "for rich and poor alike," to quote the advertisement. Accordingly the Minister said this in Parliament:
"There is no ground for the constant reiteration that the benefits of the scheme are exclusively for the rich."
The present position seems to me somewhat unfortunate, because when the scheme was suspended, as it was a few days ago, what we might call for the moment the children of the less well-to-do lost their only chance of going over to America, Canada, Australia, and South Africa, and of this scheme of balanced migration there remain only the children of the well-to-do, who can afford to pay their passages. In other words, the better-off can continue to travel, and there is apparently no means by which the children of the less well-off can travel. I do hope that my noble friend who is going to answer for the Government will be able to assure us that in fact large numbers of these children are to travel, that somehow or other the Government have a secret scheme, which they have presumably kept secret through the Ministry of Information or some other
1070
means, but which it would be desirable, I think, to make public. Certainly we do know that the Lord Privy Seal was asked in Parliament on July 16 if any State grant-aided school children had gone, and he answered "No." And the Under-Secretary of State for the Dominions said that the numbers of those who went in June were 1,454 to the Dominions and 298 to the United States, but that they were all children of the well-to-do, and that none of the other section had gone.
I am not concerned with the principle of whether it is right or wrong for children to go overseas. It can be argued either way. It was argued in another place that some men fight better if they feel that their children are somewhere else, safe against being bombed, whereas some men can fight better if they have got their children with them. Therefore, I do not think one can argue the principle. What I do feel is that if any children are going, poverty should not be a bar to the parents having a right to opt whether their children should go or not, because we are in a national emergency, in which we are all in the same boat. That is the only thing—that the parents should not be debarred from participation in this movement overseas, whether it is good or bad, by reason of poverty. All I want to ask the Minister is, Can anything be done or is something in fact being done? And I would venture to suggest to him that there are several possibilities which the Government might explore. For instance, we know that it has been suggested that American ships might come over here, and the Prime Minister a day or two ago said how ready we should be carefully to examine any such offer if it were made. I think it is worth noting also that there has been a very generous offer by the United States seamen to work without wages for such a passage of our children, provided, they said, no discrimination is made between poor and rich, and if the steamship companies concerned give free passages to these children. That is an offer which I think we should not let drop. I hope that there has been some sympathetic response by the Government to this generous offer, and that something may come from it.
Now let me put the points which affect the present situation. First of all, ships

1071
are going to Canada from here at intervals—there is no secret about it; ships are in fact going regularly. Secondly, these ships are, in fact, taking fare-paying children. The fares may be £10 or £15. In connection with that, as I have already said, poverty should not be a bar to the possibility of crossing in these ships in the emergency in which we are, and we have the extraordinarily interesting suggestion that if the shipping companies are not prepared to give free passages private organisations in this country would find the money for the fares. The Government of course have promised to find the money for the fares under the scheme, but my noble friend will tell us that, the scheme having being temporarily suspended, the Government have no need to find any money, and we did have, for example, the letter by Sir Evelyn Wrench in The Times a day or two ago, saying that private organisations would find the money. I think it probable that the shipping companies would reduce their fares in the circumstances, and we do know that oversea organisations, both in the United States and Canada as well as in the Dominions, have offered, with the utmost generosity, to take full responsibility for meeting the children and for their care and maintenance in homes of at least as high a standard as those which they would leave in this country.
Now we may be told that within the last two days a condition of affairs has developed in Canada in which a number of families going over are stranded. Those are families with mothers, and we are concerned with children. There has been no difficulty whatever, either in Canada or in the United States, in providing for the children. The responsible Canadian Minister, speaking on this subject, said they would have no difficulty in finding room for the children. It was the families who were involved in this temporary difficulty. I hope my noble friend will not use that sort of argument against this suggestion because this difficulty as regards families has arisen in Canada. It does not apply to the children at all. All we want—and this is where we are hoping for a very sympathetic response from the Government—is that the Government should give their blessing to the suggestion that a certain number of children from the State-aided
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schools should be allowed to travel in each of the ships which are now crossing at intervals to Canada.
The Government having given this, that will demand a sort of priority right to a certain number of children to occupy some of the space in each one of these ships. I do not care whether it is fifteen or twenty or thirty children; but the fact that we are sending the children of the less well-to-do to the Dominions and the United States would make it clear that we have adopted this principle. The Government should give their blessing to the principle of a certain number of these children going in the ships which are crossing. The parents of these children must accept in writing full responsibility for the decision to send the children, so that no responsibility will fall on the Government in this connection. I can see, if the Government say they cannot afford to escort these ships with warships, that they will not take responsibility. I do not want them to take any more responsibility regarding the children of the poor than they take regarding the children of the rich—and that is precisely none.
This will be a democratic measure proving that we intend to apply democratic planning to this problem, and it will meet the criticism that is coming increasingly from overseas. Let me remind your Lordships that the Nazis have a remarkable propaganda machine in the United States which seizes on every little thing such as this and develops it into a vast mountain of bitter criticism of this country, which has reverberations and increasing effects in those neutral countries which it is eminently desirable we should have on our side. If the Government have a plan, if they have been doing something, why do they not tell us, instead of letting this criticism pile up and by the time the criticism has become a mountain putting forward an explanation which never catches up with the criticism? The morale of our own people at home as well as opinion abroad demands that there should be complete equality in this matter. I only want to get from the Government an assurance that something positive has been done, is being done, and will continue to be done so that we can reply to these criticisms from overseas and the criticisms that come from our own people in this country. I beg to move for Papers.
4.25 p.m.
LORD SNELL: My Lords, most of my experience in your Lordships' House has been in the rôle of critic or prosecuting counsel. To-day I have to undertake the unfamiliar task of counsel for the defence. The question put upon the Order Paper by the noble Lord, Lord Marley, is entirely proper. It deals with a matter of real concern to a great number of people in this country, and a great number of parents are anxious to know what the present situation is. Lord Marley's question divides itself naturally into two parts—first, what steps have been taken to ensure that children from State-aided schools shall be given equal opportunities with the children of the well-to-do; and, secondly, what steps are being taken to accept the extremely generous offers for the reception and maintenance of British children which have been made by the Dominions and the United States of America. I propose to deal with these specific questions a little later. It is necessary first of all to inflict upon your Lordships a few general remarks, the first of which is that the main principles and limitations of the Government scheme have been clearly and definitely stated in another place by the Lord Privy Seal by Mr. Geoffrey Shakespeare, the Undersecretary for the Dominions, and by Mr. Chuter Ede, Parliamentary Secretary to the Board of Education. Therefore these principles are well known to members of Parliament and to those who have read closely these debates; but a re-statement of the Government's principles may perhaps have some advantage at the present time.
It has been suggested, not specifically by the noble Lord in introducing this matter, but nevertheless suggested, that some kind of discrimination has been made under which the children of well-off parents can find themselves going to the Dominions or the United States, whereas the poorer class children have no such advantage provided for them. It is advisable to state with plain and blunt finality that no special provision has been made under the Government scheme for any such selected discrimination. A certain proportion of children from what might be called the better-off sections of the community has been arranged for—children attending non-State-aided schools—but the exodus of such children has not in actual fact begun. Some children,
1074
as the noble Lord rightly pointed out, have been sent away by private arrangements. The Government are not responsible for their going, nor did they make any provision for their journey. Such arrangements as were made were made by parents in most cases before this actual scheme was on foot, and they made their arrangements in the ordinary commercial way at their own risk by personal arrangement with the shipping companies. Unless therefore it is contended that the Government should have prohibited, as the noble Lord himself seemed to suggest, such private arrangements, there is no argument which can be established against the Government under this scheme.
Let me now deal with the Government scheme as I conceive it to be. It has been stated, I repeat, with clearness in another place. What is being done is not part of a considered emigration policy. That aspect does not enter into it at all. The Government, when this scheme was launched, could not foresee that it would appeal to so large a proportion of parents as actually happened. It is a part of our home defence policy. At home we send children from one area to another area which is thought to be safer, and the sending of children to the Dominions is an extension of that same principle. The Lord Privy Seal, speaking in another place on July 2, described the limitations of this scheme quite clearly. It is important to remember, he said, that what can be done under this or any scheme is necessarily limited; the scheme is strictly limited by the amount of shipping available. The question of the amount of shipping available is the governing factor in this matter, but the rate of demand has greatly exceeded what was expected.
The Prime Minister, speaking in another place on July 18, pointed out what the limitations were. He said:
"I must frankly admit that the full bearings of this question were not appreciated by His Majesty's Government at the time when it was first raised. It was not foreseen that the mild countenance given to the plan would lead to a movement of such dimensions, and that a crop of alarmist and depressing rumours would follow at its tail, detrimental to the interests of national defence."
So the situation has been altered, my Lords, first of all by the unexpected number of applicants, and secondly and

1075
definitely by the number of ships that are available. It might interest your Lordships to know what the range of applications from parents has been. The numbers of "A" application forms—that is State-aided school forms—that have been received up to yesterday amount to no fewer than 103,000 and the number of children concerned in those forms is estimated at 175,000. The "B" application forms, relating to those who are outside State-aided schools, numbered 11,055, and the estimated number of children was 16,580. There have been medical certificates provided for the "B" class, numbering 3,210. As to the number of acceptances in England and Wales the approximate number of those under "A," so far as State-aided schools are concerned, amounts already to 3,962. The acceptances in the "B" Class amount to 44. So far as Scotland is concerned, the number of acceptances under "A" is 1,424 and under "B" 24.
If we look at this in the matter of proportions we can probably get an idea as to how this cross-section that is desired is actually working out. At an earlier period it was thought that the proportions would work out at three for "A" as against one for "B" in England, five as against one in Wales, and fifty as against one in Scotland. That was a hurried estimate made during a great rush of business, and when it was looked into with more care it was necessary to revise that estimate of proportions, so that the proportions to-day are on the new calculation that in England there would be ten under the "A" Class to one under the "B" Class; in Wales sixteen under the "A" Class to one under the "B," while in Scotland the figures remain the same, fifty under "A" and one under "B." Whatever those figures may mean they do, I think, at least prove how little substance there is in the suggestion that the Government scheme have attached to it some kind of social discrimination.
The postponement of the scheme referred to by the noble Lord is a matter of the deepest disappointment to everybody connected with the project. I should like to say with some knowledge of what has been going on that the staff who have had charge of this work have devoted the
1076
utmost enthusiasm day and night seven days a week to make this scheme a quick and a real success. They have shown enthusiasm and capacity, and, if your Lordships had watched them at work, whatever your views as to the Civil Service might have been you would have been encouraged by what you saw happening. I should like also to say that the General Council, consisting of experts in child emigration problems, have shown a zeal, a quick attitude and a capacity for informed decision which have not only avoided delay but have given assurance that these decisions were on right lines. The Under-Secretary for the Dominions, Mr. Geoffrey Shakespeare, has given to this matter all that a man could give, and he has won the respect of all of us who have been associated with him. It might have been that this work would have been done better if it had been entrusted to the hands of the critics, but I am personally convinced that it has been well done. There has been no delay and nothing to recant in the way of decisions made. The disappointment has been great. Disappointed parents are now searching with vigour for scapegoats—which always happens on these occasions—and one resentful mother has written to say that it would be better if the whole scheme was dropped, that the children who are useful should be kept at home and that the useless people, like the members of the General Council of this body, should be exported and kept out of the way. I do not know how my colleagues on the General Council would take that but if it were so decided the Chairman at least would arrange to go quietly under those conditions.
What is the present situation? It is just this, that convoyed ships are not at present possible. What it amounts to in plain language is that the Government cannot spare naval vessels for these ships and they have determined that they cannot take the risk of sending children without such convoys. That is the immediate situation. It is a vast disappointment, but it does not mean that the scheme is abandoned. It means that the situation may change from day to day, that the Council and the Board will watch over every opportunity for a quick expansion just as soon as it is possible to secure safety for the children going. We know the generous hearts of the American people and how they would have loved to

1077
have these British children as their guests, but they must at the same time realise that no British Government could risk sending these helpless and innocent children without a satisfactory amount of security being provided for them. The noble Lord thinks that children in the "A" Class might go over in ships just as children have gone under private arrangements. That is so, but the Government cannot accept the responsibility for their going—not at present. The situation may change from day to day and what is undesirable to-day may be possible, or perhaps even desirable, a week or a fortnight hence. That is the situation as I think it exists to-day.
I personally am greatly disappointed. I like to think of these gentle and engaging ambassadors of good will going to our Dominions and to the United States forging new links of friendship between those countries and our own. They could not fail to have found their way to the hearts of those who received them. British children were never more beautiful and engaging than at the present time. I like to feel that they would return at the proper time with a widened experience and enriched personality. I can say this in conclusion, that, so far as I know the purpose of the Board, and so far as I know the views of the General Council, there will be no kind of social discrimination made. If there were I could not sit upon any such body and that would be true of others of my colleagues. But, on the other hand, the Government have to determine what they consider to be safe and those of us who have been, privileged to work in this scheme will have to accept the decision that the Government have come to for the time being. Let me repeat that it is not abandoned. The machinery is ready for immediate expansion, the arrangements have already had a try-out and everybody is reassured by the smooth working and the efficiency of what has really happened. Therefore at present we can only promise to go on with a modified scheme, which has nothing rigid about it but which may expand quite quickly, in the direction that the noble Lord so properly and ardently wishes.
4.47 p.m.
LORD MARLEY: My Lords, it is a pleasure to hear the noble Lord speak from the other side of the House and
1078
with the same facility which we heard when he was on this side, but I am bound to say I think he was rather better in attack than in defence. I hope he will be a strong support to the Government when the time comes to develop our attack on Hitler after the defensive moment through which we are going at the present time. What of course he did with that facility which we expect from him was to defend and explain the scheme. But I was not concerned with the scheme. My question did not mention the scheme. I never said that I had any criticism of the scheme. Moreover, I expressly avoided attacking the dropping of the scheme. I had no wish to attack that decision of the Government because I knew the circumstances. I might very well have said that it was a pity that the Government did not foresee what has happened, but I did not say that because I had no wish to attack the Government.
The noble Lord explained and defended the scheme, but I am not concerned with that. I am concerned with the principle which I tried to lay before your Lordships. The noble Lord says the Government are not responsible for the rich going and that they have to determine what is safe. But the children of the rich are just as innocent and just as helpless as are the children of the poor and they are entitled to a measure of safety which should be accorded to all. If it is safe for ships to go—as it is, because of our command of the sea—is there any reason why the children of the less well-to-do should not go in these ships as well as the children of the well-to-do? The noble Lord did not say one word about my scheme. He did not even mention the proposal I put forward that some at least of the children in what he calls Category "A" should be allowed to go in these ships. He merely said the Government cannot accept responsibility—the very thing I said I did not want the Government to accept. I said I wanted the parents to accept this responsibility and the Government to make it possible, by giving at least a right to priority in a few cabins in the ships which are going over, for some at least of the Category "A" children, so that the democratic principle to which both he and I subscribe might have been proved to exist to the critical rest of the world.

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The noble Lord was mistaken in saying that I said the Government should have prohibited the children of the well-to-do from crossing by private arrangements. I did not say that, I did not think that. I took precisely the opposite point of view: I think the Government should have encouraged that principle and should have extended it to the children of the less well-to-do. It is difficult to extract from what the noble Lord has said any reply to the criticism to which I drew attention. It would appear that no Class "A" children have gone at all—at least, he did not tell us that a single Category "A" child had left this country. He did not tell us how many of the better-off children had gone; he probably does not know. That information could only be obtained from an analysis of the cabin
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accommodation of the shipping companies, which has not been made and which it is not his job to make. I am bound to say that his reply does not give me much ammunition with which to support the work of the Government, as I would so desire to do, against this criticism in the United States and in Canada. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

BUSINESS OF THE HOUSE.
LORD SNELL: My Lords, before we adjourn might I remind your Lordships that the House will meet to-morrow at three o'clock?
House adjourned at eight minutes before five o'clock.