Sitting of 1 July 1941

Preamble
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS.

  RAILWAY CLEARING SYSTEM SUPERANNUATION FUND CORPORATION BILL.
  Lords Amendments considered.
  The Chairman of Ways and Means (Sir Dennis Herbert): Except for one Amendment providing that the Bill shall be deemed to come into operation on 30th June, there are only drafting Amendments.
  Lord Amendments agreed to.

  EEBW VALE URBAN DISTRICT COUNCIL BILL [Lords].
  Read a Second time, and committed.

  GRAMPIAN ELECTRICITY SUPPLY ORDER CONFIRMATION BILL.
  Order for Second Reading read.
  Mr. Mathers: Before a decision is taken, may J put a question based on the fact that the evidence in support of the Preamble of the Bill was taken, for security reasons, in secret in Edinburgh? May I ask whether that evidence will be made available to Members of the House?
  The Under-Secretary of State for Scotland (Mr. Westwood): I understand that the minutes of evidence are available in the Library.
  Second Reading deferred until the next Sitting Day.

ORAL ANSWERS TO QUESTIONS.
  BRITISH ARMY.

    CANADIAN OFFICERS.
    Mr. Liddallasked the Secretary of State for War whether, in the case of
    1182
    Canadians serving now as officers in the British Army, he will secure that service as officers in the Canadian forces during the last war should be held to count for the purposes of seniority and promotion in their present service?
    The Secretary of State for War (Captain Margesson): Existing instructions already provide that commissioned service with an Imperial contingent of the Dominion Forces during the last war shall count for promotion in this war. But my hon. Friend will appreciate that, with the exception of promotion to the war substantive rank of lieutenant, promotions of non-regular personnel in war are made to fill vacancies in the war establishment and do not depend on length of service.

    RAILWAY WARRANTS (OFFICERS, HOME GUARD).
    Mr. Dobbieasked the Secretary of State for War whether, in view of the present discrimination in regard rail way warrants on duty between officers of the Home Guard and officers of the Regular Forces, and the undesirability of maintaining any such class preference, he will see to it that, in future, railway warrants issued shall either all be first- class or all third-class?
    Captain Margesson: No, Sir. I do not think that in matters of this kind the same considerations necessarily apply to both the Army and the Home Guard.

    HOME GUARD.
    Mr. Mathersasked the Secretary of State for War whether he is aware that an officer over 80 years of age has been appointed to command the Home Guard in the South of Scotland; and can he state this officer's special qualifications for the post which justify his appointment at such an advanced age?
    Captain Margesson: With regard to the first part of the Question, I am not aware of any such appointment. The second part does not, therefore, arise. In view of the publicity which has been given to my hon. Friend's Question in the Press, I am glad to have this opportunity of saying that I have been unable to discover any foundation for this story of an octogenarian appointment.
    Mr. Mathers: I apologise for putting down a Question with an age in it which I find on further inquiry was unreliable, but there are other questions with regard to this officer's record which I should like to bring to the right hon. and gallant Gentleman's attention.

    PIONEER CORPS (SKILLED ALIENS, TRANSFERENCE).
    Mr. G. Straussasked the Secretary of State for War whether he is aware that there are, in the Pioneer Corps, many friendly aliens of high technical qualifications spending their time doing manual labour; and whether, although these men are content to serve the Allied cause in any capacity, steps can be taken to make better use of their capacities?
    Captain Margesson: Yes, Sir. Arrangements are now being made whereby suitably qualified members of the Pioneer Corps may be transferred to duties where their special qualifications will be of most value to the Army.
    Mr. Strauss: Will that be done with reasonable speed? Is a general survey being made?
    Captain Margesson: The first transfers under the scheme are expected to take place in the near future.
    Mr. Bellenger: Will the right hon. and gallant Gentleman extend the provision which he has now announced to the whole of the British Army and not limit it to those of foreign nationality who happen to be engaged in the Pioneer Corps? There are many outside that small category whose services could be better utilised.
    Miss Eleanor Rathbone: Will these transfers also take place in cases where the most suitable unit for alien services is a combatant unit?
    Captain Margesson: I have answered the Question on the Paper. If further Questions are put, I must ask for notice.

    DEPENDANTS' ALLOWANCE.
    Mr. Glenvil Hallasked the Secretary of State for War whether he is aware that the wife of Private R. H. Rhodes, No. 38919, East Lancashire Regiment, has had 14s. per week stopped from her allowance in consequence of his being absent without leave; and whether, as she has
    1184
    nine children, the youngest only two months old, payment of this 14s. can now be restored to her?
    Captain Margesson: When a soldier has absented himself without leave and the Army no longer has the use of his services, he naturally forfeits his claim to pay and allowances. In order to avoid bard-ship to his dependants, however, arrangements have been made for any payments which were being made to his dependants to continue for seven days and for the amount over-issued in this way to be recovered by reasonable instalments from future payments when the soldier rejoins. I am not aware of the circumstances of the case to which my hon. Friend refers, but I am having inquiries made and will communicate with him as soon as possible.

    S.S. "ETTRICK" (INTERNEES, TREATMENT).
    Mr. Glenvil Hallasked the Secretary of State for War what action has been taken against those responsible for the treatment of interness aboard s.s. "Ettrick" in July, 1940?
    Captain Margesson: If my hon. Friend refers to incidents which are said to have occurred during the voyage, I have inquired into these and, as I told my hon. Friend the Member for East Wolverhampton (Mr. Mander) on 25th March, I am satisfied that further action is unnecessary. If he refers to incidents which may have taken place after disembarkation, as my hon. Friend realises this is a matter for the Canadian authorities, and I am not in a position to add anything to the reply given by my hon. Friend the Financial Secretary on 27th May.
    Mr. Hall: Will the right hon. and gallant Gentleman recall an answer he gave me some time ago when he promised to have the matter looked into? Will he expedite that inquiry?
    Captain Margesson: I think I said in that answer that I was expecting some further report from the Dominion of Canada. I understand that there will be some report coming over in the near future.
    Mr. Hall: Will the right hon. and gallant Gentleman try to expedite the results of that inquiry? This happened a long

    1185
    time ago, and it is time something was done.
    Captain Margesson: The hon. Member will realise that this is a matter for the Canadian Government and not for the Government at home.

    MOTOR VEHICLE ACCIDENTS (COST OF REPAIRS)
    Mr. Glenvil Hallasked the Secretary of State for War whether he is aware that motor drivers in a mobile battery, Royal Artillery, have been informed that the cost of repairs following accidents will in future be levied on the whole troop; and, whether this policy of making all suffer for the negligence of the few has his approval?
    Captain Margesson: I was not aware of any such instruction, but, if my hon. Friend will let me know the name of the unit concerned, I shall be glad to look further into it.

    MECHANISED TRANSPORT CORPS (HOME GUARD DUTIES).
    Mr. Bossomasked the Secretary of Slate for War whether he is aware that members of the Mechanised Transport Corps who give their services as drivers free to units of the Home Guard, are not insured from public funds against injury incurred in the performance of duty for the Home Guard; and whether he will arrange for them to be insured when on approved Home Guard duty?
    Captain Margesson: It is not the practice to insure from public funds members of voluntary bodies which are not recognised by the War Office, such as the Mechanised Transport Corps. Motor mileage allowance, which includes an element for insurance, may, however, be claimed in respect of privately-owned vehicles driven by members of this organisation.
    Mr. Bossom: Every Government Department is taking advantage of these drivers, who are providing their services free. Does not my right hon. and gallant Friend think it appropriate that they should be insured by the Government?
    Captain Margesson: I understand that the case referred to is that of some American vehicles which were placed at
    1186
    the disposal of the Home Guard to be used mainly for transporting stores.
    Mr. Bossom: Is my right hon. and gallant Friend aware that private people have to subscribe to provide this insurance? Is it not a thing for which the Government should provide?
    Sir Herbert Williams: Is my light hon. and gallant Friend aware that these ladies provide their own cars free, and that they are used entirely for transporting people on the Government's business, including a large number of officers of His Majesty's Army?

  SCOTLAND.

    FLOODING, RIVER ALMOND.
    Mr. Mathersasked the Secretary of State for Scotland whether his attention has been called to the serious flooding by the river Almond recently; and whether he expects to deal with this problem before the winter season starts?
    The Under-Secretary of State for Scotland (Mr. Westwood): I am aware of the flooding which has recently taken place. A scheme, which aims at lowering the flood level on the River Almond is being prepared under the Land Drainage (Scotland) Act, 1941. Engineering surveys have been carried out, a scheme of work has been designed and the assessment of agricultural benefit to the lands is now in progress. It is the intention to proceed with the scheme as soon as the procedure required in terms of the Act has been complied wth.
    Mr. Mathers: What amount of benefit is it hoped to secure by these plans?
    Mr. Westwood: It is designed to benefit about 1,570 acres of land.

    LAND DRAINAGE.
    Mr. Mathersasked the Secretary of State for Scotland whether any progress has been made in the recovery of land for agricultural purposes, since the passing of the Land Drainage (Scotland) Act. 1941?
    Mr. Westwood: It is hoped to settle and publish the Goodie Water Drainage Scheme in the course of a few days.

    1187
    Thereafter work will be started immediately. Progress is being made with the preparation of several other schemes in terms of the Act. The Kelvin Valley Scheme should be complete this year. It will relieve 2,550 acres from flooding and already 1,030 acres have been benefited. The Clyde Valley Scheme is almost complete; 945 acres have been relieved from floods and a large part of it is under crop this year.
    Mr. Mathers: I take it that that means that progress is being made and will continue to be made?
    Mr. Westwood: Certainly, Sir

  COAL INDUSTRY.

    PRODUCTION.
    Mr. Brookeasked the Secretary for Mines what improvement has taken place in coal production since the official statement five weeks ago that production in April and May was 500,000 tons a week below the target figure and that measures were being taken to remedy this deficiency?
    Major Sir James Edmondson (Vice-Chamberlain of the Household): I have been asked to reply. Production is still far below the desired level, but it is not in the public interest to publish the detailed figures. I will, however, let the hon. Member have them privately.
    Mr. Brooke: Will my hon. and gallant Friend find out from the Secretary for Mines whether the measures which are being taken are on a sufficiently big scale to make good this deficiency and really rectify a very serious situation, or will they effect merely some small improvement in it?
    Mr. Levy: Is it not true that some gas companies have less than three weeks stock of coal and that unless something is done there will be a closing down not only of the gas companies but of munition works?

    IDLE COLLIERIES, WHIT MONDAY.
    Mr. R. J. Taylorasked the Secretary for Mines whether he is now in a position to state the result of his inquiries into the reason for reasons for the Chop-
    1188
    pington Collieries, Limited, laying their collieries idle on Whit-Monday when the men desired to work, and thereby losing approximately 2,000 tons of coal; whether he is satisfied with the reason or reasons given by the company for their action; and, if not satisfied, what action he proposes to take.
    Sir J. Edmondson: The company gave as one of the main reasons for not opening their pits on Whit Monday the poor attendance of the workmen on the same occasion last year. My hon. Friend expressed to them his regret and astonishment at their failure to co-operate with other colliery owners and the mineworkers in a public-spirited response to the Government's appeal for greater production. He does not propose to take further action on what he feels sure is an isolated error of judgment.
    Mr. Taylor: Can my hon. and gallant Friend tell me whether the Secretary for Mines had had any assurance from this particular company that there will not be a repetition of this occurrence in similar circumstances?
    Sir J. Edmondson: I feel certain that there will be no repetition, but I will ask my hon. Friend to have inquiries made and let the hon. Member know.
    Mr. Taylor: But has the Secretary for Mines had any assurance from the company?
    Sir J. Edmondson: I will ask my hon. Friend that question and ask him to communicate with the hon. Member.

  PETROL RATION (REDUCTION).
  Captain Thurtleasked the Secretary for Petroleum whether his attention has been directed to the strong and still growing indignation of the people who see the lives of sailors of the Mercantile Marine being sacrificed in bringing petrol to this country at the evidence that it is being squandered in large quantities in pleasure riding by the motor-using section of the community; and will he take whatever measures may be necessary to end this evil forthwith?
  The Secretary for Petroleum (Mr. Geoffrey Lloyd): I am glad of this opportunity of stating the policy of the Government on this matter. Of the two forms

  1189
  in which petrol is supplied to motor cars, namely, the basic ration and the supplementary ration, the latter has already been substantially reduced. The Government have now decided to reduce the basic ration also, by the equivalent approximately of one-sixth and this will become operative in the next ration period. I am in agreement with the hon. Member in holding that all petrol should be remarried as issued to meet real needs, whether national, business or domestic, and to be used with strict economy. The reductions I have indicated, combined with other measures I am taking to prevent the misuse of petrol will, I hope, substantially reduce the abuse of which the hon. Member complains.
  Captain Thurtle: While thanking the Minister for the steps which he is proposing to take may I ask that he will lose no time in taking much more drastic steps, seeing that the present position is making a hollow mockery of official expressions of sympathy with the dangers and hardship encountered by our merchant seamen?
  Mr. Lloyd: I am proposing to take strong measures against the misuse of the supplementary ration. I am doubling the inspectorate of my Department, and through the courtesy of the Home Office and the Commissioner of Police I am arranging to have the services of a superintendent of the Metropolitan Police as chief inspector, and he will establish close o-operation between Scotland Yard, my Department and chief constables throughout the country. Further, the latest issue or supplementary ration permits has been accompanied by notices warning those who receive them that they must keep a log of their journeys, and 1 am proposing shortly to issue an order making the keeping of a log compulsory upon motorists who receive supplementary rations.
  Mr. Shinwell: In his definition of "real needs" in relation to the use of petrol, does the hon. Gentleman include the attendance of persons with their cars at race meetings, dog-race meetings and spectacular football matches?
  Mr. Lloyd: That is another question, and I understand that the hon. Member has given notice that he intends to raise it in Debate.
  Sir Hugh O'Neill: Can my hon. Friend say what has been the percentage reduction in the supplementary ration?
  Mr. Lloyd: Between 10 and 20 per cent.
  Sir H. Williams: Has the attention of the hon. Gentleman been drawn to the very much greater public indignation at the appalling waste of petrol by military authorities all over the country?
  Mr. Lloyd: That is not strictly within my province, but I may say that my right hon. Friend the Secretary of State for War has taken very strong measures to deal with that aspect of the matter.
  Captain Thurtle: Is the hon. Member proposing to take steps to stop the present method by which private persons can hire cars from firms for a week without a restriction on petrol?
  Mr. Lloyd: Yes, Sir, we are introducing much stricter control.
  Sir Cooper Rawson: Does the hon. Member not agree that the abuse is not of the supplementary ration but of the basic ration?
  Mr. Lloyd: No, Sir, I would not say that. On that matter I should say that our twin policy should be relentless pursuit of the "wanglers" and stricter control of supplementary rations. But I would also say that in present circumstances a great public benefit is conferred by our being still in a position to allow a certain small amount of petrol and mileage to be within the free use of the individual according to his own conscience, because, after all, he knows much better than anybody else could tell him how best to use it.
  Sir C. Rawson: Is it not true that there is behind this the ulterior motive of getting motor-car licence fees?
  Mr. Leach: Will any opportunity be given to the House to consider the question of making still more drastic recommendations than those the Minister has now outlined?
  Mr. Lloyd: That depends upon the attitude of the House. I have explained the policy of the Government in present circumstances, but that does not exclude the possibility that if circumstances change, more drastic measures will be brought in.

  PREVENTION OF FRAUD (INVESTMENTS) ACT.
  Sir H. Williamsasked the President of the Board of Trade whether he proposes to put into full operation the provisions of the Prevention of Fraud (Investments) Act, 1939?
  The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): I would refer my hon. Friend to the answer given on nth February to my hon. Friend the Member for Lincoln (Mr. Liddall).

  CLOTHES RATIONING.
  Mr. Ammonasked the President of the Board of Trade whether his attention has been called to the difficulties of missionaries who have been away from this country for many years obtaining clothing by the coupon system when home on furlough and who have to lay in a stock of equipment for several years on their return to the mission field; and will he make special provision for such cases?
  Captain Waterhouse: Yes, Sir. The Board of Trade are prepared to issue coupons to meet all reasonable requirements of this kind.
  Major Courtauldasked the President of the Board of Trade whether, in view of the fact that under the Milk and Dairies Order the wearing of milking smocks and caps is compulsory if the milk is to be sold to the public, he will issue an instruction making it clear that these garments may be bought without coupons?
  Captain Waterhouse: As was stated in reply to Questions on 24th June, discussions are now proceeding about provision under the clothing rationing scheme for special occupational needs. Caps are exempted from the Rationing Order.
  Captain Cunningham-Reidasked the President of the Board of Trade what decision has been reached with regard to the question of the surrendering or otherwise of coupons for knitting-wool purchased in the ordinary way by women desiring to use it to make comforts for their friends and relations in the forces?
  Captain Waterhouse: I am sorry that I am not yet in a position to make a statement.
  Captain Cunningham-Reid: Is the hon. and gallant Gentleman likely to be able to make a statement in the near future, because there is a lot of women who want to start knitting?
  Captain Waterhouse: "The near future" is rather a vague term. The consideration of this and other matters is being actively pursued, but it is very difficult to get a solution which will give general satisfaction.

  CONCENTRATION OF PRODUCTION
  Mr. Rhys Daviesasked the President of the Board of Trade whether steps are being taken in connection with the concentration of industry to prevent machinery rusting or being sold for scrap; and whether anything is being done to make it possible for factories now being closed to restart operations at the close of the war?
  Captain Waterhouse: I would refer the hon. Member to paragraph 9 of the Explanatory Memorandum on the Concentration of Production (Cmd. 6258). It is there stated that one of the conditions which a nucleus firm must satisfy is that it must provide for the plant of the closed firm to be kept intact, unless the premises should be requisitioned. A register of firms who are parties to concentration arrangements is being kept, and the Government departments concerned will take all measures open to them to assist the speedy reopening after the war of firms closed as a result of these arrangements.

  BOMBED-OUT TRADERS
  Captain Pluggeasked the President of the Board of Trade whether he can make any statement on the proposal to establish marquee markets, to enable bombed-out traders to continue their business after raids?
  Captain Waterhouse: I cannot, of course, speak for food shops, which are the concern of my Noble Friend the Minister of Food. As far as other shops are concerned, my right hon. Friend is not prepared to make any statement on the matter at present. My hon. and gallant Friend will appreciate that the

  1193
  provision of adequate shopping facilities after raids is a problem that varies with local needs and conditions.

  CIVIL DEFENCE

    FIRE SERVICE
    Major Maxwell Fyfeasked the Secretary of State for the Home Department whether he is aware that local authorities in London, who are the recruiting agents for the Civil Defence Services some of whose personnel are paid £3 5s. a week, are offering to employ fire-watchers at £5 a week; that this position is in part due to the fact that most of the employés of such local authorities who are subject to the Fire-watching Order were encouraged to join the Home Guard and are therefore exempt from fire-watching duties regardless of the time that they give to Home Guard training; and whether he will consult with the Secretary of State for War and local authorities as to the best use in local defence of the available man-power reserve?
    The Joint Parliamentary Secretary to the Ministry of Home Security (Miss Wilkinson): I am aware that in some areas difficulties have arisen because an insufficient number of persons is available. This is one of the matters which are being considered in the discussions which are now taking place with regard to the Business Premises Order.

    INCENDIARY BOMB EXTINGUISHING DEVICES (SALE).
    Mr. Evelyn Walkdenasked the Home Secretary what steps have been taken to put an end to the practice of the canvassing of householders to buy proprietary articles and chemical mixtures purporting to extinguish incendiary bombs which have not been approved by the Home Department; and whether he will forbid such canvassing and confiscate the advertising literature?
    Miss Wilkinson: My right hon. Friend is examining the possibility of obtaining powers to prohibit the sale or advertisement of harmful preparations purporting to extinguish incendiary bombs.
    Mr. Walkden: Is it not possible to take more drastic steps by prosecuting people who persist in ignoring the warnings of the Minister, and to collaborate with the
    1194
    Postmaster-General in order to prohibit the literature passing through the post?
    Miss Wilkinson: My right hon. Friend has no power to take such action but is examining the possibility of asking for that power.
    Mr. Woods: Will the Minister get into touch with the Minister of Labour to review the whole matter of canvassing in relation to man-power, and to see whether there is a waste of man-power because of canvassing which is harmful and dangerous to the public interests?
    Miss Wilkinson: That is a rather wider question.

  PARKHURST PRISON (DTETARY).
  Mr. Thorneasked the Home Secretary whether he can give any information in connection with the Dartmoor convict trouble; how many of the prisoners were injured; and whether he will have circulated in the OFFICIAL REPORT the prison daily dietary?
  The Under-Secretary of State for the Home Department (Mr. Peake): I think that my hon. Friend must be referring to reports of disturbances which took place, not at Dartmoor but at Parkhurst Prison, on 3rd June. These arose out of complaints about a meal which the convicts refused to eat. They were given another meal instead, but some of them refused to go to their work or to return to their cells. A few of them had to be removed with the help of prison officers brought from the neighbouring prison of Camp Hill. No one was hurt. These disturbances had nothing to do with the new dietary scale which my right hon. Friend has approved as an experimental measure for three months. The scales are to be reviewed shortly, though it is unlikely that it will be possible to introduce any fundamental changes since the scale is based on the rationing scheme which is applicable to the general public. Particulars of the present experimental scheme will be given in the OFFICIAL REPORT.
  Mr. G. Strauss: Is any inquiry being made whether the meals were really uneatable and whether some change was made in the kitchen arrangements?
  Mr. Peake: The governor of the prison has gone into those questions very carefully.

  Following are the particulars of dietary for convicts at Parkhurst Prison:

  (1)

  Ration scales

  Daily scale

  Weekly

  Bread

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  20

  Meat,fresh or preserved

  …

  …

  …

  …

  …

  …

  oz.

  1·5/7

  oz.

  12

  Bacon

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  4/7

  oz.

  4

  (a)

  Potatoes

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  16

  Jam or syrup or treacle

  …

  …

  …

  …

  …

  …

  oz.

  2/7

  oz.

  2

  Fresh vegetables

  …

  …

  …

  …

  …

  …

  …

  oz.

  3·3/7

  oz.

  24

  (a)

  Root vegetables

  …

  …

  …

  …

  …

  …

  …

  oz.

  2

  oz.

  14

  Dried vegetables (split peas, beans or marrowfat peas)

  …

  oz.

  1·2/7

  oz.

  9

  (b)

  Sugar

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  1·1/7

  oz.

  8

  Oatmeal

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  3

  oz.

  21

  Rice or Barley

  …

  …

  …

  …

  …

  …

  …

  oz.

  1

  oz.

  7

  Flour

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  2

  oz.

  14

  (d)

  Dried fruit

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  4/7

  oz.

  4

  Milk

  …

  …

  …

  …

  …

  …

  …

  oz.

  7

  pts.

  2½

  (b)

  Margarine

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  1·1/7

  oz.

  8

  Fish, salt or fresh

  …

  …

  …

  …

  …

  …

  …

  oz.

  2·6/7

  oz.

  20

  (c)

  Tea

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  1/7

  oz.

  1

  (c)

  Cocoa, Admiralty

  …

  …

  …

  …

  …

  …

  …

  oz.

  3/4

  oz.

  5¼

  Cheese

  …

  …

  …

  …

  …

  …

  …

  …

  oz.

  l/7

  oz.

  1

  Pepper

  as required.

  Salt

  Mustard

  Culinary adjuncts—

  Baking powder

  …

  …

  …

  …

  …

  6 lbs. per 100 men per month.

  Bi-carbonate of soda

  …

  …

  …

  …

  4 lbs., per 100 men per month.

  Cinnamon

  …

  …

  …

  …

  …

  …

  1 lb. per 100 men per month.

  Nutmegs

  …

  …

  …

  …

  …

  …

  1 lb. per 100 men per month.

  Spices

  …

  …

  …

  …

  …

  …

  1 lb. per 100 men per month.

  Vinegar

  …

  …

  …

  …

  …

  …

  2 pts. per 100 men may be issued with salt herrings.

  NOTES.

  (a) Quantity as cooked. The usual wastage allowance will apply.

  (b) 1 oz. a week = 6 lb. 4 oz. per 100 men, will be retained by the Cook and Baker for cooking purposes. The issue will thus be 1 oz. per prisoner, per diem. Cooking fat may be issued in lieu of margarine.

  (c) Tea and cocoa will be made without sugar.

  (d) Fresh fruit can be given when available and when the cost is no greater.

  Except as prescribed above under (a) all quantities shown are as bought, e.g., there will be no bone allowance for meat or bacon, and cabbage, etc., wastage has been allowed for.

  Alternatives.

  Fish.—Salted herrings, fresh fish, sprats or smelts, weight for weight.

  Vegetables.—Fresh vegetables 2 oz. = root vegetables, 1 oz. Dried or preserved vegetables ¼ oz.

  Treacle.—Marmalade, dried fruit, syrup, jam, weight for weight.

  Flour.—Oatmeal or rice, weight for weight.

  SPECIMEN DIETARY BASED ON THE SCALE OF INGREDIENTS.

  Breakfast (daily)—

  Bread

  …

  …

  …

  8 oz.

  Margarine

  …

  …

  ½ oz.

  Porridge

  …

  …

  …

  1pt.

  3 oz. oatmeal, 2 to 4 oz. milk as procurable.

  Tea

  …

  …

  …

  …

  1pt.

  1/7 oz. tea, 1½ oz. milk (no sugar).

  Dinner (daily) —

  Bread

  …

  …

  …

  2 oz.

  Potatoes

  …

  …

  …

  16 oz.

  Dinner No.1—

  Method.

  Meat

  …

  …

  …

  …

  4 oz.

  Boil the beef and cup up in thin slices; issue in bottom tins. Clean and cook vegetables. With rice or barley add dried vegetables; season and thicken with flour, also in bottom tins. Cabbage and potatoes in top tins.

  Root vegetables

  …

  …

  4 oz.

  Rice or barley

  …

  …

  1 oz.

  Dried vegetables

  …

  …

  ½ oz.

  Flour

  …

  …

  …

  …

  ½ oz.

  Cabbage

  …

  …

  …

  6 oz.

  Dinner No. 2 —

  Method.

  Fish

  …

  …

  …

  …

  10 oz.

  Clean and cut fish, roll in flour, cook in steam or oven, add water if oven is used. Issue in bottom tins Potatoes in top tins.

  Flour

  …

  …

  …

  ½ oz

  Flour pudding: —

  Method.

  Flour

  …

  …

  …

  …

  3½ oz

  Mix flour, cooking fat or margarine, salt, bi-carbonate of soda together, add jam or treacle dissolved in water to make pudding and steam (issue separately).

  Fat

  …

  …

  …

  …

  ½ oz.

  Treacle or jam

  …

  …

  1 oz.

  Bi-carbonate of soda

  …

  4 oz.

  per 100 men

  Dinner No.3—

  Method.

  Same ingredients as for Dinner No. 1.

  Prepare as for No. 1 except the meat, which should be cut up in small dice and added to the vegetables as above.

  Dinner No. 4—

  Method.

  Bacon

  …

  …

  …

  …

  4 oz.

  Prepare in the usual way, but if issued as savoury bacon pie 4 oz. of carrots in lieu of cabbage. Marrow fat peas in lieu of beans may be issued if available.

  Beans

  …

  …

  …

  6 oz.

  Cabbage

  …

  …

  …

  6 oz.

  Dinner No. 5—

  As for No. 2.

  Dinner No.6—

  Method.

  Root vegetables

  …

  …

  6 oz.

  Clean and cook vegetables, add rice, dried vegetables and 4 potatoes which have already been pealed and cooked. Add remainder of potatoes, peeled, to bottom tins when cooked. Mix flour and suet and a little salt, make pudding and steam-cook dried fruit, after soaking overnight, with sugar added, pour over suet pudding in top tins.

  Rice

  …

  …

  …

  …

  1 oz.

  Potatoes*

  …

  …

  …

  4 oz.

  Dried vegetables

  …

  …

  2 oz.

  Flour

  …

  …

  …

  …

  4 oz.

  Suet

  …

  …

  …

  …

  1 oz.

  Dried Fruit

  …

  …

  …

  2 oz.

  Sugar

  …

  …

  …

  …

  ½ oz.

  Dinner No 7—

  Method.

  Meat, preserved

  …

  …

  4 oz.

  Preserved meat can be issued separately. Cabbage in bottom tins with potatoes. Cook rice in usual way and put in top tins. Dried fruit as in No. 6.

  Cabbage

  …

  …

  …

  6 oz.

  Rice

  …

  …

  …

  …

  2 oz.

  Dried fruit

  …

  …

  …

  2 oz.

  Sugar

  …

  …

  …

  …

  ½ oz.

  If fish is not available, the following dinners can be issued in substitution:-

  On one day a week—

  Meat

  …

  …

  …

  …

  4 oz.

  Root vegetables

  …

  …

  4 oz.

  Rice or barley

  …

  …

  4 oz.

  Dried vegetables

  …

  …

  ½ oz.

  Flour

  …

  …

  …

  …

  ½ oz

  and the pudding of Dinner No. 2.

  and on one day a week—

  Vegetable soup of Dinner No. 6, and the pudding of Dinner No. 2.

  Supper (daily) —

  Bread

  …

  …

  …

  10 oz.

  Margarine

  …

  …

  …

  ½ oz.

  Cocoa

  …

  …

  …

  1pt.

  ¾ oz. cocoa, 1 ½ oz. milk (no sugar)

  One -day a week—

  Cheese

  …

  …

  …

  …

  1 oz.

  NOTES.

  (1) The ingredients set out above will leave 1 oz. flour and 1 oz. rice per week per prisoner for use by the Cook and Baker at his discretion.

  (2) Dinners No. 1 and 3 can be issued as Shepherds Pie or Hot-pot.

  (3) Each prisoner will be issued with 1 oz. of sugar a day with the supper meal and 1 the tins collected after breakfast next morning.

  (4) A small quantity of bi-carbonate of soda may be used with the dried fruit, say, 1 oz. per 100 men.

  (5) Stock should be used when cooking the vegetables for Dinners No. 1 and No. 3.

  * From daily ration.

  ROAD TRAFFIC LIGHTS.
  Mr. Ammonasked the Parliamentary Secretary to the Ministry of War Transport whether he is aware of the difficulty, particularly in sunny weather, in seeing the traffic regulation lights; and whether he will consider that the light be a half-disc as in the case in the provinces and districts near to the London area?
  The Joint Parliamentary Secretary to the Ministry of War Transport (Colonel Llewellin): The exposure of a larger disc oflight during daylight hours than can be allowed at night involves the adjustment of a mask on each light. It has
  1198
  not so far been found possible to instal generally an automatic device for this purpose, and it will readily be appreciated that manual adjustment night and morning of the large number of traffic lights in London is hardly practiable.
  Mr. Ammon: Is there any reason why there should be a distinction between London and some other towns?
  Colonel Llewellin: London has a very much larger number of signals. We asked the police whether they could help us in the matter, but they said they were afraid it would be impossible to go round

  1199
  and adjust every light. Where it is a question of only one or two lights the task is comparatively easy.
  Mr. Silverman: Is the Minister aware that many people only desire to avoid being converted unwittingly into offenders because of their inability to obey signals which they cannot see?
  Colonel Llewellin: Yes, Sir. I nearly did it myself the other day.
  Sir Irving Albery: Is not the position particularly dangerous on roads where there is no 30-mile speed limit, and would the Minister reconsider the question as it affects such roads where there are traffic lights?

  AIRCRAFT PRODUCTION.
  Mr. Ellis Smithasked the Minister of Aircraft Production whether he is aware of the uneasiness that is created amongst people engaged in the industry because they are not fully employed; and whether he will take steps to see that the reasons are fully explained, where possible, to the representatives of men engaged in each factory?
  The Parliamentary Secretary to the Ministry of Aircraft Production (Mr. Montague): I am satisfied that every effort is made by firms to eliminate fluctuations of work, in the factories as entities and in the different parts of the factories; my Department gives all assistance in its power to that end. I believe that the majority of the men realise the efforts that are being made and recognise that fluctuations cannot be entirely eliminated; the explanation of the position in individual factories is a matter for the discretion of the managements.
  Mr. Smith: Is not a good deal of the misunderstanding and friction avoidable, and will the Minister use his influence to get the maximum consultation between managements and all interested in the factories, in order to bring about the maximum production?
  Mr. Montague: I am personally pressing that policy, with considerable success.
  Mr. Stokes: Will the hon. Gentleman consider also pressing upon the factories concerned that they should appoint production and economy committees to which
  1200
  representations could be made by the men?
  Mr. Montague: The idea is certainly in my mind.
  Mr. Granville: Is not the best way the setting-up of joint committees in each factory between the men and the management, and will the Minister use the power which he already has in order to do this?
  Mr. Montague: The problem is rather involved.
  Mr. Levy: Is it not the fact that forward programmes are not given to managements and that this omission hangs up production and creates short time? If a little more vision and foresight were used, would not such a state of affairs be avoided?
  Mr. Montague: We try to act with vision and foresight, but the number of advance programmes —
  Mr. McKinlay: We cannot hear. Is it in order for the Minister to conduct a private conversation with hon. Members behind him?
  Mr. E. Smithasked the Minister of Aircraft Production whether he is aware that in many factories production could be increased if modern methods of production were introduced; what steps is he taking to check up in each factory; whether surveys are carried out and, if so, what action is taken on the results of the survey; and whether he is satisfied that we are obtaining the best results?
  Mr. Montague: Undoubtedly there are certain factories where improvement could be effected by the institution of more modern methods. The matter raised by my hon. Friend is constantly under review and examination, and experts are frequently consulted by the Ministry in order to improve the efficiency of production. It must be remembered, however, that in many cases it is necessary to make the best possible use of existing plant.
  Mr. Smith: Has not the Minister a system of delivery days, and, if so, are steps taken to check up those delivery days; and would he consider organising a corps of production engineers with full authority to take steps to increase production?
  Mr. Montague: All such matters are taken into consideration.
  Mr. Smithasked the Minister of Aircraft Production whether he is aware that the hon. Member for Stoke was assured, 12 and 18 months ago, that there was a satisfactory organisation for the provision of spare parts; and whether the organisation is working to enable all available aircraft to be used when required?
  Mr. Montague: Yes, Sir, without detriment to the output of complete aircraft, steps have been taken to provide spare parts up to the amount requisite.
  Mr. Smith: Am I to understand from that answer that no aeroplane in any part of the world has been held up for lack of spare parts?
  Mr. Montague: I cannot answer that question.
  Mr. Smith: Is it hot a fact that our own pilots and American pilots have recently been very indignant because they were not able to use aeroplanes in parts of the world where they might have been of assistance, because of the lack of spare parts?
  Mr. Montague: That is a general assertion. People are often not satisfied with all that happens in the course of a very complicated process. We have our experts, and we know our machinery. We do the very best we possibly can to adjust the spare parts position.
  Mr. Pickthorn: When the Minister says that steps have been taken, does he mean that those steps include the instruction of persons responsible for production graphs and statistics of production that no aeroplane or tank, and particularly no aeroplane, shall be counted unless there are produced at the same time the appropriate number of tools and spare parts?
  Mr. Montague: The answer is in the affirmative. The hon. Member will realise that aircraft construction is subject to changes of type and that, in some cases, there are difficulties in respect of the adjustment of spare parts. I do not think there is any serious reason for a general contention that sections are held up in consequence of a lack of spare parts.

  BOMBED SITES, LONDON (SCRAP METAL).
  Mr. Thorneasked the Minister of Supply whether he can give any information in connection with the need of collecting the girders and iron from bombed buildings in and around London whether this scrap iron is now wanted for the making of steel; and whether he has been in consultation with the steel control contractors about the matter?
  The Joint Parliamentary Secretary to the Ministry of Supply (Mr. Harold Macmillan): There is a continued need for all the iron and steel scrap available to ensure present and future production of steel. The Iron and Steel Control are working with the London County Council and the special committee set up by the London Defence Authority for the clearance of the bombed sites to secure the removal and utilisation of the steel as rapidly as practicable, and the fullest use is being made of the available facilities of demolition contractors and scrap merchants.
  Mr. Thorne: Can the House be assured that the steel furnaces are not held up for the lack of scrap iron?
  Mr. Macmillan: The flow of scrap is satisfactory, and as regards this particular scrap it is flowing now at the rate of about 3,500 tons per week from London alone, which is about three times the rate which obtained about a month ago.

  MILITARY SERVICE (BUILDING OPERATIVES).
  Major Vyvyan Adamsasked the Minister of Labour whether firms conducting work which they deem to be of national importance in the building industry should apply for registration as protected establishments on Form NS 169; if so, when these forms will be available; whether he will undertake that, till they are so available, firms and their employés will not be prejudiced; and, if the matter is to be dealt with under the Essential Work Order, whether merchant stockholding is covered by its language where it refers to any process, operation or manufacture incidental to, or necessary for, the carrying out of any of the said activities?
  The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Assheton): The effect of registration as a protected

  1203
  establishment is to secure reservation of men for whom there is a dual age of reservation at the lower of the two ages. The proposed dual age for building trade operatives has been cancelled and the present single age of reservation is to remain in force. Accordingly, Group 4, relating to the building trades, has been deleted from the Schedule, and the corresponding forms N.S. 169 are not necessary and will not be issued. If building employers employ men other than building trade operatives who are in dual age occupations affected at Stage B, it is open to them, as it is for any other employer, to apply on form N.S. 168 for admission to the register under Group 2, provided that they are qualified to do so by reason of their Government contracts. The Essential Work Order has no effect in relation to reservation for military service.
  Major Adams: What is the answer to the last part of the Question?
  Mr. Assheton: The answer to the last part of the Question is that the Essential Work Order has no effect in relation to reservation for military service.

  COMMUNIST SKILLED WORKERS.
  Mr. Woodburnasked the Minister of Labour whether, in considering means of helping Russia, he will, as a measure of mutual help, investigate the possibility of arranging free passage to Russia for skilled workers in the railway, transport, engineering and other civil or armed services in cases where such workers are adherents of the Community Party professing their first loyalty to Soviet Russia?
  Mr. Assheton: No, Sir.
  Mr. Gallacher: Is the hon. Gentleman aware that, the Question is put by a renegade Communist who never had loyalty to anybody or anything, not even to his own colleagues when he was a conscientious objector in Calton Gaol—
  Mr. Speaker rose—
  Mr. Gallacher: On a point of Order. Is it in order for an hon. Member to use the Order Paper to make what are meant to be slanderous statements about a Member of this House or about ordinary citizens of the country, in view of the
  1204
  rotten record as a belly-crawler that the hon. Member himself has always had?
  Mr. Speaker: Order.
  Mr. Woodburn: On a point of Order. After what has been said I think I ought to be allowed a Supplementary Question.

  FOOD SUPPLIES (EGGS).
  Sir Henry Morris-Jonesasked the Parliamentary Secretary to the Ministry of Food whether his Department will give further consideration to the recent proposals for the rationing of eggs, so far as the population in rural areas is concerned, in view of the curtailment of the milk supply and the fact that in country districts people cannot procure fish or eat in restaurants?
  The Parliamentary Secretary to the Ministry of Food (Major Lloyd George): The scheme which has recently come into operation is concerned only with bringing home-produced eggs under control. An interval must occur before detailed plans can be prepared for the rationing of eggs, both home-produced and imported. My hon. Friend's suggestion will be considered in connection with such plans. In the meantime distribution of eggs under the Ministry's control will be made on the basis of consumer registrations.
  Sir H. Morris-Jones: Is my hon. and gallant Friend aware that in some rural areas people are unable to get the proper quantities of even rationed foods like milk, eggs, cheese and jam, and because of petrol restrictions they are unable to procure fish from the nearest town, and that the rationing scheme as at present working is weighted against the rural dweller?
  Major Lloyd George: The hon. Gentleman did not quite hear my answer. There is no rationing of eggs at the moment. The only thing at the moment is that there is a scheme to control and buy eggs, and I have said that my hon. Friend's point will be considered.
  General Sir George Jeffreysasked the Parliamentary Secretary to the Ministry of Food whether retailers are entitled to insist on customers registered with them taking American eggs instead of British; and whether, in that case, they are expected to state to the purchasers

  1205
  that these eggs, having been in cold storage, will not keep in hot weather for more than a very limited period?
  Major Lloyd George: The answer to the first part of the Question is, "No, Sir" But, of course, retailers can only supply their registered consumers with the eggs which they receive for this purpose; in existing conditions these will include a considerable proportion of imported eggs. In reply to the last part of my hon. and gallant Friend's Question, all home-produced eggs sold by retailers will be marked. The position with regard to imported eggs will be no different from what it was before the war.
  Sir G. Jeffreys: Is my hon. and gallant Friend aware that new laid eggs will be unobtainable from retailers in the country under his scheme, and was the Ministry of Agriculture consulted before the proposal were made?
  Major Lloyd George: Yes, Sir, and I think my hon. and gallant Friend is a little pessimistic about the position.

  ROYAL AIR FORCE.

    MILES MASTER 11 AEROPLANE.
    Mr. Garro Jonesasked the Secretary of State; for Air what particulars have been released for publication of the performance of the Miles Magister aeroplane powered with the Bristol Mercury engine?
    The Under-Secretary of State for Air (Captain Harold Balfour): The hon. Member is under a misapprehension. The Bristol Mercury engine is fitted not in the Miles Magister aeroplane but in the Miles Master 11.
    Mr. Garro Jones: May I acknowledge my error in this case, and ask whether the lion, and gallant Gentleman could not give the information which was intended to be asked for in the Question, since it must have been known what was intended?
    Captain Balfour: Certainly, Sir. The only information which has been released regarding the performance of the Miles Master II is that it has a speed of over 250 miles an hour and that it is the fastest training aircraft in the world. This information has been released by the Ministry of Aircraft Production.
    Mr. Garro Jones: Is the hon. and gallant Gentleman aware that in the same week during which I was refused this information on the ground that it would be contrary to the public interest to give it, the information which he has just given and much fuller information was published in the technical journals, of which I propose to send my hon. and gallant Friend copies?
    Captain Balfour: I shall be very glad indeed to look into them. I am not aware that the hon. Member had been refused anything.

    AERODROMES (PROTECTION).
    Sir G. Jeffreysasked the Secretary of State for Air the measure of response to the Royal Air Force appeal for volunteers to defend new aerodromes; and whether he is satisfied that the public has understood exactly what is wanted?
    Captain Balfour: It would not be in the public interest to give the information asked for in the first part of the Question. I believe that the public understands that we want men to defend our aerodromes.
    Sir G. Jeffreys: Is my hon. and gallant Friend satisfied that the public understand the necessity for having two separate forces for-defending aerodromes?
    Captain Balfour: I do not think the public would understand the full implications, but I think they would appreciate the answer given by my right hon. Friend the Prime Minister to the hon. Member when he said that he was thoroughly satisfied that a clear-cut decision had been reached and good working arrangements made, but that on the other hand it was not expedient to go into' those matters in detail.
    Colonel Arthur Evans: Dots not my hon. and gallant Friend consider that the position would be clear if the appeal was made to the public to join the Army, which is primarily responsible for the defence of the aerodromes, rather than to join a separate Force?
    Captain Balfour: That is an entirely different question.
    Mr. Shinwell: Why does not the hon. and gallant Gentleman think it is in the public interest to inform us and the public of the nature of the response to the Government's appeal? If the response has

    1207
    been good, ought not the country to be informed, and, on the other hand, if it has been bad, should we not take advantage of it to make a further appeal?
    Captain Balfour: The terms "good" and "bad" are relative in regard to the objective which we outlined. If we stated how many we had got in relation to our target figure, the enemy would at once know the approximate number of men of the Royal Air Force we were aiming at having for guarding aerodromes, and it would not then be difficult to divide the approximate number of men required for each aerodrome into the total Force and so find out how many aerodromes we have in the country.
    Mr. Garro Jones: Why, in that case, was a high Air Ministry official allowed to give elaborate particulars to the Press, saying how disappointing the response had been, and if that is the case, why should not my hon. and gallant Friend be frank with the House and tell us the same thing?
    Captain Balfour: I am not aware that that particular statement was given by a high official as the hon. Gentleman alleges, but I think the hon. Gentleman and the House will agree that to give the specific figures for which I was asked would not be in the public interest.

  EDUCATION (BILLETED CHILDREN).
  Sir G. Jeffreysasked the President of the Board of Education the number of cases in which foster parents have been prosecuted for not compelling children billeted on them to attend school, and the number of convictions secured; and in how many cases truant children have been rebilleted in hostels to secure closer supervision than in an ordinary household?
  The President of the Board of Education (Mr. Ramsbotham): I regret that the Board have not the information desired.

  PERSONAL INJURIES (CIVILIANS) SCHEME.
  Captain Thurtleasked the Minister of Pensions whether he is aware that
  1208
  existing regulations covering pensions in respect of dependants of civilians killed by enemy action do not provide for pensions for unmarried wives of civilians killed by such action, even when the unmarried union has lasted for as long as 30 years; that in this respect the un-married dependant of a civilian killed by enemy action is in an inferior position to that of an unmarried dependant of a member of one of the armed forces, since, in the latter case, a pension is payable; and whether he will take steps to bring this anomaly to an end?
  The Minister of Pensions (Sir Walter Womersley): I would refer the hon. and gallant Member to the reply which I gave to the hon. Member for Silvertown (Mr. J. Hollins) on 27th February last. As regards their form, the benefits of the Personal Injuries (Civilians) Scheme are modelled to some extent upon the compensation provided for the fighting forces, but, as regards the circumstances in which these benefits may be paid, the Civilians Scheme has been designed to conform in general principle with other schemes for the civilian population, for example, National Health Insurance, Contributory Pensions, and Workmen's Compensation.
  Captain Thurtle: Is it not a fact that general Government policy is to compensate the dependants of civilian killed by enemy action on the same lines as the dependants of Service men who are killed by enemy action, and in these circumstances how can the Minister justify an anomaly of this kind? Is it not a fact that a free union of 30 years is worth many certificates of marriage?
  Sir W. Womersley: It is a fact that we have taken into consideration conditions and terms in relation to Service pensions but more particularly, in the Civilians Scheme, to those schemes which apply to the civilian population, and particularly, in this case, to the Workmen's Compensation Act, because the Government have taken away the right of workpeople to sue their employers under that Act for injuries due to enemy action, and we have had to put something in the place of that. This is what we have done.
  Mr. Silverman: Is the State to take no responsibility for the dependants of a man at all?
  Sir W. Womersley: Dependent children are provided for.
  Mr. Silverman: The woman would be a dependant, would she not?

  WELSH CHURCH COMMISSION.
  Sir Robert Birdasked the Prime Minister whether he is aware of the view that the Welsh Church Commission has, for some time, effectively completed the task for which it was appointed; and will he, therefore, consider introducing legislation to dissolve the commission on grounds of national economy?
  Mr. Peake: I have been asked to reply. The Welsh Church Commission has not completed its task, nor is it possible for it to do so for some years. The Commission is now actively engaged with a depleted staff on the complicated work necessary before the property now vested in it can be transferred to the beneficiaries entitled to receive it under the provisions of the Welsh Church Acts, 1914 and 1919.
  Sir H. Morris-Jones: Is the hon. Gentleman aware that the chairman of this Commission gets £1,500 a year for one hour's work a month?
  Mr. Peake: I will certainly look into that question, but the Commission is a very small body, and there is only one paid Commissioner. The cost, I am informed, is a very small figure.
  Sir R. Bird: Is the hon. Gentleman aware that the work of this Commission to-day consists solely of dealing with minor parochial matters, which could well be carried out by some other body?
  Mr. Peake: No, Sir, I do not think that the work carried out by this body could be carried out more cheaply by any other body. The Commission moreover have other functions to perform, including valuation of the property vested in them and the transfer of the property to the parties entitled to receive it.

  BOMBING ATTACKS ON GERMANY.
  Mr. Shinwellasked the Prime Minister whether, in view of the Russo-German struggle and the need for rendering every assistance to Soviet Russia within our power, steps will be taken to
  1210
  utilise all available aircraft in continued bombing attacks on Germany?
  The Lord Privy Seal (Mr. Attlee): I would refer my hon. Friend to the answer which my right hon. Friend the Prime Minister gave to my hon. Friend the Member for Eccles (Mr. Cary) on 8th October last, of which I am sending him a copy.
  Mr. Shinwell: I expected an answer of that kind, but can we be assured that action will be forceful, continuous, and even ruthless, and that everything will be done to deliver deadly blows against the enemy in the present situation? Ought we not to take advantage of the present situation to join issue with the enemy all along the line?
  Mr. Attlee: I am not prepared to add anything to the answer which my right hon. Friend the Prime Minister gave on 8th October. That answer amounts to this, that it is not advisable that the Government should announce publicly its tactics for its future conduct of the war.
  Mr. Shinwell: Will the right hon. Gentleman appreciate that I am not asking him to furnish any details? I do not want him to give a meticulous indication of what the Government intend to do. May I ask him to realise that all I am asking for is an assurance that we are going to take advantage of the present situation and are not going to allow the grass to grow under our feet?
  Mr. Attlee: I can assure the hon. Member that we shall not allow the grass to grow under our feet.
  Mr. Granville: Will the right hon. Gentleman take into consideration that every bomb on a German industrial or military target now will be worth 10 in a few weeks time?
  Mr. Austin Hopkinson: Can any useful purpose be served by asking silly Questions like this?

  SECRET SESSIONS (DOMINION PRIME MINISTERS).
  Mr. Granvilleasked the Prime Minister whether he will take steps to enable Dominion Prime Ministers to attend the secret sittings of the House of Commons during their visits to this country?
  Mr. Attlee: No, Sir.
  Mr. Granville: Does the right hon. Gentleman not think that the time has come to show the Dominions that the Mother of Parliaments is not afraid to make fresh traditions even in war-time?
  Mr. Hopkinson: May I ask the same question here as I did on the last?

  CIVIL AVIATION.
  Mr. Rhys Daviesasked the Minister without Portfolio whether his Department is considering the possibilities of extending civil aviation within this country and for foreign travel at the close of the war?
  The Minister without Portfolio (Mr. Arthur Greenwood): Yes, Sir; the future possibilities of civil aviation are the subject of special consideration and inquiry.
  Mr. Davies: Will His Majesty's Government bear in mind the possibilities of keen competition for civilian air travel between the several countries of Europe at the close of the war?
  Mr. Greenwood: As a matter of fact, this is a very wide question covering a large number of Departments, and we are working co-operatively to evolve a general policy which will be to our advantage and that of other countries.
  Mr. Noel-Baker: In view of the great importance of this matter, is the right hon. Gentleman's Department in touch with Free French and other experts who have given great attention to the matter in years gone by?
  Mr. Greenwood: At the present stage of investigation we are dealing with our own problems, the Air Ministry, the Treasury, the Colonial Office, India and Burma, and so on. Until we have got our picture more clear, it is a little too early to go further, but I will bear that point in mind.

  SCIENTIFIC AND ENGINEERING ADVISORY COMMITTEES (TECHNICAL ADVICE).
  Captain Pluggeasked the Lord President of the Council whether he is aware that both the Scientific Advisory Committee and the Engineering Advisory Committee are not in every case able to
  1212
  obtain immediately essential technical advice, or to select persons most able to give such advice, particularly with regard to matters affecting chemistry and physics; and whether, in these circumstances, he can arrange for the closer association with these bodies of representatives of chemistry and physics with experience of industry, or to provide them with liaison officers who will be competent to supply the necessary contacts with the minimum of delay?
  The Lord President of the Council (Sir John Anderson): No, Sir. I am assured that neither of the Committees mentioned has met with any difficulty in obtaining the technical advice it requires.

  NATIONAL FINANCE.

    PURCHASE TAX.
    Mr. Toucheasked the Chancellor of the Exchequer whether a retailer can recover the purchase tax paid on articles which are destroyed by accident, or are so damaged as to become unsaleable?
    The Chancellor of the Exchequer (Sir Kingsley Wood): No, Sir; the retailer must look for compensation under his insurance policy.

    INCOME TAX.
    Mr. Hannahasked the Chancellor of the Exchequer why Income Tax is deducted from the first salary payment of a new officer, not previously subject to the tax, and who would not normally be assessed until the end of the financial year?
    Sir K. Wood: Income Tax is deducted from the pay of persons payable out of public funds under special provisions in Rules 11 and 15 of the Rules relating to Schedule E which provide that the tax chargeable on official pay shall be deducted out of the pay as and when it is paid.
    Mr. Glenvil Hall: How do they know how much is to be deducted in view of the fact that this is the only payment made so far?
    Sir K. Wood: I will inquire and let the hon. Member know.
    Mr. Woodburnasked the Chancellor of the Exchequer whether, in order

    1213
    to avoid the hardship of Income Tax levied on high-earning periods being deducted during periods of low earnings, he will encourage employers to establish savings accounts for employés to provide Income Tax equalisation funds at the credit of each worker in conjunction with the National Savings Movement?
    Sir K. Wood: The existing facilities for saving already provide means by which money may be accumulated to meet every type of contingency, including such short-term commitments as the payment of taxes.
    Mr. Woodburn: Does that mean that the Chancellor would agree to receive Savings Certificates in payment of Income Tax?
    Sir K. Wood: No, Sir, that is another matter.
    Mr. Woodburnasked the Chancellor of the Exchequer whether, in the deduction of Income Tax from workers wages, instructions will be issued that in the case of short-time weeks, due to air-raids or other interruptions to work, deductions of Income Tax for such weeks will be postponed to the extent that they reduce the net weekly earnings below £3?
    Sir K. Wood: I would remind my hon. Friend that the existing regulations relating to the deduction of Income Tax from wages already provide that the amount of wages to be paid in any week shall not, by reason of the deduction of tax, fall below £2 2s. 0d. a week, or, £3 2s.0d. in the case of a married man who has asked to have this higher limit applied to him. The amount of the short deduction of tax is, of course, made good by subsequent deduction from wages.
    Mr. Woodburn: Is the right hon. Gentleman aware that there are complaints that after the £2 2s. 0d. limit is reached the further deduction of insurance and other sums frequently reduces the amount below £2 2s. 0d.?
    Sir K. Wood: I have not heard of such cases, but if my hon. Friend will give me particulars of any, I will gladly examine them.
    Mr. R. J. Taylor: In reckoning this limit of £2 2s. 0d., or £3 2s. 0d., as the case may be, will the ordinary deductions from wages be taken into consideration?
    Sir K. Wood: I have given what is a sort of general principle. As my hon. Friend is aware, the authorities have regard to the circumstances of the case, and if there is any case that he has in mind, I will gladly examine it. We want to see this working smoothly and fairly.
    Sir Reginald Blairasked the Chancellor of the Exchequer whether he will take steps to relieve the difficult financial position of those many persons who are dependent for their income on rentals of leasehold premises, owing to the destruction of such premises by enemy action?
    Sir K. Wood: I am not clear as to the precise point which my hon. Friend desires to raise. If he is referring to Schedule A, I would point out that liability to Income Tax under Schedule A would not continue in respect of property that has been destroyed by enemy action and for which rent ceases to be payable. If my hon. Friend is referring to the general question of financial hardship, I would refer him to the various measures which have been passed dealing with this problem.

    UNPAID INCOME TAX AND SURTAX (BRITISH SUBJECTS ABROAD).
    Mr. Manderasked the Chancellor of the Exchequer the amount of Income Tax and Surtax now owing by British subjects living abroad generally, and in the United States in particular?
    Sir K. Wood: I regret that this information is not available.
    Mr. Mander: Is it not the case that large sums are owing at the present time—in some cases tens of thousands of pounds— by individuals, and that the Treasury are taking no effective steps to collect this money?
    Sir K. Wood: If my hon. Friend will put that Question on the Paper, I will answer it.
    Mr. Mander: Does my right hon. Friend think that persons who do this ought to be protected any longer by British nationality?
    Sir K. Wood: My hon. Friend knows the difficulties of the matter.
    Mr. Mander: There is no difficulty.

    EXCESS PROFITS TAX.
    Sir R. Blairasked the Chancellor of the Exchequer to what extent Clause 24 of the Finance Bill, as amended in Committee, will increase the liability to Excess Profits Tax; to how many persons, in trade and business throughout the country, is it estimated that this increased liability will apply; and with what estimate he was furnished of the total annual amount of the increased liability imposed on those adversely affected by the provisions of this Clause?
    Sir K. Wood: I have no estimate of the extent to which Clause 24 of the Finance Bill may in particular cases increase liability to Excess Profits Tax. Over the whole field of industry, and particularly in the sphere in which the taxpayer has to extend his business as part of the war effort, the effect of the Clause will be to abate the liability of Excess Profits Tax for the treatment of borrowed money as capital employed in the business allows a profit margin to industry representing the excess of the statutory percentage over the interest paid on borrowed money. The cases in which it will be disadvantageous to the taxpayer are those in which the former method of computation failed to take into account as capital borrowed moneys employed in the business. In that respect, the old method was defective, and resulted in may cases where borrowed money had been reduced, in an allowance being given for an increase of capital, although, in fact, there had been no increase in the total capital employed in the business.
    Mr. Hammersley: Does not that indicate that this proposal has not been very carefully thought out; and that as a result those companies which have endeavoured to reduce their capital will be penalised at the expense of those which have stabilised their capital expenditure?
    Sir K. Wood: No, Sir; that is quite a wrong interpretation of my reply. I have no doubt that there will be an opportunity to discuss the matter further to-day.

    AMERICAN VISCOSE COMPANY.
    Mr. Stokesasked the Chancellor of the Exchequer who advised His Majesty's Government with regard to the sale of the American Viscose Company?
    Sir K. Wood: I took this decision after taking account of all the relevant circum-
    1216
    stances and receiving the counsel of those best qualified to give it to me.
    Mr. Stokes: Is the Chancellor prepared to say whether anyone received a commission from this transaction?
    Sir K. Wood: That is another matter altogether.
    Mr. Stokes: If I put a Question down, will the Chancellor answer it?
    Sir K. Wood: I certainly will, and I hope the hon. Gentleman will put it down at once, as I do not like these statements being made.
    Mr. Stokes: They are in the Press.

    WAR MATERIALS (PURCHASE, UNITED STATES).
    Mr. Craven-Ellisasked the Chancellor of the Exchequer whether he is in a position to make a statement relating to new arrangements for the raising of loans by this country, pledged upon the assets in the United States of America owned by British nationals, in connection with the financing of purchases of war materials and supplies in the United States of America?
    Sir K. Wood: No, Sir.

    BANK RATE.
    Mr. Stokesasked the Chancellor of the Exchequer whether he will now cause the Bank Rate to be reduced to 1 per cent., and insist on the demolition of the syndicate control of the Treasury discount rate, thereby enabling that discount rate to be reduced to £per cent. with great advantage to the community?
    Sir K. Wood: No, Sir.
    Mr. Stokes: Will the Chancellor explain why he considers it inadvisable to reduce the Bank Rate and to exercise the powers which he undoubtedly possesses to the common advantage?
    Sir K. Wood: I have on many occasions endeavoured to explain the position to my hon. Friend.
    Mr. Stokes: I know about all those answers. But would the Chancellor not agree that it would be to the advantage of the Treasury if this kind of syndicate were abolished and a free market allowed?
    Sir K. Wood: It would be very dangerous for me to agree with my hon. Friend.

    REQUISITIONED PREMISES (RENT).
    Sir Stanley Reedasked the Chancellor of the Exchequer whether, in view of the frequent disparity between the rentals paid by the Government Departments concerned, and the rentals paid by the dispossessed tenants, he will consider suspending all tenancy agreements affecting requisitioned premises for the duration of the requisitioning, and for the Government Departments to make direct agreements with lessors and owners of the properties?
    Sir K. Wood: Legislation would be necessary in England and Wales to suspend the tenancy agreement whenever a leasehold property was requisitioned. When the rent payable by the tenant includes the provision of services by the landlord, it is the practice of departments to negotiate with the landlord for an abatement of the rent payable by the tenant.
    Sir S. Reed: Is it equitable that tenants of property which have been requisitioned should remain under heavy contractual obligations, although they have not the use of the property?
    Sir K. Wood: I appreciate the point.
    Sir I. Albery: Can the Chancellor say whether, in equity, there is any real difference between the position of a man whose property has been lost by enemy bombing, and that of a man whose property has been taken over by the Government for the purposes of the war?
    Colonel A. Evans: Can the Chancellor say what steps the Treasury are prepared to take when the negotiations he has mentioned are not successful?
    Sir K. Wood: That is a different question, and must be put on the Paper.
    Mr. Levy: What steps does the Chancellor propose to take to remedy this anomaly?
    Sir I. Albery: This question has been raised several times, and I have asked whether it would be submitted to the legal officers of the Crown.
    Sir K. Wood: Certainly, I will do that.

  NEW MEMBER SWORN.
  Captain Kenelm Simon Digby Wingfield Digby, for the county of Dorset (Western Division).

BUSINESS OF THE HOUSE.
Ordered,
"That the Third heading of the Finance Bill may be taken immediately after the consideration of the Bill, as amended, notwithstanding the practice of the House as to the interval between the various stages of such a Bill" —[Mr. Attlee.]

ORDERS OF THE DAY.

  FINANCE BILL.
  Order for Consideration, as amended, read.
  The Chancellor of the Exchequer (Sir Kingsley Wood): I beg to move,
  "That the Bill be re-committed to a Committee of the whole House in respect of the Amendment to Clause 47, page 37, line 25 and the Clause ('Provisions as to Schedule A tax on land sustaining war damage '), standing on the Notice Paper in the name of Mr. Chancellor of the Exchequer"
  There are two Amendments for which we wish to recommit the Bill, and they arc matters in respect of which I think there will be general agreement. The first Amendment, which arises on Clause 47, is designed to place it beyond doubt that the provisions relating to tax-free payments apply in Northern Ireland. The other matter is in relation to provisions as to Schedule A taxation on land sustaining war damage. The object is to enable the appropriate adjustment to be made of the burden of Income Tax charged on the tenant of a let property which has suffered war damage. In such a case, rent may cease to be payable or may be reduced, and, in consequence, the tenant paying the Income Tax might be unable to recoup himself by the ordinary procedure of deduction of tax from rent; and, the landlord, also, might be able to escape payment of taxation to which he is liable. The Amendment provides that the burden of the tax is to be borne by the person who would be liable if the normal procedure of deduction from rent had remained operative.
  Provision is made that the Commissioners of Inland Revenue are to give the appropriate measure of relief to the tenant. For instance, in the case of rent which is a full rack rent, the tenant would be repaid by the Commissioners the whole amount of the tax, and further provision would be made for the recovery from the lessor—from the immediate lessor or superior lessor, as the case might be—of the tax from which the tenant had been relieved. It is obvious that provision should be made for cases of this kind, and I hope that both these provisions will be accepted by the House.
  Question put, and agreed to.
  Bill considered in Committee.
  [COLONEL CLIFTON BROWN in the Chair.]

  FINANCE BILL.

    Clause 47. —(Short title, construction and extent.)
    Sir K. Wood: I beg to move, in page 37, line25, to leave out from "to, "to" shall," in line 27, and to insert "death duties"
    I have just explained the purpose of this provision.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    NEW CLAUSE. —(Provisions as to Schedule A tax on land sustaining war damage.)
    Where—

    (a)any land which is the subject of a short lease suffers war damage, and in consequence the lease comes to an end or the rent thereunder ceases to be payable or is reduced; and

    (b)the Commissioners of Inland Revenue are satisfied that the lessee is unable to deduct tax which he would otherwise have been entitled to deduct under any of the Rules of No. VIII of Schedule A,

    those Commissioners shall give to him, by repayment or otherwise, such relief from tax as will in their opinion reduce the amount of tax under Schedule A ultimately borne by him in respect of the land for the year of assessment (or that part thereof for which tax is payable) to what it would have been if the damage had not occurred.
    (2)Where relief is given under Sub-section (1) of this Section the tax covered by the relief may be recovered from the persons by whom it would have ultimately been borne if the damage had not occurred, as if they had been respectively charged therewith and in the same way as any other tax charged on them may be recovered.
    (3)In this Section the expressions "land" and "short lease" have the meanings assigned to them by Section thirteen of the Finance Act, 1940, and the expression "war damage" has the meaning assigned to it by Section eighty of the War Damage Act, 1941; and for the purposes of this Section a person shall be deemed ultimately to bear tax under Schedule A in respect of any land to the ex tent, and to the extent only, that tax has been paid by him in respect thereof by deduction or otherwise and is not deductible by him under any of the Rules of No. VIII of Schedule A from rent payable by him in respect of the land.
    (4)This Section shall apply to tax for the year 1940–41 and any subsequent year of assessment. —[Sir K. Wood.]
    Brought up, and read the First time.
    Sir K. Wood: I beg to move, "That the Clause be read a Second time"

    1231
    I have just explained this provision as to Schedule A tax on land sustaining war damage.
    Question put, and agreed to.
    Clause read a Second time and added to the Bill.
    Bill reported, with Amendments; as amended in Committee and on recommittal considered.

    NEW CLAUSE—(Extension of Section 3 of Finance Act, 1940, to officers and men of the Merchant Navy.)
    (1)Section eight of the Finance Act, 1940 (which authorises the issue to members of His Majesty's naval, military or air forces of permits to use mechanically-propelled vehicles when on leave), shall, subject to any regulations made by the Minister of War Transport, apply in relation to masters and members of the crews of British sea-going ships as it applies to members of His Majesty's naval, military or air forces.
    This section shall be deemed to have come into operation on the first day of July, nineteen hundred and forty-one, and any regulations made under this Section, or made under the said Section eight as respects masters and members of the crews of British sea-going ships, may be made to apply retrospectively as from the said day. —[Sir K. Wood.]
    Brought up, and read the First time.
    Sir K. Wood: I beg to move, "That the Clause be read a Second time"
    This new Clause has been introduced in response to the undertaking which I gave on the Committee stage of the Bill, and its purpose is to extend to officers and men of the Merchant Navy the privilege given by Section 8 of the Finance Act, 1940, to members of the Armed Forces on leave. The privilege applies to men who may have a motor car or a motor cycle which is not licensed but is registered in the applicant's name, and a permit for its use can be issued during the period of leave. It has been represented to me in all parts of the House that it is right that the officers and men of the Merchant Navy should be given this privilege.
    Colonel Sandeman Allen: I would like to thank my right hon. Friend on behalf of the Merchant Navy for his kindness in putting this Clause into the Bill. I am certain that we in this House are glad to be able to add to the amenities and enjoyment ashore of these officers and men in this way. I wish to express our gratitude to the Chan-
    1232
    cellor of the Exchequer for what he has done.
    Question put, and agreed to.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE—(Limit to relief in respect of insurance premiums to be calculated by reference to pre-war income.)
    (1)This Section applies to the relief to be granted under Section thirty-two of the Income Tax Act, 1918 (which relates to life insurance premiums and other similar payments), for the year 1939–40 or any subsequent year of assessment for any part of which the Emergency Powers (Defence) Act, 1939, is in force.
    (2)In paragraph (a) of Sub-section (3) of the said Section thirty-two (which limits the amount in respect of which relief may be granted under that Section to one-sixth of the taxpayer's total income) the reference to total income shall he construed as a reference to total income for the year of assessment in question or total income for the year 1938–39, whichever is the higher. —'[Captain Crook - shank.]
    Brought up, and read the First time.
    The Financial Secretary to the Treasury (Captain Crookshank): I beg to move, "That the Clause be read a Second time"
    This is a relieving clause. Under the Act of 1915, during the last war, a similar relief was granted. It arises in this way: Under the existing law there is a relief from Income Tax given in respect of life insurance premiums. There are various conditions for that relief, and one of these is that no relief is given in respect of any excess of such premiums over one-sixth of the total income of the taxpayer from all sources during the year claimed. As a result of the drop in income during the war, this limit operates very hardly in some cases. I will give an example. Supposing a man had an income before the war of £3,000 a year, the relief operated for life premiums up to 500, which was one-sixth of his total income. Unfortunately, many people's incomes have dropped materially during the war, and supposing, instead of having £3,000, the man has now £1,800, his relief for premiums becomes only one-sixth of the reduced sum of £1,800. That is to say, he only gets relief for £300, though he might still find it necessary to pay premiums for £500. Therefore, in view of the unfairness of this type of case, this Clause seeks to remedy the hardship by

    1233
    providing that the tax-payer's total income for the year ended 5th April, 1939, may be substituted for his total income during the year of claim. The House will be ready, I am sure, to grant this relief, as it has always attached considerable importance to the general system of insurance.
    Mr. Benson: I am not sure whether I have read this Clause correctly, but it appears to me that it applies not only to insurance policies which had already been in operation since 1938–39, but also to new insurance policies taken out at any time during the period during which this Clause would operate. The concession to pre-war insurances is legitimate, but I am not entirely convinced that the concession should be applied to new insurances. I can conceive a case in which a man, realising that there would be a serious curtailment of his income during the war, might take out an endowment policy for a number of purposes, and the result would be that, if his income was fairly high in 1938–39, the Chancellor of the Exchequer would bear a very large proportion of the cost. I shall be glad if the right hon. and gallant Gentleman will let me know whether this applies to all insurance policies or merely to pre-war insurance policies.
    Captain Crookshank: I understand that it applies to all of them, and is exactly on all fours with what was done during the Great War.
    Question put, and agreed to.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE. —(Extension of Rule 13 of Rules applicable to Cases 1 and 11 of Schedule D to professions and vocations.)
    Rule 13 of the Rules applicable to Cases I and II of Schedule D (which provides for the set off of losses against profits where a person carries on two or more distinct trades) shall have effect as if any reference therein to a trade included a reference to a profession or vocation.—[Captain Crookshank]
    Brought up, and read the First time.
    Captain Crookshank: I beg to move, "That the Clause be read a Second time"
    This new Clause is in substitution for an Amendment which was proposed during the Committee stage by the hon.
    1234
    Member for East Middlesbrough (Mr. A. Edwards) and afterwards withdrawn. At present Rule 13 of the Rules applicable to Cases 1 and 11of Schedule D deal only with cases in which the Income Tax payer is carrying on two or more distinct trades. My hon. Friend sought to extend it to the case of a man who was carrying on a trade or more than one trade, and also a profession. The object of the new Clause is to bring a case of that sort into line with the case of the Income Tax payer who is carrying on two businesses. The reason why there was ever any distinction is wrapped in the mystery of time. There is no logic in it and it probably arises from the fact that in the far-off days when Income Tax began, there were comparatively few cases of a profession and a trade Being carried on simultaneously by an individual. Times have changed, however, and nowadays an ordinary business man may well be engaged in what is, for Income Tax purposes, considered to be professional work. My hon. Friend made out a perfectly good case in Committee for his point, but I could not accept his Amendment at that stage, because it was not right in its drafting. I hope he will agree that the new Clause carries out his intention.
    Mr. A. Edwards: As the law stood in this respect the professional men did seem to be unjustly treated and the right hon. and gallant Gentleman's acceptance of my proposal, in this form, will be greatly appreciated. These are cases which do not often arise but I think it is true that they arise rather more frequently at the present time than they did formerly. I am glad, therefore, that the right hon. and gallant Gentleman has seen fit to bring such cases into line with the other cases to which the Rule relates.
    Mr. Pethick-Lawrence: I am glad that the right hon. and gallant Gentleman has seen his way to put this matter right by giving to professional men the relief under this head which applies to men engaged in business and placing all on the same footing. I would however add this reminder to the Chancellor of the Exchequer. I am, by no means, making any general accusation but there is one way by which some professional men do escape their due share of taxation. Money often comes to them in the form of cash payments. They put

    1235
    the cash into a pocket and when they have to meet some little expense, they do so out of that pocket or some other pocket, and they forget, rather conveniently, that this money is really income which ought to be accounted for to the Inland Revenue authorities. Out of every pound of such money 10s. should be set aside for payment to the Chancellor of the Exchequer, before the other 10s. is paid out possibly for some personal gratification. But I fear that all do not remember that fact. I take this opportunity of reminding the right hon. Gentleman of the leak which exists in this respect. It affects doctors, dentists and other classes of people. The right hon. Gentleman might look into the point to see whether some method cannot be devised of bringing home to such people their obligations to the Exchequer.
    Sir K. Wood: Certainly I will. Any suggestion of that kind will be thankfully received.
    Question put, and agreed to.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE. —(Expenses of weekly wage earners in travelling to and from their work.)
    If it is shown in the case of a weekly wage earner assessed to Income Tax in accordance with Rule 2 of the rules applicable to Cases 1 and 11of Schedule D that his place of work or his residence has changed through circumstances connected with the present war and that in consequence he is obliged to incur and defray out of his wages additional expense in travelling between his residence and his work, the additional expense so incurred and defrayed by him in the half year, up to five pounds, shall be deducted from the wages to be assessed for the half year. —[Sir K. Wood.]
    Brought up, and read the First time.
    Sir K. Wood: I beg to move, "That the Clause be read a Second time"
    This new Clause I have placed on the Paper as the result of representations made by some of my hon. Friends opposite including the hon. Member for Ince (Mr. G. Macdonald) supported by Members in other parts of the House. This is one of the occasions on which I have thought it right and proper to make a concession which involves certain financial commitments. The New Clause provides that some allowance should be made for travelling expenses in cases where manual
    1236
    workers have been obliged to incur exceptional and additional expense in getting to work. The Clause applies to weekly wage-earners and relates to additional travelling expenses which the worker has been obliged to incur owing to a change in the place where he works or in his residence, due to circumstances connected with the war and the amount of the allowance is limited to £10 per annum. I make this concession because I think it will assist our war effort. In the belief that it is justified by the circumstances of the time and will help towards the end which I desire, I am making this allowance at some financial sacrifice.
    Sir Herbert Williams: Perhaps the right hon. Gentleman will explain precisely what is meant by the words: "weekly wage-earner" Does this term cover the very large number of girl clerks working in offices in London, or does it apply only to people engaged in manual work? That is a point of considerable significance.
    Mr. Gordon Macdonald: I am sorry not to appear more grateful about this new Clause, but it will be generally agreed that a dissatisfied person seldom shows much gratitude, and I certainly am dissatisfied in this case. When I withdrew my proposal during the Committee stage, I did so in the expectation of a fairly substantial concession. I understand now that the Chancellor of the Exchequer is unable, for financial reasons, to make the concession a substantial one. I welcome the Clause as far as it goes and as far as certain people will benefit by it, but I must point out, at the same time, that it will create considerable friction in certain areas. I put to the right hon. Gentleman for his consideration one or two cases which arise in my division. There are men who, before the war, were paying heavy travelling expenses. There are other men who, finding their colliery closed because of the war, have had to seek work at other collieries elsewhere. Men of both classes may now be employed at the same colliery travelling in the same bus and incurring the same travelling expenses. The new Clause will give the benefit to one section of them, while denying it to the other. These men who travel together day by day will compare notes and those to whom the concession is denied, will not be very

    1237
    pleased about it. I do not say that they will feel vexed because somebody else has got what is denied to them, but they will find it very difficult to understand why the differentiation has been made. Then there are women who, in response to the appeal of the Minister of Labour, have gone into industry and who were not in industry before. They are incurring heavy travelling expenses. They will, I expect, be excluded from the scope of the Clause because they were not in employment previously.
    I do not wish to belittle the offer which the right hon. Gentleman has made, but in the circumstances we can hardly feel satisfied with it. At the moment he is paying millions in assisting people to get to their work. A large number of men and women are employed in munition factories who incur expenses of anything from 1os. to 15s. a week for travelling. The right hon. Gentleman, through the Minister of Labour, has said to these people "You will be called on to pay only 3s. a week of the 15s. and the Exchequer will find the remainder" I am not begrudging, nor would the workers in my division begrudge those men and women the concession which has been made to them. To ask them to pay the full expenses would be unreasonable. But it is also unreasonable for the right hon. Gentleman to say that for financial reasons, he cannot give the small concession for which we ask when he is making such a substantial concession to another body of workers whose earnings are on the same level. I appreciate the Chancellor's difficulties, and I hope he appreciates mine too, although I want to say that since a number of people will benefit by this concession, it is not for me; to deny them that benefit.
    Mr. Craven-Ellis: Will the employer have to arrange with the employéas to what is to be the allowance for travelling expenses, because, if so, it will put a great deal of work on employers?
    Mr. Price: I too, like others, am disappointed that the Chancellor has not seen his way to go as far as we would have liked him to go. Many of us who supported him in Amendments on the Committee stage went very far to make up his revenue, and we felt we would press this Clause because the
    1238
    amount involved was so small. If the Chancellor went as far as my hon. Friend the Member for Ince (Mr. G. Macdonald) wanted him to go, I do not think it would make a serious hole in the revenue. However, this will be of some benefit to some of my constituents, who, since the outbreak of war, have had to go long journeys to work by bus and have incurred considerable expense. It will relieve them, but only if they did not incur expense like this before. In the case of my constituents that can be proved, but I would like to ask the Chancellor how proof can be furnished. What machinery will be set in motion?
    Mr. Edmund Harvey: I think the Chancellor is to be congratulated, at the least, on having recognised the principle which is recognised in this Clause, and I hope very much that he will take into account, possibly for a future Budget, what has been said by my hon. Friend the Member for Ince (Mr. G. Macdonald). However, I would like the Chancellor to explain why he has fixed the sum at £5 for each half-year. That means a daily allowable expenditure of about 8£d., and in many cases a considerably larger sum than that is actually expended. Having recognised the principle, I hope the Chancellor will at some future date consider extending the amount from £5 per half-year to something like £8 or £10 per half-year, which would cover a large part of the expenditure incurred. Although he has not gone as far as we would have liked him to go, the Chancellor has gone a good way in having recognised this principle.
    Mr. Mathers: I am concerned about the equitable working of this Clause as it has been drafted, and I would like to refer to the point put by the hon. Gentleman the Member for South Croydon (Sir H. Williams) as to how the definition of a weekly wage earner is to be interpreted. There are colleagues of mine in the railway service who, although they have a nominal salary and receive a certain amount per year, are paid weekly. Will that bring them within the definition of weekly wage earners? There is, too, this consideration to be taken into account. In many cases these people are not in a position to earn as much as those who come within the heading of. normal weekly wage earners, or, as the Chancellor put in, manual workers. In view

    1239
    of the desirability of applying this new principle equitably—I am not at the moment questioning the amount of the relief—I hope he will allow a wide interpretation of the term "weekly wage earners"
    Mr. Woods: I would like to add my appreciation, because I am afraid that the Chancellor may imagine that having made a concession to the demand he has landed himself into a lot of trouble. I hope he will not look at it from that viewpoint but will look at it from the point of view of an equitable deal for the bulk of the working class of this country. If one does a thing, it is always well to do it decently, but this is a paltry step, and the Chancellor must take the responsibility of having encouraged these criticisms. This affects the bulk of the workers in the City of London. If I might give an illustration, suppose two men are working side by side on the same basis. One does his duty by the country and has a family, and to provide accommodation he has had to go fairly well out into the suburbs. His colleague is a single man, in third-rate "digs" in the City, and he is bombed out. He has to go further into the country. The family man, however, will get no concession, because he was compelled formerly to take up residence in a suburban area. I think this will involve the Chancellor in difficulties. The statement that this is a new principle is altogether wrong. The time has come when the Chancellor should say definitely that all people should be put on the same basis and that the actual allowance they receive should be less the inevitable expenses incurred in making their income.
    This is the basis on which business firms are dealt with: they can put against their profits all that they pay their travellers who go round the country obtaining their orders, and if you make a concession like that, why should you not allow it to the ordinary salaried person? Take, for instance, a doctor who has his patients scattered over a wide area. He is allowed to deduct from his income maintenance for a car, and many are allowed maintenance for a chauffeur. This is no innovation. You are only doing now for the average wage-earner what you have done for the doctor. Members of this House who come from various parts of the
    1240
    country to Westminster are provided with free travel tickets. To be logical, the Chancellor should modify the arrangement and add to the income of Members the cost of their travelling and allow them a deduction of —5 per half-year. He will find that the arrangement outlined in this Clause will cause innumerable anomalies and increasing discontent because of its inequitable working.
    Mr. Graham White: I wish to express my great satisfaction that the Chancellor has seen his way to go so far to meet a very serious grievance, although I think it would have been. better if he had gone further and said that all travelling expenses which could be properly so described should be free of Income Tax. I want to impress upon my right hon. Friend that this matter is definitely not so much one of pounds, shillings and pence, as one of psychology. It is one among a number of matters which are of serious consequence to the production of the country at the present time. One frequently hears asked the question, "Why should I pay Income Tax on my travelling expenses? —It costs me 10s. 6d. or more in travelling expenses each week, since I was blitzed out" People ask why they should pay Income Tax on their travelling expenses when they cannot choose where they will work, as they did in normal times when they had a free choice. They ask why they should work overtime when the Chancellor takes a considerable part of the money they earn in that way; they ask why they should work overtime when there is nothing to buy in the shops.
    I assure my hon. Friend that in the aggregate these things are having a most important effect upon production. I ask him to avoid any strict rigidity in the administration of this provision, and to see that nothing is done which will be a great exasperation at a time when people's nerves are tending to get a little bit frayed. One other thing I want to ask my right hon. Friend is that the Ministry of Information, or whoever deal with these things, should make plain to the people who are paying Income Tax for the first time what is the purpose of Income Tax, so that all the questions that are in their minds at this time will be answered, and answered in the right way. If these things are not made clear, great

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    mischief may be done. Some body of people of ability and energy ought to explain these matters, remove doubts, and bring home to the citizens their responsibility in a matter of great consequence at the present time.
    Sir K. Wood: In making a few observations in reply to hon. Members who have spoken, I should like to remark first how little gratitude there is in this world; and, not desiring to dwell upon the matter any further, I will proceed immediately to reply to some of the questions that have been put to me. My right hon. Friend the Member for Southampton (Mr. Craven-Ellis) asked about the position of employers in regard to this matter. They will not be concerned, and will not be put to any further difficulty or trouble. As to the definition, it is as follows:
    "Weekly wage earners employed by way of manual labour in respect of the wages arising from that employment, and does not apply to persons employed as clerks, typists. …" etc.
    A substantial amount of criticism has been expressed by hon. Members. It is a criticism which it is easy to make. I would point out that I have made this concession in very exceptional circumstances, and that it represents a cost of £3,000,000 or £4,000,000. All the time I have to look around to see where I can obtain further money. As I reminded hon. Members on a former occasion, if it were a question of our having to deal with the end of the war, things would be different, but I have to look to the future, and hon. Members must stand by me in my efforts to get finance for the war. I have made this concession, which I believe is connected with the war effort, in the hope that it will promote and maintain good feelings in this matter. I have been bound to limit the concession to additional travelling expenses arising out of the war. Let hon. Members reflect for one moment what would be my position if I were to make the concession in respect of travelling expenses generally. At this time, I could not possibly make such a concession. The only concession which I can make, in justice to people, rich and poor, who have to pay taxes at this time, is one which has relation to the war effort. That, indeed, is what hon. Members suggested in the new Clause which they proposed. They did not suggest that I should give an allowance for travelling expenses generally, but that it should be
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    made when the travelling expenses arose as a result of enemy action, the economic circumstances of an industry, and so on. They endeavoured to limit the allowance, and quite rightly so; and I also have had to limit the concession.
    It may well be that there will be cases such as those mentioned by the hon. Member for Finsbury (Mr. Woods). I think the answer to be given is that this concession is made to meet the case of those people who have been put to extra expense on account of travelling. It is true that if two men are working together, one may get an allowance which the other does not, but the one who does not get the allowance will not have been put to the extra expense. Hon. Members opposite will be able to say that they have pressed for general concessions about travelling expenses. They will be able to tell their constituents that they have urged these concessions on me, and that I have refused to make them. They will be in the happy position of being able to say that they have obtained from me as much as they could get, that they foresaw that difficulties would arise, and warned the Chancellor of those difficulties, and they can say that, knowing the Chancellor— they can, if necessary, describe the Chancellor—one could not expect anything better from him. Hon. Members will be able to give that explanation, and I. think that they will have to say that while the present Chancellor is in office, and while he is faced with the difficult circumstances which now confront him, this is the best he can do. It is in that spirit that I hope hon. Members will accept the new Clause, recognising that in the difficult circumstances of the present this is the utmost I can do.
    Sir John Mellor: Will my right hon. Friend say why clerks and typists should be excluded?
    Sir K. Wood: I have confined the concession to manual workers because I think there is a special case for them. They are more accustomed to living near their work. Clerks and typists are not in that special position. Frankly, I have been bound to put some limit to the new Clause.
    Mr. Evelyn Walkden: Will the Chancellor say whether shop workers and dairy roundsmen will be included within the definition?
    Sir K. Wood: It applies to weekly wage earners employed by way of manual labour in respect of wages arising from that employment, and does not apply to persons employed as clerks, typists, draughtsmen, or any similar capacity.
    Mr. Lathan: Does the Chancellor realise that non-manual workers may be placed in precisely the same position in regard to this inevitable expenditure? The proposal will mean that manual workers who are receiving £10 or £12 a week as skilled engineers will have relief, whereas non-manual workers who are receiving less than half that wage will have nothing. That is the iniquity and injustice of the arrangement which we ask him to reconsider, and I hope he will not close his mind on that point.
    Mr. E. Walkden: I only wish to ask the Chancellor whether he will review the definition he has just read to the House. I am concerned with three sections of the distributive trades. In the case of shop workers, owing to men being called up, people are transferred from shop to shop which may be anything up to a distance of 10 miles. They may be transferred for two or three months only, but nevertheless they are put to considerable travelling expense. They are certainly contributing to the war by helping their employers and distribution generally. In the case of dairy roundsmen, they may be on one round for one week and then transferred 10 miles away. I could quote the case of one organisation in London whose trade extends almost 25 miles from Charing Cross. In that case a man may be transferred in the interest of his firm five or 10 miles away, and if such an arrangement were not made, obviously London's milk services might collapse. I ask the Chancellor to review these classes of workers and see whether they cannot be brought within the terms of the definition he has submitted to the House.
    Mr. Collindridge: The right hon. Gentleman has not been unfair in accepting this principle. I travelled in a workers train this morning, and I saw two trains arrive at the munition centre where I have to make my connection. In the constituency I represent thousands of workers who were unemployed before the war have now been harnessed to the war effort—and we are glad of that—
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    which has resulted in these people travelling 20 or 30 miles to and from their work. They are in the position of not being able to be housed near their work, and consequently we must face the fact that throughout the war they must meet these heavy travelling expenses out of their meagre wages. These men told me this morning that they were spending on an average between 9s. and 10s. a week on travelling expenses. We all express pleasure at the Chancellor's concession, but I hope he will not close his mind entirely to making it a little more generous. My constituency is a mining district, and because of its nature we are precluded from having any heavy munition works. We are precluded from that by reason of the service of the mining industry to the country, and the fact that subsidence makes it impossible for munition industries to be established there. The workers are, therefore, forced to travel lengthy distances, and I hope the right hon. Gentleman will see our point of view and make this concession a little more generous.
    Mr. Leslie: The Chancellor indicated that this provision referred to workers who have been affected by enemy action. I would point out that there is a considerable number of shop workers who are considered to be non-manual workers who have been affected by enemy action. Many of these people have been blitzed out of their homes. They have been forced to move a considerable distance away to take the place of men who have been called to the Colours. I think that some concession ought to be made in cases of that kind.
    Question put, and agreed to.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE—(Amendment of Section 13, Sub-section (2) of 2 & 3 Geo. 6.)
    In Sub-section (2) of Section thirteen of the Finance (No. 2) Act, 1939, as amended by Sub-section (1) of Section thirty-one of the Finance Act, 1940, the words "one thousand five hundred pounds" shall be substituted for the words "one thousand pounds" —[Sir H. Williams.]
    Brought up, and read the First time.
    Sir H. Williams: I beg to move, "That the Clause be read a Second time"
    I think I can explain this new Clause quite simply. I have tabled it at the

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    request of an accountant friend of mine who wrote to me some weeks ago pointing out a disability under which a number of companies for which he has acted have been suffering. The bulk of the people whom he advises are engaged in the cinema trade. He has not dealt with the great circuits, but the smaller undertakings, run by groups of local traders who desire to add to the amenities of a district. These people have had a rather difficult period during the standard years, with the result that many of them are on the minimum standard of £1,000, out of which directors fees have to be paid. That is the whole sum which is available for both fees and dividends. In a number of cases someone has to be employed as managing director, but as a result of certain existing regulations in that particular industry he has to be put on the board; therefore his salary is part of this minimum sum and is not a trading expense. The net result is that these people have been deprived of the opportunity of distributing little if any profits. It only applies to small companies, but I am sure it operates in a number of other industries as well as the cinema, although the particular example I have given came from my accountant friend who is concerned with the cinema industry. When the effect of tax is to deprive people of all income, then obviously the tax has been carried too far. The suggestion is a moderate one, namely, that the minimum standard should be raised from £1,000 to £1,500. It is not going to cost the Chancellor very much money, but it will help a number of people who are providing a useful amenity in many districts, who should at least have some moderate reward for their efforts.
    Mr. Levy: I beg to second the Motion.
    Captain Crookshank: I am afraid I cannot speak with the same intimate knowledge of the details of the particular case raised by my hon. Friend the Member for South Croydon (Sir H. Williams). Therefore, I may, perhaps, be allowed to deal with the matter in more general terms. In this Sub-section we are dealing with cases where there is a minimum standard. Of course, that in itself is a rare case, because most companies will be either claiming a profit standard, or a substituted, or percentage standard based on capital. The new provisions as
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    regards borrowed capital will still further reduce the number of organisations who will be on the minimum. As the law at present stands, where the business is carried on by a body corporate, other than a director controlled company, or where there are no working proprietors in the business, the minimum standard is £1,000. Where the business is carried on by an individual, partnership, or director-controlled company, there being one or more working directors, the minimum standard which can ordinarily be claimed is such sum not exceeding £6,000, as is arrived at by taking £1,500 for each working proprietor, subject to a possible further addition not exceeding £4,000 or £1,000 for each working proprietor in certain cases. I merely say that to show what is the position. The hon. Member wants to raise the sum, but on reflection I think he will be convinced that in working out this arrangement in the Act of 1939 this House attempted to make that more or less on an equal level, taking into account the different circumstances. That is to say, when £1,500 is the minimum standard, no deduction can be claimed in respect of remuneration paid to the individual, the partners or the directors of the director-controlled company.
    In the case of the £1,000 minimum a public company is allowed to deduct directors remuneration in computing its profits before it gets to the £1,000. The balance is therefore more or less kept in line. If the individual proprietors take no active part in the business, but have a manager, they can claim to deduct the salary of the manager in computing profits. That, I understand, is the case, and has been all along. Possibly my hon. Friend's friends have not been quite seized of what it is possible to claim in their case. I would not take it further without knowing the circumstances, but, generally speaking, the two figures of £1,000 and £1,500 are in direct relationship with each other, because in the £1,500 case there is the element of remuneration of the proprietor of the business whereas in the £1,000 case there is not, on the ground that that can be deducted under existing arrangements before the profit standard is computed. If, as the result of the Clause, you raise the £1,000 to £1,500, naturally, and in logic, in order to keep the two on an even keel, you would also have to make some other arrangement and raise

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    the £1,500 to some other figure so as to keep them in line. That, I am afraid, my right hon. Friend does not see it possible to do at present. It would not be a reasonable arrangement at this late stage to recast these careful arrangements which have been entered into, and are working, and I hope my hon. Friend will not press us, because my right hon. Friend cannot be pressed.
    Sir H. Williams: My right hon. and gallant Friend seems to have made out a good case, but my information comes from a friend who has had the job of negotiating with the inspector of taxes, and his assessments in a number of cases in his experience seem to vary. I asked him if he would draft something in time for the Committee stage, but he was dilatory, and I have only been able to raise it to-day. I will send him a report of what my right hon. and gallant Friend has said. If it can be cleared up administratively, it will be, but, if the position is worse than my right hon. and gallant Friend thinks, I hope he will be prepared to receive representations so as to put the thing on a fair basis if it is not on a fair basis already. With this comment, I beg to ask leave to withdraw the Clause.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE. —(Income Tax on undistributed profits.)'
    In respect to undistributed profits, the standard rate of Income Tax for the year 1941–42 shall be nine shillings in the pound. —[Mr. Hammersley.]
    Brought up, and read the First time.
    Mr. Hammersley: I beg to move, "That the Clause be read a Second time"
    The object of the Clause is self-evident. It desires to give some kind of incentive to companies to retain as much of the profits as they possibly can in the company. When my right hon. Friend made his financial proposals his first objective, of course, was revenue, but he also had the objective of raising it in such a way as not to undermine the stability of enterprise or the ability of businesses to deal with post-war problems. If the maximum of reserves can be kept in companies, they will be able to deal with the difficult
    1248
    times which lie ahead in the post-war period. The Clause will have a second desirable objective. It will reduce the distribution of profits, thereby decreasing purchasing power and reducing consumption, which was one of my right hon. Friend's objectives in introducing his Budget. It is clear that no company can or does distribute the whole of its profits which are assessed to taxation. Although one appreciates the necessity of raising these large sums of money, it is being done in a way, as regards the stability of many companies, which is rather ruthless, and I hope, if he cannot accept the Clause, he will bear in mind these criticisms and that in point of fact it is important to retain the maximum amount of undistributed profits inside companies.
    Sir Reginald Clarry: I beg to second the Motion.
    Sir K. Wood: My hon. Friend will not think I am detracting from what he has said when I say that a good many people have also put the case on many occasions under much more favourable circumstances, as far as finance is concerned, than those of to-day. In fact proposals of this kind have always been rejected by the House, either because the relief is unsound in principle or because the concessions are too costly. I will not enter into a controversy with my hon. Friend on the merits of his proposal, I will simply say that a concession of this kind would cost something in the neighbourhood of £12,000,000, which I am by no means in a position to sacrifice. Therefore, in the interests of the country as a whole, and of the Exchequer and the Treasury, I must ask him not to press it further. Perhaps in happier times, when the Income Tax is down, he will be able to put it before the Chancellor of the Exchequer of the day with more hope of success, but to-day it is impossible to make the concession.
    Motion and Clause, by leave, withdrawn.

    CLAUSE 6.—(Provision for the crediting of certain amounts of Income Tax.)
    Sir K. Wood: I beg to move, in page 4, line 10, after "be," to insert: "notified to him as soon as possible and shall be"
    This is to meet a suggestion made in Committee and to ensure that the tax-

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    payer shall be told the amount of his postwar credit as soon as it has been ascertained and recorded, and that he shall not have to wait until the sum is actually credited to him after the war.
    Amendment agreed to.
    Mr. White: I beg to move, in page 5, line 24, at the end, to insert:
    "On the death of a husband or wife, either of whom is entitled to repayment of a credited sum, the Commissioners of Inland Revenue may, at their discretion, make a payment in whole or in part of the sum credited to the survivor"
    I am moving this Amendment in order to draw attention to a case which is admittedly of small scope but is not, I feel, without importance. The Amendment is designed to deal with a case where on the death of a husband or wife who has one of these credits the survivor might well be left in the position where that credit was the only asset. It seems to me that in those circumstances it would be a proper thing, in the generality of cases, that the Inland Revenue authorities should have discretion to make a payment from the credit of such amount as they might think reasonable. In an extreme case someone who enjoyed the benefit of this credit from the Crown might otherwise be driven to go to public assistance for relief. I think I have said enough to reveal what is in my mind and I hope the House will not think it was too trivial a point to raise.
    Mr. Harvey: I beg to second the Amendment.
    I believe the principle of the Amendment will commend itself to the whole House, and I would point out that it is not open to the objection that it will lay a great burden on the Exchequer. It gives only a discretionary power to the Commissioners of Inland Revenue to meet hard cases. There are people like doctors whose whole income is derived from their practice or their profession and ceases absolutely on their death, and it would be exceedingly hard in such cases for the widow not to be able to go to the Commissioners of Inland Revenue and apply for at least a part of the sum credited to her husband to be available for funeral and other immediate and urgent expenses. I hope very much that the Chancellor may be able to accept this Amendment.
    Sir Frank Sanderson: In supporting the Amendment, I would say how much I appreciate the difficulties which people encounter in the cases of which we have had illustrations, but apart from those cases I cannot help feeling that there is a great deal of justice in this Amendment, and if the Chancellor of the Exchequer could accept it his action would meet with the approval of the whole House and of the country.
    Captain Crookshank: Hon. Members speak very mildly about this small amendment, but we are discussing the Finance Bill, and I should think that some of the predecessors of my right hon. Friend the Chancellor who belonged to the Liberal party would have had a fit at the suggestion that the Inland Revenue authorities should be given power to make discretionary payments. That responsibility has not so far come within their functions and it is one which they would not lightly wish to assume. As I understand it, what the hon. Member asks is that we should find some way by which this money which is to the credit of her husband can be paid out to the widow if she is left in difficult circumstances. Of course things would never end there. The plea of sickness would come next, and then it would be a question all along the line of where we should stop. A case of desperate disease, like tuberculosis or cancer, would be brought up next time as a ground for an extension of the concession which had been given in the case of death.
    I am not sure that the hon. Member has it clearly in his mind that the credit will not be put down until the end of the war. There might be the case when; there is one amount credited, and another where the husband and wife have separate amounts credited, and if there are separate amounts credited presumably the survivor could draw on his own account at once. On the other hand, if the husband and wife have these repayments of Income Tax coming in under one credited amount, it is a little difficult to see in logic or common sense that that asset should be dealt with in any different way from any other asset which passes at death. I do not know what answer the hon. Member himself would give to that point, but I hope that he will reflect upon it before the next Finance Bill comes forward, and having reflected upon it will appreciate the more readily why, while it

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    may seem to be a little request that he is making, my right hon. Friend is yet unable to grant it.
    Sir F. Sanderson: Could the right hon. and gallant Gentleman say what would be the attitude of the authorities if the man and wife agreed to have an amount credited in their joint names in such a way that in the event of death of the one the credit would go to the other?
    Captain Crookshank: I am afraid I have not had brought before my attention the possibility of a joint account, nor in the absence of the Law Officers could I say what would be the legal position on the death of one of the persons concerned until the estate, small though it might be, was completely settled according to the existing law.
    Mr. White: I am much obliged to the right hon. and gallant Gentleman for his reply, and I would remark that some of the circumstances which he has mentioned were not altogether absent from my mind. It was for that reason that I did not make the Amendment absolute, but left things in the discretion of the Commissioners of Inland Revenue. I am perfectly familiar with the "encroachment of the tide" argument, which is one the Treasury are never at a loss to bring forward to meet almost any circumstances.
    Captain Crookshank: Already to-day we have had experience of what happens.
    Mr. White: The Treasury always has that argument in readiness. The right hon. and gallant Gentleman did say one thing which gave me some comfort, although I am not sure whether I have correctly understood it. He said that if there were two accounts the survivor could draw upon his own account. If the amount is not to be credited until after the war how would that be possible—though I certainly did understand the right hon. and gallant Gentleman to say that the survivor could draw upon it.
    Captain Crookshank: I must make that point clear. Nothing could happen until after the war. The amounts are not credited till then.
    Mr. White: Having regard to the circumstances in which this discussion is taking place and the elucidations we have
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    had I regretfully ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 14.—(Disallowance for Income Tax purposes of certain payments in respect of war injuries to employeé.)
    Mr. Rhys Davies: I beg to move, in page 11, to leave out lines 5 to 9.
    The issue contained in this Amendment is one which I raised earlier on the Committee stage. Some employers have entered into an agreement with trade unions to make up in full the wages of any of their employés injured by enemy action if they have agreed to work during the alert. If an employéof such a firm meets with an injury, owing to enemy action and his wages nominally are £3 a week he would get say 30s. a week State compensation and the employer would make up his full wages by paying another 30s. a week for eight weeks. The amount paid by the employer to the employé in that case is not immune from taxation. The trade unions therefore feel that that is a form of penalty upon employers who are kindly disposed to their employés injured by enemy action.
    I know that the right hon. Gentleman has one or two appropriate answers up his sleeve, perhaps about what the Liberal party did a century ago, and all the rest of it. I do not think however that any argument against the claim which I am making can be found as a precedent in any of the political history of the past, because the agreements concerned were entered into during this war. I hope that, as the right hon. Gentleman was good enough to deal with this point on the last occasion and to say that he would consider it, we may have some statement from him in terms more generous than are usual on Amendments of this kind. I wait with great interest to hear what he has to say, especially in view of the fact that representations have been made to him, I understand by the employers and the trade unions concerned, seeking whether he will modify his attitude on the Clause.
    Mr. Leslie: I beg to second the Amendment.
    I understand that, as a result of questions put to the right hon. Gentleman during the Debate on 16th June, he agreed

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    to meet representatives of the trade unions and the Co-operative movement, and that the meeting took place yesterday. Perhaps he will let us know what happened.
    Sir K. Wood: On the Committee stage of the Bill I undertook to make inquiries on this matter, and, in the interval I have, for the purposes of elucidation, seen representatives of the Co-operative societies and of the unions concerned. I have received two deputations on the matter. We spent a fair amount of time together, and one deputation was accompanied by one of my hon. Friends from the opposite side of the House and the other by my hon. Friend who moved this Amendment. We discussed the matter together and went into the circumstances of the case put by the deputation, and I stated exactly what the position was. I will now tell the House about it, so that it may be on record. A certain number of payments made by employers are covered by the Clause, while others will not be covered. I would remind the House of the reasons for the Clause. Some little time ago the Government decided to bring in a comprehensive improvement of the scheme of compensation for the benefit of civilians who might, unhappily, meet with injury because of operations arising out of the war and due to enemy action. I announced in the House some months ago a scheme which meant a considerable cost to the Exchequer and under which the State took upon itself responsibility for compensation, in the circumstances which I announced. The Government decided to give compensation which appeared, in the circumstances, to be fair all the way round. I announced the scheme, and it is now in operation and covers the whole of the civilian population.
    Having assumed that responsibility, the State had to pay the bill for civilian compensation. While I expressed the view of the Government upon the merits of individual employers augmenting that compensation, I took up a very modest position, which I hope was accepted by the House, that the Government, having undertaken the expenses of the civilian scheme, should not be liable for any other payment at the instance of an individual employer. There is a good deal to be said for the view that, once the general compensation scheme has been set in operation by the State, there are objec-
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    tions to individual employers giving extra compensation in certain circumstances. It may be argued, of course, that the State compensation is not sufficient, but hon. Members would not say so if they were Chancellor of the Exchequer. There is a great deal of objection to individual employers saying to employés, "If you will work during air-raid alerts, you will receive something extra in compensation."
    The Clause prohibits the allowance, for any Income Tax purpose, of payments made by employers for the benefit of employers or their dependants who sustain injury by reason of the war. The Clause has two fields of operation. The first is in respect or payments made directly by employers to emplomés and dependants and the second is payments made by employers by way of premiums or contributions under insurance policies or schemes which provide for benefits to employés or dependants. The hon. Member's Amendment, moved no doubt for purposes of discussion, seeks to omit the first effect of the Clause. I have not received any representation or objection to the operation of the Clause. For the purpose of putting on record what I said to the two deputations that I saw, I only want to say this about the co-operative societies. There is nothing at all in this Clause which prohibits co-operative societies making payments. All this Clause says is that if they make payments which fall within the Clause, they shall not be allowed for Income Tax purposes. Having regard to the very large funds of the co-operative societies, it is only a very small sum which is at stake in this connection. The position apparently is this: The co-operative societies undertook in the case of employés injured in air raids while working during an alert to supplement the Government's compensation, for a period of eight weeks, by such an amount as would give the employés their full weekly wages.
    Further, it appears that it has been the practice of the co-operative societies in the past to pay some of their employés, shop assistants, clerks, etc., full wages during sickness or ordinary disablement, but they have not made such payments to their manual workers. The arrangements they have made in respect of war injuries now cover both classes of employés, and as I explained to the deputation, the provision under the Clause, on the assump-

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    tion that the arrangements were made after 2nd September, 1939, is as follows: As regards the classes of employés who in the past have been entitled to pay during sickness, the payments in respect of war injuries, if they do not exceed the ordinary sickness benefits, are excluded from the operation of the Clause by proviso (ii) to Sub-section (3), and will be allowed as expenses. If the war injury payments exceed the sickness benefit, only the excess will be disallowed under Subsection (4). With regard to the classes of employés who have not been in the past entitled to sickness benefit, if the arrangements provide only for payments in respect of war injuries, such payments, for the reasons I have given, would come within the Clause and would not be allowable as expenses to the employers.
    Mr. Leslie: What is the position of firms and employers who in the past have been in the habit of paying full wages during sickness for an unlimited period? It is quite usual, particularly here in London, to pay up to six months, and where there is an agreement restricted to a lesser period it is an agreement either with the unions concerned or with the individuals. What is to be the position of such firms?
    Sir K. Wood: I must not commit myself on an individual case without seeing the facts. I would refer my hon. Friend to the first statement I made, because it may be that such cases would come within the operation of the particular considerations I have laid down. I said, in regard to the classes of employés who in the past had been entitled to pay during sickness, etc., that payments in respect of war injuries, if they do not exceed the ordinary sickness benefit, are excluded from the operation of the Clause and consequently will be allowed as expenses for the employers. If the war injury payments exceed sickness benefits, only the excess will be disallowed. I cannot, of course, answer for a case I have not seen, but that is the general principle.
    Mr. Leslie: There is no limited period?
    Sir K. Wood: There is no limit in that respect.
    Mr. Woods: I am grateful for the attention the Chancellor has given to the question, but I am afraid that time has not permitted us to make such full representa-
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    tions to him as we should have liked to make. From his reply it is obvious to me that there is some little misunderstanding in his mind. It was one unit of a very large movement. I think the unit he had in mind represents about 60,000 men, whereas there are about 250,000 men affected. The organisation that supervises labour relationships was not represented, and it was therefore impossible for them to go into full details as to how exactly the situation had arisen. There are two or three considerations which I would like to submit to the Chancellor and which I think would justify him in giving further consideration to the problem with a view to introducing a modification, if necessary, in another place. It is a movement which has spread all over the country. Concessions were made, and before the war there were in operation various periods for which sick pay was available. They varied very considerably. There were further variations with regard to the types of employés, whether manual workers or otherwise, though it was not so much a question of manual or non-manual workers as of different trade unions each of which fought for the maximum concession and in various places secured it. As a result inequality arose.
    A further problem arose because of the fact that up to the war most of the negotiations were carried on an area basis, and different areas concluded different agreements. I think the Chancellor will agree that it is entirely desirable that, instead of having all these differences, an attempt should be made to secure unification. What has happened has been that since the war there has been a consolidation, and national negotiating machinery has been set up. That is what has happened so far as the employers are concerned. On the other hand, with regard to the trade unions, there has been a considerable linking up in the negotiations, and prior to the coming into operation of the Budget an agreement was signed by the national negotiating machinery with the whole of the unions concerned. I will not trouble the House by reading out their names, but will let the Chancellor have the details afterwards. Now, therefore, there is a national decision which was arrived at with a number of unions, and if discipline is to be maintained, that will have to be operated by at least 1,000 employer units. Unless it is carried out on a basis that

    1257
    this would be an acceptable thing as with former experience with sick pay—it was conceded because of the general desire of the Government that industry should carry on—and made to apply compulsorily, I can foresee all over the country self-contained employing units that would normally say, "We will accept this and put it into operation," will refuse to put it into operation, and there is danger of a considerable amount of industrial dispute. If the Chancellor will review the matter I do not think there is anything in principle involved. That would then bring this agreement into operation, which is a continuation and unification of the practice that has been in operation beforehand. I would appeal to the Chancellor, in view of the lack of time and opportunity we have had of stating our case reasonably and clearly from the wages negotiating side, that he should agree to look at this further before it officially becomes law.
    Amendment negatived.
    Clause ordered to stand part of the Bill.

    CLAUSE 15.—(Trades affected by certain arrangements for concentration of industry or business.)
    Mr. Hammersley: I beg to move, in page 13, line 6, at the end, to insert:
    "Where, in accordance with Sub-section (2) of this section, a company claims continuity of business although all production has ceased, there shall be allowed in computing the profits or losses of the trade or business such a sum in respect to the valuation of stocks as normally represents the value of the stock in process"
    This Amendment is concerned with basic stocks, sometimes known as stock in process, and has to do with those companies which are affected by the proposals for the concentration of production-companies which are closed down. It is a position which though it affects the bulk of the manufacturing industry in this country. I would like to illustrate by reference to the cotton spinning industry. In the normal production of the industry a certain amount of material is constantly passing through the machinery. Raw material in various stages of manufacture has to be constantly passing through and filling the machine, and it is quite impossible in normal production to treat that material as stock available for sale. Such material as basic stock varies from mill to
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    mill, but in respect of any particular mill it varies within very small limits, and this, in terms of £ s. d., is a figure reasonably well known to the Revenue. During the years in which manufacturing enterprises have been in production they have written down this stock in process to a very low figure. Now the concentration of production is to come along.
    Therefore, what was really part of their capital equipment in fact becomes saleable and increases their profits at this particular time when very likely they have to pay Excess Profits Tax. Therefore the whole proceeds of the sale of that material in process of production accrues to the Revenue. One has to look forward to the time when these mills will have to start up again, maybe in circumstances of considerable difficulty, and will have to replenish their stock in process before they have anything available for sale. The proposal made in my Amendment is that with respect to the value of that stock in process it shall not be taken into consideration in assessing the taxable capacity of the manufacturer and will enable him to put a figure in terms of £ s. d. on one side as a reserve to enable him to stock his machinery when he starts up in the future. I believe—I am not sure of the point, and there is a great deal of confusion in the minds of those concerned—that the Income Tax law does allow for this basic or process stock not to be taken into consideration. If that is so, I should welcome an assurance from my right hon. Friend in connection with the matter, because it is a matter which is causing a great deal of concern and obviously might inflict great injustice.
    Sir George Broadbridge: I beg to second the Amendment.
    The proposals contained in the Amendment seem to me to be perfectly reasonable and proper, and they have been quite clearly explained by the hon. Member for East Willesden (Mr. Hammersley). I have no hesitation in supporting them.
    Captain Crookshank: I think I am seized of the point my hon. Friend has in mind. Actually the wording of the Amendment is rather obscure. Maybe I have got it wrong, but if my assumption is correct, it is this: What my hon. Friend is trying to guard against is the case where a manufacturer ceases production at very

    1259
    short notice under the concentration of industry scheme, and when, therefore, it may not be possible for him to complete the manufacture of goods on which some process is proceeding, and the value of the goods deteriorates and, in fact, will be lost. I think that is the principal point which he has in mind. He also has in mind the question as to the loss which may arise from the selling-up of the stock in process. The answer I can give him is to refer him to what I said on the Committee stage. Under the concentration of industry scheme a telescoped business is to be considered as a continuing entity. Therefore the existing alleviation which exists under the Income Tax law will, of course, continue to operate in its favour. The manufacturer is, therefore, to be treated under the concentration procedure as if he were a continuing business; and the loss which, I think, my hon. Friend has in mind is the loss which is already allowable for Income Tax, National Defence Contribution, and Excess Profits Tax. That being so, it seems to me unnecessary to add these words in order to bring out the point further. That is the best explanation I can give. The business is treated as a continuing one; the points which, as I understand, my hon. Friend had in mind are already covered by the general allowances which are made, and, therefore, those advantages will still accrue to the business, although it may be concentrated.
    Mr. Hammersley: May I, with the permission of the House, speak again? I must apologise to my right hon. and gallant Friend and to the House if the wording of my Amendment did not clearly make the point which I wished to bring out. The point is that, under the concentration of production proposals, when a mill is forced to close down, you get as manufactured goods not only the normal production, but the whole of the production which in the ordinary course of events remains in the machinery.
    Mr. Pethick-Lawrence: Windfall profits.
    Mr. Hammersley: Yes. My case is that that windfall profit ought not to be dealt with in this way, because it is accruing when the companies are paying Excess Profits Tax and it will have to be replaced when the companies may be facing great difficulties. The State is causing
    1260
    this windfall profit to come into the Revenue at a time which is most unreasonable. Businesses are being concentrated in order to meet national difficulties, and my contention is that this sum should be put. on one side—I understand that in Lancashire it is a common practice for it to be put on one side—and rendered available to the company when it starts up again. If conditions are good when the company restarts, the Revenue will lose nothing; but if, as, indeed, one anticipates, the position is one of difficulties for this industry, the industry will be unduly penalised by being forced to bring in this windfall profit at the wrong time. I hope that my right hon. and gallant Friend did, in fact, cover that point, but I was not certain, from what he said.
    Captain Crookshank: I am afraid that I cannot take the matter further. I tried to make the position clear, but one is in some difficulty, as the Amendment was put down at the last moment and it deals with a rather technical point. The concatenation of all those circumstances may have made my reply not so lucid as I should have desired.
    Mr. Hammersley: In the circumstances, I cannot withdraw the Amendment with any sense of satisfaction, for I feel that the point has not been adequately covered, but I will ask leave to withdraw it in the hope that between now and the time when the Bill is considered in another place the matter may be carefully examined.
    Amendment, by leave, withdrawn.

    CLAUSE 21.—(Modification of provisions for Tax-free salaries, pensions, etc.)
    Amendments made:
    In page 18, line 39, after the first "of," insert "income."
    In line 39, leave out "the rates of."
    In page 19, line 1, leave out "1937–38."
    In line 1, after "surtax," insert "in force for the year 1937–38." —[Captain Crookshank.]

    CLAUSE 24.—(Borrowed money to be treated as capital.)
    Major Maxwell Fyfe: I beg to move, in page 22, line 25, at the end, to insert:

    1261
    "(a) shall not apply in the case of any trade or business if the person carrying on the same so elects and notifies to the Commissioners of Inland Revenue such election in writing on or before the thirtieth day of September, nineteen hundred and forty-one"
    The effect of this Amendment is to give a right of election in the case of the present proposals, by which all borrowed money would be treated as capital—that is, to give the option to firms and companies not to treat all borrowed money as capital, but to allow the present position to obtain. The difference which is made by this Clause is that, whereas heretofore the borrowed money has been limited to certain defined items, coming down in the scale to the position where the securities are deposited for the purpose of securing a loan, where actually defined securities exist and are used for that purpose, under the present proposals there would be included advances in respect of stocks which are pledged to the bank under the ordinary method which exists in many businesses. It is true that in certain cases the effect is beneficial. That is so where the amount of the loan has been reduced between the relevant pre-war period and the present day, because there the business gets the advantage of allowances and certain statutory rates, which probably exceed the rates at which they are borrowed. They also get the pre-war ceiling increased by the amount of the additional borrowed money. But a very different position obtains where the amount of borrowed money is decreased. Then, the business loses the difference between the rate at which it has been able to borrow in the pre-war period and the statutory rate of 6 per cent.
    To take one very simple example, stripped of all the usual attendant difficulties, there is the case of a business whose pre-war capital was £50,000, exclusive of advances of £100,000 which the business used for the purpose of carrying stocks or of assisting customers, and whose pre-war profits were £5,000, again excluding the interest of £2,000 which they would normally pay on the £100,000 advances. That business in 1941–42 has capital still of £50,000, but it no longer has any of these advances, and its profits are still £5,000. Under the present system the standard for such a business would be computed at £5,000, and the figure for the chargeable period would also be £5,000. That business would have no
    1262
    excess which would attract the tax. Under the proposals of this Clause the standard profits of such a business would be the £5,000, with the addition of £2,000 for interest, making £7,000. But there would have to be deducted from that figure £6,000 because of the decrease in capital owing to the disappearance of the advances, which would give an adjusted standard of £1,000. Against this one has to put the profits which, I postulated, have remained at £5,000, and in each case the business would be a sum of £4,000 which would attract the Excess Profits Tax. That is merely a matter of reducing the proposals to arithmetic. There cannot be any dispute on that; that is the way it operates in the case of a business which is decreasing its borrowing, and a business upon which I am laying special stress Which is decreasing its advances. The answer to that, as I understand it, is that a very small number of businesses are in that position, and it is really on this point that I would ask for the serious and sympathetic consideration of my right hon. and gallant Friend.
    If he considers the case a priori, he has to face this position: There is a large number of businesses which cannot make advances for their stock because they had to carry large stocks in the pre-war period, or else they had to give facilities to their customers which brought them into the same position. To-day these businesses cannot get the stocks, even if they wanted to carry them, and owing to many circumstances, upon which I need not dilate, they have no longer the customers who are desiring the credit facilities which necessitated business borrowing. That is the class of business which is certainly to be found, to my own knowledge in Liverpool, in Bradford and district to a very considerable extent, and also in Leicester and that part of the country. I give these three parts where I speak from my own knowledge and from full inquiries which I have made with regard to the matter. I do not know, and perhaps my right hon. and gallant Friend will tell the House, whether he has had an opportunity of considering the various concrete examples which have been placed before him, but I suggest, whether you consider it as a matter of principle but bearing in mind the position which I have endeavoured to place before the House, or whether you examine

    1263
    the position in the industries in different parts of the country, you will find a large number of businesses which are in the position that their borrowings have decreased, and are therefore, about to suffer in the way that I have put forward in my example. The remedy that we suggest is that an election should be placed at the disposal of such businesses. I am sure that my right hon. and gallant Friend and the Chancellor of the Exchequer are desirous of assisting these firms and companies which were increasing their borrowings and assisting in the war effort with their expanding businesses. I am sure it is not the desire to penalise those who are placed in that converse and unfortunate position, and I ask, as I have said, for the sympathetic consideration of the Amendment which I have moved.
    Sir Edmund Brocklebank: I beg to second the Amendment.
    The Liverpool Chamber of Commerce, which is a very active body, has been in communication with Members not only in Liverpool, but also with friends in London, and it has asked that we should support the Amendment. 1 beg leave, therefore, to support my hon. and gallant Friend in the Amendment which he has proposed to this Clause.
    Mr. Hammersley: The Mover and Seconder of the Amendment have supported it on grounds which are relevant to businesses which for one circumstance or another have been forced to reduce the amount of borrowed money which they employ in their businesses. I would like to support it on slightly different grounds and to make the contention that the Bill without the Amendment might very well have the effect of working out most disadvantageously to those companies that, had endeavoured to deal with excessive capitalisation and had followed the advice of Lord Baldwin, who came down to Lancashire and advised them in most energetic terms to "cut out the dead wood" In order to bring the position of affairs to the attention of the House and to my right hon. and gallant Friend, I would like to give the position of two companies in identical circumstances. Company "A" and company "B" both engage £500,000 in their respective businesses, consisting of £250,000 in share
    1264
    capital and £250,000 of borrowed money. These companies are engaged in the same trade, and in the standard year their maximum trading profits are the same, namely, £24,000. But company "A" in its endeavour to deal with its financial position has entered into a moratorium scheme with its creditors, the persons from whom they borrowed the money, and as a result of a scheme of arrangement they do not pay any interest on the borrowed money. Company "B," of course, has to pay its interest—which, for the sake of the argument, is 4 per cent. — so that the trading profit, which is £24,000, for Income Tax purposes is reduced to £4,000. Company "A," therefore, is in the position of having to consider that it would be on a profits standard of E.P.T., whereas company "B," which is identical in every respect except in its financial operations, will probably elect to be on a capital standard. Subsequent to the standard years company "A" proceeds further with its desire to cut out the dead wood, and it puts to its shareholders and those who have lent money a proposal to convert loan-holders to shareholders in the company on the basis that the existing share capital is written down by four-fifths. This company "A" reduces its capital to £50,000 corresponding with the old shareholding of £250,000, and an additional £250,000 which corresponded with the old borrowed money, so that the company now has a share capital of £300,000. During this time company "B" makes no proposals to deal with its financial position, which remains exactly as before.
    What is the position of these two companies, "A" and "B," prior to the passing of this Bill, in respect of excess profits? The Excess Profits Tax for company "A" would be the excess on the profit of £24,000 which it obtained in the standard year, plus an addition of 8 per cent, on the new capital which is employed in the business. That is £250,000 which has been converted from loan into capital. Thus there is an addition of £20,000 to its profit standard and Company "A" gets a profit standard of £44,000. The E.P.T. standard for company "B" is 6 per cent, on the share capital, which, on the £250,000 capital, is £15,000.
    What happens if this Bill becomes an Act? Company "A," with the 8 per

    1265
    cent. allowance for new money which has been added to its profit standard, has this amount taken away. Its E.P.T. standard will be reduced from £44,000 to £24,000. Company "B" on the other hand, will have an increase of capital standard from £15,000 to £30,000. As a result of these proposals a company which has cut out the dead wood will lose £24,000 and a company which has stabilised its capital will have added to it £15,000 as their respective standard for excess profits. I do not think anybody in the House would really care to defend a proposal the effect of which was to penalise companies which have made great sacrifices in order to get on a low capital basis, compared with their competitors in the same trade who have stabilised and formalised their capita] structure perhaps by turning borrowed money into mortgaged debentures or things of that kind. I have sent my right hon. Friend specific example about specific companies, and I can assure him that this position will apply largely to the peculiar system of finance in the Lancashire cotton trade. I ask him to bear this argument in mind with a view to some ameliorating action.
    Major Vyvyan Adams: Like my hon. Friend the Member for the Fairfield Division of Liverpool (Sir E. Brocklebank), I have received representations about this Clause, but unlike him they naturally come from Leeds and not from Liverpool. I cannot usefully add anything to the cogent arguments which have been advanced by the hon. Members who have just spoken, but this is a matter of great urgency. I have had examples given to me showing that firms will be seriously damnified in a way they do not understand unless this Amendment is accepted. I ask the Chancellor to give it sympathetic and practical consideration.
    Captain Crookshank: The Clause itself is, of course, in the Bill, and the proposal with regard to borrowed money has been accepted by this House in Committee. What we are concerned about with regard to this Amendment is whether or not certain people should be able, within a certain time limit, to make an election that: they should not come under the Clause. It would be most unsound to invite the House to accept an amendment of that kind. If the principle of not
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    dealing with borrowed money in the way in which it is dealt with in the Clause is wrong, then it would be wrong to have an election of time limit. Therefore, it is also unnecessary to have this proposal. The Clause in the Bill is either right or wrong, and no amount of electing to get within it or without it would be justified.
    Hon. Members who have spoken have resurrected the whole original issue as to what should be the position of borrowed capital. With all respect, I am not sure whether the House will at this stage tolerate going over all the arguments once more, but if I may put it shortly, the view of my right hon. Friend is this: He has considered all the points which were raised in the Debate and the various representations which have been made together with the letter which has been sent to hon. Members. I have one myself. It is a letter which appeared in the "Times" on 16th June on this subject, and in addition Members have received a whole heap of literature. Despite it all my right hon. Friend feels that, generally speaking, the proposals which were contained in the Bill as passed through Committee were right. He feels that in these matters you have to look, so far as adjustment of percentage rates is concerned, at the profit earned as well as the interest which is paid. I know it is a little difficult and that it would be better if only we could have a blackboard set up, so that one could see the intricacies of the points put before the Committee. By and large, it does seem that if you are to raise the issue of the Clause at all—which I think is doubtful at this stage—there is. in effect only an artificial difference from the point of view of the purpose we have in mind as to whether the share capital or borrowed capital is employed in the business. That is the overriding consideration.
    If it is said that the whole of that should be taken into account, there may be cases where it may not act advantageously to a particular concern as the alternative method which has existed up to now. There may be cases where the present arrangements are better than the proposed alteration, but even it that is so the fact still remains that un amended proposals which are in the law are unsound in principle by seeking to differentiate between two different types of capital. So far as the Amendment itself is concerned, my right hon. Friend does

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    not feel that any such election as is proposed is in any way right or suitable to be inserted in the legislation, and for that reason I hope the Committee will not accept the proposal.
    Mr. Benson: I am pleased that the Chancellor has refused to accept this Amendment. It is quite possible that in this Clause or any other Clause in the Bill there are anomalies and difficulties which could be put right if election were allowed, but I think it would be fundamentally unsound to allow the taxpayer any form of election of the basis of assessment. If two or more methods of assessment were open to the taxpayer, obviously those taxpayers having an opportunity to make an election would invariably choose the lesser burden, and the result would be that not only would the Chancellor lose money, but the minority of taxpayers to whom an election was open would gain at the expense of the other taxpayers. I maintain that election of the basis of assessment would be essentially unsound.
    Sir H. Williams: In spite of the speech of the hon. Member for Chesterfield (Mr. Benson), and in spite of what was said by my right hon. and gallant Friend the Financial Secretary, the last word of wisdom has not been said on this matter. What is the problem? When taxation is so high, people will ultimately get to the stage where they think they are entitled to cheat the State if the State is behaving like Robin Hood. Ultimately, that stage will be reached. When an injustice is imposed upon people and when something is introduced to remedy the injustice and at the same time creates a new one, it is no good saying that the Clause is intended to remedy an injustice. Why should there not be an election of the basis of assessment? Many firms have been concentrated. The Prime Minister has recently concentrated the author of concentration; I am referring to the President of the Board of Trade, who has been bumped off the Front Bench. He was the author of the policy which has given rise to this Amendment. I think it is a very good thing he has left the Board of Trade. That is the first sign of improvement. It is no good the Chancellor looking horrified because I say things about Ministers who have not been successful. This Amendment arises out of the policy of concentration. As a result
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    of this Clause, many people whose businesses have been prejudiced because of that policy will be made worse off. My right hon. and gallant Friend the Financial Secretary thinks he has solved the problem when he says, "Oh, well, this is this and that is that" That is not good enough. People are being subjected to grave injustices by the policy of concentration and the policy of restriction of sales—which may be necessary. Those policies produce these results, but Ministers do not like criticism. It is good for them to be criticised, because they are not doing too well in their jobs. It is these policies of restriction which produced the necessity for the Amendment which was so ably moved by my hon. and learned Friend. Ministers must not think that simply because they say certain things from the Front Bench, we shall be satisfied. Some of us are becoming a little impatient of a Government that is too complacent. I ask Ministers to pay a little more attention to the arguments that are presented to them from time to time.
    Sir Granville Gibson: I must confess that I am a little anxious concerning the point raised by my hon. Friend the Member for South Croydon (Sir H. Williams) —that is to say, the question of the firms which have been drawn into the nucleus firms in connection with the concentration of industry. No doubt in years gone by many of these firms have been carrying on their business with perhaps a limited capital, and have been borrowing smaller or larger amounts of money. Having been absorbed into the nucleus undertakings, there is in most cases no further necessity for the use of borrowed capital. I can quite understand that under this Clause there will be a definite advantage to those firms which are still borrowing money in connection with their business or are increasing the amounts, but those firms whose borrowings are reduced will suffer. It is the firms which are reducing their borrowings that will in most cases be worst hit, as will be the case with those firms which have been absorbed into the nucleus firms in the concentration of industry. What will happen to them? Through no fault of their own, their profits standard will be automatically lowered. I think this will be very unfair on them, and I hope my right hon. Friend the Chancellor of the Exchequer will give

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    further consideration to this aspect of the matter. There are also other cases. I have in mind a firm that was working on quite a large amount of borrowed money, which borrowed money was regarded as capital under the standard. Owing to the fact that the firm is now working on a commission basis under the Government in connection with the administration of foodstuffs, there is no necessity for borrowed money, and the firm's standard is automatically lowered. I maintain that this is not fair. It is still doing the same bulk of business as previously, but its standard is lowered by £15,000 a year. I hope my right hon. Friend will give further consideration to the two matters I have raised.
    Mr. Denman: Will my hon. Friend tell me whether it will be a common occurrence that concentrated firms will be liable to the Excess Profits Tax?
    Sir G. Gibson: It may not happen to any material extent in commerce generally, but in the boot and shoe industry the nucleus firms will be the large firms, and consequently, the firms absorbed by the nucleus firms will be small firms whose profits in the past have not been very large on the whole, although they were large to the firms individually. I want simply to make a plea for more fair and reasonable treatment for the small firms which have been absorbed and which now find, through no fault of their own, that their standard profits are automatically reduced as a result of the operation of this Clause, which has a result which I am sure the Chancellor never envisaged.
    Mr. Hammersley: I should be obliged if my right hon. Friend the Chancellor would say a few more words on this matter. I appreciate that it is impossible to accept the Amendment as it stands, but I have sent to my right hon. Friend a series of cases which he was good enough to look into and which definitely show that the companies which, in the process of endeavouring to reduce their capital charges, have put themselves, by reason of the legislation—
    Mr. Deputy-Speaker: The hon. Member must not make another speech. I allowed him to address an appeal to the Chancellor to make a special reply.
    Mr. Hammersley: Am I not entitled to make another speech by leave of the House?
    Mr. Benson: Did the hon. Member ask the leave of the House?
    Mr. Deputy-Speaker: It is quite contrary to the general practice on the Report stage.
    Sir K. Wood: I am glad to say a few words on this matter, because I realise that some of my hon. Friends are concerned about the operation of the Clause. Although I do not admit that in the main their apprehensions are justified, I will, of course, examine what has been said in the Debate and any cases that have been sent to me. I will not mention the names of the firms, but my hon. Friend the Member for East Willesden (Mr. Hammersley) has sent me one or two cases which have been examined. I will take one case in order to show that some of the misapprehensions are unjustified. The hon. Member sent me details of a particular company which, in 1936, made a scheme of arrangement of debts for £382,000. In May of the next year these debts were disposed of as follows: £28,000 paid in cash, £213,000 cancelled, and £141,000 allotted shares—giving a total of £382,000. Thus £354,000 of debts, on which no interest had been paid, ceased to be deductible as debts and capital for E.P.T. increased as the result of a purely paper transaction. Without a penny of fresh capital the company secured an increase of standard by £28,320.
    I will examine any other cases which may be sent to me, but I should like to make two points before we finish with this particular Amendment. I think hon. Members will agree in the first place, as regards the Amendment which has been put down for the purpose of a discussion, that it would be impossible for me to allow the taxpayers to have an option. I do not think anyone would seriously press for that. Secondly, I believe it is also realised—I have heard nothing further about the Clause itself except commendation—that it was a wise thing to include borrowed money in the way that I have in the Bill. It is undoubtedly going to bring a considerable benefit to a large number of companies. Therefore I do not think that anyone would desire for a moment to see the Clause withdrawn from

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    the Bill. The criticism as I see it, speaking in broad terms, because it is dangerous and unwise to deal with any particular instances given on the Floor of the House without being able to examine them carefully, is that the operations of the Clause will bear hardly upon certain companies— particularly the case where a company had a large amount of borrowed money in the pre-war standard period, which has either been reduced or abolished to-day. So far as I can follow my hon. Friend in the particular case he has given, there were some adjustments of that kind. I will give an example which does not deal with any particular case. A company might have had borrowed money of £100,000 in the standard period and have reduced that borrowed money to £50,000 to-day. Under the existing law this reduction in borrowed money would have made no difference to the assessment of capital employed in the business; but it is perfectly true that under the new proposals, and leaving on one side the saving in interest, the capital for Excess Profits Tax purposes would fall to be reduced by 6 per cent. —the rate generally applicable to reductions of capital.
    That is an example, which has been given of the unfairness of this Clause. But is that the case? Is not the answer to the criticism that the new principle which we are adopting in this Clause is the right one, and that, in fact, there is no case for maintaining what was the previous illogical position, simply because in a number of cases the old position was more favourable than would be the case under the new proposals? In the ordinary type of case where it is urged that the new proposal would be harder, in point of fact what matters is that the amount of capital at stake in the business has been reduced. It is therefore only right if that is the case, as I think it will be found on a careful examination of all the details, that there should be some reduction in the standard for Excess Profits Tax purposes.
    It is also well to remember one particular anomaly which can arise under the existing law. For example, if in the standard period a company has ordinary share capital of £100,000 and borrowed capital of £50,000 then, if the borrowed capital is changed into share capital, the
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    law regards that as an increase of £50,000 in the capital employed in the business and grants an allowance of 8 per cent. on that increase, although, in fact, the total amount of money at stake has remained throughout at £150,000. The amount employed in the business is exactly the same, but owing to the operations of the old law there has been that allowance for increase. There has been some evidence that this change-over of borrowed capital to share capital has been used to reduce liability to Excess Profits Tax, but under the new proposals that will not be possible. In the example I have given to the Committee the capital would remain at £150,000 throughout, which is a true reflection of the real financial position. I gave that case to illustrate what this Clause means in general terms. I will examine with care and attention any cases which may be sent to me, but I submit that when you look at the matter on broad principles, apart from individual instances given to-day, not only is there a great benefit to trade and industry in the Clause we are now placing on the Statute Book, but the changes in the law, which may be otherwise affected by the proposals of the Bill, are on sound lines.
    Amendment negatived.

    CLAUSE 30.—(Transactions designed to avoid liability to Excess Profits Tax.)
    Mr. Denman: I beg to move, in page 30, line 33, at the end, to insert "main"
    The Clause to which we now come was subject to discussion both on Second Reading and in Committee. With the purposes of the Clause there was, I think, general agreement that the tax dodger, whom we wish to restrain, was adequately dealt with. At the same time it was felt there would be included a large number of wholly innocent persons—not only were we rounding up the goats, but we were also rounding up a large number of wholly inoffensive sheep—and that in fact, when it came to actual administration, the Commissioners would not be able to make adjustments of the assessment merely because the reduction of liability was among the purposes of the transaction but would have to consider whether the transaction was a tax-dodging device, and in fairness to the sheep it was right that the Clause should contain the real criterion on which the Commissioners had to decide. It was accordingly moved in Committee that the

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    offence should be described as an improper avoidance of liability to taxation. That met with the objection of the lawyers that to them it had no meaning, that no court could possibly hold that that which was technically lawful was improper, and that therefore the Amendment would completely destroy the whole purpose of the Clause.
    That was frankly disappointing, but the lawyers were adamant, and there was nothing to do but try again. A lawyer friend advised me that the word "main" would really provide the key to the difficulty and that, if we described the offence in these terms, that the main purpose for which the transaction was effected was the avoidance or the reduction of liability, we should effect what the Revenue wanted and at the same time satisfy the requirements of the law. I was a little doubtful whether that was not going too far and whether, while we satisfied the need for excluding the sheep from the ambit of the Clause, we were not at the same time allowing some of the goats to escape, but after further consideration I think my legal friend was right and that in fact the Commissioners would not attempt to revise adjustments unless the main purpose of the transaction were the avoidance of liability and, further, that the Clause as amended will satisfy the requirement that the Solicitor-General wisely drew our attention to, the requirement that the Clause should act as a deterrent and that it would not in fact be frequently utilised at all, that it would be so alarming that it would effectively prevent the tax-dodger from trying his dodges, and that it would be so discouraging to the breed of goats as to act as an effective method of birth control.
    I hope my legal friend was right, and it is in the belief that he was that I move this Amendment, because I think I am here to present the common view of all parties that we are determined to put an end to this tiresome business of tax dodging. It is a weariness to us year after year to have to try to find fresh words to meet some fresh ingenuity of this tax-dodging fraternity. As a people we are exceedingly good taxpayers, and it is really monstrous that the Revenue, and the good taxpayer, should suffer from a minority of blacklegs, because that is what this tax dodging amounts to. I hope the Clause as amended will achieve
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    that object, and I hope this will be the last time that we shall be required to change these words. I believe we have, with the co-operative assistance of the House in the various stages of the Bill, reached a final form of words which should be adequate for the purpose we have at heart.
    Sir R. Clarry: I beg to second the Amendment.
    It is in the nature of a compromise. We think it desirable that the words should be made precise as to whether anyone is doing anything illegal or not, and at present it is left to opinion to say that transactions are taking place innocently which may ultimately be quite illegal. That appears to me to be wrong.
    Mr. Benson: I am afraid the memories of the Mover and Seconder and of the legal gentleman whom they consulted are extremely short. This discussion is merely an echo of those which took place on the Finance Bills of 1936 and 1938. I do not know whether the Mover has gone back to the Bill of 1936 to find a common form, but the words of the Amendment are taken directly from those Bills in the Clauses dealing with the transfer of assets abroad. The Chancellor in 1936 attempted to stop the avoidance of Surtax by the transfer of assets abroad and chose the words which the hon. Member is trying to insert, that the taxpayer was allowed to transfer his assets if he could show that the transfer took place mainly for some purpose other than the purpose of avoiding taxation. The use of the word "mainly" in that Bill is identical with its use here.
    Mr. Denman: It was left to the Commissioners to decide whether in their opinion that was so.
    Mr. Benson: Certainly it was. How else could they decide whether the transfer had taken place mainly or solely or without any reference to the purpose of avoiding taxation? As soon as you introduce purpose, there is no proof. It must be a decision of opinion, and it was left to the opinion of the Commissioners as to whether the transfer was made for the purpose, mainly or not mainly, of avoiding taxation. What happened was that the word "mainly," instead of being the key to the difficulty, was the key to the stable door. It completely vitiated the

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    effect of the tax. I remember Lord Simon in 1938 giving an example of the motives alleged for the transfer of assets abroad. One gentleman transferred them, not for the purpose of avoiding tax, even mainly, but because he alleged that he was afraid of the Labour party becoming the Government of the country, and he got away with it. The explanation was regarded as adequate. Two years later the Board of Inland Revenue were compelled to get rid of the word "mainly," and they choose exactly the words that are in this Clause. We have two forms of words, one of which has been tried and found wanting and after two years had to be amended, and the other which has stood the test of time. The hon. Member moves to leave those out and to insert words which have proved ineffective.
    Mr. Spens: The hon. Member's comparison is not adequate. The Clause in the old Act Was mainly for a purpose other than that of evading taxation. Here the test is whether we ought to include the word "main," where what the Commissioners have to find is whether a transaction is mainly for the purpose of avoiding taxation or not, a different question altogether and one which in my view is essential.
    Mr. Benson: Of the two phrases which the hon. and learned Gentleman has quoted, surely one is merely a negative statement while the other is positive. In the phrases "mainly for the purpose" and "mainly other than" is not the operative word "mainly"?
    Mr. Spens: The question whether it is done mainly for the purpose of avoiding taxation or mainly for some purpose other than avoiding taxation opens two different spheres of inquiry. As the Clause is working at the present time, in every transaction which in fact produces Excess Profits Tax, it is very difficult to say whether or not one of the purposes of the transaction may not have been the reduction of taxation. Supposing the hon. Member were the adviser of a board of directors and he said to them, "This is a magnificent thing to do, it is in the national interest, it is in everybody's interest, but I have to point out that if you do it you will, in fact, reduce your E.P.T. by £100"If that is mentioned to the
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    Board then it is postulated that one of the purposes which some of the Board may have had in mind may not have been the saving of that £100 per annum. We do not want that. We want to stop tax dodging, we want to stop people from entering into a transaction mainly for the purpose of avoiding taxation. Therefore, I hope that the House will see that really the two Clauses are not comparable and that the Amendment put forward is one which is in the interests which all of us have in mind.
    Sir K. Wood: I have naturally paid a good deal of attention to the proposal made by my hon. Friend. I was, of course, conscious when I introduced this Clause that it was of a very extensive nature, and that it might well be thought that, as it was then worded, it might hit certain transactions which generally speaking could not be objected to, and that difficulties might arise, but in the circumstances that were brought to my knowledge I did feel that a Clause of this character was necessary. My hon. Friend put down his Amendment and, as anticipated, my hon. Friend opposite, who has a great deal of knowledge of these affairs, recalls what happened in 1936. Before deciding what I would do about the Amendment I examined, with my advisers, the position as it is under Section 18 of the Finance Act, 1936. I think it is right to say that that Section deals with one limited type of transaction, namely, the transfer of assets abroad. Moreover, it should be pointed out that it was accompanied by a special saving in respect of commercial transactions. It was expressly provided that the Section would not apply in the case of bona fide commercial transactions unless it could be shown that they had been devised for the purpose of avoiding liability to taxation.
    Therefore, I think it can be said that in applying the principle to the Excess Profits Tax area we are following along the lines laid down in the Finance Act, 1938. If a transaction is designed for the purpose of avoiding taxation then such transaction is really one which has the avoidance of tax as its main purpose. Finally, it has to be borne in mind that the assessing authorities for Excess Profits Tax are the Commissioners of Inland Revenue, and while they are not likely to attempt to apply the avoidance powers of Clause 30 to innocent trading trans-

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    actions they are equally not likely to allow to pass unchallenged any case in which the avoidance of taxation and not genuine business is the governing motive. I consulted my two right hon. and learned Friends the law officers, and they did not hold that I should be justified in refusing to accept the Amendment. If I find that acceptance of the Amendment would destroy the object of the Clause I shall have to take another course. I therefore accept the Amendment to-day with the warning that I may have to come back to the House and ask it to reverse its decision.
    Amendment agreed to.
    Further Amendment made: In page 30, line 34, leave out "or one of the purposes" — [Mr. Denman.]
    Mr. Craven-Ellis: I beg to move, in page 31, line 6, to leave out "Board of Referees," and to insert," Special Commissioners"
    In putting forward this Amendment I do not wish to pass any reflection upon the Board of Referees. I only want cases to be decided by a body in which industry has greater confidence. The Board of Referees is composed of business men. Under the chairman is a panel called upon to hear cases from time to time. It is unreasonable to expect that they will be expert in their knowledge of all matters which will come within this Clause. Let me give one or two cases. Take the case of a company which decides that, during the war, it will not make any profit but will supply the Government with their requirements at cost price. Under the Clause, the Commissioners would have the right to say that that decision was an evasion of E.P.T. although the company had supplied the Government with their requirements at cost. The Commissioners could certify that the company was subject to E.P.T. In the case of the one-man company, let us take the man who has spent some years in developing his business until it has reached the stage of earning a profit. This man decides to bring in two, three or four of his friends as co-directors. Under the Finance Bill of 1940, the statutory level of tax would be £1,500 a year, but if he put three more directors on his board, the statutory level would be £6,000. Are the Commissioners to be allowed to say that by putting three extra directors on the board the company
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    was evading E.P.T.? We must have experts to decide cases like those, and for that reason I suggest my Amendment.
    Mr. Spens: I beg to second the Amendment.
    I do so in very much the same frame of mind toward the Board of Referees as my hon. Friend who moved it. I do not think anyone will take the view that there is much objection to this Amendment, in order to meet a rather difficult situation arising in war-time. It is a matter of convenience. A body which is almost permanently in session, is always get-at-able and sits all. over the country is more convenient than the Board of Referees, which sits from time to time and requires a certain amount of time to convene.
    Sir K. Wood: I was glad to hear the mover and seconder agree on the subject of the Board of Referees, who have a high reputation, and do their work with satisfaction to everybody. I am inclined to accept the Amendment for the reasons that have been stated. In war-time there is something to be said for it.
    Amendment agreed to.
    Sir K. Wood: I beg to move, in page 31, line 6, at the end, to insert:
    "whether on the ground that the purpose of the transaction or transactions was not or did not include the avoidance or reduction of liability to tax or on the ground that no direction ought to have been given or that the adjustments directed to be made are inappropriate"
    The purpose of this Amendment is to make clear the powers of the Special Commissioners and that it will be open to them to consider the matter quite afresh and apart from any other considerations or decisions that might have been come to. That has always been the intention of the Clause, but it has been pointed out to me that there might be doubts, and I want to make the matter perfectly plain.
    Question proposed, "That those words be there inserted in the Bill"
    Amendments to the proposed Amendment made:
    In line I, after the second "the," insert "main"
    In line 2, leave out "or did not include" —[Mr. Denman.]
    Amendment, as amended, agreed to.

    CLAUSE 41—(Relief from death duties in case of death due to operations of war.)
    Captain Crookshank: I beg to move, in page 35, line 16, at the end, to insert:
    "Provided that the relief to be given under this Sub-section in the case of a married woman whose husband survives her shall be calculated as if, in the enactments referred to in Section thirty-eight of the Finance Act, 1924, any reference to a widow included a reference to a surviving husband"
    We so often have the case of the widow brought before the House that it is a change to deal with that of the widower. But this is due to the extension of the relief from Death Duties in the case of death during operations of war which is granted in the Clause to the estates of civilians. When the Clause was drafted it adapted the words of the Finance Act of 1924, but as that was dealing with the Armed Forces of the Crown it was not likely that many widowers would be concerned. However, now it is extended to the civilian population it is just as likely that the surviving spouse should be the husband as that it should be the wife, and it is in order to deal fairly with both these cases that I ask the House to accept this Amendment.
    Amendment agreed to.
    Captain Crookshank: I beg to move, "That the Bill be now read the Third time"
    In moving the Third Reading, may I just call attention very briefly to one or two important considerations which we have discussed and which are now to be found in the Measure? It is one of the great contributions that the people of this country are making to carry on the war, and it is necessary to strengthen the financial arm just as it is to strengthen those of the Armed Forces. In this Bill the more interesting Clauses which we touched upon are Clause 6, which introduces the system of crediting after the war some part of the allowances which have been taken away by this Bill; Clause 8, which alters for a considerable number, though by no means all, of the farming taxpayers the incidence of their Income Tax; Clauses 20, 21 and 22, which were inserted at rather a late stage to deal with tax-free payments in order that the beneficiaries of such payments should pay their share of the extra increase of the burden of war taxation, whereas those who have to pay out should be relieved
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    of some part of their burden in order, in many cases, that there may be more available for the residuary legatees; and Clause 24, which has been touched upon to-day, dealing with borrowed money to be treated as capital for Excess Profits Tax purposes. There is also Clause 30, which we have just touched upon, with its very rigorous action against the tax-dodger, and in that connection I will draw attention once again to what my right hon. Friend has said, namely, that if it is still found to persist in spite of these wide powers, he feels himself at liberty to take more strict action, retrospectively if necessary, because the one thing this House and the people will not tolerate is tax dodging in time of war. Finally, in Clause 41 we have the relief from Death Duties in the case of civilian casualties, which it has been found wise to insert in view of the dangers which are about us every day and every night.
    Those are the more notable Clauses in the Bill, but it would not be right for the House to part with this Bill to-day without being reminded once again that this is the most enormous burden of taxation that has ever been placed upon the people of this country. Perhaps I may illustrate that by one or two concrete instances, in order to bring it home to hon. Members once again what they and their constituents are being called upon to pay. Even before the war, of course, after 1936, Budgets were swollen by rearmament expenditure, and in 1939 already the Budget was 30 per cent, higher than the average for the 10 years previous to 1936, largely as a result of the development of rearmament. Since then we have had four war Budgets. They have all heavily increased taxation, and the total increases made by those four war Budgets in a full year is no less a sum than £778,000,000, and that war increase in the Budgetary demands is higher than the average for the 10 years prior to 1936 of the whole tax revenue. That is to say, in these two years we have added, over and above, more than what was the average for the 10 years prior to 1936 of all our expenditure. The sum total of what has been put on in a full year comes to somewhere near £1,000,000,000 more than the last pre-war Budget. I think it is worth while reflecting upon that in order to show that we as a nation are making a very great financial effort. By

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    the spread of the Income Tax, the deduction and reduction of the allowances, the increase in the standard rate and the high Surtax rate, it emerges quite clearly that the burden on all sections of the community is extremely heavy.
    At one end of the scale you have the unmarried man earning 46s. a week, who will have to pay somewhere about 3s. a week in direct Income Tax, whereas at the other end you get a married man earning, say, £10,000, £25,000 or £50,000 a year paying away in direct Income Tax 68 per cent., 84 per cent. and 91 per cent. of his income. In both these cases there must be a very great readjustment of their commitments, their circumstances, and their way of living. I am not here to say or to offer any view as to who will find it more difficult to do so; I just give the figures to the House. If you take the case of the married couple with an earned income of £10,000 a year, in July two years ago, as a result of Income Tax and Surtax, they would have been left with £5,795 of their £10,000 to spend as free income. Under last year's Budget that sum was reduced to £3,952, and this year it is down to £3,168. A moment's reflection will show that that needs a very great change in the circumstances of those people.
    It is just as heavy in comparison— maybe heavier; I am not expressing an opinion about that—in the case of the £?300 a year married man. On 1st July two years ago he would have expected to be left, after paying direct taxes, with £295. Last year that figure had dropped to £280, and this year to £257 15s., so he, too, will have to make very considerable readjustments, though, of course, the fact remains that in the latter case he will be credited with £16 5s. under the arrangements under Clause 6 to fructify when the war is over. If anybody cares to study the Financial Statement which is issued on Budget day, he will discover that the married couple whose income is £150,000 a year—of which there are very few indeed in this country—are: left with only £7,106 to spend out of their gross income of £150,000. He will then appreciate that in point of fact there cannot be more than a handful of people in this country to-day with a five-figure free income left to enjoy, and hon. Gentlemen on both sides of the House will realise how heavy have been the exactions made in the four war
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    Budgets and how great is the toll which my right hon. Friend is asking from the country to-day. And he is asking it, and will receive it without a murmur from anyone at all.
    The most striking thing, though, of course, one would have expected it, is that one has not heard a single criticism of the heavy weight of taxation. Whether we are dealing with the case of the £10,000 man and wife or the £300 a year man and wife, the burdens and the changes which this Bill involves are really tremendous. But it is the price that we are, all of us, in one way or another, prepared to pay in order that we may carry on the war successfully. If there is any truth in what has so often been said that we are prepared to fight to the last man and the last penny, this document, unintelligible though it may be to many people in its details, is one further proof of the view of this House that it is prepared to put upon its constituents any burden that may be required in order that victory may be achieved. It is in that belief, and in the certainty that it will be accepted by the country as the right course to adopt, that I am sure the House will wish to congratulate the Chancellor on the successful outcome of his Budget, and pass, as soon as may be, the Bill at its Third Reading.
    Mr. Benson: I am certainly very pleased to congratulate the Chancellor on a very courageous Budget. This Budget, and the Finance Bill which follows it, is certainly the heaviest burden which has been placed on the people of this country. The Chancellor has handled it well from beginning to end. He gave us something without precedent, a White Paper which was of immense value, and certainly his genial handling of the Committee and Report stages has got a very heavy Finance Bill through in very quick time. The Financial Secretary to the Treasury, in moving the Third Reading, referred to the heavy burden it represents. I am not sure whether the heaviness of the burden is a relevant matter. The only thing we have to consider is whether it is adequate, and that is a matter which time alone will show. The Chancellor has, to a certain extent, gambled. He has left a gap which he hopes will be filled by savings, by a voluntary effort of the people. So far as I could estimate the figures of that gap, I should say it was in the neighbourhood

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    of £400,000,000, a rather serious figure, in view of the rate of taxation, and in view of the fairly large savings which are already flowing in. We have to consider that gap very seriously, because unless it is filled we cannot escape inflation. Indeed, the basis for inflation has been laid at the present time.
    There has been an enormous increase in purchasing power; the volume of currency has increased far beyond any possibility of expenditure on the decreased volume of goods. What has saved us from inflation, as the "Economist" pointed out last week, is that although the volume of currency has increased sharply, the velocity of circulation has dropped sharply, and so has left us more or less as we were. With a large amount of unabsorbed purchasing power, and an increase in the volume of currency, it is a very serious matter that there should still be an un-bridged gap which can only be filled by a very much more strenuous Savings Campaign that we have at the present time. As a matter of fact, our Savings Campaign has, I think, been as weak as any part of our war effort. I am not at all certain that it would not be a good thing to have a change in the head of our War Savings Movement, because Lord Kindersley has certainly shown extraordinarily little ingenuity and imagination. There is one thing I would like to say. We have had, since the war, some very short-sighted financial policy. The Chancellor has certainly produced the first real war Budget we have had, and for that we are grateful, but I hope that we are not going to have a reversion, shall I say, to the short-sightedness that gummed up our financial policy in the first 18 months of the war. We have to look ahead and consider very seriously whether savings are going to bridge that gap of £400,000,000. I would emphasise that the first £400,000,000 of savings is easy; the second £400,000,000 is raised not quite so easily. It is the final £400,000,000 which represents the difficulty; in fact, the gap is a very large gap.
    The Chancellor's problem is, or ought to be, what is to happen if we do not bridge that gap. He has to drain off, in, some way or other, the increased purchasing power of the country, particularly if there is to be a continuous decrease in the volume of goods available. One of his
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    difficulties is that the bulk of purchasing power and the bulk of increased purchasing power lies at the lower end of the scale, and that will present him with a number of problems as to how to get at it. One thing is quite certain, that the burdens and the sacrifices imposed by total war are so great that they will not be borne unless they are borne with a great degree of equality, a far greater degree of equality than the burdens borne before the war. We are all equal before the bombs; the bombs rain on the just and unjust, the rich and poor, alike. There is equality in conscription, but can the Chancellor say we are equal before him? I do not think he can. The Chancellor cannot, like the military, demand equality of sacrifice, because I do not think that, in an unequal society, the words "equality of sacrifice" applied to financial matters have any meaning at all. The Chancellor may have done his best; his gradation rises from a penny in the at one end of the scale to 19s. 6d. in the £ at the other. It is an unparalleled attempt to impose an equal burden, but the inequality remains.
    Let me admit that the man who is paying 19s. in the £probably has commitments which he cannot reduce. The majority of those who are paying 19s. in the £ have to disinvest, not merely to live, but to meet commitments which they cannot avoid. They have to disinvest still further to meet their living expenses. But, granted all that, they are not making a very great sacrifice in the face of war conditions. A little shrinkage in their capital will not mean anything to them after the war because in these large incomes—which are nearly all unearned—there is a vast sum of capital represented. Whether that capital is reduced by £10,000, £20,000, £30,000, or even £100,000, as a result of the war, it is, so far as the comforts of life are concerned, a matter of complete indifference. What does it matter to a millionaire whether his capital is £1,000,000 or £900,000? He cannot feel any difference, although he may see a difference in his ledger.
    Mr. Stokes: Will my hon. Friend explain how he proposes that the possessors of this capital shall raise the money with which to pay the Chancellor? It seems to me a very important point.
    Mr. Benson: As I have said, they are raising the money by disinvestment.
    Mr. A. C. Reed: Ask the Chancellor what instructions he has given to the banks in regard to that.
    Mr. Benson: Is it not a fact that a man paying £143,000 on £150,000 has commitments to meet which are far above the remaining £7,000? We know perfectly well that those liabilities are met by disinvestment.
    Sir Granville Gibson: Is the hon. Member not aware that in business life money is not necessarily liquid in the banks, and that a major portion of the capital of a firm may consist of bricks and mortar, machinery and plant? It is not always so easy to part with capital as the hon. Member thinks it is.
    Mr. Benson: I do not know that all capital is invested in that way. At any rate, I am merely pointing out what the effects are. Hon. Members may argue whether it is good, bad or indifferent; the fact is that disinvestment is taking place at present on a large scale. No matter how heavy a burden the Chancellor imposes upon these people, they are still in a position to live in luxury. The "negative income" which is left after they have met their taxation and commitments still enables them to live at a very high standard. No real personal sacrifice has been imposed upon them. That does not apply to the small man who finds that he has suddenly had £30 or £40 added to the amount of his Income Tax. The country is very conscious that, no matter how high the taxation may be—and nobody will deny that it is high—there is no equality of sacrifice, so far as comforts are concerned. This consciousness may become a serious matter for the Chancellor.
    My hon. Friends here are supporting me so far; I am not sure that they will support me in what I am going to say now. If the Chancellor cannot get his money from savings, he will have to get it by taxation; and he will have to go when the increase in purchasing power is, and where the bulk of the purchasing power is. The Chancellor must go to the lower end of the scale. But if the Chancellor is to obtain his taxation from the lower end of the scale, he will have to
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    place still heavier burdens on the other end.. In order to get at the lower end, he may have to fix the burden at the higher end beyond the theoretical limit. I can quite see the possibility of an Income Tax on unearned incomes of 25s. in the £. There is a feeling of equalitarianism about now, such as there has never been before. This very high rate of taxation is going to involve new technical problems. It is these technical problems that the Chancellor ought to be thinking about now. If this burden of war-time taxation continues, we shall be compelled to adopt very unorthodox measures. I want the Chancellor to consider that the possibility of raising vast sums depends more upon people feeling that they are being treated with equality, that there is equality of sacrifice—if that has any meaning in financial matters—than upon any other factor. The Chancellor may have to go outside merely fiscal methods. He may have to go to the Board of Trade, and say, "I cannot produce more in taxation unless you help me by imposing far more rigid rationing and by curtailing luxury spending" It is the feeling that other people may go to a luxurious restaurant and get a good meal while the miner's wife is finding great difficulty in getting a couple of ounces of cheese or something for the sandwich for her husband's "snap" which will impose more difficulty than anything else in connection with the raising of bulk taxation. If we are to raise burdens beyond a certain point they must bear a semblance of equality. To establish that semblance of equality in a state of society in which there are vast ranges of inequality, will tax the Chancellor's ingenuity.
    Dr. Russell Thomas: I do not intend to detain the House for many minutes, but there are one or two points I wish to make on the Third Reading of the Bill. I regard the higher taxation in the Bill as highly commendable. Perhaps some of us think that the Chancellor of the Exchequer has still not removed sufficient of our purchasing power, but if he attempts to do that, I suggest that he does it, blindly as it were, from whatever classes possess the purchasing power, bearing in mind their commitments. Perhaps he has laid too much stress upon borrowing and has put off too many of our burdens to another day. Nevertheless, I feel as one who

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    has a rather high goal in mind with regard to the fiscal policy of this country, that he has gone a considerable way towards that goal, and far further than I thought he might have gone. There is one point that he ought to bear in mind. It was a pity—and I say it very advisedly—that the Chancellor of the Exchequer should have proposed a repayment to the taxpayer at the end of the war. I think he should have taken full advantage of the spirit of sacrifice of the British people, as I do not think that they would have asked for anything in return. At the end of the war hundreds of millions of pounds will be returned to the people of this country and will be added to the large sums of interest to be paid on the borrowing which will amount, probably, to from £500,000,000 to £700,000,000 a year. The purchasing power returned to the people at the end of the war as interest on borrowed money, will be increased by the largesse given by the Chancellor and that interest will be paid not only to the banks and insurance companies, but to the humblest people in the land who hold savings certificates, and to the innumerable members of savings groups throughout the country.
    There is another point that we ought to bear in mind, and it is intimately connected with this matter. This country after the war will be a debtor country. We shall no longer be a creditor country as we have always been during most of our industrial history. We were able to carry on during the first 18 months of the war because of our investments abroad, but after the war we shall be a debtor country. Let us see what that means in regard to the distribution of purchasing power. I do not think that there will be any unemployment in this country so long as normal foresight and judgment are observed. There ought to be no unemployment. The wheels of industry will be turning everywhere and every factory chimney will belch forth smoke. We shall be making large quantities of goods, not for ourselves, but mainly for foreign consumption in order to pay for our essential foodstuffs and raw material, but at the same time the Chancellor of the Exchequer will be distributing largesse to the taxpayer. We shall have a limited amount of goods in
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    the country and a large amount of purchasing power, and the Chancellor and the House well know what that will mean.
    When this Bill is passed he should continuously bear in mind the future fiscal policy of the country. You cannot separate the war fiscal policy from the post-war fiscal policy. There is no line of demarcation; one runs into the other. They are not interlocked or intertwined but fused into one another. The Chancellor of the Exchequer should ever bear in mind the burden that this Bill is laying upon the country now and in the future. It should be considered by him in all its aspects and he should endeavour to lighten the burden so as to be prepared for any crises or developments that might occur. He should see to it that he lightens the burden so that our people, who are fighting for freedom, are not borne down to a condition of industrial slavery and serfdom at the end of the war, and sacrificed on the altar of Mammon by the high priests of the Golden Temple.
    I feel that the Chancellor of the Exchequer and Parliament have acted wisely in retaining Clause 30 in the Bill, which was Clause 26 before the Report stage. Under normal conditions, I would have opposed it strongly and considered it contrary to our constitution and to my conception of liberty. I dislike inquisitions into the motives of the subject unless they are criminal or something of that nature. Indeed Parliament has a long history of struggle in which it has endeavoured to remove the arbitrary powers of the Crown. But in time of war, when we are fighting for our existence, the laws must be silent. The Chancellor of the Exchequer is entitled to look for motive when he thinks there is a possibility of Excess Profit Tax being evaded. That tax had as its intention the removal of profits made out of the war, and I consider that in these perilous times the Chancellor is entitled to take the most stringent measures when he thinks it might be evaded. It is a tax which lends itself to evasion.
    In this Bill he has forged a weapon which is essential for us in our fight for victory. Some of us think that he has not sharpened that weapon enough; others, possibly, by their arguments have tended to blunt it. Nevertheless, it is an extraordinary good weapon, and I think

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    he has done remarkably well and I do not wish to criticise in any way.
    I intend to be helpful in anything I say. I do not suppose it will be of much help, but at lease it is genuine. I am not one who likes to engage in destructive criticism and I take this opportunity to dissociate myself entirely and completely, here and now, before many witnesses and in this House, from the carping, nagging and persistent criticism, so constantly levelled against the Prime Minister and the Government, for motives best known to themselves, by those two or three Members who usually sit on the Government side of the House just below the Gangway.
    Sir John Wardlaw-Milne: I would like to join with others in congratulating my right hon. Friend the Chancellor of the Exchequer upon a very courageous Budget. The question I want to raise to-day is not that of the problems with which he has finished at the moment, but of the problems which lie ahead and which arise to some extent out of this Finance Bill. I fear the task of my right hon. Friend is only beginning. The problem of finance in this war effort will be with him every day. My right hon. and gallant Friend who moved the Third Reading spoke of the effect of this Bill as strengthening the financial aspect of our war effort. I agree that in certain respects it does this very definitely, but what 1 am concerned with is whether, as a result of this Bill—and I put it to the House frankly that this is the primary question in my mind at the moment—we are to get a greater war production or not. I understand there is a possibility that the House will be discussing in the near future the question of production in all its aspects, and I have no intention of anticipating that Debate to-day. I am concerned only with the effect on production of the financial measures we are taking and with the problem which lies ahead of my right hon. Friend. I have several times stated in public debate—contrary perhaps to the opinions just expressed by the hon. Member for Southampton (Dr. Russell Thomas) —that I thought it a great mistake that we ever imposed the Excess Profits Tax at the rate of 100 per cent. In my view it was panic legislation and 1 have always believed that we should get more revenue and better results at a lower rate of tax. But that is
    1290
    not the matter which I wish to raise in detail now. What I propose to raise is the effect of that tax and other Clauses in this Bill on the production we are getting to-day.
    Clause 23 of the Bill does not really help us. The mere fact that a man will get back 20 per cent. of what he has paid out, or that a firm will get back a small part of what it has paid in Excess Profits Tax, less Income Tax at that date, whatever the rate may then be, will not solve the problem which confronts the Chancellor of the Exchequer. At the present time a large number of concerns working for the war effort are unable to finance the extensions which are necessary to give us the production we require for the war. That is the real problem. I want, if I may, to give the House an illustration of what I mean. We are dealing with conditions as they are; I am not concerned at the moment with ideas about the future or what conditions might be then. So long as you have private enterprise you must not remove the incentive to gain. If you do, your private enterprise will not work. That may be, to some, a sound reason for changing that system at some future time but we are dealing with conditions as they are, and the problem is whether we are using the financial system we have to-day in a manner which will really ensure the success of our war effort
    War production is involving a great number of concerns in ever-increasing expenditure. They have had to enlarge their plant and expand their capacity much beyond that necessary in pre-war years and, in fact, a good deal beyond what is probably justifiable by peace-time conditions of the future, so far as they can see ahead. There will be no dispute about that. It is urgently necessary that this expansion should continue. Under our present financial system and conditions of taxation, as laid down in this Bill, private enterprise has had largely removed from it any incentive to extend production. The normal machinery of financing production does not operate to-day. In many cases the proprietors of these concerns would not be justified, except for the war effort, in proposing any extension at all. They certainly could not justify it as a long-term policy to their bankers and the result is that they cannot obtain loans to meet their requirements. Expansions are therefore financed only in cases when the

    1291
    cost can be charged to revenue; this is rarely possible and means a slackening of effort and a retardation of the output required.
    It may be said that the Government come to the rescue. That is true in certain cases only and even then it is by no means always with the speed necessary to secure the extensions required. Where the Government are taking over the whole plant, the question of finance is comparatively simple but a large amount of the output we want to-day must come from smaller concerns working on their own account. They cannot all get Government assistance and in some cases, where it is available, they do not get it quickly enough to give us the production we require. I am not saying that this difficulty of getting Government finance is entirely, or even perhaps mainly, the fault of the Government. It is a problem which no Government have ever had to face before. They have not the staff and expert people to examine these questions but it seems to me that the Chancellor will have to consider seriously in the near future, whether he can, in some way or other, promote the necessary finance for what I might call the middle-grade firms, whose expansion is absolutely essential for the war effort. There is one thing I hope we shall not say. It is that we cannot afford to finance this kind of production. We cannot afford not to finance it. That is the position. In the old sense of the word there is nothing we can afford but we are at war all must be sacrificed for victory. It is not a question of dividends. Limit the dividends if you like; it is quite immaterial. As a matter of fact the ordinary industrialist, in the strain of the war effort, has long passed from the consideration of dividends. All he is interested in is to remain solvent and to try to keep his business going until the post-war years.
    We are not immediately interested in what will happen to him after the war. Let us be quite frank. What we want is his production now and that problem is one which this Bill does not help. During the Committee stage of this Bill, I and some of my hon. Friends raised the question of allowances in the case of companies which had not come to full fruition of their enterprise. There is also, of course, the very difficult question of the depreciation of assets which is taking
    1292
    place in consequence of the war effort. As a result of that effort, you have machinery which is working far beyond its normal pressure and is being worn out. There is no inducement to the manufacturer to work his machinery in this way. He is not properly recompensed for the destruction or deterioration of his assets. We want in this war, indeed, we must have, a system which will give incentive to both employer and workman to produce to the utmost of their capacity. The Prime Minister said in this House a few days ago that we had not the guns with which to defend our aerodromes in Crete. Then there was the very serious statement made by Colonel Knox yesterday showing what we are losing at sea. We not only want the United States to deliver the goods to us. We must produce to the utmost of our capacity here at home. As I have said, it is not a question of what we can afford. It is a question of what we must afford.
    I appreciate that at the present time, as my hon. Friend opposite said, inequalities exist, and I agree with him that a great many people are going to live on the realisation of capital. I do not suppose he looks forward to that situation in the country any more than the rest of us do. It is a situation that is very bad for all —it is the destroying of our national capital. No doubt a very far-reaching programme of social reconstruction may be necessary after the war. A vast part of the great concentrated war effort will come to an end over night, and we cannot adapt ourselves to peace conditions in a day. If there is no planning ahead, there will be chaos. The Chancellor's problem will be the combination of two things, getting the utmost out of the present capacity of the country for the war effort, and planning ahead for the peace.
    My right hon. Friend must face the fact —there is no other way, I am afraid— that the financial system will have to be altered in such a way as to give, first, that incentive of which I have spoken to meet immediate requirements; secondly, we must have a wages and a price policy, for otherwise there will be increased inflation; and thirdly, we must plan ahead the financial policy which, after the war, will provide the necessary credit for expanding industry and consumption. Consumption is the keynote for the post-war future. I

    1293
    hesitate to enter this field for more than a sentence, but I think that after the war there will arise the necessity of placing in the hands of the people of the country the ability to use the credit which they themselves create in a way which they have never been able to do before. Whatever may be the merits of these matters, which will have to be discussed in future, I hope the Chancellor will consider now whether it is not possible to do something to procure from the industrialists that expanding production and that incentive to the utmost output which is absolutely essential if we are to win the war.
    Mr. A. Edwards: I should like to remind the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) that there is something facing the working-class people which is worse than war, and that is peace. Peace reminds them of the dreadful conditions that may prevail immediately after the war. Yet, at the moment when we are asking them to do more, we are confessing that we are doing very little to prevent them from being thrown back into conditions of poverty.
    Sir J. Wardlaw-Milne: I agree with the hon. Member, but it is not one class only that will suffer.
    Mr. Edwards: It is not a very sound argument to say that if somebody is paying i9s. 6d. in taxation from every pound of income, he is making a sacrifice. There is no sacrifice when a person has abundance; there is sacrifice only when a person has to pay more than he can afford.
    Sir J. Wardlaw-Milne: The question is, what will be the value of the residue?
    Mr. Edwards: There are people who are able to live without making any real sacrifice in their standard of living, because they can use their capital. This reminds me of another point, which I have put to the Chancellor on previous occasions, concerning the disinvestment of capital. At the present time, people not only disinvest in order to live, but make substantial profits in the process. The Chancellor ought to decide that for the duration of the war, at any rate, all capital profits are to be taxed both for Income Tax and Excess Profits Tax. I want now to refer to Clause 2, for which I am grateful, which enables the Chancellor to abolish Import Duties. Had the Chan-
    1294
    cellor had the courage to make such a provision a year ago, he would have saved many millions of pounds for the country. The right hon. Gentleman's mistake is that he has not really strengthened his financial arm, to which the Financial Secretary referred. I suggest, without any fear of contradiction, that it can be shown that in this Finance Bill the Chancellor has made the money which he is raising worth very much less. He has to provide the money for the increased output for our war effort, but he has to do more than that—he has to raise an extra sum of money to cover the depreciated value which he has himself caused.
    The right hon. Gentleman has taken powers to abolish Import Duties. The important thing is that he should use those powers. I want again to remind the Chancellor of something of which I have spoken for the last 18 months, but which he and his advisers have persistently ignored. The Government have deliberately raised the price of goods, which is inflation, and nothing else. They have powers to control prices, but instead of doing that, they have deliberately increased prices. An announcement was made this morning that the price of household coke and blast furnace coke is to be raised.
    Mr. Speaker: The hon. Member must confine his remarks to what is in the Bill. I have allowed the Debate to be very wide, but I cannot allow it to become wider
    Mr. Edwards: In Clause 2 the Chancellor has taken powers to abolish Import Duties, and my purpose is to show that he can save millions of pounds for the country if he exercises those powers. Let me take another case. The Government have increased the cost of machine tools, which represent one of our largest purchases, by 60 per cent. Is there any sense in such a financial policy? The Chancellor has deliberately increased the market value of machine tools in this country by 60 per cent. With regard to steel, the Import Duties were removed some time ago, but in other ways, under powers which he has under various Acts, the right hon. Gentleman has put up the price of steel to an entirely fictitious figure. This is a very serious matter. The right hon. Gentleman is destroying the very foundation of our financial system. There is no stable price struc-

    1295
    ture, and the Budget means nothing if, having said that the cost in the coming year will be so much, the right hon. Gentleman in the meantime destroys prices, so that the money is worth only two-thirds of what it originally was worth. If the right hon. Gentleman will use his powers to abolish, not partially but absolutely, all Import Duties, he will be able to reduce prices by a very considerable amount, and he will be able to reduce the cost of the war by more millions than he has referred to to-day in rejecting certain Amendments. What is also important is that he would be able under this Clause to release some thousands of men. At a time like this I have the right to remind the Chancellor that he alone is responsible for any inflation that is occurring. He alone is producing inflation, and he alone can prevent it, because he has the power to fix prices. Day by day he is raising prices and increasing costs in different industries, and those increased costs, in turn, come back to himself. Can there be anything more inane than that?
    Again, I would draw the attention of the House to world prices. The world prices of raw materials have risen by 11 per cent. only since the war began, whereas in this country they have risen by 70 per cent. That is inflation, a waste of money, and pure nonsense, and if the Chancellor pursues that policy, he will have to raise more money. He raises prices and then sends Lord Kindersley around to the working people. All the time he is making that money very much less in value than the figure which he has told the people it is worth. This raising of money by War Savings is really not good enough. I hope the Chancellor is going to face the problem, and stop Lord Kindersley deceiving the people. Would it not be more sensible to say that we can get the money at ⅛ instead of 2£ per cent.? Do not tell the people you are raising £1,200,000,000, when you are probably raising only about £300,000,000. The time has come to be straight and honest with the people.
    Mr. Pethick-Lawrence: The Debate to-day has shown both approval and criticism of the Chancellor and the Bill of which we are now taking farewell. Personally, I find myself in a good deal of agreement with some of the
    1296
    criticism which has been made. Although I do not go so far as my hon. Friend the Member for East Middlesbrough (Mr. A. Edwards) I agree that the Government have a great deal more power to control prices than most people inside or outside this House seem to realise. I do not think I would go as far as to say that the Government are responsible for the increases in prices. Although the Government may not have done all that they could, I would rather say that they have done a good deal more than some expected, and a very great deal more than was done in the last war, when our financial system was thoroughly bad.
    The really important thing is that we are going through a transition stage. In the days before the war the Government had very little control over prices, either of commodities, or of money. To-day the Government has almost absolute power over prices of commodities and of money. That is a stupendous change. Nearly 10 years ago I went to a country which has come very largely into the picture during the last few days. I had an extraordinarily interesting time, and I found that the economics of the Soviet Union were different from those of any country in history. Probably they were different then from what they will be again there or anywhere else. At that time the Government of Russia had complete control of the price figures. They could decide, not only the price of an article, but the differential price, according to the purchaser, according to the place where he was allowed to buy it, and according to the conditions under which the sale took place.
    The result was that there was no overt market at all. The price of a piece of cheese to a workman might be less than one-tenth of the price charged to another purchaser. The same thing applied to all articles. I remember being rather inquisitive about what would happen in the case of a family whose teapot had been cracked. I asked a girl what she would do if her teapot were broken and she wanted to buy another in its place. I asked that question because there were practically no shops. "Oh," she said, "Mother goes down to the co-operative every day, and once in a while when she sees a teapot she buys it" That seemed to be a fantastic state of affairs, but we are getting somewhere near it at the

    1297
    present time. When you want an article you have to wander about and scrounge for it, and you may find it, or you may not. And so we are moving in the directions of the position which existed in Russia some ten years ago. Maybe we shall get still nearer to it as time goes on.
    This Budget, and what the Chancellor has done, is typically British. Here we are, facing the burdens of taxation, and facing conditions of existence which would have been unimaginable a few years back. We are facing them not in gloom and despair, but with a smile, and with a welcome to the Chancellor who has castigated us in this cruel manner. All this shows the good side of the British character. We have set our teeth, and we are not going to yield to this man who has broken every covenant of Divine and human law. We are going to face the situation whatever the cost. The Chancellor has shown a spirit of good will in his efforts, and he and his loyal staff at the Treasury have not spared themselves, by day or night, in meeting individual people and trying to work things out. Certainly they have shown a fine British spirit, which we all praise.
    Of course our British qualities have their weaker side. We do not look very far ahead. We do not plan for the future, and we are just a little bit happy-go-lucky. Had we planned a little further ahead a few years ago, some of us believe there would not have been a war, because Hitler would have been crushed before he became so difficult to subdue. On the financial side, if we had looked a little further ahead, we might have made our situation somewhat easier. I do not think we are looking very far ahead now, to the days which will follow the war. Perhaps it is as well. We know we have to tread a certain path, and there is a hymn which says, "One step enough for me" After the war, we shall not be able to afford great luxurious expenditures in certain directions. We must make certain at the same time that if we lose these great expenditures on the one side, we also lose the great evil of dire poverty on the other. I believe that view is in accordance with the spirit of the people, high and low. There may be a few exceptions of people who want to go back to old ways and live luxuriously at the expense of others, but I believe it is also true of the British spirit that pervades all
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    ranks of society, that the people hope for greater equality in the days to come.
    I have never believed in absolute equality. I know quite well that you cannot have it. I remember a story that came from Russia about the operas which they arranged to have when the war was over. They were just about to start when it was found that the leading tenor was missing and the performance had to be held up. They hunted high and low for him, and in the end they found him in the topmost gallery selling programmes. They said, "Do you not know that we are all waiting for you?" He said, "Yes, I know that, but you told me that all the tasks that we perform in this society are of equal value, and I prefer gelling programmes" I hope my hon. Friends opposite will not use that story against some of us. I merely relate it to explain my statement that I do not think you can have an absolutely equal society. I do not think you can have a system in which all services, rendered by every one, are of equal value in an economic sense. But you must get way from the utterly unequal system that we had before. I have no wish to go back to that system of society. I have said before, and I say it again, that I believe our people to be of that mind.
    This Bill places enormous burdens on the people. Those burdens, in my opinion, will be borne courageously and cheerfully and with the song of victory not far away. But the human frame can bear only a certain amount of strain, and I hope we shall realise that fact. We have put upon human beings during these last 14 months an enormous burden and, if, sometimes, they are not doing exactly all that everyone thinks they should do, I want the House to remember this stupendous physical and nervous strain that has been put upon the people and not demand more of flesh and blood than it can bear. I believe that every demand the Chancellor is making can be met. It may be that he will have to demand more in the years to come than he is demanding at present, but, as my hon. Friend behind said, he must bear in mind that while the people will do everythng they can, as long as they feel that others are having to face the same difficulties as themselves, what they will not stand is injustice. They will not stand for grave burdens being put upon themselves while

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    other people, apparently for no reason, get off very much more lightly and continue to have a good time. I do not think any large section of people in this country are luxuriating at the present day, but there are a few slackers, probably in all classes of society. They ought to be rounded up. It may be that between now and next year, if the war is still continuing then—it is possible that it may not be, that we may see a cracking on the other side, and that it will end all the sooner because we are preparing fully for its continuance—the Chancellor will have to see whether there is not some method by which he can round up the slackers, so that by a common effort, in which all take part, we may pull our weight in securing victory.
    The Chancellor of the Exchequer (Sir Kingsley Wood): I wish to add only a few words to all that my hon. Friends have said to-day. They have been good enough to refer to me in very generous terms. I must say that but for the co-operation of the House as a whole it would have been impossible to get the Bill through in the time we have, and I thank the House very much indeed for what they have done, because it has been by their good will that it has been possible to achieve a Bill such as we have to-day. I should also like to thank my right hon. and gallant Friend the Financial Secretary and the learned Attorney-General and the learned Solicitor-General, and also my officers at the Treasury, for the very great assistance they have rendered me. They have very much lightened the weight which otherwise would have fallen upon my shoulders. On the Third Reading of a Measure of this kind one is entitled, I feel, to look back just for a few moments, and in doing so I think the chief reflection one has, and no doubt it will be shared by all my hon. Friends who have taken part in these Debates, is astonishment at the way in which the burdens which it has been necessary to impose by this Budget have been accepted. I must confess that when I first considered the Budget I did not anticipate the full and willing acceptance that it has received on all hands and from all sections of society.
    It is not my purpose to try to give judgment upon the question whether some people are faring better in this war than
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    others, but my object in the Budget was to deal fairly with the community as I found it, and to work out a practical plan which would be accepted as fair, just in so far as it lay in the power of any individual to do so. I think it was largely the fact that it was felt that an honest endeavour had been made to apportion our very considerable burdens as fairly as possible that has made the Budget as acceptable as it is. I also feel that behind the fact that the Budget has been received so wholeheartedly lies a general appreciation by the people as a whole, greater, I think, than at any time in our history, of how vital a factor finance has become in our war effort. At no time, I suppose, have so many people followed with so much knowledge and care the proposals made in a Budget. I do not suppose that there have been so many people well-informed about financial affairs at any time in our history as there are to-day; and that is all to the good. These people, at least, appreciate in general terms what is meant by inflation, and they can see to-day the justification for Measures which have been deliberately designed to abate that danger.
    In a sense, this Budget was not a financial Budget. While it is only sound common sense to pay our way as far as we can, I did not bring forward my proposals in order to conform to some theoretical requirements, for instance, that the people of this generation should bear on their shoulders some mathematical proportion of the total cost of the war. Nor did I bring them forward for the reason that, without them, the money for the war could not be found. If, out of natural sympathy for the people of this country in their present tremendous ordeal, we had chosen to spare them further drastic taxation, the money to finance the war would still have been found, but only at a terrible price and at the cost of serious inflation. I ask the House and the country to view the Budget in that context and to regard it as a part, and an integral feature, of the Government's economic policy, which finds expression also in many other directions—the limitation of supplies, the concentration of industry, the rationing of food and price control. The question before us is not whether we can finance the war but whether we shall do so in a manner calculated to abate inflation and thus to avoid the severest hardships on

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    all classes of the community, including those with the smallest resources. I can assure the House that, in our Finance Bill, it has been my desire to pursue this fight against inflation, and that that will continue to be my constant endeavour.
    I should like to leave with the House one final thought before the Bill is read the Third time. The current rates of taxation have been fixed, but to deal with the inflationary gap we have to look to the increase in the rate of genuine savings, on which I based my calculation at that time. One of the finest efforts in this war has been the voluntary Savings Movement, and the House and the country owe a great debt to that movement. It is not easy for us to find voluntary savings, and the growth of genuine savings must be related to a policy of rigid economy in private affairs, to drastic curtailment of civilian consumption and to an understanding by everyone that every penny saved and lent to the nation is an essential contribution to victory.
    Although the War Weapons Weeks have now come to an end, the National Savings Movement, far from remaining content with the results up to date, is intensifying its effort, and I would only say in conclusion that, though I appreciate and am aware of criticisms of various kinds—which are natural in connection with any great movement—I want to thank the hon. Members of the House for the great part so many of them have taken in connection with the National Savings Movement. I appeal to them today not to relax their efforts. Further effort is now being made which I do not think will be open to any of the criticisms of my hon. Friend opposite, and I am particularly anxious, because so much depends upon it, that the voluntary Savings Movement in this country should not only be maintained but increased in the months to come. It is of great moment for every one of us, and I hope my hon. Friends will continue to assist. I am very grateful to the House for their help, and I can only say that I trust that the hopes upon which this Budget was based will be fulfilled, and that it will be regarded as a great contribution to victory by the people of this country.
    Question, "That the Bill be now read the Third time," put, and agreed to.
    Bill read the Third time, and passed.

  REPAIR OF WAR DAMAGE BILL.
  Order for Second Reading read.
  The Minister of Health (Mr. Ernest Brown): I beg to move, "That the Bill be now read a Second time"
  Both the Bills whose Second Readings I have to move to-day are agreed Bills, and both originated with the local authorities. Little explanation is needed, but I would say just a few words about this Bill. The essence of the repair of war damage to small houses is speed, and immediately we began to work out the plans which had been concerted—and plans had been concerted and stocks of materials assembled—to deal with the terrific problems involved in the heavy bombing of last winter and this spring, we found that certain of the provisions of the Housing (Emergency Provisions) Act, 1939, had been drawn too narrowly. The local authorities had doubts about them, called our attention to them, and were told to go on and ignore the technicalities, to get the work done with all speed; and the Government pledged themselves to resolve their doubts and regularise the procedure. That is the real meaning of the main part of this Bill. It will remove doubts which have arisen through the use of the word "temporary" in the original Act; and the Act could be construed so that local authorities were not quite sure whether or not they could repair a house that was empty. Those are only illustrations of a number of points that I could give.
  More than that, certain conditions were laid down in the original Act which meant a double approach to the owners of the property and which in some cases meant a delay of more than a fortnight, when as a matter of fact all those who are faced with the conditions know that the first aim in first-aid repairs must be the quickest method of getting the house made proof against wind and weather. It is for that purpose that we have brought forward this Bill. Under Clause 8any doubts or irregularities which might possibly have arisen are resolved as from the passing of the original Act in 1939. We also overlooked in the original Act

  1303
  the necessity of enabling loans to be made to local authorities to repair their own houses, and this point is also covered in this Bill. I could talk for a long time on the subject of the repair of war damage. The full story cannot be told in war-time, because it would give information to the enemy, but when the whole story can be told of the way in which the local authorities and those who work with them, the emergency repair squads, have tackled this terrific problem, it will turn out to be one of the very finest efforts that have been made in the whole of the war.
  Mr. James Griffiths: I will not keep the House more than a moment or two. May I join the right hon. Gentleman in paying a tribute to those local authorities which have found themselves faced with this enormous task in circumstances of the greatest difficulty? I think the Minister will agree that this job has been more successfully accomplished by the authorities which have gone on with the job first and afterwards tried to find out whether they were right or wrong. Certain authorities did act very quickly, and the Minister and his Department have supported them afterwards. It was discovered that there were handicaps in the way of doing the job quickly. These have now been removed. As the Minister said, speed is the essence of the matter. Those authorities which have got on with the work very quickly deserve the support of this House. All those who have experienced it know how much is gained by getting people back to their homes quickly, after an event of this kind. Therefore, I welcome the Bill.
  May I make a small suggestion? It was put to me by people who have had experience of these circumstances. The provision of this Bill is that authority is given to the local authority to get on with first-aid repairs without any formality. A large number of people want to do that for themselves without even waiting for the local authority. I think we should encourage them. Take the case of a man, the roof of whose house, and the windows, have gone, and who would like to carry out the first-aid repairs himself. The suggestion has been made to me as to whether it is possible, either by Amendment of this Bill on the Committee stage, or by administrative action, to allow the occu-
  1304
  pier to do first-aid repairs to the house— to enable him to go to the local authority's store and get what he wants and trust him, though there will have to be some financial limit to the procedure. Would it be possible for a man to say, "I want something to cover the roof; I do not want you to send a man; give me the stuff, and I will do the job myself"? The best thing in that kind of situation is to find something for people to do. It is the best tonic for morale. It is the experience of those who have known these terrible blitzes that there is a large number of occupiers who would like to do a job of that kind and who could do it. I hope the Minister will consider the provision I have suggested, or something better.
  Mr. E. Brown: It is being done now.
  Mr. J. Griffiths: I am very glad that that has been announced.
  Mr. George Griffiths: Shortage of material brings a good deal of trouble to local authorities, and I would like the Minister somehow or other to enable sufficient material to be available for these repairs.
  Mr. E. Brown: We have the very highest priority for this, and we do out utmost. We did encourage local authorities before the war to assemble large stocks of materials. In addition to that, at our suggestion, the Ministry of Works and Buildings have provided large dumps in various parts of the country. If there is any difficulty in a particular case, I hope the hon. Member will let me know. We have the highest priority, subject to a particular material being available at a particular place at a particular time.
  Question, "That the Bill be now read a Second time," put, and agreed to
  Bill read a Second time.
  Bill committed to a Committee of the Whole House for the next Sitting Day. — [Major Dugdale.]

  REPAIR OF WAR DAMAGE [MONEY].
  Considered in Committee under Standing Order 69.
  Resolved.
  "That for the purpose of any Act of the present Session to amend the Housing (Emerg-

  1305
  ency Powers) Act, 1939, and the Essential Buildings and Plant (Repair of War Damage) Act, 1939, it is expedient to authorise

  (a) the payment out of moneys provided by Parliament of any increase in the amount of the loans made under the two last-mentioned Acts attributable to the provisions (whether retrospective or not) of the said Act of the present Session;

  (b) the payment into the Exchequer of any increase so attributable in the sums received by way of repayment of such loans. (King's Recommendation signified.) —[Mr. Ernest Brown.]

  Resolution to be reported upon the next Sitting Day.

  LOCAL GOVERNMENT (FINANCIAL PROVISIONS) BILL.
  Order for Second Reading read.
  The Parliamentary Secretary to the Ministry of Health (Miss Horsbrugh): I beg to move, "That the Bill be now read a Second time"
  I think that this Bill will meet with the approval of all quarters of the House, and that it will be agreed that speed in dealing with it is of great importance. As hon. Members know, the block grant of the Exchequer to local authorities is calculated on a five-years basis, on a particular formula. If we were to have the recalculation now required, with the end of March, 1942, as the beginning of the new period, it would be quite impossible for anyone to suggest with any certainty what would be the position in various local authorities' areas in the years 1942–47. In that formula, there is a calculation of the population, of the number of children under five, and of various other points. Nobody would suggest that it could be said with certainty how long people will be in a particular area, especially the children under five. It is, therefore, agreed that the new calculation should be postponed until a time to be decided by Parliament, at the end of the war.
  Mr. James Griffiths: It is the obvious thing to continue the existing block grant at its present level for the period of the war and for the five years afterwards. I hope that the Minister of Health will agree that when this war comes to an end the whole financial structure of local Government will have to be considered, and that it will be better perhaps to be free at the end of the war to get rid of this kind of formula. I
  1306
  come from a distressed area, and I remember how we used to weigh up the factors. I do not know who invented that formula, but I never met anyone who understood it. In the meantime, we hope that the Ministry of Health and the Ministry of Reconstruction, in consultation with other expert people, are going to give real attention to the problem.
  Sir Percy Harris: It is quite right that this Bill should be passed through all stages as rapidly as possible. Otherwise, the Government would be in an impossible position, and, what is far more important, the local authorities would be unable to work their machine. I remember the right hon. Gentleman the Minister of Health, some years ago, was a very severe critic of this formula. However, that is past history, and he can rest assured that we shall not hold that against him. But I want to impress upon the Minister the serious necessity for studying closely the intricate problem which is growing up very rapidly all over the country, owing to the movement of population. We shall find directly after the war that we have very difficult financial questions to face, which may undermine the whole fabric of local Government if the Ministry is caught unawares. The main burden of working out the financial scheme must obviously rest on the right hon. Gentleman's Department.
  Question, "That the Bill be now read a Second time," put, and agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the Whole House for the next Sitting day. — [Major Dugdale]

  LOCAL GOVERNMENT (FINANCIAL PROVISIONS) [MONEY].
  Considered in Committee, under Standing Order 69.
  Resolved,
  "That for the purposes of any Act of the present Session to extend the third fixed grant period under the Local Government Act, 1929, and to make provision for the stabilisation of Supplementary Exchequer Grants and for other purposes, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums so payable which is attributable:

  (a)to the extension of the said period until such date as Parliament may hereafter determine;

  1307

  (b) to the stabilisation for the term of the extension of the said period of Supplementary Exchequer Grants under the Local Government Act, 1929;

  (c) to the continuation during the said term of schemes under Section ninety-three of the last-mentioned Act in respect of maternity and child welfare services."— (King's recommendation signified.) —[Mr. Ernest Brown.]

  Resolution to be reported upon the next Sitting Day.

  ALIENS ORDER (DETENTION).
  Motion made, and Question proposed, "That this House do now adjourn" — [Major Dugdale.]
  Major Vyvyan Adams: I wish to raise the case of Mr. Richard Weininger, now detained under Article 12 (5A) of the Aliens Order. As the House is aware, this classification includes friendly or non-enemy aliens. On 20th May my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) asked the Home Secretary
  "how many cases had been considered by the Committee set up by him to deal with cases of citizens of friendly countries detained under a deportation order; how many cases await hearing; and in how many cases has release from detention been granted? "
  The Under-Secretary of State for the Home Department replied:
  "The Committee appointed to advise my right hon. Friend on the cases of non-enemy aliens detained under Article 12 (5A) of the Aliens Order has so far considered 316 of the cases referred to it. Fourteen further cases await hearing. Of the cases considered by the Committee, the release of 114 persons has been authorised. In addition, my right hon. Friend has authorised the release of 276 detainees without reference to the Committee"
  Then the hon. Member for Kidderminster asked this Supplementary Question, to which I ask the House to give its special attention:
  "Does my hon. Friend really think that the situation is satisfactory and quite fair to these people? It is quite true that they have the right to appear before the Committee, but is it not the case that they are not told what charges are to be brought against them? It is a difficult thing for a man to answer a charge if he does not know the nature of the charge.
  MR. PEAKE: I have examined many transcripts of proceedings before these committees and invariably it is the practice of the committee to put to the detained person facts known to his detriment"—[OFFICIAL REPORT, 20th May, 1941; col. 1383, Vol. 371.]
  With great respect to my hon. Friend, I think he meant to use the word "dis-
  1308
  credit "instead of" detriment" There is an important distinction between the two. If, for example, I suffer from a harelip or if I am robbed or my house is burned down, that is to my detriment, but not one of these misfortunes would warrant my internment. The distinction is important as the word "discredit" is a great deal narrower than the word "detriment" On 19th June I asked the Home Secretary the following Question:
  "whether, in the inquiry into the case of a friendly alien, Richard Weininger, now held as an internee, under Regulation 12 (5) A, the normal practice was followed by the tribunal of informing him what was known to his discredit?"
  The answer was: "Yes, Sir," and subsequent Supplementary Questions and replies to them were as follow:
  "MAJOR ADAMS: Is my right hon. Friend aware that this man is wholly ignorant of the charges made against him?
  MR. MORRISON: I do not think that is true. The position was made quite clear in the course of the proceedings, and that statement would not be justified.
  MAJOR ADAMS: Is the Minister aware that he is entirely misinformed, and that this man was examined when he was in a condition of extremely bad health?
  MR. MORRISON: I have taken great care about this case, and I have decided that detention should be continued. I think I am right in the knowledge of all the facts available. The proceedings were very carefully conducted, and Mr. Weininger had ample opportunity to state his case fully to the committee.
  MAJOR ADAMS: Does the right hon. Gentleman mean that he will not reconsider the case?
  MR. MORRISON: I have already reconsidered it on the report of the advisory committee. I have come to a certain conclusion, and I see no reason to vary that conclusion at the moment"
  Then the hon. Gentleman the Member for South Croydon (Sir H. Williams) intervened to ask:
  "Is the Minister aware that there are very substantial reasons for believing that Mr. Weininger has never had a statement in plain terms of the grounds on which he has been interned?"
  Then the Home Secretary made this statement:
  "When aliens, as distinct from British subjects, are interned, details are not furnished in the same sense as for British subjects. I think that is right. In the course of these proceedings it was perfectly clear that the apprehensions of the authorities were justified. It must be understood that the proceedings under this Order must be different from the proceedings in a court of law" —[OFFICIAL REPORT, 19th June, 1941; cols. 805-806, Vol. 372.]

  1309
  Then I said that in view of the nature of the reply I would raise the matter again on the Adjournment at the earliest possible moment. The earliest possible moment is to-day, and although I intend no reflection on the Under-Secretary, I must say I am sorry not to see the Home Secretary in his place. I informed him two or three times that this matter was to be raised to-day. I am sure the House would have liked to have heard from him why he said first that the position was made quite clear in the course of the proceedings, and then a moment later said that when aliens were interned details were not furnished in the same sense as for British subjects. This is a contradiction, no doubt unintentional, but both statements cannot be correct. They are mutually inconsistent.
  Nor do I understand why my right hon. Friend thinks it right that the reasons for their detention should be given to British subjects but not to friendly aliens. We are under no obligation in the case of enemies to explain, for example, to Hess, why he should be locked up, but there is every reason why we should inform a man who has enjoyed Czechoslovak nationality since the last war, has become well known for his pro-British sympathies and loyalty to the British cause, and one who has been resident in this country fairly continuously since 1936.
  My hon. Friend will no doubt correct me if he thinks I am wrong, but I understand we are fighting against the proposition that justice can put on some coloured shirt, and is limited by national boundaries, and can wave some national flag. Unless we repudiate such a doctrine, we sink to the level of Field-Marshal Goering. All I am asking is that Richard Weininger should be given a chance of answering what the Home Office have against him.
  Let me give very briefly, in skeleton outline, his history. It is this. On 18th September, 1940, Richard Weininger was arrested at the London residence of my hon. Friend the Member for East Aberdeen (Mr. Boothby). He was detained at Brixton in solitary confinement for 20 hours a day, which included periods when air raids were in progress. This form of detention lasted for 17 weeks. [Interruption.] Does my hon. Friend say, "What does that matter?"
  Mr. McKie: No. Does my hon. and gallant Friend suggest that
  1310
  Weininger's position in air raids was any worse than that of anybody else?
  Major Adams: It will be apparent to my hon. Friend why I make that point in one moment. If he will possess himself in patience, he will find it unnecessary to interrupt me when time is so limited. This form of detention lasted for 17 weeks. On 5th November, there began the investigation by the Select Committee into the conduct of my hon. Friend the Member for East Aberdeen. The counsel of my hon. Friend, in his opening remarks, made this point to the Committee:
  "Mr. Weininger was arrested seven weeks ago in Mr. Boothby's own flat. He was taken to Brixton, where he has been for 7 weeks without any charge being presented against him. I have, with the learned Attorney-General's consent, been to see him this morning, and I can tell the Committee that he is almost a broken man"
  On 28th November Mr. Weininger was examined at length before the Committee. Indeed I believe he was virtually the only witness during a single day's sitting. On the same day the Home Secretary, when questioned in the House about Mr. Weininger's detention, said that information had been received raising doubts as to Mr. Richard Weininger's reliabilty, and that he would come before an appropriate tribunal. On 3rd December, still in the course of these inquiries by the Select Committee into the conduct of the hon. Member, Sir Alexander Maxwell, the Permanent Under-Secretary of the Home Office, gave evidence, and was asked this question:
  "Is there anything in the reasons for the arrest and detention of Mr. Richard Weininger which has anything to do with the subject of the inquiry of this Committee?"
  The answer which Sir Alexander Maxwell gave was:
  "No, Sir"
  On 18th December, the Report of the Select Committee was issued, and in the course of it they said:
  "Your Committee has always been clearly decided that Mr. Weininger's conduct was in no way in question and was quite irrelevant to their inquiry"
  On 13th January of this year, Mr. Weininger was transferred to an internment camp at Lingfield, where conditions were a great deal better than they had been at Brixton. It was suspected at this time that he was suffering from what the doctors called a pre-cancerous condition of the bowel, a condition which in-

  1311
  duced considerable pain, and which went back, from this point of time, for at least six weeks.
  It being the hour appointed for the interruption of Business, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, "That this House do now adjourn." — [Major Dugdale.]
  Major Adams: I was describing the pathological condition of Mr. Weininger about this time. The pain was so severe that in order to get any sleep he had to take drugs in considerable quantities. On 20th January, in the kind of state which is induced by soporifics, he appeared before a body known as the Lindley Tribunal. As far as he could recollect, Mr. Weininger subsequently wrote out the questions put to him and the answers he gave. I have seen this transcript, and I have read these questions, and re-read them time and again, searching and searching for some clear indication of what might be moving in the mind of the tribunal. With the best will in the world, I cannot, for the life of me, make out what the tribunal was driving at. How much more obscure must they have seemed to an alien with an imperfect understanding of English, and muzzy with the drugs he was compelled to take because of his illness. I assure the House that if he has at any time been given any clue as to the reason for his incarceration, Mr. Weininger has not understood it. I could read at length the impressions he formed of the Committee, but I will merely give one phrase which he used and which strikes me as significant. The phrase is "cold hostility." The impression he had was that the minds of the members of the tribunal seemed to have been made up for them by the Home Office official.
  No witnesses were heard on Weininger's behalf, although, among others, the following gentlemen could have been called.
  Mr. McKie: The hon. and gallant Member made great play with the words "discredit" and "detriment." Does he think this "cold hostility" was to the Committee's discredit or—
  Major Adams: I wish my hon. Friend the Member for Galloway (Mr. McKie)
  1312
  would not make these ludicrous interruptions. This is a serious matter. This man has been interned for nine months and does not know why he has been interned. This is not the time for these ridiculous interventions.
  As I was saying, no witness was heard on behalf of Weininger, although among others who could have been called were: Mr. F. T. A. Ashton-Gwatkin, well known as a member of the Runciman Commission; Mr. Stopford, of the Ministry of Economic Warfare; Commander P. C. J. Carey, R.N., of the Naval Intelligence Division; Mr. J. H. Thorpe, K.C., now working at the Admiralty, who authorised me only yesterday to say he was still willing to speak as emphatically as possible on Weininger's behalf; Mr. Malik, of the Czech National Bank; and the hon. Member for East Aberdeen (Mr. Boothby). Nothing was heard from any of these men, who were all willing to come forward and speak to the loyalty and generally to the credentials of Richard Weininger. In February Weininger's doctor applied for a permit to visit him, and on 3rd March the occupants of Ling-field Camp were transferred to the racecourse at York, where conditions were bad. On 16th March the Home Secretary announced his refusal to release Weininger. On 28th March Weininger's doctor received a permit. to visit and examine Weininger, and on 31st March the camp doctor received orders from the Home Office to examine Weininger, and he reported him unfit for internment and camp life. On 1st April Weininger's doctor found him in urgent need of specialist treatment, and on 24th April Weininger was admited to York County Hospital, where he stayed until 21st June, when he was admitted to a mental home known as "The Retreat." where he now is.
  One of the reasons why this man is so ill, both physically and mentally—indeed, the main reason—isthe cloud of uncertainty which overhangs him. I have deliberately avoided any opportunity of seeing him myself, so I am able to avoid anything like rhetorical exaggeration. But all who have visited him, his relatives and others, whose word I do not doubt for a single instant, say that the whole time he can do little more than exclaim, "Why am I here? What have they got against me? When shall I be released?" That

  1313
  can be borne out by the intelligence officers who watch him, and, from all accounts from reliable individuals, his brain and his body are being gradually destroyed day by day.
  Every possible charge;, likely or unlikely, has been answered by him or on his behalf in appeals to the Home Office. I will give an example. Richard Weininger is a man of some wealth. He has money abroad. I have it direct from his secretary—and I do not doubt her word—that everything in connection with dollar accounts was disclosed at the proper time, just after the outbreak of the war. On 14th May last, in writing to the Home Secretary, Weininger used these words: "I have never held or controlled one single dollar which was not disclosed to the Bank of England" There are many other points which, to put it mildly, had there been time, would deserve inquiry and explanation. I only want to add this. Mr. Weininger is fortunate in having a number of friends, although in this crisis they do not seem to have been able to do him very much good. I cannot help wondering how hopeless is the lot of many of the 200 other friendly aliens who are also detained under Regulation 12 (5A) and may not know anyone who will speak for them.
  Here is a case where a man is indefinitely detained for no clear reason. It will not do for the Home Office or for the Parliamentary Secretary, or for the Home Secretary himself, whom I repeat I am sorry not to see here, because this is a very serious matter, to say that Weininger knows why he is detained, nor yet to hint darkly that we have only heard one side of the question. Weininger does not know, and, if there is another side, it should be stated, if not here, at least to Richard Weininger. Nor can my hon. Friend say that it is contrary to the public interest to tell him or anyone else even in confidence. The public interest, I suggest, demands that we should practise the elementary justice for which we are supposed to be fighting, and I do ask my hon. Friend to let this man be released or at least tried again under fair conditions.
  The Under-Secretary of State for the Home Department (Mr. Peake): The time is rather short in which to deal with a matter of this importance. I make no
  1314
  complaint, however, because my hon. and gallant Friend has stated his case briefly and fairly. I will deal with the various points he has made in the order in which he made them. I would say, however, at the outset that there is obviously a great practical difficulty in dealing in a Debate in public on the Adjournment with the individual case of an alien whom the Home Secretary has detained for security reasons. It must be perfectly clear to every hon. Member that considerations of security cannot be discussed in public, and I am therefore precluded from dealing, except in the very broadest outline, with the merits of this case as an individual case. My hon. and gallant Friend thought there was some discrepancy between an Answer which I gave to my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) on 20th May and Answers given by my right hon. Friend the Home Secretary on 19th June. It is the fact that the procedure in the cases of aliens detained under Article 12 (5A) of the Aliens Order is different from the procedure in the case of British subjects detained under Defence Regulation 18B. Article 12 (5A) of the Aliens Order is merely an extension of ordinary peace-time powers exercised by the Rome Secretary. In times of peace he exercises a complete and unfettered discretion over the entry of aliens into this country and over the question what aliens shall be permitted to stay in this country. My right hon. Friend can in peace-time, without any reasons given, publicly or otherwise, order that any alien shall leave the country, and he can detain that alien without trial pending the carrying into effect of the deportation order.
  In May, 1940, we were faced with the position that for practical reasons it was impossible in many cases to effect deportation. As a rule the only country willing to take an alien whom we wish to get rid of is his country of origin, and by May of last year countries such as Czecho-Slovakia, Norway, Sweden, Denmark, Holland, Belgium and some other European countries had become impossible of access. It was also in some cases inexpedient to carry out deportation orders. There were some aliens who knew so much that it would have been very unwise to allow them to go overseas. Therefore in May, 1940, we were faced with this situation,

  1315
  that under our peace-time powers we could detain aliens without trial pending deportation, but to have done so indefinitely in point of time would, I think, have been an abuse of our peace-time powers. Therefore, we proceeded to take additional powers which enabled us to hold in detention an alien in respect of whom it was either impossible or inexpedient to make use of our peace-time powers of deportation. I say that by way of explaining that in establishing a committee to inquire into these cases under Article 12 (5A) my right hon. Friend has given something which does not exist in time of peace, that is to say, an independent tribunal which goes into the merits of the individual case.
  It is clear that enemy agents are much more likely to be found in the ranks of so-called neutral and friendly aliens than among enemy aliens or British subjects. It is common knowledge and experience that the most suitable persons for employment as spies are persons of neutral nationality. Therefore it is pretty certain that among this small group of 200 or 300 aliens detained under this procedure we have some of the most dangerous enemies of this country. That is why my right hon. Friend has always thought it right to exclude if necessary from consideration by the Lindley Tribunal cases where considerations of the very highest degree of national security were involved. The only difference in procedure in considering the cases of people held under Defence Regulation 18b and of people held under this Aliens Order is that in the 18b cases a statement of reasons for detention has to be furnished before the hearing by the Committee. The hon. Member for Ipswich (Mr. Stokes) has often complained of the vagueness and lack of definition in statements furnished under that procedure. It is often necessary not to specify in too great detail the sources of information upon which the Home Office and the security services have to rely.
  My hon. and gallant Friend mentioned in the course of his speech that he had seen a statement drawn up by Mr. Weininger giving his account of his experiences before the Lindley Committee. I have also seen that statement. It consists of heads of questions put by the Committee, some 45 in number.
  Mr. Stokes: Was Mr. Weininger given notice of those questions before they were put to him?
  Mr. Peake: No, he was not given notice of those questions. Mr. Weininger's examination by the Committee, when reduced to print, consists of more than 23 pages of closely typed foolscap. I have studied this transcript on more than one occasion. It shows that Mr. Weininger fully understood the purpose of the questions which were being put to him.
  Major Adams: How could he when he was drugged?
  Mr. Peake: It shows that he was not in any way muzzy or incapable of dealing with them.
  Mr. Stokes: Is it clear from the notes whether the report was made out as a result of shorthand notes taken by Mr. Weininger or his representative at the time or was written out from memory subsequently?
  Mr. Peake: A full transcript was made by an official shorthand writer. There was a separate document made by Mr. Weininger, which he passed on to his solicitor and a number of copies of which have found their way into circulation. One of them was sent to me by the hon. Member for East Aberdeen (Mr. Boothby). Another was sent to me by the solicitors acting for Mr. Weininger. Apparently yet a further copy has been communicated to my hon. and gallant Friend who raised this matter.
  Major Adams: Surely that does not surprise my hon. Friend?
  Mr. Peake: I was surprised at the names and details mentioned in the document. If it were in the hands of an agent of the enemy, it would convey a great deal more to him than it does to my hon. and gallant Friend. It is quite clear that the whole purpose of this tribunal will be defeated if solicitors acting on behalf of clients in any way broadcast verbatim accounts of what is alleged to have taken place before the Committee.
  Major Adams: I must interrupt again. I did not get it from the solicitor, and I have treated it in the most confidential way.
  Mr. Peake: I was quite unaware of the way in which my hon. and gallant Friend came into possession of this document. The House will see that the task of the Committee in trying to indicate to the

  1317
  alien in question what is known against him—and to indicate it with such particularity as may enable the alien to meet the case—will be made infinitely more difficult if it is thought that after the hearing details of what has been put to the alien are going to be scattered abroad. I hope that everybody who has come into possession of a copy of this document will treat it with very great care, because it contains a large number of names of individuals who are very well known to the security services of this country.
  I was dealing with the alleged discrepancy between the answer which I gave in the House on 20th May and the answer given by my right hon. Friend on 19th June. My answer was:
  "I have examined many transcripts of proceedings before these Committees, and invariably it is the practice of the Committee to put to the detained person facts which are known to his detriment" —[OFFICIAL REPORT, 20th May, 1941; col. T383, Vol. 371.]
  My hon. and gallant Friend uses the word "discredit," and he is perfectly welcome to it. I never said, nor could I have been heard to say, that they invariably put to every detained person every single fact known to his detriment or the source from which that fact has been obtained. That would clearly be impossible. The Committee have to exercise very great discretion in putting matters to these aliens, for fear that they may betray the very intimate sources from which this information is sometimes obtained. When my right hon. Friend the Home Secretary gave his answers on 19th June, there again I can see no inconsistency between the answers which he gave and the answer which I gave on a previous occasion. My right hon. Friend said that in the case of Mr. Weininger
  "the position was made quite clear in the course of the proceedings. … —[OFFICIAL REPORT, 19th June, 1941; col. 805, Vol. 372.]
  but my hon. Friend's complaint is, that in reply to a later question by the hon. Member for South Croydon (Sir H. Williams) my right hon. Friend said:
  "When aliens, as distinct from British subjects, are interned, details are not furnished in the same sense as for British subjects" — [OFFICIAL REPORT, 19th June, 1941; col. 806, Vol. 372-]
  I have already explained that what my right hon. Friend was referring to there was that no statement of reasons for de-
  1318
  tention is furnished to the alien under the procedure laid down as it is under Defence Regulation 18B, but again that cannot be taken to mean that in any individual case details were not furnished to the alien in the course of his hearing before the Committee. In the case of Mr. Weininger the examination was exceedingly full, and Mr. Weininger himself was asked what he had to say. At the end of the proceedings he made a speech to the Committee which covers three and a half pages of foolscap paper. He retired, and then as an afterthought found that there was something more he would like to add. After an adjournment he again came before the Committee and made a further statement. There is not the slightest foundation for the suggestion that Mr. Weininger has not had his case fully and fairly investigated.
  Mr. Stokes: Has he seen the report as transcribed?
  Mr. Peake: He has not, of course, seen the official transcript.
  Mr. Stokes: Why should he not?
  Mr. Peake: I do not know that it would carry the matter any further if he did My right hon. Friend has to consider the report of this body, which is only an advisory body, and upon that lie has to make up his mind. My hon. and gallant Friend, in raising this question, also said that no witnesses were called on behalf of Mr. Weininger. It is equally true to say that no witnesses were called who were opposed to Mr. Weininger. All the statements made before the Committee were, in this case, written statements, and testimonials, I think, from all the gentlemen whose names my hon. and gallant Friend mentioned were before the Committee at the time they investigated this case. There is one other misstatement which has gained currency, that Mr. Weininger was arrested in the flat of the hon. Member for East Aberdeen. In point of fact, the police went to Mr. Weininger's hotel and found him there, and were about to arrest him for detention. He pleaded, however, that he had an urgent and pressing engagement of importance with the hon. Member for East Aberdeen, and the police, therefore, accompanied him to the flat of the hon. Member, and after he had said what he wished to say to the hon. Member, he was taken away for detention.

  1319
  May I just refer to the point raised about his condition in January of this year? It is true that his health was not good then; it is true that his health has deteriorated steadily, I am sorry to say, during the period he has been detained. It is also true that his solicitors at that time were pressing that his case should come before the Advisory Committee. No request for any adjournment was made on his behalf because his health was indifferent, and in fact, an examination of the notes shows very clearly that his mind was perfectly clear and was fully able to deal with all the points which had been made.
  I wish to avoid any reference to the merits of this case, but Mr. Weininger is one of the few aliens about whom something is known to the general public beyond what the Home Office knows. Mr. Weininger's internment had nothing whatever to do, as was stated in evidence before the Select Committee, with the affair of the Czech assets, in which an hon. Member of this House was concerned —nothing whatever. But if hon. Members refer to the Report of the Select Committee, they will see two things. They will see first a very clear finding of the Committee, in paragraph 49 of their conclusions, first of all that the hon. Member in question had a claim to participation in this very large sum of money; and secondly, that:
  1320
  "Your Committee are satisfied that, generous as Mr. Weininger may have been and anxious as he was to help his friend whose political activities he admired, the promise to pay him such a considerable sum of money was given on the understanding that Mr. Boothby would render services in return. Such services included political speeches and pressure on Ministers of the Crown and Treasury officials"
  That is the finding of the Select Commit tee. I must confess that an alien who is prepared to come to this country and spend his money in that way is not one who commends himself very highly, at least in my eyes, and, I suppose, in the eyes of many Members of this House. A further point is perfectly clear. Hon. Members will remember that this matter was raised on a question of Privilege later, because Mr. Weininger was never ready to accept the decision of this Committee. He challenged them in the "Times" newspaper and put himself, the "Times" and his solicitors within peril of breach of Privilege. He is no more willing at this time to accept the decision of the Home Secretary; he challenges it fundamentally, and he is not ready to accept it. He will make use of any and every method which may be open to him to challenge that decision. I hope that hon. Members —
  It being the hour appointed for the Adjournment of the House, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

  STEAMSHIP "DUNERA" (INTERNEES CLAIMS).
  STEAMSHIP "DUNERA" (INTERNEES CLAIMS).
  CONSCIENTIOUS OBJECTORS (SENTENCES).
  CONSCIENTIOUS OBJECTORS (SENTENCES).
  COAL INDUSTRY (STATISTICS).
  COAL INDUSTRY (STATISTICS).
  NEW BUILDINGS (LOCAL ARCHITECTS)
  NEW BUILDINGS (LOCAL ARCHITECTS)
NATIONAL WAR EFFORT
  PRODUCTION
  PRODUCTION
  AIRCRAFT FACTORIES (ATTENDANCE)
  AIRCRAFT FACTORIES (ATTENDANCE)
GOVERNMENT DEPARTMENTS.
  REQUISITIONING.
  REQUISITIONING.
  AIR MINISTRY (JUVENILE WORKERS, ESTABLISHMENTS PAY).
  AIR MINISTRY (JUVENILE WORKERS, ESTABLISHMENTS PAY).
  RATIONING SCHEMES (STAFFS).
  RATIONING SCHEMES (STAFFS).
  MEXICO.
  MEXICO.
  ALLIED REPRESENTATIVES (EMPEROR OF ABYSSINIA).
  ALLIED REPRESENTATIVES (EMPEROR OF ABYSSINIA).
  SWEDEN.
  SWEDEN.
  RUSSIA (BRITISH SUBJECT'S IMPRISONMENT).
  RUSSIA (BRITISH SUBJECT'S IMPRISONMENT).
  WAR DAMAGE (CLAIMS).
  WAR DAMAGE (CLAIMS).
  PUBLIC ELEMENTARY AND NURSERY SCHOOLS.
  PUBLIC ELEMENTARY AND NURSERY SCHOOLS.
  CLOTHES RATIONING.
  CLOTHES RATIONING.
  STEEL (AIR-RAID SHELTERS).
  STEEL (AIR-RAID SHELTERS).
  EXIT PERMITS (NORTHERN IRELAND).
  EXIT PERMITS (NORTHERN IRELAND).
  TRANSPORT (GREEN LINE OMNIBUSES).
  TRANSPORT (GREEN LINE OMNIBUSES).
  CIVIL DEFENCE SERVICES (STANDING-BY).
  CIVIL DEFENCE SERVICES (STANDING-BY).
FOOD SUPPLIES.
  WHEAT AND EGGS (IMPORTS).
  WHEAT AND EGGS (IMPORTS).
  EXCESSIVE PRICES (PROSECUTIONS).
  EXCESSIVE PRICES (PROSECUTIONS).
  MEAT PRICES.
  MEAT PRICES.
Preamble
The House met, The LORD CHANCELLOR on the Woolsack.
CONSOLIDATED FUND (No. 3) BILL.
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act, 1911; and read 1a.
GOODS AND SERVICES (PRICE CONTROL) BILL.
Brought from the Commons; and read 1a.
TRUSTEE (WAR DAMAGE INSURANCE) BILL. [H.L.]
Returned from the Commons, agreed to.
NAVAL DISCIPLINE (AMENDMENT) BILL. [H.L.]
Returned from the Commons, agreed to.
JUSTICES (SUPPLEMENTAL LIST) BILL. [H.L.]
Returned from the Commons, agreed to.
RAILWAY CLEARING SYSTEM SUPERANNUATION FUND CORPORATION BILL.
Returned from the Commons, with the Amendments agreed to.
LAND DRAINAGE PROVISIONAL ORDER BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.

AGRICULTURE.
LORD TEVIOT LORD TEVIOT rose to call attention to the present agricultural policy of His Majesty's Government, especially in regard

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to the best treatment of the land in order to produce the maximum quantity of healthy food, and to move for Papers. The noble Lord said: My Lords, my noble friend Lord Woolton has asked me to apologise to your Lordships for his non-attendance here to-day, as he feels that in view of the terms of my Motion he should have been here. Circumstances have arisen which have prevented him from doing so, and he has asked me to say that he will take an early opportunity of answering any questions arising out of the debate which relate to his Ministry.
The whole question with regard to our agricultural policy seems to be whether we are going to have a long or a short war. If we art; going to have a short war, and the Government are legislating as regards agriculture with that prospect in view, then I am bound to say I have very little to say; but I feel that it is not wise for us to gamble on that. This year the two million acres that were ordered to be ploughed up by Sir Reginald Dorman-Smith will be producing their second crop. What of the future with regard to the fertilization of that land? We know that the animal population of the whole country has been reduced, and still is, owing to force of circumstances, being reduced, resulting in an equivalent reduction in that very valuable fertilizer that comes from the animal. How do we propose to fertilize these extra two million acres, plus what has been ploughed up since, let alone the normal arable land of this country, without endangering the humus which is so important in producing healthy crops? We know how dangerous an overdose of artificial fertilizer is to the land and its future. This question has been, and is, exercising the minds of cultivators all over the country. Looking at it from a logical viewpoint, it would appear that there will be less food produced in 1942 and 1943 if the present agricultural policy is pursued. It is really a question of retaining the fertility of the land, and this is, and must be, of paramount importance to all of us in view of the, as yet, undecided result of the Battle of the Atlantic.
Farmers really do not know where they stand. Orders and restrictions were issued—I think they were beginning in 1939—and then came the knock-out blow in April of the present year, when 100 per cent. of the wheat was required to be sold
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to the Government for human consumption. The farmer, therefore, is unable to retain crops, wheat in particular, in order to feed the pigs and poultry through which he is able to maintain, in a great many parts of the country, the fertility of his land. In the last few weeks, when visiting various farms, I have found that crops which have been properly fertilized are looking very well indeed, but that there are other crops which, through want of animal fertilizing, look a bad colour and will undoubtedly show a very small return. In regard to the former—the crops which have been property fertilized—in the particular area which I have in mind there is undoubtedly going to be, with respect to wheat, a return of fifty bushels per acre and upwards. But in regard to the rest of this land, it is already beginning to show the defects arising from the want of animal fertilizing, and we shall be very lucky if fifteen to twenty bushels per acre come from it. I fully appreciate the anxiety of the Minister of Food to keep a full larder. But we must realise that if, as a consequence, the land is unduly strained, he will find this task increasingly difficult to carry out. I would seriously suggest that the Ministry of Agriculture should determine what amount is available for the Ministry of Food to distribute. Only the agriculturist can know what he can take out of his land without reducing his future crops, and he must, if he is to go on producing, keep his land in good heart.
I should like to dwell for a moment on the treatment of the soil. This, of course, is very familiar to many of your Lordships. To put it baldly, if the humus is to remain healthy and full of life it must have animal fertilizing. At present it seems to us in the agricultural world that this question has been forgotten. Nothing can take the place of organic manure, balanced, of course, according to the land, with a certain amount of artificials of various kinds. It appears that the Government take the view that if animals are fed with food that can be used for human beings, it is a waste. I am absolutely certain from what I have seen and from what I know that that is a fallacy. If you feed a certain percentage of what you grow through your animals back into the land you will obtain far bigger crops and produce far more human food than you do by reducing the number of your

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animals, which is now being done. I suggest that it is advisable, and even necessary, to permit farmers to exercise discretion in retaining a sufficient amount of the crops which they grow in order to continue the present and the future productivity of their land.
Let me give as an instance the case of a farm which I know intimately. In 1940 this farm produced 942 cwt. of pig meat, 200 cwt. of eggs and poultry, 11,000 odd cwt. of corn and 1,600 odd cwt. of dry grass meal, a total of 14,000 cwt. This will probably be maintained this year as far as cereals are concerned, but next year, owing to the various Orders and restrictions, there is no doubt in my mind from what I have seen with my own eyes that there will be a reduction, and I am afraid quite a large reduction, in what is produced on that farm. At the beginning of the war the particular farmer concerned had eighty-five breeding sows; he now has only twenty-five, simply because he cannot do what he likes. His poultry have also been reduced by at least two-thirds. If he had had his own way, he would have one hundred breeding sows now, and an equivalent increase in the poultry. He would not have asked the Government to risk a ship or a man in order to bring feeding-stuffs to this country. Now there is this final blow, that he is to sell for human food 100 per cent. of his wheat. The land of which I am speaking is poor land, land which can be hired at about 10s. an acre, but it is capable of producing magnificent crops, entirely by folded pigs and folded poultry. It is a curious thing that the poultry seem to beat the pigs; the poultry seem to succeed on this land slightly better than the pigs.
There is a very serious provision in this recent Order with regard to that, however. Those who have been interested in raising poultry will know that unless they are given at least 10 per cent. of their ration in whole wheat the mortality amongst them is very serious indeed. The fact is that it is necessary to put back into the soil through the animals on it some of the food which is grown on the farm; if not, the humus dies sooner or later, for it cannot live on artificials, as was shown by the Woburn trials, which brought out this point very clearly indeed. What do you get if the humus goes? Poor, diseased crops,
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serious mortality among the animals and eventually the danger of erosion, of which the world has now plenty of experience. Land is like a man. If you are going to work a man hard you must feed him well, and you must occasionally give him periods of rest. He can carry on on artificials with the assistance of the bottle in some cases, but he does not last very long, and then, when the deterioration begins it is very rapid. A friend of mine puts it very cogently in a letter I have received from him. He says:
"To my mind the application of too much inorganic artificials at regular intervals has just the same effect as 'dope' has if taken regularly by the individual."
When one goes into that question one finds that it is absolutely true, and this letter is written by a man of great experience. I stress the pig and the poultry because they are very prolific and their fertilizing is very valuable.
We in this country are rooted in this soil. For our own health and salvation we must treasure and preserve it, and see that it has no overstrain. We all know what overstrain means. We see evidence of it to-day in many walks of life. The soil of our country is our greatest heritage. Through that soil, as we all know, we have become the stud farm of the world. Where is it that the foreigner comes when he wants a pedigree animal? He comes here. Let us not jeopardise that great position at which we have arrived. We know of the Battle of the Atlantic. We know of the Battle of Britain, and we know of those great battles which are being fought by our Armies to-day. This is going to be a great battle, and it is a simple one. It is going to be a great battle for us to retain the fertility of the soil of our country. I welcome whole-heartedly the appointment of the Agricultural Improvement Council, and particularly its terms of reference where it is to advise from time to time concerning agricultural problems which appear to require scientific investigation. I have tried to give a general picture of the position as far as I see it. One could, of course, go into much more detail and be far more technical, but I am not without hope that, as the result of this debate, the Ministries concerned will perhaps call some of us in for consultation on this subject. I beg to move for Papers.
VISCOUNT DAWSON OF PENN: My Lords, although it falls to me to follow my noble friend opposite on. this question, I do not mean to convey that I am in any way competent to follow him on this abstruse question of the fertility of the soil. I do so rather for this reason. The subject of agricultural production has various aspects, and certain aspects are made the more important by the fact that the country is at war. If my song is different to his, it is because it seems to be desirable that two aspects of this question, not necessarily opposed, should be before your Lordships prior to what will, no double, be a valuable discussion. My song is milk and the production of milk, a matter that presents an anxious problem at the present moment. Last February there was a debate in your Lordships' House on the subject of food on the Motion of the noble Viscount, Lord Bledisloe. That discussion ended with a notable; speech by the noble Lord the Minister of Food. After a lapse of nearly six months; it would seem to be proper that we should pass the food question in review. We should have had an opportunity of doing that because, originally, there were to be two discussions this afternoon which would have included both the question of agriculture and the question of food; but, in the unavoidable absence of the: Minister of Food, my noble friend Lord Davies is postponing his Motion, and I hope that the postponement will be for a few days only. For that reason I shall confine myself to the question of the production of milk and its present great importance.
On the one hand there has been, and is, an increasing consumption of milk in this country, but unfortunately that increased consumption exists side by side with decreasing production. The Minister of Food gave the measure of the increasing consumption of milk in this country by stating that the consumption of milk by the population as a whole had, last February, increased by 5,000,000 gallons a month, and the consumption of milk by people who had prior needs had then reached the large amount of 10,000,000 gallons per month. At present it would probably be true to say that at no time has this country consumed so much milk as it is consuming to-day. On that I venture to offer this opinion, with some confidence, that the present consumption
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of milk is contributing in no small measure to the good health of the people of the present day, notwithstanding the rationing of staple foods and the inevitable wear and tear of the times.
Now I pass to decreasing production. The Minister of Food stated last March that production of milk in this country had been falling since 1939, and was still falling. As recently as June 11 of this year a disturbing statement was made by the Parliamentary Secretary of the Ministry of Food who, when asked if one pint of milk daily could be provided for children under sixteen and half a pint for adults, had to reply that such suggested allowances of milk in the winter would be 50 per cent. in excess of the total production of the country. Further than that, in a recent article in a technical journal, it was stated that a reduction of even 12 per cent. in the production of milk would disable us from meeting the needed requirements of the population in the coming winter. Now in contrast with that, although the Germans have talked very big about guns and butter, it is to be noted that we do not grumble much about butter. Does not the available evidence show that the production of liquid milk in Germany increased from 1939 to 1940, and further increased in the early months of this year? No doubt the Ministry of Agriculture can confirm or deny that statement. I would, with respect, suggest that the Government should inquire into this matter, for it is a question that affects, at any rate, His Majesty's Government, and I think it is a question of fact which, I hope, can be given quite freely to your Lordships' House.
The problem of the milk production is concerned with winter feeding. After the vegetables and potatoes and leguminous foods that are needed for consumption by the human being direct, the next claim on home-grown food should be that of the dairy herd. Before the war we were importing 6,500,000 tons of cereals from other countries each year for our stock. This importation has had to be seriously curtailed, for reasons we all know. The Minister of Agriculture has put forth great efforts, which show an increase in the home-grown food that is available. I take it that that is why the grasslands are, to some extent, being ploughed up and also why there is an urgent campaign

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for the further adoption of scientific methods. High authority holds that of the 15,750,000 acres of permanent grass in England and Wales no less than 9,000,000 of those acres should be ploughed up for a space of two or three years, and we are told that if that were done we should, in a very short time, receive from the special crops sown upon that land far more food for our animals, and possibly even for ourselves, than if the whole of that acreage were left permanently to grass. I am not in a position to judge that question, but as an outsider reading the evidence I would have said that there is a strong case for considerable ploughing up of permanent grassland, step by step no doubt.
This policy has been pursued energetically by the Ministry of Agriculture this year, but it is obvious that its fruition, even if it is to produce what is hoped for, must be a gradual process, so that the replacement of imported cereals by home production can, for the purposes of next winter at any rate, only be partial. I would point out to my noble friend opposite that, although he may be right in the long view that he takes, we have constantly to keep before ourselves that we have to feed this country during the war, and in order to feed our people I think, although we are not justified in spoiling the land, we are justified in straining the land if such temporary strain will help us in. providing the essential nourishment for our people so as to maintain the present standard of living. It follows, then, that if milk production is to be maintained in this coming winter, dairy cattle must have priority of home-grown food beyond such food as is required for direct human consumption, and that the balance of nourishment needed above and beyond what home production can give must be obtained by giving the dairy cattle priority in the consumption of imported foodstuffs.
If we cannot do something to make good the diminished production of milk the only alternative I can see to giving priority, and real priority, to dairy herds is to reduce the consumption of milk in this country, and that leads me to ask for the consideration of what that would mean in the health of our people. I would put forward the view that any material reduction
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of milk for the consumption of the people during the coming winter would inevitably entail risks, and might easily be fraught with danger. Milk is a complete and unique food. It must stand alone in all matters connected with the nourishment of the people. It contains proteins, it contains sugar, it contains fats, it contains the necessary vitamins to activate those substances. Equally important, it contains those essential minerals, calcium, phosphorus and iron, and not only contains them but contains them in a strikingly assimilable form which increase their value as nourishment. You can curtail meat within reason, you can even curtail that almost essential food cheese; you can, in short, ration even imported food provided you do not tamper with your milk supply. Milk is the keystone of the nutrition problem, and you cannot interfere with that keystone without injuring the whole fabric.
It is not too much to say that the production of milk should be rated as of equal importance with munitions, and if it is necessary to import food for the purpose of producing milk, then that should be done. It might be said that if you reduced the consumption of milk you could still secure the milk required, for example, by expectant and nursing mothers, young children, and the infirm, and that you might concentrate your reduction in the consumption of milk among the adult population. I think that can only be done with considerable danger and considerable risk, for after all, from the war point of view, what we are most concerned with is the working adult population, the war workers, and most people are war workers in these days. It is those people who are contributing to the war effort and their health and stamina are a national asset which should be maintained. Let there be no mistake about it, with the present rationing of foods, milk contributes more remarkably to the maintenance of the present state of efficiency of those people than anything else. And this is doubly true of that large body of sedentary workers, with their long hours and, in the winter months, the fatigue and harassing effects of getting to and from their homes. Many of these people, when they get home, are not in a mood to eat ordinary food. They are tired, their digestions are at fault, and if they are given ordinary food,

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in many instances it will do them little good. That is where the value of milk in the lighter foods comes in, and that is one of the reasons why we cannot afford to reduce the amount.
It is well known that in many people stress and anxiety are apt to produce digestive disorders. They carry on, but unless they are carefully fed their ailments will become illness, and illness means incapacity, and incapacity means a weakening of the war effort. If we want to prevent illness and maintain the standard of the people, which we all admit is of prime: importance for the war effort, what is the solution? Clearly, milk is the answer, not only for its own sake, but also because of the essential part that milk takes in a great many of the lighter foods. We were fortunate last winter in the small amount of epidemic illness which invaded this country. We cannot be sure that we shall be equally fortunate this winter. The noble Lord, the Minister of Food, was right when he stated in this Horse that we: must maintain our dairy herds at almost any cost. Dairy herds are at the present time being reduced in numbers. I would like to ask this question of the noble Duke who will reply to the debate: Is this reduction being limited to poor milk supply? It would be reassuring if the noble Duke could answer that question in the affirmative. It is surely plain that a cow which only produces, say, two gallons of milk against a normal quantity of five or six gallons, is an uneconomic proposition. Such animals, I have no doubt, would ultimately reach the butcher.
Apart from the health effect of milk, it must be borne in mind that the bullock in its production of beef is a far less economic animal than the cow in the production of milk. If you take a ton of feeding-stuff and give it to bullocks, and take another ton and give it to cows, you will produce, as human food, more than twice the amount from the cows as milk as you will from the bullocks as beef. Beef will not: compare with milk in regard to its economic value. I am not saying that a certain amount of meat is not only desirable but necessary for the people, but one thing which the Minister of Food has taught this nation is that it has been eating a great deal more meat than is good for it and that it would be better off if it ate less. He has
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converted the people to a more rational view of meat in their dietary, and to the eating of flesh foods to a less extent than formerly.
There is an uneasiness in people's minds that the Ministry has been hanging back on this question of reducing the bullock population. It must be borne in mind that as long as those bullocks exist they must be fattened, and fattening requires foodstuffs. I am well aware that the reduction of bullocks does reduce the means of fertilizing the soil, but I think the state of the war should lead us not to put too much stress upon that point, and it can be otherwise met. It would be interesting if the noble Duke could tell us to what extent the bullocks have already been reduced. We are given to understand that the dairy herds are being reduced to the extent of 5 per cent. We were also given to understand that bullocks would be reduced to a much higher extent. Perhaps he can tell us to what extent they have already been reduced and what further reductions are contemplated.
To sum up, if I may, my contentions would be these: Keep up milk production by giving first priority of home-grown food for your dairy herds, outside, of course, such home-grown food as is necessary for direct human consumption. Secondly, substantially reduce the bullocks for beef and seek the more economic milk. Give priority of imported foods to the dairy herds; and, in my submission, the second on the priority list for food would be eggs rather than beef. If, with all these efforts, the milk production still threatens to be materially reduced, my suggestion is that powdered milk and powdered skim milk should be imported in such quantity as to maintain the milk production as it is at present. New Zealand, if I may say so, the founder of powdered-milk products, would, I am sure, come to our assistance; indeed, we had a statement by the Minister of Health that he was taking steps even some months ago to lay in a large store of powdered milk. Incidentally, I may perhaps say that powdered milk only contains two per cent. of water, whereas a bullock contains 60 per cent. of water and 20 per cent. of inedible food. I would not for a moment substitute powdered milk for liquid milk without first having taken all the measures I have suggested, but I submit that if necessary

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enough powdered milk should be introduced to carry on through the coming winter. Given adequate reduction in the number of bullocks, and if we do not have a repetition of the drought which we had last winter, I hope every effort of which we are capable will be made to avoid the rationing of milk with its great attendant evil.
LORD ADDISON: My Lords, I would like to associate myself with the two noble Lords who have already spoken in regretting that the Minister of Food could not be here to-day. My text has largely gone because I had prepared some material on the doings of the Ministry of Food. In particular, I had intended to talk about eggs and milk and certain other exploits of that Ministry which I think ought to come under review without delay. Therefore, I hope it will be possible for the noble Lord the Minister of Food to join in a discussion here very soon, perhaps on the Motion which my noble friend Lord Davies has on the Paper or on some other appropriate Motion. I am quite sure that it is of first importance that the relation of our food policy to agriculture should be under review regularly.
My noble friend who has just spoken championed milk. He has been a champion of milk for many years, and I am very glad that he intervened in this debate. I am sure that he is sorry, as I am sorry, that the Minister of Food is not here to-day, but I know that the Minister will take note of what the noble Viscount has said with the great responsibility which attaches to everything he does say on this subject. I will, therefore, defer what I had intended to say about milk until a later date, and will only say now that I give 100 per cent. support to what the noble Viscount has said as to the vital importance of milk as a food. I think he was perhaps unduly apprehensive as to the policy of the Ministry of Agriculture in this respect, because I know that they are insisting that the maintenance of milking herds is a first necessity. I believe that every county agricultural executive committee is fully alive to the importance of maintaining the milking herds. Although as you go about the country you find a few very select herds from which no animals ought to be taken out, if you regard the country as a whole I am sure that it is a very moderate statement to
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say that 5 per cent. of the animals in the milking herds could be dispensed with without doing any harm to our milk production. Indeed there are herds in which animals of the class described by the noble Viscount number even more than 5 per cent. Discriminate culling of indifferent milking cows will be all to the good. It will leave more food for those that yield a good return.
The Minister of Agriculture, so far as one can judge from the instructions issued to county agricultural committees, is fully alive to the importance of maintaining our milk supplies, and I am sure that the importance of that cannot be exaggerated. I wish that the Ministry of Food would take the same view about eggs, but I will defer what I have to say about that. What we have to do in the next year or two is to produce as much food as possible for the people who eat it. It may even be necessary to capitalize some of the dormant fertility of the land in order to do that because it is this crisis that we have to get over. I should not be apprehensive as to the diminution of the beef-producing herds for the reasons already mentioned in this debate and for another reason which I will mention presently. I should like to say something in support of what has been said as to the results of the Orders of the Ministry of Food in reducing the poultry population, but that can well be deferred, although I would say in passing that I am glad the noble Viscount placed eggs so high in his category of valuable foods.
We have in the neglected grassland of this country a reserve of fertility which is almost of unaccountable dimensions. I think the noble Lord did not do justice to his subject in omitting reference to that. Millions of acres of poor grassland would be all the better for being ploughed. I saw last week a series of most interesting and valuable experiments carried on under the supervision of a young man from Sir George Stapledon's school. I would like to tell your Lordships of what I saw in one place. There were two fields, one worn-out arable and one worn-out grass. That is the only way to describe them. On the grass field there was indifferent herbage of a miserable kind which supported scanty herds; indeed, it was not worth calling herbage. Both those fields had been ploughed up and treated in

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exactly the same way. With the oats that were sown there had also been sown a special seed mixture of clover and other grasses for the production of the necessary humus next year. The result of the experiment was really startling in demonstrating what can be produced if worn-out grassland is dealt with properly. There were crops showing splendid promise with a good growth of clover and other grasses among the spring corn. You will produce vastly more animal food from those fields in that way in one year than would be produced in five years, or even ten years, if they were left as they were before.
We have in this unused fertility an immensely valuable store which is only just beginning to be tapped. If the Minister perseveres, as I hope he will, in this policy of getting poor grassland ploughed up and properly treated, he will immeasurably increase the fertility of the land of this country. Therefore I do not feel a bit disheartened at the outlook. I think that what is happening is going to do a lot of good, because it is going to enable us to appreciate some of our splendid land much better than we have hitherto done. I will not continue the discussion any further except to say that I think the war is bringing home to us what many people have been saying for many years—that we have in the land of our country, if we use it, a food-producing potential far beyond anything that we have hitherto made use of. I hope sincerely that it will be possible for the different parties to arrive at some measure of agreement by which the valuable lessons which we are now learning will not be neglected later.
LORD BALFOUR OF BURLEIGH: My Lords, I am sure we are all very grateful to my noble friend who has introduced this Motion, both for the Motion itself and for the very eloquent and interesting speech which he made. I am perfectly certain that every one of us will support his demand for the maintenance of the fertility of the soil. There cannot be any controversy about that. I venture to hope, and I believe, that in advocating the maintenance of the fertility of soil he is not saying anything with which the Ministry of Agriculture will disagree. I believe that the Ministry are very much alive to the necessity of doing what my noble friend has advocated. I believe, also, that the Ministry of Agriculture are
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alive to another point on which we shall all agree—the necessity of protecting existing agricultural land from further depredations. I believe that the figures are very disturbing on that score. I have an idea that at the end of the last war there were something like 1,500,000 acres of really first-class agricultural land, land of the highest quality, and that of those acres a very large proportion—I think, if I recollect the figure aright, something in the neighbourhood of 200,000 acres—have disappeared since then, under buildings of one kind and another or have been lost in some other irretrievable way. At all events, whether those are the figures or not. protection of existing agricultural land from further loss is, in my submission, as important as protection of the fertility of the soil.
I believe that the Ministry of Agriculture are alive to that also, but if that be so I would like to ask the noble Duke who is going to reply what the Ministry are doing about it. Protection of agricultural land is a matter which does not lie in the hands of the Ministry alone. Quite obviously, it is a matter, firstly, for coordination with other Ministries, and secondly, for planning in its most vital sense. I would like to feel that the decision is imminent to establish some central planning authority which will look after that aspect of our agriculture as well as a great many other aspects of our national life. It seems to me to be absolute folly to go on without having regard to the rapidly diminishing quantity of our agricultural land. Factories are being set up here, there and everywhere, when in all probability if all the factors were competently examined it could have been found that equally good situations were available without the same loss of agricultural land. Those are two points with regard to which I am quite certain the Ministry of Agriculture arc, at all events, alive to what is desirable, however helpless they may be to secure all they want on the second count.
Passing from those two points we come, I think, into regions of controversy. It is obvious that there may be a distinction to be drawn between a war agricultural policy and a long-term agricultural policy. As has already been pointed out by noble Lords who have taken part in the debate, during a war you have to

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produce the maximum amount of food, and there may well be differences of opinion as to the method by which the maximum is to be produced. I do not propose to go into that because I have not the knowledge with which to make any useful contribution to a discussion on such a subject.
There is, however, another aspect of this matter on which I think there will be dispute and which I would like to feel was receiving the attention of His Majesty's Government from the long-term point of view. I suppose that there has never been a time when one's postbag contained so many little pamphlets. Hardly a day passes in my experience—and no doubt the experience of other noble Lords is the same—without one getting little pamphlets, a large proportion of them about agriculture, all written from one particular point of view. I try to read as many of them as possible and I find them interesting. Some of them are better than others, and many of them are convincing from the point of view they set out to expound. But few take into account another, and different, point of view. Taking agriculture as a point of view, no agriculturist whose pamphlet I have yet read has taken any account of any claims of industry which may be in opposition to it. What strikes one is that sometimes people advocating one kind of agriculture or another forget that we have a great exporting industry to look after. In order to sell our exports we have to import. T do not desire to go into this question except to raise the point as to whether attention is being given to finding a via media, a summum bonum as between industry and agriculture. There must be a course which will produce the maximum of benefit. It is no use any single industry, whether a manufacturing industry or agriculture, hoping to get everything its own way. National necessity does demand a synthesis. I would like to know that a long-term synthesis is, even now, being thought out.
There is another synthesis which requires thinking out and that relates to the interests from the agricultural point of view of the Dominions and this country. New Zealand, as your Lordships know, is a very big exporter to this country of butter and cheese, and the point was
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reached, not long before the war came to alter the situation, when it appeared to be becoming necessary to put some limit on the quantities of butter to be imported into this country from New Zealand. That is a thing which should be receiving intent study now with a view to the future. I am going to suggest that there is only one angle from which all these possibly conflicting interests can be synthesised and that is the angle of nutrition, which has been dealt with—and I was very glad to hear his contribution—by my noble friend Viscount Dawson of Penn. If we take nutrition as the starting point, it seems to me that it will give us the hope of finding the best possible outlook from all these different points of view and will be an extraordinarily good angle from which to study these matters in the postwar world.
We are going to face a very difficult situation in the post-war world, and a great many countries are going to be starved of essential foodstuffs. It may be useful to have a subject on which all the different countries can come together and seek to find some mutual interest. Germany and other countries which have been under the heel of Germany may be starving, and this may be an extremely useful point from which to re-start international relations. I hope that even in the midst of the struggle to win the war—and that must come first—these questions of long-term policy are not being overlooked, because unless we are ready to deal with them immediately after the war we shall find that our victory may not give us the fruits for which we all hope.
EARL DE LA WARR: My Lords, I should like first of all to associate myself with other noble Lords who have spoken in thanking the noble Lord, Lord Teviot, for putting down this Motion, and also for the extraordinarily interesting and important speech which he delivered on the subject. Other noble Lords have followed, and the subject has been treated from a number of different aspects; but there is one current which seems to run through the whole of this discussion, and it is that most of us feel that, while we are primarily concerned at the moment with growing more food in order to help us through the immediate war situation, nevertheless it is going to be very difficult to do so unless we take into account the

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fact that nothing responds so unsatisfactorily to short-term policies as the land of this country.
There were two points in particular which seemed to worry the noble Lord, Lord Teviot, and the noble Viscount, Lord Dawson of Penn. To some extent they were the same point, but each noble Lord approached the matter from a different aspect. The question is that of the slaughter of stock. The noble Viscount, Lord Dawson of Penn, was mainly concerned with the loss of dairy herds, while the noble Lord, Lord Teviot, thought of the subject more in terms of those animals on which the fertility of the land depends. It has now been announced that there is no intention to slaughter stock at the moment, apart from the scheme for disposing of bad and diseased cattle; and I was very pleased to hear the noble Viscount, Lord Dawson of Penn, associate himself with others in saying that, provided that restriction were maintained, the step would be a wise one. There is no doubt that there are, unfortunately, large numbers of cattle at the present moment which are doing very little but, in the words of an old farmer, "growing older," and the sooner the country is rid of those cattle and not wasting good food and money on them, the better it will be for the farmers and for the country as a whole. Far from reducing the supply of milk, I think that the slaughter of these bad dairy cattle may tend rather to enable us to make the most of our available feeding-stuffs, because there is no doubt that feeding-stuffs fed to these cattle are wasted.
Many of us have been surprised to find that the farmers who took the Minister's advice and looked ahead and grew feeding-stuffs for their cattle have not in fact lost milk; their cattle, they say, are milking better and looking better because of the freshness of their food. It is the farmers who did not take the advice given so strongly by the Minister who have suffered. I remember that when the present Minister first took office he was criticised for seeming to exaggerate the seriousness of the feeding-stuff position by the warning which he gave to farmers; but since then he has proved to have been optimistic rather than pessimistic. His problem has always been to make the most of our available feeding-stuffs in order to save as many cattle as possible,
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both on the fattening side and on the dairy side, while, as the noble Viscount, Lord Dawson of Penn, said, rightly giving priority to milk production.
This debate is really concerned with the fertility of our land and the need to safeguard that fertility in order to enable us to face a long war. There can be no one solution for a problem of that character, in view of the varieties of farming, the varieties of land and the varieties of climate in this country. The hill sheep farmer of the Borders and the market gardener of Kent are dealing with circumstances as different as those of the iron and steel industry and the coal industry. It is impossible to generalise, but there may be certain general principles which it is worth attempting to lay down, and we must try to do so, because this problem is quite fundamental. It cannot be settled in terms of artificial fertilizers alone or of organic fertilizers alone. The fact is that at the present moment it is a waste of time to discuss whether artificials or organic fertilizers are better, for the simple reason that if we are going to get through this war and feed ourselves we are going to need every kind of fertilizer that we can possibly have.
The Minister, by almost superhuman drive and energy, has managed to increase the supply of artificials very considerably; I think that he is providing us with nearly double the nitrogen that we had before the war and just under double the amount of phosphates. He would probably be the first to admit, however, that what he has managed to do has not been sufficient for our needs. We therefore come back to the point which was made by the noble Lord who initiated this debate. Assuming, as it is right to assume, that we shall almost certainly have to face a long war, and that this problem of fertility is fundamental, assuming that we are going to need all the fertility that we can get, assuming that we have all the artificial fertilizers that it is possible to obtain, and that still the supply is not enough, what are we going to be able to do for ourselves on the farms of this country? I think that the value of this debate is that your Lordships' House provides a platform from which to speak to the agricultural community. This debate is not merely a question of pressing the Ministry of doing more of this or more of that, it is a question of getting more

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ideas across to the whole agricultural community.
There are a number of things we can do on the farms for ourselves. The first thing we have to get across to farmers is that they must in future both conserve and increase all the available supplies of farmyard manure. At the present moment there is no question that frequently on the farms our methods of using and handling farmyard manure are wasteful. To some extent that is unavoidable, but to a great extent it is not. In recent years a wasteful method has grown up of wintering out our stock. That is wasteful because the stock, if kept in yards or sheds, could be making fertility, making farmyard manure. They would be eating less if kept warm and and dry, and they would not be treading in the spring grass or the ditches. The Minister has already reminded committees that they have a right to tell farmers to keep their stock in. Whether they utilize that power in terms of compulsion or by way of advice is for them to decide, but I know that some committees are writing round to farmers warning them to look to their sheds and yards now in order to bring them into repair if necessary so that they can be used during the winter months. We burn a great deal of old straw now. We ought to use more as litter. Some farmers, particularly in large arable areas, who keep a number of bullocks, tell me they are now putting four and five times as much straw under their cattle as they did before.
All these may seem to be technical details, but it does seem to me that we have no right as a farming community to demand, as we have done, that we should be allowed to keep our stock in order to maintain fertility unless we are going to make use of that stock in the best way possible for increasing fertility. Lord Addison has also mentioned the question of extending the folding of sheep. I agree that grass sheep are inefficient producers in terms of war economy, but a great number of our so-called grass breeds of sheep are perfectly all right for folding, and farmers should be encouraged, particularly in view of the present sheep prices, to increase the use they make of the fold.
Finally—and the noble Lord, Lord Addison, also mentioned this point—it is
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not necessary to think of this problem in terms of going on thrashing crops out of the same land again and again. We have got almost unlimited acres of land not yet ploughed, and there is no question that a great deal of the land that was arable before the war needs to be laid down. There is no doubt that a great deal of the land, mainly because of twenty years of depression and therefore of neglect, is in a very poor state of fertility, and we should be wrong to take more than one or at most two crops out of that land before sowing it down. In this land which we have not yet ploughed the mat or top sod which we turn over when we plough is a great reserve of fertility, and we are entitled to draw upon it because at the present moment it is sour and not available; but when we plough it over it turns into fertility. If we crop that land, it is going to increase food production, and when we lay it down it will give us a greater amount of pasture. We should actually be building up its fertility provided we did not farm it out.
The Ministry of Agriculture in some of their literature have been talking of ploughing round the farm, and there has been talk of alternate husbandry. When we talk of these things we tend to regard them as a revolution whereas, in fact, in the part of the country from which Lord Teviot comes it is one of the oldest systems of farming in existence. All that it means is that we should give up this distinction we have been playing with of drawing a line between the arable portion of a farm and the grass portion, and in future say that high-yielding temporary grasses have to take their turn in the general rotation of the farm. The advantage of that system from the point of view we are discussing is that if we lay down the arable land with temporary clover we give the land a rest, we restore its fertility, we grow more grass for our stock, and we maintain our head of stock, which, in turn, contribute to the fertility of the land.
Therefore, if I may sum up briefly, we should do our utmost to maintain our stock. We should do our utmost to see that we make the most of our farmyard manure, and make more of it. We should see to it that we develop as far as we can arable sheep farms; and, finally, we should continue with our ploughing-up policy and increase fertility in the matter of permanent pasture. If we pursue that

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policy we shall increase food for human consumption, we shall increase rather than decrease the fertility of the soil, always remembering that the soil is very like the supply of human energy—namely, the more we make use of it, providing we use it wisely and intelligently, the greater its store of vitality.
VISCOUNT WOLMER: My Lords, I join in thanking my noble friend Lord Teviot for giving us an opportunity for discussing this all-important problem, and for his admirable speech. I do not wish to repeat the things which have already been said so truly. There is a very general agreement in the speeches to which we have listened. The noble Earl who has just spoken has achieved a very brilliant synthesis between the noble Lord, Lord Teviot, the noble Viscount, Lord Dawson, and the Government's policy. There is no real difference of opinion as to what the proper war policy is. We are committed to this ploughing-up policy, which is certainly the right national policy. It is undoubtedly right to grow as much of our own cattle food as possible, and, while doing that, we have got to maintain the fertility of the soil. I do not think there is any serious criticism against the policy of the Minister of Agriculture. The only criticism one does hear is that sometimes these Orders and edicts from Whitehall are applied in local circumstances where they arc altogether unsuitable. I do hope the Minister in framing his edicts will always, give as much latitude as possible to the county war agricultural committees and the men on the spot because, as the noble Earl who has just spoken has remarked, the diversity of conditions in British agriculture is so immense that it is extraordinarily difficult to dogmatise from Whitehall or from anywhere else about them.
I have not risen to discuss these technical points on which there is so much agreement. I have risen rather to support my noble friend Lord Balfour of Burleigh, in pleading for an agreed postwar policy. I do so for this reason, that I am quite sure one of the most important factors that is militating against the maximum food production at this moment is the feeling of insecurity which still haunts the minds of farmers. It is an immensely important point. With the best will in the world, with the utmost
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patriotism, these men cannot help remembering what happened to them after the last war when many of them were ruined, and many more were so crippled financially that not only has their land suffered in its cultivation, as has been pointed out this afternoon, but the advent of this war found them financially weaker than they ought to be in order to rise to the great opportunity of increased food production. I am aware that it is possible for a farmer now to get very generous credit facilities, that the Government are ready to help him with loans, and that banks have come forward and played their part in assisting farmers financially. But no prudent or wise, or honest man will incur expenditure which he does not see his way ultimately to pay back. The point I wish to make is that if we can get an agreed agricultural policy which will give the farmers of this country a sense of security, then that must inevitably increase the food production in this present time of national crisis. Therefore I want to support the appeal made by my noble friend Lord Balfour of Burleigh.
I would like to make an appeal to noble Lords opposite. I am sorry that my noble friend Lord Addison is not present at this moment, because I know he would give a generous response to such an appeal. He and I have collaborated together in agricultural matters in the past, and I am asking: Is it not possible that those of us who know a little about agriculture, who care about agriculture, and who represent different schools of political thought, should come together and arrive at an agreed policy which will commend itself to the nation as a whole, so that there shall no longer be disputes about agricultural policy any more than there are disputes nowadays about gas policy or electricity policy? Really, cannot we approach the subject from a scientific point of view? My noble friend Lord Balfour of Burleigh has pointed out one line of approach which certainly would have to be taken into consideration. He has suggested that we must consult the industrialists of this country and the Dominions, we must achieve a synthesis between what is grown at home and what is imported from abroad and from the Empire. There are other approaches that can be made to the problem.

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I would like to suggest to my noble friend this approach. I would like to look at the problem from the point of view of man-power and national security. Let us ask ourselves, how many men do the security and the health of the nation require to be on the land? Having arrived at that figure, then let us decide what is a fair wage for the agricultural worker who, I venture to say, is just as much entitled to a good wage as any artisan in any town, for he is the most skilled artisan in the country. There is no insurmountable difficulty in ascertaining what prices you have to secure to agriculture to enable these wages to be paid to that number of men. I am suggesting that the whole subject should be approached from that scientific basis. I would like to make an appeal to agriculturists of the Liberal Party and of the Socialist Party and to the industrialists of this country and the representatives of our great Dominions on these lines. Can they not come together in some small conference—because the fewer the number attending the conference the more likely we are to get speedy and valuable results—and lift the whole of this agricultural problem right above the level of Party politics, so that there can be an agreed purpose for the whole nation after the war as to what we are going to do with our land? If that can be achieved, I venture to believe that it is not only going to help food production in war-time enormously, but it is also going to bring great benefit to this country in the generation which is to follow us.
LORD DAVIES: My Lords, I do not propose to follow previous speakers in this debate. We have listened to very able speeches upon the subject of producing our supply of food, but the point I should like specially to direct your Lordships' attention to is the production and collection and sale of vegetables. A few weeks ago we had a discussion in this House on the question of food supplies, and I raised the question as to whether the Minister of Food and the Ministry of Agriculture were in agreement with regard to the steps to be taken for increasing the production of vegetables, especially in private gardens and allotments. It was then suggested to me that this matter should be raised on another occasion, and that is my reason for bringing it forward to-day.
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Two weeks ago there appeared a letter in The Times written by Professor Orwin, of the Agricultural Economics Research Institute, Oxford, and Chairman of the Oxfordshire Garden Produce Committee. In this letter he complained of two things. He said:
"On November 9 last you published a letter from me drawing attention to the organisation of county garden produce committees under a scheme inaugurated by the Ministries of Food and of Agriculture. Their purpose was to increase the production of non-perishable vegetables in private gardens and allotments, and to arrange for collection and marketing. Recently the responsibility for the work of these county garden produce committees has been transferred entirely to the Ministry of Agriculture, and the policy of the scheme has been modified. The Secretary of the Ministry has informed my committee that: 'it is not the Minister's policy to stimulate the production in private gardens and allotments of surplus vegetables for sale.' While this change of policy may cause some disappointment, and even disorganisation, in those counties where active steps have been taken already to procure a marketable surplus of non-perishable vegetables from private gardens, it is satisfactory to know that the food situation is so well in hand that this is no longer necessary."
That appears to raise two questions. In the first place, may I ask the noble Duke why it is that the partnership which apparently existed between the Ministry of Agriculture and the Ministry of Food has apparently now been dissolved? When these committees were first constituted they were placed under the control of a joint committee, at least under the joint supervision of the Ministry of Food and the Ministry of Agriculture. One gathers from this letter that they are now entirely under the direction of the Ministry of Agriculture. In these days when the closest collaboration between Departments is essential, one would have hoped that they would still have remained under the joint supervision of both Departments. It may be said that that letter did not quote in full the circular from the Ministry, and that the complaint is one which does not appear from the context of the letter. I do not think that that charge would be at all justified, because the letter from the Ministry to the committees certainly gave them the impression that the original policy of increased production was not now the policy of the Ministry.
Here is what the letter says—this was written on the 19th April, 1941—
"I am directed to refer to your letter of 2nd April, and to say that the progress report

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of the Oxfordshire Garden Produce Committee for the period July, 194O, to April, 1941, has been read with much interest. As you are aware, the policy of the Minister is to secure the orderly cropping of gardens and allotments on the lines indicated in Dig for Victory Leaflet No. 1, rather than to encourage the indiscriminate production of surplus vegetables which may fail to secure an effective outlet. It is not the Minister's policy to stimulate the production in private gardens and allotments of surplus vegetables for sale. …"
As I have said, that is the complaint which was made in regard to Professor Orwin's letter which appeared in The Times. From the full context of the letter it is quite clear that the Ministry intended apparently to discourage the production of vegetables. In June, 1940, when the circular was first issued, all these committees and other organisations engaged in stimulating production were encouraged to do so, and I should like the noble Duke to tell us why they are now apparently discouraged from producing surplus vegetables. Then, in regard to another remark in the letter of the 8th March, 1941, in which it was said that "the question of the function of the committees in relation to the collection and disposal of surplus non-perishable vegetables is reserved for subsequent consideration," I understand that this "subsequent consideration" is still going on. I should be very grateful to the noble Duke if he would tell us what the considered view of the Ministry is in regard to collection and disposal, because that obviously is a matter which is of great importance to the committees who have hitherto endeavoured to organise that part of the war effort.
So I would again ask, what really is the policy of the Ministry? Is it to encourage or to discourage the growing of vegetables? I am told that part of the policy is that rural areas should become self-sufficing. Everybody knows that they have always been self-supporting so far as the production of vegetables is concerned. What they were asked to do was to provide a surplus which would obviously have to be sold in extraneous markets to provide for the necessities of the people in urban centres. It has been suggested that the Ministry have been anxious to protect the greengrocers and the licensed wholesalers and retailers from any competition which may arise: from the sale of the surplus from private gardens and allotments. Well, in these days
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when every ounce of food is wanted, surely it is unwise to allow any private interest to interfere with the production of our food supplies. There are people who hold licences, I understand, for the sale of vegetables, and I should like to ask the noble Duke: Have any licences been refused to those who have been engaged in carrying out what the Ministry suggested more than a year ago in collecting and trying to dispose of the surplus which they were asked to provide? Advice is one thing and compulsion is another. If it is true that pressure is brought to bear by withholding licences or by any other means, I am sure your Lordships would agree that it is entirely wrong and should not be allowed to continue. I hope the Minister will be able to reassure us on this point because the general interest, the interest of the public, the interest of the consumer, is the first consideration, and we cannot afford in these days to let slip any opportunity of increasing the food production of the country.
THE JOINT PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE DUKE OF NORFOLK): My Lords, I am sure that everyone will agree that the very full debate to which we have listened has been most sustaining and it will be very valuable to His Majesty's Government in the carrying out of their policy. I should like to begin by saying that the point stressed by the noble Lord who opened the debate will find a ready response from all of us engaged in the food production campaign. The point to which I refer is the general one, that the foundation of agriculture—in peace or war—in the production of crops or of livestock rests ultimately on the fertility of our land. I am glad that this and other matters have been raised to-day, since some misgivings have been expressed that the Government's policy seems merely to be the ploughing up of so many thousand acres of grassland. Nothing could be further from the truth and few aspects of our work have received more lengthy and careful consideration than the problem of the land itself—a problem that means considering the proper balance between grass and arable, the proper balance between crops and livestock, the proper balance between the imports of food and of fertilizers, and finally, as the noble Lord has indicated, a

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proper balance between long-term and short-term policy.
These are the fundamental issues and it is dangerous to consider the production of any specific crop or type of livestock apart from them. Measures to such an end, however desirable they may seem in themselves, may disturb the general balance and fail to bring about an increase in the total output from our land over the next two or three years, which is the main task from which nothing must divert us. Most of us here realise that to get a proper balance of farming means in reality that each farm must be treated on its own basis. From this it follows that for the best results we must allow considerable latitude in each county. For that reason the policy laid down in Whitehall must be left to be worked out by the war agricultural executive committees. Now the broad objectives of our policy are, (I), to raise total food production from our land to the maximum; (2), to ensure as far as practicable that within that total, foodstuffs are produced of the kind and in the quantities desired by the Government. This means keeping up the milk supply. The noble Viscount, Lord Dawson, raised the question of the culling of the dairy herds. I would like to assure him that there is no intention whatever that any cow should be killed that is not either diseased or unthrifty in some other way. I cannot give exact figures, but the total is not expected to exceed 5 per cent.
Our instruments for giving effect to this policy may be divided into two main groups. First, there are general measures—propaganda, prices and guaranteed markets. Secondly, there are individual measures—specific advice and directions by war agricultural committees: rationing or control of feeding-stuffs and fertilisers. Specific advice or directions or rationing of individual farmers are carried out by the Ministry's agents, the war agricultural committees, and the policy is being interpreted in the light of individual circumstances. This is why we have not attempted to lay down the law for every farm from Whitehall and why any effort to do so would not lead to maximum production; and this is why we have enrolled the voluntary services of several thousand farmers to interpret on each farm the
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general policy in the light of their local knowledge and experience. In such circumstances results cannot conform to a uniform standard. Some failures and errors of judgment are only human. Nevertheless, I think that the Minister, the county committees, the district committees and the Ministry's staff can together claim a greater and quicker revolution and improvement in farming than this country has ever seen. Anyone who, like myself, has recently travelled through a great part of England can see it with his own eyes. The noble Lord, Lord Teviot, referred to some crops which I think he said looked poor in colour, but I have been myself to nine or ten counties in the last few weeks, and I have found farmers very much more cheerful than I ever anticipated. I think the general opinion in all those counties was that crops are going to be good.
I turn now to the very difficult question that has been so widely discussed to-day: the fertility of the land or, to put it another way, the relationship on each farm between crops and livestock. The needs of war demand that the stored up fertility of our grassland should be converted to human food—there can be no question as to the wisdom of such a policy. But this need not of itself be accompanied by an undue depletion of fertility of the remaining arable land. Seeds and temporary leys will not only restore fertility but will yield more hay and grazing than much of the permanent grass not ploughed up. To this extent, available fertility is being increased and not diminished by taking the plough round the farm. Grass dairy farms which become self-supporting in winter foodstuffs will in most cases be able to maintain the fertility of their new arable land for several years, whilst it is the Government's desire to encourage arable sheep.
The extent to which crops for direct human consumption should replace crops for livestock must be governed by two main factors: the maintenance of the milk supply and the maximum output of direct human food for the next two or three years on the farm in question. On many farms the present numbers of cattle are necessary to achieve the latter, that is, to consume the by-products and to maintain crop yields by keeping the land clean and in good heart. On other farms in high condition it may be possible to devote

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large areas to wheat and potatoes and reduce the fodder and cleaning crops. Those who have relied on pigs and poultry fed on imported concentrates and other feeding-stuffs, which have now fallen away to a very low level, may have to alter their peace-time practice. But the revision of the rationing scheme is now under consideration and these matters, as well as others, will receive attention.
I have touched briefly on one or two points which have been mentioned in the course of the debate, and I must now come to the speech of my noble friend Lord Davies, who mentioned a subject which he has raised with me before. If I may say so with all diffidence, I think that there is some misunderstanding on this matter which really need not arise. It has always been the policy of my right honourable friend to encourage the production of all food from the land. What he has said, as the statements in the letter which my noble friend read indicate, is that he does not want to encourage the inopportune production of perishable vegetables—that is, vegetables; which could not well be stored in the various places where they might be produced. If the people who produce these vegetables will—as we hope and believe they will—so arrange matters that they will have a continuous production throughout the year, we shall not see, as we saw last spring, a certain number of gardens without anything in them at a time of the year when it is most wanted.
It has now been decided that where there is a surplus amount of vegetables which it is possible to keep, and there are not the available storage facilities in the growing area, arrangements will be made for collecting and storing such surplus. But it is quite obvious that it would be impossible to collect all the perishable vegetables which might be produced as surplus production, because of difficulties connected with the supply of petrol and the available means of transport. To do so, it would be necessary to have transport vehicles going round the country continuously. In the case of vegetables which would keep, however, it does not much matter whether they are collected one week or the next. I hope that my noble friend will be satisfied with this explanation.
LORD DAVIES: My Lords, I do not want to interrupt, but in the statement
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made by the Ministry of Agriculture there was no differentiation between perishable and non-perishable produce, and the inference was that it applied to both.
THE DUKE OF NORFOLK: My Lords, I think that possibly there may have been some slight misunderstanding. I hope that I have made the matter clear to the noble Lord now. Somewhat wider claims have been made in some quarters that the health of the plant, or indeed the health of the man or animal feeding on the plant, is dependant in some mysterious way on whether the plant obtains the chemical salts which it requires from decaying vegetable matter—that is, from humus—or from chemical fertilizers. There is a great deal of argument upon this subject, into which I do not propose to enter as I do not profess to know enough about it. I feel that your Lordships will all probably agree as to the profound benefits humus and farmyard manure confer on the general condition of the soil, and the most ardent advocates of chemical fertilizers regard them as a supplement and not as a substitute for them. Dung lightens a heavy soil and binds a light one; it encourages the right kind of bacterial action and improves the whole physical condition of the land. It also supplies chemical foods, the nitrogen, phosphates, potash, and so on which the plant requires. But these, it must be remembered, are derived from foodstuffs eaten by the animals making the manure. The maize, the linseed and cotton cake from overseas have helped every year to promote the fertility of our land. These imports have now largely ceased and it must take many thousands of tons of fertilizers to replace them. Far from there being any question of danger arising from the excessive use of fertilizers, a recent report from Rothamsted and all available evidence indicate that the growth of full and healthy crops demands very much larger quantities of artificial manure than have been used in the past.
I hope that I have said enough to indicate to your Lordships the inflexibility of our determination, shared, I am sure, by farmers and farmworkers throughout the country, to achieve the maximum contribution to the war effort, and the flexibility with which, in our view, the production programme has to be translated into action on each individual farm, bearing in mind the needs of the nation

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for milk and food crops and the needs of a fertile land to provide the best possible yield of those crops.
Before I sit down I must refer to the speeches made by Lord Balfour and Lord Wolmer concerning the future agricultural policy of the Government. This, as your Lordships will realise, is a very wide and a very live subject, and it is one which my right honourable friend has always in his mind. Speaking as one of the younger generation—and we were told just now that it would be for us to help—I can assure your Lordships that we all want to see that heritage which the noble Lord who raised the debate called the "land of England" got under the plough and farmed as it used to be.
LORD DAVIES: My Lords, may I ask, before the noble Duke sits down, whether he can give a reply to two of the questions I put to him? The first was whether the joint supervision of the Ministry of Food and the Ministry of Agriculture would be resumed in the case of the county garden produce committees and other organisations. The second was whether the noble Duke could assure us that no licences to enable them to sell their surplus produce
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are withheld from these committees or other organisations.
THE DUKE OF NORFOLK: With regard to the first question I can only say that I am not in a position to answer it. As to the second, so far as I know, no licences are withheld. I will, however, look into this matter and let my noble friend know the result of my inquiries.
LORD TEVIOT: My Lords, I should like to say how much we all appreciate the very able exposition of the noble Duke in his appreciation of the debate. I think it was most admirable in every way, and it has given me great confidence in the future. I am particularly pleased with his reference to the fact that in the different areas consideration will be given to different circumstances; and also with what he said regarding the pig and poultry question, which was particularly stressed by me. I am glad to think that the pigs and poultry, also, will not be forgotten. I thank the noble Duke most sincerely for his speech and I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.
House adjourned.

EAST WORCESTERSHIRE WATER BILL. [H.L.]
Reported, with Amendments.
LONDON COUNTY COUNCIL (MONEY) BILL.
Reported, without amendment.

SUNDAY ENTERTAINMENTS ACT, 1932.
Order made by the Secretary of State for the Home Department, extending Section 1 of the Act to the
Rural District of Hambledon (Parish of Cranleigh):
Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.

LAND DRAINAGE (FURTHER POSTPONEMENT OF PRESCRIBED DATE) ORDER, 1941.
Report from the Special Orders Committee, That they have examined the Special Order as required by the Standing Orders of the House; that in their opinion the Order raises important questions of policy and principle; that the Order is founded on precedent, inasmuch as a similar Order was approved by both Houses in the last Session of Parliament; that in the opinion of the Committee the Order cannot be passed by the House without special attention, but that no further inquiry is necessary before the House proceeds to a decision on the Resolution to approve the said Order:
Read, and ordered to lie on the Table.